Note 7 - Leases

3 Months Ended

Mar. 31, 2026

Notes to Financial Statements

Lessee, Operating Leases [Text Block]

7. Leases

Microbial Building Lease

On March 13, 2026, VBI entered into a Building Lease Agreement (the “Microbial Building Lease”) with TPB Merchants Ice LLC (“TPB”) to lease an approximately 8,042 square foot facility (the “Microbial Building”) located at 1305 E. Houston St., San Antonio, TX 78205 ("the Property"). The initial term of the Microbial Building Lease is eight years, unless earlier terminated by the parties pursuant to the terms thereof. VBI has (i) a one-time option to extend the lease term for an additional period of five years and (ii) the exclusive option to purchase the Microbial Building and the Property from TPB at any time during the first 24 months of the initial term for $12.5 million. In exchange for leasing the premises, VBI shall pay TPB a monthly base rent of approximately $22,605 for the first twelve months, or a total of $271,260, with annual dollar increases in later years of the lease term. The aggregate base rent over the eight-year lease term is approximately $5.34 million. The Microbial Building Lease provides that VBI will pay additional expenses to TPB related to VBI’s share of operating expenses, taxes and utilities related to the premises using ratable percentages set forth in the Microbial Building Lease.

Mammalian Building Lease

On March 9, 2026, VBI entered into a Lease (the “Mammalian Building Lease”) with Merchants Ice II, LLC (“Merchants Ice II”) to lease an approximately 20,144 square foot facility located at the Property. The term of the Mammalian Building Lease is 102 months, effective January 1, 2026, unless earlier terminated by the parties pursuant to the terms thereof. In exchange for leasing the premises, VBI shall pay Merchants Ice II a monthly base rent of $55,030 for the first twelve months, or a total of $660,357, with annual increases of approximately 3.0%. The aggregate base rent over the lease term is approximately $6.29 million. The Mammalian Building Lease provides that VBI will pay additional expenses to TPB related to VBI’s share of operating expenses, taxes and utilities related to the premises using ratable percentages set forth in the Mammalian Building Lease.

Office Sublease

On March 13, 2026, VBI entered into a Sublease (the “Office Sublease” and together with the Microbial Building Lease and the Mammalian Building Lease, the “Facility Leases”) with Texas Research and Technology Foundation (“TRTF”) to sublease approximately 8,122 square feet of office space located at the Property, which Office Sublease was consented to by TPB, as landlord of the leased premises, and is subject to the terms of that certain Office Lease Agreement, dated June 1, 2024, by and between TRTF and TPB. The term of the Office Sublease is 102 months, unless earlier terminated by the parties pursuant to the terms of the Office Sublease. This office will serve as the new principal executive office of the Company. In exchange for subleasing the premises, VBI shall pay TRTF a monthly base rent of $30,436, with annual increases of approximately 3.0%. The aggregate base rent over the lease term is approximately $3.9 million. The Office Sublease provides that VBI will pay additional expenses to TPB related to VBI’s share of operating expenses, taxes and utilities related to the premises using ratable percentages set forth in the Office Sublease.

Warehouse Lease

On February 23, 2026, VBI entered into a Lease (the “Warehouse Lease”) with EastGroup Properties L.P. ("EastGroup") to lease approximately 22,262 square feet of warehouse space located on Wetmore Rd. in San Antonio, TX.  The term of the Warehouse Lease is 35 months, effective February 1, 2026. In exchange for leasing the premises, VBI shall pay EastGroup a monthly base rent of approximately $21,069 for the first ten months with escalations each year thereafter. The aggregate base rent over the 35 month lease term is approximately $0.8 million. The Warehouse Lease provides that VBI will pay additional expenses related to VBI’s share of operating expenses, taxes and utilities related to the premises using ratable percentages set forth in the Warehouse Lease.

Facility Leases

We refer to the four leases discussed above as our facility leases.  The facility leases are accounted for in accordance with ASC 842. During the first quarter of 2026, we recorded a total of $10.3 million of right-of-use assets and related lease liabilities at lease inception.  We used an incremental borrowing rate of 11%, which reflects the estimated borrowing rate for secured mortgages over the lease terms. The right-of-use assets are being amortized over each of the lease terms.  Amortization of $177 thousand was recorded for the three months ended March 31, 2026. Total lease costs recorded for the three months ended March 31, 2026 were $391 thousand and cash paid for leases during the same period were $342 thousand.  The weighted-average remaining term of the leases is 7.95 years and the weighted-average discount rate is 11%.  

Amounts recorded on the balance sheet related to the facility leases as of March 31, 2026 are as follows (in thousands):

Right-of-use assets, operating lease	$	10,086
Operating lease liabilities, current	$	492
Operating lease liabilities, non-current	$	9,643
Total operating lease liabilities	$	10,135

Total lease costs recorded for the three months ended March 31, 2026 are as follows (in thousands):

		Three Months Ended
		March 31,
		2026		2025
		(unaudited)		(unaudited)
Operating lease cost	$	391	$	—
Short term lease cost		94		4
Total lease cost	$	485	$	4

Future cash obligations with respect to the four leases discussed above are as follows as of March 31, 2026:

Fiscal Year		Total Payments
Remainder of 2026	$	1,167
2027		1,650
2028		1,784
2029		1,663
2030		1,770
2031		1,967
Thereafter		5,957
Total minimum lease payments		15,958
Less imputed interest		(5,823)
Present value of lease payments	$	10,135

Cash  paid for amounts included in the measurement of operating lease liabilities were $375 thousand for the three months ended March 31, 2026.  There were no operating leases for the three months ended March 31, 2025.