In May 2020, the Company entered into a lease agreement to rent space in San Diego, California. The lease agreement is for three years, which commenced August 1, 2020. Total payments under the lease will be $337,000. In June 2022 the Company determined the San Diego facility was no longer required. In June 2022, the Company determined the San Diego facility was no longer required and, as a result of this decision, recorded an impairment loss of approximately $136,000 at that date. The Company paid a security deposit of $29,000 which is included in Prepaid Expenses and Other Current Assets on the March 31, 2023 condensed consolidated balance sheets.

In June 2022, the Company entered into a Sublease Agreement to rent office space in South San Francisco, California. The Sublease agreement commenced on June 18, 2022 and ends on November 30, 2023. The total payments under the term of the lease are expected to be approximately $271,000. The Company paid a security deposit of $17,000 which is included in Prepaid Expenses and Other Current Assets on the March 31, 2023 condensed consolidated balance sheets. At the commencement of the lease, the Company recorded an operating lease right of use asset and liability of $256,000.

In October 2022, the Company entered into a lease agreement to rent space in West Lafayette, Indiana. The lease agreement amended the original lease to transfer liability to the Company due to the Acquisition. The lease agreement is for 15 months, which commenced on October 1, 2022 and ends on December 31, 2023. The total payments under the term of the lease are expected to be approximately $151,000. At the commencement of the lease, the Company recorded an operating lease right of use asset and liability of $145,000.

In December 2022, the Company entered into an amendment to the lease agreement of the rental space in West Lafayette to rent additional space in the same facility under the same terms as its existing facility lease except the terms of payment. Under the

terms of the amendment, the Company will pay rent monthly for the additional space. The Company recorded an operating lease right of use asset and liability of $10,000.

In February 2023, as a result of the decision to discontinue internal development of NOV004 and to pursue out-licensing opportunities, the Company entered into a sublease agreement as the lessor for the majority of the West Lafayette facility. The lease commenced on March 17, 2023 and ends on December 31, 2023. The sublessee paid the Company a security deposit of $6,000 which is included in Accrued expenses and other current liabilities on the March 31, 2023 condensed consolidated balance sheets. Under the terms of the sublease, the Company is entitled to receive a total rental income that is expected to offset rent expense of $57,000. As a result of this decision and the sublease agreement, the Company recorded an impairment loss of approximately $66,000 which is included in Other income (expense), net for the three months ended March 31, 2023 condensed consolidated statement of operations and comprehensive loss.

The Company recognizes lease expense on a straight-line basis over the term of its operating lease. As of March 31, 2023, total future rent expense from all real estate operating leases of $176,000 will be recognized over the remaining term of 8 to 9 months on a straight-line basis over the respective lease period.

As part of the Acquisition, the Company acquired a financing lease for certain lab equipment. The Company recognizes the depreciation expense in research and development expenses in the condensed consolidated statements of operations and comprehensive loss and recognizes expense on a straight-line basis starting when the equipment is placed into service until the end of the remaining contract term of 18 months. Amortization expense of the financing lease right of use asset for the three months ended March 31, 2023 was $3,000.

In February 2023, as a result of the decision to discontinue internal development of NOV004 and to pursue out-licensing opportunities, the Company exercised its purchase option for the financed equipment in order to resell and this equipment is currently held on consignment and is included in Assets held for sale on the March 31, 2023 condensed consolidated balance sheets. As a result of this action, the Company reduced the Finance lease ROU asset and Finance lease liability by approximately $70,000.

Supplemental balance sheet information related to leases as follows (in thousands except lease terms and discount rates):


	March 31, 2023			December 31, 2022
Operating lease right of use asset, net	$	171		$	291
Short-term operating lease liability	$	269		$	377

Finance lease right of use asset		—			124
Finance lease accumulated amortization		—			(50	)
Total finance lease right of use asset, net	$	—		$	74


Weighted average remaining lease term
Operating leases	0.6 years			0.9 years
Finance leases		—		1.0 year

Weighted average discount rate
Operating leases		5.88	%		5.71	%
Finance leases		—	%		4.45	%

Year ended December 31,	Operating Lease			Operating Lease
2023 (excluding the three months ended March 31, 2023)	$	275		$	388
Total lease payments		275			388
Less: imputed interest		(6	)		(11	)
Total remaining lease liability	$	269		$	377