8. Leases

At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease and assesses its classification based on the unique facts and circumstances present in the arrangement. The Company leases office and laboratory space and has two manufacturing agreements that have been determined to include embedded leases.

Operating lease commitments

The Company leases office and laboratory space which include rent escalations and are subject to additional variable charges, including common area maintenance, property taxes and property insurance. Given the variable nature of such costs, they are recognized as expense as incurred. Additionally, some of the Company’s leases are subject to certain fixed fees which the Company has determined to be non-lease components. The Company has elected the practical expedient to account for lease and non-lease components as a single-lease component and has included fixed payments related to non-lease components in calculating the operating lease liability.

Finance lease commitments - Embedded leases

As described further in Note 6, in August 2023, and as extended in August 2024, the Company entered into work orders under the Minaris Agreement for Minaris to serve as a cell processing manufacturing partner for the MusCAARTesTM trial and RESETTM clinical trials, for an initial term of 18 months. In February 2026, the Company notified Minaris that it intended to permit the term to expire in August 2026. The terms of the August 2023 work orders included a dedicated suite with fixed costs and contingent variable costs.

As described further in Note 6, in December 2024, the Company entered into the Lonza Agreement with Lonza to serve as one of the Company's cell processing manufacturing partners. Under the initial work order, Lonza will perform cell therapy manufacturing activities for the CAR-T cell therapy product rese-cel for a term of 12 months with the ability to extend the manufacturing period subject to the terms of the Lonza Agreement. The Lonza Agreement was evaluated under ASC 842 and determined to contain an embedded finance lease commencing in March 2025. During the three months ended March 31, 2026, the Company extended the lease term in accordance with the Lonza Agreement resulting in an increase of the right-of-use asset and lease liability of $4,841.

Summary of leases under ASC 842

For finance leases embedded in CDMO arrangements, interest expense is recognized using the effective interest method, applying the Company's incremental borrowing rate as required by ASC 842, and amortization expense is recognized on a straight-line basis over the shorter of the life of the asset or the term of the lease.