IMDX

Business Context and Reporting Period

Company: Insight Molecular Diagnostics Inc. (IMDX), formerly Oncocyte Corporation.
Reporting Period: Quarter and six months ended June 30, 2026.
Business Overview: iMDx is a diagnostics technology company focused on organ transplant testing (GraftAssure family) and oncology. The company operates a CLIA-certified laboratory in Franklin, Tennessee, and R&D labs in Nashville, Tennessee, and Göttingen, Germany. In June 2025, the company changed its name and moved its headquarters to Nashville. A key strategic partnership with Bio-Rad Laboratories, Inc. governs the development and commercialization of kitted transplant products.

Key Financial Metrics

Note: Revenue is primarily derived from Laboratory Services ($218k for Q2; $250k for YTD) and Kitted Products ($21k for Q2; $21k for YTD). Gross margin for the six months ended June 30, 2026, was approximately 63% ($172k gross profit on $271k revenue).

Material Changes vs. Prior Period

• Revenue Decline: Net revenue decreased 54% year-over-year for the quarter (from $518k to $239k) and 90% for the six-month period (from $2.656M to $271k). This is attributed to a strategic shift away from Laboratory Services toward commercializing transplant kitted tests.
• Operating Expenses:
  • R&D: Increased 37% for the quarter and 52% for the six months, driven by clinical trial fees, laboratory costs, and personnel expenses related to GraftAssure development.
  • Sales & Marketing: Increased 31% for the quarter and 62% for the six months, reflecting ramp-up activities for the transplant business.
• Contingent Consideration: The change in fair value of contingent consideration resulted in a loss of $2.3M for the quarter but a gain of $3.6M for the six months ended June 30, 2026, compared to a loss of $3.7M in the prior year six-month period. This volatility is due to revised estimates of future payouts related to the IGI and Chronix acquisitions.
• Liquidity: Cash and cash equivalents increased from $11.6M (Dec 31, 2025) to $17.8M (June 30, 2026), bolstered by a February 2026 registered direct offering.

Guidance, Outlook, and Risks

• Capital Raise: On February 12, 2026, the company completed a registered direct offering raising approximately $26.0M gross ($24.6M net). Proceeds are designated for general corporate purposes and R&D in the transplantation category, specifically expanding GraftAssure beyond kidney to heart transplant testing.
• Regulatory Progress: On March 25, 2026, iMDx submitted a data package to the FDA seeking marketing authorization for GraftAssureDx (IVD kit). The company reports productive dialogue with the FDA.
• Reimbursement: On July 16, 2026, the MolDx program revised its Local Coverage Determination (LCD) to support expanded coverage for dd-cfDNA testing, including surveillance coverage, which aligns with iMDx's strategy.
• Going Concern: The company has incurred operating losses since inception with an accumulated deficit of $416.3M. While management believes current cash and the recent offering provide sufficient liquidity for the next 12 months, the company expects to continue incurring losses and negative operating cash flows. Substantial doubt regarding going concern was raised but mitigated by management's plans to reduce cash outflows and secure financing.
• Risks: Key risks include dependency on Bio-Rad for commercialization, uncertainty in obtaining/maintaining Medicare reimbursement, and the need for additional capital to fund operations and contingent consideration obligations.

Investor Verification Checklist

• Capital Runway: Verify the sufficiency of the $17.8M cash balance against the projected burn rate, given the expectation of continued operating losses.
• Contingent Consideration: Review the $40.2M liability for contingent consideration (primarily from Chronix acquisition) and the assumptions used to value it, as changes in fair value significantly impact net income.
• Revenue Concentration: Note that one customer represented approximately 89% of accounts receivable as of June 30, 2026, and 91% of revenue for the quarter.
• Bio-Rad Dependency: Assess the impact of the strategic partnership with Bio-Rad, which is a significant investor and the exclusive supplier of instruments/reagents for the kitted products.
• Regulatory Timeline: Monitor the status of the FDA marketing authorization for GraftAssureDx, which is critical for the commercialization of the kitted product strategy.