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Note 8 - Leases

9 Months Ended

Sep. 30, 2025

Operating and Finance Leases [Text Block]

8. Leases

We are a party to operating leases for our corporate office in Cupertino, modular offices, and laboratory facilities. We have also entered into several finance leases for mobile equipment and for the Riverbank Industrial Complex. These finance leases have a purchase option at the end of the term that we are reasonably certain we will exercise, so the leases are classified as finance leases. All of our leases have remaining terms of one year to 13 years. We apply an accounting policy election to keep leases with an initial term of 12 months or less off the balance sheet, and recognize those lease payments in the Consolidated Statements of Operations as we incur the expenses.

We evaluate leases in accordance with ASC 842 – Lease Accounting. When discount rates implicit in leases cannot be readily determined, we use the applicable incremental borrowing rate at lease commencement to perform lease classification tests on lease components and to measure lease liabilities and right of use (ROU) assets. The incremental borrowing rate we use is based on weighted average baseline rates commensurate with our secured borrowing rate, over a similar term. At each reporting period when there is a new lease initiated, the rates established for that quarter are used.

The components of lease expense are as follows:

	*Three months ended September 30,*				*Nine months ended September 30,*
	*2025*		*2024*		*2025*		*2024*
Operating lease cost
Operating lease expense	$	201	$	195	$	593	$	571
Short term lease expense		34		32		120		95
Variable lease expense		23		23		69		90
Total operating lease cost	$	258	$	250	$	782	$	756

Finance lease cost
Amortization of right-of-use assets	$	20	$	30	$	88	$	90
Interest on lease liabilities		93		87		272		256
Total finance lease cost	$	113	$	117	$	360	$	346

Cash paid for amounts included in the measurement of lease liabilities:

	*Three months ended September 30,*				*Nine months ended September 30,*
	*2025*		*2024*		*2025*		*2024*
Operating cash flows used in operating leases	$	191	$	189	$	609	$	603
Operating cash flows used in finance leases		93		87		272		256
Financing cash flows used in finance leases		6		9		168		170

Supplemental non-cash flow information related to ROU asset and lease liabilities was as follows for the three and nine months ended September 30, 2025 and 2024:

	*Three months ended September 30,*						*Nine months ended September 30,*
	*2025*			*2024*			*2025*		*2024*
Operating leases
Accretion of the lease liability	$	80		$	82		$	241	$	245
Amortization of right-of-use assets		122			112			352		325

The weighted average remaining lease term and weighted average discount rate as of September 30, 2025 are as follows:

Weighted Average Remaining Lease Term
Operating leases (in years)		11.2			8.2
Finance leases (in years)		11.5			12.4

Weighted Average Discount Rate
Operating leases		12.7	%		13.7	%
Finance leases		13.3	%		13.3	%

Supplemental balance sheet information related to leases is as follows:

	*September 30, 2025*			*December 31, 2024*
Operating leases
Operating lease right-of-use assets	$	2,370		$	2,237

Other current liability		560			534
Other long term liabilities		1,900			1,809
Total operating lease liabilities		2,460			2,343

Finance leases
Property and equipment, at cost	$	2,889		$	2,889
Accumulated depreciation		(437	)		(349	)
Property and equipment, net		2,452			2,540

Other current liability		244			244
Other long term liabilities		2,743			2,639
Total finance lease liabilities		2,987			2,883

Maturities of operating and finance lease liabilities are as follows:

Twelve months ended September 30,	*Operating leases*			*Finance leases*

2026	$	826		$	145
2027		752			145
2028		543			145
2029		108			145
2030		110			145
Thereafter		2,130			9,815
Total lease payments		4,469			10,540
Less imputed interest		(2,009	)		(7,553	)
Total lease liability	$	2,460		$	2,987

We act as sublessor in certain leasing arrangements, primarily related to land and buildings. Fixed sublease payments received are recognized on a straight-line basis over the sublease term. Sublease income and head lease expense for these transactions are recognized on a net basis on the consolidated financial statements. Sublease income is recorded in the General and Administrative Expense section of the Consolidated Statements of Operations and Comprehensive Loss.

The components of lease income are as follows for the three and nine months ended September 30, 2025 and 2024, respectively:

	*Three months ended September 30,*				*Nine months ended September 30,*
	*2025*		*2024*		*2025*		*2024*
Lease income	$	754	$	569	$	2,170	$	1,576

Future lease commitments to be received as of September 30, 2025, are as follows:

Twelve months ended September 30,
2026	$	1,736
2027		1,700
2028		1,559
2029		1,605
2030		607
Thereafter		-
Total future lease commitments	$	7,207