NOTE 9 – LEASES

The Company leases space under operating leases for administrative, manufacturing and laboratory facilities in Cleveland, Ohio. The Company leased office space in New York, New York, which the Company sublet. The lease for office space in New York, New York terminated in September 2025, which was the end of the lease term. The Company also leases certain office equipment under operating leases, which have a non-cancelable lease term of less than one year and the Company has elected the practical expedient to exclude these short-term leases from the Company’s right-of-use assets and lease liabilities.

During 2024, the Company signed a lease for 16,566 square feet of office space at 6700 Euclid Avenue, Cleveland, Ohio. Pursuant to the lease agreement, the lease term commences on January 1, 2025, with an initial term through December 30, 2030. Annual lease payments during the term of the lease are approximately $0.3 million. The total lease payments over the duration of the lease term are approximately $1.5 million. The impact of this lease agreement was to increase the Company’s operating right-of-use lease assets and operating lease liabilities by $1.0 million on January 1, 2025.

During 2022 and 2023, the Company entered into two sublease agreements with unrelated third parties to occupy the Company’s administrative offices in New York, New York. The sublease agreements terminated in September 2025 at the same time the Company’s lease terminated.

The following table provides a summary of the Company’s operating lease liabilities (in thousands):

SUMMARY OF OPERATING LEASE LIABILITIES

Lease costs and rent are reflected in selling, general and administrative expenses and research and development expenses in the consolidated statements of operations and comprehensive income (loss), as determined by the underlying activities.

The following table provides a summary of the components of lease costs and rent (in thousands):

SCHEDULE OF COMPONENTS OF LEASE COST

Cash paid for amounts included in the measurement of operating lease liabilities was $1.7 million and $1.3 million for the years ended December 31, 2025 and 2024, respectively. Cash received as part of tenet leasehold improvement allowance was $0.7 million for the year ended December 31, 2025. There was no cash received for the year ended December 31, 2024.

Future minimum lease payments and obligations, which do not include short-term leases, related to the Company’s operating lease liabilities as of December 31, 2025 were as follows (in thousands):

SCHEDULE OF MATURITIES OF OPERATING LEASE LIABILITIES

The weighted-average remaining term of the Company’s operating leases was 60 months, and the weighted-average discount rate used to measure the present value of the Company’s operating lease liabilities was 8.7% as of December 31, 2025.

The Company received $0.4 million and $0.6 million during the years ended December 31, 2025 and 2024, respectively, of sublease income which is recorded in other income, net on the consolidated statements of operations and comprehensive income (loss). The sublease ended on September 30, 2025, and there are no future cash receipts.