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Commitments and Contingencies | 3 Months Ended
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Mar. 31, 2026
Commitments and Contingencies Disclosure [Abstract] |
Commitments and Contingencies | 6. Commitments and Contingencies Office and Facilities Leases Irvine Office Lease On December 23, 2019, iMDx and Cushing Ventures, LLC (“Landlord”) entered into an Office Lease Agreement (the “Irvine Lease”) of a building containing approximately 26,800 square feet of rentable space located at 15 Cushing in Irvine, California (the “Premises”) that served as iMDx’s principal executive and administrative offices until June 2025 (see “Nashville Office and Facilities Leases” below). The Irvine Lease has a term of 89 calendar months (the “Term”), which commenced on June 1, 2020 (the “Commencement Date”) and will end on October 31, 2027. iMDx agreed to pay base monthly rent in the amount of $61,640 during the first 12 months of the Term. Base monthly rent increases annually, over the base monthly rent then in effect, by 3.5%. In June 2025, in connection with the Subtenant's (as defined below under the caption "Irvine Office Sublease") full usage of, and iMDx's exit of, the Premises, iMDx performed a recoverability test of the remaining lease related assets. Such lease asset group carrying amount was compared to the total undiscounted future expected cash flows from the sublease income, which resulted in no impairment. Effective as of January 2, 2025, iMDx, Landlord and Subtenant (defined below) entered into an amendment to the Irvine Lease, dated December 26, 2024 (the “Amendment”). Pursuant to the terms of the Amendment, among other things: (a) iMDx and Subtenant agreed that all rights to extend the Term of the Irvine Lease for a period of five years were terminated, and (b) Landlord and iMDx agreed that, provided iMDx is not in default under any of the terms and conditions of the Irvine Lease that is continuing beyond any and all applicable notice and cure periods, then, commencing on July 1, 2025 and continuing on the first day of each calendar month thereafter, the provided letter of credit (as further discussed below) in the amount of $1.7 million (the “Letter of Credit Amount”) shall be reduced by an amount equal to $60,714.29 on each such date, until the Letter of Credit Amount is fully reduced, after which the letter of credit shall be deemed to have been terminated and iMDx shall have no further obligation to maintain or deliver the letter of credit under the Irvine Lease. The new Letter of Credit Amount will correspond to the Company’s restricted cash on the accompanying consolidated balance sheet and the reductions in the Letter of Credit Amount would correspondingly reduce the associated amount of such restricted cash. In addition to base monthly rent, iMDx agreed to pay in monthly installments (a) all costs and expenses, other than certain excluded expenses, incurred by the lessor in each calendar year in connection with operating, maintaining, repairing (including replacements if repairs are not feasible or would not be effective) and managing the Premises and the building in which the Premises are located (“Expenses”), and (b) all real estate taxes and assessments on the Premises and the building in which the Premises are located, all personal property taxes for property that is owned by lessor and used in connection with the operation, maintenance and repair of the Premises, and costs and fees incurred in connection with seeking reductions in such tax liabilities (“Taxes”). Subject to certain exceptions, Expenses shall not be increased by more than 4% annually on a cumulative, compounded basis. iMDx was entitled to an abatement of its obligations to pay Expenses and Taxes while constructing improvements to the Premises constituting “Tenant’s Work” under the Irvine Lease prior to the Commencement Date, except that iMDx was obligated to pay 43.7% of Expenses and Taxes during the period prior to the Commencement Date for its use of the second floor of the Premises, which was already built out as office space. The lessor provided iMDx with a “Tenant Improvement Allowance” in the amount of $1.3 million to pay for the plan, design, permitting, and construction of the improvements constituting Tenant’s Work. The lessor retained 1.5% of the Tenant Improvement Allowance as an administrative fee as provided in the Irvine Lease. As of June 2021, the lessor had provided $1.3 million of the total Tenant Improvement Allowance, which is being amortized over the Term. iMDx provided the lessor with a security deposit in the amount of $150,000 and a letter of credit in the initial amount of $1.7 million. The lessor may apply the security deposit, in whole or in part, for the payment of rent and any other amount that iMDx is or becomes obligated to pay under the Irvine Lease but fails to pay when due and beyond any cure period. The lessor may draw on the letter of credit from time to time to pay any amount that is unpaid and due, or if the original issuing bank notifies the lessor that the letter of credit will not be renewed or extended for the period required under the Irvine Lease and iMDx fails to timely provide a replacement letter of credit, or an “event of default” under the Irvine Lease occurs and continues beyond the applicable cure period, or if certain instances of insolvency or bankruptcy with respect to iMDx occur. iMDx is required to restore any portion of the security deposit that is applied by the lessor to payments due under the Irvine Lease, and iMDx is required to restore the amount available under the letter of credit to the required amount if any portion of the letter of credit is drawn by the lessor. The Letter of Credit Amount shall be reduced as described in the Amendment above. To obtain the letter of credit, iMDx has provided the issuing bank with a restricted cash deposit that the bank will hold to cover its obligation to pay any draws on the letter of credit by the lessor. The restricted cash may not be used for any other purpose. Corresponding to the Letter of Credit Amount, iMDx has reflected $1.2 million as the total remaining current and noncurrent restricted cash balances in the accompanying consolidated balance sheet as of March 31, 2026. The total restricted cash balance in the accompanying consolidated balance sheet as of December 31, 2025 was $1.3 million. Irvine Office Sublease On August 8, 2023, iMDx and Induce Biologics USA, Inc. (“Subtenant”) entered into a Sublease Agreement (the “Sublease Agreement”), which subsequently became effective as of September 14, 2023, upon the execution and delivery by the Company, Subtenant, and Landlord, of that certain Landlord’s Consent to Sublease dated September 12, 2023 (the “Consent Agreement”), under which Landlord consented to the Sublease Agreement, on the terms and subject to the conditions set forth therein. The Sublease Agreement is subject and subordinate to the Irvine Lease. Under the Sublease Agreement, the Company agreed to initially sublet to Subtenant a portion of the Premises consisting of approximately 13,400 square feet of rentable space for a term (the “Initial Period”) commencing on the date that is 120 days after the effective date of the Consent Agreement (the “Sublease Commencement Date”) and ending on the date that is 18 months following the Sublease Commencement Date (June 20, 2025, the date on which the Initial Period ends, and the “Expansion Date”). On the Expansion Date, the portion of the Premises that is subleased to Subtenant under the Sublease Agreemen t automatically in creased to include the remaining portion of the Premises, which consists of approximately 13,400 square feet of additional rentable space for a term (the “Expansion Period”) beginning on the Expansion Date through the expiration of the Irvine Lease on October 31, 2027, unless earlier terminated. The Sublease Agreement provides that, from and after the Sublease Commencement Date, Subtenant will pay to the Company monthly base rent in the following amounts: (i) $36,850 for rental periods beginning on the Sublease Commencement Date and ending on or before December 31, 2024; (ii) $37,955 for rental periods beginning on or after January 1, 2025 and ending on or before June 20, 2025; (iii) $75,844 for rental periods beginning on or after July 1, 2025 and ending on or before December 31, 2025; (iv) $78,188 for rental periods beginning on or after January 1, 2026 and ending on or before December 31, 2026; and (v) $80,534 for rental periods beginning on or after January 1, 2027 and ending on or before October 31, 2027. Following the Sublease Commencement Date, Subtenant is responsible for the payment of Additional Rent, including Expenses and Taxes (as each such term is defined in the Irvine Lease), provided that, with respect to the Initial Period, Subtenant was responsible for only 50% of the Expenses and Taxes due. In addition, Subtenant paid the Company a security deposit in the amount of $101,987 in connection with the transactions contemplated by the Sublease Agreement. The Sublease Agreement contains customary provisions with respect to, among other things, Subtenant’s obligation to comply with the Irvine Lease and applicable laws, the payment of utilities and similar services utilized by Subtenant with respect its use of the Premises, the indemnification of the Company by Subtenant, and the right of the Company to terminate the Sublease Agreement in its entirety and retake the Premises if Subtenant fails to remedy certain defaults of its obligations under the Sublease Agreement within specified time periods. Nashville Office and Facilities Leases iMDx operates a CLIA-certified laboratory and office space located in the Nashville, Tennessee area under multiple lease arrangements. Since June 2025, iMDx's Nashville location also serves as our principal executive and administrative offices. iMDx maintains an aggregate of 12,881 square feet of rentable space in the Nashville area. Lab spa ce represents approximately 6,586 square feet of the total rentable space in the Nashville area. In January 2024, iMDx renewed its existing leases and added a new lease agreement to expand its Nashville area office space. The new lease agreements each have an initial term of 36 months, which commenced on January 1, 2024 and will end in January 2027. iMDx has the option to renew the term of each lease for four additional one year periods. iMDx agreed to pay an aggregate base monthly rent in the amount of $22,252 during the first 12 months of the term. Base monthly rent increases annually, over the base monthly rent then in effect, by approximately 3.0%. In September 2025, iMDx added a new lease agreement to expand its Nashville area laboratory and office space. The new lease agreement has an initial term of 36 months, which commenced on October 1, 2025 and will end in September 2028. iMDx has the option to renew or extend the term upon request. iMDx agreed to pay a base monthly rent in the amount of $6,200 during the first 24 months of the term, and $6,700 per month thereafter. Germany Office and Facilities Leases iMDx operates a research and development laboratory and office space located in Göttingen, Germany. In August 2025, iMDx added a new lease agreement to expand our Germany laboratory and office space. With the new lease, iMDx maintains an aggregate of 3,455 square feet of rentable space in Germany. Lab space represents approximately 2,077 square feet of the total rentable space in Germany. The new lease agreement has an initial term of 60 months, which commenced on October 1, 2025 and will end in September 2030. iMDx has the option to renew the term for two additional three year periods. iMDx agreed to pay an aggregate base monthly rent in the approximate amount of $7,158 over the full 60 month term. Base rent may increase or decrease based the German consumer price index annual rate of change. Any adjustments to the base rent in subsequent years will be recognized in operations as variable lease payments. The office and facilities leases discussed above are operating leases under ASC 842. The tables below provide the amounts recorded in connection with the application of ASC 842 for iMDx’s operating leases (see Note 2, “Leases” for additional policy information). Financing Leases iMDx has various financing leases for certain laboratory and other equipment. iMDx’s financing lease obligations are collateralized by the equipment financed under the lease schedules. The tables below provide the amounts recorded in connection with the application of ASC 842 for iMDx’s financing leases (see Note 2, “Leases” for additional policy information). In August 2025, iMDx entered into a lease line agreement to provide equipment leasing in the aggregate amount of $2.5 million during an availability period that expires on June 30, 2026. iMDx paid a commitment fee of $25,000. All costs relating to the installation, freight, training, insurance, appraisals and any other cost related to the acquisition, installation or operation of the leased equipment will be paid directly by iMDx. The minimum requirement for each lease schedule is $50,000. The lease line amount includes three options: (i) international equipment up to $500,000; (ii) sale and leaseback up to $1.0 million, whereby a liquidation value, based on a third-party appraiser of lessor’s choice, of the equipment will be utilized for the capitalized cost; both (i) and (ii) have an initial term of 24 months and a monthly rental factor of .0471; and (iii) new equipment up to $1.0 million with an initial term of 36 months and a monthly rental factor of .033. Actual monthly rentals will be determined by multiplying the original equipment capitalized cost by the applicable monthly rental factor, plus any monthly maintenance charges. At the end of an initial term, iMDx may return the equipment, exercise a purchase option, or extend for an additional 12 months at a monthly rental factor of .0175, plus any monthly maintenance charges. Currently, iMDx has not executed any lease schedules under the lease line agreement. Operating and Financing Leases The following table presents supplemental balance sheet information related to operating and financing leases:
|  | March 31, 2026 |  |  | December 31, 2025 |
|  | (In thousands) |
Operating leases |  |  |  |  |  |
ROU assets, net |  | $ | 1,506 |  |  | $ | 1,707 |
Lease liabilities, current |  | $ | 1,143 |  |  | $ | 1,180 |
Lease liabilities, noncurrent |  |  | 829 |  |  |  | 1,079 |
Total operating lease liabilities |  | $ | 1,972 |  |  | $ | 2,259 |
Financing leases |  |  |  |  |  |
ROU machinery and equipment |  | $ | 1,980 |  |  | $ | 1,980 |
ROU accumulated amortization |  |  | (1,027 | ) |  |  | (872 | )
ROU machinery and equipment, net |  | $ | 953 |  |  | $ | 1,108 |
Lease liabilities, current |  | $ | 541 |  |  | $ | 551 |
Lease liabilities, noncurrent |  |  | 376 |  |  |  | 509 |
Total financing lease liabilities |  | $ | 917 |  |  | $ | 1,060 |
Weighted average remaining lease term: |  |  |  |  |  |
Operating lease |  | 2.0 years |  |  | 2.2 years |
Financing lease |  | 2.0 years |  |  | 2.0 years |
Weighted average discount rate: |  |  |  |  |  |
Operating lease |  |  | 9.58 | % |  |  | 9.59 | %
Financing lease |  |  | 7.97 | % |  |  | 7.97 | %
Future minimum lease commitments are as follows:
|  | Operating |  |  | Financing |
|  | Leases |  |  | Leases |
|  | (In thousands) |
Year Ending December 31, |  |  |  |  |  |
2026 |  | $ | 1,011 |  |  | $ | 445 |
2027 |  |  | 855 |  |  |  | 404 |
2028 |  |  | 144 |  |  |  | 116 |
2029 |  |  | 84 |  |  |  | 5 |
2030 |  |  | 63 |  |  |  | — |
Total minimum lease payments |  |  | 2,157 |  |  |  | 970 |
Less amounts representing interest |  |  | (185 | ) |  |  | (53 | )
Present value of net minimum lease payments |  | $ | 1,972 |  |  | $ | 917 |
The following table presents supplemental cash flow information related to operating and financing leases:
|  | Three Months Ended March 31, |
|  | 2026 |  |  | 2025 |
|  | (In thousands) |
Cash paid for amounts included in the measurement of lease liabilities: |  |  |  |  |  |
Operating cash flows from operating leases |  | $ | 330 |  |  | $ | 281 |
Operating cash flows from financing leases |  | $ | 19 |  |  | $ | 24 |
Financing cash flows from financing leases |  | $ | 143 |  |  | $ | 98 |
The Company incurred total operating lease cost, including short-term lease expense, of $43,000 and $138,000, which was net of sublease income of $235,000 and $114,000, for the three months ended March 31, 2026 and 2025, respectively. Financing lease amortization expense amounted to $155,000 and $110,000 for the three months ended March 31, 2026 and 2025, respectively. Litigation – General iMDx may be subject to various claims and contingencies in the ordinary course of its business, including those related to litigation, business transactions, employee-related matters, and other matters. When iMDx is aware of a claim or potential claim, it assesses the likelihood of any loss or exposure. If it is probable that a loss will result and the amount of the loss can be reasonably estimated, iMDx will record a liability for the loss. If the loss is not probable or the amount of the loss cannot be reasonably estimated, iMDx discloses the claim if the likelihood of a potential loss is reasonably possible and the amount involved could be material. Tax Filings iMDx tax filings are subject to audit by taxing authorities in jurisdictions where it conducts business. These audits may result in assessments of additional taxes that are subsequently resolved with the authorities or potentially through the courts. Management believes iMDx has adequately provided for any ultimate amounts that are likely to result from these audits; however, final assessments, if any, could be significantly different than the amounts recorded in the consolidated financial statements. See Note 2, “Income Taxes” for additional information. Employment Contracts iMDx has entered into employment and severance benefit contracts with certain executive officers. Under the provisions of the contracts, iMDx may be required to incur severance obligations for matters relating to changes in control, as defined in the respective contracts, and certain terminations of executives. As of March 31, 2026 and December 31, 2025, iMDx accrued approximately $2.3 million, in severance obligations for certain executive officers, in accordance with the severance benefit provisions of their respective employment and severance benefit agreements, primarily related to iMDx’s acquisition of Chronix in 2021. For the periods presented, management has included $2.3 million of the accrued severance obligations related to the Chronix acquisition as contingent consideration in the consolidated balance sheets under contingent consideration liabilities, current and noncurrent. See Note 3, “Business Combinations and Contingent Consideration – Acquisition of Chronix” for additional information. Indemnification In the normal course of business, iMDx may provide indemnification of varying scope under iMDx’s agreements with other companies or consultants, typically iMDx’s clinical research organizations, investigators, clinical sites, suppliers and others. Pursuant to these agreements, iMDx will generally agree to indemnify, hold harmless, and reimburse the indemnified parties for losses and expenses suffered or incurred by the indemnified parties arising from claims of third parties in connection with the use or testing of iMDx’s diagnostic tests. Indemnification provisions could also cover third party infringement claims with respect to patent rights, copyrights, or other intellectual property pertaining to iMDx’s diagnostic tests. iMDx’s office and laboratory facility leases also will generally contain indemnification obligations, including obligations for indemnification of the lessor for environmental law matters and injuries to persons or property of others, arising from iMDx’s use or occupancy of the leased property. The term of these indemnification agreements will generally continue in effect after the termination or expiration of the particular research, development, services, lease, or license agreement to which they relate. iMDx periodically enters into underwriting and securities sales agreements with broker-dealers in connection with the offer and sale of iMDx securities. The terms of those underwriting and securities sales agreements include indemnification provisions pursuant to which iMDx agrees to indemnify the broker-dealers from certain liabilities, including liabilities arising under the Securities Act of 1933, as amended (the “Securities Act”), in connection with the offer and sale of iMDx securities. The potential future payments iMDx could be required to make under these indemnification agreements will generally not be subject to any specified maximum amounts. Historically, iMDx has not been subject to any claims or demands for indemnification. iMDx also maintains various liability insurance policies that limit iMDx’s financial exposure. As a result, iMDx management believes that the fair value of these indemnification agreements is minimal. Accordingly, iMDx has not recorded any liabilities for these agreements as of March 31, 2026 and December 31, 2025. The Razor Stock Purchase Agreement (see Note 2, “Investments in Privately Held Companies”) also contains provisions under which iMDx has agreed to indemnify Razor and Encore Clinical, Inc., a former stockholder of Razor, from losses and expenses resulting from breaches or inaccuracy of iMDx’s representations and warranties and breaches or nonfulfillment of iMDx’s covenants, agreements, and obligations under the Razor Stock Purchase Agreement.

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