Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Nov. 09, 2018 | |
Document And Entity Information | ||
Entity Registrant Name | Interpace Diagnostics Group, Inc. | |
Entity Central Index Key | 1,054,102 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business Flag | true | |
Entity Emerging Growth Company | false | |
Entity Ex Transition Period | false | |
Entity Common Stock, Shares Outstanding | 28,594,275 | |
Trading Symbol | IDXG | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,018 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 8,002 | $ 15,199 |
Accounts receivable, net | 8,640 | 3,437 |
Other current assets | 1,603 | 1,172 |
Total current assets | 18,245 | 19,808 |
Property and equipment, net | 859 | 654 |
Other intangible assets, net | 30,666 | 33,105 |
Other long-term assets | 31 | 31 |
Total assets | 49,801 | 53,598 |
Current liabilities: | ||
Accounts payable | 1,065 | 391 |
Accrued salaries and bonus | 1,146 | 1,394 |
Other accrued expenses | 4,652 | 5,004 |
Current liabilities from discontinued operations | 899 | 1,302 |
Total current liabilities | 7,762 | 8,091 |
Contingent consideration | 1,280 | 1,349 |
Other long-term liabilities | 4,730 | 4,289 |
Total liabilities | 13,772 | 13,729 |
Commitments and contingencies (Note 6) | ||
Stockholders' equity: | ||
Preferred stock, $.01 par value; 5,000,000 shares authorized, no shares issued and outstanding | ||
Common stock, $.01 par value; 100,000,000 shares authorized; 28,367,344 and 27,900,806 shares issued, respectively; 28,294,275 and 27,836,456 shares outstanding, respectively | 283 | 278 |
Additional paid-in capital | 174,878 | 173,062 |
Accumulated deficit | (137,452) | (131,800) |
Treasury stock, at cost (73,069 and 64,350 shares, respectively) | (1,680) | (1,671) |
Total stockholders' equity | 36,029 | 39,869 |
Total liabilities and stockholders' equity | $ 49,801 | $ 53,598 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ .01 | $ .01 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 28,367,344 | 27,900,806 |
Common stock, shares outstanding | 28,294,275 | 27,836,456 |
Treasury stock, shares | 73,069 | 64,350 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Income Statement [Abstract] | ||||
Revenue, net | $ 5,753 | $ 4,202 | $ 16,062 | $ 11,527 |
Cost of revenue (excluding amortization of $813 and $813 for the three months and $2,439 and $2,439 for the nine months, respectively) | 2,763 | 2,069 | 7,590 | 5,719 |
Gross profit | 2,990 | 2,133 | 8,472 | 5,808 |
Operating expenses: | ||||
Sales and marketing | 2,048 | 1,816 | 6,135 | 4,507 |
Research and development | 510 | 483 | 1,528 | 1,202 |
General and administrative | 2,084 | 2,116 | 5,981 | 6,431 |
Amortization expense | 813 | 813 | 2,439 | 2,439 |
Change in fair value of contingent consideration | (5,776) | |||
Total operating expenses | 5,455 | 5,228 | 16,083 | 8,803 |
Operating loss | (2,465) | (3,095) | (7,611) | (2,995) |
Interest expense | (248) | (40) | (248) | (433) |
Loss on extinguishment of debt | (4,278) | |||
Other expense, net | (288) | (294) | (143) | (414) |
Loss from continuing operations before tax | (3,001) | (3,429) | (8,002) | (8,120) |
Provision (benefit) for income taxes | 7 | (42) | 21 | (340) |
Loss from continuing operations | (3,008) | (3,387) | (8,023) | (7,780) |
(Loss) income from discontinued operations, net of tax | (34) | 71 | (129) | 572 |
Net loss | $ (3,042) | $ (3,316) | $ (8,152) | $ (7,208) |
Basic (loss) income per share of common stock: | ||||
From continuing operations | $ (0.11) | $ (0.15) | $ (0.29) | $ (0.65) |
From discontinued operations | 0 | 0 | 0 | 0.05 |
Net loss per basic share of common stock | (0.11) | (0.15) | (0.29) | (0.60) |
Diluted (loss) income per share of common stock: | ||||
From continuing operations | (0.11) | (0.15) | (0.29) | (0.65) |
From discontinued operations | 0 | 0 | 0 | 0.05 |
Net loss per diluted share of common stock | $ (0.11) | $ (0.15) | $ (0.29) | $ (0.60) |
Weighted average number of common shares and common share equivalents outstanding: | ||||
Basic | 28,215,000 | 22,028,000 | 28,002,000 | 12,022,000 |
Diluted | 28,215,000 | 22,028,000 | 28,002,000 | 12,022,000 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Operations (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Income Statement [Abstract] | ||||
Cost of revenue, amortization | $ 813 | $ 813 | $ 2,439 | $ 2,439 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - 9 months ended Sep. 30, 2018 - USD ($) $ in Thousands | Common Stock [Member] | Treasury Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Total |
Balance at Dec. 31, 2017 | $ 278 | $ (1,671) | $ 173,062 | $ (131,800) | $ 39,869 |
Balance, shares at Dec. 31, 2017 | 27,901,000 | 64,000 | |||
Common stock issued | $ 5 | 426 | 431 | ||
Common stock issued, shares | 466,000 | ||||
Treasury stock purchased | $ (9) | (9) | |||
Treasury stock purchased, shares | 9,000 | ||||
Stock-based compensation expense | 1,390 | 1,390 | |||
Net loss | (8,152) | (8,152) | |||
Adoption of ASC 606 | 2,500 | 2,500 | |||
Balance at Sep. 30, 2018 | $ 283 | $ (1,680) | $ 174,878 | $ (137,452) | $ 36,029 |
Balance, shares at Sep. 30, 2018 | 28,367,000 | 73,000 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Cash Flows Used in Operating Activities | ||
Net loss | $ (8,152) | $ (7,208) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 2,580 | 2,813 |
Interest accretion | 248 | 312 |
Provision for bad debt | (6) | |
Amortization of debt issuance costs | 117 | |
Mark to market on derivatives | 61 | |
Reversal of severance accrual | (2,034) | |
Reversal of DOJ accrual | (350) | |
Mark to market on warrants | 259 | 401 |
Loss on extinguishment of debt | 4,278 | |
Stock-based compensation, consulting agreements | 174 | 216 |
Stock-based compensation | 1,390 | 477 |
Change in fair value of contingent consideration | (5,776) | |
Other changes in assets and liabilities: | ||
Increase in accounts receivable | (2,703) | (588) |
(Increase) decrease in other current assets | (174) | 162 |
Decrease in other long-term assets | 220 | |
Increase (decrease) in accounts payable | 674 | (2,208) |
Decrease in accrued salaries and bonus | (248) | (1,805) |
Decrease in other accrued expenses | (680) | (2,210) |
Increase (decrease) in other long-term liabilities | 182 | (106) |
Net cash used in operating activities | (6,800) | (12,884) |
Cash Flows Used in Investing Activities | ||
Purchase of property and equipment | (388) | (29) |
Net cash used in investing activities | (388) | (29) |
Cash Flows Used in Financing Activities | ||
Issuance of common stock, net of expenses | 24,042 | |
Cash paid for repurchase of restricted shares | (9) | (28) |
Net cash (used in) provided by financing activities | (9) | 24,014 |
Net (decrease) increase in cash and cash equivalents | (7,197) | 11,101 |
Cash and cash equivalents - beginning | 15,199 | 602 |
Cash and cash equivalents - ending | $ 8,002 | $ 11,703 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | 1. BASIS OF PRESENTATION The accompanying unaudited interim condensed consolidated financial statements and related notes (the “Interim Financial Statements”) should be read in conjunction with the consolidated financial statements of Interpace Diagnostics Group, Inc. (the “Company” or “Interpace”), and its wholly-owned subsidiaries, Interpace Diagnostics Lab Inc., Interpace Diagnostics Corporation, and Interpace Diagnostics, LLC, and related notes as included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017, as filed with the U.S. Securities and Exchange Commission (“SEC”) on March 23, 2018. The condensed Interim Financial Statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) for interim financial reporting and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. The condensed Interim Financial Statements include all normal recurring adjustments that, in the judgment of management, are necessary for a fair presentation of such interim financial statements. Discontinued operations include the Company’s wholly owned subsidiaries: Group DCA, LLC, (“Group DCA”); InServe Support Solutions; and TVG, Inc. and its Commercial Services (“CSO”) business unit which was sold on December 22, 2015. All significant intercompany balances and transactions have been eliminated in consolidation. Operating results for the nine-month period ended September 30, 2018 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2018. |
Liquidity
Liquidity | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Liquidity | 2. LIQUIDITY As of September 30, 2018, the Company had cash and cash equivalents of $8.0 million, net accounts receivable of $8.6 million, total current assets of $18.2 million and total current liabilities of $7.8 million. For the nine months ended September 30, 2018, the Company had a net loss of $8.2 million and cash used in operating activities was $6.8 million. The Company does not expect to generate positive cash flows from operations for the year ending December 31, 2018. The Company believes however, that it has sufficient cash balances to meet near term obligations and further intends to meet its capital needs by revenue growth, containing costs, entering into strategic alliances as well as exploring other options, including the possibility of raising additional debt or equity capital as necessary. There is, however, no assurance the Company will be successful in meeting its capital requirements prior to becoming cash flow positive. In November 2018, the Company entered into up to a $4.0 million secured Line of Credit facility including a 3-year term loan for $850,000 with Silicon Valley Bank (“SVB”). The proceeds of the term loan are expected to be used for laboratory capital expenditures and will be repaid monthly. The balance of the Line of Credit is available for working capital purposes as a revolving line of credit and has a three-year term. The borrowing limit of the revolving line of credit is the lower of 80% of the Company’s eligible accounts receivable (as adjusted by SVB) and the aggregate amount of cash collections with respect to accounts receivable during the three prior calendar months. Term loan outstanding amounts incur interest at a rate per annum equal to the greater of the Wall Street Journal Prime Rate (the “Prime Rate”) and 5.00%. Revolving Line outstanding amounts incur interest at a rate per annum equal to the Prime Rate plus 0.5%. See Note 17, Subsequent Events |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Accounting Estimates The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts of assets and liabilities reported and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management’s estimates are based on historical experience, facts and circumstances available at the time, and various other assumptions that are believed to be reasonable under the circumstances. Significant estimates include accounting for valuation allowances related to deferred income taxes, contingent consideration, allowances for doubtful accounts, revenue recognition, unrecognized tax benefits, and asset impairments involving other intangible assets. The Company periodically reviews these matters and reflects changes in estimates in earnings as appropriate. Actual results could materially differ from those estimates. Revenue Recognition Our Services We are a fully integrated commercial and bioinformatics company that develops and provides clinically useful molecular diagnostic tests and pathology services. We develop and commercialize molecular diagnostic tests and related first line assays principally focused on early detection of patients at high risk of cancer and leverage the latest technology and personalized medicine for improved patient diagnosis and management. We currently have four commercialized molecular diagnostic assays in the marketplace for which we are receiving reimbursement: PancraGEN ® ® ® ® ® ® ® Adoption of Accounting Standards Codification Topic 606 (“ASC 606”), “Revenue from Contracts with Customers” Effective January 1, 2018, the Company adopted ASC 606 which amends the guidance for the recognition of revenue from contracts with customers for the transfer of goods and services, by using the modified-retrospective method applied to any contracts that were not completed as of January 1, 2018. The results for the reporting period beginning after January 1, 2018, are presented in accordance with the new standard, although comparative information has not been restated and continues to be reported under the accounting standards and policies in effect for those periods. Upon adoption, the Company performed a comprehensive analysis of existing revenue arrangements as of January 1, 2018 following the five-step model outlined in ASC 606. Based on our analysis, we recorded a cumulative adjustment to opening accumulated deficit and an increase in accounts receivable of $2.5 million as of January 1, 2018. The cumulative impact was driven by a change in the timing of revenue recognition for certain payer categories and the related proprietary tests performed. The balance of accounts receivable related to the adjustment is approximately $0.7 million as of September 30, 2018. The following tables present the effect of the adoption of ASC Topic 606 on our condensed consolidated balance sheet and revenue as of and for the nine months ended September 30, 2018: September 30, 2018 (unaudited) As reported Balances without Adoption of ASC 606 Effect of Change Higher/(Lower) Accounts receivable, net $ 8,640 $ 7,963 $ 677 Accumulated deficit (137,452 ) (139,952 ) (2,500 ) Revenue: For the Nine Months Ended September 30, 2018 (unaudited) As reported Balances without Adoption of ASC 606 Effect of Change Higher/(Lower) Revenue, net $ 16,062 $ 14,792 $ 1,270 Historically, for certain third-party payers that did not have established contractual reimbursement rates or a predictable pattern of collectability, including commercial insurance carriers, Medicaid and certain direct-bill payers (primarily hospitals, but also laboratories), the Company previously recognized revenues when the fee was fixed or determinable and collectability was reasonably assured, which was upon request of third-party payer notification of payment or when cash was received. Under the new standard, the Company estimates the variable consideration within the transaction price for all third-party payers and proprietary tests and recognizes revenue as the Company satisfies its performance obligations. In addition, the Company updated its estimates of the expected transaction price for its payer categories and related proprietary tests based on the variable consideration guidance in ASC 606. This consisted of updating the reimbursement rates realized by the Company’s proprietary tests based on historical amounts received by each payer category for the corresponding tests performed. Overall, other than an initial acceleration in the timing of our revenue recognition for certain payer categories, the adoption of this new standard will not have a significant impact on our reported total revenues and operating results as compared to amounts that would have been reported under the prior revenue recognition standard over our typical revenue cycle. Our accounting policies under the new standard were applied prospectively and are discussed further below. Revenue Recognition after adoption of ASC 606 Upon adoption of ASC 606, the Company recognizes revenue when a customer obtains control of promised goods or services in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. To the extent the transaction price includes variable consideration, the Company estimates the amount of variable consideration that should be included in the transaction price using the expected value method based on historical experience. The Company derives its revenues from the performance of its proprietary tests. The Company’s performance obligation is fulfilled upon completion, review and release of test results to the customer. The Company subsequently bills third-party payers or direct-bill payers for the proprietary tests performed. Revenue is recognized based on the estimated transaction price or net realizable value (“NRV”), which is determined based on historical collection rates by each payer category for each proprietary test offered by the Company. The Company regularly reviews the ultimate amounts received from the third-party payers and related estimated reimbursement rates and adjusts the NRV’s and related contractual allowances accordingly. If actual collections and related NRV’s vary from our estimates, we will adjust the estimates of contractual allowances, which would affect net revenue in the period such variances become known. Disaggregated Revenues We operate in a single operating segment and, therefore, the results of our operations are reported on a consolidated basis for purposes of segment reporting, which is consistent with internal management reporting. For the nine-month periods ended September 30, 2018 and September 30, 2017, substantially all of the Company’s revenues were derived from its molecular diagnostic tests. Financing and Payment Our payment terms vary by third-party payers and type of proprietary testing services performed. The term between invoicing and when payment is due is not significant. Costs to Obtain or Fulfill a Customer Contract Sales commissions are expensed when incurred because the amortization period would have been one year or less. These costs are recorded in sales and marketing expense in the condensed consolidated statements of operations. Accounts Receivable The Company’s accounts receivables represent unconditional rights to consideration and are generated using its proprietary tests. The Company’s services are fulfilled upon completion of the test, review and release of the test results. In conjunction with fulfilling these services, the Company bills the third-party payer or direct-bill payer. Prior to the adoption of ASC 606 on January 1, 2018, the Company recognized accounts receivable related to billings for Medicare, Medicare Advantage, and direct-bill payers on an accrual basis, net of contractual adjustment, when collectability was reasonably assured. Under ASC 606 accounts receivable is now recognized for all payer groups, net of contractual adjustment and net of estimated uncollectable amounts. Contractual adjustments represent the difference between the list prices and the reimbursement rates set by third party payers, including Medicare, commercial payers, and amounts billed to direct-bill payers. Specific accounts may be written off after several appeals, which in some cases may take longer than twelve months. Other Current Assets Other current assets consisted of the following as of September 30, 2018 and December 31, 2017: September 30, 2018 December 31, 2017 (unaudited) Indemnification asset $ 875 $ 875 Prepaid assets 662 266 Other 66 31 $ 1,603 $ 1,172 Long-Lived Assets, including Finite-Lived Intangible Assets Finite-lived intangible assets are stated at cost less accumulated amortization. Amortization of finite-lived acquired intangible assets is recognized on a straight-line basis, using the estimated useful lives of the assets of approximately two years to nine years in acquisition related amortization expense in the condensed consolidated statements of operations. The Company reviews the recoverability of long-lived assets and finite-lived intangible assets whenever events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. If the sum of the expected future undiscounted cash flows is less than the carrying amount of the asset, an impairment loss is recognized by reducing the recorded value of the asset to its fair value measured by future discounted cash flows. This analysis requires estimates of the amount and timing of projected cash flows and, where applicable, judgments associated with, among other factors, the appropriate discount rate. Such estimates are critical in determining whether any impairment charge should be recorded and the amount of such charge if an impairment loss is deemed to be necessary. Discontinued Operations The Company accounts for business dispositions and its businesses held for sale in accordance with ASC 205-20, Discontinued Operations (“ASC 205-20”) Discontinued Operations Basic and Diluted Net Loss per Share A reconciliation of the number of shares of common stock used in the calculation of basic and diluted loss per share for the three- and nine-month periods ended September 30, 2018 and 2017 is as follows: Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 (unaudited) Basic weighted average number of common shares 28,215 22,028 28,002 12,022 Potential dilutive effect of stock-based awards - - - - Diluted weighted average number of common shares 28,215 22,028 28,002 12,022 The following outstanding stock-based instruments were excluded from the computation of the effect of dilutive securities on loss per share for the following periods presented because they would have been anti-dilutive: Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 (unaudited) Options 2,256 1,496 2,256 1,496 Stock-settled stock appreciation rights (SARs) 59 84 59 84 Restricted stock units (RSUs) 220 68 220 68 Warrants 13,542 15,267 13,542 15,267 16,077 16,915 16,077 16,915 |
Other Intangible Assets
Other Intangible Assets | 9 Months Ended |
Sep. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Other Intangible Assets | 4. OTHER INTANGIBLE ASSETS The net carrying value of the identifiable intangible assets as of September 30, 2018 and December 31, 2017 are as follows: As of September 30, 2018 As of December 31, 2017 (unaudited) Life Carrying Carrying (Years) Amount Amount Diagnostic assets: Asuragen acquisition: Thyroid 9 $ 8,519 $ 8,519 RedPath acquisition: Pancreas test 7 16,141 16,141 Barrett’s test 9 18,351 18,351 Total $ 43,011 $ 43,011 Diagnostic lab: CLIA Lab 2.3 $ 609 $ 609 Accumulated Amortization $ (12,954 ) $ (10,515 ) Net Carrying Value $ 30,666 $ 33,105 Amortization expense was approximately $0.8 million for the three-month periods ended September 30, 2018 and 2017, respectively, and approximately $2.4 million for the nine-month periods ended September 30, 2018 and 2017, respectively. Amortization of our diagnostic assets begins upon launch of the product. Estimated amortization expense for the next five years is as follows, based on current assumptions of future product launches: 2018 2019 2020 2021 2022 $ 3,252 $ 3,252 $ 5,292 $ 4,908 $ 2,987 |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 5. FAIR VALUE MEASUREMENTS Cash and cash equivalents, accounts receivable, and accounts payable approximate fair value due to their relative short-term nature. The Company’s financial liabilities reflected at fair value in the condensed consolidated financial statements include contingent consideration and warrant liability. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In determining fair value, the Company uses various methods including the market, income and cost approaches. Based on these approaches, the Company often utilizes certain assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and/or the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market-corroborated, or generally unobservable inputs. The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. Based upon observable inputs used in the valuation techniques, the Company is required to provide information according to the fair value hierarchy. The fair value hierarchy ranks the quality and reliability of the information used to determine fair values into three broad levels as follows: Level 1: Valuations for assets and liabilities traded in active markets from readily available pricing sources for market transactions involving identical assets or liabilities. Level 2: Valuations for assets and liabilities traded in less active dealer or broker markets. Valuations are obtained from third-party pricing services for identical or similar assets or liabilities. Level 3: Valuations incorporate certain assumptions and projections in determining the fair value assigned to such assets or liabilities. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability. The valuation methodologies used for the Company’s financial instruments measured on a recurring basis at fair value, including the general classification of such instruments pursuant to the valuation hierarchy, are set forth in the tables below: As of September 30, 2018 Fair Value Measurements Carrying Fair As of September 30, 2018 Amount Value Level 1 Level 2 Level 3 (unaudited) Liabilities: Contingent consideration: Asuragen (1) $ 1,597 $ 1,597 $ - $ - $ 1,597 Other long-term liabilities: Warrant liability (2) 732 732 - - 732 $ 2,329 $ 2,329 $ - $ - $ 2,329 As of December 31, 2017 Fair Value Measurements Carrying Fair As of December 31, 2017 Amount Value Level 1 Level 2 Level 3 Liabilities: Contingent consideration: Asuragen (1) $ 1,581 $ 1,581 $ - $ - $ 1,581 Other long-term liabilities: Warrant liability (2) 473 473 - - 473 $ 2,054 $ 2,054 $ - $ - $ 2,054 (1)(2) Accrued Expenses and Long-Term Liabilities In connection with the acquisition of certain assets from Asuragen, the Company recorded contingent consideration related to contingent payments and other revenue-based payments. The Company determined the fair value of the contingent consideration based on a probability-weighted income approach derived from revenue estimates. The fair value measurement is based on significant inputs not observable in the market and thus represents a Level 3 measurement. On June 21, 2017, the Company closed on a public offering issuing both Pre-Funded Warrants and Underwriters Warrants to purchase 2,600,000 shares and 575,000 shares of the Company’s common stock, respectively. Both the Pre-Funded and Underwriters Warrants include a cash settlement feature in the event of certain circumstances. Accordingly, both the Pre-Funded and Underwriters Warrants are classified as liabilities and were fair valued using the Black Scholes Option-Pricing Model, the inputs for which included exercise price of the respective warrants, market price of the underlying common shares, expected term, volatility based on the Company’s historical market price, and the risk-free rate corresponding to the expected term of the underlying agreement. Changes to the fair value of the warrant liabilities are recorded in Other expense, net. The Pre-Funded Warrants were fully exercised in 2017 and therefore the Company has no remaining liability associated with those warrants. A roll forward of the carrying value of the Contingent consideration liability and the Underwriters’ Warrant to September 30, 2018 is as follows: Cancellation Mark to December 31, of Obligation/ Market September 30, 2017 Payments Accretion Conversions Adjustment 2018 (unaudited) Asuragen $ 1,581 $ (232 ) $ 248 $ - $ - $ 1,597 Underwriters Warrant 473 - - 259 732 $ 2,054 $ (232 ) $ 248 $ - $ 259 $ 2,329 Certain of the Company’s non-financial assets, such as other intangible assets and goodwill, are re-measured at fair value on a nonrecurring basis, if and when there is an indicator of impairment and recorded at fair value only when an impairment charge is recognized. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 6. COMMITMENTS AND CONTINGENCIES Litigation Due to the nature of the businesses in which the Company is engaged it is subject to certain risks. Such risks include, among others, risk of liability for personal injury or death to persons using products the Company promotes or commercializes. There can be no assurance that substantial claims or liabilities will not arise in the future due to the nature of the Company’s business activities and recent increases in litigation related to healthcare products. The Company could also be held liable for errors and omissions of its employees in connection with the services it performs that are outside the scope of any indemnity or insurance policy. The Company could be materially adversely affected if it were required to pay damages or incur defense costs in connection with a claim that is outside the scope of an indemnification agreement; if the indemnity, although applicable, is not performed in accordance with its terms; or if the Company’s liability exceeds the amount of applicable insurance or indemnity. As of September 30, 2018, the Company’s accrual for litigation and threatened litigation was not material to the condensed consolidated financial statements. RedPath – DOJ Settlement In connection with the October 31, 2014 acquisition of RedPath Integrated Pathology, Inc., (“RedPath”), the Company assumed a liability for the settlement agreement entered into by the former owners of RedPath with the Department of Justice (“DOJ”). Under the terms of the settlement agreement, the Company was obligated to make payments to the DOJ for the calendar years ended December 31, 2014 through 2017, up to a maximum of $3.0 million. Payments were due on March 31st following the calendar year in which the revenue milestones were achieved. The Company made payments totaling $0.5 million during the year ended December 31, 2017 related to fiscal 2016 and had accrued $0.5 million for its potential liability for fiscal 2017, the final year of the settlement agreement. During the second quarter of 2018, the Company entered into an agreement with the DOJ to settle in full the outstanding fiscal 2017 liability at approximately $0.15 million and paid this amount as the final settlement payment in July 2018. Prolias Technologies, Inc. v. PDI, Inc. On April 8, 2015, Prolias Technologies, Inc. (“Prolias”) filed a complaint (the “Complaint”) against the Company with the Superior Court of New Jersey (Morris County) (the “Court”) in a matter entitled Prolias Technologies, Inc. v. PDI, Inc. In the Complaint, Prolias alleged that it and the Company entered into an August 19, 2013 collaboration agreement and an amendment thereto (collectively, the “Agreement”) whereby Prolias and the Company agreed to work in good faith to commercialize a diagnostic test known as “Thymira.” On March 9, 2017, the Court entered a final judgment in the Company’s favor against Prolias for the sum of $636,053 plus ten percent interest continuing to accrue on the principal balance of $500,000 unless and until paid. Final judgment was also entered in the Company’s favor and against Prolias, declaring Prolias is deemed to have executed and delivered to the Company a promissory note in the amount of $1,000,000 and Prolias is obligated to repay the Company the principal amount and all interest in accordance with the terms of the promissory note and the Agreement. On April 3, 2017, the final judgment against Prolias was recorded as a statewide lien. The Company has not recovered on the judgment against Prolias and no assurance can be given that the Company will ever be able to recover on the judgment in the future. Pittsburgh Lease On March 15, 2018, the Company amended the lease for its Pittsburgh laboratory to extend it through June 30, 2023. The lease is for 20,000 square feet of laboratory and office space, with monthly base rent of $33,333 beginning July 1, 2018, escalating by twenty-five percent (25%) on July 1, 2019 to $41,667 per month. The Company may, at its option, extend the term of the Lease for two consecutive terms of five years each, with the monthly base rent escalating by ten percent (10%) for each of the additional five year terms. |
Accrued Expenses and Long-Term
Accrued Expenses and Long-Term Liabilities | 9 Months Ended |
Sep. 30, 2018 | |
Payables and Accruals [Abstract] | |
Accrued Expenses and Long-Term Liabilities | 7. ACCRUED EXPENSES AND LONG-TERM LIABILITIES Other accrued expenses consisted of the following as of September 30, 2018 and December 31, 2017: September 30, 2018 December 31, 2017 (unaudited) Accrued royalties $ 1,082 $ 296 Indemnification liability 875 875 Contingent consideration 317 232 DOJ settlement - 500 Accrued professional fees 740 700 Taxes payable 419 515 Unclaimed property 565 565 All others 654 1,321 $ 4,652 $ 5,004 Long-term liabilities consisted of the following as of September 30, 2018 and December 31, 2017: September 30, 2018 December 31, 2017 (unaudited) Warrant liability $ 732 $ 473 Uncertain tax positions 3,891 3,734 Other 107 82 $ 4,730 $ 4,289 |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | 8. STOCK-BASED COMPENSATION Stock Incentive Plan The Company’s stock-incentive program is a long-term retention program that is intended to attract, retain and provide incentives for talented employees, officers and directors, and to align stockholder and employee interests. Currently, the Company is able to grant options, SARs and restricted shares from the Interpace Diagnostics Group, Inc. Amended and Restated 2004 Stock Award and Incentive Plan, (the “Amended 2004 Plan”). Unless earlier terminated by action of its Board of Directors, the Amended 2004 Plan will remain in effect until such time as no stock remains available for delivery and the Company has no further rights or obligations under the Amended 2004 Plan with respect to outstanding awards thereunder. Historically, stock options have been granted with an exercise price equal to the market value of the common stock on the date of grant, expire 10 years from the date they are granted, and generally vested over a one to three-year period for employees and members of the Board of Directors. Upon exercise, new shares will be issued by the Company. The Company granted stock options in 2017 which vest monthly over a one-year period. SARs are generally granted with a grant price equal to the market value of the common stock on the date of grant, vest one-third each year on the anniversary of the date of grant and expire five years from the date of grant. The restricted shares and restricted stock units granted to employees generally have a three-year graded vesting period and are subject to accelerated vesting and forfeiture under certain circumstances. Restricted shares and restricted stock units granted to board members generally have a three-year graded vesting period and are subject to accelerated vesting and forfeiture under certain circumstances. During March 2018, the Company’s Chief Executive Officer, Chief Financial Officer, senior executives and members of the Board were granted incentive stock options to purchase an aggregate of 745,600 shares of common stock with an exercise price of $1.01 per share and 186,400 RSUs, (subject generally to the executive’s or board member’s, as applicable, continued service with the Company), which vest one-third each year over a period of three years. There were no stock-based awards granted during the quarter ended September 30, 2018. The following table provides the weighted average assumptions used in determining the fair value of the stock option awards granted during the nine-month periods ended September 30, 2018 and 2017. Nine Months Ended September 30, 2018 September 30, 2017 (unaudited) Risk-free interest rate 2.65 % 1.85 % Expected life 6.00 4.93 Expected volatility 126.93 % 141.73 % Dividend yield - - The Company recognized approximately $0.4 million and $0.3 million of stock-based compensation expense during the three-month periods ended September 30, 2018 and 2017, respectively, and approximately $1.4 million and $0.5 million for the nine month periods ended September 30, 2018 and 2017, respectively. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 9. INCOME TAXES Generally, accounting standards require companies to provide for income taxes each quarter based on their estimate of the effective tax rate for the full year. The authoritative guidance for accounting for income taxes allows use of the discrete method when it provides a better estimate of income tax expense. Due to the Company’s valuation allowance position, it is the Company’s position that the discrete method provides a more accurate estimate of income tax expense and therefore income tax expense for the current quarter has been presented using the discrete method. As the year progresses, the Company refines its estimate based on the facts and circumstances by each tax jurisdiction. The following table summarizes income tax expense on (loss) income from continuing operations and the effective tax rate for the three- and nine month periods ended September 30, 2018 and 2017: Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 (unaudited) (unaudited) Provision (benefit) from income tax $ 7 $ (42 ) $ 21 $ (340 ) Effective income tax rate (0.2 )% 1.2 % (0.3 )% 4.2 % Income tax expense for the three- and nine-month periods ended September 30, 2018 was primarily due to minimum state and local taxes. Regarding the recent taw law change in New Jersey, the company has analyzed its position and given the projection of future near-term losses, the Company does not expect the impact of the change to have a material impact on its financials and would not be subject to the additional 2.5% New Jersey tax. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
Segment Information | 10. SEGMENT INFORMATION Since December 22, 2015, the Company reports its operations as one segment, molecular diagnostics and bioinformatics. The Company’s reporting segment structure is reflective of the way both the Company’s management and chief operating decision maker view the business, make operating decisions and assess performance. This structure allows investors to better understand Company performance, better assess prospects for future cash flows, and make more informed decisions about the Company. The Company’s molecular diagnostics and bioinformatics business focuses on developing and commercializing molecular diagnostic tests, leveraging the latest technology and personalized medicine for better patient diagnosis and management. Through the Company’s business, the Company aims to provide physicians and patients with diagnostic options for detecting genetic and other molecular alterations that are associated with gastrointestinal, endocrine and lung cancers, which are principally focused on early detection of patients at high risk of cancer. Customers in the Company’s segment consist primarily of physicians, hospitals and clinics. The service offerings throughout the segment have similar long-term average gross margins, contract terms, types of customers and regulatory environments. They are promoted through one centrally managed marketing group and the chief operating decision maker views their results on a combined basis. |
Discontinued Operations
Discontinued Operations | 9 Months Ended |
Sep. 30, 2018 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | 11. DISCONTINUED OPERATIONS The components of liabilities classified as discontinued operations relate to Commercial Services and consist of the following as of September 30, 2018 and December 31, 2017: September 30, 2018 December 31, 2017 (unaudited) Accounts payable $ 192 $ 192 Other 707 1,110 Current liabilities from discontinued operations 899 1,302 Total liabilities $ 899 $ 1,302 |
Long-Term Debt
Long-Term Debt | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | 12. LONG-TERM DEBT As more fully described in our Form 10-K filed on March 23, 2018, during the first six months of fiscal 2017 the Company entered into an Exchange Agreement related to its debt with an investor. The Company exchanged (the “RedPath Debt Exchange”) such then-existing debt for senior convertible notes (“Senior Convertible Notes”) of the Company on March 22, 2017. Subsequently between March 23, 2017 and April 18, 2017, the Senior Convertible Notes were converted into 3,795,429 shares of the Company’s common stock. The Company recorded a loss of $4.3 million in 2017 as a result of the exchange. The Company had no long-term debt as of September 30, 2018 or December 31, 2017, and has not incurred any long-term debt since the RedPath Debt Exchange. |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 9 Months Ended |
Sep. 30, 2018 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental Cash Flow Information | 13. SUPPLEMENTAL CASH FLOW INFORMATION The following table presents cash flows used in the Company’s discontinued operations for the nine months ended September 30, 2018 and 2017: Nine Months Ended September 30, 2018 2017 (unaudited) Net cash used in operating activities of discontinued operations $ (376 ) $ (2,259 ) Supplemental Cash Flow Information (in thousands) Nine Months Ended September 30, 2018 2017 (unaudited) Operating Adoption of ASC 606 $ 2,500 $ - Prepaid stock grants issued to vendors $ 257 $ - Investing Acquisition of property and equipment in other accrued expenses $ 12 $ - Tenant incentives recorded as part of deferred rent $ - $ 84 Financing Settlement of the RedPath Note $ - $ (8,098 ) Issuance of the Exchange Notes $ - $ 11,375 Common shares issued in debt exchange $ - $ 8,869 *See Note 14, Equity |
Equity
Equity | 9 Months Ended |
Sep. 30, 2018 | |
Equity [Abstract] | |
Equity | 14. EQUITY As more fully described in our Form 10-K filed on March 23, 2018, during the first quarter of fiscal 2017 the Company issued 2,793,000 common shares and 855,000 warrants for gross proceeds to us of approximately $12.2 million. In addition, as described in Note 12, Long-Term Debt During the second quarter of 2017, the Company completed a public offering of (i) 9,900,000 shares of the Company’s common stock (the “Firm Shares”), (ii) warrants to purchase 12,500,000 shares of Common Stock at an exercise price equal to $1.25 per share (the “Base Warrants”) and (iii) warrants to purchase 2,600,000 shares of Common Stock at an exercise price equal to $0.01 per share (the “Pre-Funded Warrants”). Each Firm Share and accompanying Base Warrant was sold for a combined effective price of $1.10, and each Pre-Funded Warrant and accompanying Base Warrant was sold for a combined effective price of $1.09. The issuance of the Firm Shares and the Pre-Funded Warrants resulted in combined gross proceeds to us of approximately $13.7 million, with approximately $12.3 million of net funds available to the Company after deducting underwriting discounts and other stock issuance expenses. During the third quarter of 2017, the Underwriters from the Company’s second quarter offering exercised their over-allotment option to purchase 875,000 Company shares for approximately $1.0 million, resulting in gross proceeds to us of approximately $1.0 million and providing net proceeds to the Company of approximately $0.9 million. During the third quarter of 2017, the Company received proceeds of approximately $0.6 million from the exercise of Pre-Funded and Base Warrants. |
Warrants
Warrants | 9 Months Ended |
Sep. 30, 2018 | |
Warrants | |
Warrants | 15. WARRANTS There was no warrant activity for the nine months ended September 30, 2018. Warrants outstanding for the period ended September 30, 2018 are as follows: Description Classification Exercise Price Expiration Date Warrants Issued Warrants Exercised Warrants Cancelled/ Expired Balance December 31, 2017 Balance September 30, 2018 Private Placement Warrants, issued January 25, 2017 Equity $ 4.69 June 2022 855,000 - - 855,000 855,000 RedPath Warrants, issued March 22, 2017 Equity $ 4.69 September 2022 100,000 - - 100,000 100,000 Pre-Funded Warrants, issued June 21, 2017 Liability $ 0.01 None 2,600,000 (2,600,000 ) - - - Underwriters Warrants, issued June 21, 2017 Liability $ 1.32 December 2022 575,000 - (40,000 ) 535,000 535,000 Base & Overallotment Warrants, issued June 21, 2017 Equity $ 1.25 June 2022 14,375,000 (5,672,852 ) - 8,702,148 8,702,148 Vendor Warrants, issued August 6, 2017 Equity $ 1.25 August 2020 150,000 - - 150,000 150,000 Warrants issued October 12, 2017 Equity $ 1.80 April 2022 3,200,000 - - 3,200,000 3,200,000 21,855,000 (8,272,852 ) (40,000 ) 13,542,148 13,542,148 |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Changes and Error Corrections [Abstract] | |
Recent Accounting Pronouncements | 16. RECENT ACCOUNTING PRONOUNCEMENTS Recently adopted standards In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU 2014-09, “Revenue from Contracts with Customers,” previously defined in Note 3 as “ASC 606”. The standard, including subsequently issued amendments, replaces most existing revenue recognition guidance in U.S. GAAP. The key focus of the new standard is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve this key focus, there is a five-step approach outlined in the standard. We adopted this new standard as of January 1, 2018, by using the modified-retrospective method. See Note 3, Summary of Significant Accounting Policies, for further details. New standards not yet adopted In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which when effective will require organizations that lease assets (e.g., through “leases”) to recognize assets and liabilities for the rights and obligations created by the leases on the balance sheet. A lessee will be required to recognize assets and liabilities for leases with terms that exceed twelve months. The standard will also require disclosures to help investors and financial statement users better understand the amount, timing and uncertainty of cash flows arising from leases. The disclosures include qualitative and quantitative requirements, providing additional information about the amounts recorded in the financial statements. The guidance is effective for annual periods beginning after December 15, 2018, and interim periods within those annual periods. Early adoption is permitted. The Company is currently evaluating the impact of this standard on its consolidated financial position and results of operations. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | 17. SUBSEQUENT EVENTS Line of credit On November 13, 2018, the Company and its subsidiaries entered into a Loan and Security Agreement (the “SVB Loan Agreement”) with Silicon Valley Bank (“SVB”), providing for up to $4.0 million of debt financing consisting of a term loan (the “Term Loan”) of up to $850,000 and a revolving line of credit based on its outstanding accounts receivable (the “Revolving Line”) of up to $4.0 million. The available amount of the Revolving Line will be reduced by the outstanding amount of the Term Loan. The Company intends to use the proceeds of the Term Loan for capital expenditures in connection with its laboratory expansion and the proceeds of the Revolving Line for working capital purposes. The Term Loan may be borrowed in up to two advances until March 31, 2019, unless there has been an event of default. Term Loan outstanding amounts bear interest at a rate per annum equal to the greater of the Wall Street Journal Prime Rate (the “Prime Rate”) and 5.00% and are repayable in 36 equal monthly installments of principal commencing on June 3, 2019 through and including April 1, 2022. In addition, the Company is required to pay a Term Loan final payment to SVB (the “Term Loan Final Payment”) equal to 5.0% of the original principal amount of all Term Loan advances at the earliest to occur of the maturity of the Term Loan, the prepayment of the Term Loan, or the acceleration of the Term Loan upon an event of default. The Company may prepay outstanding amounts of the Term Loan in whole, but not in part. Prepayment of the Term Loan requires payment of the Term Loan Final Payment and a Term Loan prepayment fee equal to 3.0% of the original principal amount of all Term Loan advances if prepaid in the first year of the SVB Loan Agreement, 2.0% of the original principal amount of the Term Loan advances if prepaid in the second year of the SVB Loan Agreement and 1.0% of the original principal amount of the Term Loan advances if paid in the third year of the SVB Loan Agreement. The amount that may be borrowed under the Revolving Line is the lower of 80% of the Company’s eligible accounts receivable (as adjusted by SVB) and the aggregate amount of cash collections with respect to accounts receivable during the three prior calendar months. Revolving Line outstanding amounts incur interest at a rate per annum equal to the Prime Rate plus 0.5%. The Company is also required to pay an unused Revolving Line facility fee monthly in arrears in an amount equal to 0.35% per annum of the average unused but available portion of the Revolving Line. The Revolving Line has a three year maturity. If the Company’s accounts receivable fail to satisfy certain financial requirements specified by the terms of the Revolving Loan, the Company may be required to repay the Revolving Loan in whole or in part. Upon termination of the SVB Loan Agreement or the termination of the Revolving Line for any reason prior to the Revolving Line maturity date, in addition to the payment of any other amounts then-owing, the Company is required to pay a Revolving Line termination fee in an amount equal to 3.0% of the Revolving Line if the termination occurs in the first year of the SVB Loan Agreement, 2.0% of the Revolving Line if the termination occurs in the second year of the SVB Loan Agreement and 1.0% of the Revolving Line if the termination occurs in the third year of the SVB Loan Agreement. The Revolving Line and the Term Loan are both secured by a first priority lien on all assets of the Company and its subsidiaries, except for intellectual property. The Company’s intellectual property may not be sold or encumbered without the Bank’s prior written consent (a negative pledge). The SVB Loan Agreement contains a number of affirmative and negative restrictive covenants that are applicable whether or not any amounts are outstanding under the SVB Loan Agreement. These restrictive covenants could adversely affect our ability to conduct our business. The SVB Loan Agreement also contains a number of customary events of default. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Accounting Estimates | Accounting Estimates The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts of assets and liabilities reported and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management’s estimates are based on historical experience, facts and circumstances available at the time, and various other assumptions that are believed to be reasonable under the circumstances. Significant estimates include accounting for valuation allowances related to deferred income taxes, contingent consideration, allowances for doubtful accounts, revenue recognition, unrecognized tax benefits, and asset impairments involving other intangible assets. The Company periodically reviews these matters and reflects changes in estimates in earnings as appropriate. Actual results could materially differ from those estimates. |
Revenue Recognition | Revenue Recognition Our Services We are a fully integrated commercial and bioinformatics company that develops and provides clinically useful molecular diagnostic tests and pathology services. We develop and commercialize molecular diagnostic tests and related first line assays principally focused on early detection of patients at high risk of cancer and leverage the latest technology and personalized medicine for improved patient diagnosis and management. We currently have four commercialized molecular diagnostic assays in the marketplace for which we are receiving reimbursement: PancraGEN ® ® ® ® ® ® ® Adoption of Accounting Standards Codification Topic 606 (“ASC 606”), “Revenue from Contracts with Customers” Effective January 1, 2018, the Company adopted ASC 606 which amends the guidance for the recognition of revenue from contracts with customers for the transfer of goods and services, by using the modified-retrospective method applied to any contracts that were not completed as of January 1, 2018. The results for the reporting period beginning after January 1, 2018, are presented in accordance with the new standard, although comparative information has not been restated and continues to be reported under the accounting standards and policies in effect for those periods. Upon adoption, the Company performed a comprehensive analysis of existing revenue arrangements as of January 1, 2018 following the five-step model outlined in ASC 606. Based on our analysis, we recorded a cumulative adjustment to opening accumulated deficit and an increase in accounts receivable of $2.5 million as of January 1, 2018. The cumulative impact was driven by a change in the timing of revenue recognition for certain payer categories and the related proprietary tests performed. The balance of accounts receivable related to the adjustment is approximately $0.7 million as of September 30, 2018. The following tables present the effect of the adoption of ASC Topic 606 on our condensed consolidated balance sheet and revenue as of and for the nine months ended September 30, 2018: September 30, 2018 (unaudited) As reported Balances without Adoption of ASC 606 Effect of Change Higher/(Lower) Accounts receivable, net $ 8,640 $ 7,963 $ 677 Accumulated deficit (137,452 ) (139,952 ) (2,500 ) Revenue: For the Nine Months Ended September 30, 2018 (unaudited) As reported Balances without Adoption of ASC 606 Effect of Change Higher/(Lower) Revenue, net $ 16,062 $ 14,792 $ 1,270 Historically, for certain third-party payers that did not have established contractual reimbursement rates or a predictable pattern of collectability, including commercial insurance carriers, Medicaid and certain direct-bill payers (primarily hospitals, but also laboratories), the Company previously recognized revenues when the fee was fixed or determinable and collectability was reasonably assured, which was upon request of third-party payer notification of payment or when cash was received. Under the new standard, the Company estimates the variable consideration within the transaction price for all third-party payers and proprietary tests and recognizes revenue as the Company satisfies its performance obligations. In addition, the Company updated its estimates of the expected transaction price for its payer categories and related proprietary tests based on the variable consideration guidance in ASC 606. This consisted of updating the reimbursement rates realized by the Company’s proprietary tests based on historical amounts received by each payer category for the corresponding tests performed. Overall, other than an initial acceleration in the timing of our revenue recognition for certain payer categories, the adoption of this new standard will not have a significant impact on our reported total revenues and operating results as compared to amounts that would have been reported under the prior revenue recognition standard over our typical revenue cycle. Our accounting policies under the new standard were applied prospectively and are discussed further below. Revenue Recognition after adoption of ASC 606 Upon adoption of ASC 606, the Company recognizes revenue when a customer obtains control of promised goods or services in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. To the extent the transaction price includes variable consideration, the Company estimates the amount of variable consideration that should be included in the transaction price using the expected value method based on historical experience. The Company derives its revenues from the performance of its proprietary tests. The Company’s performance obligation is fulfilled upon completion, review and release of test results to the customer. The Company subsequently bills third-party payers or direct-bill payers for the proprietary tests performed. Revenue is recognized based on the estimated transaction price or net realizable value (“NRV”), which is determined based on historical collection rates by each payer category for each proprietary test offered by the Company. The Company regularly reviews the ultimate amounts received from the third-party payers and related estimated reimbursement rates and adjusts the NRV’s and related contractual allowances accordingly. If actual collections and related NRV’s vary from our estimates, we will adjust the estimates of contractual allowances, which would affect net revenue in the period such variances become known. Disaggregated Revenues We operate in a single operating segment and, therefore, the results of our operations are reported on a consolidated basis for purposes of segment reporting, which is consistent with internal management reporting. For the nine-month periods ended September 30, 2018 and September 30, 2017, substantially all of the Company’s revenues were derived from its molecular diagnostic tests. Financing and Payment Our payment terms vary by third-party payers and type of proprietary testing services performed. The term between invoicing and when payment is due is not significant. Costs to Obtain or Fulfill a Customer Contract Sales commissions are expensed when incurred because the amortization period would have been one year or less. These costs are recorded in sales and marketing expense in the condensed consolidated statements of operations. |
Accounts Receivable | Accounts Receivable The Company’s accounts receivables represent unconditional rights to consideration and are generated using its proprietary tests. The Company’s services are fulfilled upon completion of the test, review and release of the test results. In conjunction with fulfilling these services, the Company bills the third-party payer or direct-bill payer. Prior to the adoption of ASC 606 on January 1, 2018, the Company recognized accounts receivable related to billings for Medicare, Medicare Advantage, and direct-bill payers on an accrual basis, net of contractual adjustment, when collectability was reasonably assured. Under ASC 606 accounts receivable is now recognized for all payer groups, net of contractual adjustment and net of estimated uncollectable amounts. Contractual adjustments represent the difference between the list prices and the reimbursement rates set by third party payers, including Medicare, commercial payers, and amounts billed to direct-bill payers. Specific accounts may be written off after several appeals, which in some cases may take longer than twelve months. |
Other Current Assets | Other Current Assets Other current assets consisted of the following as of September 30, 2018 and December 31, 2017: September 30, 2018 December 31, 2017 (unaudited) Indemnification asset $ 875 $ 875 Prepaid assets 662 266 Other 66 31 $ 1,603 $ 1,172 |
Long-Lived Assets, Including Finite-lived Intangible Assets | Long-Lived Assets, including Finite-Lived Intangible Assets Finite-lived intangible assets are stated at cost less accumulated amortization. Amortization of finite-lived acquired intangible assets is recognized on a straight-line basis, using the estimated useful lives of the assets of approximately two years to nine years in acquisition related amortization expense in the condensed consolidated statements of operations. The Company reviews the recoverability of long-lived assets and finite-lived intangible assets whenever events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. If the sum of the expected future undiscounted cash flows is less than the carrying amount of the asset, an impairment loss is recognized by reducing the recorded value of the asset to its fair value measured by future discounted cash flows. This analysis requires estimates of the amount and timing of projected cash flows and, where applicable, judgments associated with, among other factors, the appropriate discount rate. Such estimates are critical in determining whether any impairment charge should be recorded and the amount of such charge if an impairment loss is deemed to be necessary. |
Discontinued Operations | Discontinued Operations The Company accounts for business dispositions and its businesses held for sale in accordance with ASC 205-20, Discontinued Operations (“ASC 205-20”) Discontinued Operations |
Basic and Diluted Net Loss Per Share | Basic and Diluted Net Loss per Share A reconciliation of the number of shares of common stock used in the calculation of basic and diluted loss per share for the three- and nine-month periods ended September 30, 2018 and 2017 is as follows: Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 (unaudited) Basic weighted average number of common shares 28,215 22,028 28,002 12,022 Potential dilutive effect of stock-based awards - - - - Diluted weighted average number of common shares 28,215 22,028 28,002 12,022 The following outstanding stock-based instruments were excluded from the computation of the effect of dilutive securities on loss per share for the following periods presented because they would have been anti-dilutive: Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 (unaudited) Options 2,256 1,496 2,256 1,496 Stock-settled stock appreciation rights (SARs) 59 84 59 84 Restricted stock units (RSUs) 220 68 220 68 Warrants 13,542 15,267 13,542 15,267 16,077 16,915 16,077 16,915 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Schedule of Effect of Adoption of ASC Topic 606 on Condensed Consolidated Balance Sheet and Statement of Operations | The following tables present the effect of the adoption of ASC Topic 606 on our condensed consolidated balance sheet and revenue as of and for the nine months ended September 30, 2018: September 30, 2018 (unaudited) As reported Balances without Adoption of ASC 606 Effect of Change Higher/(Lower) Accounts receivable, net $ 8,640 $ 7,963 $ 677 Accumulated deficit (137,452 ) (139,952 ) (2,500 ) Revenue: For the Nine Months Ended September 30, 2018 (unaudited) As reported Balances without Adoption of ASC 606 Effect of Change Higher/(Lower) Revenue, net $ 16,062 $ 14,792 $ 1,270 |
Schedule of Other Current Assets | Other current assets consisted of the following as of September 30, 2018 and December 31, 2017: September 30, 2018 December 31, 2017 (unaudited) Indemnification asset $ 875 $ 875 Prepaid assets 662 266 Other 66 31 $ 1,603 $ 1,172 |
Schedule of Weighted Average Number of Shares | A reconciliation of the number of shares of common stock used in the calculation of basic and diluted loss per share for the three- and nine-month periods ended September 30, 2018 and 2017 is as follows: Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 (unaudited) Basic weighted average number of common shares 28,215 22,028 28,002 12,022 Potential dilutive effect of stock-based awards - - - - Diluted weighted average number of common shares 28,215 22,028 28,002 12,022 |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following outstanding stock-based instruments were excluded from the computation of the effect of dilutive securities on loss per share for the following periods presented because they would have been anti-dilutive: Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 (unaudited) Options 2,256 1,496 2,256 1,496 Stock-settled stock appreciation rights (SARs) 59 84 59 84 Restricted stock units (RSUs) 220 68 220 68 Warrants 13,542 15,267 13,542 15,267 16,077 16,915 16,077 16,915 |
Other Intangible Assets (Tables
Other Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Identifiable Intangible Assets Carrying Value | The net carrying value of the identifiable intangible assets as of September 30, 2018 and December 31, 2017 are as follows: As of September 30, 2018 As of December 31, 2017 (unaudited) Life Carrying Carrying (Years) Amount Amount Diagnostic assets: Asuragen acquisition: Thyroid 9 $ 8,519 $ 8,519 RedPath acquisition: Pancreas test 7 16,141 16,141 Barrett’s test 9 18,351 18,351 Total $ 43,011 $ 43,011 Diagnostic lab: CLIA Lab 2.3 $ 609 $ 609 Accumulated Amortization $ (12,954 ) $ (10,515 ) Net Carrying Value $ 30,666 $ 33,105 |
Schedule of Future Estimated Amortization Expense | Estimated amortization expense for the next five years is as follows, based on current assumptions of future product launches: 2018 2019 2020 2021 2022 $ 3,252 $ 3,252 $ 5,292 $ 4,908 $ 2,987 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Schedule of Financial Instrument Measured on Recurring Basis | The valuation methodologies used for the Company’s financial instruments measured on a recurring basis at fair value, including the general classification of such instruments pursuant to the valuation hierarchy, are set forth in the tables below: As of September 30, 2018 Fair Value Measurements Carrying Fair As of September 30, 2018 Amount Value Level 1 Level 2 Level 3 (unaudited) Liabilities: Contingent consideration: Asuragen (1) $ 1,597 $ 1,597 $ - $ - $ 1,597 Other long-term liabilities: Warrant liability (2) 732 732 - - 732 $ 2,329 $ 2,329 $ - $ - $ 2,329 As of December 31, 2017 Fair Value Measurements Carrying Fair As of December 31, 2017 Amount Value Level 1 Level 2 Level 3 Liabilities: Contingent consideration: Asuragen (1) $ 1,581 $ 1,581 $ - $ - $ 1,581 Other long-term liabilities: Warrant liability (2) 473 473 - - 473 $ 2,054 $ 2,054 $ - $ - $ 2,054 (1)(2) Accrued Expenses and Long-Term Liabilities |
Schedule of Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation | A roll forward of the carrying value of the Contingent consideration liability and the Underwriters’ Warrant to September 30, 2018 is as follows: Cancellation Mark to December 31, of Obligation/ Market September 30, 2017 Payments Accretion Conversions Adjustment 2018 (unaudited) Asuragen $ 1,581 $ (232 ) $ 248 $ - $ - $ 1,597 Underwriters Warrant 473 - - 259 732 $ 2,054 $ (232 ) $ 248 $ - $ 259 $ 2,329 |
Accrued Expenses and Long-Ter_2
Accrued Expenses and Long-Term Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Payables and Accruals [Abstract] | |
Schedule of Other Accrued Expenses | Other accrued expenses consisted of the following as of September 30, 2018 and December 31, 2017: September 30, 2018 December 31, 2017 (unaudited) Accrued royalties $ 1,082 $ 296 Indemnification liability 875 875 Contingent consideration 317 232 DOJ settlement - 500 Accrued professional fees 740 700 Taxes payable 419 515 Unclaimed property 565 565 All others 654 1,321 $ 4,652 $ 5,004 |
Schedule of Long Term Liabilities | Long-term liabilities consisted of the following as of September 30, 2018 and December 31, 2017: September 30, 2018 December 31, 2017 (unaudited) Warrant liability $ 732 $ 473 Uncertain tax positions 3,891 3,734 Other 107 82 $ 4,730 $ 4,289 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Share-Based Payment Award, Stock Options, Valuation Assumptions | The following table provides the weighted average assumptions used in determining the fair value of the stock option awards granted during the nine-month periods ended September 30, 2018 and 2017. Nine Months Ended September 30, 2018 September 30, 2017 (unaudited) Risk-free interest rate 2.65 % 1.85 % Expected life 6.00 4.93 Expected volatility 126.93 % 141.73 % Dividend yield - - |
Income Taxes (Tables)
Income Taxes (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of Effective Income Tax Rate Reconciliation | The following table summarizes income tax expense on (loss) income from continuing operations and the effective tax rate for the three- and nine month periods ended September 30, 2018 and 2017: Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 (unaudited) (unaudited) Provision (benefit) from income tax $ 7 $ (42 ) $ 21 $ (340 ) Effective income tax rate (0.2 )% 1.2 % (0.3 )% 4.2 % |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of Discontinued Operations Amount Recognized in Balance Sheet | The components of liabilities classified as discontinued operations relate to Commercial Services and consist of the following as of September 30, 2018 and December 31, 2017: September 30, 2018 December 31, 2017 (unaudited) Accounts payable $ 192 $ 192 Other 707 1,110 Current liabilities from discontinued operations 899 1,302 Total liabilities $ 899 $ 1,302 |
Supplemental Cash Flow Inform_2
Supplemental Cash Flow Information (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Supplemental Cash Flow Elements [Abstract] | |
Schedule of Supplemental Disclosure of Cash flow Information | The following table presents cash flows used in the Company’s discontinued operations for the nine months ended September 30, 2018 and 2017: Nine Months Ended September 30, 2018 2017 (unaudited) Net cash used in operating activities of discontinued operations $ (376 ) $ (2,259 ) Supplemental Cash Flow Information (in thousands) Nine Months Ended September 30, 2018 2017 (unaudited) Operating Adoption of ASC 606 $ 2,500 $ - Prepaid stock grants issued to vendors $ 257 $ - Investing Acquisition of property and equipment in other accrued expenses $ 12 $ - Tenant incentives recorded as part of deferred rent $ - $ 84 Financing Settlement of the RedPath Note $ - $ (8,098 ) Issuance of the Exchange Notes $ - $ 11,375 Common shares issued in debt exchange $ - $ 8,869 *See Note 14, Equity |
Warrants (Tables)
Warrants (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Warrants | |
Schedule of Warrants Outstanding and Warrants Activity | There was no warrant activity for the nine months ended September 30, 2018. Warrants outstanding for the period ended September 30, 2018 are as follows: Description Classification Exercise Price Expiration Date Warrants Issued Warrants Exercised Warrants Cancelled/ Expired Balance December 31, 2017 Balance September 30, 2018 Private Placement Warrants, issued January 25, 2017 Equity $ 4.69 June 2022 855,000 - - 855,000 855,000 RedPath Warrants, issued March 22, 2017 Equity $ 4.69 September 2022 100,000 - - 100,000 100,000 Pre-Funded Warrants, issued June 21, 2017 Liability $ 0.01 None 2,600,000 (2,600,000 ) - - - Underwriters Warrants, issued June 21, 2017 Liability $ 1.32 December 2022 575,000 - (40,000 ) 535,000 535,000 Base & Overallotment Warrants, issued June 21, 2017 Equity $ 1.25 June 2022 14,375,000 (5,672,852 ) - 8,702,148 8,702,148 Vendor Warrants, issued August 6, 2017 Equity $ 1.25 August 2020 150,000 - - 150,000 150,000 Warrants issued October 12, 2017 Equity $ 1.80 April 2022 3,200,000 - - 3,200,000 3,200,000 21,855,000 (8,272,852 ) (40,000 ) 13,542,148 13,542,148 |
Liquidity (Details Narrative)
Liquidity (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Cash and cash equivalents | $ 8,002 | $ 11,703 | $ 8,002 | $ 11,703 | $ 15,199 | $ 602 |
Accounts receivable, net | 8,640 | 8,640 | 3,437 | |||
Total current assets | 18,245 | 18,245 | 19,808 | |||
Total current liabilities | 7,762 | 7,762 | $ 8,091 | |||
Net loss | 3,042 | $ 3,316 | 8,152 | 7,208 | ||
Net cash used in operating activities | $ 6,800 | $ 12,884 | ||||
November 2018 [Member] | ||||||
Line of credit facility, description | The proceeds of the term loan is expected to be used for laboratory capital expenditures and will be repaid monthly.. The balance of the Line of Credit is available for working capital purposes and has a three-year term. The borrowing limit of the revolving line of credit is the lower of 80% of the company's eligible accounts receivable (as adjusted by SVB) and the aggregate amount of cash collections with respect to accounts receivable during the three prior calendar months. | |||||
Line of credit, percentage | 0.50% | |||||
November 2018 [Member] | Prime Rate [Member] | ||||||
Line of credit, percentage | 5.00% | |||||
November 2018 [Member] | Silicon Valley Bank [Member] | ||||||
Line of credit facility | 850 | $ 850 | ||||
Line of credit facility term loan | 3 years | |||||
November 2018 [Member] | Silicon Valley Bank [Member] | Maximum [Member] | ||||||
Line of credit facility | $ 4,000 | $ 4,000 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details Narrative) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018USD ($)Integer | Sep. 30, 2017USD ($) | |
Accounts receivable related to the adjustment | $ 2,703 | $ 588 |
Number of operating segment | Integer | 1 | |
Minimum [Member] | ||
Finite-lived intangible asset, useful life | 2 years | |
Maximum [Member] | ||
Finite-lived intangible asset, useful life | 9 years | |
Adoption of ASC Topic 606 [Member] | ||
Cumulative adjustment to opening accumulated deficit and increase of accounts receivable | $ 2,500 | |
Accounts receivable related to the adjustment | $ 700 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Schedule of Effect of Adoption of ASC Topic 606 on Condensed Consolidated Balance Sheet and Statement of Operations (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Dec. 31, 2017 | |
Accounts receivable, net | $ 8,640 | $ 3,437 |
Accumulated deficit | (137,452) | $ (131,800) |
Revenue, net | 16,062 | |
Balances without Adoption of ASC 606 [Member] | ||
Accounts receivable, net | 7,963 | |
Accumulated deficit | (139,952) | |
Revenue, net | 14,792 | |
Effect of Change Higher/(Lower) [Member] | ||
Accounts receivable, net | 677 | |
Accumulated deficit | (2,500) | |
Revenue, net | $ 1,270 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Schedule of Other Current Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Accounting Policies [Abstract] | ||
Indemnification assets | $ 875 | $ 875 |
Prepaid assets | 662 | 266 |
Other | 66 | 31 |
Other current assets | $ 1,603 | $ 1,172 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Schedule of Weighted Average Number of Shares (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Accounting Policies [Abstract] | ||||
Basic weighted average number of common shares | 28,215,000 | 22,028,000 | 28,002,000 | 12,022,000 |
Potential dilutive effect of stock-based awards | ||||
Diluted weighted average number of common shares | 28,215,000 | 22,028,000 | 28,002,000 | 12,022,000 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share | 16,077,000 | 16,915,000 | 16,077,000 | 16,915,000 |
Options [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share | 2,256,000 | 1,496,000 | 2,256,000 | 1,496,000 |
Stock-Settled Stock Appreciation Rights (SARs) [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share | 59,000 | 84,000 | 59,000 | 84,000 |
Restricted Stock Units (RSUs) [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share | 220,000 | 68,000 | 220,000 | 68,000 |
Warrants [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share | 13,542,000 | 15,267,000 | 13,542,000 | 15,267,000 |
Other Intangible Assets (Detail
Other Intangible Assets (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization expense | $ 813 | $ 813 | $ 2,439 | $ 2,439 |
Other Intangible Assets - Sched
Other Intangible Assets - Schedule of Identifiable Intangible Assets Carrying Value (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Finite-lived Intangible Assets, Accumulated Amortization | $ (12,954) | $ (10,515) | |
Finite-lived Intangible Assets, Net Carrying Value | $ 30,666 | 33,105 | |
Diagnostic Assets, Thyroid [Member] | Asuragen Acquisition [Member] | |||
Finite-lived Intangible Asset, Useful Life (Years) | 9 years | ||
Finite-lived Intangible Assets, Gross | $ 8,519 | 8,519 | |
Diagnostic Assets, Pancreas Test [Member] | RedPath Acquisition [Member] | |||
Finite-lived Intangible Asset, Useful Life (Years) | 7 years | ||
Finite-lived Intangible Assets, Gross | $ 16,141 | 16,141 | |
Diagnostic Assets, Barrett's Test [Member] | RedPath Acquisition [Member] | |||
Finite-lived Intangible Asset, Useful Life (Years) | 9 years | ||
Finite-lived Intangible Assets, Gross | $ 18,351 | $ 18,351 | |
Diagnostic Lab, CLIA Lab [Member] | |||
Finite-lived Intangible Asset, Useful Life (Years) | 2 years 3 months 19 days | ||
Finite-lived Intangible Assets, Gross | $ 609 | 609 | |
Diagnostic Assets [Member] | |||
Finite-lived Intangible Assets, Gross | $ 43,011 | $ 43,011 |
Other Intangible Assets - Sch_2
Other Intangible Assets - Schedule of Future Estimated Amortization Expense (Details) $ in Thousands | Sep. 30, 2018USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2,018 | $ 3,252 |
2,019 | 3,252 |
2,020 | 5,292 |
2,021 | 4,908 |
2,022 | $ 2,987 |
Fair Value Measurements (Detail
Fair Value Measurements (Details Narrative) | Jun. 21, 2017shares |
Pre-Funded Warrants [Member] | |
Warrant to purchase shares of common stock | 2,600,000 |
Underwriter Warrants[Member] | |
Warrant to purchase shares of common stock | 575,000 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Financial Instrument Measured on Recurring Basis (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 | |
Reported Value Measurement [Member] | |||
Warrant liability | [1] | $ 732 | $ 473 |
Fair value of liabilities | 2,329 | 2,054 | |
Fair Value Measurements [Member] | |||
Warrant liability | [1] | 732 | 473 |
Fair value of liabilities | 2,329 | 2,054 | |
Level 1 [Member] | |||
Warrant liability | [1] | ||
Fair value of liabilities | |||
Level 2 [Member] | |||
Warrant liability | [1] | ||
Fair value of liabilities | |||
Level 3 [Member] | |||
Warrant liability | [1] | 732 | 473 |
Fair value of liabilities | 2,329 | 2,054 | |
Asuragen [Member] | |||
Contingent consideration | [1] | 1,597 | 1,581 |
Asuragen [Member] | Fair Value Measurements [Member] | |||
Contingent consideration | [1] | 1,597 | 1,581 |
Asuragen [Member] | Level 1 [Member] | |||
Contingent consideration | [1] | ||
Asuragen [Member] | Level 2 [Member] | |||
Contingent consideration | [1] | ||
Asuragen [Member] | Level 3 [Member] | |||
Contingent consideration | [1] | $ 1,597 | $ 1,581 |
[1] | See Note 7, Accrued Expenses and Long-Term Liabilities |
Fair Value Measurements - Sch_2
Fair Value Measurements - Schedule of Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Beginning Balance | $ 2,054 |
Payments | (232) |
Accretion | 248 |
Cancellation of Obligation/Conversions | |
Mark to Market Adjustment | 259 |
Ending Balance | 2,329 |
Underwriter Warrants [Member] | |
Beginning Balance | 473 |
Payments | |
Accretion | |
Cancellation of Obligation/Conversions | |
Mark to Market Adjustment | 259 |
Ending Balance | 732 |
Asuragen [Member] | |
Beginning Balance | 1,581 |
Payments | (232) |
Accretion | 248 |
Cancellation of Obligation/Conversions | |
Mark to Market Adjustment | |
Ending Balance | $ 1,597 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) | Mar. 15, 2018USD ($)ft² | Mar. 09, 2017USD ($) | Jun. 30, 2018USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2017USD ($) |
Promissory note | $ 11,375,000 | ||||||
Pittsburgh Lease [Member] | |||||||
Operating lease expire date description | Extend it through June 30, 2023 | ||||||
Number of square foot for laboratory and office space | ft² | 20,000 | ||||||
Operating lease, description | The lease is for 20,000 square feet of laboratory and office space, with monthly base rent of $33,333 beginning July 1, 2018, escalating by twenty-five percent (25%) on July 1, 2019 to $41,667 per month. The Company may, at its option, extend the term of the Lease for two consecutive terms of five years each, with the monthly based rent escalating by ten percent (10%) for each of the additional five year terms. | ||||||
Pittsburgh Lease [Member] | July 1, 2018 [Member] | |||||||
Monthly base rent | $ 33,333 | ||||||
Pittsburgh Lease [Member] | July 1, 2019 [Member] | |||||||
Monthly base rent | $ 41,667 | ||||||
Companys Counter-Claim Against Prolias [Member] | |||||||
Litigation settlement, amount | $ 500,000 | ||||||
Loss contingency, damages sought, value | 636,053 | ||||||
Promissory note | $ 1,000,000 | ||||||
Settlement Agreement [Member] | RedPath [Member] | |||||||
Payments for legal settlements | $ 150,000 | $ 500,000 | |||||
Loss contingency accrual, payments | $ 500,000 | ||||||
Settlement Agreement [Member] | RedPath [Member] | Maximum [Member] | |||||||
Litigation settlement, amount | $ 3,000,000 |
Accrued Expenses and Long-Ter_3
Accrued Expenses and Long-Term Liabilities - Schedule of Other Accrued Expenses (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Payables and Accruals [Abstract] | ||
Accrued royalties | $ 1,082 | $ 296 |
Indemnification liability | 875 | 875 |
Contingent consideration | 317 | 232 |
DOJ settlement | 500 | |
Accrued professional fees | 740 | 700 |
Taxes payable | 419 | 515 |
Unclaimed property | 565 | 565 |
All others | 654 | 1,321 |
Total other accrued expenses | $ 4,652 | $ 5,004 |
Accrued Expenses and Long-Ter_4
Accrued Expenses and Long-Term Liabilities - Schedule of Long Term Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Payables and Accruals [Abstract] | ||
Warrant liability | $ 732 | $ 473 |
Uncertain tax positions | 3,891 | 3,734 |
Other | 107 | 82 |
Long-term liabilities | $ 4,730 | $ 4,289 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Share-based compensation arrangement, options, grants in period, gross | |||||
Share-based compensation expense | $ 400 | $ 100 | $ 1,390 | $ 477 | |
Stock Incentive Plan [Member] | |||||
Share-based compensation arrangement by share-based payment award, description | Stock options have been granted with an exercise price equal to the market value of the common stock on the date of grant, expire 10 years from the date they are granted, and generally vested over a one to three-year period for employees and members of the Board of Directors. Upon exercise, new shares will be issued by the Company. The Company granted stock options in 2018 and 2017 which vest monthly over a one-year period. SARs are generally granted with a grant price equal to the market value of the common stock on the date of grant, vest one-third each year on the anniversary of the date of grant and expire five years from the date of grant. The restricted shares and restricted stock units granted to employees generally have a three-year graded vesting period and are subject to accelerated vesting and forfeiture under certain circumstances. | ||||
Share-based compensation arrangement, options, grants in period, gross | 745,600 | ||||
Share-based compensation arrangements, options, grants in period, weighted average exercise price | $ 1.01 | ||||
Stock Incentive Plan [Member] | Restricted Stock Units (RSUs) [Member] | |||||
Share-based compensation arrangement, options, grants in period, gross | 186,400 | ||||
Share-based compensation arrangement, award vesting period | 3 years |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Share-Based Payment Award, Stock Options, Valuation Assumptions (Details) | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Risk-free interest rate | 2.65% | 1.85% |
Expected life | 6 years | 4 years 11 months 4 days |
Expected volatility | 126.93% | 141.73% |
Dividend yield | 0.00% | 0.00% |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Income tax rate | (0.20%) | 1.20% | (0.30%) | 4.20% |
New Jersey [Member] | ||||
Income tax rate | 2.50% |
Income Taxes - Schedule of Effe
Income Taxes - Schedule of Effective Income Tax Rate Reconciliation (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | ||||
Provision (benefit) from income tax | $ 7 | $ (42) | $ 21 | $ (340) |
Effective income tax rate | (0.20%) | 1.20% | (0.30%) | 4.20% |
Segment Information (Details Na
Segment Information (Details Narrative) | Dec. 22, 2015Integer |
Segment Reporting [Abstract] | |
Number of reportable segments | 1 |
Discontinued Operations - Sched
Discontinued Operations - Schedule of Discontinued Operations Amount Recognized in Balance Sheet (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Discontinued Operations and Disposal Groups [Abstract] | ||
Accounts payable | $ 192 | $ 192 |
Other | 707 | 1,110 |
Current liabilities from discontinued operations | 899 | 1,302 |
Total liabilities | $ 899 | $ 1,302 |
Long-Term Debt (Details Narrati
Long-Term Debt (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Extinguishment fair value loss | $ (4,278) | ||||
Long term debt | |||||
Exchange Agreement [Member] | Senior Convertible Notes [Member] | March 23, 2017 and April 18, 2017 [Member] | |||||
Debt conversion, converted instrument, shares issued | 3,795,429 | ||||
Extinguishment fair value loss | $ 4,300 |
Supplemental Cash Flow Inform_3
Supplemental Cash Flow Information - Schedule of Supplemental Disclosure of Cash flow Information (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Supplemental Cash Flow Elements [Abstract] | ||
Net cash used in operating activities of discontinued operations | $ (376) | $ (2,259) |
Adoption of ASC 606 | 2,500 | |
Prepaid stock grants issued to vendors | 257 | |
Acquisition of property and equipment in other accrued expenses | 12 | |
Tenant incentives recorded as part of deferred rent | 84 | |
Settlement of the RedPath Note | (8,098) | |
Issuance of the Exchange Notes | 11,375 | |
Common shares issued in debt exchange | $ 8,869 |
Equity (Details Narrative)
Equity (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Mar. 31, 2017 | Jun. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Number of common stock issued, shares | 2,793,000 | 9,900,000 | |||
Warrants to purchase shares of common stock | 855,000 | ||||
Gross proceeds from equity offerings | $ 12,200 | ||||
Warrants exercise price description | Each Firm Share and accompanying Base Warrant was sold for a combined effective price of $1.10, and each Pre-Funded Warrant and accompanying Base Warrant was sold for a combined effective price of $1.09. | ||||
Gross proceeds from warrants | $ 13,700 | ||||
Net proceeds from warrants | $ 12,300 | ||||
Number of common stock issued, value | $ 431 | ||||
Net proceeds from common stock | $ 24,042 | ||||
Underwriters [Member] | Over-Allotment Option [Member] | |||||
Number of common stock issued, shares | 875,000 | ||||
Gross proceeds from equity offerings | $ 1,000 | ||||
Number of common stock issued, value | 1,000 | ||||
Net proceeds from common stock | 900 | ||||
Base Warrants [Member] | |||||
Warrants to purchase shares of common stock | 12,500,000 | ||||
Warrant exercise price | $ 1.25 | ||||
Net proceeds from warrants | $ 600 | ||||
Pre-Funded Warrants [Member] | |||||
Warrants to purchase shares of common stock | 2,600,000 | ||||
Warrant exercise price | $ 0.01 | $ 0.01 | |||
Termination Agreement [Member] | RedPath Equityholder Representative, LLC [Member] | |||||
Warrants to purchase shares of common stock | 100,000 | ||||
Warrant term | 5 years | ||||
Common stock price, per share | $ 4.69 | ||||
RedPath Debt Exchange and conversion of Senior Convertible Notes [Member] | |||||
Number of common stock issued, shares | 3,795,429 |
Warrants - Schedule of Warrants
Warrants - Schedule of Warrants Outstanding and Warrants Activity (Details) - $ / shares | 9 Months Ended | ||
Sep. 30, 2018 | Dec. 31, 2017 | Jun. 30, 2017 | |
Warrants Issued | 21,855,000 | ||
Warrants Exercised | (8,272,852) | ||
Warrants Cancelled/Expired | (40,000) | ||
Warrants | 13,542,148 | 13,542,148 | |
Private Placement Warrants[Member] | |||
Description | Private Placement Warrants, issued January 25, 2017 | ||
Classification | Equity | ||
Exercise Price | $ 4.69 | ||
Expiration Date | June 2,022 | ||
Warrants Issued | 855,000 | ||
Warrants Exercised | |||
Warrants Cancelled/Expired | |||
Warrants | 855,000 | 855,000 | |
RedPath Warrants[Member] | |||
Description | RedPath Warrants, issued March 22, 2017 | ||
Classification | Equity | ||
Exercise Price | $ 4.69 | ||
Expiration Date | September 2,022 | ||
Warrants Issued | 100,000 | ||
Warrants Exercised | |||
Warrants Cancelled/Expired | |||
Warrants | 100,000 | 100,000 | |
Pre-Funded Warrants [Member] | |||
Description | Pre-Funded Warrants, issued June 21, 2017 | ||
Classification | Liability | ||
Exercise Price | $ 0.01 | $ 0.01 | |
Expiration Date | None | ||
Warrants Issued | 2,600,000 | ||
Warrants Exercised | (2,600,000) | ||
Warrants Cancelled/Expired | |||
Warrants | |||
Underwriter Warrants [Member] | |||
Description | Underwriters Warrants, issued June 21, 2017 | ||
Classification | Liability | ||
Exercise Price | $ 1.32 | ||
Expiration Date | December 2,022 | ||
Warrants Issued | 575,000 | ||
Warrants Exercised | |||
Warrants Cancelled/Expired | (40,000) | ||
Warrants | 535,000 | 535,000 | |
Base & Overallotment Warrants [Member] | |||
Description | Base & Overallotment Warrants, issued June 21, 2017 | ||
Classification | Equity | ||
Exercise Price | $ 1.25 | ||
Expiration Date | June 2,022 | ||
Warrants Issued | 14,375,000 | ||
Warrants Exercised | (5,672,852) | ||
Warrants Cancelled/Expired | |||
Warrants | 8,702,148 | 8,702,148 | |
Vendor Warrants [Member] | |||
Description | Vendor Warrants, issued August 6, 2017 | ||
Classification | Equity | ||
Exercise Price | $ 1.25 | ||
Expiration Date | August 2,020 | ||
Warrants Issued | 150,000 | ||
Warrants Exercised | |||
Warrants Cancelled/Expired | |||
Warrants | 150,000 | 150,000 | |
Warrants Issued [Member] | |||
Description | Warrants issued October 12 2017 | ||
Classification | Equity | ||
Exercise Price | $ 1.80 | ||
Expiration Date | April 2,022 | ||
Warrants Issued | 3,200,000 | ||
Warrants Exercised | |||
Warrants Cancelled/Expired | |||
Warrants | 3,200,000 | 3,200,000 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) $ in Thousands | 9 Months Ended |
Sep. 30, 2018USD ($) | |
SVB Loan Agreement [Member] | First Year [Member] | |
Line of credit facility, description | 3.0% of the original principal amount of all Term Loan advances if prepaid in the first year of the SVB Loan Agreement, |
SVB Loan Agreement [Member] | Second Year [Member] | |
Line of credit facility, description | 2.0% of the original principal amount of the Term Loan advances if prepaid in the second year of the SVB Loan Agreement |
SVB Loan Agreement [Member] | Third Year [Member] | |
Line of credit facility, description | 1.0% of the original principal amount of the Term Loan advances if paid in the third year of the SVB Loan Agreement |
November 13, 2018 [Member] | Silicon Valley Bank [Member] | |
Line of credit | $ 4,000 |
Liine of credit outstanding accounts receivable | $ 4,000 |
Line of credit, percentage | 5.00% |
Line of credit installment decription | Repayable in 36 equal monthly installments of principal commencing on May 1, 2019 through and including April 1, 2022 |
Line of credit prepayment decription | The Company may prepay outstanding amounts of the Term Loan in whole, but not in part. Prepayment of the Term Loan requires payment of the Term Loan Final Payment and a Term Loan prepayment fee equal to 3.0% of the original principal amount of all Term Loan advances if prepaid in the first year of the SVB Loan Agreement, 2.0% of the original principal amount of the Term Loan advances if prepaid in the second year of the SVB Loan Agreement and 1.0% of the original principal amount of the Term Loan advances if paid in the third year of the SVB Loan Agreement. |
Line of credit facility, description | The amount that may be borrowed under the Revolving Line is the lower of 80% of the Company's eligible accounts receivable (as adjusted by SVB) and the aggregate amount of cash collections with respect to accounts receivable during the three prior calendar months. Revolving Line advances incur interest at a rate per annum equal to the Prime Rate plus 0.5%. The Company is also required to pay an unused Revolving Line facility fee monthly in arrears in an amount equal to 0.35% per annum of the average unused but available portion of the Revolving Line. |
Line of credit, term | 3 years |
November 13, 2018 [Member] | Silicon Valley Bank [Member] | Prime Rate [Member] | |
Line of credit, percentage | 5.00% |
November 13, 2018 [Member] | Silicon Valley Bank [Member] | Term Loan [Member] | |
Line of credit | $ 850 |