7.  LEASES

In 2025, the Company entered into a finance lease arrangement for servers. The lease has a term of three years and includes a purchase option that the Company is reasonably certain to exercise, resulting in a finance lease classification under ASC 842. Finance lease right of use assets and corresponding lease liabilities are recognized at the commencement date based on the present value of remaining lease payments, using the lease’s implicit rate, if determinable, or the Company’s incremental borrowing rate at lease commencement.

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Finance lease cost for the six months ended June 30, 2026 consisted of the following:

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Finance lease right of use assets and lease liabilities consisted of the following at June 30, 2026:

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The finance lease right-to-use assets are included in Other assets, and finance lease liabilities are included in Other accrued liabilities (current) and Other long-term liabilities (non-current) on the Condensed Balance Sheets.  Amortization of finance lease right-of-use assets is included in operating expense.

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The weighted average remaining lease term at June 30, 2026 was 2.33 years.  The weighted average discount rate at June 30, 2026 was 7.0%.

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Future minimum finance lease payments as of June 30, 2026 are as follows:

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