13. OPERATING LEASE, RELATED PARTY

As part of the STS Acquisition, NANO acquired a noncancelable lease agreement for office space in Winder, Georgia that is used and occupied by STS. The office space is owned by an entity controlled by Mr. Boyd, a related party.

The lease agreement provides the right to receive substantially all of the economic benefits from the use of the office and the right to direct the use of the space. Thus, the lease agreement was deemed to contain a lease. On the date of the STS Acquisition, the Company recorded a right-of-use asset and lease liability for the present value of the future lease payments at the lease commencement. The interest rate used to determine the present value was based on an estimated incremental borrowing rate of 7.00% after considering market interest rates for collateralized loans.

This lease, originally signed in January 2025 between Onium as lessor and STS as lessee, as amended in May 2026 as a result of the STS Acquisition, has an initial term through December 31, 2027, and includes an additional 5-year automatic extension provided there is no default thereunder, which would extend the lease term through December 31, 2032. The automatic extension was from the lease commencement and were included in the initial right-of-use asset and operating lease liability balances. Monthly lease payments of $8,522 are required on the initial lease term. Annual rents increase based on the consumer price index at each renewal option period. The rental payments over the extension period are based on the monthly rate of $8,522 in effect at the commencement of the lease extension and will increase by 3.0% in the first extended year and annually thereafter.