Encision (ECIA) 10-Q 6 Feb 15 2015 Q3 Quarterly report Financial data

Document_and_Entity_Informatio

Document and Entity Information	9 Months Ended
	Dec. 31, 2014	Jan. 31, 2015
Document and Entity Information
Entity Registrant Name	ENCISION INC
Entity Central Index Key	930775
Document Type	10-Q
Document Period End Date	31-Dec-14
Amendment Flag	FALSE
Current Fiscal Year End Date	-28
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		10,673,225
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q3

Balance_Sheets

Balance Sheets (USD $)	Dec. 31, 2014	Mar. 31, 2014
Current assets:
Cash and cash equivalents	$688,302	$1,689,580
Accounts receivable, net of allowance for doubtful accounts of $13,000 at December 31, 2014 and $8,000 at March 31,2014	1,013,714	863,220
Inventories, net of reserve for obsolescence of $220,000 at December 31, 2014 and $560,000 at March 31, 2014	2,087,785	2,224,228
Prepaid expenses	212,523	65,387
Total current assets	4,002,324	4,842,415
Equipment, at cost:
Furniture, fixtures and equipment	2,954,766	3,641,037
Customer-site equipment	954,695	1,016,265
Accumulated depreciation	-3,056,877	-3,552,079
Equipment, net	852,584	1,105,223
Patents, net of accumulated amortization of $236,756 at December 31, 2014 and $215,969 at March 31, 2014	257,383	248,971
Other assets	17,512	14,127
TOTAL ASSETS	5,129,803	6,210,736
Current liabilities:
Accounts payable	581,349	666,159
Accrued compensation	304,824	264,595
Other accrued liabilities	419,781	408,549
Lease payable - short term		67,057
Deferred rent - short term	30,384	30,384
Line of credit	83,500
Total current liabilities	1,419,838	1,436,744
Lease payable - long term		54,619
Deferred rent - long term	108,877	131,664
Total liabilities	1,528,715	1,623,027
Commitments and contingencies
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; 10,673,225 shares issued and outstanding at December 31, 2014 and March 31, 2014	23,592,034	23,545,080
Accumulated (deficit)	-19,990,946	-18,957,371
Total shareholders' equity	3,601,088	4,587,709
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$5,129,803	$6,210,736

Balance_Sheets_Parenthetical

Balance Sheets (Parenthetical) (USD $)	Dec. 31, 2014	Mar. 31, 2014
Condensed Balance Sheets
Accounts receivable, allowance for doubtful accounts (in dollars)	$13,000	$8,000
Inventories, reserve for obsolescence (in dollars)	220,000	560,000
Accumulated amortization	$236,756	$215,969
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	10,673,225	10,673,225
Common stock and additional paid-in capital, shares outstanding	10,673,225	10,673,225

Statements_of_Operations

Statements of Operations (USD $)	3 Months Ended		9 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2014	Dec. 31, 2013
Revenue, Net [Abstract]
NET REVENUE	$2,608,408	$2,715,505	$7,364,011	$8,042,818
COST OF REVENUE	1,392,805	1,291,990	3,850,951	3,754,244
GROSS PROFIT	1,215,603	1,423,515	3,513,060	4,288,574
OPERATING EXPENSES:
Sales and marketing	791,113	600,896	2,174,627	2,265,873
General and administrative	433,636	360,867	1,184,700	1,068,977
Research and development	353,447	363,652	1,026,495	1,067,388
Total operating expenses	1,578,196	1,325,415	4,385,822	4,402,238
OPERATING INCOME (LOSS)	-362,593	98,100	-872,762	-113,664
Interest expense, net	-1,593	-12,663	-6,634	-35,669
Other income (expense), net	-52,661	-52,891	-154,179	-179,368
Interest (expense) and other income, net	-54,254	-65,554	-160,813	-215,037
LOSS BEFORE PROVISION FOR INCOME TAXES	-416,847	32,546	-1,033,575	-328,701
Provision for income taxes			0
NET LOSS	($416,847)	$32,546	($1,033,575)	($328,701)
Net loss per share-basic and diluted (in dollars per share)	($0.04)	$0	($0.10)	($0.04)
Weighted Average Number of Shares Outstanding, Basic	10,673,225	8,616,110	10,673,225	8,346,435
Weighted Average Number of Shares Outstanding, Diluted	10,673,225	8,619,727	10,673,225	8,346,435

Statements_of_Cash_Flows

Statements of Cash Flows (USD $)	9 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Cash flows from operating activities:
Net loss	($1,033,575)	($328,701)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	293,726	361,040
Stock-based compensation expense related to stock options	46,954	44,557
Provision for estimated losses	5,000	1,000
Provision for inventory obsolescence, net change after impairment of inventory	116,501	29,000
Change in operating assets and liabilities:
Accounts receivable	-155,494	-75,626
Inventories	19,942	243,252
Prepaid expenses and other assets	-150,521	-48,437
Accounts payable	-84,810	-437,437
Accrued compensation and other accrued liabilities	-93,002	32,671
Net cash (used in) operating activities	-1,035,279	-178,681
Cash flows from investing activities:
Acquisition of property and equipment	-20,300	-359,247
Patent costs	-29,199	-30,468
Net cash (used in) investing activities	-49,499	-389,715
Cash flows from financing activities:
Borrowings from credit facility	83,500
Proceeds from the issuance of common stock		1,970,500
Cost of the issuance of common stock		-7,974
Net cash provided by financing activities	83,500	1,962,526
Net decrease in cash and cash equivalents	-1,001,278	1,394,130
Cash and cash equivalents, beginning of period	1,689,580	126,224
Cash and cash equivalents, end of period	$688,302	$1,520,354

ORGANIZATION_AND_NATURE_OF_BUS

ORGANIZATION AND NATURE OF BUSINESS	9 Months Ended
	Dec. 31, 2014
Description of Business
Description 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® (Active Electrode Monitoring) surgical instrument technology is changing the marketplace for electrosurgical devices and instruments by providing a solution to a patient safety risk in laparoscopic surgery. Our sales to date have been made principally in the United States.
	We have an accumulated deficit of $19,990,946 at December 31, 2014. Operating funds have been provided primarily by issuances of our common stock and warrants, a line of credit, and the exercise of stock options to purchase our common stock. Should our liquidity be diminished in the future because of operating losses, 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 and surgery centers in the United States.

SUMMARY_OF_SIGNIFICANT_ACCOUNT

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	9 Months Ended
	Dec. 31, 2014
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies	Note 2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
	Basis of Presentation.  The condensed interim financial statements included herein have been prepared by us, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles accepted in the United States (“GAAP”) have been condensed or omitted pursuant to such rules and regulations, although we believe that the disclosures made are adequate to make the information presented not misleading. The condensed interim financial statements and notes thereto should be read in conjunction with the financial statements and the notes thereto included in our Annual Report on Form 10-K for the fiscal year ended March 31, 2014, filed on June 26, 2014.
	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.  The preparation of financial statements in conformity with 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 six months or less to be cash equivalents.
	Fair Value of Financial Instruments.  Our financial instruments consist of cash and cash equivalents, short-term trade receivables, payables and a line of credit. The carrying values of cash and cash equivalents, short-term trade receivables, payables and line of credit approximate their fair value due to their short maturities.
	Concentration of Credit Risk.  Financial instruments, which potentially subject us to concentrations of credit risk, consist of cash and cash equivalents, accounts receivable and a line of credit. The amount of cash on deposit with financial institutions exceeds the $250,000 federally insured limit at December 31, 2014. We believe that cash on deposit that exceeds $250,000 with 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. The net accounts receivable balance at December 31, 2014 of $1,013,714 included 9% from one customer. The net accounts receivable balance at March 31, 2014 of $863,220 included no more than 5% from any one customer.
	Warranty Accrual.  We provide for the estimated cost of product warranties at the time sales are recognized and include it as other accrued liabilities. 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.
	Inventories.  Inventories are stated at the lower of cost (first-in, first-out basis) or market. 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 actual market conditions are less favorable than those projected by management, additional inventory write-downs may be required. At December 31, 2014 and March 31, 2014, inventory consisted of the following:
		December 31, 2014			March 31, 2014
	Raw materials	$	1,396,294		$	1,498,867
	Finished goods	911,491			1,285,361
	Total gross inventories	2,307,785			2,784,228
	Less reserve for obsolescence	(220,000		)	(560,000		)
	Total net inventories	$	2,087,785		$	2,224,228
	Property and Equipment. Property and equipment are stated at cost, with depreciation computed over the estimated useful lives of the assets, generally five 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.
	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.
	Income Taxes.  We account for income taxes under the provisions of FASB Accounting Standards Codification (“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. As a result, no provision for income tax is reflected in the accompanying statements of operations. Should we achieve sufficient, sustained income in the future, we may conclude that some or all of the valuation allowance should be reversed. We are required to make many subjective assumptions and judgments regarding our income tax exposures. At December 31, 2014, we had no unrecognized tax benefits, which would affect the effective tax rate if recognized and had no accrued interest, or penalties related to uncertain tax positions.
	Revenue Recognition. Revenue from product sales is recorded when we ship the product and title has passed to the customer, provided that we have evidence of a customer arrangement and can conclude that collection is probable. 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. Revenue from engineering services is recognized when the service is performed.
	Research and Development Expenses.  We expense research and development costs for products and processes as incurred.
	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.
	Stock-based compensation expense recognized under ASC 718 for the three and nine months ended December 31, 2014 was $17,018 and $46,954, respectively, and for the three and nine months ended December 31, 2013 was $16,486 and $44,557, respectively, which consisted of stock-based compensation expense related to grants of employee stock options and restricted stock units (“RSUs”).
	Segment Reporting.  We have concluded that we have one operating segment.
	Recent Accounting Pronouncements.  We have reviewed all recently issued, but not yet effective, accounting pronouncements and do not believe the future adoption of any such pronouncements may be expected to cause a material impact on our financial condition or the results of our operations.

BASIC_AND_DILUTED_INCOME_AND_L

BASIC AND DILUTED INCOME AND LOSS PER COMMON SHARE	9 Months Ended
	Dec. 31, 2014
BASIC AND DILUTED INCOME AND LOSS PER COMMON SHARE
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 and RSUs 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,			December 31,		December 31,			December 31,
		2014			2013		2014			2013
	Net income (loss)	$	(416,847	)	$	32,546	$	(1,033,575	)	$	(328,701	)
	Weighted-average shares — basic	10,673,225			8,616,110		10,673,225			8,346,435
	Effect of dilutive potential common shares	—			3,617		—			—
	Weighted-average shares — diluted	10,673,225			8,619,727		10,673,225			8,346,435
	Net income (loss) per share — basic	$	(0.04	)	$	0	$	(0.10	)	$	(0.04	)
	Net income (loss) per share — diluted	$	(0.04	)	$	0	$	(0.10	)	$	(0.04	)
	Antidilutive employee stock options and RSUs	599,924			617,000		599,924			627,000

COMMITMENTS_AND_CONTINGENCIES

COMMITMENTS AND CONTINGENCIES	9 Months Ended
	Dec. 31, 2014
Commitments and Contingencies
Commitments and Contingencies	Note 4.COMMITMENTS AND CONTINGENCIES
	Effective December 1, 2013, we extended our noncancelable lease agreement through July 31, 2019 for our facilities at 6797 Winchester Circle, Boulder, Colorado. The lease includes $172,176 of leasehold improvements granted by the landlord. The $172,176 was recorded on our condensed balance sheets as leasehold improvements and deferred rent. The leasehold improvements are being amortized over the lesser of the lease term or the assets life and the deferred rent is being amortized against rent expense over the lease term. The minimum future lease payment, by fiscal year, as of December 31, 2014 is as follows:
	Fiscal Year	Amount
	2015 (Three months remaining)	65,125
	2016	268,672
	2017	276,732
	2018	285,034
	2019	293,585
	2020	99,800
	Total	$	1,288,948
	We paid off our capital equipment lease with General Electric Capital Corporation and, at December 31, 2014, have no balance remaining.
	Included in our furniture, fixtures and equipment balance is leased equipment that was acquired, under the provisions of a long-term capital lease, during the quarter ended September 30, 2013. The equipment had an original cost of $177,547 and has a net book value of $66,467 at December 31, 2014.
	On May 19, 2014, we signed an amendment to our credit facility agreement with Silicon Valley Bank, effective May 10, 2014. The terms of the credit facility include a line of credit for $2,000,000 for one year at an interest rate calculated at the prime rate plus 1.25%, subject to increase upon a default. Our borrowing under the credit facility is limited by our eligible receivables and inventory at the time of borrowing. The credit facility is secured by all tangible and intangible assets, whether now owned or hereafter acquired, wherever located. At December 31, 2014, we had $83,500 of borrowings from our line of credit and, under our eligible receivables and inventory limit, we had $926,000 available to borrow.
	Aside from the operating lease, 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, 2014. FDA inspections are conducted periodically at the discretion of the FDA. Our latest inspection by the FDA occurred in December 2012.

SHAREBASED_COMPENSATION

SHARE-BASED COMPENSATION	9 Months Ended
	Dec. 31, 2014
Defined Contribution Employee Benefit Plan
Defined Contribution Employee Benefit Plan	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, RSUs and employee stock purchases for the three and nine months ended December 31, 2014 and 2013, which was allocated as follows:
		Three Months Ended				Nine Months Ended
		December 31,		December 31,		December 31,		December 31,
		2014		2013		2014		2013
	Cost of sales	$	491	$	345	$	1,473	$	1,035
	Sales and marketing	2,770		2,438		8,307		6,234
	General and administrative	12,996		12,186		34,891		30,344
	Research and development	761		1,517		2,283		6,944
	Stock-based compensation expense	$	17,018	$	16,486	$	46,954	$	44,557
	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 30,000 and 95,000 stock options granted during the three and nine months ended December 31, 2014, respectively. There were 15,000 and 30,000 stock options forfeited during the three and nine months ended December 31, 2014, respectively. Share-based compensation cost for RSUs is measured based on the closing fair market value of the Company’s common stock on the date of grant. There were 14,286 and 24,924 RSUs granted during the three and nine months ended December 31, 2014, respectively.
	As of December 31, 2014, $291,000 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, 2014
Related Party Transaction
Related Party Transaction	Note 6.RELATED PARTY TRANSACTION
	We paid consulting fees of $20,880 and $64,553 to an entity owned by one of our directors during the three and nine months ended December 31, 2014, respectively, and $18,623 and $52,644 during the three and nine months ended December 31, 2013.
	We have an employment agreement with Roger C. Odell, an employee. The employment agreement began January 2013 and continues until January 2016. We have accrued a liability for the employment agreement of $120,000 at December 31, 2014 and March 31, 2014.

SUBSEQUENT_EVENTS

SUBSEQUENT EVENTS	9 Months Ended
	Dec. 31, 2014
Subsequent Events
Subsequent Events	Note 7.SUBSEQUENT EVENTS
	We evaluated all of our activity and concluded that no subsequent events have occurred that would require recognition in our financial statements or disclosed in the notes to our financial statements.

SUMMARY_OF_SIGNIFICANT_ACCOUNT1

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	9 Months Ended
	Dec. 31, 2014
Summary of Significant Accounting Policies
Basis of Presentation	Basis of Presentation.  The condensed interim financial statements included herein have been prepared by us, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles accepted in the United States (“GAAP”) have been condensed or omitted pursuant to such rules and regulations, although we believe that the disclosures made are adequate to make the information presented not misleading. The condensed interim financial statements and notes thereto should be read in conjunction with the financial statements and the notes thereto included in our Annual Report on Form 10-K for the fiscal year ended March 31, 2014, filed on June 26, 2014.
	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.  The preparation of financial statements in conformity with 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	Cash and Cash Equivalents.  For purposes of reporting cash flows, we consider all cash and highly liquid investments with an original maturity of six months or less to be cash equivalents.
Fair Value of Financial Instruments	Fair Value of Financial Instruments.  Our financial instruments consist of cash and cash equivalents, short-term trade receivables, payables and a line of credit. The carrying values of cash and cash equivalents, short-term trade receivables, payables and line of credit approximate their fair value due to their short maturities.
Concentration of Credit Risk	Concentration of Credit Risk.  Financial instruments, which potentially subject us to concentrations of credit risk, consist of cash and cash equivalents, accounts receivable and a line of credit. The amount of cash on deposit with financial institutions exceeds the $250,000 federally insured limit at December 31, 2014. We believe that cash on deposit that exceeds $250,000 with 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. The net accounts receivable balance at December 31, 2014 of $1,013,714 included 9% from one customer. The net accounts receivable balance at March 31, 2014 of $863,220 included no more than 5% from any one customer.
Warranty Accrual	Warranty Accrual.  We provide for the estimated cost of product warranties at the time sales are recognized and include it as other accrued liabilities. 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.
Inventories	Inventories.  Inventories are stated at the lower of cost (first-in, first-out basis) or market. 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 actual market conditions are less favorable than those projected by management, additional inventory write-downs may be required. At December 31, 2014 and March 31, 2014, inventory consisted of the following:
		December 31, 2014			March 31, 2014
	Raw materials	$	1,396,294		$	1,498,867
	Finished goods	911,491			1,285,361
	Total gross inventories	2,307,785			2,784,228
	Less reserve for obsolescence	(220,000		)	(560,000		)
	Total net inventories	$	2,087,785		$	2,224,228
Property and Equipment	Property and Equipment. Property and equipment are stated at cost, with depreciation computed over the estimated useful lives of the assets, generally five 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.
Long-Lived Assets	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	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.
Income Taxes	Income Taxes.  We account for income taxes under the provisions of FASB Accounting Standards Codification (“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. As a result, no provision for income tax is reflected in the accompanying statements of operations. Should we achieve sufficient, sustained income in the future, we may conclude that some or all of the valuation allowance should be reversed. We are required to make many subjective assumptions and judgments regarding our income tax exposures. At December 31, 2014, we had no unrecognized tax benefits, which would affect the effective tax rate if recognized and had no accrued interest, or penalties related to uncertain tax positions.
Revenue Recognition	Revenue Recognition. Revenue from product sales is recorded when we ship the product and title has passed to the customer, provided that we have evidence of a customer arrangement and can conclude that collection is probable. 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. Revenue from engineering services is recognized when the service is performed.
Research and Development Expenses	Research and Development Expenses.  We expense research and development costs for products and processes as incurred.
Stock-Based Compensation	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.
	Stock-based compensation expense recognized under ASC 718 for the three and nine months ended December 31, 2014 was $17,018 and $46,954, respectively, and for the three and nine months ended December 31, 2013 was $16,486 and $44,557, respectively, which consisted of stock-based compensation expense related to grants of employee stock options and restricted stock units (“RSUs”)
Segment Reporting	Segment Reporting.  We have concluded that we have one operating segment.
Recent Accounting Pronouncements	Recent Accounting Pronouncements.  We have reviewed all recently issued, but not yet effective, accounting pronouncements and do not believe the future adoption of any such pronouncements may be expected to cause a material impact on our financial condition or the results of our operations.

SUMMARY_OF_SIGNIFICANT_ACCOUNT2

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)	9 Months Ended
	Dec. 31, 2014
Summary of Significant Accounting Policies
Schedule of inventory
		December 31, 2014			March 31, 2014
	Raw materials	$	1,396,294		$	1,498,867
	Finished goods	911,491			1,285,361
	Total gross inventories	2,307,785			2,784,228
	Less reserve for obsolescence	(220,000		)	(560,000		)
	Total net inventories	$	2,087,785		$	2,224,228

BASIC_AND_DILUTED_INCOME_AND_L1

BASIC AND DILUTED INCOME AND LOSS PER COMMON SHARE (Tables)	9 Months Ended
	Dec. 31, 2014
BASIC AND DILUTED INCOME AND LOSS PER COMMON SHARE
Schedule of calculation of basic and diluted net income (loss) per share
		Three Months Ended					Nine Months Ended
		December 31,			December 31,		December 31,			December 31,
		2014			2013		2014			2013
	Net income (loss)	$	(416,847	)	$	32,546	$	(1,033,575	)	$	(328,701	)
	Weighted-average shares — basic	10,673,225			8,616,110		10,673,225			8,346,435
	Effect of dilutive potential common shares	—			3,617		—			—
	Weighted-average shares — diluted	10,673,225			8,619,727		10,673,225			8,346,435
	Net income (loss) per share — basic	$	(0.04	)	$	0	$	(0.10	)	$	(0.04	)
	Net income (loss) per share — diluted	$	(0.04	)	$	0	$	(0.10	)	$	(0.04	)
	Antidilutive employee stock options and RSUs	599,924			617,000		599,924			627,000

COMMITMENTS_AND_CONTINGENCIES_

COMMITMENTS AND CONTINGENCIES (Tables)	9 Months Ended
	Dec. 31, 2014
Commitments and Contingencies
Schedule of minimum future lease payments, by fiscal year	Fiscal Year	Amount
	2015 (Three months remaining)	65,125
	2016	268,672
	2017	276,732
	2018	285,034
	2019	293,585
	2020	99,800
	Total	$	1,288,948

SHAREBASED_COMPENSATION_Tables

SHARE-BASED COMPENSATION (Tables)	9 Months Ended
	Dec. 31, 2014
Defined Contribution Employee Benefit Plan
Schedule of stock-based compensation expense related to employee stock options
		Three Months Ended				Nine Months Ended
		December 31,		December 31,		December 31,		December 31,
		2014		2013		2014		2013
	Cost of sales	$	491	$	345	$	1,473	$	1,035
	Sales and marketing	2,770		2,438		8,307		6,234
	General and administrative	12,996		12,186		34,891		30,344
	Research and development	761		1,517		2,283		6,944
	Stock-based compensation expense	$	17,018	$	16,486	$	46,954	$	44,557

ORGANIZATION_AND_NATURE_OF_BUS1

ORGANIZATION AND NATURE OF BUSINESS (Details) (USD $)	Dec. 31, 2014	Mar. 31, 2014
Description of Business
Accumulated deficit	$19,990,946	$18,957,371

SUMMARY_OF_SIGNIFICANT_ACCOUNT3

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) (USD $)	9 Months Ended	12 Months Ended
	Dec. 31, 2014	Mar. 31, 2014
	item	item
Concentration of credit risk
Federally insured limit	$250,000
Number of financial institutions which maintain a majority of the entity's cash balances	1
Net accounts receivable	1,013,714	863,220
Number of major customers		1
Inventories
Raw materials	1,396,294	1,498,867
Finished goods	911,491	1,285,361
Total gross inventories	2,307,785	2,784,228
Less reserve for obsolescence	-220,000	-560,000
Total net inventories	2,087,785	2,224,228
Accounts receivable
Concentration of credit risk
Net accounts receivable	$1,013,714	$863,220
Accounts receivable | Customer concentration risk
Concentration of credit risk
Number of major customers	1
Accounts receivable | Customer concentration risk | One customer
Concentration of credit risk
Concentration risk (as a percent)	9.00%
Maximum | Accounts receivable | Customer concentration risk
Concentration of credit risk
Concentration risk (as a percent)		5.00%
Maximum | Accounts receivable | Customer concentration risk | One customer
Concentration of credit risk
Concentration risk (as a percent)		5.00%

SUMMARY_OF_SIGNIFICANT_ACCOUNT4

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 2)	9 Months Ended
	Dec. 31, 2014
Minimum
Property and Equipment
Estimated useful lives of assets	5 years
Maximum
Property and Equipment
Estimated useful lives of assets	7 years

SUMMARY_OF_SIGNIFICANT_ACCOUNT5

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 3) (USD $)	9 Months Ended
	Dec. 31, 2014
Income Taxes
Provision for income taxes	$0
Unrecognized tax benefits	0
Amount of income tax related interest or penalties assessed or recorded	0
Sales Recognition
Obligations related to product sales	$0
Patents
Patents
Economic or legal life	20 years

SUMMARY_OF_SIGNIFICANT_ACCOUNT6

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 4) (USD $)	3 Months Ended		9 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2014	Dec. 31, 2013
				segment
Stock-Based Compensation
Stock-based compensation expense related to grants of employee stock options	$17,018	$16,486	$46,954	$44,557
Segment Reporting
Number of operating segments				1

BASIC_AND_DILUTED_INCOME_AND_L2

BASIC AND DILUTED INCOME AND LOSS PER COMMON SHARE (Details) (USD $)	3 Months Ended		9 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2014	Dec. 31, 2013
BASIC AND DILUTED INCOME AND LOSS PER COMMON SHARE
Net income (loss)	($416,847)	$32,546	($1,033,575)	($328,701)
Weighted-average shares - basic (in shares)	10,673,225	8,616,110	10,673,225	8,346,435
Effect of dilutive potential common shares		3,617
Weighted-average shares - diluted (in shares)	10,673,225	8,619,727	10,673,225	8,346,435
Net loss per share-basic (in dollars per share)	($0.04)	$0	($0.10)	($0.04)
Antidilutive employee stock options and RSUs (in shares)	-0.04	0	-0.1	-0.04

COMMITMENTS_AND_CONTINGENCIES_1

COMMITMENTS AND CONTINGENCIES (Details) (USD $)	0 Months Ended
	19-May-14	Mar. 31, 2014	Dec. 31, 2014
Minimum future capital equipment lease payments
Less current portion		($67,057)
Long term portion		54,619
Line of credit
Credit facility agreement
Maximum borrowing capacity	2,000,000
Term	1 year
Variable rate basis	prime rate
Variable rate margin (as a percent)	1.25%
Amount of borrowings			83,500
Amount available to borrow under eligible receivables and inventory limit			926,000
Facilities at 6797 Winchester Circle, Boulder, Colorado
Commitments and contingencies
Leasehold improvements			172,176
Minimum future lease payments, by fiscal year
2015 (six months remaining)			65,125
2016			268,672
2017			276,732
2018			285,034
2019			293,585
2020			99,800
Total			1,288,948
Equipment leases with General Electric Capital Corporation
Minimum future capital equipment lease payments
Original cost of lease equipment acquired			177,547
Net book value of lease equipment acquired			$66,467

SHAREBASED_COMPENSATION_Detail

SHARE-BASED COMPENSATION (Details) (USD $)	3 Months Ended		9 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2014	Dec. 31, 2013
Stock-based compensation expense related to employee stock options and employee stock purchases
Stock-based compensation expense	$17,018	$16,486	$46,954	$44,557
Unrecognized compensation costs related to nonvested stock options
Stock options granted during the period (in shares)	30,000		95,000
Stock options forfeited during the period (in shares)	15,000		30,000
Total unrecognized compensation costs related to nonvested stock options	291,000		291,000
Expected period for recognition of compensation costs related to nonvested stock options			5 years
Restricted Stock Units (RSUs) [Member]
Stock-based compensation expense related to employee stock options and employee stock purchases
Share-based compensation expense (in shares)	14,286		24,924
Cost of sales
Stock-based compensation expense related to employee stock options and employee stock purchases
Stock-based compensation expense	491	345	1,473	1,035
Sales and marketing
Stock-based compensation expense related to employee stock options and employee stock purchases
Stock-based compensation expense	2,770	2,438	8,307	6,234
General and administrative
Stock-based compensation expense related to employee stock options and employee stock purchases
Stock-based compensation expense	12,996	12,186	34,891	30,344
Research and development
Stock-based compensation expense related to employee stock options and employee stock purchases
Stock-based compensation expense	$761	$1,517	$2,283	$6,944

RELATED_PARTY_TRANSACTION_Deta

RELATED PARTY TRANSACTION (Details) (USD $)	3 Months Ended		9 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2014	Dec. 31, 2013	Mar. 31, 2014
Related party transaction
Accrued liabilities for employment agreement	$120,000		$120,000		$120,000
Director
Related party transaction
Consulting fees paid	$20,880	$18,623	$64,553	$52,644