We are subject to litigation, claims, investigations, and audits arising from time to time in the ordinary course of our business. When applicable, we record accruals for contingencies when it is probable that a liability will be incurred, and the amount of loss can be reasonably estimated. While the outcome of lawsuits and other proceedings against us cannot be predicted with certainty, in our opinion, individually or in the aggregate, no such lawsuits are expected to have a material effect on our consolidated financial position or results of operations.

In the opinion of management, after consultation with legal counsel, the ultimate disposition of any such matters as of March 31, 2026, is not expected to have a materially adverse effect on the consolidated financial position or results of operations of the Company.

The Company has made certain indemnities, under which it may be required to make payments to an indemnified party, in relation to certain transactions. The Company indemnifies its directors, officers, employees, and agents to the maximum extent permitted under the laws of the State of Delaware. In connection with its facility

lease, the Company has indemnified its lessor for certain claims arising from the use of the facilities. The duration of the indemnities varies, and in many cases is indefinite. These indemnities do not provide for any limitation of the maximum potential future payments the Company could be obligated to make. Historically, the Company has not been obligated to make any payments for these obligations and no liabilities have been recorded for these indemnities in the accompanying consolidated balance sheets.

The Company leases its corporate headquarters, manufacturing, and warehouse facility in San Diego County, under a non-cancelable operating lease. The facility is approximately 29,342 square feet in Escondido, California with a lease that expires in August 2030. The Company also leases a 925 square foot facility in Salt Lake City, Utah which houses its Ion software development team. This lease expires in June 2026. Additionally, the Company leased a 1,632 square foot facility located in Anaheim, California. This lease expired on July 31, 2025, and the Company extended the lease through January 31, 2026. Upon expiration of the lease on January 31, 2026, the Company did not renew the lease and exited the facility.

Other information related to leases for the three month periods ended March 31, 2026 and 2025 was as follows:


	For the Three Months Ended March 31,
	2026			2025
Operating lease expense	$	144,778		$	153,974
Total lease expense	$	144,778		$	153,974

Cash paid for amounts included in the measurement of operating lease liabilities:
Operating cash flows from operating leases	$	102,619		$	113,068

Weighted-average remaining lease term - operating leases	53.9 months			65.3 months
Weighted-average discount rate - operating leases		13.66	%		13.66	%

The following table presents the maturity of the Company’s operating lease liabilities as of March 31, 2026:


Year	Operating Leases
Remaining 2026	$	296,274
2027		403,771
2028		419,922
2029		436,719
2030		298,809
Total lease payments		1,855,495
Less: Amount representing interest		(438,777	)
Present value of lease payments		1,416,718
Less: current portion of operating lease obligation		(230,075	)
Operating lease obligation, net of current portion	$	1,186,643

In the normal course of business, the Company may enter into purchase commitments for inventory components to be delivered based upon non-cancellable, pre-established delivery schedules that are over a period that may exceed one year. Total non-cancellable purchase orders as of March 31, 2026 were $4,395,534.

During the three month periods ended March 31, 2026 and 2025, the Company had one customer, in each period, that accounted for approximately 51% and 41% of revenue, respectively. No other customers represented greater than 10% of our revenue in these periods.

As of March 31, 2026 and December 31, 2025, the Company had one and three customers, respectively, that accounted for (in the aggregate) approximately 61% and 77%, respectively, of trade accounts receivables for which each of such customer’s balances represented 10% or greater of our consolidated trade accounts receivable balance.

During the three month periods ended March 31, 2026 and 2025, the Company had approximately 37% and 50%, respectively, of aggregate purchases from three and two suppliers, respectively, for which each represents greater than 10% of our consolidated purchases.