Commitments and Contingencies

12 Months Ended

Dec. 31, 2024

Commitments and Contingencies Disclosure [Abstract]

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.

The following table shows right-of-use assets and lease liabilities, and the associated financial statement line items as of December 31, 2024 and 2023 (in thousands):


		December 31,
Lease-Related Assets and Liabilities	Financial Statement Line Items	2024		2023
Right-of-use assets:
Operating leases	Other assets	$	613	$	1,180
Finance leases	Property and equipment, net		699		1,008
Total right-of-use assets		$	1,312	$	2,188

Lease liabilities:
Operating leases	Accrued and other current liabilities	$	644	$	578
	Operating lease obligation, net of current portion		—		644
Finance leases	Finance lease obligation, current portion		194		440
	Finance lease obligation, net of current portion		2		196
Total lease liabilities		$	840	$	1,858

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


	Year Ended
	December 31,
	2024			2023
Lease cost
Finance lease cost:
Amortization of right-of-use assets	$	314		$	312
Interest on lease liabilities		26			55
Operating lease cost		636			636
Total lease cost	$	976		$	1,003

Other information
Finance leases:
Operating cash outflows	$	26		$	55
Financing cash outflows	$	440		$	466
Right-of-use assets obtained in exchange for lease liabilities	$	—		$	18
Weighted-average remaining lease term (in years)		0.4			1.4
Weighted-average discount rate		6.7	%		6.5	%
Operating leases:
Operating cash outflows	$	646		$	628
Right-of-use assets obtained in exchange for lease liabilities	$	—		$	—
Weighted-average remaining lease term (in years)		1.0			2.0
Weighted-average discount rate		7.5	%		7.5	%

Future minimum lease payments for the Company’s leases as of December 31, 2024 were as follows (in thousands):


	Operating Leases			Finance Leases			Total
2025	$	666		$	197		$	863
2026		—			2			2
2027 and thereafter		—			—			—
Total minimum lease payments		666			199			865
Less: imputed interest		(22	)		(3	)		(25	)
Present value of future lease payments		644			196			840
Less: current portion		(644	)		(194	)		(838	)
Long-term portion	$	—		$	2		$	2

Operating Leases

The Company leases a total of approximately 24,300 square feet of office and laboratory space under a single non-cancelable operating lease with a termination date of December 31, 2025 (as amended, the “Office Lease”). The Office Lease includes an early termination right which termination would occur under certain circumstances, as provided in the amended Office Lease, after July 1, 2024 if exercised. The Company is reasonably certain it will not exercise the termination right. 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.

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.

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, 2024 and 2023. The Company has never incurred costs to defend lawsuits or settle claims related to these indemnification agreements.

Employee Agreements

The Company has signed various employment agreements with key executives pursuant to which if their employment is terminated by the Company without cause or by the employees for good reason, or following a change of control of the Company, the employees are entitled to receive certain benefits, including severance payments, accelerated vesting of stock and stock options, and certain insurance benefits.

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.