NOTE 15 – LEASES

The Company leases office space at 165 Lincoln Ave, 2nd Floor, Winter Park, Florida, under a non-cancelable operating lease that commenced in June 2026 with a term of approximately five years, expiring May 31, 2031. The lease contains a five-year renewal option that the Company is not reasonably certain to exercise; accordingly, the renewal period is excluded from the lease term. The lease also includes a one-time early termination option effective 24 months after commencement, exercisable upon at least three months’ prior written notice and payment of a termination fee equal to five months of then-current base rent plus any unamortized broker commissions. The Company is not reasonably certain to exercise this option; accordingly, it is excluded from the lease term. The Company recognized a right-of-use asset and corresponding lease liability based on the present value of the remaining lease payments, discounted using the Company’s incremental borrowing rate of 7.50%, as the rate implicit in the lease was not readily determinable. The lease is structured as a modified gross lease, under which the landlord is responsible for property taxes, property insurance, and common area maintenance, and the Company’s only variable payment obligation relates to a pro rata share of the property’s electricity costs, billed as additional rent. The Company has elected to account for the lease and non-lease components as a single lease component. Prior to June 2026, the Company’s office space arrangements had terms of 12 months or less and, consistent with the Company’s accounting policy election under the short-term lease exception in ASC 842-20-25-2, were not recognized on the balance sheet as right-of-use assets or lease liabilities; the associated cost is reflected as other lease expense for the three and six months ended June 30, 2025. Accordingly, no right-of-use asset or lease liability was recognized as of December 31, 2025.

The following table presents the components of lease cost for the periods indicated:

SCHEDULE OF LEASE COST 

The following table presents the classification of the Company’s right-of-use asset and operating lease liabilities in the unaudited condensed consolidated balance sheets:

SCHEDULE OF RIGHT-OF-USE ASSET AND OPERATING LEASE LIABILITIES  

The weighted-average remaining lease term and weighted-average discount rate for the Company’s operating lease as of June 30, 2026 were 4.9 years and 7.50%, respectively.

The following table presents the maturities of the Company’s operating lease liabilities as of June 30, 2026:

SCHEDULE OF MATURITIES OPERATING LEASE LIABILITIES   

Supplemental cash flow information related to the Company’s operating lease was as follows: cash paid for amounts included in the measurement of the operating lease liability was $11 for the six months ended June 30, 2026. In June 2026, the Company recognized a right-of-use asset and a corresponding operating lease liability of $810 upon commencement of the lease, presented as a non-cash investing and financing activity in the unaudited condensed consolidated statements of cash flows. As of June 30, 2026, the right-of-use asset was $799 and the total operating lease liability was $800. The right-of-use asset reflects the $810 recognized at commencement, reduced by amortization since commencement; the difference between the right-of-use asset and the lease liability results from the recognition of lease cost on a straight-line basis, consistent with the subsequent measurement of operating leases under ASC 842.

Variable lease cost, consisting of the Company’s pro rata share of the property’s electricity costs billed as additional rent, was less than $1 for each of the three and six months ended June 30, 2026. The short-term lease cost recognized for the three and six months ended June 30, 2026 relates to month-to-month office arrangements that were replaced by the Company’s long-term operating lease that commenced in June 2026; accordingly, the Company’s short-term lease commitments for the twelve months following June 30, 2026 are not expected to be material.