Company: ECIA
Filing Date: 2025-07-10
Form Type: 10-K
Source: 0001079973-25-001132
Chunk: 56

Company: ENCISION INC
Filing Date: 2025-07-10
Form: 10-K
Item: Item 1
Chunk 56
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and Contingencies

We have a noncancelable lease agreement for our
facilities at 6797 Winchester Circle, Boulder, Colorado. The lease expires October 31, 2026.

On April 1, 2021, we adopted Accounting Standards
Codification (“ASC”) ASC 842 “Leases” using the initial date of adoption method, whereby the adoption does not
impact any periods prior to April 1, 2019. ASC Topic 842 retains a distinction between finance leases and operating leases. The classification
criteria for distinguishing between finance leases and operating leases are substantially similar to the classification criteria for distinguishing
between capital leases and operating leases in the previous leases’ guidance. We recorded an operating Right of Use (“ROU”)
asset of $1,555,150, and an operating lease liability of $1,619,842 as of April 1, 2019. The difference between the initial operating
ROU asset and operating lease liability of $64,692 is accrued rent previously recorded under ASC 840. We elected to adopt the package
of practical expedients and, accordingly, did not reassess any previously expired or existing arrangements and related classifications
under ASC 840.

If the rate implicit in the lease is not readily
determinable, we use our incremental borrowing rate as the discount rate. We use our best judgement when determining the incremental borrowing
rate, which is the rate of interest that we would have to pay to borrow on a collateralized basis over a similar term to the lease payments.

Our operating lease includes the use of real
property. We have not identified any material finance leases as of March 31, 2025.

For the years ended March 31, 2025 and 2024,
we had $384,184 and $357,503, respectively, for lease expense.

The following is a maturity analysis of the annual
undiscounted cash flows reconciled to the carrying value of the operating lease liabilities as of March 31, 2025:

    Schedule of principal U.S. Bank payment 

    Fiscal Year 
    Amount 
  
    2026 
    $455,543 
  
    2027 
     270,666 
  
    Total operating lease payments 
    $726,209 
  
    Less imputed interest 
     (29,599)
  
    Total operating lease liabilities 
    $696,610 
  
    Weighted-average remaining lease term 
                	1.