The Company’s subsidiaries, AGA, Pacific Sun, SVM and A&B entered into non-cancelable operating leases for the office and warehouse spaces occupied to operate its business.

The Pacific Sun lease was executed on July 9, 2025, and the Company committed to monthly lease payments of $6,300 through June 30, 2026. Thereafter, monthly payments increase by 3% each year starting on July 1, 2026. The lease expires on June 30, 2030. On October 20, 2025, the lease was modified to expand the premises to the entire building. The modification revised the monthly base rent and shifted the remaining term to commence payments on January 1, 2026, and end on December 31, 2030. Modified monthly base rent is $7,415 for 2026, increasing 3% annually thereafter. The modification was accounted for as a lease remeasurement under ASC 842; the lease liability and right-of-use asset were adjusted using the incremental borrowing rate.

The AGA lease was executed on July 19, 2025, and the Company committed to monthly lease payments of $18,905 through August 31, 2026. Thereafter, monthly payments increase to $22,020 starting on September 1, 2026 and increase by 3% each year starting on September 1, 2027. The lease expires on August 31, 2029. The Company committed to paying common area maintenance cost which is currently $1,045 per month.

The SVM lease commenced on February 2, 2026, and the Company committed to monthly base lease payments of $25,000 through January 31, 2028. The lease includes two one-year renewal options which management determined are reasonably certain to be exercised; accordingly, the lease term was determined to be 48 months for accounting purposes. Monthly base rent increases by 5% annually. The Company is also responsible for its proportionate share of property operating expenses, including common area maintenance, utilities, insurance and real property taxes, which are currently approximately $3,957 per month.

The A&B lease was signed on May 21, 2026 and commenced on June 1, 2026, with monthly base rent of $28,900. The lease includes one five-year extension option which management determined is reasonably certain to be exercised; accordingly, the lease term was determined to be 121 months for accounting purposes, expiring June 30, 2036. The Company paid a security deposit of $50,000 in connection with the lease.

The Company used a discount rate of 8%, as the incremental cost of borrowing, to calculate the present value of the future lease payments and the resulting operating lease liabilities and right-of-use assets.

The Company recognized a total lease cost related to its non-cancelable operating leases of $205,081 for the six months ended June 30, 2026, included in office and administrative expenses.

The Company recognizes right-of-use (“ROU”) assets and corresponding lease liabilities for operating leases in accordance with ASC 842, Leases. ROU assets represent the Company’s right to use underlying leased assets over the lease term and are initially measured at the amount of the lease liability, adjusted for initial direct costs, prepaid lease payments, and lease incentives.

As of June 30, 2026, the Company’s operating lease ROU assets had a carrying value of $4,800,629. During the six months ended June 30, 2026, additions to ROU assets were $4,962,054, relating to the Pacific Sun, AGA, SVM and A&B leases. Amortization of ROU assets for the six months ended June 30, 2026 was $161,426, which is included in operating expenses, primarily within office and administrative. The Company’s ROU assets relate primarily to office and warehouse facilities used in its operations.

As of June 30, 2026 and December 31, 2025, the Company recorded a security deposit of $163,117  and $81,757, associated with these operating leases.

Future minimum lease payments under the Company’s operating leases that have an initial non-cancelable lease term in excess of one year at June 30, 2026, are as follows: