Note 11 - Leases

12 Months Ended

Dec. 31, 2025

11.

LEASES

On September 1, 2020, the Company entered into a five-year operating lease for their headquarters building in San Diego, California. The term of the existing lease was extended until February 28, 2026 and subsequently until September 30, 2026. The agreement also provides that the Landlord may terminate the lease upon sixty (60) days’ prior written notice to the Company. At this time, it is not reasonably certain that the Company will extend the term of the lease and, therefore, the renewal periods have been excluded from the right-of-use (“ROU”) asset.

As part of the All Cell acquisition, the Company assumed a facility lease located in Broadview, Illinois, and recorded $0.2 million in right-of-use asset and lease liability. The lease term ended on August 31, 2023 and contains clauses for annual rent escalation. The present values of the lease payment streams were calculated using an effective borrowing rate of 10%. The Company remained in the facility on a month-to-month lease and then entered into a five-year lease extension effective February 1, 2024 and recorded $1.4 million in right-of-use asset and lease liability.

As part of the acquisitions in Serbia, the Company assumed a lease for a small office and a few minimal leases in Belgrade, Serbia, which have an indefinite term and may be terminated at any time with 30 days’ notice. Because of the short term and small value, these leases were not capitalized.

During the twelve months ended December 31, 2025 and 2024, cash paid for amounts included in the measurement of operating lease liabilities were $0.8 million and $1.1 million, respectively. Operating lease costs for the twelve months ended December 31, 2025 and 2024 were $0.8 million and $1.0 million, respectively.

The table below summarizes the Company's lease-related assets and liabilities as of December 31, 2025 and 2024:

	*Year Ended*
	*December 31,*
	*2025*		*2024*
Lease assets	$	1,358	$	1,893

Lease liabilities
Current operating lease liabilities, included in current liabilities	$	484	$	696
Noncurrent operating lease liabilities, included in long-term liabilities		815		971
Total Lease liabilities	$	1,299	$	1,667

Supplemental cash flow information related to the lease is as follows:

	*Year Ended*
	*December 31,*
	*2025*			*2024*
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	752		$	1,098
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	442		$	1,697
Weighted Average Remaining Lease Term:
Operating leases		2.67			3.22
Weighted Average Discount Rate:
Operating leases		10	%		10	%

As the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate to discount the lease payments to present value. The estimated incremental borrowing rate is derived from information available at the lease commencement date. The future minimum rental commitments for our operating leases is as follows:

2026	$	598
2027		500
2028		390
Thereafter		-
Total undiscounted future minimum payments		1,488
Less imputed interest		(189	)
Total lease liability	$	1,299