NOTE 4. RENTAL INVENTORY, NET

During the years ended June 30, 2026 and 2025, the Company developed and built its collapsible containers and actuators used to collapse the marine containers. The containers purchased are recognized as rental inventory and are depreciated over their estimated useful lives.

As of June 30, 2026 and 2025, rental inventory consists of the following: 

Depreciation on rental inventory of $60,825 and $124,920 was recognized during the years ended June 30, 2026 and June 30, 2025, respectively and is included in costs of goods sold on the accompanying consolidated statements of operations. During the years ended June 30, 2026 and 2025, the Company recorded impairment loss of $501,118 and $1,130,000, respectively, on its rental inventory related to a decline in the expected net realizable value of the 40 foot containers and actuators. During the year ended June 30, 2026, the Company entered into a manufacturing agreement to develop 300 new high cube containers. The Company received 100 such containers during the year ended June 30, 2026, for which it paid $1,342,000, and the Company paid a deposit of $805,000 related to the remaining 200 containers. The Company expects to incur an additional cost of $1,878,800 for the remaining containers