Note 7. 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 has not accrued any liabilities in the unaudited condensed consolidated financial statements as a result of these provisions.

Legal Proceedings

On January 7, 2025, a putative securities class action complaint was filed against the Company and certain of its officers and directors in the United States District Court for the Northern District of California (the "Court"). The complaint alleged violations of Section 11 and Section 15 of the Securities Act, based on allegations that defendants misrepresented and/or omitted certain information in the Company’s initial public offering registration statement concerning azelaprag. An amended complaint was filed on June 2, 2025. On October 30, 2025, the Court entered an order granting defendants’ motion to dismiss without prejudice. On November 20, 2025, a further amended complaint was filed. On March 2, 2026, the Court entered an order granting defendants’ further motion to dismiss with

prejudice. On March 27, 2026, the plaintiff filed a notice of appeal of the Court’s order granting defendants’ motion to dismiss. On July 22, 2026, the plaintiff filed its opening brief in the United States Court of Appeals for the Ninth Circuit. Defendants’ answering brief is due on September 18, 2026, and any reply brief from the plaintiff is due by October 2, 2026. Oral argument, to the extent scheduled, would likely occur in early 2027.

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.

Leases

In August 2017, the Company entered into an agreement to lease office and lab space in Richmond, California, which the Company used for its corporate offices and research facility (the “Richmond Lease”). The Richmond Lease expired in August 2025. The Company recognized rent expense on a straight-line basis over the lease term.

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, 2026, the Emeryville Lease remaining lease term was 4.7 years and the discount rate used to determine the operating lease liability was 11.6%.

Operating lease expense was $0.2 million and $0.4 million for the three months ended June 30, 2026 and 2025, respectively, and $0.4 million and $0.6 million for the six months ended June 30, 2026 and 2025, respectively. Cash paid for amounts included in the measurement of operating lease liabilities was $0.2 million and $0.4 million for the six months ended June 30, 2026 and 2025, respectively, and was included in net cash used in operating activities in the Company’s condensed consolidated statement of cash flows. Variable lease payments related to operating leases were $0.3 million and less than $0.1 million for the six months ended June 30, 2026 and 2025, respectively.