13. Leases

For operating leases, the Company records right-of-use assets and corresponding lease liabilities in the consolidated balance sheets for all leases with terms longer than twelve months. The Company has one operating leases, with no variable lease costs, and no finance leases as of December 31, 2025. The Company has three operating leases, with no variable lease costs, and no finance leases as of December 31, 2024.

eXoZymes was consolidated up to November 14, 2024. In October 2023, eXoZymes, made changes to an existing lease agreement that was originally entered into in August 2021, which resulted in an extension of the lease term by an additional 14 months. The revised lease maintained the same escalation rate for lease payments as the previous arrangement. To account for this modification, the Company reevaluated the remaining lease term at the time of execution. As the Company was actively utilizing the premises, adjustments were made to reflect the revaluation of both the right-to-use asset and the corresponding lease liability in line with the updated lease term. This was originally entered into in August 2021, with a term of 60 months beginning on August 24, 2021 and ending on September 30, 2026, with an option to extend for 60 additional months and was further modified on April 3, 2023 for an additional 21 months with the lease ending date of April 30, 2028. At the time the lease commenced, it was not probable the Company would exercise the one five-year option to extend the facility lease; therefore, this extension option is not included in the lease analysis. The initial base rent is $14.3 thousand per month. The lease provides for annual increases. The base rent for the lease in the final year is $16.7 thousand per month. Additionally, eXoZymes was responsible for annual operating cost increases of 2.5%, which are included in the rent. Since eXoZymes is not consolidated for 2025, the information above was only calculated for 2024.

Furthermore, in October 2023, eXoZymes made changes to a second existing lease agreement that was originally entered into in April 2023, which resulted in an extension of the lease term by an additional 12 months. The revised lease maintained the same escalation rate for lease payments as the previous arrangement. To account for this modification, the Company reevaluated the remaining lease term at the time of execution. As the Company was actively utilizing the premises, adjustments were made to reflect the revaluation of both the right-to-use asset and the corresponding lease liability in line with the updated lease term. This was originally entered into in April 2023, with a term of 60 months beginning on July 1, 2023 and ending on June 30, 2028, with an option to extend for 60 additional months. At the time the lease commenced, it was not probable the Company would exercise the one five-year option to extend the facility lease; therefore, this extension option is not included in the lease analysis. The initial base rent is $13.3 thousand per month. The lease provides for annual increases. The base rent for the lease in the final year is $15.4 thousand per month. Additionally, eXoZymes is responsible for annual operating cost increases of 3.0%, which are included in the rent. Since eXoZymes is not consolidated for 2024, the information above is only calculated for 2023.

On July 1, 2022 the Company executed a lease for new office space in the Dallas, Texas metropolitan area, the space was occupied on December 20, 2022. The lease with a term of 91 months and began once we took control of the space on December 20, 2022 and ending on July 20, 2030, without an option to extend. The initial base rent was $12.6 thousand per month, after 7 months of free rent. The lease provides for annual increases. The base rent for the lease in the final year is $13.9 thousand per month.

ROU assets represent the Company’s right to use an underlying asset for the lease term, and lease liabilities represent the Company’s obligation to make lease payments. Operating lease ROU assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. The Company’s uses the implicit rate in its lease calculations when it is readily determinable. Since the Company’s leases do not provide implicit rates, to determine the present value of lease payments, management uses the Company’s estimated incremental borrowing rate for a fully collateralized loan with a similar term of the lease that is based on the information available at the inception of the lease.

Schedule of Operating Lease Cost

Future payments due under operating leases for the as of December 31, 2025 are as follows (in thousands):

Schedule of Future payments Due Under Operating Lease