Note 9 - Commitments and Contingencies

6 Months Ended

Jun. 30, 2025

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

9. COMMITMENTS AND CONTINGENCIES

Leases

We have noncancelable operating leases for offices and data centers expiring at various dates through April 2030. These operating leases are included in other long-term assets on the Company's June 30, 2025 and December 31, 2024 Consolidated Balance Sheets and represent the Company’s right to use the underlying asset for the lease term. The Company’s obligation to make lease payments are included in other current liabilities and long-term lease obligation on the Company's June 30, 2025 and December 31, 2024 Consolidated Balance Sheets. Operating lease right-of-use assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Because the rate implicit in each lease is not readily determinable, the Company uses its incremental borrowing rate to determine the present value of the lease payments.

Supplemental Information–Leases

Supplemental information related to our right-of-use assets and related lease liabilities is as follows:

	June 30, 2025			December 31, 2024
Right-of-use asset, net and lease liabilities (in thousands)	$	4,738		$	2,747
Weighted average remaining lease term (years)		3.9			3.5
Weighted average discount rate		7.2	%		6.6	%

For the six months ended June 30, 2025 and 2024, cash paid for operating leases included in operating cash flows was $718,000 and $659,000, respectively. During the second quarter of 2025, we recorded a right-of-use asset and corresponding lease liability of $2,473,000.

Maturities of our operating lease liabilities as of June 30, 2025 is as follows:

	Operating Leases
	(in thousands)
2025		796
2026		1,625
2027		1,123
2028		1,067
2029		763
Thereafter		220
Total lease payments		5,594
Less imputed interest		(856	)
Total lease liabilities		4,738

Lease expense for the three and six months ended June 30, 2025 and 2024 consisted of the following:

	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2025		2024		2025		2024
Cost of Revenue	$	195	$	209	$	404	$	385
General and Administrative		126		121		250		238
Development		32		32		64		36
Total	$	353	$	362	$	718	$	659

Retention Liability

On May 7, 2025, the Board of Directors approved a retention program for employees who, as of July 31, 2024, have been employees of the Company for more than five years, which includes our President and Chief Executive Officer, and our Chief Financial Officer and Corporate Secretary. Under the program, we agreed to make a cash retention payment to each covered employee equal to the amount, if any, by which the employee’s 2024 base salary exceeds the value, measured as of close of trading on December 31, 2028, of the shares of restricted stock granted to such employee in 2024 and 2025 that are vested as of December 31, 2028. Employees must remain actively and continuously employed, in good standing, through December 31, 2028, and the program may be cancelled in connection with an acquisition of the Company by a buyer with a market capitalization in excess of $1 billion if the restricted stock granted to the covered employees in 2024 and 2025 vests within 30 days after closing. We expect to evaluate the liability and corresponding service cost associated with the program on a quarterly basis. The program is not evidenced by a formal written plan document or formal written agreements with the covered employees.. The maximum liability under this plan is approximately $13,151,000, and we expect to record the fair value of the remaining liability to stock compensation expense over the service period based on the closing stock price each quarter. We recorded a liability of $50,000, included in other long-term liabilities on the Consolidated Balance Sheets and corresponding stock-based compensation expense included in general and administrative expenses on the Consolidated Statements of Operations for the second quarter of 2025 with respect to this program.

Legal Matters

There are no pending or threatened legal proceedings. However, in the ordinary course of business, from time to time we may be involved in various pending or threatened legal actions. The litigation process is inherently uncertain and it is possible that the resolution of such matters might have a material adverse effect upon our financial condition and/or results of operations. We accrue for unpaid legal fees for services performed to date.