Company: ECIA
Filing Date: 2025-07-10
Form Type: 10-K
Source: 0001079973-25-001132
Chunk: 28

Company: ENCISION INC
Filing Date: 2025-07-10
Form: 10-K
Item: Item 1
Chunk 28
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 least cash flow break-even, additional capital may be required to maintain ongoing
operations.

16 

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, 2025, net operating loss carryforwards
totaling approximately $8.2 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 $384,184 for the fiscal year ended March 31, 2025 and $357,503 for the fiscal year ended March 31,
2024. The minimum future lease payment, by fiscal year, as of March 31, 2025 is as follows:

    Fiscal Year  
    Amount