12 — LEASES

The Company adopted Topic 842 for all periods presented. At the inception of a contract, the Company determines if the arrangement is, or contains, a lease. The Company’s leases mainly consisted of offices, retail stores, and warehouses.

The Company’s operating right-of-use (“ROU”) assets and lease liabilities were as follows:

The Company had 9 and 36 leases as of March 31, 2026 and 2025, respectively.

The weighted average lease term, discount rates, and remaining lease terms for the operating leases as of March 31, 2026 were as follows:

Remaining lease term and discount rate:

The weighted average lease term, discount rates, and remaining lease terms for the operating leases as of March 31, 2025 were as follows:

Remaining lease term and discount rate:

The Company leases its offices, warehouse, and retail stores under non-cancellable operating lease agreements. During the year ended March 31, 2026, lease expenses were approximately $2.6 million, including approximately $1.5 million in cost of revenues and approximately $1.1 million in selling expense and nil in general and administrative expense. During the year ended March 31, 2025, lease expenses were approximately $4.3 million, including approximately $1.4 million in cost of revenues and approximately $2.9 million in selling expense and $62,527 in general and administrative expense.

For the year ended March 31, 2026, the Company terminated 28 leases. For the year ended March 31, 2025, the Company terminated 12 leases.

As of March 31, 2026, future minimum lease liabilities, all under office and facilities non-cancellable operating lease agreements, were as follows: