NOTE 7 – RIGHT OF USE ASSET

Lease Agreement

In January 2020, the Company entered into a lease agreement commencing February 8, 2020 for its corporate office in Carlsbad, California, which was set to expire in 2025. In December 2024, the Company extended its lease for fourteen months through March 2026, with an option to extend for an additional 14 months. At inception of the lease, the Company recorded a right of use asset and liability. The Company used an incremental borrowing rate of 8.5% within the calculation.

In April 2026, the Company entered into a new lease agreement for its corporate office located in Carlsbad, California. The lease commenced on June 1, 2026 and has an initial term of five years and three months, expiring on August 31, 2031. The lease provides for an initial monthly base rent of $3,798, subject to scheduled increases over the lease term, and includes an option to extend the lease pursuant to the terms of the agreement. At commencement of the lease, the Company recorded a right-of-use asset and lease liability. The Company used an incremental borrowing rate of 9.0% in the calculation.

The rent expense was $37 and $37 for the six months ended June 30, 2026 and 2025, respectively.