Company: ECIA
Filing Date: 2025-08-15
Form Type: 10-Q
Source: 0001079973-25-001326
Chunk: 23

Company: ENCISION INC
Filing Date: 2025-08-15
Form: 10-Q
Item: Item 8
Chunk 23
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of any tax benefits, which, more likely than not based on current circumstances, are not expected to be realized. Should we maintain 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 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.

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 the useful lives of our
patents 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.

We currently estimate forfeitures for stock-based
compensation expenses related to employee stock options at 40% and evaluate the forfeiture rate quarterly. Other assumptions that are
used in calculating stock-based compensation expense include risk-free interest rate, expected life, expected volatility, and expected
dividend.

ITEM
3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are a smaller reporting company as defined by Rule
12b-2 of the Exchange Act and are not required to provide the information required under this item.

16 

ITEM
4. Controls and procedures

Management’s Evaluation of Disclosures Controls
and Procedures

Our management, comprised of our Chief Executive Officer
(CEO) and Principal Financial and Accounting Officer (PFAO), evaluated the effectiveness of our disclosure controls and procedures as
of June 30, 2025. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange
Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company
in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods
specified in