Commitments and Contingencies |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2026 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Commitments and Contingencies | Note 12. Commitments and Contingencies
Legal Matters
From time to time the Company may be involved in claims and legal actions that arise in the ordinary course of business. To the Company’s knowledge, there are no material pending legal proceedings to which the Company is a party or of which any of the Company’s property is the subject.
Leases
The Company conducts its operations in leased facilities located in King of Prussia, PA under a non-cancelable operating lease expiring on December 31, 2027. The Company entered into a second amendment to the operating lease agreement, effective June 1, 2025, relating to the leased facilities. The second amendment provides for an extension term to December 31, 2027, and for monthly rent payments of, initially, $7,147, escalating annually by 3.5%. The Company has capitalized the present value of the minimum lease payments commencing June 1, 2025, using an estimated incremental borrowing rate of 6.5%. The minimum lease payments do not include common area annual expenses which are considered to be non-lease components.
On May 18, 2026, the Company, through its wholly owned subsidiary, Polymeric Nocopi, assumed a -year lease agreement executed in year 2024 to conduct its operations in leased facilities located in North Kansas City, MO. The Company assumed balances of the ROU assets and lease liabilities of $117,458 through the Polymeric Acquisition (see Note 8) based on an weighted average incremental borrowing rate of approximately 4%.
Simultaneously, on May 18, 2026, the Company, through its wholly owned subsidiary, Polymeric Nocopi, entered into an amendment agreement due to the Polymeric Acquisition (see Note 8) and extended the lease term of the above lease agreement for an additional -year period which will expire on December 31, 2028. The May 2026 amendment qualifies as a partial termination because it alters the contractual terms and does not create a separate lease since no new right of use was granted and lease payments did not increase to reflect a new right. This represents a partial termination of the existing lease as defined in ASC 842-10-25-13.
Accordingly, the Company recalculated the lease liability for the shortened term (from May 2023 to December 2028) using the incremental borrowing rate as of May 18, 2026 of 6.5%, derecognized the carrying amounts of the ROU asset and lease liability of $117,458 associated with the terminated portion and recognized a new ROU asset and lease liability for the amended term of $473,183.
As of June 30, 2026 and December 31, 2025, the operating lease ROU asset amounted to approximately $568,900 and $161,300, respectively. As of June 30, 2026 and December 31, 2025, total operating lease liability amounted approximately $577,700 and $168,900, respectively, consisting of current portion of approximately $249,500 and $80,200, respectively, and non-current portion of approximately $328,200 and $88,700, respectively.
Total operating lease costs were $46,500 and $20,400 for the three months ended June 30, 2026 and 2025, respectively, and approximately $68,100 and $40,000 for the six months ended June 30, 2026 and 2025, respectively.
Undiscounted future minimum lease payments as of June 30, 2026, by year and in aggregate are approximately as follows:
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