Note 15 - Operating Lease

6 Months Ended

Jun. 30, 2026

15. OPERATING LEASE

On July 4, 2025, the Company entered into a non-cancelable facility lease commencing and expiring on July 3, 2028, for approximately 6,600 square meters of industrial space in Hangzhou, China. The lease term is 36 months and includes a three-month rent-free period from July 4, 2025 through October 3, 2025, during which only property management fees and utilities are payable. Base rent is $27 per month. The lease is denominated in Renminbi (“RMB” or “yuan”), and the lease liability and right-of-use asset are initially measured in RMB and translated into U.S. dollars for consolidated financial reporting purposes in accordance with ASC830.

In accordance with ASC 842, the components of lease expense were as follows:

For the six months ended June 30,	2026		2025
Operating lease expense	$	163	$	-
Total lease expense	$	163	$	-

In accordance with ASC 842, other information related to leases was as follows:

For the six months ended June 30,	2026		2025
Operating cash flows from operating leases	$	163	$	-
Cash paid for amounts included in the measurement of lease liabilities	$	163	$	-

In accordance with ASC 842, the future minimum lease payments are as follows:

2026 (remaining six months)	$	163
2027		326
2028		163
2029		-
2030		-
Thereafter		-
Total undiscounted cash flows	$	652

Reconciliation of lease liabilities:
Weighted-average remaining lease terms (years)	2.1
Weighted-average discount rate		6.0	%
Present values	$	620

Lease liabilities—current		301
Lease liabilities—long-term		319
Lease liabilities—total		620

Difference between undiscounted and discounted cash flows	$	32