Leases

12 Months Ended

Dec. 31, 2024

Leases

Leases

15. Leases

The Company accounts for its leases under ASC 842, Leases. The Company has determined that its leases for office and laboratory space without optional terms or variable components are operating leases.

The Company conducts its operations from leased facilities in Morrisville, North Carolina; San Antonio, Texas; and North Brunswick, New Jersey. The North Carolina lease will expire in 2030 and the Texas lease will expire in 2038. The leases are for general office space, manufacturing space, and lab space and require the Company to pay property taxes, insurance, common area expenses and maintenance costs. The New Jersey lease for lab space was amended in July 2024 to reduce the square footage to 1,425 for monthly rent of $4,022 exclusive of utilities. The New Jersey lease is set to expire in July 2025 and allows cancellation with thirty days written notice.

In June 2021, the Company entered into a lease agreement with Durham KTP Tech 7, LLC, to lease a 15,996 square foot facility in Morrisville, North Carolina to expand its research and development activities. The lease has a term of eight years following the commencement date and provides the Company the option to extend the lease term for one five year term, however option to extend was not included in the ROU asset and liability. It is subject to fixed rate escalation increases and also provides up to $2.4 million for tenant improvements. The Company, upon commencement, recorded an operating lease right-of-use asset of $5.6 million and lease liability of $3.2 million for this lease in the accompanying consolidated balance sheets.

In October 2021, Scorpius Bio entered into a lease agreement with Merchants Ice II, LLC to lease a 20,144 square foot facility in San Antonio, TX for general office, laboratory, research, analytical, and/or biomanufacturing purposes. Merchants Ice II, LLC is a nonprofit entity investing in the building with the intention to encourage development of emerging technologies. As a result, investments made by both Merchants Ice II, LLC and Scorpius Bio into the building may qualify and share tax credits under the New Market Tax Credit (“NMTC”) program. Scorpius Bio agreed that all investments and expenditures qualifying under the NMTC (i.e., certain equipment and building improvements) would be purchased by Merchants Ice II, LLC to generate the largest possible tax incentive and Scorpius Bio would reimburse Merchants Ice II, LLC for these payments. The lease officially commenced on September 15, 2022. As of December 31, 2022, Scorpius Bio had reimbursed Merchants Ice II, LLC $24.3 million. Based on ASC 842, Scorpius Bio has capitalized $13.2 million of the reimbursements as lab equipment, expensed $0.9 million as supplies and facilities, and $10.2 million has been included in the finance lease right-of-use asset. In 2023, additional NMTC tax credit payments totalling $3.1 million were received which resulted in a lease modification. The ROU asset and liability were adjusted to reflect the impacts of the modification. The lease has a term of fifteen years following the commencement date and provides Scorpius Bio the option to extend the lease term for one fifteen-year term, and one subsequent ten year term upon expiration of the first extended term. These options to extend were not included in the ROU asset and lease liability. It is subject to fixed rate escalation increases and also provides up to $2.4 million for tenant improvements. Scorpius Bio upon commencement, recorded a finance lease right-of-use asset of $15.1 million and lease liability of $5.1 million for this lease in the accompanying consolidated balance sheets.

In December 2022, Scorpius Bio entered into a lease agreement with TPB Merchants Ice LLC to lease a 8,042 square foot facility in San Antonio, TX for general office, laboratory, and/or biomanufacturing purposes. The lease has a term of fifteen years following the commencement date and provides the Scorpius Bio the option to extend the lease term for one ten year term, however option to extend was not included in the ROU asset and liability. It is subject to fixed rate escalation increases and provided up to $0.5 million for tenant improvements. The lease commenced in May 2023 and Scorpius Bio recorded a finance lease right-of-use asset of $7.8 million and lease liability of $2.3 million for this lease in the accompanying consolidated balance sheets.

In December 2023, Scorpius Bio entered into a lease agreement with EastGroup Properties, L.P. to lease a 22,262 square foot facility in San Antonio, TX for general office and warehouse purposes. The lease has a term of five years following the commencement date. It is subject to fixed rate escalation increases and provided up to $0.1 million for tenant

improvements. Scorpius Bio recorded a operating lease right-of-use asset of $0.9 million and lease liability of $1.0 million for this lease in the accompanying consolidated balance sheets.

Total cash paid for operating leases during the years ended December 31, 2024 and 2023 was $0.9 million and $0.8 million and is included within cash flows from operating activities within the consolidated statements of cash flows.

The Company leases furniture and specialized lab equipment under finance leases. The related ROU assets are amortized on a straight-line basis over the lesser of the lease term or the estimated useful life of the asset. For the year ended December 31, 2023, additional finance equipment leases commenced and right-of-use assets of $2.2 million were recorded, and modifications to finance equipment leases were obtained totalling $0.07 million. Both are included within the supplemental disclosure for cash flow within the consolidated statements of cash flows.

The Company’s lease cost reflected in selling, general, and administrative of the statements of operations and comprehensive loss is as follows:

	For the Year Ended December 31, 2024		For the Year Ended December 31, 2023
Operating lease cost	$	1,235,695	$	1,239,539
Finance lease cost
Amortization of lease assets		2,258,012		1,816,463
Interest on lease liabilities		949,423		776,838
Total finance lease cost	$	3,207,435	$	2,593,301

The weighted average remaining lease term and incremental borrowing rate as of December 31, 2024 and 2023 were as follows:

	For the Year Ended December 31, 2024			For the Year Ended December 31, 2023
Weighted average remaining lease term
Operating leases		5.8 years			6.2 years
Finance leases		11.0 years			11.2 years
Weighted average incremental borrowing rate
Operating leases		9.79	%		9.67	%
Finance leases		10.12	%		10.11	%

Maturities of operating and finance lease liabilities as of December 31, 2024 were as follows:

	Operating Leases		Finance Leases		Total
2025	$	800,202		1,765,385	$	2,565,587
2026		826,748		1,679,279		2,506,027
2027		854,030		902,127		1,756,157
2028		882,343		931,290		1,813,633
2029		650,863		961,311		1,612,174
2030		532,650		1,068,169		1,600,819
2031		—		1,094,135		1,094,135
Thereafter		—		7,183,957		7,183,957
Total minimum lease payments		4,546,836		15,585,653		20,132,489
Less: imputed interest		(1,035,707)		(6,563,606)		(7,599,313)
Present value of lease liabilities	$	3,511,129	$	9,022,047	$	12,533,176

See Note 17 for information related to lease-related events occurring subsequent to December 31, 2024.