The Company has an operating lease for its former corporate office headquarters in Seattle, WA. In April 2026, the Company entered into a sublease agreement for the full premises of this operating lease. The sublease commenced on May 1, 2026 and will run through the end of the Company's existing lease term in September 2027.

Under ASC 842, Leases, and ASC 360, Property, Plant, and Equipment, subleasing the entire premises of the head lease qualifies as a triggering event to assess for impairment. Under the ASC 360 two-step recoverability test, the Company assessed there to be an impairment loss of approximately $0.2 million from the terms of the sublease agreement. The Company notes that under ASC 855, Subsequent Events, this impairment loss qualified as a recognized subsequent event during the three months ended March 31, 2026, as the sublease contract had been approved and committed to by management in March 2026. The $0.2 million impairment loss was recognized in the three months ended March 31, 2026, and is included within Interest income (expense) and other, net on the Consolidated Statement of Operations for the six months ended June 30, 2026.

The Company recognizes its operating lease agreements in accordance with ASC 842, Leases, and recognizes rent expense on a straight-line basis over the lease term with any lease incentives amortized as a reduction of rent expense over the lease term. Only assets under an operating lease with a term over 12 months were included in Right-of-use lease assets, and the related remaining liabilities are included in Operating lease liability, current and Operating lease liability, non-current on the Consolidated Balance Sheets.

Lease cost, other than the impairment loss amount, recognized in the Consolidated Statements of Operations and other lease information is summarized as follows:


	Three Months Ended June 30,						Six Months Ended June 30,
(In Thousands, Except Terms in Years and Percentages)	2026			2025			2026		2025
Operating lease cost	$	10		$	127		$	105	$	271
Finance lease cost:
Interest on lease liabilities		—			8			—		18
Variable and short-term lease cost		—			9			—		19
Total lease cost	$	10		$	144		$	105	$	308
Other information:
Weighted-average remaining lease term - operating leases		1.3			2.4
Weighted-average remaining lease term - finance leases		—			0.4
Weighted-average discount rate - operating leases		7.5	%		7.5	%
Weighted-average discount rate - finance leases		—			14.1	%
Cash paid for operating leases	$	99		$	130		$	195	$	271
Cash paid for finance leases	$	—		$	115		$	—	$	229

As of June 30, 2026, the Company’s undiscounted future payments under operating lease liabilities were as follows:


(In Thousands)
2026	$	203
2027		311
Gross future lease payments	$	514
Less: imputed interest		(26	)
Present value of total lease liabilities	$	488
Less: current portion of lease liabilities		(385	)
Total long-term lease liabilities	$	103

In accordance with ASC 842, Leases, as the sublease is comprised of the entire remaining head lease term and transfers substantially all remaining economic benefits of the right-of-use ("ROU") asset, the sublease is characterized as a finance lease where the Company must derecognize the portion of the ROU asset transferred (entire leased asset transferred in this case), continue recognizing the original head lease liabilities, and recognize the imputed sublease interest income. Accordingly, the remaining ROU lease asset's remaining balance of approximately $0.3 million was derecognized and sublease receivables were established on the Consolidated Balance Sheet at June 30, 2026, comprised of a remaining balance of approximately $0.2 million in Other current assets and approximately $0.1 million in Other assets, net.