Encision Reports First Quarter Fiscal Year 2022 Results

BOULDER, Colo., Aug. 9, 2021 /PRNewswire/ -- Encision Inc. (PK:ECIA), a medical device company owning patented Active Electrode Monitoring (AEM®) Technology that prevents dangerous stray electrosurgical burns in minimally invasive surgery, today announced financial results for its fiscal 2022 first quarter that ended June 30, 2021.

The Company posted quarterly net revenue of $2.01 million for a quarterly net loss of $7 thousand, or $0.00 per diluted share. These results compare to net revenue of $1.35 million for a quarterly net loss of $139 thousand, or $(0.01) per diluted share, in the year-ago quarter. Gross margin on net revenue was 51% in the fiscal 2022 first quarter and 48% in the fiscal 2021 first quarter. Gross margin in the fiscal 2021 first quarter was lower due to reduced product volume that resulted in higher costs of unit produced.

"Total revenue, which included service revenue, increased 49% from our COVID impacted first quarter revenue of last year," said Gregory Trudel, President and CEO of Encision Inc. "We continue to be positive as we assess and react to how surgery rebounds from the pandemic. We have learned to flex our sales tactics as the market reacts to waves of COVID and we encounter varying degrees of direct access to our customers.

"Service revenue for our first quarter of fiscal 2022 resulted from services performed under a Master Services Agreement with Auris Health, Inc. ("Auris Health"), a part of the Johnson & Johnson family of companies. Under the agreement, we are collaborating on the integration of AEM Technology into monopolar instrumentation produced by Auris Health for advanced surgical applications. This work is ongoing and is reported separately, as service revenue, in our Statement of Operations.

"In February 2021, we entered into an unsecured promissory note under the Paycheck Protection Program ("PPP") for a principal amount of $533,118. Under the terms of the CARES Act, a PPP loan recipient may apply for, and be granted, forgiveness for all or a portion of loans granted under the PPP. Such forgiveness will be determined based upon the use of loan proceeds for payroll costs, rent and utility costs, and the maintenance of employee and compensation levels. We expect that we will achieve the requirements for, and have applied for, forgiveness of that note."

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, 2021 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

   

June 30, 2021

 

June 30, 2020

Product revenue

 

$1,718

 

$1,348

Service revenue

 

290

 

––

Total revenue

 

2,008

 

1,348

         

Product cost of revenue

 

838

 

701

Service cost of revenue

 

143

 

––

Total cost of revenue

 

981

 

701

         

Gross profit

 

1,027

 

647

Operating expenses:

       

Sales and marketing

 

528

 

368

General and administrative

 

327

 

287

Research and development

 

177

 

141

Total operating expenses

 

1,032

 

796

Operating (loss)

 

(5)

 

(149)

Interest expense and other income (expense), net

 

(2)

 

10

(Loss) before provision for income taxes

 

(7)

 

(139)

Provision for income taxes

 

––

 

––

Net (loss)

 

$ (7)

 

$(139)

Net (loss) per share—basic and diluted

 

$ 0.00

 

$ (0.01)

Weighted average number of basic and diluted shares

 

11,583

 

11,583

Encision Inc.

Unaudited Condensed Balance Sheets

(in thousands)

 
   

June 30, 2021

 

March 31, 2021

ASSETS

       

Cash

 

$1,329

 

$1,474

Accounts receivable, net

 

1,141

 

1,024

Inventories, net

 

1,591

 

1,446

Prepaid expenses and other assets

 

104

 

154

Total current assets

 

4,165

 

4,098

Equipment, net

 

258

 

266

Patents, net

 

209

 

213

Right of use asset

 

994

 

1,061

Other assets

 

26

 

21

Total assets

 

$ 5,652

 

$ 5,659

         

LIABILITIES AND SHAREHOLDERS' EQUITY

       

Accounts payable

 

$ 521

 

$ 390

Secured notes

 

21

 

20

Accrued compensation

 

216

 

182

Other accrued liabilities

 

183

 

282

Accrued lease liability

 

310

 

303

Total current liabilities

 

1,251

 

1,177

Secured notes

 

216

 

220

Accrued lease liability

 

848

 

927

Unsecured promissory note

 

533

 

533

Total liabilities

 

2,848

 

2,857

Common stock and additional paid-in capital

 

24,274

 

24,265

Accumulated (deficit)

 

(21,470)

 

(21,463)

Total shareholders' equity

 

2,804

 

2,802

Total liabilities and shareholders' equity

 

$ 5,652

 

$ 5,659

Encision Inc.

Unaudited Condensed Statements of Cash Flows

(in thousands)

 
   

Years Ended

   

June 30, 2021

 

June 30, 2020

Operating activities:

       

Net (loss)

 

$ (7)

 

$ (139)

Adjustments to reconcile net (loss) to cash

(used in) operating activities:

       

Depreciation and amortization

 

27

 

26

Share-based compensation expense

 

8

 

8

(Recovery from) provision for doubtful accounts, net

 

(25)

 

(13)

Provision for (recovery from) inventory obsolescence, net

 

(49)

 

14

Changes in operating assets and liabilities:

       

Right of use asset, net

 

(5)

 

20

Accounts receivable

 

(91)

 

97

Inventories

 

(97)

 

(96)

Prepaid expenses and other assets

 

44

 

(40)

Accounts payable

 

132

 

(52)

Accrued compensation and other accrued liabilities

 

(65)

 

10

Net cash (used in) operating activities

 

(128)

 

(165)

         

Investing activities:

       

Acquisition of property and equipment

 

(7)

 

––

Patent costs

 

(7)

 

(4)

Net cash (used in) investing activities

 

(14)

 

(4)

         

Financing activities:

       

(Paydown of) credit facility, net change

 

––

 

(187)

(Paydown of) secured notes

 

(3)

 

––

Unsecured promissory note

 

––

 

599

Net cash (used in) generated by financing activities

 

(3)

 

412

         

Net (decrease) increase in cash

 

(145)

 

243

Cash, beginning of period

 

1,474

 

385

Cash, end of period

 

$1,329

 

$ 628

           

Cision View original content:https://www.prnewswire.com/news-releases/encision-reports-first-quarter-fiscal-year-2022-results-301350344.html

SOURCE Encision Inc.


Company Codes: OTC-BB:ECIA, OTC-PINK:ECIA, OtherOTC:ECIA

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