Encision Reports Second Quarter Fiscal Year 2024 Results

BOULDER, CO / ACCESSWIRE / November 14, 2023 / Encision Inc. (OTC PINK:ECIA), a medical device company owning patented Active Electrode Monitoring (AEMĀ®) 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-month 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-month 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 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     Six Months Ended  
    September 30, 2023     September 30, 2022     September 30, 2023     September 30, 2022  
Product revenue
  $ 1,752     $ 1,704     $ 3,366     $ 3,400  
Service 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 cost of revenue
    37       --       58       --  
Total cost of revenue
    964       872       1,755       1,743  
                                 
Gross profit
    862       832       1,725       2,116  
Operating expenses:
                               
Sales and marketing
    389       490       823       993  
General and administrative
    366       397       755       742  
Research and development
    101       223       269       393  
Total operating expenses
    856       1,110       1,847       2,128  
Operating income (loss)
    6       (278 )     (122 )     (12 )
Interest expense and other income, net
    (13 )     (1 )     (26 )     (3 )
(Loss) before provision for income taxes
    (7 )     (279 )     (148 )     (15 )
Provision for income taxes
    --       --       --       --  
Net (loss)
  $ (7 )   $ (279 )   $ (148 )   $ (15 )
Net (loss) per share-basic and diluted
  $ 0.00     $ (0.02 )   $ (0.01 )   $ 0.00  
Weighted average shares-basic and diluted
    11,770       11,752       11,770       11,735  

Encision Inc.
Unaudited Condensed Balance Sheets
(in thousands)

    September 30, 2023     March 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  


Encision Inc.
Unaudited Condensed Statements of Cash Flows
(in thousands)

    Six Months Ended        
    September 30, 2023     September 30, 2022  
Operating activities:
           
Net (loss)
  $ (148 )   $ (15 )
Adjustments to reconcile net (loss) to cash
(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  
                         

SOURCE: Encision, Inc.


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