Note 9 – Leases

The Company has various lease agreements including leases of office space, a laboratory and manufacturing facility, and various equipment. Some leases include purchase, termination or extension options for one or more years. These options will be included in the lease term when it is reasonably certain that the option will be exercised. Certain of the Company’s lease agreements contain rent escalation clauses.

Operating and finance leases are presented in the Company’s consolidated balance sheets as right-of-use assets from leases, current lease liabilities and long-term lease liabilities. The assets and liabilities from our leases are recognized at the lease commencement date based on the present value of remaining lease payments over the lease term using the Company’s incremental borrowing rates or implicit rates, when readily determinable. Short-term leases, which have an initial term of 12 months or less, are not recorded on the balance sheet. As the Company’s operating leases do not provide implicit rates, the Company has utilized its incremental borrowing rate, determined based on the long-term borrowing costs of companies with similar credit profiles, to record its lease obligations. The Company’s finance leases provide readily determinable implicit rates. For operating leases, the Company recognizes the minimum rental expense on a straight-line basis based on the fixed components of a lease arrangement. The Company will amortize this expense over the term of the lease beginning with the lease commencement date.

Operating lease obligations

On November 1, 2013, the Company entered into a 7-year lease for office space in Bedminster, New Jersey which commenced in June 2014 at a monthly rent of approximately $13, increasing to approximately $14 toward the end of the term. The lease was subsequently amended on September 13, 2022 to provide additional space and to extend the term of the lease until June 30, 2029 at a monthly rent of approximately of approximately $20, increasing to approximately $23 toward the end of the term. On October 3, 2025, the Bedminster lease was amended to decrease the lease term to 15 months, beginning in October 2025 and ending December 31, 2026. The amendment included a one-time payment of $323 in full satisfaction of the Company’s rental obligations through the end of the amended term date. The lease amendment also included a provision which provided the landlord the right to relocate the Company to mutually acceptable space within the building. In November 2025, the Company was moved to another space in the building which is approximately 500 square feet and approximately 94% less space than the prior leased office space. The decrease in office space generated a right-of-use asset write-off of $207. This partial lease termination resulting in the recognition of the loss in the amount of $241 in the accompanying consolidated statement of operation and comprehensive loss. There is no renewal option, no security deposit, no residual value or significant restrictions or covenants other than those customary in such arrangements. Except as expressly provided, all other terms, covenants, conditions and agreements as set forth in the lease will remain unchanged and in full force and effect.

On December 15, 2016, the Company entered into a 10-year, 3-month lease of laboratory and manufacturing space in Bridgewater, New Jersey. The lease began August 2017. The monthly rent started at approximately $43, increasing to approximately $64 in the final year. To obtain the lease, the Company provided an initial security deposit of $586 which was subsequently reduced and is currently $200 at December 31, 2025. The Bridgewater lease is currently in dispute, please see Bridgewater lease proceedings in Note: 11- Commitments and Contingencies.

The Company incurred lease expense for its operating leases of $634 and $902 for the years ended December 31, 2025 and 2024, respectively. The Company incurred amortization expense on its operating lease right-of-use assets of $420 and $602 for the years ended December 31, 2025 and 2024, respectively.

Finance Leases

The Company incurred interest expense on its finance leases of $1 and $2 for the years ended December 31, 2025 and 2024, respectively. The Company incurred amortization expense on its finance lease right-of-use assets of $4 and $5 for the years ended December 31, 2025 and 2024, respectively.

The following table presents information about the amount and timing of liabilities arising from the Company’s operating leases and finance leases as of December 31, 2025:

 Schedule of Maturity of Operating and Finance Leases Liabilities

The following table presents information about the amount and timing of liabilities arising from the Company’s operating leases and finance leases as of December 31, 2024:

Impairment of right-of-use assets

During the fourth quarter of 2024, the Company determined that the net book value of Bridgewater facility lease right-of-use asset might not be recoverable, primarily due to the terminated partnership negotiations for the future development and commercialization of MAT2203 and subsequent cost-cutting measures. The Company conducted a recoverability test by comparing the projected undiscounted future cash flows associated with the right-of-use asset to its carrying amount and concluded that an impairment charge must be recognized. The charge was subsequently determined based on the excess of the carrying amount of the asset over its estimated fair value. The Company recorded impairment charges related to its Bridgewater facility lease right-of-use asset of $782, and a related finance lease of right-of-use asset of $8. The lease impairment charges were included in the impairment charges of other assets line in the consolidated statement of operations and comprehensive loss for the year ended December 31, 2024.

During 2025, the Company endeavoured to secure a sub-tenant for the Bridgewater facility. In the third quarter of 2025, the Company determined, due to the passage of time without securing a sub-tenant, the carrying amount of the Bridgewater facility lease right of use asset might not be recoverable. The Company performed a recoverability test by comparing the projected undiscounted future cash flows associated with the right-of-use asset to its carrying amount and concluded that the carrying amount was recoverable. The Company also assessed the asset for impairment in the fourth quarters of 2025 and concluded there were no events or circumstances where Bridgewater facility right of use asset was not recoverable. Accordingly, the Company did not record an impairment charge during the fourth quarter of 2025.