Surgalign Holdings (SRGA) notes as previously reported, on March 12, 2021, the Company entered into a Lease with SNH Medical Office Properties Trust, a Maryland real estate investment trust, to house the Company’s offices, lab and innovation space in San Diego, California. The material terms of the Lease were included in Item 1.01 of the Current Report on Form 8-K filed with the Securities and Exchange Commission on March 18, 2021, which is incorporated by reference herein. The description of the Lease incorporated by reference is not complete and qualified in its entirety by the Lease, a copy of which was filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2021. The Lease has yet to commence.
On May 12, 2023, the Landlord sent a Notice of Repudiation and Termination to the Company. The Notice provides that the Landlord terminated the Lease because of the Company’s alleged failure to perform its obligations under the Lease. In connection with the Notice, on May 18, 2023, the Landlord applied the Company’s entire $2.5 million security deposit against purported damages caused by the Company’s alleged breaches.
The Company disagrees with the Landlord’s termination, allegations and other actions taken and believes that the Landlord is in breach of certain of its materials obligations under the Lease. The Company intends to defend itself vigorously and will pursue all legal remedies available under applicable laws.
The Company believes that it will continue to meet is operational needs with its other facilities.
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