DermTech : Accelaration/Increase of Financial Obligation - Form 8-K

Item 2.04 Triggering Events That Accelerate or Increase a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement.

On May 7, 2024, DermTech, Inc. (the "Company") received notice from Kilroy Realty, L.P. (the "Landlord") of a potential event of default under that certain Office Lease, by and between the Landlord and the Company, dated as of July 1, 2023 (as amended, the "Lease") for failure to pay Basic Rent and Additional Rent (as each term is defined in the Lease) in the aggregate amount of $661,706.34 (the "Past Due Rent") by no later than May 8, 2024, the date that is five business days after the date the Past Due Rent was due. As of the date hereof, the Company has not paid the Past Due Rent. The Landlord stated in its notice that it reserves the right to exercise any and all rights and remedies to which it is entitled under the Lease and California law as a result of an event of default, including, but not limited to, immediately filing an action for breach of lease to recover rent as it becomes due, drawing on the $3.5 million letter of credit held by Landlord, clawing back any previously granted rent abatement, and/or terminating the Lease.

The Company is working with the Landlord to come to an amicable resolution. However, no assurance can be given that the parties will reach an amicable resolution on a timely basis, on favorable terms, or at all. If the Company is unable to resolve the purported default under the Lease, it would have a material adverse effect on the Company's liquidity, financial condition and results of operations.