Company: ECIA
Filing Date: 2025-08-15
Form Type: 10-Q
Source: 0001079973-25-001326
Chunk: 16

Company: ENCISION INC
Filing Date: 2025-08-15
Form: 10-Q
Item: Item 8
Chunk 16
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 our instruments, which depends on factors such as ergonomics, quality, and ease of use, in addition
to the technological and safety advantages of AEM products. If surgeons prefer other instruments to our instruments, our business results
will suffer.

Possibility of Operating Losses: 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. We have made
strides toward improving our operating results, but due to the ongoing need to develop, optimize, and train our direct sales managers
and the independent sales representative network, the need to support the development of refinements to our product line, and the need
to increase sustained sales to a level adequate to cover fixed and variable operating costs, we may operate at a net loss. Sustained losses,
or our inability to generate sufficient cash flow from operations to fund our obligations, may result in a need to raise additional capital.

12 

Revenue Growth: We expect to generate increased
product revenue in the U.S. from sales to new customers and from expanded sales to existing customers as the medical device industry stabilizes
and our network of direct and independent sales representatives becomes more efficient. We believe that the visibility and credibility
of the independent clinical endorsements for AEM technology will contribute to new accounts and increased product revenue in fiscal year
2026. We also expect to increase market share through promotional programs that place our AEM monitors at no charge in hospitals that
commit to standardizing with AEM instruments. However, all of these efforts to increase market share and grow product revenue will depend
in part on our ability to expand the efficiency and effective coverage range of our direct and independent sales representatives, as well
as maintain and, in some cases, improve the quality of our product offerings. The omission or delay of elective surgeries would negatively
impact the extent and timing of revenue growth. Service revenue represents design, development and product supply revenue from our agreements
with strategic partners.

We also have longer-term initiatives in place to improve
our prospects. We expect that the development of next-generation versions of our AEM products will better position our products in the
marketplace and improve our retention rate at hospitals and