Company: ECIA
Filing Date: 2025-07-10
Form Type: 10-K
Source: 0001079973-25-001132
Chunk: 43

Company: ENCISION INC
Filing Date: 2025-07-10
Form: 10-K
Item: Item 1
Chunk 43
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 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, 2025 and 2024, inventory consisted
of the following:

    Schedule of inventory 

    March 31, 2025  
    March 31, 2024 
  
    Raw materials 
    $1,093,530  
    $1,044,161 
  
    Finished goods 
     389,652  
     358,177 

    Total net inventories 
    $1,483,182  
    $1,402,338 

For the fiscal year 2025, Encision added $82,606
in additional inventory reserve and wrote off $77,687 in inventory. In the fiscal year 2024, Encision added $153,511 in additional inventory
reserve and wrote off $141,511 in inventory. Total Raw Materials reserve for fiscal year 2025 is $47,973, and $47,948 for fiscal year 2024. Finished
goods reserve for fiscal year 2025 is $19,947 and $9,052 in fiscal year 2024.

    28 

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