Company: ECIA
Filing Date: 2025-07-10
Form Type: 10-K
Source: 0001079973-25-001132
Chunk: 32

Company: ENCISION INC
Filing Date: 2025-07-10
Form: 10-K
Item: Item 1
Chunk 32
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 based on enacted tax laws, of temporary differences between the financial reporting and
tax bases of assets and liabilities. 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. Should we achieve 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 three 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 these lives 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.

Stock-based
compensation is presented in accordance with the guidance of Financial Accounting Standards Board (“FASB”) Accounting Standards
Codification (“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 made to employees and
directors including employee stock options based on estimated fair values 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.

Certain prior
year balances have been reclassified to conform with the current year presentation. In presenting the Company’s consolidated
balance sheet at March 31, 2024, the Company presented $156,685 EIDL note payable as a line of credit. In presenting the
Company’s consolidated balance sheet at March 31, 2025, the Company has reclassified the balance of $5,000 as part of Secured
notes, a current liability, and the balance of $151