Leases and Obligations

6 Months Ended

Jun. 30, 2026

10.

Leases and Obligations

Marysville, Washington — Mor & Mor Warehouse License

On June 6, 2025, SUPA Food Services LLC, a related party and the Company’s majority stockholder, entered into a License Agreement with Mor & Mor Commercial, LLC (“Licensor”) for the right to occupy approximately 8,100 square feet of warehouse space located at 4150 152nd Street NE, Marysville, Washington (the “Premises”). The arrangement does not constitute a traditional lease under ASC 842, Leases, but instead qualifies as a license agreement, given that it does not grant SUPA control over the premises and explicitly disclaims a landlord–tenant relationship.

The Premises are used in the operations of SUPA FoodSystems LLC, the Company’s wholly-owned operating subsidiary, and the related license fees are included in rent expense in the accompanying consolidated financial statements.

Key Terms of the License Agreement

	·	Commencement Date: June 9, 2025
	·	Term: Month-to-month; terminable by either party with 30 days written notice.
	·	Monthly License Fee: $8,100 due in advance on the first of each month.
	·	Security Deposit: $8,100 paid upon execution of the agreement.
	·	Use Restriction: Licensee is permitted to use the premises solely for dead storage of non-hazardous materials.

Owner Termination Right: The Owner retains the right to terminate the license at any time with 30 days’ notice in the event of a new lease agreement with another party.

Per ASC 842-10-15-3, leases must convey the right to control the use of an identified asset for a period of time in exchange for consideration. This agreement, while permitting use of the premises, restricts SUPA’s rights and does not convey control of the underlying asset. Accordingly, the agreement is excluded from lease accounting guidance under ASC 842.

Irvine, California — Office Space

Effective January 2026, the Company entered into an arrangement for office space at 530 Technology Drive, Suite 100, Irvine, California, at a monthly cost of $160. The arrangement is short-term and qualifies for the short-term lease practical expedient under ASC 842; accordingly, no right-of-use asset or lease liability has been recognized.

Rent expense, including warehouse license fees, totaled $33,210 and $57,915 for the three and six months ended June 30, 2026, respectively, as compared to $8,125 for the three and six months ended June 30, 2025.