Note 8. Commitments and Contingencies

Indemnification

The Company entered into indemnification agreements with directors and certain officers that will require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers. No demands have been made upon the Company to provide indemnification under such agreements, and thus, there are no claims that the Company is aware of that could have a material effect on the unaudited condensed consolidated financial statements. The Company also maintains director and officer insurance, which may cover certain liabilities arising from the Company’s obligation to indemnify its directors and officers. To date, the Company has not incurred any costs and have not accrued any liabilities in the unaudited condensed consolidated financial statements as a result of these provisions.

Legal Proceedings

On January 7, 2025, a securities class action lawsuit was commenced in the United States District Court, Northern District Court of California, naming the Company, the Company’s directors and certain of the Company’s officers as defendants, and alleging violations of the Securities Act of 1933 in connection with allegedly false and misleading statements made by the defendants in connection with the Company's initial public offering. The plaintiff seeks to represent a class comprised of purchasers of the Company’s common stock purchased pursuant and/or traceable to the Company's initial public offering and seeks damages, costs and expenses and such other relief as determined by the Court. The Company believes it has meritorious defenses and intends to defend the lawsuit vigorously. It is possible that similar lawsuits may yet be filed in the same or other courts that name the same or additional defendants.

From time to time, in the ordinary course of business, the Company is subject to legal proceedings. The Company accrues a liability for such matters when it is probable that a liability has been incurred and that the amount can be reasonably estimated. Legal fees and other costs associated with such proceedings are expensed as incurred.

Employee Benefit Plan

The Company maintains a defined contribution 401(k) plan, under which employee contributions are voluntary and are determined on an individual basis, limited by the maximum amounts allowable under federal tax regulations. The Company provides an automatic matching contribution of employee contributions into the plan up to a maximum of 4% of employee deferral. The Company’s matching contributions to employees was $0.2 million and $0.1 million for the three months ended June 30, 2025 and 2024, respectively, and $0.4 million and $0.3 million for the six months ended June 30, 2025 and 2024, respectively.

Leases

In August 2017, the Company entered into an agreement to lease approximately 6,436 square feet of office and lab space in Richmond, California, which the Company uses for its corporate offices and research facility (the “Richmond Lease”). The Richmond Lease had an initial term of three years but was amended in October 2017 and August 2019 to add additional space for a total of 18,829 square feet and to extend the term of the lease through February 2023. In January 2023, the Company entered into an amendment which extended the term of the lease through August 2024. In March 2024, the Company entered into an amendment which extended the term of the lease through August 2025. The Richmond Lease includes escalating rent payments but does not provide for any renewal options. The Company recognizes rent expense on a straight-line basis over the lease term. The Richmond lease does not provide a bargain purchase option nor does it transfer ownership at any point during the lease to the Company and is classified as an operating lease.

In September 2024, the Company entered into an agreement to lease approximately 10,479 square feet of office and lab space in Emeryville, California (the "Emeryville Lease"). The Emeryville Lease commenced on February 25, 2025, as that was the date that the Company obtained control over the facility. The Emeryville Lease has an initial term of six years, ending in February 2031. The Emeryville Lease includes escalating rent payments and includes an option to extend the lease term for an additional five years. The Company is not reasonably certain to exercise the option to extend the lease term. The Company recognizes rent expense on a straight-line basis over the lease term. The Emeryville Lease does not provide a bargain purchase option nor does it transfer ownership at any point during the lease to the Company and is classified as an operating lease.

As of June 30, 2025, the weighted average remaining lease term was 5.6 years and the weighted average discount rate used to determine the operating leases liability was 11.6%.

Operating lease expense was $0.4 million and $0.1 million for the three months ended June 30, 2025 and 2024, respectively, and $0.6 million and $0.2 million for the six months ended June 30, 2025 and 2024, respectively. Cash paid for amounts included in the measurement of operating lease liabilities was $0.4 million and $0.2 million for the six months ended June 30, 2025 and 2024, respectively, and was included in net cash used in operating activities in the Company’s unaudited condensed consolidated statement of cash flows. Variable lease payments related to operating leases for the three and six months ended June 30, 2025 and 2024 were not material.