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Encision Inc (ECIA) SEC Filing 8-K Material Event for the period ending Thursday, February 10, 2022

Encision Inc

CIK: 930775 Ticker: ECIA

Exhibit 99.1

 

 

 

 

February 10, 2022

 

Encision Reports Third Quarter Fiscal Year 2022 Results

Boulder, Colorado, February 10, 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 2022 third quarter that ended December 31, 2021.

 

The Company posted quarterly net revenue of $1.94 million for a quarterly net loss of $16 thousand, or $0.00 per diluted share. These results compare to net revenue of $2.16 million for a quarterly net income of $599 thousand, or $0.05 per diluted share, in the year-ago quarter. Net income in last year’s quarter included $599 thousand of extinguishment of debt income. Gross margin on net revenue was 52% in the fiscal 2022 third quarter and 51% in the fiscal 2021 third quarter.

 

The Company posted nine months net revenue of $6.07 million for a nine months net income of $337 thousand, or $0.03 per diluted share. Net income included extinguishment of debt income. These results compare to nine months net revenue of $5.39 million for a nine months net income of $469 thousand, or $0.04 per diluted share, in the year-ago nine months. Net income included extinguishment of debt income. Gross margin on net revenue was 49% in the fiscal 2022 nine months and 51% in the fiscal 2021 nine months. Gross margin in the fiscal 2022 nine months was lower due to higher material costs.

“Total revenue, which included service revenue, decreased 10% from our third quarter revenue of last year,” said Gregory Trudel, President and CEO of Encision Inc. “COVID reduced total surgical procedures and our revenues suffered as a result. We continue to be positive as we assess and navigate the ups and downs of the pandemic market and continuously look for opportunities to serve our customers and to drive adoption. Our sales and marketing efforts are yielding new customers for our EnTouchâ 2X Scissors and we look forward to their contributions as the market bounces back.”

“Service revenue for our third 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 August 2021, we signed a Supply Agreement with Auris Health. During the term of the agreement, Auris has agreed to buy certain AEM® Technology enabled products exclusively from us. We are proud of being awarded this agreement and look forward to our continued relationship with Auris.”

 

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   Nine Months Ended 
   December 31, 2021   December 31, 2020   December 31, 2021   December 31, 2020 
Product revenue  $1,734   $1,999   $5,348   $5,093 
Service revenue   210    164    718    298 
Total revenue   1,944    2,163    6,066    5,391 
                     
Product cost of revenue   828    976    2,729    2,501 
Service cost of revenue   106    81    356    150 
Total cost of revenue   934    1,057    3,085    2,651 
                     
Gross profit   1,010    1,106    2,981    2,740 
Operating expenses:                    
Sales and marketing   505    581    1,595    1,513 
General and administrative   327    373    994    999 
Research and development   194    139    584    443 
Total operating expenses   1,026    1,093    3,173    2,955 
Operating (loss) income   (16)   13    (192)   (215)
Interest expense, extinguishment of debt     income and other income, net   —      586    529    684 
(Loss) income before provision for income taxes   (16)   599    337    469 
Provision for income taxes   —      —      —      —   
Net (loss) income  $(16)  $599   $337   $469 
Net (loss) income per share—basic and diluted  $0.00   $0.05   $0.03   $0.04 
Weighted average number of basic shares   11,678    11,583    11,599    11,583 
Weighted average number of diluted shares   11,678    11,709    12,045    11,750 

 

 

 

 
 
 

Encision Inc.

Unaudited Condensed Balance Sheets

(in thousands)

 

   December 31, 2021   March 31, 2021 
ASSETS          
Cash  $1,424   $1,474 
Accounts receivable, net   1,029    1,024 
Inventories, net   1,406    1,446 
Prepaid expenses and other assets   149    154 
Total current assets   4,008    4,098 
Equipment, net   235    266 
Right of use asset   856    1,061 
Patents, net   189    213 
Other assets   31    21 
Total assets  $5,319   $5,659 
LIABILITIES AND SHAREHOLDERS’ EQUITY          
Accounts payable  $531   $390 
Secured notes   18    20 
Accrued compensation   238    182 
Other accrued liabilities   138    282 
Accrued lease liability   357    303 
Total current liabilities   1,282    1,177 
Secured notes   212    220 
Accrued lease liability   648    927 
Unsecured promissory note   —      533 
Total liabilities   2,142    2,857 
Common stock and additional paid-in capital   24,304    24,265 
Accumulated (deficit)   (21,127)   (21,463)
Total shareholders’ equity   3,177    2,802 
Total liabilities and shareholders’ equity  $5,319   $5,659 


 

 

 
 
 

 

Encision Inc.

Unaudited Condensed Statements of Cash Flows

(in thousands)

 

   Nine Months Ended 
   December 31, 2021   December 31, 2020 
Operating activities:          
Net income  $337   $469 
Adjustments to reconcile net income to cash
(used in) provided by operating activities:
          
Extinguishment of debt income   (533)   (599)
Depreciation and amortization   86    68 
Share-based compensation expense   30    25 
Other income from release of accounts payable   —      (56)
(Recovery from) doubtful accounts, net   (35)   (31)
(Recovery from) provision for inventory obsolescence, net   (28)   24 
Changes in operating assets and liabilities:          
Right of use asset, net   (20)   68 
Accounts receivable   30    (130)
Inventories   67    80 
Prepaid expenses and other assets   (5)   (108)
Accounts payable   142    87 
Accrued compensation and other accrued liabilities   (88)   212 
Net cash (used in) provided by operating activities   (17)   109 
           
Investing activities:          
Acquisition of property and equipment   (18)   (4)
Patent costs   (13)   (16)
Net cash (used in) investing activities   (31)   (20)
           
Financing activities:          
Net proceeds from options exercised   8    —   
(Paydown of) credit facility, net change   —      (371)
(Paydown of) secured  notes   (10)   —   
EIDL loan   —      152 
Unsecured promissory note   —      599 
Net cash (used in) generated by financing activities   (2)   380 
           
Net (decrease) increase in cash   (50)   469 
Cash, beginning of period   1,474    385 
Cash, end of period  $1,424   $854 

 

 


 

 

 

 

 

 

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Ticker: ECIA
CIK: 930775
Form Type: 8-K Corporate News
Accession Number: 0001079973-22-000140
Submitted to the SEC: Thu Feb 10 2022 11:10:00 AM EST
Accepted by the SEC: Thu Feb 10 2022
Period: Thursday, February 10, 2022
Industry: Surgical And Medical Instruments And Apparatus
Events:
  1. Earnings Release
  2. Financial Exhibit

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