Leases

9 Months Ended

Sep. 30, 2025

9. Leases

In February 2025, the Company entered into an operating lease agreement for office space in Berkeley Heights, New Jersey. In accordance with ASC 842, the Company has determined the lease commencement occurred in September 2025 upon substantial completion of lessor-owned improvements. The lease is expected to terminate in December 2031, however, the Company has the option to extend the lease term twice for an additional three years. As of September 30, 2025, it is not reasonably certain that the Company will exercise this option to extend. The Company can terminate the lease after four years and four months after the lease commencement date with a termination penalty of $0.3 million. In addition to the base rent, the Company will pay its share of operating expenses and taxes. The lessor provided a tenant improvement allowance of up to $0.4 million, which the Company fully utilized as of September 30, 2025. The Company is responsible for additional improvement expense incurred in excess of the tenant improvement allowance and has incurred $0.1 million of excess costs as of September 30, 2025. The Company records excess costs as payments in the measurement of lease liabilities.

In connection with the signing of the lease, the Company secured a letter of credit in favor of the lessor in the amount of $0.5 million, which will be reduced to $0.2 million over five years. The letter of credit is recorded as restricted cash in the condensed consolidated balance sheet as of September 30, 2025.

The following table summarizes the presentation of the Company's operating lease on its condensed consolidated balance sheet as of September 30, 2025 (in thousands):


Leases	Balance sheet classification	September 30, 2025
Assets:
Operating lease assets	Operating lease right-of-use assets	$	1,516
Total lease assets		$	1,516
Liabilities:
Current:
Operating lease liabilities	Operating lease liability, current	$	376
Noncurrent:
Operating lease liabilities	Operating lease liability, long-term		1,169
Total lease liabilities		$	1,545

The components of lease cost under ASC 842 included within general and administrative expenses in the Company’s condensed consolidated statements of operations and comprehensive loss were as follows for the three and nine months ended September 30, 2025 (in thousands):


Lease cost	Three and Nine Months Ended September 30, 2025
Operating lease cost	$	29
Total lease cost	$	29

As of September 30, 2025, the weighted-average remaining lease term for the operating lease was 6.3 years, and the weighted-average discount rate was 13.12%. There were no cash payments for amounts included in the measurement of lease liabilities for the three and nine months ended September 30, 2025.

Future minimum annual lease commitments under the Company's non-cancelable operating lease as of September 30, 2025 was as follows (in thousands):


Year ended December 31,	Amount
2025 (remaining 3 months)	$	144
2026		335
2027		342
2028		349
2029		356
Thereafter		701
Total lease payments		2,227
Less: interest		(682	)
Present value of operating lease liabilities	$	1,545