Form 8-K - Current report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d)

of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 14, 2024

ENCISION, INC.

(Exact name of registrant as specified in its charter)

Colorado	001-11789	84-1162056
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

6797 Winchester Circle, Boulder, Colorado

80301

(Address of principal executive offices)

(Zip Code)

(303) 444-2600

(Registrant’s telephone number, including area code)


(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading

Symbol(s)

Name of each exchange

on which registered

Common Stock, no par value

ECIA

OTC Bulletin Board

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02 Results of Operations and Financial Condition.

On February 14, 2024, Encision, Inc. issued a press release announcing its third quarter financial results for the quarter ended December 31, 2023. The full text of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

Exhibit Number		Description
99.1		Press Release issued by Encision Inc. dated February 14, 2024.
104		Cover Page Interactive Data File (embedded within the Inline XBRL document).

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	ENCISION, INC.
	(Registrant)

Date: February 14, 2024
	/s/ Mala M Ray
	Mala M Ray
	Controller
	Principal Accounting Officer

Exhibit 99.1

February 14, 2024

Encision Reports Third Quarter Fiscal Year 2024 Results

Boulder, Colorado, February 14, 2024 -- Encision Inc. (PK:ECIA), a medical device company owning patented Active Electrode Monitoring (AEM®) Technology that prevents dangerous radiant energy burns in minimally invasive surgery, today announced financial results for its fiscal 2024 third quarter that ended December 31, 2023.

The Company posted quarterly product net revenue of $1.56 million and service net revenue of $20 thousand, or total net revenue of $1.58 million for a quarterly net loss of $207 thousand, or $(0.02) per diluted share. These results compare to product net revenue of $1.68 million and no service net revenue, or total net revenue of $1.68 million for a quarterly net loss of $216 thousand, or $(0.02) per diluted share, in the year-ago quarter. Gross margin on product net revenue was 46% in the fiscal 2024 third quarter and 53% in the fiscal 2023 third quarter.

The Company posted nine months product net revenue of $4.93 million and service net revenue of $134 thousand, or total net revenue of $5.06 million for a nine months net loss of $355 thousand, or $(0.03) per diluted share. These results compare to product net revenue of $5.08 million and service net revenue of $459 thousand, or total net revenue of $5.54 million for a nine months net loss of $231 thousand, or ($0.02) per diluted share, in the year-ago nine months. Gross margin on product net revenue was 48% in the fiscal 2024 nine months and 50% in the fiscal 2023 nine months.

“The fiscal 2024 third quarter presented significant challenges for Encision and for the medical device market in general,” said Gregory Trudel, President and CEO of Encision Inc. “The demand for surgical procedures was diminished during the pandemic period and its rebound has been a slow process. The market has seen a number of positive indicators for an increase in demand and Encision continues to drive toward them. The service revenue that we were able to drive in the previous year was very helpful and we are starting to gain traction in recreating that revenue stream with a few new partners and opportunities to collaborate on our foundational technologies.”

Encision Inc. designs and markets a portfolio of high-performance surgical instrumentation that delivers advances in patient safety with AEM technology, surgical performance, and value to hospitals across a broad range of minimally invasive surgical procedures. Based in Boulder, Colorado, the company pioneered the development and deployment of Active Electrode Monitoring, AEM technology, to eliminate dangerous stray energy burns during minimally invasive procedures. For additional information about all our products, please visit www.encision.com.

In accordance with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, the Company notes that statements in this press release and elsewhere that look forward in time, which include everything other than historical information, involve risks and uncertainties that may cause actual results to differ materially from those indicated by the forward-looking statements. Factors that could cause the Company’s actual results to differ materially include, among others, its ability to develop new or enhanced products and have such products accepted in the market, its ability to increase net sales through the Company’s distribution channels, its ability to compete successfully against other manufacturers of surgical instruments, insufficient quantity of new account conversions, insufficient cash to fund operations, delay in developing new products and receiving FDA approval for such new products and other factors discussed in the Company’s filings with the Securities and Exchange Commission. Readers are encouraged to review the risk factors and other disclosures appearing in the Company’s Annual Report on Form 10-K for the year ended March 31, 2023 and subsequent filings with the Securities and Exchange Commission. We do not undertake any obligation to update publicly any forward-looking statements, whether as a result of the receipt of new information, future events, or otherwise.

CONTACT: Mala Ray, Encision Inc., 303-444-2600, mray@encision.com

Encision Inc.

Unaudited Condensed Statements of Operations

(in thousands, except per share information)

	Three Months Ended						Nine Months Ended
	December 31, 2023			December 31, 2022			December 31, 2023			December 31, 2022
Product revenue	$	1,561		$	1,684		$	4,927		$	5,084
Service revenue		20			—			134			459
Total revenue		1,581			1,684			5,061			5,543

Product cost of revenue		843			786			2,539			2,528
Service cost of revenue		11			—			69			—
Total cost of revenue		854			786			2,608			2,528

Gross profit		727			898			2,453			3,015
Operating expenses:
Sales and marketing		414			502			1,237			1,494
General and administrative		352			360			1,107			1,103
Research and development		151			247			420			641
Total operating expenses		917			1,109			2,764			3,238
Operating income (loss)		(190	)		(211	)		(311	)		(223	)
Interest expense and other income, net		(17	)		(5	)		(44	)		(8	)
(Loss) before provision for income taxes		(207	)		(216	)		(355	)		(231	)
Provision for income taxes		—			—			—			—
Net (loss)	$	(207	)	$	(216	)	$	(355	)	$	(231	)
Net (loss) per share—basic and diluted	$	(0.02	)	$	(0.02	)	$	(0.03	)	$	(0.02	)
Weighted average shares—basic and diluted		11,770			11,763			11,770			11,761

Encision Inc.

Unaudited Condensed Balance Sheets

(in thousands)

	December 31, 2023			March 31, 2023
ASSETS
Cash	$	99		$	189
Accounts receivable		923			921
Inventories, net		1,554			1,899
Prepaid expenses		129			116
Total current assets		2,705			3,125
Equipment, net		269			303
Right of use asset		1,083			496
Patents, net		166			163
Other assets		64			47
Total assets	$	4,287		$	4,134
LIABILITIES AND SHAREHOLDERS’ EQUITY
Accounts payable	$	302		$	253
Secured notes		45			44
Line of credit		—			177
Accrued compensation		233			218
Other accrued liabilities		130			85
Accrued lease liability		351			354
Total current liabilities		1,061			1,131
Secured notes		233			268
Accrued lease liability		800			240
Total liabilities		2,094			1,639
Common stock and additional paid-in capital		24,401			24,348
Accumulated (deficit)		(22,208	)		(21,853	)
Total shareholders’ equity		2,193			2,495
Total liabilities and shareholders’ equity	$	4,287		$	4,134

Encision Inc.

Unaudited Condensed Statements of Cash Flows

(in thousands)

	Nine Months Ended
	December 31, 2023			December 31, 2022
Operating activities:
Net (loss)	$	(355	)	$	(231	)
Adjustments to reconcile net (loss) to cash generated by (used in) operating activities:
Depreciation and amortization		64			64
Share-based compensation expense		53			39
Provision for inventory obsolescence, net		63			53
Changes in operating assets and liabilities:
Right of use asset, net		(30	)		(31	)
Accounts receivable		(2	)		118
Inventories		282			(375	)
Prepaid expenses and other assets		(30	)		(28	)
Accounts payable		49			(274	)
Accrued compensation and other accrued liabilities		60			(73	)
Net cash generated by (used in) operating activities		154			(738	)

Investing activities:
Acquisition of property and equipment		(12	)		(173	)
Patent costs		(20	)		(10	)
Net cash (used in) investing activities		(32	)		(183	)

Financing activities:
Net proceeds from options exercised		—			21
Borrowings from secured notes		(212	)		70
Net cash (used in) provided by financing activities		(212	)		91

Net (decrease) in cash		(90	)		(830	)
Cash, beginning of period		189			950
Cash, end of period	$	99		$	120

Cover	Feb. 14, 2024
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Feb. 14, 2024
Entity File Number	001-11789
Entity Registrant Name	ENCISION, INC.
Entity Central Index Key	0000930775
Entity Tax Identification Number	84-1162056
Entity Incorporation, State or Country Code	CO
Entity Address, Address Line One	6797 Winchester Circle
Entity Address, City or Town	Boulder
Entity Address, State or Province	CO
Entity Address, Postal Zip Code	80301
City Area Code	303
Local Phone Number	444-2600
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, no par value
Trading Symbol	ECIA
Entity Emerging Growth Company	false