NOTE 7 – LEASES

Westlake Village, California: The Company leases 4,050 square feet of office space located at 2625 Townsgate Road for its corporate headquarters. The lease expires on July 14, 2027. The lease contains an option to renew for two additional five-year terms and first right of refusal for certain additional space at the same premises. The Company is not reasonably certain that it will exercise this option to renew and therefore it is not included in right-of-use assets and liabilities as of June 30, 2026.

San Diego, California: The Company leases 6,755 square feet of office and research and development laboratory space located at 6365 Marindustry Drive. The lease was extended in March 2026 and expires on October 31, 2035.

The Company also leases 7,569 square feet of manufacturing space located at 6335 Marindustry Drive. The lease was extended in March 2026 and expires on October 31, 2035.

In December 2025, the Company entered into a lease agreement, whereby the Company leases an office space located at 6215 Ferris Square, San Diego. The lease expires on December 31, 2027. The lease contains an option to renew for one additional year. The Company is not reasonably certain that it will exercise this option to renew and therefore it is not included in right-of-use assets and liabilities as of December 31, 2025.

During March 2026, the Company executed amendments to extend the lease terms for the facilities located at 6335 Marindustry Drive and 6365 Marindustry Drive. The extensions modified the lease terms and resulted in a reassessment of the lease liability and right-of-use asset. As a result of the extensions, the Company remeasured the lease liability using a revised discount rate as of the modification date and recorded a corresponding adjustment to the right-of-use asset.

Manufacturing equipment lease: On September 4, 2025, the Company entered into written agreements (Equipment Agreements), whereby the Company agreed to acquire certain equipment through a financing arrangement structured as a finance lease. Lease commencement will occur when the equipment is made available to the Company, which is the final onsite installation date and is expected to be approximately 16 months after the execution of the Equipment Agreements, or approximately January 2027. The Company has the option to purchase the asset at the end of the lease term for the amount of $1. At that time, recognition of the related finance lease asset and liability commences. Upon commencement, the lease term will be 60 months (Initial Term), with future lease payments up to approximately $6.2 million. The Company has the right to terminate the lease without cause at the end of the Initial Term or any term thereafter upon 90 days prior written notice without incurring penalties or interest.

As of June 30, 2026, no right-of-use asset or liability has been recognized for the manufacturing equipment lease in the financial statements, as the Company does not have possession of the equipment. The Equipment Agreements also include a refundable security deposit, equal to $2.0 million as of June 30, 2026, which is classified as restricted cash on the Company’s condensed balance sheet.

The components of lease assets and liabilities along with their classification on the Company’s condensed balance sheets were as follows:

 SCHEDULE OF COMPONENTS OF LEASE ASSETS AND LIABILITIES

 SCHEDULE OF LEASE COST

The following table presents maturities of operating lease liabilities on an undiscounted basis as of June 30, 2026:

 SCHEDULE OF MATURITIES LEASE LIABILITIES

The following table presents supplemental cash flow and other information:

 SCHEDULE OF SUPPLEMENTAL CASH FLOW AND OTHER INFORMATION RELATED LEASES

Other Leases

In November 2019, the Company entered into a short-term lease agreement for one of its office facilities, which was subsequently extended until December 2022 and thereafter on a month-to-month basis. No rent expense was recorded during the six months ended June 30, 2026 and was de minimis during the six months ended June 30, 2025. In February 2026, the Company terminated the lease agreement effective March 31, 2026.