NOTE 8 – LEASE

Through September 30, 2026, the Company held a five-year lease for laboratory and office space which expired in September 2026. The lease had escalating contractual rent and variable rent components and the Company elected to separate the contractual and variable elements for valuing the operating lease liability and right-of-use asset. The lease did not have any options for extension or expansion. On December 30, 2025 and effective on January 1, 2026, the Company entered into a license agreement to sublease a portion of its leased space to the sublessee for $25,000 per month on a monthly basis, which terminated in July 2026. In connection with lease agreement, in January 2026, the Company collected a $25,000 security deposit, which is included in accrued liabilities on the accompanying unaudited condensed consolidated balance sheet as of September 30, 2026.

On September 1, 2026, the Company entered into a lease agreement (the “Lease”) with SMBC Baker, LLC for approximately 3,498 rentable square feet of office and laboratory space at 999 Baker Way, San Mateo, California. The Lease commenced on September 1, 2026 and expires on September 30, 2028, a term of 25 months.

Monthly base rent is $30,000 from October 2026 through September 2027, $31,050 from October 2027 through August 2028, and $32,137 for September 2028. Base rent for September 2026 was abated. The abated amount becomes payable if the Lease is terminated because of a Company default. The Company paid base rent for October 2026 upon execution of the Lease.

In addition to base rent, the Company pays its 5.09% pro rata share of the building’s operating expenses and real estate taxes in excess of 2026 base-year amounts. These amounts are accounted for as variable lease payments, which are expensed as incurred. The Lease also provides the Company with use of landlord-owned furniture and equipment in the premises, non-exclusive use of shared laboratory areas and equipment, and ten non-exclusive parking spaces at no charge. The Company accounts for these as part of the single lease component.

The Lease includes an option to extend the term for one additional two-year period, from October 1, 2028 through September 30, 2030, at specified base rents of $33,261 and $34,425 per month. The Company must give notice by April 1, 2028. At commencement, the Company concluded that it was not reasonably certain to exercise the extension option. The option period is therefore excluded from the lease term and from the measurement of the ROU asset and lease liability.

The Lease is classified as an operating lease. At commencement, the Company recognized an operating lease liability of $687,052 and an operating lease ROU asset of $687,052. The lease liability was measured using an incremental borrowing rate of 10.0%, based on the Company’s current borrowing rate.

As required by the Lease, the Company delivered a $120,000 irrevocable standby letter of credit to the landlord. The letter of credit must remain in effect until 90 days after the Lease expires or terminates. The letter of credit is collateralized by a cash deposit of $120,000, which is included in restricted cash, non-current, in the unaudited condensed consolidated balance sheet as of September 30, 2026.

The Company recorded the following lease costs:

The right-of-use asset, net for the operating lease was recorded in the consolidated balance sheets as follows:

The operating lease liability for the operating lease was recorded in the consolidated balance sheets as follows:

Maturity of the Company’s lease liability as of September 30, 2026 is as follows: