4. Commitments and Contingencies

Lease Commitments

The Company leases office space located at 4660 La Jolla Village Dr., Suite 100, San Diego, California, through a month-to-month rental agreement, with monthly rent of $151. Beginning in February 2021, the Company leased 2,140 square feet of laboratory space in San Diego, California (the “Lease”). In December 2024, the Company signed an amendment extending the Lease term until February 28, 2025. The base monthly rent was equal to $5,350, and the Company was required to maintain a security deposit of approximately $6,000. The Lease contained customary default provisions, representations, warranties and covenants. In addition to base rent, the Lease required the Company to pay certain taxes, insurance and operating costs relating to the leased premises. In 2024 upon amending the lease agreement, the Company applied the short-term lease exception as the amendment was less than twelve months. The Lease was classified as an operating lease. Subsequent to the expiration of the Lease, the Company began leasing the same space on a month-to-month basis with monthly rent of $5,350 per month, through December 31, 2025.

 

In November 2025, the Company entered into a new lease for laboratory and office space (the “Oberlin Lease”), which commenced on December 1, 2025. The Oberlin Lease, which is an operating lease, has a non-cancelable term of three years, with one three-year renewal option at fair market value. The exercise of the renewal option is not recognized as part of the right-of-use asset and lease liability, as the Company did not conclude that the exercise of renewal was reasonably certain to occur. The Oberlin Lease requires base monthly rent of approximately $33,000 which escalates annually by 3%, and contains provisions for free rent periods and an allowance for tenant improvements of up to approximately $54,000. In addition to base rent, the Oberlin Lease requires the Company to pay certain taxes, insurance and operating costs relating to the leased premises, which represent variable lease costs. On the lease commencement date, the Company recognized a right-of-use asset and lease liability of approximately $741,000 on its consolidated balance sheet. As the Oberlin Lease does not provide an implicit rate, the Company used its incremental borrowing rate of 9.5%, which was determined using a set of peer companies’ incremental borrowing rates. As of December 31, 2025, the remaining lease term of the Oberlin Lease was 2.9 years.

 

A summary of total lease costs relating to the Company’s leases is as follows:

 

 

December 31,
2025

 

 

December 31,
2024

 

Operating lease cost

 

$

24,496

 

 

$

 

Short-term lease cost

 

 

64,200

 

 

 

64,200

 

Variable lease cost

 

 

33,595

 

 

 

36,629

 

Total lease cost

 

$

122,291

 

 

$

100,829

 

 

Future minimum lease payments under the Oberlin Lease as of December 31, 2025 is as follows:

 

Year Ended December 31,

 

 

 

Amount

 

2026

 

 

 

$

93,052

 

2027

 

 

 

 

406,220

 

2028

 

 

 

 

382,583

 

Total lease payments

 

 

 

$

881,855

 

Less interest

 

 

 

 

(135,071

)

Total lease liability

 

 

 

 

746,784

 

Current portion of lease liability

 

 

 

 

23,013

 

Lease liability, net of current portion

 

 

 

$

723,771

 

Commitments

The Company enters into contracts in the normal course of business with third party service providers and vendors. These contracts generally provide for termination on notice and, therefore, are cancellable contracts and not considered contractual obligations and commitments.

Contingencies

From time to time, the Company may become subject to claims and litigation arising in the ordinary course of business. The Company is not a party to any material legal proceedings, nor is it aware of any material pending or threatened litigation.

Historical Timeline

Fiscal YearFiled
2025Feb 26, 2026Showing above
2024Mar 6, 2025
2023Mar 22, 2024
2022Mar 30, 2023
2021Apr 15, 2022
2020Mar 31, 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.