LEASES

12 Months Ended

Dec. 31, 2025

12. LEASES

Office and Warehouse Leases

During the year ended December 31, 2024, the Company was a lessee as well as a sublessor for a certain office space lease. No residual value guarantees had been provided by the sublessee. For the year ended December 31, 2024, the Company recognized income related to the sublease of $91,000. The sublease expired November 30, 2024. Fixed sublease payments received were recognized on a straight-line basis over the sublease term and netted against operating lease expenses.

The Company leases offices and warehouse space under an operating lease requiring periodic payments. The following table provides a summary of leases by balance sheet category as of December 31, 2025, and 2024:


	December 31, 2025		December 31, 2024
Operating right-of-use assets	$	45,000	$	567,000
Operating lease liability – current		51,000		581,000
Operating lease liability – non-current		-		50,000

The components of lease expenses recorded within operating expenses on the Company’s consolidated statements of operations for the years ended December 31, 2025, and 2024, were as follows:

Schedule of lease cost
	December 31,
	2025		2024
Operating lease costs	$	550,000	$	649,000
Less: Sublease income		-		(91,000)
Total	$	550,000	$	558,000

The following tables provides a summary of other information related to leases for the year ended December 31, 2025:


	December 31, 2025
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows related to operating leases	$	609,000
Right-of-use assets obtained in exchange for new operating lease liabilities		-
Weighted-average remaining lease term – operating leases		.1 years
Weighted-average discount rate – operating leases		8	%

Payments due by period of lease liabilities under the Company’s non-cancellable operating lease as of December 31, 2025, were as follows:


2026	$	51,000
Total lease payments		51,000
Less interest		-
Present value of lease liabilities	$	51,000