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Commitments and Contingencies | 6 Months Ended
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Jun. 30, 2025
Commitments and Contingencies Disclosure [Abstract] |
Commitments and Contingencies | Commitments and Contingencies Leases Company as a Lessee: Operating Lease Obligations The Company currently leases office spaces and laboratory spaces located in Dallas, Texas and Alderley Park in the United Kingdom. During the quarter ended June 30, 2025, the Company terminated its prior lease in Thousand Oaks, California. The Company’s leased facilities have original lease terms ranging from 2 to 5 years that in general require the Company to provide a security deposit. Certain leases provide the right for the Company to renew the lease upon the expiration of the initial lease term, and various leases have scheduled rent increases on an annual basis. The exercise of lease renewal options for the Company’s existing leases is at the Company’s sole discretion, and not included in the measurement of right-of-use asset or lease liability as they are not reasonably certain to be exercised. Certain leases have leasehold improvements that are being amortized over the shorter of the estimated useful life of the improvements or the remaining life of the lease. Such improvements incurred by the Company will revert to the landlord at the expiration of the lease and will be removed from Company’s condensed consolidated balance sheets. The Company’s lease costs consisted of the following (in thousands):
| Three Months Ended |  | Six Months Ended
| June 30, |  | June 30,
| 2025 |  | 2024 |  | 2025 |  | 2024
Operating lease cost | $ | 396 |  | $ | 537 |  | $ | 818 |  | $ | 925
Variable lease cost | 463 |  | 76 |  | 628 |  | 366
Total lease cost | $ | 859 |  | $ | 613 |  | $ | 1,446 |  | $ | 1,291
The following table summarizes cash flow information related to the Company’s lease obligations (in thousands):
| Three Months Ended |  | Six Months Ended
| June 30, |  | June 30,
| 2025 |  | 2024 |  | 2025 |  | 2024
Cash paid for operating lease liabilities | $ | 398 |  |  | $ | 734 |  |  | $ | 815 |  |  | $ | 1,262 |
The following table summarizes the Company’s lease assets and liabilities (in thousands):
| June 30, 2025 |  | December 31, 2024
Operating lease right-of-use assets | $ | 590 |  |  | $ | 934 |
Current operating lease liabilities | $ | 456 |  |  | $ | 1,682 |
Non-current operating lease liabilities | $ | 6 |  |  | $ | 1,017 |
The following table summarizes other supplemental information related to the Company’s lease obligations:
| June 30, 2025 |  | December 31, 2024
Weighted-average remaining lease term (in years) | 0.86 |  | 1.70
Weighted-average discount rate | 6.75 | % |  | 6.75 | %
Future minimum lease payments under operating lease liabilities were (in thousands):
| June 30, 2025
2025 (remaining six months) | $ | 309 |
2026 | 171 |
Total future lease payments | 480 |
Less: imputed interest | 18 |
Total lease liability balance | 462 |
Less: current portion of operating lease liabilities | 456 |
Total operating lease liabilities, non-current | $ | 6 |
During the six months ended June 30, 2025 and 2024, the Company evaluated its remaining right-of-use assets for impairment, as the Plan (as defined below in Note 12) has resulted in a cessation of use for several locations. The Company determined these assets were impaired and recognized an impairment loss of nil for each of the three months ended June 30, 2025 and 2024, and nil and $0.2 million for the six months ended June 30, 2025 and 2024, respectively, which are recorded in the line item “restructuring and impairment charges” in the condensed consolidated statements of operations and comprehensive loss. Company as a Lessor: Tarzana Facility Lease with AstraZeneca On July 10, 2024, Complex Therapeutics LLC, a wholly owned subsidiary of the Company, entered into a lease with AstraZeneca Pharmaceuticals LP pursuant to which Tenant is leasing the facility located in Tarzana, California (the "Lease"). The Lease has an initial term of approximately 15 years, beginning on July 10, 2024 and ending on July 31, 2039, with Tenant having two consecutive options to extend the term for a five-year period each and a one-time option to terminate the Lease on the tenth anniversary of the commencement of the Lease, which, if exercised, obligates Tenant to pay Complex Therapeutics LLC a termination fee. The initial base rent is approximately $0.6 million per month (approximately $7.5 million annually) and the base rent will escalate by 3% per annum. Tenant is also required to pay certain operating expenses and tax expenses as additional rent. There is rent abatement during the first year of the Lease such that Tenant will pay no rent or reduced rent during this period. Tenant also has a right of first offer to purchase the premises that are subject to the Lease. The Lease is classified as an operating lease and revenue is recognized on a straight-line basis and is recorded within the consolidated statements of operations and comprehensive loss in the line item “Other rental income” as this is not a part of the Company’s core operations. Rental income related to the Lease was as follows (in thousands):
| Three Months Ended |  | Six Months Ended
| June 30, |  | June 30,
| 2025 |  | 2024 |  | 2025 |  | 2024
Rental income related to fixed lease income | $ | 2,242 |  |  | $ | — |  |  | $ | 4,484 |  |  | $ | — |
Approximate future straight-lined contractual lease income to be recognized under the Lease in effect as of June 30, 2025, are as follow s (in thousands):
| June 30, 2025
2025 (remaining six months) | $ | 4,484 |
2026 | 8,968 |
2027 | 8,968 |
2028 | 8,968 |
2029 | 8,968 |
2030 and thereafter | 85,941 |
Total | $ | 126,297 |
Legal Proceedings From time to time, the Company may have certain contingent liabilities that arise in the ordinary course of its business activities. The Company accrues a liability for such matters when it is probable that future expenditures will be made and that such expenditures can be reasonably estimated. Significant judgment is required to determine both probability and the estimated amount. The Company does not expect that the resolution of these matters will have a material adverse effect on its financial position, results of operations or cash flows. Debt In June 2022, the Company’s wholly owned subsidiaries Complex Therapeutics Mezzanine LLC and Complex Therapeutics LLC entered into a mortgage construction loan and mezzanine construction loan (together, the “Construction Loans”) secured by Complex Therapeutic LLC’s Tarzana, California land and building. The initial principal amount of the Construction Loans was $52.1 million, with additional future principal of up to $32.9 million to fund ongoing construction costs. The Construction Loans were guaranteed by the Company and bore interest at the one-month Secured Overnight Financing Rate, plus 5.25% per annum. The Company discontinued capitalizing interest in June 2023 as the building was substantially complete at such time. On July 10, 2024, Complex Therapeutics LLC entered into the Lease. On December 20, 2024, Complex Therapeutics LLC refinanced the outstanding principal amount under the Construction Loans and the Company treated it as a loan extinguishment for accounting purposes and recorded the $0.4 million of unamortized debt issuance costs associated with the Construction Loans as a loss on debt extinguishment recognized in other expense, net in the condensed consolidated statements of operations and comprehensive loss for the year ended December 31, 2024. On December 20, 2024 (the “Closing Date”), Complex Therapeutics LLC entered into a Term Loan Agreement (the “Loan”) and related loan documents with Midland National Life Insurance Company (“Lender”), pursuant to which Lender loaned Complex Therapeutics LLC a term loan in the principal amount of $85.6 million to refinance the Construction Loans. Substantially all of the Loan proceeds were used to repay in full the Construction Loans. As of both June 30, 2025 and December 31, 2024, the outstanding principal amount under the Loan was $85.6 million and unamortized debt issuance costs were $1.2 million and $1.4 million, respectively. The Loan has a term of two years with a one-year extension option. The extension option is subject to certain conditions being met, including: (a) no potential default or event of default, (b) payment of a 0.35% extension fee and the costs and expenses of Lender incurred in connection with the extension, (c) replenishing of all reserve funds as reasonably determined by Lender, and (d) compliance with minimum debt yield and debt service coverage ratio requirements. The Loan bears interest at a fixed rate of 6.35% per annum, with interest-only payments during the term of the Loan and the principal balance due in full at maturity. The Loan may be prepaid in whole but not in part. If the Loan is prepaid on or prior to the 12-month anniversary of the Closing Date, a prepayment fee is required (other than in connection with a casualty or condemnation event) to make Lender whole for the interest it would have otherwise earned on the Loan during the first 12 months. There is no prepayment fee due if the Loan is prepaid after the 12-month anniversary of the Closing Date. The net carrying amount of the liability component of the Loan was as follows (in thousands):
| June 30, 2025 |  | December 31, 2024
Principal amount | $ | 85,600 |  |  | $ | 85,600 |
Unamortized debt issuance cost | (1,180) |  |  | (1,413) |
Net carrying amount | $ | 84,420 |  |  | $ | 84,187 |
The following table sets forth the interest expense recognized related to the Loan (in thousands):
| Three Months Ended |  | Six Months Ended
| June 30, |  | June 30,
| 2025 |  | 2024 |  | 2025 |  | 2024
Contractual interest expense | $ | 1,389 |  |  | $ | 1,750 |  |  | $ | 2,275 |  |  | $ | 3,482 |
Amortization of debt issuance cost | 193 |  |  | 249 |  |  | 405 |  |  | 498 |
Total interest expense related to the Loan | $ | 1,582 |  |  | $ | 1,999 |  |  | $ | 2,680 |  |  | $ | 3,980 |
Other Commitments In the normal course of business, the Company enters into contracts and various purchase agreements and commitments with third-party vendors for clinical research services, products and other services for operating purposes. These agreements generally provide for termination or cancellation at the Company's option, other than for costs already incurred. As of June 30, 2025 and December 31, 2024, the Company had nil and $0.1 million outstanding liabilities, respectively, in commitments for employee benefits as part of the Plan (see Note 12). As of June 30, 2025 and December 31, 2024, the Company had $0.2 million and $1.9 million, respectively, in commitments for contract terminations as part of the Plan (see Note 12). The Company entered into an agreement in 2023 with a third-party collaborator related to the development of the Company's CoStAR-TIL technology. Milestone payments of nil and $2.6 million were made during the six months ended June 30, 2025 and 2024, respectively, and were recorded within research and development expense in the consolidated statements of operations and comprehensive loss.
Commitments and Contingencies | Commitments and Contingencies Leases Company as a Lessee: Operating Lease Obligations The Company currently leases office spaces and laboratory spaces located in Dallas, Texas and Alderley Park in the United Kingdom. During the quarter ended June 30, 2025, the Company terminated its prior lease in Thousand Oaks, California. The Company’s leased facilities have original lease terms ranging from 2 to 5 years that in general require the Company to provide a security deposit. Certain leases provide the right for the Company to renew the lease upon the expiration of the initial lease term, and various leases have scheduled rent increases on an annual basis. The exercise of lease renewal options for the Company’s existing leases is at the Company’s sole discretion, and not included in the measurement of right-of-use asset or lease liability as they are not reasonably certain to be exercised. Certain leases have leasehold improvements that are being amortized over the shorter of the estimated useful life of the improvements or the remaining life of the lease. Such improvements incurred by the Company will revert to the landlord at the expiration of the lease and will be removed from Company’s condensed consolidated balance sheets. The Company’s lease costs consisted of the following (in thousands):
| Three Months Ended |  | Six Months Ended
| June 30, |  | June 30,
| 2025 |  | 2024 |  | 2025 |  | 2024
Operating lease cost | $ | 396 |  | $ | 537 |  | $ | 818 |  | $ | 925
Variable lease cost | 463 |  | 76 |  | 628 |  | 366
Total lease cost | $ | 859 |  | $ | 613 |  | $ | 1,446 |  | $ | 1,291
The following table summarizes cash flow information related to the Company’s lease obligations (in thousands):
| Three Months Ended |  | Six Months Ended
| June 30, |  | June 30,
| 2025 |  | 2024 |  | 2025 |  | 2024
Cash paid for operating lease liabilities | $ | 398 |  |  | $ | 734 |  |  | $ | 815 |  |  | $ | 1,262 |
The following table summarizes the Company’s lease assets and liabilities (in thousands):
| June 30, 2025 |  | December 31, 2024
Operating lease right-of-use assets | $ | 590 |  |  | $ | 934 |
Current operating lease liabilities | $ | 456 |  |  | $ | 1,682 |
Non-current operating lease liabilities | $ | 6 |  |  | $ | 1,017 |
The following table summarizes other supplemental information related to the Company’s lease obligations:
| June 30, 2025 |  | December 31, 2024
Weighted-average remaining lease term (in years) | 0.86 |  | 1.70
Weighted-average discount rate | 6.75 | % |  | 6.75 | %
Future minimum lease payments under operating lease liabilities were (in thousands):
| June 30, 2025
2025 (remaining six months) | $ | 309 |
2026 | 171 |
Total future lease payments | 480 |
Less: imputed interest | 18 |
Total lease liability balance | 462 |
Less: current portion of operating lease liabilities | 456 |
Total operating lease liabilities, non-current | $ | 6 |
During the six months ended June 30, 2025 and 2024, the Company evaluated its remaining right-of-use assets for impairment, as the Plan (as defined below in Note 12) has resulted in a cessation of use for several locations. The Company determined these assets were impaired and recognized an impairment loss of nil for each of the three months ended June 30, 2025 and 2024, and nil and $0.2 million for the six months ended June 30, 2025 and 2024, respectively, which are recorded in the line item “restructuring and impairment charges” in the condensed consolidated statements of operations and comprehensive loss. Company as a Lessor: Tarzana Facility Lease with AstraZeneca On July 10, 2024, Complex Therapeutics LLC, a wholly owned subsidiary of the Company, entered into a lease with AstraZeneca Pharmaceuticals LP pursuant to which Tenant is leasing the facility located in Tarzana, California (the "Lease"). The Lease has an initial term of approximately 15 years, beginning on July 10, 2024 and ending on July 31, 2039, with Tenant having two consecutive options to extend the term for a five-year period each and a one-time option to terminate the Lease on the tenth anniversary of the commencement of the Lease, which, if exercised, obligates Tenant to pay Complex Therapeutics LLC a termination fee. The initial base rent is approximately $0.6 million per month (approximately $7.5 million annually) and the base rent will escalate by 3% per annum. Tenant is also required to pay certain operating expenses and tax expenses as additional rent. There is rent abatement during the first year of the Lease such that Tenant will pay no rent or reduced rent during this period. Tenant also has a right of first offer to purchase the premises that are subject to the Lease. The Lease is classified as an operating lease and revenue is recognized on a straight-line basis and is recorded within the consolidated statements of operations and comprehensive loss in the line item “Other rental income” as this is not a part of the Company’s core operations. Rental income related to the Lease was as follows (in thousands):
| Three Months Ended |  | Six Months Ended
| June 30, |  | June 30,
| 2025 |  | 2024 |  | 2025 |  | 2024
Rental income related to fixed lease income | $ | 2,242 |  |  | $ | — |  |  | $ | 4,484 |  |  | $ | — |
Approximate future straight-lined contractual lease income to be recognized under the Lease in effect as of June 30, 2025, are as follow s (in thousands):
| June 30, 2025
2025 (remaining six months) | $ | 4,484 |
2026 | 8,968 |
2027 | 8,968 |
2028 | 8,968 |
2029 | 8,968 |
2030 and thereafter | 85,941 |
Total | $ | 126,297 |
Legal Proceedings From time to time, the Company may have certain contingent liabilities that arise in the ordinary course of its business activities. The Company accrues a liability for such matters when it is probable that future expenditures will be made and that such expenditures can be reasonably estimated. Significant judgment is required to determine both probability and the estimated amount. The Company does not expect that the resolution of these matters will have a material adverse effect on its financial position, results of operations or cash flows. Debt In June 2022, the Company’s wholly owned subsidiaries Complex Therapeutics Mezzanine LLC and Complex Therapeutics LLC entered into a mortgage construction loan and mezzanine construction loan (together, the “Construction Loans”) secured by Complex Therapeutic LLC’s Tarzana, California land and building. The initial principal amount of the Construction Loans was $52.1 million, with additional future principal of up to $32.9 million to fund ongoing construction costs. The Construction Loans were guaranteed by the Company and bore interest at the one-month Secured Overnight Financing Rate, plus 5.25% per annum. The Company discontinued capitalizing interest in June 2023 as the building was substantially complete at such time. On July 10, 2024, Complex Therapeutics LLC entered into the Lease. On December 20, 2024, Complex Therapeutics LLC refinanced the outstanding principal amount under the Construction Loans and the Company treated it as a loan extinguishment for accounting purposes and recorded the $0.4 million of unamortized debt issuance costs associated with the Construction Loans as a loss on debt extinguishment recognized in other expense, net in the condensed consolidated statements of operations and comprehensive loss for the year ended December 31, 2024. On December 20, 2024 (the “Closing Date”), Complex Therapeutics LLC entered into a Term Loan Agreement (the “Loan”) and related loan documents with Midland National Life Insurance Company (“Lender”), pursuant to which Lender loaned Complex Therapeutics LLC a term loan in the principal amount of $85.6 million to refinance the Construction Loans. Substantially all of the Loan proceeds were used to repay in full the Construction Loans. As of both June 30, 2025 and December 31, 2024, the outstanding principal amount under the Loan was $85.6 million and unamortized debt issuance costs were $1.2 million and $1.4 million, respectively. The Loan has a term of two years with a one-year extension option. The extension option is subject to certain conditions being met, including: (a) no potential default or event of default, (b) payment of a 0.35% extension fee and the costs and expenses of Lender incurred in connection with the extension, (c) replenishing of all reserve funds as reasonably determined by Lender, and (d) compliance with minimum debt yield and debt service coverage ratio requirements. The Loan bears interest at a fixed rate of 6.35% per annum, with interest-only payments during the term of the Loan and the principal balance due in full at maturity. The Loan may be prepaid in whole but not in part. If the Loan is prepaid on or prior to the 12-month anniversary of the Closing Date, a prepayment fee is required (other than in connection with a casualty or condemnation event) to make Lender whole for the interest it would have otherwise earned on the Loan during the first 12 months. There is no prepayment fee due if the Loan is prepaid after the 12-month anniversary of the Closing Date. The net carrying amount of the liability component of the Loan was as follows (in thousands):
| June 30, 2025 |  | December 31, 2024
Principal amount | $ | 85,600 |  |  | $ | 85,600 |
Unamortized debt issuance cost | (1,180) |  |  | (1,413) |
Net carrying amount | $ | 84,420 |  |  | $ | 84,187 |
The following table sets forth the interest expense recognized related to the Loan (in thousands):
| Three Months Ended |  | Six Months Ended
| June 30, |  | June 30,
| 2025 |  | 2024 |  | 2025 |  | 2024
Contractual interest expense | $ | 1,389 |  |  | $ | 1,750 |  |  | $ | 2,275 |  |  | $ | 3,482 |
Amortization of debt issuance cost | 193 |  |  | 249 |  |  | 405 |  |  | 498 |
Total interest expense related to the Loan | $ | 1,582 |  |  | $ | 1,999 |  |  | $ | 2,680 |  |  | $ | 3,980 |
Other Commitments In the normal course of business, the Company enters into contracts and various purchase agreements and commitments with third-party vendors for clinical research services, products and other services for operating purposes. These agreements generally provide for termination or cancellation at the Company's option, other than for costs already incurred. As of June 30, 2025 and December 31, 2024, the Company had nil and $0.1 million outstanding liabilities, respectively, in commitments for employee benefits as part of the Plan (see Note 12). As of June 30, 2025 and December 31, 2024, the Company had $0.2 million and $1.9 million, respectively, in commitments for contract terminations as part of the Plan (see Note 12). The Company entered into an agreement in 2023 with a third-party collaborator related to the development of the Company's CoStAR-TIL technology. Milestone payments of nil and $2.6 million were made during the six months ended June 30, 2025 and 2024, respectively, and were recorded within research and development expense in the consolidated statements of operations and comprehensive loss.

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