NOTE 6 – LEASE LIABILITIES

The Company determines whether a contract is, or contains, a lease at inception. Right-of-use (“ROU”) assets represent the Company’s right to use an underlying asset during the lease term, and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at lease commencement based upon the estimated present value of unpaid lease payments over the lease term. The Company leases its office and warehouse locations, and certain warehouse equipment. Leases with an initial term of 12 months or less are not included on the condensed balance sheets.

On April 1, 2022, the Company entered into a facility lease for 4,000 square foot facility in St. Joseph, Missouri, to expand its manufacturing business to include advanced premium golf shafts. In July 2025, the Company entered into an additional lease agreement that added a parking lot and a designated space for a dumpster.

The expanded lease runs from January 1, 2025 through December 31, 2027, with monthly rent of $3,900.

The Company’s lease liability balance was $84,000 as of December 31, 2025. As of June 30, 2026 our lease liability was $65,000, of which the current portion of lease liability was $42,000, leaving a long-term lease liabilities balance of $23,000.

During the six months ended June 30, 2026 and 2025, lease costs totaled approximately $23,000 and $20,000, respectively.

As of June 30, 2026, the weighted average remaining lease term for operating leases was 1.50 years, and the weighted average discount rate for operating leases was 10.00%.