NOTE 8 – LEASES

We lease office, manufacturing, and warehouse space in Scottsdale, AZ, Atlanta and Marietta, GA, and Manitowoc, WI under contracts we classify as operating leases. None of our leases are financing leases. The Scottsdale lease has been extended through 2029 and does not include a renewal option. We terminated our lease agreement in Marrietta during the year ended March 31, 2024 and decreased our Right of Use Asset and Operating Lease Liabilities by $38,185.

As of the June 30, 2024 and March 31, 2024, total Right of Use Assets were $1,825,564 and $2,000,093, respectively. As of the three months ended June 30, 2024 and June 30, 2023, total Operating Lease Liabilities were $1,915,627 and $1,246,520, respectively. The current portion of our Operating Lease Liability on June 30, 2024 and March 31, 2024, is $488,887 and $479,651, respectively, and is reported as a current liability. The remaining $1,426,740 of the total $1,915,627 as of June 30, 2024 and the $1,609,836 of the total $2,089,487 as of March 31, 2024 of the Operating Lease Liability is presented as a long-term liability net of the current portion.

AMMO, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Consolidated lease expense for the three months ended June 30, 2024 was $167,357 including $161,916 of operating lease expense and $5,441 of other lease associated expenses such as association dues, taxes, utilities, and other month to month rentals.

The weighted average remaining lease term and weighted average discount rate for operating leases were 3.7 years and 10.0%, respectively.

Future minimum lease payments under non-cancellable leases as of June 30, 2024, are as follows:

SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS UNDER NON-CANCELLABLE LEASES

AMMO, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS