Note 13. Commitment and Contingencies

Operating Leases

Operating leases are recorded as right of use (“ROU”) assets and lease liabilities on our balance sheet. ROU assets represent our right to use the leased assets for the lease term, and lease liabilities represent our obligation to make lease payments. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of the Company’s leases do not provide an implicit rate, the Company uses its estimated incremental borrowing rate at the commencement date to determine the present value of lease payments. The operating lease ROU assets also include any lease payments made and exclude lease incentives.

The Company entered into a lease agreement beginning July 1, 2020, for the Company’s principal headquarters on the fifth floor of 7800 Susquehanna Street, Pittsburgh, Pennsylvania, which includes office space and sterile manufacturing operations (the “Lease”). The Lease has a five-year term and includes an option for renewal. The Company renewed the Lease at the end of its existing term on September 30, 2025. The renewal is for five years, beginning July 1, 2025. On July 26, 2023, the Company entered a second lease for additional space on the fourth floor of the same building (the “Fourth Floor Lease”), commencing August 1, 2023 and co-terminating with the existing Lease on June 30, 2025. Subsequently effective January 1, 2024, the Company terminated the Fourth Floor Lease early at no penalty upon mutual agreement with the landlord and replaced it with a lease of additional space that had become available immediately adjacent to our existing offices (the “Suite 504 Lease”, and together with the Lease, “the Leases”). The Suite 504 Lease term co-terminates with the Lease.

On March 20, 2025, we notified Bridgeway Development Corporation  of our intent to renew our Leases for our headquarters at the end of their existing term on September 30, 2025. The renewal term is for five years beginning July 1, 2025, as per the lease agreements. Future minimum rent payments under the Leases as of September 30, 2025 are as follows: 

The Leases are accounted for as a ROU asset and liability. As of September 30, 2025, the Company had an ROU asset of $262,823 and current and non-current operating lease liabilities of $44,267 and $219,816, respectively. As of December 31, 2024, the Company had an ROU asset of $46,754 and current and non-current operating lease liabilities of $47,605 and $0, respectively.

The lease expense for the three months ended September 30, 2025 and September 30, 2024 was $16,304 and $23,834, respectively. Cash paid for the amounts included in the measurement of lease liabilities for the three months ended September 30, 2025 and 2024 was $15,044 and $24,259, respectively.

The non-cash operating right of use asset and liability for the nine months ended September 30, 2025 was $274,540.

The lease expense for the nine months ended September 30, 2025 and September 30, 2024 was $65,115 and $71,680, respectively. Cash paid for the amounts included in the measurement of lease liabilities for the nine months ended September 30, 2025 and 2024 was $63,562 and $71,854, respectively. The payments are included in the operating activities in the accompanying statement of cash flows. The discount rates used for our ROU leases range from 6.25% to 7.25%.

Contract Commitments

The Company enters into contracts in the normal course of business with contract research organizations (“CROs”), contract manufacturing organizations, universities, and other third parties for preclinical research studies, clinical trials, and testing and manufacturing services. These contracts generally do not contain minimum purchase commitments and are cancellable by us upon prior written notice, although purchase orders for clinical materials are generally non-cancellable. Payments due upon cancellation consist only of payments for services provided or expenses incurred, including non-cancellable obligations of our service providers, up to the date of cancellation or upon the completion of a manufacturing run.