Note 7 - Leases

12 Months Ended

Dec. 31, 2025

NOTE 7. LEASES

Operating Leases

The Company leases its facilities in Clearwater, Florida and Sofia, Bulgaria under non-cancelable operating lease agreements. During May 2023, the Company entered into a Single Tenant Industrial Building Lease (the “Lease”), on property it previously owned in Clearwater, Florida. The Lease has an initial term of ten (10) years commencing from the closing (the “Initial Term”), and a renewal term of five (5) years, exercisable at the Company’s option. The annual fixed rent is $619,500 for the first year of the Initial Term, and is subject to a 4% escalation every year thereafter through the Initial Term. Rent will be reset to the current market rate should the Company exercise the renewal option. The Lease provides for a 3% management fee on rent payments throughout the Initial Term and optional renewal term. During the year ended December 31, 2022, the Company entered into a five-year extension of its Sofia, Bulgaria facility. These operating leases have terms expiring through May 2033.

Finance Leases

The Company has entered into non-cancelable finance leases for certain computer equipment in Clearwater, Florida. During the year ended December 31, 2022, the Company entered into a 63-month lease for computer equipment. The computer equipment lease expires in July 2027.

Information about the Company’s lease costs are as follows:

	*Year Ended*
	*December 31,*
(in thousands)	*2025*		*2024*
Operating lease costs	$	785	$	888
Finance lease costs:
Amortization of right-of-use assets		21		21
Interest on lease liabilities		1		1
Variable lease costs		133		103
Total lease costs	$	940	$	1,013

Cash information related to our leases are as follows:

	*Year Ended*				*Year Ended*
	*December 31, 2025*				*December 31, 2024*
(in thousands)	*Operating*		*Finance*		*Operating*		*Finance*
Cash paid for lease liabilities	$	810	$	21	$	778	$	21

Information about the Company’s weighted average remaining lease terms and discount rate assumptions are as follows:

	*Year Ended*						*Year Ended*
	*December 31, 2025*						*December 31, 2024*
	*Operating*			*Finance*			*Operating*			*Finance*
Weighted average remaining lease term (in years)		7.1			1.6			8.0			2.6
Weighted average discount rate		8.67	%		2.32	%		8.58	%		2.32	%

Maturities of lease liabilities as of December 31, 2025 are as follows:

(In thousands)	*Operating*			*Finance*
2026	$	839		$	21
2027		868			12
2028		764			—
2029		794			—
2030		826			—
Thereafter		2,131			—
Total lease payments		6,222			33
Less imputed interest		(1,764	)		—
Present value of lease liabilities		4,458			33
Less current portion of lease liabilities		(407	)		(21	)
Long-term portion of lease liabilities	$	4,051		$	12