10. Commitments and Contingencies

Spitfire Acquisition

In July 2019, the Company entered into the Spitfire merger agreement to acquire all of the equity interests of Spitfire Pharma, Inc. (“Spitfire”). Spitfire was a privately held, preclinical pharmaceutical company developing novel peptide products for pharmaceutical indications, including pemvidutide for the treatment of MASH. As part of the agreement, the Company is obligated to make payments of up to $80.0 million upon the achievement of specified worldwide net sales of all products developed using the technology acquired from Spitfire Pharma, Inc. (the “Sales Milestone”) within ten years following the approval of a new drug application filed with the U.S. Food and Drug Administration (the “FDA”).

The contingent payments related to the Sales Milestones are predominately cash-based payments accounted for under FASB Accounting Standards Codification Topic 450, Contingencies. Accordingly, the Company will recognize the Sales Milestones when the contingency is probable and the amount can be reasonably estimated.

Lease

On June 15, 2026, the Company entered into a lease agreement for office space in Morristown, New Jersey, which will serve as the Company’s new headquarters upon facility occupancy and lease commencement. The Company will make monthly rental payments aggregating approximately $0.3 million annually for the 5-year lease term. The lease is expected to commence on October 1, 2026 (“Lease Commencement Date”). The Company determined that the lease is an operating lease under ASC 842. On the Lease Commencement Date, the Company will record ROU asset and lease liability of approximately $1.2 million on its balance sheet.

Litigation

The Company from time to time may be a party to various contracts and subject to disputes, litigation, and potential claims arising in the ordinary course of business, none of which are currently reasonably possible or probable of material loss.