LEASES

9 Months Ended

Dec. 31, 2023

Leases

LEASES

NOTE 9 – 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. During the nine months ended December 31, 2023, we extended the term of our Scottsdale lease for five years and increased our Right of Use Assets and Operating Lease Liabilities by $1,252,896 and we terminated our Marietta lease resulting in a $35,919 decrease to our Right of Use Assets and a $38,185 decrease to our Operating Lease Liabilities. We terminated our lease agreement in our first Manitowoc, WI location during the year ended March 31, 2023. Accordingly, we decreased our Right of Use Assets and Operating Lease Liabilities by $901,076.

As of December 31, 2023 and March 31, 2023, total Right of Use Assets were $2,113,943 and $1,261,634, respectively. As of December 31, 2023 and March 31, 2023, total Operating Lease Liabilities were $2,200,674 and $1,374,224, respectively. The current portion of our Operating Lease Liability on December 31, 2023 and March 31, 2023 is $463,059 and $470,734, respectively, and is reported as a current liability. The remaining $1,737,615 of the total $2,200,674 as of December 31, 2023 and the $903,490 of the total $1,374,224 as of March 31, 2023 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 nine months ended December 31, 2023 was $502,889 including $477,065 of operating lease expense and $25,824 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 4.2 years and 10.0%, respectively.

Future minimum lease payments under non-cancellable leases as of December 31, 2023 are as follows:

Years Ended March 31,
2024 (1)	$	165,040
2025		666,233
2026		665,069
2027		581,574
2028		379,067
Thereafter		258,102
		2,715,085
Less: Amount Representing Interest		(514,411	)
	$	2,200,674

(1) This amount represents future lease payments for the remaining three months of fiscal year 2024. It does not include any lease payments for the nine months ended December 31, 2023.