Form 8-K ENCISION INC For: Aug 09

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):   August 9, 2022

 

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 August 9, 2022, Encision, Inc. issued a press release announcing its first quarter financial results for the quarter ended June 30, 2022. 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 August 9, 2022.
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:  August 9, 2022
	/s/ Mala M Ray
	Mala M Ray
	Controller
	Principal Financial and Accounting Officer

 

Exhibit 99.1

 

 

 

 

August 9, 2022

 

Encision Reports First Quarter Fiscal Year 2023 Results

Boulder, Colorado, August 9, 2022 -- 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 year 2023 first quarter that ended June 30, 2022.

 

The Company posted quarterly net revenue of $2.15 million for a quarterly net income of $265 thousand, or $0.02 per diluted share. These results compare to net revenue of $2.01 million for a quarterly net loss of $7 thousand, or $0.00 per diluted share, in the year-ago quarter. Gross margin on net revenue was 60% in the fiscal 2023 first quarter and 51% in the fiscal 2022 first quarter. Gross margin increased in the current year’s first quarter compared to last year’s first quarter due principally to higher service revenue gross margin.

 

“The first quarter presented significant challenges for Encision,” said Gregory Trudel, President and CEO of Encision Inc. “During the first quarter of fiscal year 2023 and fiscal year 2022, COVID resurgences continued to impact procedure volumes. COVID has had, and will likely continue to have, an adverse impact on our procedure volumes. We continue to encounter supply chain issues and work tirelessly to deliver a steady mix of products to our customers who depend on us. Encision continues to be positive as we navigate the ups and downs of the pandemic market and the new-normal supply chain turmoil. We continuously look for opportunities to serve our customers with new products, to work smarter, and to drive increased efficiencies. In spite of limited customer access, our sales and marketing efforts are yielding new customers for our new EnTouchâ 2X Scissors and recently released AEMÒ Shield Disposable Electrodes. We look forward to the contributions that these new products will make as the market bounces back.”

 

“Service revenue for our first quarter of fiscal year 2023 resulted from services performed under a Supply Agreement with Auris Health, Inc. (“Auris Health”), a part of the Johnson & Johnson family of companies. Under the agreement, Encision collaborated on the integration of AEM® Technology into monopolar instrumentation produced by Auris Health for advanced surgical applications. On August 23, 2021, we entered into a Supply Agreement with Auris Health. Towards the end of the first quarter business needs took a different direction and on May 5, 2022, the parties mutually agreed to terminate all the agreements. We enjoyed collaborating with the team at J&J and we look forward to future opportunities to work together.”

 

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, 2022 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, [email protected]

 

 

 

 

Encision Inc.

Unaudited Condensed Statements of Operations

(in thousands, except per share information)

 

 

		Three Months Ended
		June 30, 2022				June 30, 2021
Product revenue		$	1,696			$	1,718
Service revenue			458				290
Total revenue			2,154				2,008
			—
Product cost of revenue			870				838
Service cost of revenue							143
Total cost of revenue			870				981
Gross profit			1,284				1,027
Operating expenses:
Sales and marketing			503				528
General and administrative			344				327
Research and development			170				177
Total operating expenses			1,017				1,032
Operating income (loss)			267				(5	)
Interest expense, extinguishment of debt     income and other income, net			(2	)			(2	)
Income (loss) before provision for income taxes			265				(7	)
Provision for income taxes			—				—
Net income (loss)		$	265			$	(7	)
Net income (loss) per share—basic and diluted		$	0.02			$	0.00
Weighted average number of basic shares			11,720				11,583
Weighted average number of diluted shares			12,021				11,583

 

 

 

 

Encision Inc.

Unaudited Condensed Balance Sheets

(in thousands)

 

		June 30, 2022				March 31, 2022
ASSETS
Cash		$	828			$	950
Accounts receivable, net			921				948
Inventories, net			1,799				1,584
Prepaid expenses and other assets			101				120
Total current assets			3,649				3,602
Equipment, net			235				189
Right of use asset			715				786
Patents, net			178				181
Other assets			42				34
Total assets		$	4,819			$	4,792
LIABILITIES AND SHAREHOLDERS’ EQUITY
Accounts payable		$	388			$	576
Secured notes			23				22
Accrued compensation			221				191
Other accrued liabilities			115				125
Accrued lease liability			371				362
Total current liabilities			1,118				1,276
Secured notes			201				206
Accrued lease liability			477				564
Unsecured promissory note			—				—
Total liabilities			1,796				2,046
Common stock and additional paid-in capital			24,288				24,275
Accumulated (deficit)			(21,265	)			(21,529	)
Total shareholders’ equity			3,023				2,746
Total liabilities and shareholders’ equity		$	4,819			$	4,792

 

 

 

Encision Inc.

Unaudited Condensed Statements of Cash Flows

(in thousands)

 

		Three Months Ended
		June 30, 2022				June 30, 2021
Operating activities:
Net income (loss)		$	265			$	(7	)
Adjustments to reconcile net income (loss) to cash (used in) operating activities:
Depreciation and amortization			20				27
Share-based compensation expense			12				8
(Recovery from) doubtful accounts, net			—				(25	)
(Recovery from) inventory obsolescence, net			(1	)			(49	)
Changes in operating assets and liabilities:
Right of use asset, net			(8	)			(5	)
Accounts receivable			27				(91	)
Inventories			(214	)			(97	)
Prepaid expenses and other assets			11				44
Accounts payable			(188	)			132
Accrued compensation and other accrued liabilities			20				(65	)
Net cash (used in) operating activities			(56	)			(128	)
Investing activities:
Acquisition of property and equipment			(58	)			(7	)
Patent costs			(5	)			(7	)
Net cash (used in) investing activities			(63	)			(14	)
Financing activities:
(Paydown of) secured  notes			(3	)			(3	)
Net cash (used in) provided by financing activities			(3	)			(3	)
Net (decrease) in cash			(122	)			(145	)
Cash, beginning of period			950				1,474
Cash, end of period		$	828			$	1,329

 

 

 

 

 

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