7. OPERATING LEASE 

In August 2024, the Company entered a 12-month operating lease with an option to extend for four additional one-year periods which the Company is reasonably certain they will exercise. The lease provides for approximately 750 square feet of rentable area which the Company intends to sublease. The lease was amended by changing the effective date to June 11, 2025 with the option to extend for three additional one-year periods. The addendum also modified the monthly lease payments to $2,500 effective December 11, 2025 until June 11, 2026, $2,650 the first year, $2,800 for the second year, and $2,950 for the third year of the lease. On the commencement date of the lease, the Company recorded $112,746 related to the ROU asset and lease liability. At June 30, 2026, the Company revalued its ROU asset and lease liability due to the decision to not renew the lease. As a result, the Company reduced the carrying value of the ROU asset and lease liability to zero and recognized $(11,967) in rent expense.

Operating lease expense was $32,200 and $26,766 for the years ended June 30, 2026 and June 30, 2025, respectively. Operating cash flows used for the operating leases during the years ended June 30, 2026 and 2025, was $28,650 and $12,000, respectively.