8-K
ENCISION INC (ECIA)
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): November14, 2023
ENCISION, INC.
(Exact name of registrant as specified in its charter)
| Colorado | 001-11789 | 84-1162056 |
|---|---|---|
| (State or other jurisdiction of incorporation) | (Commission File<br> Number) | (I.R.S. Employer Identification<br> No.) |
| 6797 Winchester Circle, Boulder, Colorado | 80301 | |
| --- | --- | |
| (Address<br> of principal executive offices) | (Zip Code) | |
| (303) 444-2600 | ||
| --- | ||
| (Registrant’s<br> 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): | ||
| ☐<br> Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | ||
| ☐<br> Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | ||
| ☐<br> Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | ||
| ☐<br> 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<br><br> <br>Symbol(s) | Name of each exchange<br><br> <br>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 November 14, 2023, Encision, Inc. issued a press release announcing its second quarter financial results for the quarter ended September 30, 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 November 14, 2023. |
| 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: November<br> 14, 2023 | |
| /s/ Mala M Ray | |
| Mala M Ray | |
| Controller | |
| Principal Accounting Officer |
Exhibit 99.1
August 14, 2023
Encision Reports Second Quarter Fiscal Year 2024 Results
Boulder, Colorado, August 14, 2023 -- 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 second quarter that ended September 30, 2023.
The Company posted quarterly product net revenue of $1.75 million and service net revenue of $74 thousand, or total net revenue of $1.83 million for a quarterly net loss of $7 thousand, or $0.00 per diluted share. These results compare to product net revenue of $1.70 million and no service net revenue, or total net revenue of $1.70 million for a quarterly net loss of $279 thousand, or $(0.02) per diluted share, in the year-ago quarter. Gross margin on product net revenue was 47% in the fiscal 2024 second quarter and 49% in the fiscal 2023 second quarter.
The Company posted six months product net revenue of $3.37 million and service net revenue of $114 thousand, or total net revenue of $3.48 million for a six months net loss of $148 thousand, or $(0.01) per diluted share. These results compare to product net revenue of $3.40 million and service net revenue of $459 thousand, or total net revenue of $3.86 million for a six months net loss of $15 thousand, or $0.00 per diluted share, in the year-ago six months. Gross margin on product net revenue was 50% in the fiscal 2024 six months and 49% in the fiscal 2023 six months.
“The fiscal 2024 second 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 working to recreate that revenue stream with 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 provisionsof the Private Securities Litigation Reform Act of 1995, the Company notes that statements in this press release and elsewhere that lookforward in time, which include everything other than historical information, involve risks and uncertainties that may cause actual resultsto differ materially from those indicated by the forward-looking statements. Factors that could cause the Company’s actual resultsto 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 othermanufacturers of surgical instruments, insufficient quantity of new account conversions, insufficient cash to fund operations, delay indeveloping new products and receiving FDA approval for such new products and other factors discussed in the Company’s filings withthe Securities and Exchange Commission. Readers are encouraged to review the risk factors and other disclosures appearing in the Company’sAnnual Report on Form 10-K for the year ended March 31, 2023 and subsequent filings with the Securities and Exchange Commission. We donot 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
EncisionInc.
UnauditedCondensed Statements of Operations
(inthousands, except per share information)
| Three<br> Months Ended | Six<br> Months Ended | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| September<br> 30, 2023 | September<br> 30, 2022 | September<br> 30, 2023 | September<br> 30, 2022 | |||||||||
| Product revenue | $ | 1,752 | $ | 1,704 | $ | 3,366 | $ | 3,400 | ||||
| Service<br> revenue | 74 | — | 114 | 459 | ||||||||
| Total revenue | 1,826 | 1,704 | 3,480 | 3,859 | ||||||||
| Product cost of revenue | 927 | 872 | 1,697 | 1,743 | ||||||||
| Service<br> cost of revenue | 37 | — | 58 | — | ||||||||
| Total cost of revenue | 964 | 872 | 1,755 | 1,743 | ||||||||
| Gross<br> profit | 862 | 832 | 1,725 | 2,116 | ||||||||
| Operating expenses: | ||||||||||||
| Sales and marketing | 389 | 490 | 823 | 993 | ||||||||
| General and administrative | 366 | 397 | 755 | 742 | ||||||||
| Research<br> and development | 101 | 223 | 269 | 393 | ||||||||
| Total<br> operating expenses | 856 | 1,110 | 1,847 | 2,128 | ||||||||
| Operating income (loss) | 6 | (278 | ) | (122 | ) | (12 | ) | |||||
| Interest<br> expense and other income, net | (13 | ) | (1 | ) | (26 | ) | (3 | ) | ||||
| (Loss) before provision for<br> income taxes | (7 | ) | (279 | ) | (148 | ) | (15 | ) | ||||
| Provision<br> for income taxes | — | — | — | — | ||||||||
| Net<br> (loss) | $ | (7 | ) | $ | (279 | ) | $ | (148 | ) | $ | (15 | ) |
| Net (loss) per share—basic<br> and diluted | $ | 0.00 | $ | (0.02 | ) | $ | (0.01 | ) | $ | 0.00 | ||
| Weighted average shares—basic and diluted | 11,770 | 11,752 | 11,770 | 11,735 |
EncisionInc.
UnauditedCondensed Balance Sheets
(inthousands)
| September<br> 30, 2023 | March<br> 31, 2023 | |||||
|---|---|---|---|---|---|---|
| ASSETS | ||||||
| Cash | $ | 306 | $ | 189 | ||
| Accounts receivable | 1,025 | 921 | ||||
| Inventories, net | 1,642 | 1,899 | ||||
| Prepaid expenses | 53 | 116 | ||||
| Total current assets | 3,026 | 3,125 | ||||
| Equipment, net | 272 | 303 | ||||
| Right of use asset | 1,169 | 496 | ||||
| Patents, net | 167 | 163 | ||||
| Other assets | 55 | 47 | ||||
| Total assets | $ | 4,689 | $ | 4,134 | ||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||
| Accounts payable | $ | 300 | $ | 253 | ||
| Secured notes | 44 | 44 | ||||
| Line of credit | 339 | 177 | ||||
| Accrued compensation | 167 | 218 | ||||
| Other accrued liabilities | 41 | 85 | ||||
| Accrued lease liability | 273 | 354 | ||||
| Total current liabilities | 1,164 | 1,131 | ||||
| Secured notes | 256 | 268 | ||||
| Accrued lease liability | 896 | 240 | ||||
| Total liabilities | 2,316 | 1,639 | ||||
| Common stock and additional paid-in capital | 24,374 | 24,348 | ||||
| Accumulated (deficit) | (22,001 | ) | (21,853 | ) | ||
| Total shareholders’ equity | 2,373 | 2,495 | ||||
| Total liabilities and shareholders’ equity | $ | 4,689 | $ | 4,134 |
EncisionInc.
UnauditedCondensed Statements of Cash Flows
(inthousands)
| Six Months<br> Ended | ||||||
|---|---|---|---|---|---|---|
| September 30, 2023 | September 30, 2022 | |||||
| Operating activities: | ||||||
| Net (loss) | $ | (148 | ) | $ | (15 | ) |
| Adjustments to reconcile net (loss) to cash<br> <br>(used in) operating activities: | ||||||
| Depreciation and amortization | 44 | 41 | ||||
| Share-based compensation expense | 26 | 25 | ||||
| Provision for inventory obsolescence, net | 64 | 29 | ||||
| Changes in operating assets and liabilities: | ||||||
| Right of use asset, net | (97 | ) | (19 | ) | ||
| Accounts receivable | (104 | ) | 33 | |||
| Inventories | 193 | (303 | ) | |||
| Prepaid expenses and other assets | 55 | 50 | ||||
| Accounts payable | 47 | (143 | ) | |||
| Accrued compensation and other accrued liabilities | (83 | ) | (36 | ) | ||
| Net cash (used in) operating activities | (3 | ) | (338 | ) | ||
| Investing activities: | ||||||
| Acquisition of property and equipment | — | (191 | ) | |||
| Patent costs | (17 | ) | (10 | ) | ||
| Net cash (used in) investing activities | (17 | ) | (201 | ) | ||
| Financing activities: | ||||||
| Net proceeds from options exercised | — | 16 | ||||
| Borrowings from secured notes | 137 | 110 | ||||
| Net cash provided by financing activities | 137 | 126 | ||||
| Net increase (decrease) in cash | 117 | $ | (413 | ) | ||
| Cash, beginning of period | 189 | $ | 950 | |||
| Cash, end of period | $ | 306 | $ | 537 |