11. Commitments and Contingencies

Operating and Financing Leases

On October 10, 2022, the Company entered into an Office Lease Agreement (the “San Diego Lease”) of a building containing 15,197 square feet of rentable space located in San Diego, California (the “Premises”) that will serve as the Company’s new principal executive and administrative offices and laboratory facility. The Company completed constructing tenant improvements at the Premises on February 27, 2023, and moved into the Premises by the end of March 2023.

To secure and execute the San Diego Lease, Mr. Allan J. Camaisa (or “Mr. Camaisa”) provided a personal Guaranty of Lease of up to $0.9 million (the “Guaranty”) to the lessor for the Company’s future performance under the San Diego Lease agreement. As consideration for the Guaranty, the Company agreed to pay Mr. Camaisa 10% of the Guaranty amount for the first year of the San Diego Lease, and 5% per annum of the Guaranty amount thereafter through the life of the lease, with all amounts accrued and payable at the termination of the San Diego Lease or release of Mr. Camaisa from the Guaranty by the lessor, whichever occurs first. Mr. Camaisa received $0.2 million during the fiscal year ended 2025 in connection with the lease guarantee.

The San Diego Lease has an initial term of 48 calendar months, from the first day of the first full month following which the “Commencement Date” occurs (the “Term”), which was March 1, 2023.

Beginning on the Commencement Date, the Company pays base monthly rent in the amount of $0.1 million during the first 12 months of the Term, plus a management fee equal to 3.0% of base rent. Base monthly rent will increase annually, over the base monthly rent then in effect, by 3.0%.

In addition to base monthly rent and management fees, the Company pays in monthly installments its share of (i) all costs and expenses, other than certain excluded expenses, incurred by the lessor in each calendar year in connection with operating, maintaining, repairing (including replacements if repairs are not feasible or would not be effective) and managing the Premises and the building in which the Premises are located (“Expenses”), and (ii) all real estate taxes and assessments on the Premises and the building in which the Premises are located, all personal property taxes for property that is owned by Landlord and used in connection with the operation, maintenance and repair of the Premises (“Taxes”).

Upon execution of the San Diego Lease, the Company provided the lessor a payment of $0.1 million as first month base rent and prepaid operating expenses, and a letter of credit in the amount of $0.1 million issued by a bank in the name of the lessor. To obtain the letter of credit, the Company has provided the issuing bank with a restricted cash deposit that the bank will hold to cover its obligation to pay any draws on the letter of credit by the lessor. The restricted cash may not be used for any other purpose (see Note 2). The prepaid rent was included in the initial accounting of the San Diego Lease, as presented in the tables below.

On July 10, 2026, the Company entered into (i) a Lease Termination Agreement to terminate the San Diego Lease effective September 30, 2026 and (ii) a new lease agreement (the “New Lease”) for a different location effective October 1, 2026. Additionally, on July 10, 2026, Mr. Camaisa entered into a Guarantee Termination Agreement to be effective September 30, 2026. See Note 12 for more information on this subsequent event.

On April 1, 2022, StemVac entered into an office lease which includes laboratory space which expires on March 31, 2027, with monthly payments of €4,047 Euros per month.

The Company also leases certain laboratory equipment under finance lease agreements with lease terms expiring between January 2027 and May 2031, which represent the non-cancelable periods of the leases and any renewal options that are reasonably certain to be exercised. The Company’s finance leases contain certain renewal options that can extend the lease term by an additional twelve months. The Company excludes extension, termination, and purchase options that are not reasonably certain to be exercised from its lease terms.

Operating lease expense recognized during both the three months ended June 30, 2026 and 2025 was approximately $0.4 million, and during both the six months ended June 30, 2026 and 2025 was approximately $0.8 million.

The Company is also party to certain financing leases for machinery and equipment.

The following table presents supplemental cash flow information related to operating and financing leases for the periods presented (in thousands):

 Schedule of Supplemental Cash Flow Information Related to Operating and Financing Leases 

The following table presents supplemental balance sheet information related to operating and financing leases for the periods presented (in thousands, except weighted averages):

 Schedule of Supplemental Balance Sheet Information Related to Operating and Financing Leases 

The following table presents future minimum lease commitments as of June 30, 2026 (in thousands):

 Schedule of Future Minimum Lease Commitments 

Litigation — General

The Company is subject to various claims and contingencies in the ordinary course of its business, including those related to litigation, business transactions, employee-related matters, and other matters. At each reporting date, the Company evaluates whether a potential loss amount or a potential range of loss is probable and reasonably estimable under the provisions of the authoritative guidance that addresses accounting for contingencies. If it is probable that a loss will result and the amount of the loss can be reasonably estimated, the Company will record a liability for the loss. If the loss is not probable or the amount of the loss cannot be reasonably estimated, the Company discloses the claim if the likelihood of a potential loss is reasonably possible, and the amount involved could be material. The Company expenses the costs related to legal proceedings as incurred. See other legal matters discussed below. Other than the matters discussed below, the Company is not currently party to any material legal proceedings.

Legal Proceedings  

Former Chief Accounting Officer and Interim Chief Financial Officer, and Controller

On November 15, 2023, Tony Kalajian, the Company’s prior Chief Accounting Officer and interim Chief Financial Officer, filed a complaint in the Superior Court of the State of California County of San Diego against the Company, Mr. Camaisa, the Company’s director and former Chief Executive Officer, and Ms. Pizarro, the Company’s former Chief Corporate Development Officer and Chief Legal Officer, alleging defamation and constructive discharge of Mr. Kalajian’s position of Chief Accounting Officer and interim Chief Financial Officer (Case No. 37-2023-00049813-CU-DF-CTL) (the “Primary Case”). Mr. Kalajian is seeking an unspecified amount in damages under his employment contract, damages to be proven at trial, punitive damages, and attorney’s fees.

On November 21, 2023, the Company initiated arbitration proceedings against Mr. Kalajian for breach of fiduciary duty, constructive fraud, conversion, and declaratory relief, seeking to recover from Mr. Kalajian bonuses Mr. Kalajian caused to be paid to himself, Hazel Sanchez, the former Controller, and his accounting team. The bonuses (the “Accounting Bonuses”) were not authorized by the Company’s Board of Directors or Compensation Committee.

On November 30, 2023, Hazel Sanchez, the Company’s prior Controller, filed a complaint in the Superior Court of the State of California County of San Diego against the Company, Mr. Camaisa, and Ms. Pizarro, alleging defamation, constructive discharge, violation of California Family Rights Act, and wrongful discharge. Ms. Sanchez is seeking an unspecified amount in damages under her employment contract, damages to be proven at trial, punitive damages, and attorney’s fees. In February 2024, the Company filed a Cross-Complaint against Ms. Sanchez for breach of fiduciary duty, constructive fraud, conversation, and declaratory relief seeking to recover the Accounting Bonuses.

On February 29, 2024, Mr. Kalajian also filed a Petition for Writ of Mandate in the Superior Court of California, County of San Diego, seeking to compel the production of certain corporate records from the Company. This case is deemed related to the Primary Case above and was dismissed by stipulation in March 2025.

On May 1, 2024, Mr. Kalajian filed a complaint in the Superior Court of the State of California, County of San Diego against the Company alleging intentional conversion and violation of Section 158 of the Delaware General Corporations Code due to the Company’s failure to remove a restrictive legend from 73 shares of the Company’s Common Stock. Mr. Kalajian is seeking compensatory damages to be proven at trial, punitive damages and attorney’s fees, and an order requiring removal of the restrictive legend from his share certificates. The Company intends to vigorously defend itself. This case is deemed related to and consolidated with the Primary Case above.

The Primary Case, Kalajian Arbitration, Sanchez Case, and Conversion Case were deemed related and ultimately consolidated. A trial date has been set for May 14, 2027.

Former Executive Assistant

In July 2025, the Company filed a lawsuit in San Diego Superior Court against a former executive assistant alleging breach of fiduciary duty to the Company, constructive fraud, conversion, and misappropriation and improper disclosure of confidential and proprietary information in violation of her proprietary information and inventions agreement, non-disclosure agreement, and severance agreement with the Company (Case No. 25CU034887C). The Company is seeking injunctive relief and damages. The case is in its early stages, and the outcome is uncertain. A trial has been scheduled for May 21, 2027. The Company does not currently expect this matter to have a material adverse effect on the Company’s financial condition or results of operations.

Securities Matter

On October 29, 2024, Mr. Yian Zeng filed a complaint against the Company related to securities fraud under California Corporations Code §25401, breach of covenant of good faith and fair dealing, unjust enrichment, restitution, breach of fiduciary duty, and constructive fraud in the U.S. District Court, Southern District of California (Case Number 3:24-cv-02026-H-KSC). The Company vigorously opposes this case and categorically denies all claims. On April 9, 2025, the parties engaged in a mandatory settlement conference which resulted in no resolution of the case. Discovery has been completed. A pre-trial conference has been set for October 19, 2026, but no trial date has been set. On June 1, 2026, the Company filed a Motion for Summary Judgment (the “MSJ”), seeking to dismiss all claims. On June 2, 2026, Mr. Zeng filed a Motion for Voluntary Dismissal Without Prejudice (the “MTD”), with each party to bear their own fees and costs. The Company has opposed the MTD because it is without prejudice, and the Company seeks to preserve its rights to recover attorneys’ fees and costs. A hearing on both the MSJ and MTD will be held on August 24, 2026. At this time, the Company is unable to evaluate the outcome of this case or estimate the amount or range of potential loss.

Employment Contracts

The Company has entered into employment and severance benefit contracts with certain executive officers and other employees. Under the provisions of the contracts, the Company may be required to incur severance obligations for matters relating to changes in control, as defined, and certain terminations of those executives and employees. During 2025, the Company incurred severance obligations for certain executive officers and other employees. See Note 6 for information on the accruals for such severance obligations.

License Agreements with Northwestern University

On June 7, 2021, the Company entered into a License Agreement (the “Northwestern Agreement”) with Northwestern University (“Northwestern”) for the exclusive commercialization rights to the investigational new drug (“IND”) and with a non-exclusive license to data generated from Northwestern’s phase 1 clinical trial treating malignant glioma patients with an engineered oncolytic adenovirus delivered by neural stem cells (“NSC-CRAd-S-pk7”). Under the Northwestern Agreement, among other rights, Northwestern granted to the Company a worldwide, twelve-year exclusive license for the commercial development of NSC-CRAd-S-pk7 or other oncolytic viruses for therapeutic and preventive uses in oncology, a right of reference to Northwestern’s IND application which relates to the treatment of newly diagnosed High Grade Glioma (“HGG”), and right of reference to Northwestern’s IND 17365.

Pursuant to the Northwestern Agreement, the Company agreed to a best-efforts commitment to fund up to $10 million towards a phase 2 clinical trial of NSC-CRAd-S-pk7 or other oncolytic viruses. Subject to the terms and conditions of the Northwestern Agreement, Northwestern may become entitled to receive contingent payments from the Company based on (i) sublicense royalty payments of double-digit percentage for any sublicensing revenue that the Company earns, if any, and, (ii) in the event of an assignment or transfer of licensed data, with the consent of Northwestern, a low single digit percentage of the fair market value of any consideration received.

On October 14, 2021, the Company entered into a Material License Agreement with Northwestern to license the NSC-CRAd-S-pk7 oncolytic virus materials which the Company intends to use to continue advancing its research, development and commercialization efforts of the NNV1 and NNV2 programs.

On December 15, 2024, the Company entered into an Investigator-Initiated Clinical Trial Agreement for Northwestern to conduct a clinical trial (the “CTA”) under the protocol referenced “A Phase I Study of Repeated Neural Stem Cell Based Virotherapy in Combination with N-Acetylcysteine amid and Standard Radiation and Chemotherapy for Newly Diagnosed High Grade Glioma” (the “Study”). In connection with the Study, Northwestern granted the Company a non-exclusive, transferable and sublicensable license to use all available de-identified data collected from the Study, including, but not limited to, survival data, patient pathology, and immune studies data. Under the CTA, among other rights, Northwestern also granted to the Company a worldwide, twelve-year exclusive license to the data, a right of reference to Northwestern’s IND application which relates to the treatment of newly diagnosed HGG, and right of reference to Northwestern’s IND 17365.

In consideration of the data use license granted by Northwestern to the Company under the CTA, the Company shall pay Northwestern the following: (i) a non-creditable and non-refundable one-time milestone payment of $0.3 million upon reaching an aggregate of $2.0 million of net sales of a licensed product; (ii) a non-creditable and nonrefundable one-time milestone payment of $0.5 million upon reaching an aggregate of $10.0 million of net sales of a licensed product; (iii) sublicensing royalty of 20% of any sublicensing revenue resulting from the grant of rights hereunder; and (iv) in the event of an assignment or transfer of licensed data, with the consent of Northwestern, a low single digit percentage of the fair market value of any consideration received. This sublicensing royalty shall be cumulative, meaning it shall be imposed only once with respect to a single unit of sublicensing revenue, regardless of whether the sublicensing revenue derives from the CTA, or the June 7, 2021 Northwestern Agreement described above, or both.

The Company has the right to terminate the CTA upon 30 days’ notice, and the right to terminate the License and Material Transfer Agreements upon 90 days’ notice.

As of the date of issuance of these unaudited condensed consolidated financial statements, it is not probable that the Company will incur these payments, if any at all. The Company will record the contingent payments if and when they become payable, in accordance with the applicable guidance.

License Agreement with City of Hope and the University of Chicago

On July 22, 2021, the Company entered into an Exclusive License Agreement with the University of Chicago (the “University of Chicago Agreement”) for patents jointly owned by the University of Chicago, City of Hope, and the University of Alabama at Birmingham covering cancer therapies using an oncolytic adenovirus loaded into allogeneic neural stem cells for treatment of HGG. Pursuant to the University of Chicago Agreement, University of Chicago transferred its IND to the Company for the commercial development of a licensed product, as defined in the University of Chicago Agreement. This agreement grants to the Company commercial sublicensable exclusive license to neural stem cells with the adenovirus known as CRAd-S-pk7 for oncolytic virotherapy, as well as a non-exclusive license to associated know-how.

The University of Chicago Agreement provides for the Company to pay royalties in low single digit percentage of net sales generated for any product of the licensed patents for specific periods, and to pay up to $18.7 million if certain milestones are achieved during the clinical trials and post commercialization of the licensed product. The Company is further obligated to pay a sublicensing royalty of 20% of any sublicensing revenue resulting from the grant of rights, and in the event of an assignment or transfer of licensed data, with the consent of Northwestern, a low single digit percentage of the fair market value of any consideration received.

As of the date of the issuance of these unaudited condensed consolidated financial statements, it is not probable that the Company will incur these payments. The Company will record the contingent payments if and when they become payable, in accordance with the applicable guidance.

Indemnification

In the normal course of business, the Company may provide indemnification of varying scope under the Company’s agreements with other companies or consultants, typically the Company’s clinical research organizations, investigators, clinical sites, suppliers and others. Pursuant to these agreements, the Company will generally agree to indemnify, hold harmless, and reimburse the indemnified parties for losses and expenses suffered or incurred by the indemnified parties arising from claims of third parties that relate to certain situations such as Company’s negligent actions, breaching agreements, failure to comply with laws and regulations, and third party infringement claims with respect to patent rights, copyrights, or other intellectual property pertaining to the Company. The Company’s office and laboratory facility leases also will generally contain indemnification obligations, including obligations for indemnification of the lessor for environmental law matters and injuries to persons or property of others, arising from the Company’s use or occupancy of the leased property. The term of these indemnification agreements will generally continue in effect after the termination or expiration of the particular research, development, services, lease, or other agreement to which they relate. The potential future payments the Company could be required to make under these indemnification agreements will generally not be subject to any specified maximum amounts. Historically, the Company has not been subject to any claims or demands for indemnification. The Company also maintains various liability insurance policies that limit the Company’s financial exposure. As a result, the Company’s management believes that the fair value of these indemnification agreements is minimal. Accordingly, the Company has not recorded any liabilities for these agreements as of June 30, 2026 and December 31, 2025.