13. Commitments and Contingencies

Leases

The Company is the lessee in all of its lease arrangements. The Company did not enter into any leases with related parties during the presented periods. The Company makes assumptions and judgments when assessing contracts for lease components, determining lease classifications, and calculating right-of-use asset and lease liability values. These assumptions and judgments may include the useful lives and fair values of the leased assets, the implicit rate underlying the Company’s leases, the Company’s incremental borrowing rate or the Company’s intent to exercise or not exercise options available in lease contracts.

Operating Leases

In September 2025, the Company entered into the fourth amendment to its single non-cancelable operating lease with Eastland Regency, L.C. to extend the current term of its office lease through June 30, 2034 and has redesigned its use of the facility to reduce its total leased space to approximately 20,400 square feet of office and laboratory space. The implicit rate provided in the Company’s operating lease is not readily determinable. As such, the Company uses its incremental borrowing rate to calculate the present value of its operating lease liabilities. The amended lease includes a termination right that permits the Company to terminate the lease if it moves to another space of at least 30,000 square feet that is managed by the landlord of its current office space. The Company does not have sufficient information at this time to determine if or when it will exercise the termination right but may exercise the termination right at such point that the Company determines it needs to expand into additional space.

Finance Leases

The Company leases certain equipment related to its information technology infrastructure and laboratory operations. All of the Company’s current finance leases include bargain purchase options that the Company is reasonably certain to exercise. The Company has elected not to separate lease and non-lease components for its equipment leases. The rates implicit in the Company’s finance leases are determinable, and the Company uses those rates to calculate the present value of its finance lease liabilities.

Lease Financial Information

The following table shows right-of-use assets and lease liabilities, and the associated financial statement line items as of December 31, 2025 and 2024 (in thousands):

 

 

 

 

 

December 31,

 

Lease-Related Assets and Liabilities

 

Financial Statement Line Items

 

2025

 

 

2024

 

Right-of-use assets:

 

 

 

 

 

 

 

 

Operating leases

 

Other assets

 

$

2,402

 

 

$

613

 

Finance leases

 

Property and equipment, net

 

 

385

 

 

 

699

 

Total right-of-use assets

 

 

 

$

2,787

 

 

$

1,312

 

 

 

 

 

 

 

 

 

Lease liabilities:

 

 

 

 

 

 

 

 

Operating leases

 

Accrued and other current liabilities

 

$

 

 

$

644

 

 

Operating lease obligation, net of current portion

 

 

2,337

 

 

 

 

Finance leases

 

Finance lease obligation, current portion

 

 

2

 

 

 

194

 

 

Finance lease obligation, net of current portion

 

 

 

 

 

2

 

Total lease liabilities

 

 

 

$

2,339

 

 

$

840

 

 

Lease costs and other information consisted of the following (in thousands, except terms and rates):

 

 

 

Year Ended

 

 

 

December 31,

 

 

 

2025

 

 

2024

 

Lease cost

 

 

 

 

 

 

Finance lease cost:

 

 

 

 

 

 

Amortization of right-of-use assets

 

$

314

 

 

$

314

 

Interest on lease liabilities

 

 

3

 

 

 

28

 

Operating lease cost

 

 

580

 

 

 

636

 

Total lease cost

 

$

897

 

 

$

978

 

 

 

 

 

 

 

Other information

 

 

 

 

 

 

Finance leases:

 

 

 

 

 

 

Operating cash outflows

 

$

3

 

 

$

28

 

Financing cash outflows

 

$

194

 

 

$

440

 

Weighted-average remaining lease term (in years)

 

 

0.3

 

 

 

0.4

 

Weighted-average discount rate

 

 

11.6

%

 

 

6.7

%

Operating leases:

 

 

 

 

 

 

Operating cash outflows

 

$

666

 

 

$

646

 

Right-of-use assets obtained in exchange for lease liabilities

 

$

2,281

 

 

$

 

Weighted-average remaining lease term (in years)

 

 

8.5

 

 

 

1.0

 

Weighted-average discount rate

 

 

8.8

%

 

 

7.5

%

 

Future minimum lease payments for the Company’s leases as of December 31, 2025 were as follows (in thousands):

 

 

 

Operating Leases

 

 

Finance Leases

 

 

Total

 

2026

 

$

280

 

 

$

2

 

 

$

282

 

2027

 

 

576

 

 

 

 

 

 

576

 

2028

 

 

594

 

 

 

 

 

 

594

 

2029

 

 

611

 

 

 

 

 

 

611

 

2030

 

 

630

 

 

 

 

 

 

630

 

Thereafter

 

 

2,359

 

 

 

 

 

 

2,359

 

Total minimum lease payments

 

 

5,050

 

 

 

2

 

 

 

5,052

 

Less: imputed interest

 

 

(1,592

)

 

 

 

 

 

(1,592

)

Less: lease incentives

 

 

(1,121

)

 

 

 

 

 

(1,121

)

Present value of future lease payments

 

 

2,337

 

 

 

2

 

 

 

2,339

 

Less: current portion

 

 

 

 

 

(2

)

 

 

(2

)

Long-term portion

 

$

2,337

 

 

$

 

 

$

2,337

 

Indemnification

The Company has agreed to indemnify its officers and directors for certain events or occurrences, while the officer or director is or was serving at the Company’s request in such capacity. The maximum amount of potential future indemnification is unlimited; however, the Company purchases director and officer insurance coverage that provides for corporate reimbursements of covered obligations that limits the Company’s exposure and enables it to recover a portion of potential future amounts paid. The Company is unable to reasonably estimate the maximum amount that could be payable under these arrangements since these obligations are not capped but are conditional to the unique facts and circumstances involved. Accordingly, the Company has no liabilities recorded for these agreements as of December 31, 2025 and 2024. The Company has never incurred costs to defend lawsuits or settle claims related to these indemnification agreements.

Legal Matters

The Company is not currently a party to any material litigation or other material legal proceedings. The Company may, from time to time, be involved in various legal proceedings arising from the normal course of business activities, and an

unfavorable resolution of any of these matters could materially affect the Company’s future results of operations, cash flows, or financial position.

Historical Timeline

Fiscal YearFiled
2025Mar 18, 2026Showing above
2024Mar 19, 2025
2023Mar 20, 2024
2022Mar 22, 2023
2021Mar 29, 2022

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.