14. Commitments and Contingencies

Operating Lease- Lessee Arrangements

The Company has operating leases for corporate offices in the U.S. and U.K., and for manufacturing facilities in the U.K. Leases with an initial term of 12 months or less are not recorded in the balance sheet. The Company has elected the practical expedient to account for each separate lease component of a contract and its associated non-lease components as a single lease component, thus causing all fixed payments to be capitalized. The Company also elected the package of practical expedients permitted within the new standard, which among other things, allows the Company to carry forward historical lease classification. The lease renewal options have not been included in the calculation of the lease liabilities and right-of-use (“ROU”) assets as the Company has not yet determined whether to exercise the options. Variable lease payment amounts that cannot be determined at the commencement of the lease such as increases in lease payments based on changes in index rates or usage, are not included in the ROU assets or liabilities. These are expensed as incurred and recorded as variable lease expense.

The Company’s prior office lease in the U.K. expired in July 2025. In January 2025, the Company entered into an agreement for a new office lease in the U.K. to begin in late May 2025 (the “2025 U.K. Office Lease”). An additional document, involving a reconstitution schedule, was required in order to complete the lease arrangement. However, the Company decided not to take the space and the parties did not reach agreement on the reconstitution schedule. The Company entered into a side letter with the landlord on July 30, 2025 to finalize the lease exit terms. The Company is required to pay $0.1 million each quarter for a maximum of 2.5 years. Payment will stop upon the property being leased to a new tenant. The Company recognized a contingent loss liability of $1.0 million related to the lease settlement. Upon the acquisition of Advent on October 24, 2025, an additional $0.8 million of contingent loss liability related to the 2025 U.K. Office Lease was recognized in the consolidation. The Company will recognize any remaining unpaid lease liability as a gain contingency upon the early exit of the lease liability. As of December 31, 2025, the Company had approximately $1.6 million contingent loss liability related to the 2025 U.K. Office Lease.

The Company’s office lease in the U.S. would have expired in August 2024. However, on August 22, 2024, the Company extended its office lease in the U.S for an additional 2 years under an amended agreement. The Company recognized additional $0.4 million ROU assets and lease liabilities for its amended office lease in the U.S.

At December 31, 2025, the Company had operating lease liabilities of approximately $4.8 million for both the 20-year lease of the building for the manufacturing facility in Sawston, U.K., and the current office lease in the U.S. and ROU assets of approximately $4.2 million for the Sawston lease and U.S. office lease are included in the consolidated balance sheet.

Operating Lease- Lessor Arrangements

On December 31, 2021, the Company entered into a Sub-lease Agreement (the “Agreement”) with Advent. The Agreement permitted use by Advent of a portion of the space in the Sawston facility, which is leased by the Company under a separate head lease with a different counterparty (Huawei) that commenced on December 14, 2018. The Company subleased approximately 14,459 square feet of the 88,000 square foot building interior space, plus corresponding support space and parking. The lease payment amount under the Agreement are two times the amount payable by the Company under the head lease (which is currently £5.75 or approximately $7.74 per square foot based on exchange rate as of December 31, 2025), but subject to a cap of $10 per square foot. Accordingly, the monthly lease payments under the Sub-lease are based on $145,000 annually for 2025. The total lease payments paid by the Company to Huawei for the 88,000 square foot facility, exterior spaces and parking under the head lease are £550,000 (approximately $740,000) per year. The term of the Agreement shall end on the same date as the head lease term ends.

Upon the acquisition of Advent on October 24, 2025, the Agreement is considered an intercompany lease, and income and expense related to the sub-lease for the post acquisition period are eliminated in consolidation.

The following summarizes quantitative information about the Company’s operating leases (in thousands):

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The Company recorded lease costs as a component of general and administrative expense during the years ended December 31, 2025 and 2024.

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Maturities of our operating leases, excluding short-term leases and sublease agreement, are as follows:

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German Tax Matter

The German tax authorities have audited our wholly owned subsidiary, NW Bio GmbH, for 2013-2015. The NW Bio GmbH submitted substantial documentation to refute certain aspects of the assessments and the German tax authorities agreed in principle with the Company’s proposed revised approach and settlement offer. A final settlement bill was received from the German Tax Authority confirming that only a portion of the original bill was owed, €277,000 (approximately $329,000), for corporate taxes, interest, and reduced penalty for the period under audit, which the Company paid on September 2, 2021. The Company also received and paid the final settlement bill from the local authority for trade taxes for the audit period in the amount of €231,000 (approximately $272,000). On November 4, 2021, the Company received a letter from the local tax authorities asking for additional late fees of €513,000 (approximately $554,000) on reimbursable withholding taxes that had been waived during the settlement process. On December 8, 2021, the Company appealed the assessment of additional late fees. Additionally, the Company has deregistered its business with the City of Leipzig, as it no longer conducting any business activities. The deregistration was granted effective December 31, 2021. Between January 2022 and July 2022, the Company received tax bills for the corporate and trade taxes for the 2016-2020 tax years that totaled approximately €222,000 (approximately $238,000). On July 27, 2022, the Company was informed that the German Tax Authorities were prepared to waive €135,000 (approximately $145,000) of the penalties. The Company offered to pay this reduced penalty if an extended payment plan was approved. A response was received dated November 14, 2022 indicating that the tax authority would not be able to grant a further deferral of payment of these penalties. In a letter dated December 27, 2022, the Leipzig tax authority sent letters to the former and current managing directors of NW Bio GmbH giving 30 days to respond to a tax liability questionnaire. Based on the responses to the liability questionnaires the tax authorities have currently not directed any further measures against former and current managing directors of NW Bio GmbH with respect to tax liability proceedings. On October 12, 2023 and January 16, 2024, the Company made €189,000 (approximately $201,000) and €189,000 (approximately $207,000) payments, respectively, regarding to the late payment penalty. As of December 31, 2025, the Company accrued for trade tax liability of €156,000 (approximately $183,000) and corporation tax of €99,000 (approximately $116,000). Based on the Company’s current operating state in Germany and the negotiations, the Company believes, based on its evaluation under ASC 740, that the resolution of these tax matters will not likely result in a net material charge to the Company.

Other Contingent Payment Obligation

During the year ended December 31, 2025 and 2024, the Company exchanged $3 million and $0.3 million from certain previously executed non - dilutive financial instrument to new convertible notes (see Note 9), respectively. During the year ended December 31, 2024, the Company entered into a non-dilutive funding agreement with an individual investor, pursuant to which the Company received funding of $50,000 related to a gain contingency.

As of December 31, 2025, the Company had contingent payment obligations of $1.7 million, which are related to a gain contingency from non-dilutive funding agreements with various investors. These agreements are accounted for under ASC 470 and are recognized as contingent payment obligations on the Company’s condensed consolidated balance sheet. The Company’s payment obligations only apply when such are received by the Company.