Encision (ECIA) 10-Q 12 Feb 21 2021 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Dec. 31, 2020	Jan. 31, 2021
Document and Entity Information
Entity Registrant Name	ENCISION INC
Entity Central Index Key	0000930775
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Dec. 31, 2020
Amendment Flag	false
Current Fiscal Year End Date	--03-31
Entity's Reporting Status Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Emerging Growth Company	false
Entity Small Business	true
Entity Shell company	false
Entity File Number	001-11789
Entity Incorporation, State Country Code	CO
Entity Interactive Data Current	Yes
Entity Common Stock, Shares Outstanding		11,582,641
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q3

Condensed Balance Sheets (Unaud

Condensed Balance Sheets (Unaudited) - USD ($)	Dec. 31, 2020	Mar. 31, 2020
Current assets:
Cash and cash equivalents	$ 854,194	$ 385,132
Accounts receivable, net of allowance for doubtful accounts of $26,500 at December 31, 2020 and $58,000 at March 31, 2020	1,042,743	881,194
Inventories, net of reserve for obsolescence of $63,000 at December 31, 2020 and $39,000 at March 31, 2020	1,521,583	1,625,901
Prepaid expenses	179,202	72,639
Total current assets	3,597,722	2,964,866
Equipment, at cost:
Furniture, fixtures and equipment	2,582,022	3,130,640
Accumulated depreciation	(2,416,274)	(2,923,482)
Equipment, net	165,748	207,158
Right of use asset	1,127,319	1,317,057
Patents, net of accumulated amortization of $313,690 at December 31, 2020 and $291,337 at March 31, 2020	221,801	228,296
Other assets	20,495	19,548
TOTAL ASSETS	5,133,085	4,736,925
Current liabilities:
Accounts payable	475,154	444,823
Line of credit	0	370,498
Accrued compensation	232,883	218,806
Other accrued liabilities	294,394	96,077
Accrued lease liability	295,627	278,271
Total current liabilities	1,298,058	1,408,475
Long-term liability:
Accrued lease liability, net of current portion	1,005,194	1,144,432
Economic injury disaster loan	152,000	0
Total liabilities	2,455,252	2,552,907
Shareholders' equity:
Preferred stock, no par value: 10,000,000 shares authorized; none issued and outstanding	0	0
Common stock and additional paid-in capital, no par value: 100,000,000 shares authorized; 11,582,641 shares issued and outstanding at December 31, 2020 and March 31, 2020	24,257,491	24,232,477
Accumulated (deficit)	(21,579,658)	(22,048,459)
Total shareholders' equity	2,677,833	2,184,018
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$ 5,133,085	$ 4,736,925

Condensed Balance Sheets (Una_2

Condensed Balance Sheets (Unaudited) (Parenthetical) - USD ($)	Dec. 31, 2020	Mar. 31, 2020
Statement of Financial Position [Abstract]
Accounts receivable, allowance for doubtful accounts (in dollars)	$ 26,500	$ 58,000
Inventories, reserve for obsolescence (in dollars)	63,000	39,000
Accumulated amortization	$ 313,690	$ 291,337
Preferred stock, par value	$ 0	$ 0
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock and additional paid-in capital, par value	$ 0	$ 0
Common stock and additional paid-in capital, shares authorized	100,000,000	100,000,000
Common stock and additional paid-in capital, shares issued	11,582,641	11,582,641
Common stock and additional paid-in capital, shares outstanding	11,582,641	11,582,641

Condensed Statements of Operati

Condensed Statements of Operations (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2020	Dec. 31, 2019
NET REVENUE:
Total revenue	$ 2,162,600	$ 2,038,925	$ 5,390,575	$ 5,891,934
COST OF REVENUE:
Total cost of revenue	1,057,002	955,520	2,650,507	2,826,563
GROSS PROFIT	1,105,598	1,083,405	2,740,068	3,065,371
OPERATING EXPENSES:
Sales and marketing	580,477	544,495	1,512,741	1,611,996
General and administrative	372,994	293,806	998,620	943,600
Research and development	139,390	158,942	443,452	567,754
Total operating expenses	1,092,861	997,243	2,954,813	3,123,350
OPERATING INCOME (LOSS)	12,737	86,162	(214,745)	(57,979)
Interest expense, net	(16,380)	(16,172)	(51,021)	(25,167)
Extinguishment of debt income	598,567	0	598,567	0
Other income, net	4,397	113	136,000	1,241
Interest expense, extinguishment of debt income and other income, net	586,584	(16,059)	683,546	(23,926)
INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES	599,321	70,103	468,801	(81,905)
Provision for income taxes	0	0	0	0
NET INCOME (LOSS)	$ 599,321	$ 70,103	$ 468,801	$ (81,905)
Net income (loss) per share-basic and diluted	$ 0.05	$ 0.01	$ 0.04	$ (0.01)
Weighted average shares-basic	11,582,641	11,578,371	11,582,641	11,565,027
Weighted average shares-diluted	11,708,797	11,631,172	11,750,349	11,565,027
Product [Member]
NET REVENUE:
Total revenue	$ 1,998,979	$ 2,038,925	$ 5,093,118	$ 5,891,934
COST OF REVENUE:
Total cost of revenue	975,581	955,520	2,500,310	2,826,563
GROSS PROFIT	1,023,398		2,592,808
OPERATING EXPENSES:
OPERATING INCOME (LOSS)	(69,463)		(362,005)
Service [Member]
NET REVENUE:
Total revenue	163,621	0	297,457	0
COST OF REVENUE:
Total cost of revenue	81,421	$ 0	150,197	$ 0
GROSS PROFIT	82,200		147,260
OPERATING EXPENSES:
OPERATING INCOME (LOSS)	$ 82,200		$ 147,260

Condensed Statements of Cash Fl

Condensed Statements of Cash Flows (Unaudited) - USD ($)	9 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Operating activities:
Net income (loss)	$ 468,801	$ (81,905)
Adjustments to reconcile net loss to net cash used in operating activities:
Extinguishment of debt income	(598,567)	0
Depreciation and amortization	67,907	111,623
Share-based compensation expense	25,014	22,015
(Recovery from) provision for doubtful accounts, net	(31,500)	9,500
Provision for (recovery from) inventory obsolescence, net	24,000	(9,000)
Other income from release of account payable	(56,435)	0
Changes in operating assets and liabilities:
Right of use asset, net	67,856	30,170
Accounts receivable	(130,049)	(59,086)
Inventories	80,318	120,581
Prepaid expenses and other assets	(107,510)	11,485
Accounts payable	86,766	(69,354)
Accrued compensation and other accrued liabilities	212,394	(131,089)
Net cash provided by (used in) operating activities	108,995	(45,060)
Investing activities:
Acquisition of property and equipment	(4,144)	(52,796)
Patent costs	(15,858)	(5,135)
Net cash (used in) investing activities	(20,002)	(57,931)
Financing activities:
Paydown of credit facility, net change	(370,498)	0
EIDL loan	152,000	0
Proceeds from PPP loan	598,567	0
Net cash generated by financing activities	380,069	0
Net increase (decrease) in cash and cash equivalents	469,062	(102,991)
Cash and cash equivalents, beginning of period	385,132	298,348
Cash and cash equivalents, end of period	854,194	195,357
Supplemental disclosure:
Right of use asset	1,127,319	1,555,150
Accrued lease liability	1,300,821	1,619,842
Interest paid	$ 51,021	$ 18,502

ORGANIZATION AND NATURE OF BUSI

ORGANIZATION AND NATURE OF BUSINESS	9 Months Ended
	Dec. 31, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]
ORGANIZATION AND NATURE OF BUSINESS	Note 1. ORGANIZATION AND NATURE OF BUSINESS Encision Inc. is a medical device company that designs, develops, manufactures and markets patented surgical instruments that provide greater safety to, and saves lives of, patients undergoing minimally-invasive surgery. We believe that our patented AEM ® We have an accumulated deficit of $21,579,658 at December 31, 2020. A significant portion of our operating funds have been provided by issuances of our common stock and warrants, a line of credit, and the exercise of stock options to purchase our common stock. Shareholders’ equity increased by $493,815 since March 31,2020 as a result of our income of $468,801 and share-based compensation of $25,014. Should our liquidity be diminished in the future because of operating losses, we may be required to seek additional capital. Our strategic marketing and sales plan is designed to expand the use of our products in surgically active hospitals and surgery centers in the United States. We have been actively monitoring the novel coronavirus (“COVID-19”) situation and its impact globally. Our production facilities continued to operate during the year as they had prior to the COVID-19 pandemic with minimal change, other than for enhanced safety measures intended to prevent the spread of the virus. The remote working arrangements and travel restrictions imposed by various governments had limited impact on our ability to maintain operations during the year, as our manufacturing operations have generally been exempted from stay-at-home orders. However, we cannot predict the impact of the progression of the COVID-19 pandemic on future results due to a variety of factors, including the continued good health of our employees, the ability of suppliers to continue to operate and deliver, our ability and our customers to maintain operations, continued access to transportation resources, the changing needs and priorities of customers, any further government and/or public actions taken in response to the pandemic and ultimately the length of the pandemic. We will continue to closely monitor the COVID-19 pandemic in order to ensure the safety of our people and our ability to serve our customers and patients worldwide.

SUMMARY OF SIGNIFICANT ACCOUNTI

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	9 Months Ended
	Dec. 31, 2020
Accounting Policies [Abstract]
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	Note 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation. The accompanying condensed interim financial statements have been prepared, in all material respects, in conformity with the standards of accounting measurements and reflect, in the opinion of management, all adjustments necessary to summarize fairly the financial position and results of operations for such periods in accordance with GAAP. All adjustments are of a normal recurring nature. The results of operations for the most recent interim period are not necessarily indicative of the results to be expected for the full year. Use of Estimates in the Preparation of Financial Statements. Cash and Cash Equivalents. Fair Value of Financial Instruments. Concentration of Credit Risk. 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. The net accounts receivable balance at December 31, 2020 of $1,042,743 and at March 31, 2020 of $881,194 included no more than 8% from any one customer. Inventories December 31, 2020 March 31, 2020 Raw materials $ 1,211,805 $ 1,147,983 Finished goods 372,778 516,918 Total gross inventories 1,584,583 1,664,901 Less reserve for obsolescence (63,000 ) (39,000 ) Total net inventories $ 1,521,583 $ 1,625,901 Property and Equipment Long-Lived Assets. Patents. Income Taxes. Revenue Recognition. Research and Development Expenses Stock-Based Compensation Stock-based compensation expense recognized under ASC 718 for the three and nine months ended December 31, 2020 was $8,483 and $25,014, respectively, and the three and nine months ended December 31, 2019 was $6,650 and $22,015, respectively, which consisted of stock-based compensation expense related to grants of employee stock options. Segment Reporting. Three Months Ended December 31, 2020 Nine Months Ended December 31, 2020 Product Service Total Product Service Total Net revenue $ 1,998,979 $ 163,621 $ 2,162,600 $ 5,093,118 $ 297,457 $ 5,390,575 Cost of revenue 975,581 81,421 1,057,002 2,500,310 150,197 2,650,507 Gross profit 1,023,398 82,200 1,105,598 2,592,808 147,260 2,740,068 Operating income (loss) (69,463 ) 82,200 12,737 (362,005 ) 147,260 (214,745 ) Depreciation and amortization 20,584 — 20,584 67,907 — 67,907 Capital expenditures — — — 4,144 — 4,144 Equipment and patents, net $ 387,549 $ — $ 387,549 $ 387,549 $ — $ 387,549 Recently Issued Accounting Pronouncements.

BASIC AND DILUTED INCOME AND LO

BASIC AND DILUTED INCOME AND LOSS PER COMMON SHARE	9 Months Ended
	Dec. 31, 2020
Earnings Per Share [Abstract]
BASIC AND DILUTED INCOME AND LOSS PER COMMON SHARE	Note 3. Basic and Diluted Income and Loss per Common Share We report both basic and diluted net income (loss) per share. Basic net income or loss per common share is computed by dividing net income or loss for the period by the weighted average number of common shares outstanding for the period. Diluted net income or loss per common share is computed by dividing the net income or loss 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. The shares used in the calculation of dilutive potential common shares exclude options to purchase shares where the exercise price was greater than the average market price of common shares for the period. The following table presents the calculation of basic and diluted net loss per share: Three Months Ended Nine Months Ended December 31, 2020 December 31, 2019 December 31, 2020 December 31, 2019 Net income (loss) $ 599,321 $ 70,103 $ 468,801 $ (81,905 ) Weighted-average basic shares outstanding 11,582,641 11,578,371 11,582,641 11,565,027 Effect of dilutive securities 126,156 52,801 167,708 — Weighted-average diluted shares 11,708,797 11,631,172 11,750,349 11,565,027 Basic net income (loss) per share $ 0.05 $ 0.01 $ 0.04 $ (0.01 ) Diluted net income (loss) per share $ 0.05 $ 0.01 $ 0.04 $ (0.01 ) Antidilutive employee stock options 909,844 910,199 868,292 963,000

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES	9 Months Ended
	Dec. 31, 2020
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND CONTINGENCIES	Note 4. COMMITMENTS AND CONTINGENCIES We have a noncancelable lease agreement for our facilities at 6797 Winchester Circle, Boulder, Colorado. The lease expires October 31, 2024. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) ("ASU 2016-02"), which modified lease accounting for both lessees and lessors to increase transparency and comparability by recognizing lease assets and lease liabilities by lessees for those leases classified as either finance or operating leases under previous accounting standards and disclosing key information about leasing arrangements. We adopted Topic 842 on April 1, 2019, using the alternative modified transition method, which requires a cumulative effect adjustment, if any, to the opening balance of retained earnings to be recognized on the date of adoption with prior periods not restated. There was no cumulative effect adjustment recorded on April 1, 2019. The primary impact for us was the balance sheet recognition of right-of-use (“ROU”) assets and lease liabilities for operating leases as a lessee. We determine if an arrangement contains a lease at inception. We currently do not have any finance leases. Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. ROU assets also include any initial direct costs incurred and any lease payments made at or before the lease commencement date, less lease incentives received. We use our incremental borrowing rate based on the information available at the commencement date in determining the lease liabilities as our leases do not provide an implicit rate. Lease expense is recognized on a straight-line basis over the lease term. The minimum future lease payment, by fiscal year, as of December 31, 2020 is as follows: Fiscal Year Amount 2021 $ 87,000 2022 357,667 2023 372,167 2024 386,667 2025 232,139 Total $ 1,435,640 On August 9, 2019, we entered into a loan and security agreement with Crestmark Bank. The loan is due on demand, has no financial covenants and is secured by all of our assets. 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 (3.25% at December 31, 2020) plus 1.5%, 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 $500,000, a loan fee of 1% annually, and an exit fee of 3%, 2% and 1% during years one, two and three, respectively. At December 31, 2020, we had no borrowings and $535,799 available to borrow under our line of credit. During January 2021, we canceled our relationship with Crestmark Bank. We had no borrowings and incurred a $20,000 exit fee. On April 17, 2020, we entered into an unsecured promissory note under the Paycheck Protection Program (the “PPP”) for a principal amount of $598,567. The PPP was established under the congressionally approved Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). Under the terms of the CARES Act, a PPP loan recipient may apply for, and be granted, forgiveness for all or a portion of loans granted under the PPP. Such forgiveness will be determined based upon the use of loan proceeds for payroll costs, rent and utility costs, and the maintenance of employee and compensation levels. In the quarter that ended December 31, 2020, we achieved the requirements for forgiveness, and all of the $598,567 was forgiven. We recognized the forgiveness as extinguishment of debt income of $598,567. 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, 2020 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. Under the Note, we will be obligated to make equal monthly payments of principal and interest of $731 beginning on August 1, 2021 through the maturity date of August 1, 2050. The Note may be prepaid in part or in full, at any time, without penalty. The minimum future EIDL payment, by fiscal year, as of December 31, 2020 is as follows: Fiscal Year Amount 2021 $ — 2022 1,997 2023 3,091 2024 3,208 2025 3,331 Thereafter 140,373 Total $ 152,000 Aside from the operating lease and EIDL loan, we do not have any material contractual commitments requiring settlement in the future. 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 compliance with these regulations. We believe that we were in substantial compliance with all known regulations at December 31, 2020. FDA inspections are conducted periodically at the discretion of the FDA. Our latest inspection by the FDA occurred in October 2019.

SHARE-BASED COMPENSATION

SHARE-BASED COMPENSATION	9 Months Ended
	Dec. 31, 2020
Share-based Payment Arrangement [Abstract]
SHARE-BASED COMPENSATION	Note 5. SHARE-BASED COMPENSATION The provisions of ASC 718-10-55 requires the measurement and recognition of compensation expense for all share-based payment awards made to our employees and directors, including employee stock options and RSUs, based on estimated fair values. The following table summarizes stock-based compensation expense related to employee stock options for the three and nine months ended December 31, 2020 and 2019, which was allocated as follows: Three Months Ended Nine Months Ended December 31, 2020 December 31, 2019 December 31, 2020 December 31, 2019 Cost of sales $ 917 $ 703 $ 2,751 $ 2,108 Sales and marketing 1,218 796 3,653 2,389 General and administrative 5,803 5,064 16,974 16,128 Research and development 545 87 1,636 1,390 Stock-based compensation expense $ 8,483 $ 6,650 $ 25,014 $ 22,015 Share-based compensation cost for stock options is measured at the grant date, based on the fair value as calculated by the Black-Scholes-Merton ("BSM") option-pricing model. The BSM option-pricing model requires the use of actual employee exercise behavior data and the application of a number of assumptions, including expected volatility, risk-free interest rate and expected dividends. There were 20,000 stock options granted and 60,000 stock options forfeited during the three months ended December 31, 2020, and 110,000 stock options granted and 72,000 stock options forfeited during the nine months ended December 31, 2020. There were 25,000 stock options granted and 5,000 stock options and 24,286 RSUs were forfeited during the three months ended December 31, 2019, and 110,000 stock options granted and 88,000 stock options and 24,286 RSUs forfeited during the nine months ended December 31, 2019. As of December 31, 2020, approximately $109,000 of total unrecognized compensation costs related to nonvested stock options is expected to be recognized over a period of five years.

RELATED PARTY TRANSACTION

RELATED PARTY TRANSACTION	9 Months Ended
	Dec. 31, 2020
Related Party Transactions [Abstract]
RELATED PARTY TRANSACTION	Note 6. RELATED PARTY TRANSACTION We paid consulting fees of $16,000 and $45,103 during the three and nine months ended December 31, 2020, respectively, and $16,813 and $53,407 to an entity owned by one of our directors during the three and nine months ended December 31, 2019, respectively.

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS	9 Months Ended
	Dec. 31, 2020
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	Note 7. SUBSEQUENT EVENTS Except for the items below, we evaluated all of our activity as of the date the condensed interim financial statements were issued and concluded that no subsequent events have occurred that would require recognition in our financial statements or disclosed in the notes to our condensed interim financial statements. During January 2021, we canceled our relationship with Crestmark Bank. We had no borrowings and incurred a $20,000 exit fee. During January 2021, 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. On February 8, 2021, we entered into an unsecured promissory note under the PPP for a principal amount of $533,118. The PPP was established under the Consolidated Appropriations Act of 2021, enacted December 27, 2020.

SUMMARY OF SIGNIFICANT ACCOUN_2

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	9 Months Ended
	Dec. 31, 2020
Accounting Policies [Abstract]
Basis of Presentation	Basis of Presentation. The accompanying condensed interim financial statements have been prepared, in all material respects, in conformity with the standards of accounting measurements and reflect, in the opinion of management, all adjustments necessary to summarize fairly the financial position and results of operations for such periods in accordance with GAAP. All adjustments are of a normal recurring nature. The results of operations for the most recent interim period are not necessarily indicative of the results to be expected for the full year.
Use of Estimates in the Preparation of Financial Statements	Use of Estimates in the Preparation of Financial Statements.
Cash and Cash Equivalents	Cash and Cash Equivalents.
Fair Value of Financial Instruments	Fair Value of Financial Instruments.
Concentration of Credit Risk	Concentration of Credit Risk. 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. The net accounts receivable balance at December 31, 2020 of $1,042,743 and at March 31, 2020 of $881,194 included no more than 8% from any one customer.
Inventories	Inventories December 31, 2020 March 31, 2020 Raw materials $ 1,211,805 $ 1,147,983 Finished goods 372,778 516,918 Total gross inventories 1,584,583 1,664,901 Less reserve for obsolescence (63,000 ) (39,000 ) Total net inventories $ 1,521,583 $ 1,625,901
Property and Equipment	Property and Equipment
Long-Lived Assets	Long-Lived Assets.
Patents	Patents.
Income Taxes	Income Taxes.
Revenue Recognition	Revenue Recognition.
Research and Development Expenses	Research and Development Expenses
Stock-Based Compensation	Stock-Based Compensation Stock-based compensation expense recognized under ASC 718 for the three and nine months ended December 31, 2020 was $8,483 and $25,014, respectively, and the three and nine months ended December 31, 2019 was $6,650 and $22,015, respectively, which consisted of stock-based compensation expense related to grants of employee stock options.
Segment Reporting	Segment Reporting. Three Months Ended December 31, 2020 Nine Months Ended December 31, 2020 Product Service Total Product Service Total Net revenue $ 1,998,979 $ 163,621 $ 2,162,600 $ 5,093,118 $ 297,457 $ 5,390,575 Cost of revenue 975,581 81,421 1,057,002 2,500,310 150,197 2,650,507 Gross profit 1,023,398 82,200 1,105,598 2,592,808 147,260 2,740,068 Operating income (loss) (69,463 ) 82,200 12,737 (362,005 ) 147,260 (214,745 ) Depreciation and amortization 20,584 — 20,584 67,907 — 67,907 Capital expenditures — — — 4,144 — 4,144 Equipment and patents, net $ 387,549 $ — $ 387,549 $ 387,549 $ — $ 387,549
Recent Accounting Pronouncements	Recently Issued Accounting Pronouncements.

SUMMARY OF SIGNIFICANT ACCOUN_3

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)	9 Months Ended
	Dec. 31, 2020
Accounting Policies [Abstract]
Schedule of inventory	At December 31, 2020 and March 31, 2020, inventory consisted of the following: December 31, 2020 March 31, 2020 Raw materials $ 1,211,805 $ 1,147,983 Finished goods 372,778 516,918 Total gross inventories 1,584,583 1,664,901 Less reserve for obsolescence (63,000 ) (39,000 ) Total net inventories $ 1,521,583 $ 1,625,901
Schedule for segment reporting	Service performs electrical engineering activities for external entities. Three Months Ended December 31, 2020 Nine Months Ended December 31, 2020 Product Service Total Product Service Total Net revenue $ 1,998,979 $ 163,621 $ 2,162,600 $ 5,093,118 $ 297,457 $ 5,390,575 Cost of revenue 975,581 81,421 1,057,002 2,500,310 150,197 2,650,507 Gross profit 1,023,398 82,200 1,105,598 2,592,808 147,260 2,740,068 Operating income (loss) (69,463 ) 82,200 12,737 (362,005 ) 147,260 (214,745 ) Depreciation and amortization 20,584 — 20,584 67,907 — 67,907 Capital expenditures — — — 4,144 — 4,144 Equipment and patents, net $ 387,549 $ — $ 387,549 $ 387,549 $ — $ 387,549

BASIC AND DILUTED INCOME AND _2

BASIC AND DILUTED INCOME AND LOSS PER COMMON SHARE (Tables)	9 Months Ended
	Dec. 31, 2020
Earnings Per Share [Abstract]
Schedule of calculation of basic and diluted net loss per share	The following table presents the calculation of basic and diluted net loss per share: Three Months Ended Nine Months Ended December 31, 2020 December 31, 2019 December 31, 2020 December 31, 2019 Net income (loss) $ 599,321 $ 70,103 $ 468,801 $ (81,905 ) Weighted-average basic shares outstanding 11,582,641 11,578,371 11,582,641 11,565,027 Effect of dilutive securities 126,156 52,801 167,708 — Weighted-average diluted shares 11,708,797 11,631,172 11,750,349 11,565,027 Basic net income (loss) per share $ 0.05 $ 0.01 $ 0.04 $ (0.01 ) Diluted net income (loss) per share $ 0.05 $ 0.01 $ 0.04 $ (0.01 ) Antidilutive employee stock options 909,844 910,199 868,292 963,000

COMMITMENTS AND CONTINGENCIES (

COMMITMENTS AND CONTINGENCIES (Tables)	9 Months Ended
	Dec. 31, 2020
Commitments and Contingencies Disclosure [Abstract]
Schedule of minimum future lease payments, by fiscal year	The following table presents the calculation of basic and diluted net loss per share: Three Months Ended Nine Months Ended December 31, 2020 December 31, 2019 December 31, 2020 December 31, 2019 Net income (loss) $ 599,321 $ 70,103 $ 468,801 $ (81,905 ) Weighted-average basic shares outstanding 11,582,641 11,578,371 11,582,641 11,565,027 Effect of dilutive securities 126,156 52,801 167,708 — Weighted-average diluted shares 11,708,797 11,631,172 11,750,349 11,565,027 Basic net income (loss) per share $ 0.05 $ 0.01 $ 0.04 $ (0.01 ) Diluted net income (loss) per share $ 0.05 $ 0.01 $ 0.04 $ (0.01 ) Antidilutive employee stock options 909,844 910,199 868,292 963,000
Schedule of minimum future EIDL payment, by fiscal year	The minimum future EIDL payment, by fiscal year, as of December 31, 2020 is as follows: Fiscal Year Amount 2021 $ — 2022 1,997 2023 3,091 2024 3,208 2025 3,331 Thereafter 140,373 Total $ 152,000

SHARE-BASED COMPENSATION (Table

SHARE-BASED COMPENSATION (Tables)	9 Months Ended
	Dec. 31, 2020
Share-based Payment Arrangement [Abstract]
Schedule of stock-based compensation expense related to employee stock options	The following table summarizes stock-based compensation expense related to employee stock options for the three and nine months ended December 31, 2020 and 2019, which was allocated as follows: Three Months Ended Nine Months Ended December 31, 2020 December 31, 2019 December 31, 2020 December 31, 2019 Cost of sales $ 917 $ 703 $ 2,751 $ 2,108 Sales and marketing 1,218 796 3,653 2,389 General and administrative 5,803 5,064 16,974 16,128 Research and development 545 87 1,636 1,390 Stock-based compensation expense $ 8,483 $ 6,650 $ 25,014 $ 22,015

ORGANIZATION AND NATURE OF BU_2

ORGANIZATION AND NATURE OF BUSINESS (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2020	Dec. 31, 2019	Mar. 31, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Accumulated deficit	$ (21,579,658)		$ (21,579,658)		$ (22,048,459)
Net loss	$ 599,321	$ 70,103	468,801	$ (81,905)
increase in shareholders' equity			493,815
Share-based compensation			$ 25,014

SUMMARY OF SIGNIFICANT ACCOUN_4

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($)	Dec. 31, 2020	Mar. 31, 2020
Inventories
Raw materials	$ 1,211,805	$ 1,147,983
Finished goods	372,778	516,918
Total gross inventories	1,584,583	1,664,901
Less reserve for obsolescence	(63,000)	(39,000)
Total net inventories	$ 1,521,583	$ 1,625,901

SUMMARY OF SIGNIFICANT ACCOUN_5

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 1) - USD ($)	3 Months Ended		9 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2020	Dec. 31, 2019
Net revenue	$ 2,162,600	$ 2,038,925	$ 5,390,575	$ 5,891,934
Cost of revenue	1,057,002	955,520	2,650,507	2,826,563
Gross profit	1,105,598	1,083,405	2,740,068	3,065,371
Operating income (loss)	12,737	86,162	(214,745)	(57,979)
Depreciation and amortization	20,584		67,907
Capital expenditures	0		4,144	52,796
Equipment and patents, net	387,549		387,549
Product [Member]
Net revenue	1,998,979	2,038,925	5,093,118	5,891,934
Cost of revenue	975,581	955,520	2,500,310	2,826,563
Gross profit	1,023,398		2,592,808
Operating income (loss)	(69,463)		(362,005)
Depreciation and amortization	20,584		67,907
Capital expenditures	0		4,144
Equipment and patents, net	387,549		387,549
Service [Member]
Net revenue	163,621	0	297,457	0
Cost of revenue	81,421	$ 0	150,197	$ 0
Gross profit	82,200		147,260
Operating income (loss)	82,200		147,260
Depreciation and amortization	0		0
Capital expenditures	0		0
Equipment and patents, net	$ 0		$ 0

SUMMARY OF SIGNIFICANT ACCOUN_6

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2020	Dec. 31, 2019	Mar. 31, 2020
Property, Plant and Equipment [Line Items]
Federally insured limit	$ 250,000		$ 250,000
Accounts Receivable	1,042,743		1,042,743		$ 881,194
Depreciation expense	13,277	$ 24,924	45,554	$ 91,646
Stock-based compensation expense	8,483	$ 6,650	25,014	$ 22,015
Unrecognized tax benefits	$ 0		$ 0
Minimum [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives of assets			5 years
Maximum [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives of assets			7 years

BASIC AND DILUTED INCOME AND _3

BASIC AND DILUTED INCOME AND LOSS PER COMMON SHARE (Details) - USD ($)	3 Months Ended		9 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2020	Dec. 31, 2019
Earnings Per Share [Abstract]
Net income (loss)	$ 599,321	$ 70,103	$ 468,801	$ (81,905)
Weighted-average basic shares outstanding	11,582,641	11,578,371	11,582,641	11,565,027
Effect of dilutive securities	126,156	52,801	167,708	0
Weighted-average diluted shares	11,708,797	11,631,172	11,750,349	11,565,027
Basic net income (loss) per share	$ 0.05	$ 0.01	$ 0.04	$ (0.01)
Diluted net income (loss) per share	$ 0.05	$ 0.01	$ 0.04	$ (0.01)
Antidilutive employee stock options	909,844	910,199	868,292	963,000

COMMITMENTS AND CONTINGENCIES_2

COMMITMENTS AND CONTINGENCIES (Details)	Dec. 31, 2020USD ($)
Minimum future lease payments, by fiscal year
2021	$ 87,000
2022	357,667
2023	372,167
2024	386,667
2025	232,139
Total	$ 1,435,640

COMMITMENTS AND CONTINGENCIES_3

COMMITMENTS AND CONTINGENCIES (Details 1)	Dec. 31, 2020USD ($)
Minimum future EIDL payment, by fiscal year
2021	$ 0
2022	1,997
2023	3,091
2024	3,208
2025	3,331
Thereafter	140,373
Total	$ 152,000

COMMITMENTS AND CONTINGENCIES_4

COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($)	Aug. 04, 2020	Aug. 09, 2019	Apr. 17, 2020	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2020	Dec. 31, 2019
Loan description		We entered into a loan and security agreement with Crestmark Bank. The loan is due on demand, has no financial covenants and is secured by all of our assets. 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 (3.25% at December 31, 2020) plus 1.5%, 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 $500,000, a loan fee of 1% annually, and an exit fee of 3%, 2% and 1% during years one, two and three, respectively.
Available to borrow line of credit				$ 535,799		$ 535,799
Exit cost						20,000
Proceeds from loan						152,000	$ 0
Forgiveness of loan						598,567
Extinguishment of debt income				$ 598,567	$ 0	$ 598,567	$ 0
PPP
Proceeds from loan			$ 598,567
EIDL
Proceeds from loan	$ 150,000
Principal amount	$ 150,000
Interest rate	3.75%
Term	30 years
Frequency of periodic payment	Monthly
Debt instrument periodic payment	$ 731
Debt instrument maturity date	Aug. 1, 2050

SHARE-BASED COMPENSATION (Detai

SHARE-BASED COMPENSATION (Details) - USD ($)	3 Months Ended		9 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2020	Dec. 31, 2019
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Stock-based compensation expense	$ 8,483	$ 6,650	$ 25,014	$ 22,015
Cost Of Sales [Member]
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Stock-based compensation expense	917	703	2,751	2,108
Selling And Marketing Expense [Member]
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Stock-based compensation expense	1,218	796	3,653	2,389
General And Administrative Expense [Member]
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Stock-based compensation expense	5,803	5,064	16,974	16,128
Research And Development Expense [Member]
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Stock-based compensation expense	$ 545	$ 87	$ 1,636	$ 1,390

SHARE-BASED COMPENSATION (Det_2

SHARE-BASED COMPENSATION (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2020	Dec. 31, 2019
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants	20,000	25,000	110,000	110,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested Options Forfeited	60,000	5,000	72,000	88,000
Unrecognized compensation costs related to nonvested stock options	$ 109,000		$ 109,000
Restricted Stock Units (RSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested Options Forfeited		24,286		24,286

RELATED PARTY TRANSACTION (Deta

RELATED PARTY TRANSACTION (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2020	Dec. 31, 2019
Director [Member]
Related Party Transaction [Line Items]
Consulting fees paid	$ 16,000	$ 16,813	$ 45,103	$ 53,407

SUBSEQUENT EVENTS (Details Narr

SUBSEQUENT EVENTS (Details Narrative) - USD ($)	1 Months Ended	9 Months Ended
	Jan. 31, 2021	Dec. 31, 2020	Feb. 08, 2021
Related Party Transaction [Line Items]
Exit cost		$ 20,000
Subsequent Event [Member] | PPP Loan [Member]
Related Party Transaction [Line Items]
Principal amount			$ 533,118
Subsequent Event [Member] | Crestmark Bank [Member]
Related Party Transaction [Line Items]
Exit cost	$ 20,000
Subsequent Event [Member] | U S Bank Bank [Member] | Notes Agreement [Member]
Related Party Transaction [Line Items]
Proceeds from note payable	$ 92,000
Interest rate	5.00%