Ernexa Therapeutics Inc.
For the period ended Dec 31, 2025. Filed Mar 13, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Mar 13, 2026
ERNA$1.88+2.7%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2024-12-31; filed 2025-03-12.
0001493152-25-010051
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2025-12-31; filed 2026-03-13.
0001493152-26-010102
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 94 previous paragraphs and 102 current paragraphs.
38 unchanged; 27 reworded; 36 added; 28 removed; 1 previous and 1 current paragraphs rearranged.
Tables are not compared: 6 previous and 5 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (36)
Current report
We are a preclinical-stage synthetic allogeneic iMSC therapy company. iMSCs are induced pluripotent stem cell-derived mesenchymal stem cells. We envision a future where cell therapies powered by synthetic iMSCs can offer new options for patients with limited treatment paths, and our mission is to transform the treatment of cancer and autoimmune disease by developing scalable, affordable, off-the-shelf cell therapies that restore hope.
Current report
2026 Public Offering
Current report
On February 6, 2026, we entered into a placement agency agreement (the “Placement Agency Agreement”) with Brookline Capital Markets, a division of Arcadia Securities, LLC (the “Placement Agent”), pursuant to which we engaged the Placement Agent for the public offering of (i) 19.0 million shares (the “Shares”) of our common stock and accompanying warrants to purchase 19.0 million shares of common stock (the “Milestone Warrants”), at a combined offering price of $0.50 per share of common stock and accompanying Milestone Warrant and (ii) pre-funded warrants (the “Pre-Funded Warrants”) to purchase 2.0 million shares of common stock and accompanying Milestone Warrants to purchase 2.0 million shares of common stock, at a combined offering price of $0.49 per Pre-Funded Warrant and accompanying Milestone Warrant ( the “2026 Offering”). In connection with the 2026 Offering, we also entered into a securities purchase agreement (each, a “Purchase Agreement”) with certain investors who purchased Shares, Pre-Funded Warrants and Milestone Warrants in the 2026 Offering.
Current report
The Pre-Funded Warrants are immediately exercisable subject to certain ownership limitations, have an exercise price of $0.01 per share, and may be exercised at any time until all of the Pre-Funded Warrants are exercised in full. On February 11, 2026 and February 18, 2026, the holder of the Pre-Funded Warrants exercised 1.3 million and 0.7 million Pre-Funded Warrants, respectively, for an aggregate exercise price of approximately $20,000. There are no remaining Pre-Funded Warrants related to the 2026 Offering outstanding.
Current report
On February 6, 2026, the Milestone Warrants commenced trading on The Nasdaq Capital Market under the symbol “ERNAW.” The Milestone Warrants are immediately exercisable subject to certain ownership limitations, have an exercise price of $0.68 per share, and expire on the earlier of (i) the five (5)-year anniversary of the original issuance date or (ii) the 180 th calendar day following the public release by us of clinical trial data from the first cohort of the Phase 1 study of ERNA-101.
Current report
Pursuant to the Placement Agency Agreement, we paid the Placement Agent an aggregate cash fee of approximately $0.5 million, which was equal to 6.5% of the aggregate purchase price paid by investors in the Offering (or 1.5% with respect to certain existing investors). We will also pay the Placement Agent a cash fee as compensation for gross proceeds we receive from any exercise of any Milestone Warrants sold in connection with the 2026 Offering, payable quarterly on each January 1, April 1, July 1 and October 1 following the closing of the 2026 Offering (or the following business day if such day is not a business day), at the same percentage and as calculated in the manner as set forth above. We also issued approximately 0.2 million shares of common stock to the Placement Agent, which was equal to 1.5% of the aggregate number of Shares and Pre-Funded Warrants sold in the Offering (or 0.5% with respect to sales to certain existing investors). In addition, we reimbursed the Placement Agent for its accountable offering-related legal expenses in an amount of $125,000.
Current report
The 2026 Offering closed on February 10, 2026, for aggregate gross proceeds of approximately $10.5 million before deducting Placement Agent fees and other offering expenses payable by us. We intend to use the net proceeds from the 2026 Offering to support the advancement of our development programs, working capital and general corporate purposes.
Current report
The Placement Agency Agreement and the Purchase Agreements contain customary representations, warranties and agreements by us, customary conditions to closing, indemnification obligations of us, the Placement Agent, or the investors, as the case may be, and other obligations of the parties.
Current report
Pursuant to the terms of the Purchase Agreements and the Placement Agency Agreement, we have agreed that for a period of ninety (90) days from the closing of the 2026 Offering, that neither we nor any subsidiary may (i) issue, enter into any agreement to issue or announce the issuance or proposed issuance of any shares of common stock or common stock equivalents or (ii) file any registration statement or prospectus, or any amendment or supplement thereto, in each case, subject to certain exceptions. We have also agreed not to effect or enter into an agreement to effect any issuance of common stock or common stock equivalents involving a Variable Rate Transaction, as defined in the Purchase Agreements, for a period of ninety (90) days following the closing of the 2026 Offering, subject to certain exceptions, unless waived by the Placement Agent. In addition, as part of the Purchase Agreement, subject to certain exceptions, our officers and directors entered into lock-up agreements, pursuant to which they agreed not to sell or otherwise dispose of any of the common stock for a period of ninety (90) days following the date of closing of the 2026 Offering.
Current report
On February 10, 2026, we also entered into a Warrant Agent Agreement with the transfer agent pursuant to which the transfer agent agreed to act as warrant agent with respect to the Milestone Warrants.
Current report
Amendments to Restated Articles of Incorporation, as Amended
Current report
Effective June 2, 2025, we filed a certificate of amendment to our Restated Certificate of Incorporation, as amended (the “Amended COI”), with the Secretary of State of Delaware to increase the authorized shares of our common stock from 100 million to 150 million (the “Authorized Shares Amendment”).
Current report
Also effective June 2, 2025, we filed a certificate of amendment to our Amended COI with the Secretary of State of Delaware to allow for action required or permitted to be taken by our stockholders to be effected by written consent of such stockholders in addition to duly called annual or special meetings of such stockholders (“the Written Consent Amendment”)
Current report
On June 10, 2025, we filed a certificate of amendment to our Amended COI with the Secretary of State of Delaware to effect a reverse stock split of our common stock at a ratio of 1-for-15 effective at 12:01 a.m. (the “Reverse Stock Split”). Upon the effectiveness of the Reverse Stock Split, every fifteen shares of the issued and outstanding common stock were automatically combined and reclassified into one issued and outstanding share of common stock. The Reverse Stock Split did not alter the par value of the common stock, and the number of authorized shares of common stock remains unchanged at 150 million. No fractional shares were issued in connection with the Reverse Stock Split, and no cash or other consideration was paid in connection with any fractional shares. Stockholders who otherwise would have held a fractional share after giving effect to the Reverse Stock Split instead owned one whole share of the post-reverse stock split common stock. We issued an aggregate of 153 shares for rounding up fractional shares to whole shares.
Current report
All share and per share data in this Annual Report have been adjusted for all periods presented to reflect the Reverse Stock Split.
Current report
The Authorized Shares Amendment, Written Consent Amendment, and Reverse Stock Split Amendment were approved by our stockholders at our 2025 Annual Meeting of Stockholders on June 2, 2025 (the “Annual Meeting”).
Current report
2025 Private Placement of Equity
Current report
On March 31, 2025, we entered into a securities purchase agreement (the “SPA”) with certain accredited investors and a related registration rights agreement. Pursuant to the SPA, we agreed to issue and sell to the investors, and the investors agreed to purchase, in a private placement, an aggregate of approximately 4,621,000 shares of common stock at a purchase price of $1.569 per share (or pre-funded warrants in lieu of common stock at a purchase price of $1.494 per pre-funded warrant). The pre-funded warrants will be exercisable until exercised in full at a nominal exercise of $0.075 per share and may not be exercised to the extent such exercise would cause the holder to beneficially own more than 4.99% or 9.99%, as applicable, of our outstanding common stock.
Current report
Upon the initial closing of the SPA on April 2, 2025 (the “First Closing”), we sold to the investors an aggregate of approximately 662,000 shares of common stock and 34,000 pre-funded warrants (such shares, including the shares underlying the pre-funded warrants, equal to 19.99% of our outstanding shares as of March 31, 2025). Following shareholder approval at the Annual Meeting, on June 9, 2025, we sold to the investors an aggregate of approximately 3,182,000 shares of common stock and 622,000 pre-funded warrants, and on June 27, 2025, we sold the remaining approximately 121,000 shares of common stock (the June 9, 2025 and June 27, 2025 issuances collectively referred to as the “Second Closing”). The Company raised approximately $7.2 million in gross proceeds under the SPA.
Current report
Forward sales contract expense
Current report
For the year ended December 31, 2025, we recognized $5.8 million in expense related to a forward sales contract for the sale of shares of the Company’s common stock and prefunded warrants (the “2025 Private Placement”), $5.3 million of which was initially recognized at the contract inception date because the fair value of the shares that were expected to be issued under a securities purchase agreement (the “2025 SPA”) exceeded the proceeds, and the remaining $0.5 million loss was related to the change in fair value that was remeasured immediately prior to the respective settlement of the shares issued under the 2025 SPA. See Note 15 to the accompanying consolidated financial statements for more information on the 2025 Private Placement. There was no similar transaction for the year ended December 31, 2024.
Current report
During the year ended December 31, 2025, we recognized a gain on extinguishment of debt of approximately $0.8 million related to liabilities that have been deemed to be time-barred from collection under the respective state laws. See Note 10 to the accompanying consolidated financial statements for more information.
Current report
As of December 31, 2024, we remeasured a contingent liability and recognized a credit of less than $0.1 million for the year ended December 31, 2024 due to a decrease in the fair value of the liability. There were no amounts recognized for the year ended December 31, 2025. The contingent consideration liability will expire in April 2026.
Current report
Other Income, Net
Current report
During the year ended December 31, 2025, we recognized approximately $0.5 million of income from Factor Limited as a result of the Assignment Agreement, offset by approximately $0.2 million of financing fees that we expensed for the 2025 Private Placement, as the related securities purchase agreement was accounted for as a liability until its settlement. See Note 15 to the accompanying consolidated statement of operations for more information on the 2025 Private Placement.
Current report
Benefit (Provision) for Income Taxes
Current report
During the year ended December 31, 2025, we raised $7.2 million in gross proceeds from the 2025 Private Placement. We used a portion of the proceeds from this financing to repay the notes, as discussed above.
Current report
On May 1, 2025, our $10.0 million standby equity purchase agreement (“SEPA”) with Lincoln Park Capital Fund, LLC (“Lincoln Park”) expired. The Company did not sell any shares of common stock under the SEPA during either of the years ended December 31, 2025 or 2024. We do not currently have a new SEPA in place.
Current report
On February 10, 2026, we received approximately $9.6 million in net proceeds from the 2026 Offering of (i) 21.0 million shares of the Company’s common stock or pre-funded warrants and (ii) accompanying warrants to purchase 21.0 million shares of the Company’s common stock (the “Milestone Warrants”).
Current report
Net cash provided by financing activities for the year ended December 31, 2025 includes $2.3 million of gross proceeds received from the issuance of two promissory notes and $4.9 million of proceeds received from the 2025 Private Placement, net of offsetting $2.3 million of a receivable related to 2025 Private Placement due from a related party with the outstanding notes payable, including accrued interest, due to the same related party.
Current report
Net cash provided by financing activities for the year ended December 31, 2024 includes $6.3 million of gross proceeds received from (i) the issuance of convertible notes in January 2024 and the fees related to such issuance and (ii) proceeds received from the Bridge Notes and 2024 Private Placement.
Current report
Goodwill Impairment Evaluation
Current report
The Company performed its annual qualitative assessments as of December 31, 2025 and 2024, and based on those assessments, the Company was unable to conclude that it was more likely than not that the fair value of the entity exceeded its carrying value as of such date. As a result, the Company performed a step-one quantitative assessment and concluded that the fair value of the reporting unit was greater than the carrying value as of December 31, 2025 and 2024, and the goodwill was considered not impaired. Therefore, the Company did not recognize an impairment charge during the years ended December 31, 2025 and 2024. However, the decline in the Company’s stock price during the first quarter of 2026 has increased the likelihood that the fair value of the reporting unit may be below its carrying value as of March 31, 2026, which could result in the recognition of a goodwill impairment charge for the three months ended March 31, 2026.
Current report
In September 2025, the FASB issued ASU No. 2025-06,*Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software.*This ASU modernizes the accounting for internal-use software costs by removing all references to prescriptive and sequential software development stages and instead requires capitalization when (i) management has authorized and committed to funding the software project and (ii) it is probable that the project will be completed and the software will be used to perform the function intended have both occurred. ASU No. 2025-06 is effective for fiscal years beginning after December 15, 2027, and interim reporting periods, with early adoption permitted. We do not expect the amendments in this ASU to have a material impact on our consolidated financial statements.
Current report
In December 2025, the FASB issued ASU No. 2025-11,*Interim Reporting (Topic 270): Narrow-Scope Improvements.*This ASU includes a disclosure principle that requires entities to disclose events since the end of the last reporting period that have a material impact on the entity, which is modeled after the SEC disclosure requirement. This ASU also clarifies the applicability of Topic 270, the types of interim reporting, and the form and content of interim financial statements in accordance with GAAP. For public business entities, this ASU is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. We do not expect the amendments in this ASU to have a material impact on our consolidated financial statements.
Current report
In December 2025, the FASB issued ASU No. 2025-12,*Codification Improvements.*The amendments in this update represent changes to the Codification that (1) clarify, (2) correct errors, or (3) make minor improvements. The amendments in this ASU are varied in nature and may affect the application of guidance in cases in which the original guidance may have been unclear. This ASU is effective for all entities for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods. We do not expect the amendments in this ASU to have a material impact on our consolidated financial statements.
Removed paragraphs (28)
Previous report
We are a preclinical-stage synthetic allogeneic iMSC therapy company. Our vision is to improve the lives of patients with difficult-to-treat diseases through innovative, effective, and safe, but accessible cellular therapies, and our mission is to develop allogenic off-the-shelf cellular therapies, leveraging induced pluripotent stem cell (“iPSC”)-derived mesenchymal stem cells (“iMSCs”) to target solid tumors and autoimmune diseases.
Previous report
September 2024 Transactions
Previous report
Exchange Transactions
Previous report
Pursuant to exchange agreements we entered into on September 24, 2024 with the holders of certain of our warrants and convertible notes, on October 29, 2024, we issued an aggregate of 38.3 million shares of our common stock in exchange for: (i) warrants to purchase an aggregate of approximately 4.4 million shares of our common stock that we issued in December 2022 with an exercise price of $1.43 per share; (ii) $8.7 million in the aggregate principal amount of convertible notes that we issued in July 2023 and warrants to purchase an aggregate of approximately 6.1 million shares of our common stock that we issued in July 2023 with an exercise price of $1.43 per share; (iii) $9.2 million in the aggregate principal amount of convertible notes that we issued in December 2023 and warrants to purchase an aggregate of approximately 9.6 million shares of our common stock that we issued in December 2023 with an exercise price of $1.43 per share (the “exchange transactions”).
Previous report
The holders of the warrants described in the paragraph above exchanged all their warrants for shares of our common stock at an exchange ratio of 0.5 of a share of common stock for every one share of common stock issuable upon exercise of the applicable warrant (rounded up to the nearest whole number), and the holders of the convertible notes described in the paragraph above exchanged all their convertible notes for shares of our common stock at an exchange ratio equal to (A) the sum expressed in U.S. dollars of (1) the principal amount of the applicable convertible note, plus (2) all accrued and unpaid interest thereon through the date the applicable convertible note is exchanged plus (3) all interest that would have accrued through, but not including, the maturity date of applicable convertible note if it was outstanding from the date such convertible note is exchanged through its maturity date, divided by (B) $1.00 (rounded up to the nearest whole number).
Previous report
Conversion of Bridge Notes
Previous report
On September 24, 2024, we closed a private placement in which we sold an aggregate principal amount of approximately $3.9 million of 12.0% senior convertible notes (the “bridge notes”).
Previous report
On October 29, 2024, in accordance with the terms of the bridge notes, approximately $3.0 million of the principal amount of the bridge notes plus all accrued and unpaid interest thereon, plus such amount of interest that would have accrued on the principal amount through December 24, 2024, was automatically converted at a conversion price of $0.50 into 6.2 million shares of our common stock, and approximately $0.9 million of the principal amount of the bridge notes plus all accrued and unpaid interest thereon, plus such amount of interest that would have accrued on the principal amount through December 24, 2024, was automatically converted at a conversion price of $0.50 into pre-funded warrants to purchase 1.8 million shares of our common stock.
Previous report
Private Placement
Previous report
Pursuant to a securities purchase agreement we entered into with certain investors on September 24, 2024, on October 29, 2024, we closed a private placement (the “common stock private placement” and together with the bridge notes and the exchange transactions, the “September 2024 Transactions”) in which we sold an aggregate of 1.4 million shares of our common stock and pre-funded warrants to purchase 0.1 million shares of our common stock at a purchase price of $0.75 per share of common stock and $0.745 per pre-funded warrant. We received approximately $1.1 million in gross proceeds from the issuance of such securities. For additional information regarding this private placement, see Note 6 to the accompanying consolidated financial statements.
Previous report
For additional information regarding the September 2024 Transactions, see Note 6 to the accompanying consolidated financial statements.
Previous report
In total, the Company issued approximately 45.9 million shares of common stock and 1.9 million pre-funded warrants on October 29, 2024 pursuant to the private placement, the exchange transactions and the conversion of the bridge notes discussed above and had 51.4 million shares of common stock issued and outstanding after the closing of the September 2024 Transactions.
Previous report
Termination of Sublease
Previous report
In October 2022, we entered into a sublease for office and laboratory space in Somerville, Massachusetts. In connection with entering into the sublease, we delivered a security deposit in the form of a letter of credit in the amount of $4.1 million. The letter of credit was collateralized with $4.1 million of cash deposited in a restricted account.
Previous report
On August 5, 2024, the sublessor drew down on the letter of credit for the full $4.1 million to cover the approximately $4.0 million of past due rent payments for February 2024 through August 2024, plus interest and penalties.
Previous report
Acquisition of Exacis In-Process Research and Development
Previous report
In April 2023, we acquired from Exacis substantially all of its intellectual property assets, including all of its right, title and interest in an exclusive license agreement between Exacis and Factor Limited (the “Purchased License”). The Purchased License was determined to be an in-process research and development (“IPR&D”) asset that has no alternative future use and no separate economic value from its original intended purpose, which is therefore expensed in the period the cost is incurred. As a result, we expensed the fair value of the Purchased License of approximately $0.5 million during the year ended December 31, 2023. For additional information, see Note 4 to the accompanying financial statements included in this report. There was no similar transaction during the year ended December 31, 2024.
Previous report
On the closing date of the acquisition of assets from Exacis in April 2023, we recognized a contingent consideration liability of $0.2 million for future payments that may be payable to Exacis, which was included as part of the $0.5 million fair value of the Purchased License asset and expensed as IPR&D during the year ended December 31, 2023. This contingent consideration liability is remeasured at each period end, and any change in the fair value of the contingent liability is recognized in the statement of operations. As of December 31, 2024 and 2023, we remeasured the contingent liability and recognized income of $0.1 million for each of the years ended December 31, 2024 and 2023 due to the decrease in the fair value of the contingent consideration liability.
Previous report
Loss on Non-Controlling Investment
Previous report
We account for our 25% non-controlling investment in NoveCite, Inc. (“NoveCite”) under the equity method. We have not guaranteed any obligations of NoveCite, nor are we otherwise committed to providing further financial support for NoveCite. Therefore, we only record 25% of NoveCite’s losses up to our investment carrying amount. As a result, we did not recognize additional losses related to NoveCite for the year ended December 31, 2024. We recognized a loss of approximately $0.1 million for the year ended December 31, 2023.
Previous report
Other Income (Expense), Net
Previous report
Provision for Income Taxes
Previous report
On October 29, 2024, we also received approximately $1.1 million upon the closing of the common stock private placement. Other than the proceeds raised under the bridge notes and the common stock private placement, our sole source of liquidity is through sales of our common stock under the SEPA, pursuant to which Lincoln Park committed to purchase up to $10.0 million of our common stock. Such sales of common stock by us, if any, are subject to certain conditions and limitations set forth in the SEPA, including a condition that we may not direct Lincoln Park to purchase any shares of common stock under the SEPA if such purchase would result in Lincoln Park beneficially owning more than 4.99% of our issued and outstanding shares of common stock. Sales under the SEPA may occur from time to time, at our sole discretion, through April 2025. To date, we have issued and sold approximately 214,000 shares of our common stock to Lincoln Park, including approximately 74,000 commitment shares, and have received approximately $0.3 million in gross proceeds from such sales. We sold no shares under the SEPA during the year ended December 31, 2024.
Previous report
In addition, while we are not presently pursuing product development, we may do so in the future. Developing product candidates, conducting clinical trials and commercializing products requires substantial capital, and we would need to raise substantial additional funds if we were to pursue the development of one or more product candidates.
Previous report
Net cash provided by financing activities for the year ended December 31, 2024 includes approximately $6.4 million of gross proceeds received from the convertible note financing, the bridge note financing and the common stock private placement that occurred in January 2024, September 2024 and October 2024, respectively. Net cash provided by financing activities for the year ended December 31, 2023 includes approximately $16.5 million of gross proceeds from convertible note financings and $0.3 million of proceeds received from selling approximately 214,000 shares to Lincoln Park under the SEPA. The Company did not sell any shares under the SEPA during the year ended December 31, 2024.
Previous report
Goodwill Impairment
Previous report
In June 2022, the Financial Accounting Standard Board (the “FASB”)issued Accounting Standards Update (“ASU”) No. 2022-03,Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions(“ASU 2022-03”). The FASB issued ASU 2022-03 to (1) clarify the guidance in Topic 820, Fair Value Measurement, when measuring the fair value of an equity security subject to contractual restrictions that prohibit the sale of an equity security, (2) to amend a related illustrative example, and (3) to introduce new disclosure requirements for equity related securities subject to contractual sale restrictions that are measured at fair value in accordance with Topic 820. ASU 2022-03 clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. The guidance was effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years with early adoption permitted. The adoption of this ASU did not have a material impact to our consolidated financial statements.
Previous report
In November 2023, the FASB issued ASU No. 2023-07,Segment Reporting – Improvements to Reportable Segment Disclosures, which provides updates to qualitative and quantitative reportable segment disclosure requirements, including enhanced disclosures about significant segment expenses and increased interim disclosure requirements, among others. ASU No. 2023-07 was effective for fiscal years beginning after December 15, 2023, and interim periods in fiscal years beginning after December 15, 2024. Early adoption was permitted, and the amendments should be applied retrospectively. The adoption of this ASU did not have an impact to our consolidated financial statements, but did result in additional disclosures made in the notes to the consolidated financial statements.
Reworded paragraphs (27)
Previous wording
In February 2023, we entered into an exclusive option and license agreement (the “Lineage Agreement”) with Lineage Cell Therapeutics, Inc. (“Lineage”), under which we granted Lineage an option to obtain an exclusive sublicense to certain of our technology for preclinical, clinical and commercial purposes in exchange for a non-refundable up-front payment to us of $0.3 million. In August 2023, Lineage requested that we begin developing certain induced pluripotent stem cell lines in exchange for a cell line customization fee. Lineage paid us $0.4 million towards the customization fee, which we were recognizing ratably over the customization period.
Current wording
Revenue is related to an exclusive option and license agreement we had with a customer, under which we granted the customer an option to obtain an exclusive sublicense to certain of our technology for preclinical, clinical and commercial purposes in exchange for a non-refundable up-front payment to us of $0.3 million. We also began developing certain induced pluripotent stem cell lines in exchange for a cell line customization fee. The customer paid us $0.4 million towards the customization fee, which we were recognizing ratably over the customization period for the year ended December 31, 2024. The Company did not recognize any revenue during the year ended December 31, 2025.
Previous wording
On September 24, 2024, we entered into an agreement with Factor Bioscience whereby we assigned the Lineage Agreement to Factor Bioscience (the “Lineage Assignment Agreement”). The Lineage Assignment Agreement with Factor Bioscience. assigns all our rights and obligations under that the Lineage Agreement to Factor Bioscience. Payments to us related to the Lineage Agreement will now be subject to the Lineage Assignment Agreement, which provides for Factor Bioscience paying us thirty percent (30%) of all amounts it receives from Lineage in the event that Lineage obtains a sublicense from Factor Bioscience. Upon receipt of future payments for the customization activities set forth in the Lineage Agreement, Factor Bioscience will pay us twenty percent (20%) of all amounts Factor Bioscience receives from Lineage. Because we have no further obligations under the agreement with Lineage, we have fully recognized as revenue amounts previously recorded in deferred revenue of approximately $0.5 million for the year ended December 31, 2024. For additional information, see Note 5 to the accompanying consolidated financial statements. We have no other revenue generating contracts at this time.
Current wording
In September 2024, we entered into an agreement with Factor Limited (and together with Factor Bioscience Inc. and its other affiliates, “Factor Bioscience”) whereby we assigned the customer contract to Factor Bioscience (the “Assignment Agreement”). The Assignment Agreement with Factor Bioscience assigned all our rights and obligations under the customer contract to Factor Bioscience. Payments to us related to the customer contract will now be subject to the Assignment Agreement, which provides for Factor Bioscience paying us thirty percent (30%) of all amounts it receives from the customer in the event that the customer obtains a sublicense from Factor Bioscience. Upon receipt of future payments for the customization activities set forth in the customer contract, Factor Bioscience will pay us twenty percent (20%) of all amounts Factor Bioscience receives from the customer. For the year ended December 31, 2025, we received approximately $0.5 million from Factor Bioscience under the Assignment Agreement, which is recognized as other income in the consolidated statements of operations, as this income did not qualify as revenue.
Previous wording
We recognize direct labor and supplies associated with generating our revenue as cost of revenues. As provided for in the A&R Factor License Agreement discussed in Note 11 to the accompanying consolidated financial statements, we were obligated to pay Factor Limited 20% of any amounts we receive from a customer that was related to the licensed technology under the A&R Factor License Agreement, which we also recognize as a cost of revenue.
Current wording
We recognize direct labor and supplies associated with generating our revenue as cost of revenues. We were also obligated to pay Factor Bioscience 20% of any amounts we received from the customer contract discussed above under a previous license agreement we had with Factor Bioscience, which has since been terminated, and such costs were also recognized as cost of revenues.
Previous wording
We have contracted with third parties to perform various studies. The financial terms of these agreements vary from contract to contract and may result in uneven payment flows. We accrue for third party expenses based on estimates of the services received and efforts expended during the reporting period. If the actual timing of the performance of the services or the level of effort varies from the estimate, the accrual is adjusted accordingly. The expenses for some third-party services may be recognized on a straight-line basis if the expected costs are expected to be incurred ratably during the period. Payments under the contracts depend on factors such as the achievement of certain events or milestones, the allocation of responsibilities among the parties to the agreement, and the completion of portions of the preclinical study or similar conditions.
Current wording
We have contracted with third parties to perform various services. The financial terms of these agreements vary from contract to contract and may result in uneven payment flows. We accrue for third party expenses based on estimates of the services received and efforts expended during the reporting period. If the actual timing of the performance of the services or the level of effort varies from the estimate, the accrual is adjusted accordingly. The expenses for some third-party services may be recognized on a straight-line basis if the expected costs are expected to be incurred ratably during the period. Payments under the contracts depend on factors such as the achievement of certain events or milestones, the allocation of responsibilities among the parties to the agreement, and the completion of portions of the preclinical study or similar conditions.
Previous wording
During the years ended December 31, 2024 and 2023, we recognized revenue related to the cell line customization activities we performed for Lineage. The increase in revenue is due to accelerating the recognition of approximately $0.5 million of deferred revenue related to nonrefundable payments we received from Lineage due to the Lineage Assignment Agreement we entered into on September 24, 2024 with Factor Bioscience discussed earlier. As of December 31, 2024, we did not have any deferred revenue balances on our consolidated balance sheet.
Current wording
During the year ended December 31, 2024, we recognized revenue related to the cell line customization activities we performed for a customer, including the acceleration of recognizing approximately $0.5 million of deferred revenue related to nonrefundable payments we received from the customer due to the Assignment Agreement we entered into on September 24, 2024 with Factor Limited discussed earlier. We did not have any revenue recognizing contracts during the year ended December 31, 2025.
Previous wording
During the years ended December 31, 2024 and 2023, our cost of revenues included direct labor and materials to perform the customization cell line activities for Lineage. The decrease in cost of revenue was primarily related to a 20% license fee paid to Factor Bioscience during the year ended December 31, 2023 related to the Lineage Agreement, which was not repeated in 2024.
Current wording
During the year ended December 31, 2024, our cost of revenues included direct labor and materials to perform customization cell line activities for a customer. We did not have any cost of revenues during the year ended December 31, 2025.
Previous wording
Total research and development expenses decreased by approximately $1.3 million for the year ended December 31, 2024 compared to the year ended December 31, 2023, primarily due to decreased professional fees due to a reduction in consultant services, MSA/license fees as a result of the new Factor L&C Agreement, payroll-related expenses and stock-based compensation from a reduction in headcount, and other expenses incurred during 2023 related to closing down a clinical trial we ended in 2022.
Current wording
Total research and development expenses decreased by approximately $0.5 million for the year ended December 31, 2025 compared to the year ended December 31, 2024, primarily due to decreased MSA/license fees as a result of the new Factor L&C Agreement and payroll-related expenses, offset by increased professional fees due to an increase in consulting services, third party study fees related to our development programs, and other expenses incurred for the year ended December 31, 2025 compared to the year ended December 31, 2024.
Previous wording
Our general and administrative expenses decreased by approximately $1.5 million for the year ended December 31, 2024 compared to the year ended December 31, 2023 primarily due to decreases in professional fees related to legal services and consultants, insurance expense due to lower premiums and payroll-related expenses resulting from less severance expense during the year ended December 31, 2024 compared to the year ended December 31, 2023. These decreases were offset by increased occupancy expense related to our Somerville sublease that we began to incur expense for in July 2023 and was terminated effective August 31, 2024, as well as increased stock-based compensation due to stock option awards granted to the chief executive officer during the year ended December 31, 2024.
Current wording
Our general and administrative expenses decreased by approximately $8.0 million for the year ended December 31, 2025 compared to the year ended December 31, 2024 primarily due to decreases in occupancy expense as a result of terminating our Somerville sublease effective August 31, 2024, professional fees related to a reduction in legal services for litigation matters and consultants, insurance expense due to lower premiums and payroll-related expenses during the year ended December 31, 2025 compared to the year ended December 31, 2024.
Previous wording
On August 9, 2024, we and the sublessor of our Somerville sublease entered into a sublease termination agreement effective August 31, 2024. Pursuant to the sublease termination agreement, we agreed to surrender and vacate the premises, all of our right, title and interest in all furniture, fixtures and laboratory equipment at the premises will become the property of the sublessor, and both parties will be released of their obligations under the sublease. As a result of the sublease termination, we recognized a gain on lease termination of approximately $1.6 million for the year ended December 31, 2024. There was no similar transaction during the year ended December 31, 2023.
Current wording
In August 2024, we and the sublessor of our Somerville sublease entered into a sublease termination agreement effective August 31, 2024. Pursuant to this sublease termination agreement, we agreed to surrender and vacate the premises, all of our right, title and interest in all furniture, fixtures and laboratory equipment at the premises will become the property of the sublessor, and both parties will be released of their obligations under the sublease. As a result of the sublease termination, we recognized a gain on lease termination of approximately $1.6 million for the year ended December 31, 2024. There was no similar transaction during the year ended December 31, 2025.
Previous wording
Loss on Extinguishment of Debt
Current wording
Gain (Loss) on Extinguishment of Debt
Previous wording
We recognized a $22.4 million loss on extinguishment of debt for the year ended December 31, 2024 related to the exchange transaction and common stock private placement entered into on September 24, 2024. There was no similar transaction during the year ended December 31, 2023. See Note 6 to the accompanying consolidated financial statements for more information on the exchange transaction and common stock private placement.
Current wording
During the year ended December 31, 2024, we recognized a $22.4 million loss on extinguishment of debt related to (i) agreements to exchange certain convertible notes and warrants into shares of our common stock (the “Exchange Agreements”) and (ii) a securities purchase agreement for the sale of common stock (the “2024 Private Placement”), both of which were entered into on September 24, 2024. See Note 15 to the accompanying consolidated financial statements for more information on these transactions.
Previous wording
Because the modification of our convertible notes was accounted for as an extinguishment of debt and marked to fair value as of September 24, 2024 upon modification, we recognized income of approximately $1.0 million during the year ended December 31, 2024 related to the change in fair value of the convertible notes. This was due to such convertible notes being marked to fair value as of October 29, 2024 when such convertible notes were converted to shares of common stock. There was no similar transaction during the year ended December 31, 2023.
Current wording
Because the modification of our convertible notes was accounted for as an extinguishment of debt and marked to fair value upon entering into the Exchange Agreements, we recognized income of approximately $1.0 million during the year ended December 31, 2024 related to the change in fair value of the convertible notes. This was due to such convertible notes being marked to fair value as of October 29, 2024 when such convertible notes were converted to shares of common stock. There was no similar transaction during the year ended December 31, 2025.
Previous wording
We recognized expense of $1.6 million related to the initial measurement at September 24, 2024 of the incremental fair value of the bridge notes derivative liability over the carrying value due to bifurcation of the conversion feature (recognized as a derivative liability) from the bridge notes. This was offset by $0.1 million in income recognized for the change in fair value of the bridge notes derivative liability due to remeasuring the liability during the year ended December 31, 2024. There was no similar transaction during the year ended December 31, 2023. See Note 6 to the accompanying consolidated financial statements for more information on the bridge notes.
Current wording
We recognized expense of $1.6 million during the year ended December 31, 2024 related to the initial measurement of the incremental fair value of a derivative liability for convertible bridge notes we entered into (the “Bridge Notes”) over the carrying value of the Bridge Notes due to bifurcation of an embedded conversion feature. This expense was offset by a $0.2 million credit for the change in fair value of the Bridge Notes derivative liability due to remeasuring the liability at each reporting period or immediately prior to converting the Bridge Notes into shares of our common stock. There was no similar transaction during the year ended December 31, 2025. See Note 11 to the accompanying consolidated financial statements for more information on the Bridge Notes.
Previous wording
We recognized income of $0.4 million and $0.2 million for the years ended December 31, 2024 and 2023, respectively, for the change in the fair value of our warrant liabilities. The change in fair value of warrant liabilities for the year ended December 31, 2024 includes certain warrants that were reclassified to a liability in September 2024 and then exchanged for shares of common stock in October 2024 as part of the September 2024 Transactions described above. See Note 6 to the accompanying consolidated financial statements for more information on the exchanged warrants.
Current wording
The change in the fair value of the warrant liabilities for the year ended December 31, 2025 wasde minimis. We recognized income of $0.4 million for the year ended December 31, 2024 for the change in the fair value of our warrant liabilities, which includes certain warrants under the Exchange Agreements that were reclassified to a liability in September 2024 and then exchanged for shares of common stock in October 2024. See Note 15 to the accompanying consolidated financial statements for more information on the exchanged warrants.
Previous wording
We recognized an increase in interest income for the year ended December 31, 2024 compared to the year ended December 31, 2023 due to having our cash into interest bearing accounts for the full year of 2024 compared to 2023.
Current wording
We recognized a decrease in interest income of approximately $0.2 million for the year ended December 31, 2025 compared to the year ended December 31, 2024 due to lower cash balances in interest-bearing accounts.
Previous wording
We recognized an increase in interest expense for the year ended December 31, 2024 of approximately $6.1 million compared to the year ended December 31, 2023 primarily due to interest expense and amortization of debt issuance costs associated with the 2023 convertible note financings and the 2024 bridge notes.
Current wording
We recognized a decrease in interest expense for the year ended December 31, 2025 of approximately $6.7 million compared to the year ended December 31, 2024 primarily due to no longer having convertible notes outstanding during the year ended December 31, 2025 as a result of the Exchange Agreements entered into during the year ended December 31, 2024.
Previous wording
For the year ended December 31, 2024, we recognized other income related to amounts earned from Factor Bioscience under the Lineage Assignment Agreement entered into in September 2024. For the year ended December 31, 2023, we recognized (a) commitment fees and other fees related to the SEPA we entered into with Lincoln Park in April 2023 and (b) other miscellaneous expense.
Current wording
For the year ended December 31, 2024, we recognized other income related to amounts earned from Factor Limited under the Assignment Agreement of approximately $0.1 million.
Previous wording
During 2024, we expect to incur state income tax liabilities related to our operations. We have established a full valuation allowance for all deferred tax assets, including our net operating loss carryforwards, since we could not conclude that we were more likely than not able to generate future taxable income to realize these assets. The effective tax rate differs from the statutory tax rate due primarily to our full valuation allowance.
Current wording
For the year ended December 31, 2025, we incurred state minimum income tax liabilities related to our operations. However, we recognized an overall income tax benefit due to a reduction of a deferred tax liability, which was recorded through the accompanying consolidated statement of operations. We continue to maintain a full valuation allowance for all deferred tax assets, including our net operating loss carryforwards, since we could not conclude that we were more likely than not able to generate future taxable income to realize these assets. The effective tax rate differs from the statutory tax rate due primarily to our full valuation allowance.
Previous wording
As of December 31, 2024, we had cash of approximately $1.7 million, and we had an accumulated deficit of approximately $231.5 million. We have to date incurred operating losses, and we expect these losses to continue in the future. For the year ended December 31, 2024, we incurred a net loss of $44.5 million, and we used $15.8 million of cash in operating activities.
Current wording
As of December 31, 2025, we had cash of approximately $1.9 million, and we had an accumulated deficit of approximately $245.6 million. We have to date incurred operating losses, and we expect these losses to continue in the future. For the year ended December 31, 2025, we incurred a net loss of $14.1 million, and we used $7.0 million of cash in operating activities.
Previous wording
On March 11, 2025, we received $1.5 million in exchange for the issuance of a promissory note with an aggregate principal amount of $1.5 million to an investor. The promissory note matures on the earlier of (i) June 15, 2025 or (ii) upon us receiving greater than $5 million in aggregate proceeds from a subsequent capital raise. Interest accrues at a rate of 5.0% per annum, payable at maturity.
Current wording
On March 11, 2025 and March 20, 2025, we received $1.5 million and $0.8 million, respectively, for the issuance of two promissory notes with an aggregate principal amount of $2.3 million to an investor. The promissory notes had a maturity date of the earlier of (i) June 15, 2025 or (ii) upon us receiving greater than $5 million in aggregate proceeds from a subsequent capital raise. Interest accrued at a rate of 5.0% per annum, payable at maturity. During the year ended December 31, 2025, the Company repaid the notes in full for $2.3 million, including accrued interest.
Previous wording
Historically, the cash used to fund our operations has come from a variety of sources and predominantly from sales of shares of our common stock and convertible notes. We will continue to evaluate and plan to raise additional funds to support our working capital needs through public or private equity offerings, debt financings, strategic partnerships, out-licensing our intellectual property or other means. There can be no assurance that capital will be available when needed or that, if available, it will be obtained on terms favorable to us and our stockholders. Our ability to raise capital through sales of our common stock will depend on a variety of factors including, among others, market conditions, the trading price and volume of our common stock, and investor sentiment. In addition, macroeconomic factors and volatility in the financial market, which may be exacerbated in the short term by concerns over inflation, interest rates, impacts of the wars in Ukraine and the Middle East, strained relations between the U.S. and several other countries, and social and political discord and unrest in the U.S., among other things, may make equity or debt financings more difficult, more costly or more dilutive to our stockholders.
Current wording
Historically, the cash used to fund our operations has come from a variety of sources and predominantly from sales of shares of our common stock and convertible notes. We will continue to evaluate and plan to raise additional funds to support our working capital needs through public or private equity offerings, debt financings, strategic partnerships, out-licensing our intellectual property, grants or other means. There can be no assurance that capital will be available when needed or that, if available, it will be obtained on terms favorable to us and our stockholders. Our ability to raise capital through sales of our common stock will depend on a variety of factors including, among others, market conditions, the trading price and volume of our common stock, and investor sentiment. In addition, macroeconomic factors and volatility in the financial market, which may be exacerbated in the short term by concerns over inflation, interest rates, impacts of the wars in Ukraine and the Middle East, strained relations between the U.S. and several other countries, and social and political discord and unrest in the U.S., among other things, may make equity or debt financings more difficult, more costly or more dilutive to our stockholders.
Previous wording
We prepared the accompanying condensed consolidated financial statements on a going concern basis, which assumes that we will realize our assets and satisfy our liabilities in the normal course of business. As discussed above, there is substantial doubt about our ability to continue as a going concern because we do not have sufficient cash to satisfy our working capital needs and other liquidity requirements over at least the next 12 months from the date of issuance of the accompanying condensed consolidated financial statements. The accompanying condensed consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and reclassification of assets or the amounts and classifications of liabilities that may result from the outcome of the uncertainty of our ability to remain a going concern.
Current wording
We prepared the accompanying consolidated financial statements on a going concern basis, which assumes that we will realize our assets and satisfy our liabilities in the normal course of business. As discussed above, there is substantial doubt about our ability to continue as a going concern because we do not have sufficient cash to satisfy our working capital needs and other liquidity requirements over at least the next 12 months from the date of issuance of the accompanying consolidated financial statements. The accompanying consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and reclassification of assets or the amounts and classifications of liabilities that may result from the outcome of the uncertainty of our ability to remain a going concern.
Previous wording
Cash flows from operating, investing and financing activities, as reflected in the accompanying condensed consolidated statements of cash flows, are summarized as follows:
Current wording
Cash flows from operating, investing and financing activities, as reflected in the accompanying consolidated statements of cash flows, are summarized as follows:
Previous wording
There was a decrease of approximately $4.6 million in cash used in operating activities for the year ended December 31, 2024 compared to the year ended December 31, 2023. This change was due a $4.5 million decrease in net loss, after giving effect to adjustments made for non-cash transactions, primarily due to an increase in recognition of revenue as well as a reduction in professional and consulting expenses, offset by a slight increase of $0.1 million in cash used in operating assets and liabilities for the year ended December 31, 2024 compared to the year ended December 31, 2023.
Current wording
There was a decrease of approximately $8.8 million in cash used in operating activities for the year ended December 31, 2025 compared to the year ended December 31, 2024. This change was due a $6.8 million decrease in net loss, after giving effect to adjustments made for non-cash transactions, primarily due to a decrease in occupancy expense and professional fees, and by a decrease of $2.0 million in cash used in operating assets and liabilities for the year ended December 31, 2025 compared to the year ended December 31, 2024 primarily related to terminating our facility sublease and reduced payments to Factor limited.
Previous wording
Goodwill represents the excess of the purchase price over the fair value of identifiable assets acquired and the liabilities assumed. Goodwill is not amortized but is tested for impairment annually or more frequently if events occur or circumstances indicate it is more likely than not that the fair value of a reporting unit is less than its carrying value. Events that would indicate impairment and trigger an interim impairment assessment include, but are not limited to, macroeconomic conditions, industry and market considerations, cost factors, overall financial performance and other relevant events. Management evaluates our company as a single reporting unit, therefore, our goodwill is tested for impairment at the entity level. Goodwill is tested for impairment as of December 31 st of each year, or more frequently as warranted by events or changes in circumstances mentioned above. Accounting guidance also permits an optional qualitative assessment for goodwill to determine whether it is more likely than not that the carrying value of a reporting unit exceeds its fair value. If, after this qualitative assessment, we determine that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then no further quantitative testing would be necessary. A quantitative assessment is performed if the qualitative assessment results in a more likely than not determination or if a qualitative assessment is not performed. The quantitative assessment considers whether the carrying amount of a reporting unit exceeds its fair value, in which case an impairment charge is recorded to the extent the reporting unit’s carrying value exceeds its fair value.
Current wording
Goodwill represents the excess of the purchase price over the fair value of identifiable assets acquired and the liabilities assumed. Goodwill is not amortized but is tested for impairment annually or more frequently if events occur or circumstances indicate it is more likely than not that the fair value of a reporting unit is less than its carrying value. Events that would indicate impairment and trigger an interim impairment assessment include, but are not limited to, macroeconomic conditions, industry and market considerations, cost factors, overall financial performance and other relevant events. Management evaluates our company as a single reporting unit, therefore, our goodwill is tested for impairment at the entity level. Goodwill is tested for impairment as of December 31 st of each year, or more frequently as warranted by events or changes in circumstances mentioned above. Accounting guidance also permits an optional qualitative assessment for goodwill to determine whether it is more likely than not that the carrying value of a reporting unit exceeds its fair value. If, after this qualitative assessment, we determine that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then no further quantitative testing would be necessary. A quantitative assessment is performed if the qualitative assessment results in a more likely than not determination or if a qualitative assessment is not performed. The quantitative assessment considers whether the carrying amount of a reporting unit exceeds its fair value, in which case an impairment charge is recorded in an amount equal to the excess fair value.
Previous wording
In December 2023, the FASB issued ASU No. 2023-09,Improvements to Income Tax Disclosures, which requires disclosure of disaggregated income taxes paid, prescribes standard categories for the components of the effective tax rate reconciliation, and modifies other income tax-related disclosures. ASU No. 2023-09 is effective for fiscal years beginning after December 15, 2024 and allows for adoption on a prospective basis, with a retrospective option. Early adoption is permitted. We do not expect the adoption of this ASU to have a material impact on our consolidated financial statements.
Current wording
In December 2023, the Financial Accounting Standard Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2023-09,Improvements to Income Tax Disclosures, which requires disclosure of disaggregated income taxes paid, prescribes standard categories for the components of the effective tax rate reconciliation, and modifies other income tax-related disclosures. ASU No. 2023-09 was effective for fiscal years beginning after December 15, 2024 and allowed for adoption on a prospective basis, with a retrospective option. We adopted this ASU on a prospective basis, and it did not have an impact to our consolidated financial statements, but it did result in additional disclosures made in the notes to the consolidated financial statements.
Previous wording
In October 2023, the FASB issued ASU No. 2023-06,*Disclosure Improvements – Codification Amendment in Response to the SEC’s Disclosure Update and Simplification Initiative.*This ASU modified the disclosure and presentation requirements of a variety of codification topics by aligning them with the SEC’s regulations. The amendments to the various topics should be applied prospectively, and the effective date will be determined for each individual disclosure based on the effective date of the SEC’s removal of the related disclosure. If the SEC has not removed the applicable requirements from Regulation S-X or Regulation S-K by June 30, 2027, then this ASU will not become effective. Early adoption is prohibited. The Company does not expect the amendments in this ASU to have a material impact on its consolidated financial statements.
Current wording
In October 2023, the FASB issued ASU No. 2023-06,*Disclosure Improvements – Codification Amendment in Response to the SEC’s Disclosure Update and Simplification Initiative.*This ASU modified the disclosure and presentation requirements of a variety of codification topics by aligning them with the SEC’s regulations. The amendments to the various topics should be applied prospectively, and the effective date will be determined for each individual disclosure based on the effective date of the SEC’s removal of the related disclosure. If the SEC has not removed the applicable requirements from Regulation S-X or Regulation S-K by June 30, 2027, then this ASU will not become effective. Early adoption is prohibited. We do not expect the amendments in this ASU to have a material impact on our consolidated financial statements.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Because we have no further obligations under the agreement with the customer, there is no revenue recognized for the year ended December 31, 2025. For additional information, see Note 4 to the accompanying consolidated financial statements. We have no other revenue generating contracts at this time.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
On August 9, 2024, we and the sublessor entered into a sublease termination agreement pursuant to which the parties agreed to terminate the sublease effective August 31, 2024. Pursuant to the sublease termination agreement, we agreed to surrender and vacate the premises, all of our right, title and interest in all furniture, fixtures and laboratory equipment at the premises will become the property of the sublessor, and both parties will be released of their obligations under the sublease. As a result of the sublease termination, we recognized a gain on lease termination of approximately $1.6 million for the year ended December 31, 2024, and we expect to save approximately $72 million in base rental payments, parking, operating expenses, taxes and utilities that we would have paid over the remaining lease term.