Earth Science Tech, Inc. 10-Q

LEASES

9 Months Ended

Dec. 31, 2025

NOTE 5- LEASES

The Company treats a contract as a lease when the contract conveys the right to use a physically distinct asset for a period in exchange for consideration, or the Company directs the use of the asset and obtains substantially all the economic benefits of the asset. These leases are recorded as right-of-use (“ROU”) assets and lease obligation liabilities for leases with terms greater than 12 months. ROU assets represent the Company’s right to use an underlying asset for the entirety of the lease term. Lease liabilities represent the Company’s obligation to make payments over the life of the lease. A ROU asset and a lease liability are recognized at commencement of the lease based on the present value of the lease payments over the life of the lease. Initial direct costs are included as part of the ROU asset upon commencement of the lease. Since the interest rate implicit in a lease is generally not readily determinable for the operating leases, the Company uses an incremental borrowing rate to determine the present value of the lease payments. The incremental borrowing rate represents the rate of interest the Company would have to pay to borrow on a collateralized basis over a similar lease term to obtain an asset of similar value.

The Company reviews the impairment of ROU assets consistent with the approach applied to the Company’s other long-lived assets, assessing recoverability when events or changes in circumstances indicate the carrying value may not be recoverable. The Company elected the practical expedient to exclude short-term leases (leases with original terms of 12 months or less) from ROU asset and lease liability accounts. The Company has elected not to apply the other transition practical expedients available under ASC 842.

The Company’s leases are classified as operating leases. Lease expense for operating leases is recognized on a straight-line basis over the lease term.

Supplemental balance sheet information related to leases were as follows:

	December 31, 2025		March 31, 2024
	As of
	December 31, 2025		March 31, 2024
Assets
Right of use asset, net	$	139,231	$	172,429

Operating lease liabilities
Current		121,851		121,851
Non-current		18,177		37,878
Total Lease Liabilities	$	140,028	$	159,729

The components of lease cost were as follows:

SCHEDULE OF LEASE COST

	2025		2024
	For the nine months ending December 31,
	2025		2024
Operating lease cost	$	109,472	$	66,940
Variable lease cost		5,038		3,757
Total lease cost	$	114,510	$	70,697

Lease term and discount rate were as follows:

SCHEDULE LEASE TERM AND DISCOUNT RATE

The following table presents the future minimum lease payments under non-cancelable operating leases as of December 31, 2025:

As of December 31, 2025	Operating Leases
2026	$	122,217
2027		18,262
Total		140,479
Less: Imputed interest		(451	)
Present value of lease payment	$	140,028

For the nine months ending

December 31,

Weighted average remaining lease term - Operating leases

Weighted average discount rate - Operating leases