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LEASES

9 Months Ended

Sep. 30, 2025

7) LEASES

The Company currently has operating leases for offices in the Borough of Manhattan in New York, New York, and Cambridge, Massachusetts, which expire in 2027 and 2028, respectively.

For the three and nine months ended September 30, 2025 and 2024, the net operating lease expenses were as follows (in thousands):

NET OPERATING LEASE EXPENSE


	Three months ended September 30,						Nine months ended September 30,
	2025			2024			2025			2024
Operating lease expense	$	67		$	1,110		$	202		$	4,380
Sublease income		(21	)		(21	)		(63	)		(63	)
Variable lease expense		7			225			21			887
Total lease expense	$	53		$	1,314		$	160		$	5,204

Amounts for the three and nine months ended September 30, 2024 in the table above include expense related to a sublease that was terminated effective August 31, 2024.

The tables below show the beginning balances of the operating ROU assets and lease liabilities as of January 1, 2025 and the ending balances as of September 30, 2025, including the changes during the period (in thousands).

	Operating Lease ROU Assets

Operating lease ROU assets at January 1, 2025	$	670
Amortization of operating lease ROU assets		(142	)
Remeasurment of ROU asset		13
Operating lease ROU assets at September 30, 2025	$	541

	Operating Lease Liabilities
Operating lease liabilities at January 1, 2025	$	684
Principal payments on operating lease liabilities		(145	)
Remeasurment of lease liability		13
Operating lease liabilities at September 30, 2025		552
Less non-current portion		(346	)
Current portion at September 30, 2025	$	206

The lease in Cambridge, Massachusetts, which commenced in June 2021, included a tenant improvement allowance of up to $50,000 (the “TI Allowance”), which was not paid or payable at lease commencement, and the amount of payment from the lessor was contingent on future events (e.g., the timing and the amount of qualified costs the Company incurs to construct leasehold improvements). Therefore, the TI Allowance was not previously included in the consideration of the contract when the Company measured the lease liability and ROU asset.

During the three months ended September 30, 2025, the Company made some leasehold improvements to the Cambridge office space of approximately $66,000, of which $50,000 qualified to be reimbursed under the TI Allowance. As a result, the contingent aspects of the TI Allowance were resolved and became fixed, which resulted in the Company remeasuring the lease liability. The TI Allowance of $50,000 was deducted from the ROU asset balance immediately prior to the re-measurement. The remaining unpaid lease payments, including the reimbursement of the TI Allowance, which is considered a reduction in the consideration of the contract, were then remeasured using the current index and interest rate and resulted in an approximately $13,000 increase to the lease liability, with a corresponding adjustment to the ROU asset. The $66,000 of leasehold improvements was recorded as a fixed asset and is being depreciated over the remaining lease term.

As of September 30, 2025, the Company’s operating leases had a weighted-average remaining life of 2.4 years with a weighted-average discount rate of 11.93%. The maturities of the operating lease liabilities are as follows (in thousands):

	As of September 30, 2025
2025	$	26
2026		304
2027		200
2028		95
Total payments		625
Less imputed interest		(73	)
Total operating lease liabilities	$	552