The Company has a defined benefit gratuity scheme for its employees in India. This gratuity scheme provides for lump sum payment in accordance with the provisions of the Payment of Gratuity Act, 1972 to vested employees at retirement or death while in employment or on termination of employment of an amount equivalent to 15 days basic salary payable for each completed year of service or part thereof in excess of six months subject to a limit of INR 2,000,000 (equivalent to approximately $21,000). Vesting occurs upon completion of 5 years of continuous service. A roll forward of the liability balance for the six months ended June 30, 2026 and for the year ended December 31, 2025 are as follows:

Accumulated Compensated absences or paid leave encashment, which are expected to be encashed within 12 months from the end of the year and are treated as short-term employee benefits. The obligation towards the same is measured at the expected cost of accumulating compensated absences as the additional amount expected to be paid as a result of the unused entitlement at the end of the year. Actuarial gains or losses are recognized in the Consolidated Statement of Operations and Comprehensive Loss in the year in which they arise. A roll forward of the liability balance for the six months ended June 30, 2026 and for the year ended December 31, 2025 are as follows:

In accordance with Indian law, all employees in India are entitled to receive benefits under the ‘Provident Fund’, which is a defined contribution plan. Both the employee and the employer make monthly contributions to the plan at a predetermined rate (presently at 12%) of the employee’s basic salary. These contributions are made to the fund which is administered and managed by the Government of India. The Company’s monthly contributions to the above-mentioned plans are charged to consolidated statements of operations and comprehensive loss in the year they are incurred and there are no further obligations under the plan beyond those monthly contributions. The Company’s contribution towards the Provident Fund during the six months ended June 30, 2026 and 2025 was approximately $900 and $800, respectively.

On March 27, 2026, the Company received an order from the GST authorities in India relating to the refund of Integrated Goods and Services Tax (IGST) of approximately ₹3.57 crore (approximately $378,000) previously claimed on certain R&D services provided to its U.S. affiliate. The matter pertains to the determination of the place of supply under the IGST Act, 2017, for services rendered before October 1, 2019. The GST authorities have taken the position that such services do not qualify as “export of services” and have proposed recovery of the refund along with applicable interest and penalties under relevant provisions of the Central Goods & Services Tax Act. The total amount of the demand order by IGST with respect to this matter, including interest and penalty, is approximately $750,000 as of June 30, 2026.

The Company believes that its position is supported by applicable law, judicial precedents, and clarificatory guidance, including the nature of the services provided on a principal-to-principal basis and the fact that they do not constitute services in respect of goods physically made available. Accordingly, the Company contested the demand order by filing a writ petition before the Delhi High Court. Following hearings in July and August 2026, the matter was heard on August 12, 2026, including on the Company’s jurisdictional challenge that the demand order was issued beyond the applicable statutory limitation period, and the Delhi High Court reserved its order. Based on its assessment and advice from legal and tax counsel, management believes that it has substantial grounds on both jurisdictional and substantive merits and intends to pursue further legal remedies, including, if appropriate, before the Supreme Court of India. Based on its assessment, including advice from legal and tax counsel, management has concluded that a loss is not probable and, accordingly, no provision for the liability has been recorded as of June 30, 2026.

From time to time, the Company is involved in various disputes, claims, liens, and litigation matters arising out of the normal course of business, which could result in a material adverse effect on the Company’s combined financial position, results of operations, or cash flows. Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties, and other sources are recorded when it is probable that a liability has been incurred, and the amount of the assessment can be reasonably estimated. As of December 31, 2025, the Company had no outstanding claims or litigation and had no liabilities recorded for loss contingencies. In April 2026, VTL received a civil court notice with respect to deferred unpaid salary of approximately $95,000, not paid to a past employee. This has been recognized as a liability at both June 30, 2026, and December 31, 2025; therefore, there is no further impact on working capital expected related to this matter.