Encision Inc., a medical device company specializing in patented surgical instruments for minimally-invasive surgery, reported its financial results for the three and six months ended September 30, 2024. The company experienced a decline in net revenue, with figures of $1.76 million for the three months and $3.39 million for the six months, down from $1.83 million and $3.48 million, respectively, in the same periods of the previous year. This decrease is attributed to reduced sales of disposable products, despite an increase in service revenue due to a Master Services Agreement with Vicarious Surgical Inc.

Gross profit for the three months ended September 30, 2024, was $828.5 thousand, a decrease of 4% from $862.6 thousand in the prior year, primarily due to a non-cash cost increase in inventory reserves. However, gross profit for the six months increased by 3% to $1.77 million, reflecting a gross margin improvement from 50% to 52%. Operating expenses rose significantly, with total operating expenses for the three months reaching $987.4 thousand, up from $856.6 thousand in the previous year, driven by increased sales and marketing costs and higher research and development expenditures.

The company reported an operating loss of $158.9 thousand for the three months ended September 30, 2024, compared to a modest operating income of $6.0 thousand in the same period last year. The net loss for the quarter was $170.3 thousand, a substantial increase from a net loss of $7.5 thousand in the prior year. For the six-month period, the net loss was $148.2 thousand, slightly higher than the $148.0 thousand loss reported in the same period of 2023.

As of September 30, 2024, Encision's cash position improved significantly to $230.0 thousand, up from $42.5 thousand at the end of March 2024, primarily due to cash generated from operating activities and borrowings. Total assets decreased to $3.52 million, while total liabilities also declined to $1.82 million, resulting in total shareholders' equity of $1.70 million, down from $1.83 million at the end of the previous fiscal period.

Management has implemented strategies to address rising material costs, including increasing product pricing and focusing on enhancing working capital. The company continues to invest in research and development for next-generation AEM products and aims to optimize sales execution and expand market awareness of its AEM technology. Encision holds an accumulated deficit of $22.7 million as of September 30, 2024, and has been issued 16 unexpired patents related to its AEM technology.