PRECISION BIOSCIENCES INCDTIL
PRECISION BIOSCIENCES INC Commitments Disclosure
COMMITMENTS AND CONTINGENCIES
Litigation
The Company is subject to various legal matters and claims in the ordinary course of business. Although the results of legal proceedings and claims cannot be predicted with certainty, in the opinion of management, there are currently no such known matters that will have a material effect on the financial condition, results of operations or cash flows of the Company.
Servier Program Purchase Agreement
On April 9, 2021, the Company entered into a program purchase agreement with Les Laboratoires Servier and Institut de Recherches Internationales Servier (collectively, “Servier”), pursuant to which the Company reacquired all of its global development and commercialization rights previously granted to Servier pursuant to the Development and Commercial License Agreement by and between Servier and the Company, dated February 24, 2016, as amended (the “Servier Agreement”), and mutually terminated the Servier Agreement (the “Program Purchase Agreement”).
The Program Purchase Agreement requires the Company to make certain payments to Servier based on the achievement of regulatory and commercial milestones for each product. Management assessed the likelihood of each of the regulatory and commercial milestones included in the Program Purchase Agreement in accordance with ASC 450, Contingencies (“ASC 450”). If the assessment of a contingency indicates that it is probable that the milestone will be achieved and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s financial statements.
Accordingly, contingent liabilities of $10.0 million related to the Program Purchase Agreement are accrued and included in contract liabilities in the balance sheets as of December 31, 2025 and December 31, 2024.
Leases
The Company has an operating lease for real estate in North Carolina and does not have any finance leases.
On October 16, 2023, the Company and Venable Historic, LLC, successor-in-interest to Venable Tenant, LLC (the “Landlord”), entered into a Tenth Amendment to Lease Agreement (the “Lease Amendment”), which amended certain terms of the Lease Agreement dated April 5, 2010, as amended (the “Original Lease”) with respect to the Company’s headquarters facilities located in Durham, North Carolina. Among other things, the Lease Amendment extended the term of the Original Lease for an additional period of five years commencing upon August 1, 2024 and up to and through July 31, 2029.
The Company has existing leases in which the non-lease components (e.g., common area maintenance, consumables, etc.) are paid separately from rent based on actual costs incurred and therefore are not included in the right-of-use assets and lease liabilities but rather reflected as an expense in the period incurred.
The elements of lease expense were as follows:
| For the Years Ended December 31, | |||||||||||
| (in thousands) | 2025 | 2024 | |||||||||
| Lease Cost | |||||||||||
| Operating lease cost | $ | 1,933 | $ | 1,940 | |||||||
| Short-term lease cost | 782 | 759 | |||||||||
| Variable lease cost | 463 | 413 | |||||||||
| Sublease income | (20) | (428) | |||||||||
| Total Lease Cost | $ | 3,158 | $ | 2,684 | |||||||
| Other Information | |||||||||||
| Operating cash flows used for operating leases | 1,962 | 1,888 | |||||||||
| Operating right-of-use assets obtained in exchange for lease obligations | — | — | |||||||||
| Operating lease liabilities arising from obtaining right-of-use assets | — | — | |||||||||
| Operating Leases | |||||||||||
| Weighted average remaining lease term (in years) | 3.6 | 4.6 | |||||||||
| Operating Leases | |||||||||||
| Weighted average discount rate | 9.2 | % | 9.2 | % | |||||||
Future lease payments under non-cancelable operating leases with terms of greater than one year as of December 31, 2025, were as follows:
| (in thousands) | December 31, 2025 | ||||
| 2026 | $ | 2,019 | |||
| 2027 | 2,078 | ||||
| 2028 | 2,140 | ||||
| 2029 | 1,269 | ||||
| Total lease payments | 7,506 | ||||
| Less: imputed interest | 1,102 | ||||
| Total operating lease liabilities | $ | 6,404 | |||
Guarantees
The Company agreed to act as a guarantor of Imugene’s assumption of the Company’s lease for its Manufacturing Center for Advanced Therapeutics (the “MCAT Lease”) through the lease expiration date of August 31, 2027. If Imugene (including any successor or assignee of Imugene) fails to pay rent due on the MCAT Lease, the lessor may have contractual recourse against the Company.
As of December 31, 2025, the Company’s guarantee consists of a contingent liability for aggregate minimum lease payments of approximately $2.7 million. No contract liability for the Company’s guarantee of Imugene’s performance on the MCAT lease was recorded as of December 31, 2025, as it was not deemed probable that Imugene will be in default under the MCAT Lease.
Compensatory Arrangements of Certain Officers
On August 26, 2025, the Company entered into amended and restated employment agreements to help retain each of its executive officers: Michael Amoroso, the Company’s President and Chief Executive Officer; Alex Kelly, the Company’s Chief Financial Officer; Dario Scimeca, the Company’s General Counsel and Secretary; and Jeff Smith, the Company’s Chief Research Officer. The employment agreements are substantively similar to their prior employment agreements, except that they reflect such executive’s current annual base salary and target bonus amounts, provide for the payment of existing cash severance in a lump sum, include provisions regarding termination without cause in connection with a “change in control” or a “restructuring event” (each as defined in the respective employment agreements), and provide for a payment to cover potential additional expenses. The amended employment agreements also include a requirement to fund the cash severance and expenses in an escrow account. As a result, the Company entered into escrow arrangements with JPMorgan Chase Bank, N.A. and the executives with respect to the funded amounts. Interest earned from the escrow account accrues to the Company and any unused funds return to the Company. As of December 31, 2025, the escrow account cash balance was $3.8 million.
Supply Agreements
The Company enters into contracts in the normal course of business with contract manufacturing organizations (“CMOs”) for the manufacture of clinical trial materials and contract research organizations (“CROs”) for clinical trial services. These agreements provide for termination at the request of either party with less than one-year’s notice and are, therefore, cancelable contracts. If canceled, these agreements are not anticipated to have a material effect on the financial condition, results of operations, or cash flows of the Company.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 12, 2026 | Showing above |
| 2024 | Mar 26, 2025 | |
| 2023 | Mar 27, 2024 | |
| 2022 | Mar 9, 2023 | |
| 2021 | Mar 15, 2022 | |
| 2020 | Mar 18, 2021 | |
About Commitments Disclosures
Commitments and contingencies disclosures catalog a company's off-balance-sheet obligations and legal exposures — purchase commitments, guarantee arrangements, pending litigation, and regulatory proceedings. These items represent potential future cash outflows that may not appear as liabilities on the balance sheet until they become probable and estimable.
Key signals: litigation reserves and disclosed loss ranges quantify management's estimate of legal exposure, but unquantified "reasonably possible" losses often represent the larger risk. Watch for changes in language around pending cases — shifts from "remote" to "reasonably possible" or increases in estimated loss ranges signal deteriorating outcomes. Unconditional purchase obligations and take-or-pay contracts create fixed cost structures that reduce operational flexibility. Guarantee arrangements for subsidiaries or joint ventures can create cascading obligations. Compare the total commitment schedule against projected free cash flow to assess whether the company can meet its obligations without additional financing.