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 UNITED
STATES

 SECURITIES
AND EXCHANGE COMMISSION

 WASHINGTON,
D.C. 20549

 FORM

 (Mark One)

 ANNUAL
REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 193

 For the fiscal year ended March 31, 2024

 OR

 TRANSITION
REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 For
the transition period ______ from to _______

 Commission
File No.: 0-28604

 ENCISION INC.

 (Exact
name of registrant as specified in its charter)

 Colorado

 84-1162056

 (State or other jurisdiction of incorporation or organization)

 (I.R.S.
Employer Identification
No.)

 6797 Winchester Circle, Boulder, Colorado 80301

 (Address
of principal executive offices) (Zip Code)

 Registrant's
telephone number, including area code: (303) 444-2600

 Securities
registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:

 Title
 of each class

 Trading
 Symbol(s)

 Name
 of each exchange on which registered

 Common
 Stock, no par value

 ECIA

 OTC
 Bulletin Board

 Securities
registered under Section 12(g) of the Act: None

 Indicate by check mark if the registrant is a well-known seasoned issuer,
as defined in Rule 405 of the Securities Act. Yes o No

 Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or 15(d) of the Exchange Act. Yes o No

 Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes
No o

 Indicate by check mark whether the registrant has submitted electronically
every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the
preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No

 Indicate by check mark whether the registrant is a large accelerated filer,
an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of "large
accelerated filer," "accelerated filer", "smaller reporting company" and "emerging growth company"
in Rule 12b-2 of the Exchange Act.

 Large accelerated filer o

 Accelerated filer o

 Non-accelerated filer

 Smaller reporting company

 Emerging growth company o

 Indicate by check mark whether the registrant has filed a report on and
attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b)
of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. Yes No

 If securities are registered pursuant to Section 12(b) of the Act, indicate
by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously
issued financial statements.

 Indicate by check mark whether any of those error corrections are restatements
that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during
the relevant recovery period pursuant to § 240.10D-1(b).

 Indicate by check mark whether the registrant is a shell company (as defined
in Rule 12b-2 of the Exchange Act). Yes o No

 As of September 30, 2023, the aggregate market value of the shares of common
stock held by non-affiliates of the issuer on such date was $ 3,363,235. This figure is based on the average bid and asked price of $0.46
per share of the issuer's common stock on September 30, 2023 as quoted on the OTC Bulletin Board.

 The number of shares outstanding of each of the issuer's classes
of common equity, as of the last practicable date.

 Common Stock, no par value

 11,875,145

 (Class)

 (Outstanding at May 31, 2024)

 Documents Incorporated by Reference: Definitive Proxy Statement for the
2023 Annual Shareholders' Meeting to be filed with the Securities and Exchange Commission and incorporated by reference as described in
Part III. The 2024 Proxy Statement will be filed within 120 days after the end of the fiscal year ended March 31, 2024.

 Table
of Contents

 Item
 1.
 Business

 Item
 1A.
 Risk Factors

 Item
 1B.
 Unresolved Staff Comments

 Item
 1C.
 Cybersecurity

 Item
 2.
 Properties

 Item
 3.
 Legal Proceedings

 Item
 4.
 Mine Safety Disclosures

 PART
 II

 Item
 5.
 Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

 Item
 6.
 [ Reserved ]

 Item
 7.
 Management's Discussion and Analysis of Financial Condition and Results of Operations

 Item
 7A.
 Quantitative and Qualitative Disclosures About Market Risk

 Item
 8.
 Financial Statements and Supplementary Data

 Item
 9.
 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

 Item
 9A.
 Controls and Procedures

 Item
 9B.
 Other Information

 PART
 III

 Item
 10.
 Directors, Executive Officers and Corporate Governance

 Item
 11.
 Executive Compensation

 Item
 12.
 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

 Item
 13.
 Certain Relationships and Related Transactions, and Director Independence

 Item
 14.
 Principal Accounting Fees and Services

 PART
 IV

 Item
 15.
 Exhibits, Financial Statement Schedules

 Item
 16.
 Form 10-K Summary

 Forward-Looking

contained in this Annual Report on Form 10-K include forward looking statements within the meaning of the Private Securities Litigation
Reform Act of 1995 and involve substantial risks and uncertainties that may cause actual results to differ materially from those indicated
by the forward looking statements. All forward looking statements in this Annual Report on Form 10-K, including statements about our
strategies, expectations about new and existing products, market demand, acceptance of new and existing products, technologies and opportunities,
market size and growth, and return on investments in products and market, are based on information available to us on the date of this
document, and we assume no obligation to update such forward looking statements. In some cases, you can identify forward looking statements
by terminology such as "may", "will", "should", "could", "expects", "plans",
"intends", "anticipates", "believes", "estimates", "predicts", "potential",
or "continue" or the negative of such terms or other comparable terminology. Readers of this Annual Report on Form 10-K are
strongly encouraged to review the section entitled "Risk Factors".

 PART
I

 Item
1. Business

 Company
Overview

Inc. ("Encision", "we", "us", "our" or the "Company"), a medical device company
based in Boulder, Colorado, has developed and markets innovative technology that provides unprecedented outcomes and patient safety in
minimally-invasive surgery. We believe that our patented Active Electrode Monitoring (AEM) Surgical Instruments are changing the
marketplace for electrosurgical devices and laparoscopic instruments by providing a solution to a well-documented hazard unique to laparoscopic
surgery.

 We
address market opportunities created by the increase in minimally-invasive surgery ("MIS") and surgeons' use of electrosurgery
devices in these procedures. The product opportunity exists in that monopolar electrosurgery instruments used in laparoscopic procedures
provide excellent clinical results but are also susceptible to causing inadvertent collateral tissue damage outside the surgeon's
field of view. The risk of unintended electrosurgical burn injury to the patient in laparoscopic surgery has been well documented. This
risk poses a threat to patient safety, including the risk of death, and creates liability exposure for surgeons and hospitals, and increased
and preventable readmissions. Our technology helps to reduce hospital risk and liability.

 Our
patented AEM technology provides surgeons with the desired tissue effects of cutting and coagulating tissue in laparoscopic procedures,
while preventing stray electrosurgical energy that can cause complications and even death. AEM Surgical Instruments are equivalent to
conventional instruments in size, shape, ergonomics and functionality, but they incorporate a proprietary shield and electrically connect
to an Active Electrode Monitor to dynamically and continuously monitor the flow of electrosurgical current, thereby preventing patient
injury from stray monopolar energy. With our "shielded and monitored" instruments, surgeons are able to perform electrosurgical
procedures more safely, effectively and economically than is possible using conventional instruments.

 AEM
technology has been recommended and endorsed by sources from many groups involved in MIS. Surgeons, nurses, biomedical engineers, the
medicolegal community, malpractice insurance carriers and electrosurgical device manufacturers advocate the use of AEM technology. In
May 2020, the Food and Drug Administration issued a Safety Communication that stated that, "In addition to serving as an ignition
source, monopolar energy use can directly result in unintended patient burns from capacitive coupling and intra-operative insulation
failure."

 Business
Highlights

 Proprietary,
Patented Technology

 We
have developed and launched patented AEM Surgical Instruments and Monitors that enhance patient safety and patient outcomes in laparoscopic
surgical procedures. We have been issued 16 unexpired patents relating to AEM technology from the United States Patent and Trademark
Office, each encompassing multiple claims, and which have between one and seventeen years remaining. We also have patents relating to
AEM technology issued in Europe, Japan, Canada and Australia.

 Technology
Solves a Well Documented Risk in Minimally Invasive Surgery

 MIS
offers significant benefits for patients by reducing trauma, hospital stays, recovery times and medical costs. However, these benefits
have not been achieved without the emergence of new risks. The risk of unintended tissue damage from stray electrosurgical energy has
been well documented. Such injuries can be especially troubling given that often these injuries are out of the field of view, can go
unrecognized at the time of surgery, and can lead to a cascade of adverse events, including death. Our patented AEM technology eliminates
the risk of stray electrosurgical burns in MIS while providing surgeons with the tissue effects they desire.

Line has been Developed and Launched

 Our
AEM Surgical Instruments and Monitors have been engineered to provide a seamless transition for surgeons switching from conventional
laparoscopic instruments. AEM technology has been integrated into instruments that have the same look, feel and functionality as conventional
instruments that surgeons have been using for years. The AEM product line encompasses a full range of instrument sizes, types and styles
favored by surgeons. While always quality-centric, we added a new level of customer-centricity with increased marketing focus on our
reposable AEM EndoShield 2 Burn Protection System ("EndoShield 2"). The EndoShield 2 can be used for a number of surgical
procedures without reprocessing, can easily be used in any OR room with all prevalent electrosurgical generators, and eliminates a significant
barrier to adoption. Thus, hospitals can make a complete and smooth conversion to our product line, thereby advancing patient safety
in MIS.

 Emerging
as a Standard of Care

 We
believe that AEM technology is following a similar path as previous technological developments in surgery. Throughout the history of
electrosurgery, companies that have developed significant technological breakthroughs in patient safety have seen their technologies
become widely used. As with "Isolated" electrosurgical generators in the 1970s and with "REM" technology in the
1980s, AEM technology is receiving the broad endorsements that drove these previous new technologies to becoming a standard of care.
We believe that it is possible to follow a course similar to that of pulse oximetry in becoming a standard of care. Our proprietary AEM
technology enhances patient safety in MIS, especially in light of laparoscopic instruments being in closer proximity with single-port
and reduced-port approaches. As a result, knowledgeable clinicians are now advocating AEM technology's use.

 Developing
Distribution Network is Advancing Utilization of AEM Technology

 Our
AEM technology, in the hands of a sales network with broad access to the surgery marketplace, will help to increase utilization and market
share. Historically, our sales and marketing efforts have been hindered by our small size and limited distribution channels. While these
limitations continue, we improved our sales network which provided new hospital accounts with AEM technology in our fiscal year ended
March 31, 2024. Our supplier agreements with Group Purchasing Organizations ("GPOs") and other key hospitals systems are
beginning to expose more hospitals to the benefits of our AEM technology. During the year ended March 31, 2020, our proprietary patient
safety technology was recognized by the U.S. Department of Veterans Affairs and provides us with the opportunity to market our instruments
and monitors into VA Medical Centers. The VA is the largest medical system in the U.S. providing service to more than nine million veterans
across more than 1,200 facilities. Also, during the year ended March 31, 2020, we were awarded a prestigious Vizient Innovative Technology
Contract for monopolar surgical instruments and monitors. Vizient represents a diverse membership base that includes academic medical
centers, pediatric facilities, community hospitals, integrated health delivery networks and non-acute health care providers and represents
approximately $100 billion in annual medical devices and supplies purchasing volume.

 Market
Overview

 We
believe that our patented AEM technology provides us with marketing leverage toward gaining an increased share, both in terms of penetrations,
as well as increasing our impact per procedure with AEM instrumentation.

 In
the 1990s, surgeons began widespread use of minimally invasive surgical techniques. The benefits of MIS are substantial and include reduced
trauma for the patient, reduced hospital stay, shorter recovery time and lower medical costs. With improvements in the surgical laparoscopic
camera and in the variety of available instruments, laparoscopic surgery became popular among general surgeons, gynecologic surgeons
and other specialties. Laparoscopy now accounts for a large percentage of all surgical procedures performed in the United States. Approximately
75% of surgeons employ monopolar electrosurgery for laparoscopy according to INTERactive SURVeys. There are over 4.4 million laparoscopic
procedures performed annually in the United States, and this number is increasing annually. (Note: except as otherwise stated, market
estimates in this section are as reported by Patient Safety & Quality Healthcare).

 A
component of the endoscopic surgery products market includes laparoscopic hand instruments, including scissors, graspers, dissectors,
forceps, suction/irrigation devices, clip appliers and other surgical instruments of various designs, which provide a variety of tissue
effects. Among the laparoscopic hand instruments, approximately $500 million in sales annually are derived from instruments designed
for "monopolar" electrosurgical utility. This market for laparoscopic monopolar electrosurgical instruments is the market we
are targeting with our innovative AEM Surgical Instruments. Our proprietary AEM product line supplants the conventional "non-shielded,
non-monitored" electrosurgical instruments commonly used in laparoscopic surgery.

 When
a hospital decides to use our AEM technology, we make recurring sales to such hospital for replacement instruments. Sales from reusable
and disposable AEM products in hospitals represented over 90% of our sales in the fiscal year ended March 31, 2024, and we expect this
sales stream to grow as new hospitals increasingly adopt AEM technology and existing hospitals increase usage of AEM instrumentation.
We also expect to increase the value per procedure delivered to our customers and, therefore, expect the dollars per procedure to increase.
AEM Instruments are competitively priced compared to conventional laparoscopic instruments.

 We
aim to further develop the market by continuing to educate healthcare professionals about the benefits of AEM technology to advance patient
safety. We are developing new devices that integrate AEM technology, which we believe will have high surgeon appeal. We are also working
to improve the reach of our sales network to key decision makers who purchase or recommend the purchase of laparoscopic instruments and
electrosurgical devices. We are also pursuing relationships with selected GPOs, hospital systems and integrated delivery networks to
assist in promoting the benefits of AEM technology. We are seeking increasing international opportunities for AEM technology sales. We
estimate sales outside the U.S. to be at least as large as that of the U.S. market. We are growing our presence in Australia and New
Zealand and are seeking a new presence in the Middle East and Europe. As decisions are made at a system level, our intent is to highlight
the clinical, economic and safety benefits of using AEM technology.

 The
Technology

 Stray
Electrosurgical Burn Injury to the Patient

 Electrosurgical
technology is a valuable and prevalent resource for surgeons. Since its introduction in the 1930s, electrosurgical technology has continually
evolved and is estimated to be used in over 75% of all surgeries.

 The
primary form of electrosurgery, monopolar electrosurgery, is a standard tool for general surgeons throughout the world. In monopolar
electrosurgery, the surgeon uses an instrument (typically scissors, grasper/dissectors, spatula blades or suction-irrigation electrodes)
to deliver electrical current to patient tissue. This "active electrode" provides the surgeon with the ability to cut, coagulate
or ablate tissue as needed during the surgery. With the advent of MIS procedures, surgeons have continued using monopolar electrosurgery
as a primary tool for hemostatic incision, coagulation of bleeding tissues, excision and ablation. Unfortunately, conventional laparoscopic
electrosurgical instruments from competing manufacturers are susceptible to emitting stray electrical currents during the procedure.
This risk is exacerbated by the fact that laparoscopic camera systems limit the surgical field of view. Ninety percent of the instrument
may be outside the surgeon's field of view at any given time during the surgery.

 The
dangers of stray energy are twofold. Not only is there the danger created by the burn injury itself, but there is the compounding danger
that the burn will go unnoticed during the surgery and be allowed to manifest post-operatively as fecal peritonitis or other potentially
deadly and devastating outcomes. In many cases, the surgeon cannot detect stray electrosurgical burns at the time of the procedure because
it is out of their field of visualization. The resulting complication usually presents itself days later in the form of a severe infection
or sepsis, which often results in a hospital readmission and a difficult course of remedial surgeries and prolonged hospital recovery
for the patient. This situation has even resulted in fatalities.

 Stray
electrosurgical burn injury can result from two causes – instrument insulation failure and capacitive coupling. Instrument insulation
failure can be a common occurrence with laparoscopic instruments. Conventional active electrodes for laparoscopic surgery are designed
with the same basic construction – a single conductive element and an outer insulation coating. This insulation can fail during
the course of normal use during surgery. One university study found insulation defects in new disposable instruments before they were
used or after limited surgical use. It is also possible for instrument insulation to become flawed during the handling, cleaning and
sterilization process. This common insulation failure can allow electrical currents to "spark" from the instrument to unintended
and unseen tissue with potentially serious consequences for the patient, such as bowel perforations. Four different studies indicate
that the insulation failure rate in reusable instruments can be as high as one in five. Capacitive coupling is another way stray electrosurgical
energy can cause unintended burns during laparoscopy. Capacitive coupling is an electrical phenomenon that occurs when current is induced
from the instrument to nearby tissue or another instrument despite intact insulation. This potential for capacitive coupling is present
in all laparoscopic surgeries that utilize monopolar electrosurgery devices and are likely to occur outside the surgeon's field
of view.

 Conventional,
"non-shielded, non-monitored" laparoscopic instruments are susceptible to causing unintended, unseen burn injuries to the
patient in MIS. Instrument insulation failure and capacitive coupling are the primary causes of stray electrosurgical burns in laparoscopy
and are the two events over which the surgical team has traditionally had no control. Although alternative forms to monopolar electrosurgery
energy exist, these alternative energies tend to be less effective, take longer to achieve the desired surgical effect and are costlier.

 Encision's
AEM Surgical Instruments

 AEM
technology eliminates the risk of stray electrical energy caused by instrument insulation failure and capacitive coupling, and thus prevents
unintended burn injuries to patients.

 AEM
Surgical Instruments are an innovative solution to stray electrosurgical burns in laparoscopic surgery and are designed with the same
look, feel and functionality as conventional instruments. They direct electrosurgical energy where the surgeon desires, while continuously
monitoring the current flow to prevent stray electrosurgical energy from instrument insulation failure or capacitive coupling.

 Whereas
conventional instruments are simply a conductive element with a layer of insulation coating, AEM Surgical Instruments have a patented,
multi-layered design with a built-in "shield," a concept much like the third-wire ground in standard electrical cords. The
shield in these instruments is electrically connected and referenced back to an AEM Monitor at the electrosurgical generator. In the
event of a harmful level of stray electrical energy, the monitor shuts down the power at the source, assuring patient safety. If instrument
insulation failure should occur, the AEM system, while continually monitoring the instrument, immediately interrupts monopolar output
from the electrosurgical generator and alerts the surgical staff. The AEM system protects against capacitive coupling by providing a
neutral return path for "capacitive" electrical energy. Capacitive energy is continually drained away from the instrument
and away from the patient through the protective shield built into all AEM instruments and the connected AEM Monitor.

 The
AEM system consists of shielded 5mm AEM Instruments and an AEM monitor. The AEM Instruments are designed to function identically to the
conventional 5mm instruments that surgeons are familiar with, but with the added benefit of enhanced patient safety. Our entire line
of laparoscopic instruments has the integrated AEM design and includes the full range of instruments that are common in laparoscopic
surgery today. The AEM monitor is compatible with most electrosurgical generators, and can also be adapted for use in robotic systems.
AEM Surgical Instruments provide enhanced patient safety, require no change in surgeon technique and are cost competitive. Thus, conversion
to AEM Surgical Instruments is easy and economical.

 Historical
Perspective

 We
were organized as a Colorado corporation in 1991 and spent several years developing the AEM monitoring system and protective sheaths
to adapt to conventional electrosurgical instruments. During this period, we conducted product trials and applied for patents with the
United States Patent and Trademark Office and with International patent
 agencies. Our patents relate to the basic shielding and monitoring technologies that we incorporate
into our AEM products. As of March 31, 2024, we have 16 unexpired United States patents relating to specific implementations of shielding
and monitoring in instruments and continue to add patents as we further develop our proprietary technology and its applications.

 As
we evolved, it was clear to us that our "active electrode monitoring" technology needed to be integrated into the standard
laparoscopic instrument design. As the development program proceeded, it also became apparent that the merging of electrical and mechanical
engineering skills in the instrument development process for our patented, integrated electrosurgical instruments was a complex and difficult
task. As a result, instruments with integrated AEM technology were not completed for several years. Prior to offering a full range of
laparoscopic electrosurgical instrumentation, it was difficult for hospitals to commit to the AEM solution, as we did not have adequate
comparable surgical instrument options to match surgeon demand.

 With
the broad array of AEM instruments now available, the surgeon has a wide choice of instrument options and does not have to change surgical
technique to use our AEM products. Since conversion
to AEM technology is transparent to the surgeon, hospitals can now universally convert to AEM technology,
thus providing all of their laparoscopic surgery patients a higher level of safety. This development coincides with the continued
expansion of independent endorsements for AEM technology. Recommendations from the malpractice insurance and medicolegal communities
complement the broad clinical endorsements that AEM technology has garnered over the past few years, leading to better awareness for
the benefits of the technology.

 Products

 We
produce and market a full line of AEM Instruments, which are "shielded and monitored" to prevent stray electrosurgical burns
from insulation failure and capacitive coupling. Our product line includes a broad range of endo-mechanical instruments (scissors, graspers
and dissectors), fixed-tip electrodes and suction-irrigation electrodes. These AEM Instruments are available in a wide array of reusable
and disposable options. Also, we have a line of handles that are used for advanced laparoscopic procedures that incorporate stiffer shafts
and ergonomic features. In addition, we market an AEM monitor product line that is used in conjunction with AEM Instruments. Our AEM
EndoShield 2 Burn Protection System can be used for a number of surgical procedures without reprocessing, reduces the customer's
cost per use significantly, and eliminates a significant barrier to adoption. Thus, hospitals can make a complete and smooth conversion
to our product line, thereby advancing patient safety in MIS. The EndoShield 2 integrates our patented AEM technology into a disposable
smart cord and eliminates the need for a separate AEM monitor. It is changing the marketplace for electrosurgical devices and laparoscopic
instruments by providing a solution to a well-documented hazard unique to laparoscopic surgery.

 The
introduction of our AEM 2X enTouch Scissors ("2X Scissors") brought new levels of performance and economy
to the surgical scissor market by combining the best-in-class performance of our enTouch Disposable Scissors with the value and economy
of a multi-use device. We believe that our 2X Scissors will have a significant impact on the disposable laparoscopic scissor market.
Our enTouch Disposable Scissors have long been the surgeon preferred product because of their sharpness and micro-serrations. Our 2X Scissors
provide all those benefits at half the cost per use and reduce hospital waste and the impact on the environment as well. The thermochromic
technology integrated into 2X Scissors lets the hospital know when to replace the scissors with new ones and makes tracking
their use simple and easy. 2X Scissors work with hot AEM dissection and have a price point that makes them suitable for cold dissection
as well. 2X Scissors should open new use segments for us and create an opportunity for customers to standardize on our entire portfolio
of Active Electrode Monitoring (AEM) products.

 Services

 In
February 2023, we signed a Proof-of-Concept Services Agreement with Vicarious Surgical Inc. ("Vicarious"). The Vicarious
robot design intends to maximize visualization, precision, and control of instruments in robotic-assisted minimally invasive surgery.

 Sales
and Marketing Overview

 We
believe that AEM technology can become the standard of care in laparoscopic surgery worldwide. Our marketing efforts are focused on building
awareness by providing technical education for Health Care Providers on the dangers of stray electrosurgical energy and in providing
clinical and economic evidence to substantiate the value of AEM technology to hospitals, their staff, and their patients. We also leverage
relationships with prominent hospitals and surgeons where AEM Technology has increased their level of patient care and improved their
overall surgical outcomes.

 In
addition, there is increasing public interest in the reduction of medical errors and the advancement of patient safety. For example,
the National Quality Forum and CMS (Centers for Medicare and Medicaid Services) recognize "patient death or serious disability
associated with a burn incurred from any source while being cared for in a healthcare facility" as a "never-event".
We believe that the credibility and importance of our technology is complemented by this expanding public interest in advancing patient
safety in new CMS Hospital Quality Metrics.

 To
cost effectively expand market coverage, we focus on optimizing our distribution network comprised of direct and independent sales representatives
who are managed and directed by our regional sales managers throughout the United States. In some instances, customers have recognized
the patient safety risks inherent in monopolar electrosurgery and have accepted AEM technology as the way to eliminate those risks. In
other instances, we have found selling the concept behind AEM technology more difficult. This difficulty is due to several factors, including
the necessity to make surgeons, nurses and hospital risk managers aware of the potential for unintended electrosurgical burns (which
exists when conventional instruments are used during laparoscopic monopolar electrosurgery) and the resulting increased patient injury
and medicolegal liability exposure. Additionally, we must contend with the overall lack of single purchasing points in the industry (surgeons,
hospital personnel, and value analysis committees have to be in substantial agreement as to the benefits of new technology), and the
resulting need to make multiple sales calls on personnel with the authority to commit to hospital expenditures. Other challenges include
the fact that many hospitals have exclusive contractual agreements with manufacturers of competing surgical instruments.

 Our
goal is to optimize a network that has experience selling into the hospital operating room environment. We believe that improvement in
this network offers us the best opportunity to cost effectively broaden acceptance of our product line and generate increased and recurring
sales. Additionally, we are pursuing supplier agreements with the major selected GPOs, hospital systems and integrated delivery networks.

 In
addition to the efforts to broaden market acceptance in the United States, we have contracted with independent distributors in Australia
and New Zealand to market our products internationally. We have achieved Conformit Europ ene ("CE") marking
for our products so that we may sell into the European marketplace. The CE marking indicates that a manufacturer has conformed to all
of the obligations imposed by European health, safety and environmental legislation. While CE certification opens up incremental markets
in Europe, our distribution options in the European marketplace are developing, and sales in international markets are small.

 We
believe that the expanding awareness for AEM technology through education and the improved sales network of independent representatives
will provide the basis for increased sales and continuing profitable operations. However, these measures, or any others that we may adopt,
may not result in increased sales or profitable operations.

 Research
and Development

 We
aim to continually expand our AEM Instrument product line to satisfy the evolving needs of surgeons. For AEM technology to fully become
a standard of care, we must satisfy surgeons' preferred instrument shapes, sizes, styles and functionality with integrated AEM
technology. This commitment includes expanding the styles of electrosurgical instruments available for MIS applications so that the conversion
to AEM technology is transparent to surgeons and does not require significant change in their current surgical techniques. We employ
full-time engineers and use independent contractors from time to time in our research and product development efforts. This group continuously
explores ways to broaden and enhance the product line. Current research and development efforts are focused primarily on line-extension
projects to further expand our AEM Instrument product offering to increase surgeons' choices and options in laparoscopic surgery.
Our research and development expenses were $621,894 in fiscal year 2024 and $816,119 in fiscal year 2023. We expense research and development
costs for products and processes as incurred. Costs that are included in research and development expenses include direct salaries, contractor
fees, materials, facility costs and administrative expenses that relate to research and development.

 Manufacturing,
Regulatory Affairs and Quality Assurance

 We
engage in various manufacturing and assembly activities at our leased facility in Boulder, Colorado. These operations include disposable
scissor inserts manufacturing and assembly of our AEM Instrument system as well as fabrication, assembly and test operations for instruments,
monitors and accessories. We also have relationships with a number of outside suppliers. Three vendors accounted for approximately 47%
of our inventory purchases.

 We
believe that the use of both internal and external manufacturing capabilities allows for increased flexibility in meeting our customer
delivery requirements and significantly reduces the need for investment in specialized capital equipment. We have developed multiple
sources of supply where possible. Our relationship with our suppliers is generally limited to individual purchase order agreements supplemented,
as appropriate, by contractual relationships to help ensure the availability and low cost of certain products. All components, materials
and sub-assemblies used in our products, whether produced in-house or obtained from others, are inspected to ensure compliance with our
specifications. All finished products are subject to our quality assurance and performance testing procedures.

 As
discussed in the section on Government Regulation, we are subject to the rules and regulations of the United States Food and Drug Administration
("FDA"). Our leased facility of 28,696 square feet contains approximately 15,100 square feet of manufacturing, regulatory
affairs and quality assurance space. The facility is designed to comply with the Quality System Regulation ("QSR"), as specified
in published FDA regulations. Our latest inspection by the FDA occurred in October 2015.

 We
achieved CE marking in August 2000, which required prior certification of our quality system and product documentation. Maintenance of
the CE marking status requires periodic audits of the quality system and technical documentation by our European Notified Body, TUV Rheinland.
The most recent audit was completed in February 2023.

 Patents,
Patent Applications and Intellectual Proprietary Rights

 We
have invested heavily in an effort to protect our valuable technology, and, as a result of this effort, we have been issued 16 unexpired
relevant patents that together form a significant intellectual property position. Our patents relate to the basic shielding and monitoring
technologies that we incorporate into our AEM products. As of March 31, 2024, we have 16 unexpired United States patents relating to
specific implementations of shielding and monitoring in instruments. As of March 31, 2024, there are between one and seventeen years
remaining on our AEM patents. We have five patent applications in process, and we have four trademarks.

 Our
technical progress depends to a significant degree on our ability to maintain patent protection for products and processes, to preserve
our trade secrets and to operate without infringing the proprietary rights of third parties. Our policy is to attempt to protect our
technology by, among other things, filing patent applications for technology that we consider important to the development of our business.
The validity and breadth of claims covered in medical technology patents involve complex legal and factual questions and, therefore,
may be highly uncertain. Even though we hold patented technology, others might copy our technology or otherwise incorporate our technology
into their products.

 We
require our employees to execute non-disclosure agreements upon commencement of employment. These agreements generally provide that all
confidential information developed or made known to the individual by us during the course of the individual's employment is our property
and is to be kept confidential and not to be disclosed to third parties.

 Competition

 The
electrosurgical device market is intensely competitive and tends to be dominated by a relatively small group of large and well-financed
companies. We compete directly for customers with those companies that currently make conventional electrosurgical instruments. Larger
competitors include Advanced Surgical Technologies Group (a division of Medtronic plc) and Ethicon Endo-Surgery (a division of Johnson
& Johnson). While we know of no competitor (including those referenced above) that can provide a continuous solution to stray electrosurgical
burns, the manufacturers of conventional (non-monitored, non-shielded) instruments will resist any loss of market share resulting from
the presence of our products in the marketplace. What clearly differentiates us from the competition is that while competitive technologies
may somewhat reduce the risk of stray energy burns, only AEM Technology completely eliminates it.

 We
also believe that manufacturers of products based on alternative technology to monopolar electrosurgery are our competitors. These alternative
technologies include other "advanced energy" technologies such as bipolar electrosurgery, laser surgery and ultrasonic dissector
sealers. Leading manufacturers in these areas include Advanced Surgical Technologies Group, Gyrus/ACMI (a division of Olympus Corporation
and a leader in bi-polar electrosurgery), Lumenis (laser surgery) and Ethicon Endo-Surgery (a division of Johnson and Johnson, manufacturers
of the harmonic scalpel). We believe that monopolar electrosurgery offers substantial competitive, functional and financial advantages
over these alternative energy technologies and will remain the primary tool for the surgeon, as it has been for decades. However, the
risk exists that these alternative technologies may gain greater market share and that new competitive techniques may be developed and
introduced.

 As
mentioned in the Sales and Marketing discussion, the competitive issues involved in selling our AEM product line do not primarily revolve
around a comparison of cost or features, but rather involve generating an awareness of the inherent hazards of electrosurgery and the
potential for injury to the patient. This involves conceptual selling, rather than just product selling, which results in a longer sales
cycle and generally higher sales costs. Independent endorsements of AEM technology have greatly enhanced the credibility of AEM Instruments.
However, our efforts to increase market awareness of this technology may not be successful, and our competitors may develop alternative
strategies and/or products to counter our marketing efforts.

 Many
of our competitors and potential competitors have widely-used products and significantly greater financial, technical, product development,
marketing and other resources. In addition to our direct sales force, we utilize a network of independent distributor representatives
in selected areas. In some cases, our options for independent distribution have conflicting and competing product interests which compromise
our ability to make market advances in certain areas. We may not be able to compete successfully against current and future competitors,
and competitive pressures faced by us may have a material adverse impact on our business, operating results and financial condition.

 Government
Regulation

 Government
regulation in the United States and other countries is a significant factor in the development and marketing of our products and in our
ongoing manufacturing, research and development activities. The FDA regulates us and our products under a number of statutes, including
the Federal Food, Drug and Cosmetics Act (the "FDC Act"). Under the FDC Act, medical devices are classified as Class I, II
or III based on the controls deemed necessary to reasonably ensure their safety and effectiveness. Class I devices are subject to the
least extensive controls, as their safety and effectiveness can be reasonably assured through general controls (e.g., labeling, pre-market
notification and adherence to QSR). For Class II devices, safety and effectiveness can be assured using special controls (e.g., performance
standards, post-market surveillance, patient registries and FDA guidelines). Class III devices (e.g., life-sustaining or life-supporting
implantable devices or new devices which have been found not to be substantially equivalent to legally marketed devices) require the
highest level of control, generally requiring pre-market approval by the FDA to ensure their safety and effectiveness. Our products are
Class II devices.

 If
a manufacturer or distributor of medical devices can establish that a proposed device is "substantially equivalent" to a legally
marketed Class I or Class II medical device or to a Class III medical device for which the FDA has not required a pre-market approval
application, the manufacturer or distributor may seek FDA marketing clearance for the device by filing a 510(k) pre-market notification.
Following submission of the 510(k) notification, the manufacturer or distributor may not place the device into commercial distribution
in the United States until an order has been issued by the FDA. The FDA's target for issuing such orders is within 90 days of submission,
but the process can take significantly longer. The order may declare the FDA's determination that the device is "substantially equivalent"
to another legally marketed device and allow the proposed device to be marketed in the United States. The FDA may, however, determine
that the proposed device is not substantially equivalent or may require further information, such as additional test data, before deciding
regarding substantial equivalence. Any adverse determination or request for additional information could delay market introduction and
have a material adverse effect on our continued operations. We have received a favorable 510(k) notification for our AEM monitors and
AEM Instruments, all of which are designated as Class II medical devices.

 Labeling
and promotional activities are subject to scrutiny by the FDA and, in certain instances, by the Federal Trade Commission. The FDA also
imposes post-marketing controls on us and our products, and registration, listing, medical device reporting, post-market surveillance,
device tracking and other requirements on medical devices. Failure to meet these pervasive FDA requirements or adverse FDA determinations
regarding our clinical and preclinical trials could subject us and/or our employees to injunction, prosecution, civil fines, seizure
or recall of products, prohibition of sales or suspension or withdrawal of any previously granted approvals, which could lead to a material
adverse impact on our financial position and results of operations.

 The
FDA regulates our quality control and manufacturing procedures by requiring us and our contract manufacturers to demonstrate compliance
with the QSR as specified in published FDA regulations. The FDA requires manufacturers to register with the FDA, which subjects them
to periodic FDA inspections of manufacturing facilities. If violations of applicable regulations are noted during FDA inspections of
our manufacturing facilities or the facilities of our contract manufacturers, the continued marketing of our products may be adversely
affected. Such regulations are subject to change and depend heavily on administrative interpretations. In October 2015, the FDA conducted
a QSR inspection of our facilities. We believe that we have the internal resources and processes in place to be reasonably assured that
we are in compliance with all applicable United States regulations regarding the manufacture and sale of medical devices. However, if
we were found not to be in compliance with the QSR, in the future, such findings could result in a material adverse impact on our financial
condition, results of operations and cash flows.

 Sales
of medical devices outside of the United States are subject to United States export requirements and foreign regulatory requirements.
Legal restrictions on the sale of imported medical devices vary from country to country. The time required to obtain approval by a foreign
country may be longer or shorter than that required for FDA approval and the requirements may differ. Our Certificate of Export from
the United States Department of Health and Human Services has expired and we will seek to renew it. However, a specific foreign country
in which we wish to sell our products may not accept or continue to accept the Certificate of Export. Entry into the European Economic
Area market also requires prior certification of our quality system and product documentation. We achieved CE marking in August 2000,
allowing a launch into the European marketplace. Maintenance of the CE marking status requires annual audits of the quality system and
technical documentation by our European Notified Body, TUV Rheinland. The most recent audit was completed in February 2023.

 A
Safety Communication was released by the FDA on May 29, 2020. It is on the FDA's website at:
The Safety Communication states that, "In addition to serving as an ignition source, monopolar energy use can directly result in
unintended patient burns from capacitive coupling and intra-operative insulation failure. If a monopolar electrosurgical units (ESU)
is used: Do not activate when near or in contact with other instruments."

 Environmental
Laws and Regulations

 From
time to time we receive materials returned from customers, sales representatives and other sources which are potentially biologically
hazardous. These materials are segregated, and disposed of in accordance with specific procedures that minimize potential exposure to
employees. The costs of compliance with these procedures are not significant. Our operations, in general, do not involve the use of environmentally
sensitive materials.

 Insurance

 We
are covered under comprehensive general liability insurance policies, which have per occurrence and aggregate limits of $1 million and
$2 million, respectively, and a $10 million umbrella policy. We maintain customary property and casualty, workers' compensation,
employer liability and other commercial insurance policies.

 Employees

 As
of March 31, 2024, we employed 22 full-time and 2 part-time individuals, of which 2 full-time and 2 part-time are engaged directly in
research, development, and regulatory activities, 8 full-time in manufacturing/operations, 7 full-time in marketing and sales, and 5
full-time time in administrative positions. None of our employees are covered by a collective bargaining agreement, and we consider our
relations with our employees to be good.

 Available
information

 Our
internet address is www.encision.com. We are not including the information contained in our website as part of, or incorporating it by
reference into, this document. We make available, free of charge, through our website our annual reports on Form 10-K, quarterly reports
on Form 10-Q, current reports on Form 8-K and amendments to these reports filed or furnished pursuant to Section 13(a) or 15(d)
of the Exchange Act, as soon as reasonably practicable after we electronically file such materials with, or furnish such materials to,
the SEC.

 Item
1A. Risk Factors

 You
should carefully consider the risk factors described below. If any of the following risk factors actually occur, our business, prospects,
financial condition or results of operations would likely suffer. In such case, the trading price of our common stock could fall, resulting
in the loss of all or part of your investment. You should look at all these risk factors in total. Some risk factors may stand on their
own. Some risk factors may affect (or be affected by) other risk factors. You should not assume we have identified these connections.
You should not assume that we will always update these and future risk factors in a timely manner. We are not undertaking any obligation
to update these risk factors to reflect events or circumstances after the date of this report or to reflect the occurrence of unanticipated
events.

 Among
the factors that could cause future results and financial condition to be materially different from expectations are:

 Our
products may not be accepted by the market. The success of our products and our financial condition depends on the acceptance of
AEM products by the medical community in commercially viable quantities during fiscal year 2024 and beyond. We cannot predict how quickly
or how broadly AEM products will be accepted by the medical community. We need to continually educate the marketplace about the potential
hazards involved in the use of conventional electrosurgical products during MIS procedures and the expected benefits associated with
the use of AEM products. If we are unsuccessful in educating the marketplace about our technology and the hazards of conventional instruments,
we will not create sufficient demand by hospitals and surgeons for AEM products and our financial condition, results of operations and
cash flows could be adversely affected.

 We
need to continually develop and train our network of direct and independent sales representatives and expand our distribution efforts
in order to be successful. Our attempts to develop and train a network of direct and independent sales representatives in the U.S.
and to expand our international distribution efforts may take longer than expected and may result in considerable amounts of retraining
effort as the direct and independent sales representatives change their product lines, product focus and personnel. We may not be able
to obtain full coverage of the U.S. by direct and independent sales representatives as quickly as anticipated. The independent sales
representative network has inherent flaws and inefficiencies, which can include conflicts of interest and competing products. Optimizing
the quality of the network and the performance of direct and independent sales representatives in the U.S. is an ongoing challenge. We
may also encounter difficulties in developing our international presence due to regulatory issues and our ability to successfully develop
international distribution options. Our inability to expand our network of direct and independent sales representatives and optimize
their performance could adversely affect our financial results.

 We
may need additional funding to support our operations. We were formed in 1991 and have incurred losses of approximately $22 million
since that date. We have primarily financed research, development and operational activities with issuances of our common stock and warrants,
the exercise of stock options to purchase our common stock, loans, and, in some years, by operating profits. For the fiscal year ended
March 31, 2024, our cash provided by operations was $144,000. At March 31, 2024, we had cash and equivalents of $43,000. If we are unable
to maintain cash flows sufficient to support ongoing operations, we will need to seek additional financing. There is no assurance that
we will be able to raise additional capital on acceptable terms or at all. If we raise additional funds through the issuance of equity
or convertible debt securities, the percentage ownership of our existing stockholders could be diluted, and these newly issued securities
may have rights, preferences or privileges senior to those of existing stockholders. If we raise additional funds through debt financing,
which may involve restrictive covenants, our ability to operate our business may be restricted. If adequate funds are not available or
are not available on acceptable terms, if and when needed, our ability to fund our operations, our business, results of operations and
financial condition could be materially and adversely affected.

 We
may not be able to compete successfully against current manufacturers of conventional ("unshielded, unmonitored") electrosurgical
instruments or against competitors who manufacture products that are based on surgical technologies that are alternatives to monopolar
electrosurgery. The electrosurgical products market is intensely competitive. We expect that manufacturers of "unshielded,
unmonitored" electrosurgical instruments will resist any loss of market share that might result from the presence of our "shielded
and monitored" instruments in the marketplace. We also believe that manufacturers of products that are based upon surgical technologies
that are alternatives to monopolar electrosurgery are our competitors. These technologies include bipolar electrosurgery, the harmonic
scalpel and lasers. The alternative technologies may gain market share and new competitive technologies may be developed and introduced.
Most of our competitors and potential competitors have significantly greater financial, technical, product development, marketing and
other resources than we do. Most of our competitors also currently have substantial customer bases in the medical products market and
have significantly greater market recognition than we have. As a result of these factors, our competitors may be able to respond more
quickly to new or emerging technologies and changes in customer requirements or to devote greater resources to the development, promotion
and sale of their products. It is possible that new competitors or new alliances among competitors may emerge and rapidly acquire significant
market share. The competitive pressures we face may materially adversely affect our financial position, results of operations and cash
flows, and this may hinder our ability to respond to competitive threats.

 If
we do not continually enhance our products and keep pace with rapid technological changes, we may not be able to attract and retain customers.
 Our future success and financial performance will depend in part on our ability to meet the increasingly sophisticated needs of customers
through the timely development and successful introduction of product upgrades, enhancements and new products. These upgrades, enhancements
and new products are subject to significant technological risks. The medical device market is subject to rapid technological change,
resulting in frequent new product introductions and enhancements of existing products, as well as the risk of product obsolescence. While
we are currently developing new products and enhancing our existing product lines, we may not be successful in completing the development
of new products or enhancements. In addition, we must respond effectively to technological changes by continuing to enhance our existing
products to incorporate emerging or evolving standards. We may not be successful in developing and marketing product enhancements or
new products that respond to technological changes or evolving industry standards. We may experience difficulties that could delay or
prevent the successful development, introduction and marketing of those products, and our new products and product enhancements may not
adequately meet the requirements of the marketplace and achieve commercially viable levels of market acceptance. If any potential new
products, upgrades, or enhancements are delayed, or if any potential new products, upgrades, or enhancements experience quality problems
or do not achieve market acceptance, or if new products make our existing products obsolete, our financial position, results of operations
and cash flows would be materially adversely affected.

 If
government regulations change or if we fail to comply with existing and/or new regulations, we might miss market opportunities and experience
increased costs and limited growth. The research, development, manufacturing, marketing and distribution of our products in the United
States and other countries are subject to extensive regulation by numerous governmental authorities including, but not limited to, the
Food and Drug Administration. Under the Federal Food, Drug and Cosmetic Act, medical devices must receive clearance from the Food and
Drug Administration through the Section 510(k) pre-market notification process or through the lengthier pre-market approval process before
they can be sold in the United States. The process of obtaining required regulatory approvals is lengthy and has required the expenditure
of substantial resources. There can be no assurance that we will be able to continue to obtain the necessary approvals. As part of our
strategy, we also intend to pursue commercialization of our products in international markets. Our products are subject to regulations
that vary from country to country. The process of obtaining foreign regulatory approvals in certain countries can be lengthy and require
the expenditure of substantial resources. We may not be able to obtain necessary regulatory approvals or clearances on a timely basis
or at all, and delays in receipt of or failure to receive such approvals or clearances, or failure to comply with existing or future
regulatory requirements would have a material adverse effect on our financial position, results of operations and cash flows. Tariffs
will increase our material costs and, if they are fully absorbed by us, then they will negatively affect our gross profit margins.

 If
we fail to comply with the extensive regulatory requirements governing the manufacturing of our products, we could be subject to fines,
suspensions or withdrawals of regulatory approvals, product recalls, suspension of manufacturing, operating restrictions and/or criminal
prosecution. The manufacturing of our products is subject to extensive regulatory requirements administered by the Food and Drug
Administration and other regulatory agencies. Inspection of our manufacturing facilities and processes can be conducted at any time,
without prior notice, by the Food and Drug Administration and such regulatory agencies. In addition, future changes in regulations or
interpretations made by the Food and Drug Administration or other regulatory agencies, with possible retroactive effect, could adversely
affect us. Changes in existing regulations or adoption of new regulations or policies could prevent us from obtaining, or affect the
timing of, future regulatory approvals or clearances. We may not be able to obtain necessary regulatory approvals or clearances on a
timely basis in the future, or at all. Delays in receipt of, failure to receive such approvals or clearances and/or failure to comply
with existing or future regulatory requirements would have a material adverse effect on our financial position, results of operations
and cash flows.

 Our
current patents, trade secrets and know-how may not provide a competitive advantage, the pending applications may not result in patents
being issued, and our competitors may design around any patents issued to us. Our success will continue to depend in part on our
ability to maintain patent protection for our products and processes, to preserve our trade secrets and to operate without infringing
the proprietary rights of third parties. We have 16 issued U.S. patents on several technologies embodied in our AEM Monitoring system,
AEM instruments and related accessories and we have applied for additional U.S. patents. In addition, we have four issued foreign patents.
The validity and breadth of claims coverage in medical technology patents involve complex legal and factual questions and may be highly
uncertain. Also, patents may not protect our proprietary information and know-how or provide adequate remedies for us in the event of
unauthorized use or disclosure of such information, and others may be able to develop competing technology, independent of such information.
There has been substantial litigation regarding patent and other intellectual property rights in the medical device industry. Litigation
may be necessary to enforce patents issued to us, to protect trade secrets or know-how owned by us, to defend us against claimed infringement
of the rights of others or to determine the ownership, scope or validity of our proprietary rights or those of others. Any such claims
may require us to incur substantial litigation expenses and to divert substantial time and effort of management personnel and could substantially
decrease the amount of capital available for our operations. An adverse determination in litigation involving the proprietary rights
of others could subject us to significant liabilities to third parties, could require us to seek licenses from third parties, and could
prevent us from manufacturing, selling or using our products. The occurrence of any such actual or threatened litigation or the effect
on our business of such litigation may materially adversely affect our financial position, results of operations and cash flows. Additionally,
our assessment that a patent is no longer of value could result in a significant charge against our earnings.

 We
depend on single source suppliers for certain of the key components of our products and sub-contractors to provide much of the materials
used in the manufacturing of our products. The loss of a supplier or limitation in supply from existing suppliers could have a material
adverse effect on our ability to manufacture our products until a new source of supply is located. Although we believe that there
are alternative suppliers, any interruption in the supply of key components could have a material adverse effect on us. A sudden increase
in customer demand may create a backorder situation as lead times for some of our critical materials are in excess of 16 weeks. We rely
on subcontractors to provide products, either in the form of finished goods or sub-assemblies that we then assemble and test. While these
sub-contractors reduce our total cost of manufacturing, they may not be as responsive to increased demand as we would be if we had our
manufacturing capacity entirely in-house, which may limit our growth strategy and sales.

 The
potential fluctuation in future quarterly results may cause our stock price to fluctuate. We expect that our operating results could
fluctuate significantly from quarter to quarter in the future and will depend upon a number of factors, many of which are outside our
control. These factors include the extent to which our AEM technology and related accessories gain market acceptance; our investments
in marketing, sales, research and development and administrative personnel necessary to support growth; our ability to expand our market
share; actions of competitors; and, general economic conditions. The market value of our common stock has dramatically fluctuated in
the past and is likely to fluctuate in the future. Any of these factors, or factors not listed, could have an immediate and significant
negative impact on the market price of our stock.

 Our
common stock is thinly traded, the prices at which it trades are volatile and the buying or selling actions of a few shareholders may
adversely affect our stock price. As of May 31, 2024, we had a public float, which is defined as shares outstanding minus shares
held by our officers, directors, or beneficial holders, of greater than 10% of our outstanding common stock, of 7,400,465 shares, or
62% of our outstanding common stock. The average number of shares traded in any given day over the past year has been relatively small
compared to the public float. Thus, the actions of a few shareholders either buying or selling shares of our common stock may adversely
affect the price of the shares. Historically, thinly traded securities such as our common stock have experienced extreme price and volume
fluctuations that do not necessarily relate to operating performance.

liability claims may exceed our current insurance coverage. We face an inherent business risk of exposure to product liability claims
in the event that the use of our products is alleged to have resulted in adverse effects to a patient. We maintain a general liability
insurance policy up to the amount of $10,000,000 that includes coverage for product liability claims. Liability claims may be excluded
from the policy, may exceed the coverage limits of the policy, or the insurance may not continue to be available on commercially reasonable
terms or at all. Consequently, a product liability claim or other claim with respect to uninsured liabilities or in excess of insured
liabilities could have a material adverse effect on our financial position, results of operations and cash flows.

 We
depend on certain key personnel. We are highly dependent on a limited number of key management personnel, particularly our President
and CEO, Gregory J. Trudel. Our loss of key personnel to death, disability or termination, or our inability to hire and retain qualified
personnel, could have a material adverse effect on our financial position, results of operations and cash flow.

 Any
cybersecurity-related attack, significant data breach or disruption of the information technology systems or networks on which we rely
could negatively affect our business. Our operations rely on information technology systems for the use, storage and transmission
of sensitive and confidential information with respect to our customers, suppliers, employees and other parties. A malicious cybersecurity-related
attack, intrusion or disruption by either an internal or external source or other breach of the systems on which we and our employees
conduct business, could lead to unauthorized access to, use of, loss of or unauthorized disclosure of sensitive and confidential information,
disruption of our services, and resulting regulatory enforcement actions, litigation, indemnity obligations and other possible liabilities,
as well as negative publicity, which could damage our reputation, impair sales and harm our business. Cyberattacks and other malicious
internet-based activity continue to increase. In addition to traditional computer "hackers," malicious code (such as viruses
and worms), phishing, employee theft or misuse and denial-of-service attacks, sophisticated nation-state and nation-state supported actors
now engage in attacks (including advanced persistent threat intrusions). Despite efforts to create security barriers to such threats,
it is not feasible, as a practical matter, for us to entirely mitigate these risks. If our security measures are compromised as a result
of third-party action, employee, customer, or user error, malfeasance, stolen or fraudulently obtained log-in credentials or otherwise,
our reputation would be damaged, our data, information or intellectual property, or those of our customers, may be destroyed, stolen
or otherwise compromised, our business may be harmed and we could incur significant liability.

 Evaluation
of Disclosure Controls and Procedures

 Under
the supervision and with the participation of our management, including our principal executive officer and principal financial officer,
as of March 31, 2024, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e)
and Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended. Based on this evaluation, our principal executive
officer and principal financial officer have concluded that, based on the material weaknesses discussed below, our disclosure controls
and procedures were not effective as of such date to ensure that information required to be disclosed by us in reports filed or submitted
under the Securities Exchange Act were recorded, processed, summarized, and reported within the time periods specified in the SEC's
rules and forms and that our disclosure controls are not effectively designed to ensure that information required to be disclosed by
us in the reports that we file or submit under the Securities Exchange Act is accumulated and communicated to management, including our
principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely
decisions regarding required disclosure.

 Changes
in Internal Control over Financial Reporting

 There
have been no changes in our internal control over financial reporting that occurred during our fourth fiscal quarter that have materially
affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 Management's
Annual Report on Internal Control over Financial Reporting

 Management
is responsible for establishing and maintaining adequate internal control over financial reporting. As defined in Rules 13a-15(f) under
the Securities Exchange Act of 1934, internal control over financial reporting is a process designed by, or under the supervision of,
the Company's principal executive, principal operating and principal financial officers, or persons performing similar functions,
and effected by the Company's board of directors, management and other personnel, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP.

 Our
internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records, that,
in reasonable detail, accurately and fairly reflect the transactions and dispositions of the Company's assets; (2) provide reasonable
assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted
accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of the
Company's management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use or disposition of the Company's assets that could have a material effect on the financial statements.

 Because
of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of
any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions,
or that the degree of compliance with the policies or procedures may deteriorate.

 Our
management, including our principal executive officer and principal financial officer, assessed the effectiveness of our internal control
over financial reporting at March 31, 2024. In making this assessment, management used the criteria set forth by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO) in Internal Control—Integrated Framework (2013). Based on that assessment under
those criteria, management has determined that, as of March 31,2024, our internal control over financial reporting was not effective.

 Our
internal controls are not effective for the following reason: (i) there is an inadequate segregation of duties consistent with control
objectives as management is comprised of only two persons, one of which is our principal executive officer and the other is the principal
financial officer.

 In
order to mitigate the foregoing material weaknesses, we have engaged an outside accounting consultant with significant experience in
the preparation of financial statements in conformity with GAAP to assist us in the preparation of our financial statements to ensure
that these financial statements are prepared in conformity with GAAP. We will continue to monitor the effectiveness of this action and
make any changes that our management deems appropriate.

 We
would need to hire additional staff to provide greater segregation of duties. Currently, it is not feasible to hire additional staff
to obtain optimal segregation of duties. Management will continue to reassess this matter to determine whether improvement in segregation
of duty is feasible. In addition, we would need to expand our board to include independent members.

 Going
forward, we intend to evaluate our processes and procedures and, where practicable and resources permit, implement changes in order to
have more effective controls over financial reporting.

 This
Annual Report does not include an attestation report of our registered public accounting firm regarding internal control over financial
reporting. Management's report was not subject to attestation by our registered public accounting firm pursuant to the exemption
provided to issuers that are not "large accelerated filers" nor "accelerated filers" under the Dodd-Frank Wall
Street Reform and Consumer Protection Act.

 Item
1B. Unresolved Staff Comments

 Not
required for small reporting companies.

 Item
1C. Cybersecurity

 Cybersecurity
Risk Management and Strategy

 We
have not yet developed a cybersecurity risk management program, though we are in the process of assessing the potential risks. As of
this time, we have determined that risks from cybersecurity threats have not materially affected and are not reasonably likely to materially
affect our business strategy, results of operations, or financial condition.

 Cybersecurity
Governance

 Our
Board of Directors is responsible for overseeing our enterprise risk management activities. The Board of Directors receives an update
on our risk management process and the risk trends related to cybersecurity at least annually. Additionally, on a quarterly basis, the
Audit Committee will receive updates from Management on cybersecurity.

 Item
2. Properties

 We
lease 28,696 square feet of office and manufacturing space under noncancelable lease agreements through October 31, 2026 at 6797 Winchester
Circle, Boulder, Colorado. We believe that our existing facilities are adequate for our current operations.

 Item
3. Legal Proceedings

 From
time to time, we are involved in various disputes, claims, suits, investigations, and legal proceedings arising in the ordinary course
of business. We believe that the resolution of current pending legal matters will not have a material adverse effect on our business,
financial condition, results of operations or cash flows. Nonetheless, we cannot predict the outcome of these proceedings, as legal matters
are subject to inherent uncertainties, and there exists the possibility that the ultimate resolution of these matters could have a material
adverse effect on our business, financial condition, results of operations or cash flows.

 Item
4. Mine Safety Disclosures

 None.

 PART
II

 Item
5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

our fiscal years 2024 and 2023, our common stock has been quoted on the Pink tier, operated by the OTC Markets Group, Inc. The ticker
symbol "ECIA" has been assigned to our common stock for over-the-counter quotations.

 We
have never paid cash dividends on our common stock and have no present plans to do so. We presently intend to retain any cash generated
from operations in the future for use in our business. As of March 31, 2024, there were approximately 68 holders of record of our common
stock.

 Recent
Sales of Unregistered Securities

the fiscal year ended March 31, 2024, there were no sales of unregistered securities by the Company that were not previously reported
on a Form 8-K or Form 10-Q.

.

 Issuer
Purchases of Equity Securities

 We
did not repurchase any of our equity securities during the period covered by this Annual Report.

 Item
6. [Reserved]

 Item
7. Management's Discussion and Analysis of Financial Condition and Results of Operations

 Certain
statements contained in this section are not historical facts, including statements about our strategies and expectations about new and
existing products, market demand, acceptance of new and existing products, technologies and opportunities, market and industry segment
growth, and return on investments in products and markets. These statements are forward looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995 and involve substantial risks and uncertainties that may cause actual results to differ
materially from those indicated by the forward looking statements. All forward looking statements in this section are based on information
available to us on the date of this document, and we assume no obligation to update such forward looking statements. Readers of this
Form 10-K are strongly encouraged to review the section entitled "Risk Factors".

 Outlook

 Installed
Base of AEM Monitoring Equipment. We believe that we are gaining more awareness in medico-legal circles and publications and from
presentations at medical meetings. We believe that improvement in the quality of sales representatives carrying our AEM products line,
along with increased marketing efforts and the introduction of new products, may provide the basis for increased sales and continuing
profitable operations. However, these measures, or any others that we may adopt, may not result in either increased sales or continuing
profitable operations.

 Possibility
of Operating Losses. We have an accumulated deficit of $22,617,329 at March 31, 2024. We have made significant strides toward improving
our operating results. However, due to the ongoing need to develop new products, the need to develop, optimize and train our sales distribution
network 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 in future periods.

 Sales
Growth. We expect to generate increased sales in the U.S. from sales to new hospital customers and to grow AEM instrumentation sales
to existing accounts. In fiscal year 2024, we will focus on growing our AEM franchise through a campaign focused on the clinical, economic
and safety benefits of AEM technology, a medico-legal initiative and our new AEM products. In addition, prior years' efforts in
vertical integration have given us three core competencies – electrosurgery, instrument design, and manufacturing – which
we expect will allow us to increase sales from our strategic partnership initiatives. Our goal is to offer our customers an AEM disposable
counterpart for each AEM reusable instrument.

 Gross
Margin. We believe that if our fiscal year 2024 revenues increase, then our fiscal year 2024 gross profit and gross margin, as a
percentage of revenue, will increase due to a higher gross margin on product revenue as a result of an increase in product produced.

 Sales
and Marketing Expenses. We continue our efforts to expand domestic and international distribution capability, and we
believe that sales and marketing expenses will need to be maintained at a healthy level in order to expand our market visibility and
optimize the field sales capability of converting new hospital customers to AEM technology.
Sales and marketing expenses are expected to increase as we increase our marketing efforts to support our direct sales representatives.
In fiscal year 2024, we expect to have six direct sales managers. Each direct sales manager also manages a separate territory.

 Manufacturing.
We believe that we will be able to achieve cost reductions, and provide better control over
quality and consistency, by producing products on our own. We manufacture our own disposable scissor inserts and are exploring other
products that we may manufacture internally.

 Research
and Development Expenses. Research and development expenses are expected to increase to support
expansion to our AEM product line, which will further expand the instrument options for the
surgeon. New refinements to AEM product lines are planned for introduction in fiscal year 2025.

 Results
of Operations

 Net
Product revenue. Net
product revenue for the fiscal year ended March 31, 2024 ("FY24") was $6,431,969, and for the fiscal year ended March 31,
2023 ("FY23"), net revenue was $6,885,158, or a decrease of 7%. Product revenue for the fiscal year ended March 31, 2024
decreased primarily because of the decrease in non-essential surgical procedures performed during this period.

 Net
Service revenue. Net
service revenue for FY24 was $153,913, and for FY23 net service revenue was $463,356. Net service revenue for FY23 was for engineering
services performed under a Master Services Agreement with Auris Health, Inc. ("Auris Health"). Auris Health is a part of
the Johnson & Johnson family of companies. Under the agreement, we collaborated on the integration of AEM technology into monopolar
instrumentation produced by Auris Health for advanced surgical applications.

 Gross
profit. Gross profit in FY24 was $3,135,962, which represented a decrease of $896,571, or 22%, from gross profit in FY23 of $4,032,533.
Gross profit margin was 48% of net product revenue for FY24 and 55% of net product revenue for FY 23. Gross profit decreased in FY24
from FY23 due principally to higher product vendor costs and increased inventory reserves. In FY23 we had high margin service revenue.
Our product revenue from GPOs in FY23 was approximately
79% of our total product revenue. In FY24, we had increased product vendor costs that were not allowed
to be passed on to our GPO customers for the fiscal year and resulted in a compressed gross profit margin.

 Sales
and marketing expenses. Sales and marketing expenses were $1,634,124 in FY24, a decrease of $398,291, or 20%, from $2,032,415 in
FY23. The decrease was because of decreased commissions on decreased revenue.

 General
and administrative expenses. General and administrative expenses were $1,520,727 in FY24, an increase of $33,931 or 2%, from $1,486,796
in FY23. The increase was because of increased regulatory fees.

 Research
and development expenses. Research and development expenses were $621,894 in FY24, a decrease of $196,225 or 24%, from $816,119 in
FY23. The decrease was the result of decreased compensation and outside services.

 Other
(expense), net. Other (expense), net of $51,000 for FY24 was primarily for interest expense of $62,373.

 Net
(loss). Net (loss) in FY24 of $691,783 represented a loss increase
 of $367,838 compared to FY23 net loss of $323,945. The net loss increase was principally because
of lower product and service revenue and was partially offset by decreased operating expenses.

 Liquidity
and Capital Resources

 To
date, operating funds have been provided primarily by issuances of our common stock and warrants, the exercise of stock options to purchase
our common stock, loans and, in some years, by operating profits. To date, common stock and additional paid in capital totaled $24,371,795
from our inception through March 31, 2024. Our operations provided $144,389 and used $861,485 of cash in FY24 and FY23, respectively,
on net revenue of $6,585,882 and $7,348,514 in FY24 and FY23, respectively. Working capital was $1,206,252 at March 31, 2024 compared
to $1,993,777 at March 31, 2023. The decrease in working capital was primarily caused by the FY24 net loss and decreased inventories.
Current liabilities were $1,220,022 at March 31, 2024 compared to $1,130,826 at March 31, 2023.

 On
November 15, 2022, we entered into a loan and security agreement with Pathward, N.A. The loan is due on demand and has no financial covenants.
Under the agreement, we were provided with a line of credit that is not to exceed the lesser of $1,000,000 or 85% of eligible accounts
receivable. The interest rate is prime rate plus 0.5%, with a floor of 6.75%, plus a monthly maintenance fee of 0.4%, based on the average
monthly loan balance. Interest is charged on a minimum loan balance of $300,000, a loan fee of 0.5% at closing and annually, and an exit
fee of 3%, 2% and 1% during years one, two and three, respectively.

 We
believe that the unique performance of AEM technology and our breadth of independent endorsements provide an opportunity for market share
growth. We believe that the market awareness of AEM technology and its endorsements is continually improving and that this will benefit
revenue efforts in FY 25. We believe that we enter FY 25 having achieved improvements in the clinical credibility of our technology.
Our FY 25 operating plan is focused on growing revenue, increasing gross profits, increasing research and development costs while increasing
profits and positive cash flows. We cannot predict with certainty the expected revenue, gross profit, net income or loss and usage of
cash, cash equivalents and restricted cash for FY 25. We believe that cash resources and borrowing capacity will be sufficient to fund
our operations for at least the next twelve months under our current operating plan. If we are unable to manage business operations in
line with our budget expectations, it could have a material adverse effect on business viability, financial position, results of operations
and cash flows. Further, if we are not successful in sustaining profitability and remaining at least cash flow break-even, additional
capital may be required to maintain ongoing operations.

 We
have explored and are continuing to explore options to provide additional financing to fund future operations as well as other possible
courses of action. Such actions include, but are not limited to, securing a larger credit facility, sales of debt or equity securities
(which may result in dilution to existing shareholders), licensing of technology, strategic alliances and other similar actions. There
can be no assurance that we will be able to obtain additional funding (if needed) through a sale of our common stock or loans from financial
institutions or other third parties or through any of the actions discussed above on terms acceptable to us or at all. If we cannot sustain
profitable operations and additional capital is unavailable, lack of liquidity could have a material adverse effect on our business viability,
financial position, results of operations and cash flows.

 Income
Taxes

 As
of March 31, 2024, net operating loss carryforwards totaling approximately $8.9 million were available to reduce taxable income in the
future. The net operating loss carryforwards expire, if not previously utilized, at various dates beginning in fiscal year 2025. We have
not paid income taxes since our inception. The Tax Reform Act of 1986 and other income tax regulations contain provisions which may limit
the net operating loss carryforwards available to be used in any given year if certain events occur, including changes in our ownership.
We have established a valuation allowance for the entire amount of our deferred tax asset since inception due to our history of losses.
Should we achieve sufficient, sustained income in the future, we may conclude that some or all of the valuation allowance should be reversed.

 Off-Balance
Sheet Financing Arrangements

 We
do not utilize variable interest entities or other off-balance sheet financial arrangements.

 Contractual
Obligations

 Effective
November 9, 2017, we extended our noncancelable lease agreement through July 31, 2024, and further extended it through October 31, 2026,
for our facilities at 6797 Winchester Circle, Boulder, Colorado. Lease expense was $357,503 for the fiscal year ended March 31, 2024
and $329,255 for the fiscal year ended March 31, 2023. The minimum future lease payment, by fiscal year, as of March 31, 2024 is as follows:

 Fiscal
 Year

 2025

 $
 370,377

 2026

 430,398

 2027

 266,212

 Total

 $
 1,066,987

 On
August 4, 2020, we received $150,000 in loan funding from the U.S. Small Business Administration ("SBA") under the Economic
Injury Disaster Loan ("EIDL") program administered by the SBA, which program was expanded pursuant to the CARES Act. The
EIDL is evidenced by a promissory note, dated August 1, 2021 in the original principal amount of $150,000 with the SBA, the lender. Under
the terms of the Note, interest accrues on the outstanding principal at the rate of 3.75% per annum. The term of the Note is thirty years,
though it may be payable sooner upon an event of default under the Note.

 The
minimum future EIDL payment, by fiscal year, as of March 31, 2024 is as follows:

 Fiscal
 Year

 2025

 $
 3,208

 2026

 3,331

 2027

 3,457

 2028

 3,587

 Thereafter

 146,689

 Total

 $
 156,685

June 2020, we entered into a note agreement with U.S. Bank for $92,000. The note is for five years at a 5% interest rate and the proceeds
were used to purchase equipment. The note is secured by the equipment.

 The
minimum future U.S. Bank payment, by fiscal year, as of March 31, 2024 is as follows:

 Fiscal
 Year

 2024

 18,400

 2025

 13,800

 Total

 $
 32,200

September 2022, we entered into a note agreement with U.S. Bank for $115,004. The note is for five years at a 6% interest rate and the
proceeds were used to purchase equipment. The note is secured by the equipment.

 The
minimum future principal U.S. Bank payment, by fiscal year, as of December 31, 2023 is as follows:

 Fiscal
 Year

 2025

 2026

 2027

 2028

 5,949

 Total

 $
 77,331

 Payment due by period

 Contractual obligations

 Totals

 Less
 than 1 year

 1-3
 years

 3-5
 Years

 More
 than 5 Years

 Lease obligations

 $
 1,141,875

 $
 415,667

 $
 726,208

 $
 —

 $
 —

 EIDL note

 156,685

 3,208

 6,788

 7,174

 139,515

 U.S. Bank note

 32,200

 18,400

 13,800

 —

 —

 U.S. Bank note

 77,331

 47,588

 5,949

 —

 Totals

 $
 1,408,091

 $
 461,069

 $
 794,384

 $
 13,123

 $
 139,515

 Aside
from the operating lease, we do not have any material contractual commitments requiring settlement in the future.

 Critical
Accounting Policies and Estimates

 Our
discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been
prepared in accordance with accounting principles generally accepted in the United States.
The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets,
liabilities, sales and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our estimates,
including those related to bad debts, inventories, sales returns, warranty, contingencies
and litigation. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under
the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that
are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
We believe the following critical accounting policies affect the more significant judgments and estimates used in the preparation of
our financial statements.

 We
record revenue at a single point in time, when control is transferred to the customer, which is consistent with past practice. We will
continue to apply our current business processes, policies, systems and controls to support recognition and disclosure. Our shipping
policy is FOB Shipping Point. We recognize revenue from sales to stocking distributors when there is no right of return, other than for
normal warranty claims. We have no ongoing obligations related to product sales, except for normal warranty obligations. We evaluated
the requirement to disaggregate product revenue, and concluded that substantially all of its revenue comes from multiple products within
a line of medical devices. Our engineering service contracts are billed on a time and materials basis and revenue is recognized over
time as the services are performed

 We
maintain allowances for doubtful accounts for estimated losses resulting from the inability of our customers to make required payments.
If the financial condition of our customers were to deteriorate, resulting in an impairment
 of their ability to make payments, additional allowances would be required, which would increase
our expenses during the periods in which any such allowances were made. The amount recorded as a provision for bad debts in each period
is based upon our assessment of the likelihood that we will be paid on our outstanding receivables, based on customer-specific as well
as general considerations. To the extent that our estimates prove to be too high, and we ultimately collect a receivable previously determined
to be impaired, we may record a reversal of the provision in the period of such determination.

 We
provide for the estimated cost of product warranties at the time sales are recognized. While we engage in extensive product quality programs
and processes, including actively monitoring and evaluating the quality of our component
 suppliers, we have experienced some costs related to warranty. The warranty accrual is based upon
historical experience and is adjusted based on current experience. Should actual warranty experience differ from our estimates, revisions
to the estimated warranty liability would be required.

 We
reduce inventory for estimated obsolete or unmarketable inventory equal to the difference between the cost of inventory and the estimated
market value based upon assumptions about future demand and market conditions. If a ctual
market conditions are less favorable than those projected by management, additional inventory write-downs may be required. Any write-downs
of inventory would reduce our reported net income during the period in which such write-downs were applied.

 We
recognize deferred income tax assets and liabilities for the expected future income tax consequences, based on enacted tax laws, of temporary
differences between the financial reporting and tax bases of assets and liabilities. Deferred tax assets are then reduced, if deemed
necessary, by a valuation allowance for the amount of any tax benefits which, more likely than not based on current circumstances, are
not expected to be realized. Should we achieve sufficient, sustained income in the future, we may conclude that all or some of the valuation
allowance should be reversed.

 Property
and equipment are stated at cost, with depreciation computed over the estimated useful lives of the assets, generally three to seven
years. We use the straight-line method of depreciation for property and equipment. Leasehold improvements are depreciated over the shorter
of the remaining lease term or the estimated useful life of the asset. Maintenance and repairs are expensed as incurred and major additions,
replacements and improvements are capitalized.

 We
amortize our patent costs over their estimated useful lives, which is typically the remaining statutory life. From time to time, we may
be required to adjust these lives based on advances in technology, competitor actions, and the like.
We review the recorded amounts of patents at each period end to determine if their carrying amount is still recoverable based on our
expectations regarding sales of related products. Such an assessment, in the future, may result in a conclusion that the assets are impaired,
with a corresponding charge against earnings.

compensation is presented in accordance with the guidance of Financial Accounting Standards Board ("FASB") Accounting Standards
Codification ("ASC") Topic 718, Compensation – Stock Compensation ("ASC 718 ").
Under the provisions of ASC 718, companies are required to estimate the fair value of share-based payment awards made to employees and
directors including employee stock options based on estimated fair values on the date of
grant using an option-pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as expense
over the requisite service periods in our statements of operations.

 Item
7A. Quantitative and Qualitative Disclosures About Market Risk

 Not
required.

 Item
8. Financial Statements and Supplementary Data

 The
following financial statements are included in this Report:

 Page

 Report
 of Independent Registered Public Accounting Firm for the fiscal year ended March 31, 2024

 Balance Sheets as of March 31, 2024 and 2023

 Statements of Operations for the fiscal years ended March 31, 2024 and 2023

 Statements of Shareholders' Equity for the fiscal years ended March 31, 2024 and 2023

 Statements of Cash Flows for the fiscal years ended March 31, 2024 and 2023

 Notes to Financial Statements

 Report
of Independent Registered Public Accounting Firm

 To
the Board of Directors and Shareholders

 of
Encision, Inc.

 Opinion
on the Financial Statements

 We
have audited the accompanying balance sheet of Encision, Inc. (the Company) as of March 31, 2024, and the related statements of operations,
shareholders' equity, and cash flows for the year then ended and the related notes (collectively referred to as the financial statements).

 In
our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of March 31,
2024, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally
accepted in the United States of America.

 The
financial statements of the Company as of March 31, 2023, were audited by other auditors whose report dated June 28, 2023, expressed
an unqualified opinion on those statements.

 Basis
for Opinion

 These
financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's
financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board
(United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities
laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 We
conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company
is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits,
we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion
on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

 Our
audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error
or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding
the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant
estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits
provide a reasonable basis for our opinion.

 Critical
Audit Matter

 The
critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated
or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial
statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters
does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit
matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

 Inventory
Valuation - Finished Goods

 The
Company's inventories consist of finished goods and raw materials, which are manufactured or purchased for use in the Company's
finished goods. The Company offers several different products to its customers. The cost of the internally produced inventory is a combination
of raw materials, labor to convert those materials to components of the inventory to finished goods, and an allocation of overhead and
related costs. Significant judgment is exercised by the Company in determining the components of the costs of inventory and includes
the determination of which costs to include at each manufacturing phase, including overhead allocation and materials used for production
of finished goods, and monitoring the appropriate absorption of the overhead cost and correcting the hourly rate when necessary

 How
the Critical Audit Matter Was Addressed in the Audit

 Our
principal audit procedures related to the Company's inventory included the following:

 -
 We
 assessed the reasonableness of costs and the appropriate application of management's
 significant accounting policies related to inventory, including determination of inventory
 obsolescence reserve.

 -
 We
 selected a sample of finished goods and raw materials and performed detailed testing over
 the items selected, including but not limited to the following:

 o
 Agreed
 the bill of materials source documents for each selection, including raw materials value,
 labor, and overhead allocations, and any other items relevant to price verification.

 o
 Agreed
 a selection of raw materials to the source documents, invoices, and any other items relevant
 to price verification

 o
 Tested
 managements identification and application of the overhead calculation and labor cost

 July
12, 2024

 Green
Growth CPAs

 We
have served as the Company's auditor since 2024.

 Los
Angeles, California

 PCAOB
ID Number 6580

Inc.

 Balance
Sheets

 ASSETS

 Current assets:

 Cash

 $
 42,509

 $
 188,966

 Accounts receivable

 891,129

 920,721

 Inventories

 1,402,338

 1,899,202

 Prepaid expenses and other assets

 90,298

 115,714

 Total current assets

 2,426,274

 3,124,603

 Equipment:

 Furniture, fixtures and equipment

 2,627,726

 2,615,676

 Accumulated depreciation

 ( 2,373,722
)

 ( 2,312,400
)

 Equipment, net

 254,004

 303,276

 Right of use asset, net

 900,787

 496,004

 Patents, net

 164,010

 163,133

 Other assets

 65,641

 46,953

 TOTAL ASSETS

 $
 3,810,716

 $
 4,133,969

 LIABILITIES AND SHAREHOLDERS' EQUITY

 Current liabilities:

 Accounts payable

 $
 346,049

 $
 252,957

 Line of credit

 156,685

 177,402

 Secured notes

 42,194

 44,491

 Accrued compensation

 184,913

 217,724

 Other accrued liabilities

 119,804

 84,578

 Accrued lease liability

 370,377

 353,674

 Total current liabilities

 1,220,022

 1,130,826

 Long-term liability:

 Secured notes

 67,336

 268,512

 Accrued lease liability

 696,610

 239,820

 Total liabilities

 1,983,968

 1,639,158

 Commitments and contingencies (Note 4)

 Shareholders' equity:

 Preferred stock, no par value: 10,000,000 shares authorized; none issued and outstanding

 —

 —

 Common stock and additional paid-in capital, no par value:
 100,000,000 shares authorized; 11,858,627 issued and outstanding at March 31, 2024 and 11,769,543 at March 31, 2023

 24,371,795

 24,348,075

 Accumulated (deficit)

 ( 22,545,047
)

 ( 21,853,264
)

 Total shareholders' equity

 1,826,748

 2,494,811

 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

 $
 3,810,716

 $
 4,133,969

 The
accompanying notes to financial statements are an integral part of these statements.

Inc.

of Operations

 March 31, 202 3

 NET REVENUE:

 $
 6,431,969

 $
 6,885,158

 Service

 153,913

 463,356

 Total revenue

 6,585,882

 7,348,514

 COST OF REVENUE:

 3,370,855

 3,313,620

 Service

 79,065

 2,361

 Total cost of revenue

 3,449,920

 3,315,981

 GROSS PROFIT

 3,135,962

 4,032,533

 OPERATING EXPENSES:

 Sales and marketing

 1,634,124

 2,032,415

 General and administrative

 1,520,727

 1,486,796

 Research and development

 621,894

 816,119

 Total operating expenses

 3,776,745

 4,335,330

 OPERATING (LOSS)

 ( 640,783
)

 ( 302,797
)

 OTHER (EXPENSE):

 Interest expense, net

 ( 62,373
)

 ( 19,529
)

 Other income, (expense) net

 11,373

 ( 1,619
)

 Interest expense and other income, expense, net

 ( 51,000
)

 ( 21,148
)

 (LOSS) BEFORE PROVISION FOR INCOME TAXES

)

)

 Provision for income taxes

 —

 —

 NET (LOSS)

 $
)

 $
)

 Net (loss) per share—basic and diluted

 $
 ( 0.06
)

 $
 ( 0.03
)

 Weighted average shares—basic and diluted

 11,770,391

 11,762,995

 The
accompanying notes to financial statements are an integral part of these statements.

Inc.

of Shareholders' Equity

 Shares of Common Stock

 Common Stock and Additional
 Paid-in Capital

 Accumulated
 Deficit

 Total Shareholders'
 Equity

 BALANCES AT MARCH 31, 2022

 11,719,543

 $
 24,275,183

 $
 ( 21,529,319
)

 $
 2,745,864

 Net loss

 —

 —

)

)

 Compensation expense related to stock based compensation

 —

 —

 Options exercised

 50,000

 21,000

 —

 21,000

 BALANCES AT MARCH 31, 2023

 11,769,543

 $
 24,348,075

 $
 ( 21,853,264
)

 $
 2,494,811

 Net loss

 —

 —

)

)

 Compensation expense related to stock based compensation

 —

 —

 Options exercised

 89,084

 ( 29,832
)

 —

 ( 29,832
)

 BALANCES AT MARCH 31, 2024

 11,858,627

 $
 24,371,795

 $
 ( 22,545,047
)

 $
 1,826,748

 The
accompanying notes to financial statements are an integral part of these statements.

Inc.

of Cash Flows

 Cash flows provided by (used in) operating activities:

 Net (loss)

 $
)

 $
)

 Adjustments to reconcile net (loss) income to net cash (used in) operating activities:

 Depreciation and amortization

 85,218

 86,906

 Stock-based compensation expense related to stock options

 Provision for inventory obsolescence

 12,000

 15,000

 Change in operating assets and liabilities:

 Right of use asset, net

 68,710

 ( 42,912
)

 Accounts receivable

 29,592

 26,902

 Inventories

 484,866

 ( 329,881
)

 Prepaid expenses and other assets

 6,728

 ( 8,294
)

 Accounts payable

 93,092

 ( 323,423
)

 Accrued compensation and other accrued liabilities

 2,414

 ( 13,730
)

 Net cash provided by (used in) operating activities

 144,389

 ( 861,485
)

 Cash flows (used in) investing activities:

 Acquisition of property and equipment

 ( 12,050
)

 ( 173,269
)

 Patent costs

 ( 24,773
)

 ( 10,030
)

 Net cash (used in) investing activities

 ( 36,823
)

 ( 183,299
)

 Cash flows provided by (used in) financing activities:

 Borrowings from (paydown of) credit facility, net change

 ( 20,717
)

 239,752

 Borrowings from (paydown of) secured notes

 ( 203,473
)

 23,353

 Net proceeds (payments) from exercise of stock options

 ( 29,833
)

 21,000

 Net cash provided by (used in) financing activities

 ( 254,023
)

 284,105

 Net (decrease) in cash

 ( 146,457
)

 ( 760,679
)

 Cash, beginning of fiscal year

 188,966

 949,645

 Cash, end of fiscal year

 $
 42,509

 $
 188,966

 Supplemental disclosure of non-cash investing activity information:

 Supplemental disclosures of cash flow information:

 Cash paid during the year for interest

 $
 62,373

 $
 19,529

 The
accompanying notes to financial statements are an integral part of these statements.

 ENCISION INC.

 NOTES
TO FINANCIAL STATEMENTS

 1. Description
of Business and Basis of Presentation

Inc. is a medical device company that designs, develops, manufactures and markets patented surgical instruments that provide greater
safety to patients undergoing minimally-invasive surgery. We believe that our patented AEM surgical instrument technology
is changing the marketplace for electrosurgical devices and instruments by providing a solution to a well-documented risk in laparoscopic
surgery. Our sales to date have been made primarily in the United States. Sales included $ 311,104 from Australia and $ 48,861 from New
Zealand.

 We
have an accumulated deficit of $ 22,545,047 at March 31, 2024. Operating funds have been provided primarily by issuances of our common
stock and warrants, the exercise of stock options to purchase our common stock, loans, and by operating profits. Our liquidity has diminished
because of prior years' operating losses, and we may be required to seek additional capital in the future.

 Our
strategic marketing and sales plan is designed to expand the use of our products in surgically active hospitals in the United States.

 In
February 2024, we signed a Proof-of-Concept Services Agreement with Vicarious Surgical Inc. ("Vicarious"). The Vicarious
robot design intends to maximize visualization, precision, and control of instruments in robotic-assisted minimally invasive surgery.

 We
had (net loss) available to shareholders of $( 691,783) and $( 323,945) for the fiscal years ended March 31, 2024 and 2023, respectively.
At March 31, 2024, we had $ 42,509 in cash available to fund future operations. We increased our pricing on products to mitigate somewhat
our higher material costs. We have a line of credit for up to $ 1 million, restricted by eligible receivables. Management concludes that
it is probable that our cash resources and line of credit will be sufficient to meet our cash requirements for twelve months from the
issuance of the financial statements

 The
accompanying consolidated financial statements have been prepared assuming that we will continue as a going concern.

 2. Summary
of Significant Accounting Policies

 Use
of Estimates in the Preparation of Financial Statements. The preparation of financial statements in conformity with accounting principles
generally accepted in the United States ("GAAP") requires management to make estimates and assumptions. Such estimates and
assumptions affect the reported amounts of assets and liabilities as well as disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of sales and expense during the reporting period. Actual results could differ from
those estimates.

 Cash
and Cash Equivalents For purposes of reporting cash flows, we consider all cash and highly liquid investments with an original maturity
of three months or less to be cash equivalents.

 Fair
Value of Financial Instruments. Our financial instruments consist of cash, cash equivalents, short-term trade receivables, payables,
line of credit, PPP loan, Economic Injury Disaster Loan ("EIDL") loan and secured notes. The carrying values of cash, cash
equivalents, trade receivables, payables, line of credit approximate their fair value due to their short maturities. The fair values
of the EIDL Loan approximates the carrying value based on estimated discounted future cash flows using the current rates at which similar
loans would be made.

 Concentration
of Credit Risk. Financial instruments, which potentially subject us to concentrations of credit risk, consist of cash and cash equivalents,
and accounts receivable. The carrying value of all financial instruments approximates fair value. The amount of cash on deposit with
financial institutions occasionally exceeds the $ 250,000 federally insured limit at March 31, 2024. However, we believe that cash on
deposit that exceeds $ 250,000 in the financial institutions is financially sound and the risk of loss is minimal.

 We
have no significant off-balance sheet concentrations of credit risk such as foreign exchange contracts, options contracts or other foreign
hedging arrangements. We maintain the majority of our cash balances with one financial institution in the form of demand deposits.

 Accounts
receivable are typically unsecured and are derived from transactions with and from entities in the healthcare industry primarily located
in the United States. Accordingly, we may be exposed to credit risk generally associated with the healthcare industry. We maintain allowances
for doubtful accounts for estimated losses resulting from the inability of our customers to make
required payments. We charge interest on past due accounts on a case-by-case basis.

 The
accounts receivable balance at March 31, 2024 of $ 891,129 included no more than 11% from any one customer. The accounts receivable balance
at March 31, 2023 of $ 920,721 included no more than 8% from any one customer.

 Warranty
Accrual. We provide for the estimated cost of product warranties at the time sales are recognized.
While we engage in extensive product quality programs and processes, including actively monitoring and evaluating the quality of our
component suppliers, our warranty obligation is based upon historical experience and is also affected by product failure rates and material
usage incurred in correcting a product failure. Should actual product failure rates or material
usage costs differ from our estimates, revisions to the estimated warranty liability would be required. There was no warranty accrual
at March 31, 2024.

 Inventories.
 Inventories are stated at the lower of cost
(first-in, first-out basis) or net realizable value. We reduce inventory for estimated obsolete or unmarketable inventory equal to the
difference between the cost of inventory and the net realizable value based upon assumptions about future demand and market conditions.
If actual market conditions are less favorable than those projected by management, additional inventory write-downs may be required.

 At
March 31, 2024 and 2023, inventory consisted of the following:

 Schedule of inventory

 2024

 2023

 Raw materials

 $
 1,044,161

 $
 1,424,366

 Finished goods

 358,177

 474,836

 Total net inventories

 $
 1,402,338

 $
 1,899,202

 For
the fiscal year 2024, Encision added $ 153,511 in additional inventory reserve and wrote off $ 141,511 in inventory. In fiscal year 2023,
Encision added $ 49,917 in inventory reserve and wrote off $ 34,917 in previously reserved inventory. No inventory reserve was reduced
from the prior year. Total Raw Materials reserve for fiscal year 2024 is $ 53,948 and $ 32,107 for fiscal year 2023. Finished goods reserve
for fiscal year 2024 is $ 9,052 and $ 18,893 in fiscal year 2023.

 Right
of Use Assets and Lease Liabilities. We determine if an arrangement includes a lease at the inception of the agreement and the right-of-use
asset and lease liability is determined at the lease commencement date and is based on the present value of estimated lease payments.
Our lease agreements contain both fixed and variable lease payments, none of which are based on a rate or an index. Fixed lease payments
are included in the determination of the right-of-use asset and lease liability. Variable lease payments that are not based on a rate
or index are expensed when incurred. The present value of estimated lease payments is determined utilizing the rate implicit in the lease
agreement if that rate can be determined. If the implicit rate cannot be determined, the present value of estimated lease payments is
determined utilizing our incremental borrowing rate. The incremental borrowing rate is determined at the lease commencement date and
is estimated utilizing similar or collateralized borrowing instruments adjusted for the terms of leasing arrangement as necessary. Our
lease agreements do not contain any material residual value guarantees or material restrictive covenants. The lease agreement is for
our building. The original lease is from June 3, 2004 and was amended in August 2023 to extend the term until October 31, 2026. The balances
as of March 2024 and 2023, for the Right of Use Asset were $ 900,787 and $ 496,004, respectively. The balances as of March 2024 and 2023
for Lease Liabilities were $ 1,066,987 and $ 593,494, respectively.

 Property
and Equipment. Property and equipment are stated at cost, with depreciation computed over the estimated useful lives of the assets,
generally three to seven years. We use the straight-line method of depreciation for property and equipment. Leasehold improvements are
depreciated over the shorter of the remaining lease term or the estimated useful life of the asset. Maintenance and repairs are expensed
as incurred and major additions, replacements and improvements are capitalized. Depreciation expense for the years ended March 31, 2024
and 2023 was $ 61,322 and $ 59,290, respectively. Property and equipment additions for the years ended March 31, 2024 and 2023 were $ 12,050
and $ 173,269, respectively. Property and equipment is comprised principally of equipment and is depreciated over seven years.

 Long-Lived
Assets. Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount
of an asset may not be recoverable. A long-lived asset is considered impaired when estimated future cash flows related to the asset,
undiscounted and without interest, are insufficient to recover the carrying amount of the asset. If deemed impaired, the long-lived asset
is reduced to its estimated fair value. Long-lived assets to be disposed of are reported at the lower of their carrying amount or estimated
fair value less cost to sell.

 Patents.
 The costs of applying for patents are capitalized and amortized on a straight-line basis over the lesser of the patent's economic
or legal life (20 years from the date of application in the United States). Capitalized costs are expensed if patents are not issued.
We review the carrying value of our patents periodically to determine whether the patents have continuing value and such reviews could
result in the conclusion that the recorded amounts have been impaired. A summary of our patents at March 31, 2024 and 2023 is as follows:

 Summary of patents

 2024

 2023

 Patents issued

 436,831

 $
 432,345

 Write off of obsolete patents

 —

 ( 2,500
)

 Accumulated amortization

 ( 315,530
)

 ( 292,066
)

 Patents issued, net of accumulated amortization

 121,301

 137,779

 Patent applications

 57,897

 37,733

 Accumulated amortization

 ( 15,188
)

 ( 12,380
)

 Patent applications, net of accumulated amortization

 42,709

 25,353

 Total net patents and patent applications

 $
 164,010

 $
 163,132

 The
expected annual amortization expense related to patents and patent applications as of March 31, 2024, for the next five fiscal years,
is as follows:

 Schedule of expected annual amortization expense

 2025

 $
 20,104

 2026

 19,150

 2027

 18,332

 2028

 17,841

 Thereafter

 88,583

 Total

 $
 164,010

 Other
Accrued Liabilities. At March 31, 2024 and 2023, other accrued liabilities consisted of the following:

 Schedule of other accrued liabilities

 2024

 2023

 Sales commissions

 $
 9,794

 $
 34,668

 Sales and use tax

 13,006

 12,769

 Marketing fees

 21,217

 13,788

 Payroll taxes, payroll

 45,172

 16,883

 Miscellaneous

 30,615

 6,470

 Total other accrued liabilities

 $
 119,804

 $
 84,578

 Income
Taxes. We account for income taxes under the provisions of ASC Topic 740, "Accounting for Income Taxes" ("ASC 740").
ASC 740 requires recognition of deferred income tax assets and liabilities for the expected future income tax consequences, based on
enacted tax laws, of temporary differences between the financial reporting and tax bases of assets and liabilities. ASC 740 also requires
recognition of deferred tax assets for the expected future tax effects of all deductible temporary differences, loss carryforwards and
tax credit carryforwards. Deferred tax assets are then reduced, if deemed necessary, by a valuation allowance for the amount of any tax
benefits which, more likely than not based on current circumstances, are not expected to be realized. Should we achieve sufficient, sustained
income in the future, we may conclude that some or all of the valuation allowance should be reversed (Note 5).

 ASC
740 prescribes a comprehensive model for how companies should recognize, measure, present, and disclose in their financial statements
uncertain tax positions taken or expected to be taken on a tax return. Under ASC 740, tax positions must initially be recognized in the
financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax
positions must initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of
being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts.

 There
are open statutes of limitations for taxing authorities in federal and state jurisdictions to audit the Company's tax returns from
fiscal year ended March 31, 2003 through the current period. Our policy is to account for income tax related interest and penalties in
income tax expense in the statements of operations. There have been no income tax related interest or penalties assessed or recorded.
The Company has provided a full valuation allowance on all of its deferred tax assets.

 Revenue
Recognition. We record revenue at a single point in time, when control is transferred to the customer, which is consistent with past
practice. We will continue to apply our current business processes, policies, systems and controls to support recognition and disclosure.
Our shipping policy is FOB Shipping Point. We recognize revenue from sales to stocking distributors when there is no right of return,
other than for normal warranty claims. We have no ongoing obligations related to product sales, except for normal warranty obligations.
As presented on the Statement of Operations our revenue is disaggregated between product revenue and service revenue. As it relates specifically
to product revenue, we do not believe further disaggregation is necessary as substantially all our product revenue comes from multiple
products within a line of medical devices. Our engineering service contracts are billed on a time and materials basis and revenue is
recognized over time as the services are performed.

 We
determine revenue recognition through the following steps: (1) identification of the contract with a customer; (2) identification of
the performance obligations in the contract; (3) determination of the transaction price; (4) allocation of the transaction price to the
performance obligations in the contract (where revenue is allocated on a relative standalone selling price basis by maximizing the use
of observable inputs to determine the standalone selling price for each performance obligation); and (5) recognition of revenue when,
or as, we satisfy a performance obligation.

 Topic
606 requires the disaggregation of revenue into broad categories, which we have defined as shown below.

 Schedule of disaggregation revenue

 Product revenue

 $
 6,431,969

 $
 6,885,158

 Service revenue

 153,913

 463,356

 Total revenues

 $
 6,585,882

 $
 7,348,514

 Sales
Taxes. We collect sales tax from customers and remit the entire amount to each respective state. We recognize revenue from product
sales net of sale taxes.

 Research
and Development Expenses. We expense research and development costs for products and processes as incurred.

 Advertising
Costs. We expense advertising costs as incurred. Advertising expense for the years ended March 31, 2024 and 2023 was minimal.

 Stock-Based
Compensation. Stock-based compensation is presented in accordance with the guidance of ASC Topic 718, "Compensation –
Stock Compensation" ("ASC 718"). Under the provisions of ASC 718, companies are required to estimate the fair value
of share-based payment awards on the date of grant using an option-pricing model. The value of the portion of the award that is ultimately
expected to vest is recognized as expense over the requisite service periods in our statements of operations.

 ASC
718 requires companies to estimate the fair value of share-based payment awards on the date of grant using an option-pricing model. The
value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service periods in
the accompanying statements of operations.

compensation expense recognized during the period is based on the value of the portion of share-based payment awards that is ultimately
expected to vest during the period. Stock-based compensation expense recognized in our statements of operations for fiscal years 2024
and 2023 included compensation expense for share-based payment awards granted prior to, but not yet vested as of March 31, 2024, based
on the grant date fair value. Compensation expense for all share-based payment is recognized using the straight-line, single-option method.
As stock-based compensation expense recognized in the accompanying statements of operations for fiscal years 2024 and 2023 is based on
awards ultimately expected to vest, it has been reduced for estimated forfeitures. ASC 718 requires forfeitures to be estimated at the
time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.

 We
used the Black-Scholes option-pricing model ("Black-Scholes model") to determine fair value. Our determination of fair value
of share-based payment awards on the date of grant using an option-pricing model is affected by our stock price as well as assumptions
regarding a number of highly complex and subjective variables. These variables include, but are not limited to our expected stock price
volatility over the term of the awards, and actual and projected employee stock option exercise behaviors. Although the fair value of
employee stock options is determined in accordance with ASC 718 using an option-pricing model, that value may not be indicative of the
fair value observed in a willing buyer/willing seller market transaction.

compensation expense recognized under ASC 718 for fiscal years 2024 and 2023 was $ 53,552 and $ 51,892, respectively, which consisted of
stock-based compensation expense related to director and employee stock options.

compensation expense related to director and employee stock options under ASC 718 for fiscal years 2024 and 2023 was allocated as follows:

 Schedule of stock-based compensation expense

 2024

 2023

 Cost of sales

 $

 $

 Sales and marketing

 7,261

 7,009

 General and administrative

 41,180

 39,630

 Research and development

 4,977

 4,622

 Stock-based compensation expense

 $

 $

 Segment
Reporting. We have concluded that we have two operating segments, product and service. Product designs, develops, manufactures and
markets patented surgical instruments. Service performs electrical engineering activities for external entities.

 Schedule of operating segments

 Year
 Ended March 31, 2024

 Year
 Ended March 31, 2023

 Service

 Total

 Service

 Total

 Net revenue

 $
 6,431,969

 $
 153,913

 $
 6,585,882

 $
 6,885,158

 $
 463,356

 $
 7,348,514

 Cost of revenue

 3,370,855

 79,065

 3,449,920

 3,313,620

 2,361

 3,315,981

 Gross profit

 3,061,114

 74,848

 3,135,962

 3,571,538

 460,995

 4,032,533

 Operating income (loss)

 ( 715,631
)

 74,848

 ( 640,783
)

 ( 763,792
)

 460,995

 ( 302,797
)

 Depreciation and amortization

 85,218

 —

 85,218

 86,906

 —

 86,906

 Capital expenditures

 12,050

 —

 12,050

 173,269

 —

 173,269

 Equipment and patents, net

 $
 418,014

 $
 —

 $
 418,014

 $
 466,409

 $
 —

 $
 466,409

 Basic
and Diluted Income per Common Share. Net income per share is calculated in accordance with ASC Topic 260, "Earnings Per Share"
("ASC 260"). Under the provisions of ASC 260, basic net income per common share is computed by dividing net income for the
period by the weighted average number of common shares outstanding for the period. Diluted net income per common share is computed by
dividing the net income for the period by the weighted average number of common and potential common shares outstanding during the period
if the effect of the potential common shares is dilutive. Because we had a loss in fiscal years 2024 and 2023, the shares used in the
calculation of dilutive potential common shares exclude options to purchase shares.

 The
following table presents the calculation of basic and diluted net income (loss) per share:

 Schedule of basic and diluted net income (loss) per share

 March
 31, 2024

 March
 31, 2023

 Net income (loss)

 $
)

 $
)

 Weighted-average shares — basic

 11,770,391

 11,762,995

 Effect of dilutive potential common shares

 —

 —

 Weighted-average shares — basic and diluted

 11,770,391

 11,762,995

 Net loss per share — basic and diluted

 $
 ( 0.06
)

 $
 ( 0.03
)

 Antidilutive equity units

 751,000

 1,049,000

 3.
 Shareholders' Equity

 Stock
Option Plans. We adopted our 2014 Equity Incentive Plan (the "Plan," as summarized below) to promote our and our shareholders'
interests by helping us to attract, retain and motivate our key employees and associates. Under the terms of the Plan, the Board of Directors
may grant incentive and non-qualified stock options, stock appreciation rights, restricted stock, restricted stock units, performance
units, and other stock-based awards. The purchase price of the shares subject to a stock option will be the fair market value of our
common stock on the date the stock option is granted. Generally, vesting of stock options occurs such that 20% becomes exercisable on
each anniversary of the date of grant for each of the five years following the grant date of such option. Generally, all stock options
must be exercised within five years from the date granted. The number of common shares reserved for issuance under the Plan is 1,100,000
shares of common stock, subject to adjustment for dividend, stock split or other relevant changes in our capitalization.

 Under
ASC 718, the value of each employee stock option was estimated on the date of grant using the Black-Scholes model for the purpose of
financial information in accordance with ASC 718. The use of a Black-Scholes model requires the use of actual employee exercise behavior
data and the use of a number of assumptions including expected volatility, risk-free interest rate and expected dividends. Employee stock
options for 120,000 and 155,000 shares of stock were granted during fiscal years 2024 and 2023, respectively.

 As
of March 31, 2024, $ 145,000 of total unrecognized compensation costs related to nonvested stock is expected to be recognized over a period
of five years. During the year ended March 31, 2024, various fully vested five-year stock options to purchase 328,916 shares of common
stock of us previously granted to board members and employees expired unexercised.

 The
assumptions for employee stock options are summarized as follows:

 Summary of assumptions for employee stock options

 Year Ended

 Dividend yield

 %

 Expected volatility

 87 % to 93 %

 Risk-free interest rate

 4.05 % to 4.64 %

 Expected life (in years)

 5.0

 Stock price

 $ 0.39 to $ 0.75

 Exercise price

 $ 0.33 to $ 0.38

 Cumulative
compensation cost recognized in net income or loss with respect to options that are forfeited prior to vesting is adjusted as a reduction
of compensation expense in the period of forfeiture. The volatility of the stock is based on the historical volatility for the period
that approximates the expected lives of the options being valued. Fair value computations are highly sensitive to the volatility factor;
the greater the volatility, the higher the computed fair value of options granted.

compensation expense related to director and employee stock options under ASC 718 for fiscal years 2024 and 2023 was allocated as follows:

 Schedule of stock-based compensation

 2024

 2023

 Cost of sales

 $

 $

 Sales and marketing

 7,261

 7,009

 General and administrative

 41,180

 39,630

 Research and development

 4,977

 4,622

 Stock-based compensation expense

 $

 $

 The
total fair value of options granted was computed to be approximately $ 40,025 and $ 56,600 for the fiscal years ended March 31, 2024 and
2023, respectively. For disclosure purposes, these amounts are amortized ratably over the vesting periods of the options. Effects of
stock-based compensation, net of the effect of forfeitures, totaled $ 53,552 and $ 51,892 for fiscal years 2024 and 2023, respectively.

 The
Black-Scholes model was developed for use in estimating the fair value of traded options that have no vesting restrictions and are fully
transferable. In addition, option valuation models require the use of assumptions, including the expected stock price volatility. Because
our employee stock options have characteristics significantly different than those of traded options, and because changes in the subjective
input assumptions can materially affect the fair value estimate, in management's opinion, the existing models do not necessarily
provide a reliable single measure of the fair value of our employee stock options. A summary of our stock option activity and related
information for equity compensation plans approved by security holders for each of the fiscal years ended March 31, 2024 and 2023 is
as follows:

 Summary of stock option activity

 STOCK
 OPTIONS OUTSTANDING

 Outstanding

 Weighted-Average
 Exercise Price per Share

 BALANCE AT MARCH 31, 2022

 1,061,000

 $
 0.65

 Granted

 155,000

 0.51

 Exercised

 ( 50,000
)

 0.42

 Forfeited/expired

 ( 117,000
)

 0.47

 BALANCE AT MARCH 31, 2023

 1,049,000

 0.66

 Granted

 120,000

 0.44

 Exercised

 ( 89,084
)

 0.34

 Forfeited/expired

 ( 328,916
)

 0.44

 BALANCE AT MARCH 31, 2024

 751,000

 $
 0.75

 The
following table summarizes information about employee stock options outstanding and exercisable at March 31, 2024:

 Schedule of employee stock options outstanding and exercisable

 STOCK
 OPTIONS OUTSTANDING

 STOCK
 OPTIONS EXERCISABLE

 Range
 of Exercise Prices

 Outstanding

 Weighted-Average
 Remaining Contractual Life (in Years)

 Weighted-Average
 Exercise Price
 per
 Share

 Exercisable

 Weighted-Average
 Exercise Price
 per
 Share

 $0.34 - $0.35

 80,000

 1.5

 $
 0.35

 77,072

 $
 0.35

 $0.39 - $0.50

 260,000

 1.3

 $
 0.45

 118,366

 $
 0.46

 $0.51 - $1.40

 411,000

 3.4

 $
 1.02

 196,026

 $
 1.07

 751,000

 2.5

 $
 0.75

 391,464

 $
 0.74

 The
 751,000 options outstanding as of March 31, 2024 are nonqualified stock options. The exercise price of all options granted through March
31, 2024 has been equal to or greater than the fair market value, as determined by our Board of Directors or based upon publicly quoted
market values of our common stock on the date of the grant.

 The
following table sets forth options to acquire shares of our common stock granted to Executive Officers during the fiscal year ended March
31, 2024.

 Schedule of options to acquire shares

 Name

 Grant Date

 Number of securities underlying options (#)

 Exercise price of option awards ($/Sh)

 Grant date fair value of option awards ($) (1)

 Gregory J. Trudel

 10/19/23

 10,000

.46

 3,371

 Brian Jackman

 —

 —

 —

 Mala Ray

 10/19/23

 10,000

.46

 3,371

 Name

 Number of Securities underlying unexercised options (#)exercisable

 Number of Securities underlying unexercised options (#) unexercisable

 Option exercise price ($/Sh)

 Option expiration Date

 Gregory J. Trudel

 4,631

 0.35

 11/12/24

 8,422

 1,578

 0.41

 03/12/25

 7,272

 2,728

 0.50

 11/12/25

 37,000

 38,000

 1.40

 01/13/27

 30,800

 39,200

 1.35

 04/19/27

 4,684

 5,352

 0.51

 02/09/28

 —

 10,000

 0.46

 01/19/29

 Brian Jackman

 4,631

 0.35

 11/12/24

 4,100

 0.55

 05/25/25

 7,272

 2,728

 0.50

 11/12/25

 4,933

 5,067

 1.40

 01/13/27

 4,183

 10,817

 0.51

 02/09/28

 Mala Ray

 19,767

 0.44

 07/22/24

 4,631

 0.35

 11/14/24

 7,272

 2,728

 0.50

 11/12/25

 7,400

 7,600

 1.40

 01/13/27

 6,972

 18,028

 0.51

 02/09/28

 —

 10,000

 0.46

 01/19/29

 4. Commitments
and Contingencies

 We
have a noncancelable lease agreement for our facilities at 6797 Winchester Circle, Boulder, Colorado. The lease expires October 31, 2026.

 On
April 1, 2021, we adopted Accounting Standards Codification ("ASC") ASC 842 "Leases" using the initial date of
adoption method, whereby the adoption does not impact any periods prior to April 1, 2019. ASC Topic 842 retains a distinction between
finance leases and operating leases. The classification criteria for distinguishing between finance leases and operating leases are substantially
similar to the classification criteria for distinguishing between capital leases and operating leases in the previous leases' guidance.
We recorded an operating Right of Use ("ROU") asset of $ 1,555,150, and an operating lease liability of $ 1,619,842 as of April
1, 2019. The difference between the initial operating ROU asset and operating lease liability of $ 64,692 is accrued rent previously recorded
under ASC 840. We elected to adopt the package of practical expedients and, accordingly, did not reassess any previously expired or existing
arrangements and related classifications under ASC 840.

 If
the rate implicit in the lease is not readily determinable, we use our incremental borrowing rate as the discount rate. We use our best
judgement when determining the incremental borrowing rate, which is the rate of interest that we would have to pay to borrow on a collateralized
basis over a similar term to the lease payments.

 Our
operating lease includes the use of real property. We have not identified any material finance leases as of March 31, 2024.

 For
the years ended March 31, 2024 and 2023, we had $ 329,255 and $ 357,644, respectively, for lease expense.

 The
following is a maturity analysis of the annual undiscounted cash flows reconciled to the carrying value of the operating lease liabilities
as of March 31, 2024:

 Schedule of principal U.S. Bank payment

 2025

 $
 415,667

 2026

 455,542

 2027

 270,666

 Total operating lease payments

 $
 1,141,875

 Less imputed interest

 ( 74,888
)

 Total operating lease liabilities

 $
 1,066,987

 Weighted-average remaining lease term

 2.6 years

 Weighted-average discount rate

 5.0
 %

 On
November 15, 2023, we entered into a loan and security agreement with Pathward, N.A. The loan is due on demand and has no financial covenants.
 Under the agreement, we were provided with a line of credit that is not to exceed the lesser of $1,000,000 or 85% of eligible accounts
receivable. The interest rate is prime rate plus 0.5%, with a floor of 6.75%, plus a monthly maintenance fee of 0.4%, based on the average
monthly loan balance. Interest is charged on a minimum loan balance of $300,000, a loan fee of 0.5% at closing and annually, and an exit
fee of 3%, 2% and 1% during years one, two and three, respectively.

 On
August 4, 2020, we received $ 150,000 in loan funding from the U.S. Small Business Administration ("SBA") under the Economic
Injury Disaster Loan ("EIDL") program administered by the SBA, which program was expanded pursuant to the CARES Act. The
EIDL is evidenced by a promissory note, dated August 1, 2021 in the original principal amount of $ 150,000 with the SBA, the lender. Under
the terms of the Note, interest accrues on the outstanding principal at the rate of 3.75 % per annum. The term of the Note is thirty years,
though it may be payable sooner upon an event of default under the Note.

 The
minimum future EIDL payment, by fiscal year, as of March 31, 2024 is as follows:

 Schedule of principal U.S. Bank payment

 2024

 3,091

 2025

 3,208

 2026

 3,331

 2027

 3,457

 Thereafter

 148,744

 Total

 $
 161,831

September 2020, we entered into a note agreement with U.S. Bank for $ 92,000.
The note is for five 5 years at a 5 % interest rate and the proceeds were used to purchase equipment. The note is secured by the
equipment.

 The
minimum future U.S. Bank payment, by fiscal year, as of March 31, 2024 is as follows:

 Schedule of principal U.S. Bank payment

 2024

 18,400

 2025

 13,800

 Total

 $
 32,200

June 2022, we entered into a note agreement with U.S. Bank for $ 118,970. The note is for five years at a 6 % interest rate and the proceeds
were used to purchase equipment. The note is secured by the equipment.

 The
minimum future principal U.S. Bank payment, by fiscal year, as of March 31, 2024 is as follows:

 Schedule of principal U.S. Bank payment

 2025

 2026

 2027

 2028

 5,949

 Total

 $
 77,331

 We
are subject to regulation by the United States Food and Drug Administration ("FDA"). The FDA provides regulations governing
the manufacture and sale of our products and regularly inspects us and other manufacturers to determine our and their compliance with
these regulations. As of March 31, 2024, we believe we were in substantial compliance with all known regulations. FDA inspections are
conducted periodically at the discretion of the FDA. We were last inspected in October 2019.

 Our
obligation with respect to employee severance benefits is minimized by the "at will" nature of the employee relationships.
Our total obligation with respect to contingent severance benefit obligations was none as of March 31, 2024 and 2023.

 5. Income
Taxes

 We
account for income taxes under ASC 740, which requires the use of the liability method. ASC 740 provides that deferred income tax assets
and liabilities are recorded based on the differences between the tax bases of assets and liabilities and their carrying amounts for
financial reporting purposes, referred to as temporary differences. Deferred income tax assets and liabilities at the end of each period
are determined using the currently enacted tax rates applied to taxable income in the periods in which the deferred income tax assets
and liabilities are expected to be settled or realized.

 Income
tax provision (benefit) for income taxes is summarized below:

 Schedule of income tax expense (benefit)

 Current:

 Federal
 $

 —

 $

 —

 State

 —

 —

 Total current

 —

 —

 Deferred:

 Federal

 22,000

 ( 12,000
)

 State

 4,000

 ( 1,000
)

 Total deferred

 26,000

 ( 13,000
)

 Valuation allowance

 ( 26,000
)

 13,000

 Total
 $

 —

 $

 —

 The
following is a reconciliation between the effective rate and the federal statutory rate:

 Schedule of effective income tax rate reconciliation

 March
 31, 2024

 March
 31, 2023

 Expected income tax rate

 $
 ( 145,000
)

 $
 ( 68,000
)

 State income taxes, net of federal tax benefit

 ( 28,000
)

 ( 13,000
)

 Other permanent differences

 ( 10,000
)

 12,000

 Research credits

 ( 8,000
)

 —

 Change in valuation allowance

 191,000

 69,000

 Income tax expense

 $
 —

 $
 —

 The
components of the net accumulated deferred income tax asset (liability) are as follows:

 Schedule of deferred income tax asset liability

 March
 31, 2024

 March
 31, 2023

 Other deferred assets

 $
 16,000

 $
 42,000

 Valuation allowance

 ( 16,000
)

 ( 42,000
)

 Current deferred tax assets

 —

 —

 Credits and net operating loss carryforwards

 2,616,000

 1,829,000

 Valuation allowance

 ( 2,616,000
)

 ( 1,829,000
)

 Long-term deferred tax assets

 —

 —

 Total deferred tax assets

 —

 —

 Valuation allowance

 —

 —

 Long-term deferred tax liabilities

 —

 —

 Total deferred tax liabilities

 —

 —

 Net deferred tax assets (liabilities)

 $
 —

 $
 —

 The
primary components of our deferred tax assets are described below:

 Differences in reporting long-term assets

 $
 16,000

 $
 42,000

 Credits and net operating loss carryforwards

 2,616,000

 1,829,000

 Less valuation allowance

 ( 2,600,000
)

 ( 1,871,000
)

 Total deferred tax assets

 $
 —

 $
 —

 In
assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all
of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of
future taxable income during the periods in which net operating losses and reversal of timing differences may offset taxable income.
Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies
in making this assessment. A valuation allowance is provided when it is more likely than not that some portion or all of a deferred tax
asset will not be realized. Due to our lack of earnings history, the net deferred tax assets have been fully offset by a valuation allowance.

 As
of March 31, 2024, we had approximately $ 8.9 million of net operating loss carryovers for tax purposes. Additionally, we have approximately
$ 384,000 of research and development tax credits available to offset future federal income taxes. The net operating loss and credit carryovers
begin to expire in the fiscal year ended March 31, 2025. In fiscal years ended after March 31, 2024, net operating losses expire at various
dates through March 31, 2045. The Internal Revenue Code contains provisions, which may limit the net operating loss carryforwards available
to be used in any given year if certain events occur, including significant changes in ownership interests.

 6. Major
Customers/Suppliers

 We
depend on sales that are generated from hospitals' ongoing usage of AEM surgical instruments. In fiscal year 2024, we generated
sales from over 300 hospitals that have changed to AEM products. Three vendors accounted for approximately 47 % of our inventory purchases.

 7. Defined
Contribution Employee Benefit Plan

 We
have adopted a 401(k) Profit Sharing Plan which covers all full-time employees who have completed at least three months of full-time
continuous service and are age eighteen or older. Participants may defer up to 20% of their gross pay up to a maximum limit determined
by law. Participants are immediately vested in their contributions. We may make discretionary contributions based on corporate financial
results for the fiscal year. To date, we have not made contributions to the 401(k) Profit Sharing Plan. Vesting in a contribution account
(our contribution) is based on years of service, with a participant fully vested after five years of credited service.

 8. Related
Party Transaction

 We
paid consulting fees of $ 32,032 and $ 55,715 to an entity owned by one of our directors in fiscal years 2024 and 2023, respectively.

 9. Subsequent Events

 Management
evaluated all of our activity and concluded that, as of the date the financial statements were issued, no subsequent events have occurred
that would require recognition in the financial statements or disclosure in the notes to the financial statements.

 Item
9. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure.

 On
October 17, 2023, we were notified that Gries & Associates, LLC ("Gries"), our independent registered public accounting
firm, had completed a sale of its customers to GreenGrowth CPAs Inc. ("GreenGrowth"). As a result of this transaction, Gries
resigned its engagement with us immediately.

 On
October 18, 2023, upon the approval of our Audit Committee, we engaged GreenGrowth as our new independent registered public accounting
firm for our fiscal year ending March 31, 2023 and interim periods.

 Gries'
reports on our financial statements for the past two years did not contain an adverse opinion or a disclaimer of opinion, and were not
qualified or modified as to uncertainty, audit scope, or accounting principles. The report had been prepared assuming that we would continue
as a going concern and included an explanatory paragraph regarding our ability to continue as a going concern as result of recurring
losses and a deficiency in shareholders' equity.

the years ended March 31, 2023 and 2022, and the subsequent period through October 17, 2023, there were (i) no disagreements (as described
in Item 304(a)(1)(iv) of Regulation S-K and the related instructions) between us and Gries on any matter of accounting principles or
practices, financial statement disclosure, or auditing scope or procedure, which, if not resolved to Gries' satisfaction, would
have caused Gries to make reference thereto in its reports on the financial statements for such years; and (ii) no "reportable
events" within the meaning of Item 304(a)(1)(v) of Regulation S-K, except that Gries advised us of material weaknesses in its internal
control over financial reporting as of March 31, 2023 and 2022.

our two most recent fiscal years ended March 31, 2023 and 2022, and the subsequent interim period through the date of its engagement,
we did not consult with GreenGrowth regarding either of the following: (i) the application of accounting principles to a specified transaction,
either completed or proposed, or the type of audit opinion that might be rendered on our financial statements, and GreenGrowth did not
provide a written report or oral advice on any accounting, auditing or financial reporting issue that GreenGrowth concluded was an important
factor considered by us in reaching a decision as to the accounting, auditing or financial reporting issue, or (ii) any matter that was
either the subject of a disagreement, as defined in Item 304(a)(1)(iv) of Regulation S-K and the related instructions, or a "reportable
event," as described in Item 304(a)(1)(v) of Regulation S-K.

 Item
9A. Controls and Procedures.

 Evaluation
of Disclosure Controls and Procedures

 Under
the supervision and with the participation of our management, including our principal executive officer and principal financial officer,
as of March 31, 2024, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e)
and Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended. Based on this evaluation, our principal executive
officer and principal financial officer have concluded that, based on the material weaknesses discussed below, our disclosure controls
and procedures were not effective as of such date to ensure that information required to be disclosed by us in reports filed or submitted
under the Securities Exchange Act were recorded, processed, summarized, and reported within the time periods specified in the SEC's
rules and forms and that our disclosure controls are not effectively designed to ensure that information required to be disclosed by
us in the reports that we file or submit under the Securities Exchange Act is accumulated and communicated to management, including our
principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely
decisions regarding required disclosure.

 Changes
in Internal Control over Financial Reporting

 There
have been no changes in our internal control over financial reporting that occurred during our fourth fiscal quarter that have materially
affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 Management's
Annual Report on Internal Control over Financial Reporting

 Management
is responsible for establishing and maintaining adequate internal control over financial reporting. As defined in Rules 13a-15(f) under
the Securities Exchange Act of 1934, internal control over financial reporting is a process designed by, or under the supervision of,
the Company's principal executive, principal operating and principal financial officers, or persons performing similar functions,
and effected by the Company's board of directors, management and other personnel, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP.

 Our
internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records, that,
in reasonable detail, accurately and fairly reflect the transactions and dispositions of the Company's assets; (2) provide reasonable
assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted
accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of the
Company's management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use or disposition of the Company's assets that could have a material effect on the financial statements.

 Because
of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of
any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions,
or that the degree of compliance with the policies or procedures may deteriorate.

 Our
management, including our principal executive officer and principal financial officer, assessed the effectiveness of our internal control
over financial reporting at March 31, 2024. In making this assessment, management used the criteria set forth by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO) in Internal Control—Integrated Framework (2013). Based on that assessment under
those criteria, management has determined that, as of March 31,2024, our internal control over financial reporting was not effective.

 Our
internal controls are not effective for the following reason: (i) there is an inadequate segregation of duties consistent with control
objectives as management is comprised of only two persons, one of which is our principal executive officer and the other is the principal
financial officer.

 In
order to mitigate the foregoing material weaknesses, we have engaged an outside accounting consultant with significant experience in
the preparation of financial statements in conformity with GAAP to assist us in the preparation of our financial statements to ensure
that these financial statements are prepared in conformity with GAAP. We will continue to monitor the effectiveness of this action and
make any changes that our management deems appropriate.

 We
would need to hire additional staff to provide greater segregation of duties. Currently, it is not feasible to hire additional staff
to obtain optimal segregation of duties. Management will continue to reassess this matter to determine whether improvement in segregation
of duty is feasible. In addition, we would need to expand our board to include independent members.

 Going
forward, we intend to evaluate our processes and procedures and, where practicable and resources permit, implement changes in order to
have more effective controls over financial reporting.

 This
Annual Report does not include an attestation report of our registered public accounting firm regarding internal control over financial
reporting. Management's report was not subject to attestation by our registered public accounting firm pursuant to the exemption
provided to issuers that are not "large accelerated filers" nor "accelerated filers" under the Dodd-Frank Wall
Street Reform and Consumer Protection Act.

 Item
9B. Other Information

the fiscal year ended March 31, 2024, no director or officer adopted or terminated any Rule 10b5-1 trading arrangement
or non-Rule 10b5-1 trading arrangement, as each term is defined in Item 408(a) of Regulation S-K.

 Item
9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

 Not
applicable.

 PART
III

 Item
10. Directors, Executive Officers and Corporate Governance.

in response to this item is incorporated by reference from the registrant's definitive proxy statement for its 2021 Annual Meeting of

 Item
11. Executive Compensation.

in response to this item is incorporated by reference from the registrant's definitive proxy statement for its 2021 Annual Meeting of

 Item
12. Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters.

in response to this item is incorporated by reference from the registrant's definitive proxy statement for its 2021 Annual Meeting of

 The
following table summarizes certain information regarding our equity compensation plan as of March 31, 2024:

 Plan
 Category

 of securities to be issued upon exercise of outstanding equity units

 Weighted-average
 exercise price of equity units

 of securities remaining available for future issuance under equity units plan

 Equity
 compensation plans approved by security holders

 751,000

 $
 0.75

 349,000

 Item
13. Certain Relationships and Related Transactions, and Director Independence.

 Item
13. Certain Relationships and Related Transactions, and Director Independence.

in response to this item is incorporated by reference from the registrant's definitive proxy statement for its 2023 Annual Meeting of

 Item
14. Principal Accounting Fees and Services.

in response to this item is incorporated by reference from the registrant's definitive proxy statement for its 2024 Annual Meeting of

 PART
IV

 Item
15. Exhibits, Financial Statement Schedules.

 3.1
 Articles of Incorporation of the Company, as amended. (Incorporated by reference from Registration Statement #333-4118-D dated June
25, 1996).

 3.2
 Bylaws of the Company. (Incorporated by reference from Current Report on Form 8-K filed on October 30, 2007).

 3.3
 First Amended and Restated Bylaws (incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K filed on May 31, 2017).

 4.1
 Form of certificate for shares of Common Stock. (Incorporated by reference from Registration Statement #333-4118-D dated June 25,
1996).

 4.2
 Description of Capital Stock. (Incorporated by reference from Annual Report on Form 10-K filed on June 14, 2019)

 10.1
 Lease Agreement dated June 3, 2004 between Encision Inc. and DaPuzzo Investment Group, LLC (Incorporated by reference from Quarterly
Report on Form 10-Q filed on August 12, 2004).

 10.2
 Encision Inc. 2007 Stock Option Plan (Incorporated by reference from Proxy Statement dated June 30, 2007).

 10.3
 Encision Inc. First Amended and Restated 2014 Stock Option Plan (Incorporated by reference from Proxy Statement dated July 6, 2020).

 10.4
 Employment Agreement, dated November 14, 2016, between Encision Inc. and Gregory J. Trudel (Incorporated
by reference to Exhibit 10-1 to our Current Report on Form 8-K filed on November 18, 2016).

 10.5
 Fifth Amendment to Office Building Lease dated November 9, 2017 (Incorporated by reference to Exhibit 10.1 to Quarterly Report on
Form 10-Q filed February 12, 2018).

 10.6
 PPP Promissory Note dated as of April 17, 2020 (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed
on April 23, 2020).

 10.8
 Economic Injury Disaster Loan dated as of August 1, 2020 (incorporated by reference to Exhibit 10.1 to our Quarterly Report on Form
10-Q filed on August 14, 2020).

 10.9
 US Bank Equipment Finance Note dated January 21, 2021 (incorporated by reference to Exhibit 4.3 to our
 Annual Report on Form 10-K filed on June 23, 2021)

 10.10
 PPP Promissory Note dated as of February 8, 2021 (incorporated by reference to Exhibit 10.1 to our Quarterly Report on Form 10-Q
 filed on February 12, 2021).

 10.11
 Supply Agreement dated August 23, 2021 between Auris Health, Inc. and Encision Inc. (incorporated by reference to Exhibit 10.1 to
our Quarterly Report on Form 10-Q filed on November 15, 2021).+

 10.12
 New Line of Credit and Security Agreement with Pathward, N.A. dated November
15, 2022 (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on November 17, 2022)

 23.1
 Consent of Independent Registered Public Accounting Firm

 31.1
 Section 302 Certification of Principal Executive Officer **

 31.2
 Section 302 Certification of Principal Financial and Accounting Officer **

 32.1
 Section 906 Certifications **

 Inline interactive data files pursuant to Rule 405 of Regulation S-T: (i) the Balance Sheets, (ii) the Statements of Operations, (iii) Statements of Stockholders Equity, (iv) Statements of Cash Flows and (v) the Notes to the Consolidated Financial Statements **

 Denotes management contract or compensatory plan or arrangement.

 **
 Filed herewith.

 Item
16. Form 10-K Summary.

 None.

 SIGNATURES

 Pursuant
to the requirements of Section 13 or 15(d) of the Exchange Act, the registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.

 Dated:

 ENCISION INC.

 By:

 /s/ Mala Ray

 Mala Ray
Controller
Principal Accounting Officer & Principal Financial Officer

 Pursuant
to the requirements of the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in
the capacities and on the dates indicated.

 Signature

 Date

 /s/ Mala
 Ray

 Mala
 Ray

 Controller
Principal
Accounting Officer & Principal Financial Officer

 /s/ Patrick
 W. Pace

 Patrick
 W. Pace

 Director

 /s/ Robert
 H. Fries

 Robert H. Fries

 Director

 /s/ Vern
 D. Kornelsen

 Vern
 D. Kornelsen

 Director

 /s/ Gregory
 J. Trudel

 Gregory
 J. Trudel
 President
 and CEO
Principal Executive Officer

 Director