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Note 5 - Leases

6 Months Ended

Jun. 30, 2026

5.	LEASES

The Company leases office facilities in Northern California under non-cancelable operating leases. In July 2024, the Company entered into two new long-term leases, one of which the Company uses as its headquarters. In February 2026, the Company entered into an agreement with the landlord to amend the existing operating lease at its corporate headquarters. The amendment added additional square footage, extended the lease term to February 28, 2029, and included an option to renew with renewal terms that, if exercised by the Company, extends the lease term for an additional five years. The Company determined that the amendment represents a lease modification and remeasured its right-of-use asset and operating lease liability using an updated incremental borrowing rate as of the modification date. The Company recognized a $1,033 increase in its right-of-use asset and operating lease liability and no gain or loss was recognized as a result of the modification.

In August 2024, one of the Company's existing leases, originally set to expire on November 30, 2026, was terminated early. On April 28, 2025, the Company and the former landlord entered into a settlement agreement to resolve all outstanding disputes related to the early termination of the lease. Under the terms of the agreement, the Company paid $1,400 in cash and issued a warrant to purchase up to 350,000 shares of the Company's common stock at an exercise price of $2.22 per share which had a fair value of $899 on the date of issuance in August 2025. The Company recorded a net gain on termination of operating lease of $1,612 during the six months ended June 30, 2025. All liabilities were settled in 2025.

The components of operating lease expenses, excluding the gain (loss) on early termination of operating lease, for the three and six months ended June 30, 2026 and 2025, are as follows (in thousands):

	*Three months ended June 30,*				*Six months ended June 30,*
	*2026*		*2025*		*2026*		*2025*
Operating lease cost	$	134	$	70	$	228	$	141
Variable lease cost		4		4		8		8
Total operating lease cost	$	138	$	74	$	236	$	149

Maturities of lease liabilities are as follows (in thousands):

	*Operating leases*
Years ending - December 31:	*(unaudited)*
2026 (remaining six months)	$	273
2027		545
2028		519
2029		87
Total lease payments		1,424
Less amount to discount to present value		(82	)
Present value of lease liabilities	$	1,342