Note 9. Leases

Operating lease

We have a new lease contract entered April 28, 2026 which includes our office facility that commenced on May 1, 2026 and expires on April 30, 2031. The monthly “Base Rent” is $10,913. The Company pays 50% of Base rent for the first 3 months. The Base Rent is increased by 4.0% each year starting in year 3.

We have a lease contract entered June 1, 2025 which includes both our office facility and warehouse space that expires May 31, 2028. The monthly “Base Rent” is $12,232 and $13,150. The Base Rent is increased by 3.0% each year. We had a lease contract entered June 1, 2024 which includes both our office facility and warehouse space that expired May 31, 2025. The monthly “Base Rent” was $11,876 and $12,767.

We recognized total lease expense, primarily related to our operating leases, on a straight-line basis in accordance with ASC 842.

As of June 30, 2026 and December 31, 2025, the Company recorded a refundable security deposit of $10,000 for its warehouse space and is included in other assets on the balance sheet.

The operating lease expense were as follows:

 Schedule of Operating Lease Expense 

Supplemental balance sheet information related to operating leases was as follows:

 Summary of Supplemental Balance Sheet Information 

Future minimum lease payments under operating leases that have initial noncancelable lease terms in excess of one year as of June 30, 2026, were as follows:

 Schedule of Future Minimum Lease Payments Under Operating Leases 

Sublease – related party

On August 1, 2021, the Company entered into a Sublease Agreement with its related party, CTC (“Sublandlord”), whereby the Company shall sublease certain offices, rooms and shared use of common spaces located at 150 Sykes Creek Parkway, Merritt Island, FL. The sublease agreement is a month-to-month lease and may be terminated with 30 days’ notice to the Sublandlord. The monthly rent shall be $4,570 from inception through January 31, 2022, $4,707 from February 1, 2022 to January 31, 2023 and $4,847 from February 1, 2023 to January 31, 2024. On February 1, 2024, the Company extended the month-to-month Sublease agreement. The monthly rent shall be $4,618.03 from February 1, 2024 to January 31, 2025, $4,756.57 from February 1, 2025 to January 31,2026 and $4,899.27 from February 1, 2026 to January 31, 2027. A common area maintenance fee (CAM) will be charged in addition to the monthly rent. During the three and six months ended June 30, 2026 and 2025, the Company recorded sublease expenses as follows.

 Schedule of Sublease Expense