Operating leases

The Company leases office space in San Diego, California, pursuant to a lease agreement that is scheduled to expire on May 31, 2026. The Company has signed a letter of intent to lease new office space in San Diego with a lease commencement date of June 2026 (see Note 18). The Company leased office space in Toronto, Ontario, Canada, which expired on June 30, 2024. The Company has not included any extension periods in calculating its right-of-use assets and lease liabilities. The Company also enters into leases for small office equipment.

To calculate the lease liability, the lease payments in the table below were discounted over the remaining term of the leases using the Company’s incremental borrowing rate as of January 1, 2019 for existing leases at the time of adopting the FASB’s Accounting Standards Codification (“ASC”) No. 842, Leases (“ASC 842”) and for new leases after the adoption of ASC 842, as of the date of the execution date of the new lease.

Retention bonuses

The Company has entered into retention award agreements with its senior leadership team and certain other key employees. In the event of a change in control, subject to the terms of these agreements, retention bonuses will be payable in an aggregate amount of $1.0 million. As the events triggering the retention bonuses are outside the control of the Company and given the level of uncertainty surrounding such a transaction, the expense related to these payments would not be recognized until the event occurs.