The Company is subject to various legal matters and claims in the ordinary course of business. Although the results of legal proceedings and claims cannot be predicted with certainty, in the opinion of management, there are currently no such known matters that will have a material effect on the financial condition, results of operations or cash flows of the Company.

On April 9, 2021, the Company entered into a program purchase agreement with Les Laboratoires Servier and Institut de Recherches Internationales Servier (collectively, “Servier”), pursuant to which the Company reacquired all of its global development and commercialization rights previously granted to Servier pursuant to the Development and Commercial License Agreement by and between Servier and the Company, dated February 24, 2016, as amended (the “Servier Agreement”), and mutually terminated the Servier Agreement (the “Program Purchase Agreement”).

The Program Purchase Agreement requires the Company to make certain payments to Servier based on the achievement of regulatory and commercial milestones for each product. Management assessed the likelihood of each of the regulatory and commercial milestones included in the Program Purchase Agreement in accordance with ASC 450, Contingencies (“ASC 450”). If the assessment of a contingency indicates that it is probable that the milestone will be achieved and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s financial statements.

Accordingly, contingent liabilities of $10.0 million related to the Program Purchase Agreement are accrued and included in contract liabilities in the balance sheets as of December 31, 2024 and December 31, 2023.

The Company has an operating lease for real estate in North Carolina and does not have any finance leases.

On October 16, 2023, the Company and Venable Historic, LLC, successor-in-interest to Venable Tenant, LLC (the “Landlord”), entered into a Tenth Amendment to Lease Agreement (the “Lease Amendment”), which amended certain terms of the Lease Agreement dated April 5, 2010, as amended (the “Original Lease”) with respect to the Company’s headquarters facilities located in Durham, North Carolina. Among other things, the Lease Amendment extends the term of the Original Lease for an additional period of five years commencing upon August 1, 2024 and up to and through July 31, 2029.

The Company has existing leases in which the non-lease components (e.g., common area maintenance, consumables, etc.) are paid separately from rent based on actual costs incurred and therefore are not included in the right-of-use assets and lease liabilities but rather reflected as an expense in the period incurred.

The elements of lease expense were as follows:


	For the Years Ended December 31,
(in thousands)	2024			2023
Lease Cost
Operating lease cost	$	1,940		$	2,043
Short-term lease cost	759			742
Variable lease cost		413			692
Sublease income		(428	)		(137	)
Total Lease Cost	$	2,684		$	3,340

Other Information
Operating cash flows used for operating leases		1,888			2,026
Operating right-of-use assets obtained in exchange for lease obligations		—			9,955
Operating lease liabilities arising from obtaining right-of-use assets		—			9,328

Operating Leases
Weighted average remaining lease term (in years)		4.6			5.6

Operating Leases
Weighted average discount rate		9.2	%		9.2	%

Pursuant to the Imugene Purchase Agreement, Imugene subleases from the Company space at the Company’s headquarters (the “Imugene Sublease”). As the Company is not relieved of its primary obligation to the lessor under the terms of the Imugene Sublease, the Company will continue to carry the related right-of-use assets and lease liabilities on its Balance Sheets and will net sublease income with lease cost in its statements of operations.

Future lease payments under non-cancelable operating leases with terms of greater than one year as of December 31, 2024, were as follows:


(in thousands)	December 31, 2024
2025	$	1,962
2026		2,019
2027		2,078
2028		2,140
2029		1,269
Total lease payments		9,468
Less: imputed interest		1,744
Total operating lease liabilities	$	7,724

The Company agreed to act as a guarantor of Imugene’s assumption of the Company’s lease for its Manufacturing Center for Advanced Therapeutics (the “MCAT Lease”) through the lease expiration date of August 31, 2027. If Imugene (including any successor or assignee of Imugene) fails to pay rent due on the MCAT Lease, the lessor may have contractual recourse against the Company.

As of December 31, 2024, the Company’s guarantee consists of a contingent liability for aggregate minimum lease payments of approximately $4.3 million. No contract liability for the Company’s guarantee of Imugene’s performance on the MCAT lease was recorded as of December 31, 2024, as it was not deemed probable that Imugene will be in default under the MCAT Lease.

The Company enters into contracts in the normal course of business with contract manufacturing organizations (“CMOs”) for the manufacture of clinical trial materials and contract research organizations (“CROs”) for clinical trial services. These agreements

provide for termination at the request of either party with less than one-year’s notice and are, therefore, cancelable contracts. If canceled, these agreements are not anticipated to have a material effect on the financial condition, results of operations, or cash flows of the Company.