NOTE 6 — LEASES

In June 2026, the Company entered into a new operating lease for additional warehouse space in Miami, FL for Century's operations. This lease expires July 31, 2029 and calls for monthly rental payments of approximately $47,000. The Company recognized initial right-of-use ("ROU") assets and lease liabilities of approximately $1.7 million related to the new lease. The Company's other ROU assets and lease liabilities consist primarily of operating leases for the operations facilities in Granite City, IL, Orlando, FL and Tampa, FL and administrative office spaces in The Woodlands, TX and Longview, TX. The Company’s other operating leases for items such as operations equipment, IT equipment and storage space are either short-term in nature or immaterial. The Company does not have any finance leases in place.

The Company determines if an arrangement contains a lease at inception based on if the arrangement conveys the right to control the use of an identified asset for a period of time in exchange for consideration and allows the Company to obtain substantially all of the economic benefit from the use of the identified asset. Certain lease agreements contain rent escalation clauses and one or more options to extend the lease. The Company considers these provisions when calculating operating lease obligations. The Company uses its incremental borrowing rate at lease commencement to determine the present value of lease payments.

The components of expense related to leases for the three months ended June 30, 2026 and 2025 are as follows (in thousands):

The following table illustrates the balance sheet classification for ROU assets and lease liabilities as of June 30, 2026 and March 31, 2026 (in thousands):

As of June 30, 2026, the weighted-average remaining lease term was 10.1 years for operating leases. The weighted average discount rate was 7.0% for operating leases.

Maturities of lease liabilities as of June 30, 2026 were as follows (in thousands):