Company: ECIA
Filing Date: 2025-08-15
Form Type: 10-Q
Source: 0001079973-25-001326
Chunk: 14

Company: ENCISION INC
Filing Date: 2025-08-15
Form: 10-Q
Item: Item 8
Chunk 14
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 involved in MIS. Surgeons, nurses, biomedical engineers, the medicolegal community, malpractice insurance carriers, and electrosurgical
device manufacturers advocate the use of AEM technology. To date, we have focused our marketing strategies on expanding the market awareness
of AEM technology and our broad independent endorsements, and we have continued efforts to improve and expand AEM technology penetration.

When a hospital or surgery center changes to AEM technology,
we receive recurring revenue from sales of replacement instruments. We believe that there is no directly competing technology to supplant
AEM products. The replacement market of reusable and disposable AEM products in hospitals and surgery centers that use our AEM technology
represented over 90% of our product revenue during the three months ended June 30, 2025. This revenue stream is expected to grow as the
base of accounts using AEM technology expands. In addition, we intend to develop more disposable versions of our AEM products in order
to meet market demands and expand our sales opportunities.

11 

We have an accumulated deficit of $22,806,378 at June
30, 2025. A significant portion of our operating funds have been provided by issuances of our common stock and warrants and the exercise
of stock options to purchase our common stock, loans, and (in some periods) by operating profits. Should our liquidity be diminished in
the future because of operating losses, we may be required to seek additional capital.

During the three months ended June 30, 2025, we used
$115,508 of cash in our operating activities and used $6,535 for investments in property and equipment. At June 30, 2025, we had $47,918
in cash and at March 31, 2025 we had $257,433 in cash available to fund future operations, an decrease of $209,515 from March 31, 2025.
The decrease to cash was principally the result of cash used by operating activities and repayment of borrowing from our line of credit.
Our working capital was $1,172,666 at June 30, 2025 compared to $1,036,850 at March 31, 2025.

Historical Perspective

We were organized in 1991 and spent several years
developing the AEM monitoring system and protective sheaths to adapt to conventional electrosurgical instruments. We have invested heavily
in an effort to protect our valuable technology, and, as a result of this effort,