NOTE 14 — LEASES

The Company had no right-of-use assets or lease liabilities recorded on its consolidated balance sheets as of December 31, 2025.

Office lease

In July 2026, the Company entered into a Commercial Sublease Agreement (the “Sublease”) with American State Bank, a Texas banking association, for approximately 3,766 rentable square feet of office space at 1900 N. Pearl Street, Suite 1750, Dallas, Texas 75201, which serves as the Company’s corporate headquarters. The Sublease has a term of 53 months commencing July 13, 2026, and expiring November 30, 2030. Base rent under the Sublease is as follows:

The Company also leases 11 parking spaces at a fixed charge of $1,786 per month, which is included in the measurement of the lease liability because of the Company’s election to combine lease and non-lease components. In addition to base rent, the Company is obligated to pay its proportionate share of operating expenses, real estate taxes, and sublessor insurance (NNN), estimated at $26.54 per rentable square foot for 2026 (approximately $8,328 per month), subject to annual reconciliation. Because these amounts vary with actual costs incurred by the sublessor, they are not included in the measurement of the lease liability and are recognized as variable lease cost in the period incurred.

At commencement, the Company paid a security deposit of $21,906 and prepaid rent of $131,436. Total amounts paid to the Sublessor upon commencement, including the security deposit, prepaid rent, and prorated July 2026 rent and NNN, were $165,420. The prepaid rent is applied against one monthly invoice per calendar quarter over six consecutive quarters beginning December 1, 2027. Of the prepaid rent, $77,937 relates to base rent and parking and was included in the initial measurement of the ROU asset; the remaining $53,499 relates to NNN and is recorded in other non-current assets. The security deposit of $21,906 is refundable and is also recorded in other non-current assets.

The Sublease is classified as an operating lease. At commencement, the Company recognized a ROU asset of $522,236 and a lease liability of $444,299.

The Sublease contains no options to extend or terminate the lease, no purchase option over the premises, and no residual value guarantees. The Sublease does not provide an implicit rate, and the Company therefore measured the lease liability using its estimated incremental borrowing rate of 15.0% at the commencement date. That rate was determined on a collateralized basis for a term approximating the lease term, by reference to the Company’s recent borrowings adjusted for the effect of collateral and corroborated against market yields for issuers of comparable credit quality.

Total lease cost is included in general and administrative expenses in the condensed consolidated statements of operations. The Company had no lease cost for the three and nine months ended September 30, 2025, other than short-term lease cost of $8,613 and $36,193, respectively. Short-term lease cost relates to the Company’s former office premises, which were vacated in July 2026.

Supplemental cash flow and other information related to the operating lease was as follows:

Cash paid for amounts included in the measurement of lease liabilities excludes $77,937 of prepaid rent paid at commencement, which was included in the initial measurement of the right-of-use asset rather than the lease liability; total cash paid for the operating lease during the nine months ended September 30, 2026, was $97,583, presented within operating activities.

The weighted-average remaining lease term and weighted-average discount rate as of September 30, 2026, were 4.2 years and 15.0%, respectively. Maturities of the operating lease liability as of September 30, 2026, were as follows:

The maturity analysis above excludes $77,937 of contractual base rent and parking charges that will be settled through application of the prepaid rent described above, which was included in the initial measurement of the right-of-use asset and will not result in future cash outflows. It also excludes variable NNN payments, which are not included in the measurement of the lease liability.