21. SUBSEQUENT EVENTS

New Operating lease

The Company entered into a 5-year operating lease beginning January 1, 2026, for new office and warehouse space with annual lease payments of approximately $.5 million. The total estimated lease commitment is approximately $2.4 million. This lease agreement begins subsequent to December 31, 2025, and accordingly, no amounts related to this lease are reflected in the accompanying balance sheet.

Convertible debt issued pursuant to the SPA

The Agreement provides that the Loan shall be conducted through seven (7) separate tranche closings, provided, that SJC has the ability, exercisable in its sole discretion, to purchase any principal face amounts of convertible notes prior to the dates of the tranche closings provided for in the Agreement. Four additional tranches closed prior to the filing of our 2025 Form 10K as described below.

Pursuant to the Agreement, the second tranche closed on January 9, 2026, the third tranche closed on January 30,2026, and the fourth and fifth tranches on March 27, 2026. These closings consisted of the issuance of Convertible Notes to SJC in the total principal face amount of $880,000, for a total purchase price of $800,000. The convertible notes accrue interest at 12% per annum and will mature one year from issuance of the notes. The convertible notes are convertible into shares of the Company’s common stock at any time at a conversion price equal to the greater of (i) $0.035 per share, which shall not be adjusted for stock dividends, stock splits, stock combinations and other similar transactions and (ii) 20% discount to the Company’s lowest VWAP (as defined in the convertible notes) of the common stock during the ten trading days immediately prior to the date of conversion into shares of common stock.