Encision Inc.

What they do

Encision designs, manufactures, and markets AEM Surgical Instruments and Monitors. The AEM system includes shielded 5mm instruments and a monitor compatible with most electrosurgical generators, and can be adapted for robotic systems. The company also generates service revenue from engineering services, such as a Master Services Agreement with Vicarious Surgical Inc. to integrate AEM technology into a robotic surgical system.

Revenue drivers

• Replacement AEM Instruments — Recurring revenue from sales of replacement reusable and disposable AEM instruments to hospitals and surgery centers already using AEM technology; represented over 90% of product revenue in the three and six months ended September 30, 2024.
• AEM Monitors and Accessories — Sales of AEM monitors and related equipment to new hospital accounts, which then drive recurring instrument sales; part of the broader AEM product line.
• Service Revenue — Engineering services, such as the Master Services Agreement with Vicarious Surgical Inc., contributed $337,628 in FY25 versus $153,913 in FY24, and is a high-margin revenue stream management is trying to grow.
• EndoShield 2 Disposable System — A reposable (reusable/disposable) burn protection system that can be used across multiple procedures without reprocessing and is compatible with all prevalent electrosurgical generators, marketed to ease hospital conversion to AEM technology.

Recent performance

For fiscal year ended March 31, 2025, total net revenue was $6.6 million, down from $7.3 million in FY23 and $6.6 million in FY24. Product revenue was $6.2 million, down 3% from FY24, while service revenue increased to $337,628. Gross profit margin improved to 54% of product revenue in FY25 from 48% in FY24, driven by lower material costs. Net loss narrowed to $220,198 in FY25 from a $691,783 loss in FY24. For the quarter ended September 30, 2025, revenue was $1.5 million, and cash and equivalents were $71,731 with an accumulated deficit of $23.1 million.

Strategy

Management plans to grow the AEM franchise through a campaign emphasizing clinical, economic, and safety benefits, a medico-legal initiative, and new AEM products. The company intends to expand its direct sales force to five sales managers, each with a territory, and to develop disposable versions of more AEM products to meet market demand. Vertical integration in electrosurgery, instrument design, and manufacturing is expected to support cost reductions and new product development. Management also seeks to create service revenue streams through partnerships and collaborations on foundational technologies.

Risks

• Sustained operating losses — Encision has an accumulated deficit of $23,074,211 at September 30, 2025, and management warns it may operate at a net loss in future periods due to product development, sales network expansion, and fixed costs.
• Revenue decline from non-essential procedures — Product revenue decreased 3% in FY25 primarily due to a decrease in non-essential surgical procedures, which could continue to impact sales.
• Dependence on service revenue partnerships — Service revenue is tied to a Master Services Agreement with Vicarious Surgical Inc., and the loss or non-renewal of such agreements could reduce high-margin revenue.
• Limited cash position — As of September 30, 2025, cash and equivalents were only $71,731, which may be insufficient to fund operations without additional financing, as noted in risk factors.

Outlook

Management expects fiscal year 2026 revenue to increase, with gross margin improving as a percentage of revenue due to higher product production. Sales and marketing expenses are expected to rise to support direct sales representatives, and research and development spending is planned to expand the AEM product line with new refinements. The company will focus on growing the AEM franchise through new hospital customers and existing account penetration.