The Company leases office and laboratory space in Wilmington, Delaware under a noncancelable lease (the “Chestnut Run Lease”). The premises include approximately 81,000 rentable square feet and expires in May 2037, subject to the Company's option to extend the term of the lease by up to 3 five-year terms and certain expansion rights. Neither the option to extend nor the expansion rights were recognized as part of the Company's measurement of the right-of-use ("ROU") asset and operating lease liability as of March 31, 2026. Under the terms of the Chestnut Run Lease, the landlord provided an allowance towards the cost of completing tenant improvements for the premises. The Company concluded that the improvements resulting from both the landlord's build-out and the tenant improvements are the landlord's assets for accounting purposes. Costs incurred by the Company related to tenant improvements in excess of the landlord's allowance were treated as prepaid rent and increased the right-of-use asset on the commencement date.

In November 2025, the Company entered into a sublease agreement with a counterparty to sublease approximately 20,000 square feet of the Chestnut Run Lease. The sublease began in December 2025 and continues through November 2027. The sublessee has three options to extend the sublease for one year each.

The Company analyzed the sublease under ASC Topic 842, Leases ("ASC 842"), and concluded the sublease is a separate lease, as the Company was not relieved of the primary obligation under the Chestnut Run Lease. The Company will continue to account for the Chestnut Run Lease as a lessee and in the same manner as prior to the execution of the sublease agreement. The Company accounted for the sublease agreement as the lessor, and concluded the sublease qualified as an operating lease, as it did not meet the criteria of a sales-type or direct financing lease. The Company's sublease income was $143 thousand for three months ended March 31, 2026.

The Company's operating lease costs for each of the three months ended March 31, 2026 and 2025 was $1.1 million.

Supplemental balance sheet and other information related to our operating and finance leases as of March 31, 2026 and December 31, 2025 were as follows:


(in thousands)
Leases	Classification	March 31, 2026			December 31, 2025
Assets
Operating	Operating lease right-of-use assets	$	26,778		$	27,165
Liabilities
Current:
Operating	Current liabilities, operating lease liability	$	2,761		$	2,744
Non-Current:
Operating	Operating lease liability		14,960			15,045
Total lease liabilities		$	17,721		$	17,789

Weighted-average discount rate
Operating lease			15.0	%		15.0	%
Weighted-average remaining lease term (years)
Operating lease			11.2			11.4

Supplemental cash flow information related to our leases for the three months ended March 31, 2026 and 2025 were as follows:


	Three months ended March 31,
(in thousands)	2026		2025
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating lease	$	734	$	620
Operating cash flows from finance lease		-		4
Financing cash flows from finance lease		-		155

Future minimum annual lease payments for operating and finance lease at March 31, 2026 are as follows:


(in thousands)	Operating lease
2026 (remaining)	$	2,239
2027		3,048
2028		3,124
2029		3,202
2030		3,282
2031		3,364
Thereafter		19,729
Total undiscounted lease payments		37,988
Less imputed interest		(20,267	)
Lease liability	$	17,721

The Company paid a security deposit for the Chestnut Run Lease in the form of a letter of credit, the balance of which is $3.2 million as of March 31, 2026 and is included in the accompanying balance sheet as restricted cash. The security deposit may be reduced to $0.5 million over time in accordance with the terms of the Chestnut Run Lease.

The Company has employment agreements with key personnel providing for compensation and severance in certain circumstances, as defined in the respective employment agreements.

The Company sponsors a 401(k) defined‑contribution plan covering all employees. Participants are permitted to contribute up to 100% of their eligible annual pretax compensation up to an established federal limit on aggregate participant contributions. The Company provides a match of a maximum amount of 3% of the participant’s compensation. For each of the three months ended March 31, 2026 and 2025, the Company made matching contributions of $0.1 million and $0.2 million, respectively.

The Company enters into agreements with CROs to assist in the performance of research and development activities. Expenditures to CROs will represent a significant cost in clinical development for the Company.