NOTE 7 – LEASES

We lease office space in Scottsdale, AZ and Atlanta, GA under contracts we classify as operating leases. None of our leases are financing leases. The Scottsdale lease extension is effective until 2029 and does not include a renewal option.

On September 17, 2025, we signed a lease for 2,660 square feet of mixed-use warehouse space in Marietta, GA. The lease commenced on October 1, 2025 and expires in October 2028.

Lease expense for the year ended March 31, 2026 was $605,804 including $564,866 of operating lease expense and $40,938 of other lease associated expenses such as association dues, taxes, utilities, and other month to month rentals. Consolidated lease expense for the year ended March 31, 2025 was $656,674 including $653,420 of operating lease expense and $3,255 of other lease associated expenses such as association dues, taxes, utilities, and other month to month rentals.

Lease Impairment

During the year ended March 31, 2026, we vacated our Scottsdale office. As we have been unable to sublease the property, we are working to negotiate a termination with the landlord. As a result, we recognized a write-down of the right-of-use asset of $0.7 million, which is reported in corporate general and administrative expense on the consolidated statements of operations.

Lease Disclosures

The weighted average remaining lease term and weighted average discount rate for operating leases were 1.69 years and 10.0%, respectively, at March 31, 2026 and were 3.1 years and 10.0%, respectively, at March 31, 2025.