Leases
Operating Leases
The Company leases certain office space under non-cancelable operating leases. The New York City office lease terminates on July 31, 2026, the lease for the research laboratory in Planegg, Germany terminates on November 30, 2028. The lease term has expired for the Gräfelfing, Germany office, however, the Company is currently operating on a one-year monthly rolling lease and the Company needs to provide one-years notice to terminate the lease. Renewal options were not included in calculating the right of use asset and liabilities for this facility. These agreements include both lease (e.g., fixed rent) and non-lease components (e.g., common-area and other maintenance costs). The non-lease components are deemed to be executory costs and are therefore excluded from the minimum lease payments used to determine the present value of the operating lease obligation and related right-of-use asset. The New York City lease was extended on November 8, 2024 for an additional 12 months resulting in the new lease termination date of July 31, 2026. The New York City lease has a renewal option, but this was not included in calculating the right of use asset and liabilities. In February 2023, the Company leased space in Germany for a research laboratory. The leases do not have concessions, leasehold improvement incentives or other build-out clauses. Further, the leases do not contain contingent rent provisions. There were net additions of $448,000 related to the extension of the New York City lease and Gräfelfing offices during the year ended December 31, 2024.
The leases do not provide an implicit rate and, due to the lack of a commercially salable product, the Company is generally considered unable to obtain commercial credit. Therefore, the Company estimated its incremental interest rate to be 6% for the original leases and 8% for the New York City extension and German laboratory, considering the quoted rates for the lowest investment-grade debt. Immunic used its estimated incremental borrowing rate and other information available at the lease commencement date in determining the present value of the lease payments.
Immunic’s operating lease costs and variable lease costs were $1.3 million and $1.1 million for the years ended December 31, 2025 and 2024, respectively. Variable lease costs consist primarily of common area maintenance costs, insurance and taxes which are paid based upon actual costs incurred by the lessor.
Maturities of the operating lease obligation are as follows as of December 31, 2025 (in thousands): | | | | | | | | |
| 2026 | | $ | 428 | |
| 2027 | | $ | 87 | |
| 2028 | | $ | 84 | |
| 2029 | | $ | — | |
| 2030 | | $ | — | |
| Thereafter | | $ | — | |
| Total lease payments | | $ | 599 | |
| Less: interest portion | | $ | (22) | |
| Present value of lease obligation | | $ | 577 | |
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.