Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2019 | Nov. 08, 2019 | |
Document And Entity Information | ||
Entity Registrant Name | INTERPACE BIOSCIENCES, INC. | |
Entity Central Index Key | 0001054102 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2019 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business Flag | true | |
Entity Emerging Growth Company | false | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 38,196,038 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2019 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 2,358,000 | $ 6,068,000 |
Accounts receivable, net | 14,701,000 | 9,483,000 |
Other current assets | 3,522,000 | 2,170,000 |
Total current assets | 20,581,000 | 17,721,000 |
Property and equipment, net | 7,033,000 | 837,000 |
Other intangible assets, net | 34,532,000 | 29,853,000 |
Goodwill | 8,273,000 | |
Operating lease assets | 4,212,000 | |
Other long-term assets | 42,000 | 31,000 |
Total assets | 74,673,000 | 48,442,000 |
Current liabilities: | ||
Accounts payable | 5,020,000 | 1,059,000 |
Accrued salary and bonus | 2,087,000 | 1,424,000 |
Other accrued expenses | 9,423,000 | 5,091,000 |
Current liabilities from discontinued operations | 766,000 | 918,000 |
Total current liabilities | 17,296,000 | 8,492,000 |
Contingent consideration | 2,465,000 | 2,693,000 |
Operating lease liabilities | 2,791,000 | |
Line of credit | 3,750,000 | |
Excess consideration note | 6,822,000 | |
Other long-term liabilities | 4,791,000 | 4,319,000 |
Total liabilities | 37,915,000 | 15,504,000 |
Commitments and contingencies (Note 8) | ||
Preferred stock, $.01 par value; 5,000,000 shares authorized, Series A Preferred Stock 60 shares issued and outstanding; Series A-1 Preferred Stock 80 shares issued and outstanding | 13,161,000 | |
Stockholders' equity: | ||
Common stock, $.01 par value; 100,000,000 shares authorized; 38,295,006 and 28,767,344 shares issued, respectively;38,196,038 and 28,694,275 shares outstanding, respectively | 383,000 | 287,000 |
Additional paid-in capital | 182,361,000 | 175,820,000 |
Accumulated deficit | (157,435,000) | (141,489,000) |
Treasury stock, at cost (98,968 and 73,069 shares, respectively) | (1,712,000) | (1,680,000) |
Total stockholders' equity | 23,597,000 | 32,938,000 |
Total liabilities and stockholders' equity | 61,512,000 | 48,442,000 |
Total liabilities, preferred stock and stockholders equity | $ 74,673,000 | $ 48,442,000 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2019 | Dec. 31, 2018 |
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 38,295,006 | 28,767,344 |
Common stock, shares outstanding | 38,196,038 | 28,694,275 |
Treasury stock, shares | 98,968 | 73,069 |
Series A Preferred Stock [Member] | ||
Preferred stock, shares issued | 60 | 60 |
Preferred stock, shares outstanding | 60 | 60 |
Series A-1 Preferred Stock [Member] | ||
Preferred stock, shares issued | 80 | 80 |
Preferred stock, shares outstanding | 80 | 80 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Income Statement [Abstract] | ||||
Revenue, net | $ 7,725 | $ 5,753 | $ 20,005 | $ 16,062 |
Cost of revenue (excluding amortization of $995 and $813 for the three months and $2,621 and $2,439 for the nine months, respectively) | 4,835 | 2,763 | 10,489 | 7,590 |
Gross profit | 2,890 | 2,990 | 9,516 | 8,472 |
Operating expenses: | ||||
Sales and marketing | 2,757 | 2,048 | 8,127 | 6,135 |
Research and development | 857 | 510 | 2,032 | 1,528 |
General and administrative | 4,492 | 2,084 | 9,790 | 5,981 |
Acquisition related expense | 838 | 2,534 | ||
Acquisition related amortization expense | 995 | 813 | 2,621 | 2,439 |
Total operating expenses | 9,939 | 5,455 | 25,104 | 16,083 |
Operating loss | (7,049) | (2,465) | (15,588) | (7,611) |
Accretion expense | (111) | (248) | (331) | (248) |
Other (expense) income, net | (135) | (288) | (12) | (143) |
Loss from continuing operations before tax | (7,295) | (3,001) | (15,931) | (8,002) |
Provision for income taxes | 9 | 7 | 19 | 21 |
Loss from continuing operations | (7,304) | (3,008) | (15,950) | (8,023) |
Income (loss) from discontinued operations, net of tax | (58) | (34) | (51) | (129) |
Net loss | (7,362) | (3,042) | (16,001) | (8,152) |
Net loss attributable to preferred shareholders | (7,362) | (16,001) | ||
Less dividends on preferred stock | (75) | (75) | ||
Net loss attributable to common shareholders | $ (7,437) | $ (16,076) | ||
Basic and diluted (loss) income per share of common stock: | ||||
From continuing operations | $ (0.19) | $ (0.11) | $ (0.43) | $ (0.29) |
From discontinued operations | 0 | 0 | 0 | 0 |
Net loss per basic and diluted share of common stock | $ (0.19) | $ (0.11) | $ (0.43) | $ (0.29) |
Weighted average number of common shares and common share equivalents outstanding: | ||||
Basic | 38,196 | 28,215 | 37,169 | 28,002 |
Diluted | 38,196 | 28,215 | 37,169 | 28,002 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Operations (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Income Statement [Abstract] | ||||
Cost of revenue, amortization | $ 995 | $ 813 | $ 2,621 | $ 2,439 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - 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) | |
Balance, shares at Dec. 31, 2017 | 27,901,000 | 64,000 | |||
Common stock issued | $ 1 | ||||
Common stock issued, shares | 41,000 | ||||
Common stock issued through offering, net of expenses | |||||
Common stock issued through offering, net of expenses, shares | |||||
Treasury stock purchased | $ (9) | ||||
Treasury stock purchased, shares | 9,000 | ||||
Stock-based compensation expense | $ 597 | ||||
Net loss | (3,193) | ||||
Adoption of ASC 606 | 2,500 | ||||
Adoption of ASC 842 | |||||
Balance at Mar. 31, 2018 | $ 279 | $ (1,680) | 173,659 | (132,493) | |
Balance, shares at Mar. 31, 2018 | 27,942,000 | 73,000 | |||
Balance at Dec. 31, 2017 | $ 278 | $ (1,671) | 173,062 | (131,800) | |
Balance, shares at Dec. 31, 2017 | 27,901,000 | 64,000 | |||
Net loss | $ (8,152) | ||||
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 | |||
Balance at Mar. 31, 2018 | $ 279 | $ (1,680) | 173,659 | (132,493) | |
Balance, shares at Mar. 31, 2018 | 27,942,000 | 73,000 | |||
Common stock issued | $ 3 | 282 | |||
Common stock issued, shares | 325,000 | ||||
Treasury stock purchased | |||||
Treasury stock purchased, shares | |||||
Stock-based compensation expense | 419 | ||||
Net loss | (1,917) | ||||
Balance at Jun. 30, 2018 | $ 282 | $ (1,680) | 174,360 | (134,410) | |
Balance, shares at Jun. 30, 2018 | 28,267,000 | 73,000 | |||
Common stock issued | $ 1 | ||||
Common stock issued, shares | 100,000 | ||||
Common stock issued through offering, net of expenses | 144 | ||||
Common stock issued through offering, net of expenses, shares | |||||
Treasury stock purchased | |||||
Treasury stock purchased, shares | |||||
Stock-based compensation expense | 374 | ||||
Net loss | (3,042) | (3,042) | |||
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 | |||
Balance at Dec. 31, 2018 | $ 287 | $ (1,680) | 175,820 | (141,489) | 32,938 |
Balance, shares at Dec. 31, 2018 | 28,767,000 | 73,000 | |||
Common stock issued | $ 1 | ||||
Common stock issued, shares | 95,000 | ||||
Common stock issued through offering, net of expenses | $ 94 | 5,868 | |||
Common stock issued through offering, net of expenses, shares | 9,333,000 | ||||
Treasury stock purchased | $ (32) | ||||
Treasury stock purchased, shares | 26,000 | ||||
Stock-based compensation expense | 266 | ||||
Net loss | (3,419) | ||||
Adoption of ASC 606 | |||||
Adoption of ASC 842 | 55 | ||||
Balance at Mar. 31, 2019 | $ 382 | $ (1,712) | 181,954 | (144,853) | |
Balance, shares at Mar. 31, 2019 | 38,195,000 | 99,000 | |||
Balance at Dec. 31, 2018 | $ 287 | $ (1,680) | 175,820 | (141,489) | 32,938 |
Balance, shares at Dec. 31, 2018 | 28,767,000 | 73,000 | |||
Net loss | (16,001) | ||||
Balance at Sep. 30, 2019 | $ 383 | $ (1,712) | 182,361 | (157,435) | 23,597 |
Balance, shares at Sep. 30, 2019 | 38,295,000 | 99,000 | |||
Balance at Mar. 31, 2019 | $ 382 | $ (1,712) | 181,954 | (144,853) | |
Balance, shares at Mar. 31, 2019 | 38,195,000 | 99,000 | |||
Common stock issued | $ 1 | 72 | |||
Common stock issued, shares | 100,000 | ||||
Treasury stock purchased | |||||
Treasury stock purchased, shares | |||||
Stock-based compensation expense | 205 | ||||
Net loss | (5,220) | ||||
Balance at Jun. 30, 2019 | $ 383 | $ (1,712) | 182,231 | (150,073) | |
Balance, shares at Jun. 30, 2019 | 38,295,000 | 99,000 | |||
Common stock issued | |||||
Common stock issued, shares | |||||
Treasury stock purchased | |||||
Treasury stock purchased, shares | |||||
Dividends accrued | (75) | ||||
Stock-based compensation expense | 205 | ||||
Net loss | (7,362) | (7,362) | |||
Balance at Sep. 30, 2019 | $ 383 | $ (1,712) | $ 182,361 | $ (157,435) | $ 23,597 |
Balance, shares at Sep. 30, 2019 | 38,295,000 | 99,000 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Cash Flows From Operating Activities | ||
Net loss | $ (16,001) | $ (8,152) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 2,911 | 2,580 |
Interest accretion | 331 | 248 |
Reversal of DOJ accrual | (350) | |
Bad debt expense | 499 | |
Mark to market on warrants | (35) | 259 |
Stock-based compensation | 1,246 | 1,564 |
Other gains and expenses, net | 18 | |
Other changes in operating assets and liabilities: | ||
Increase in accounts receivable | (1,986) | (2,703) |
Increase in other current assets | (417) | (174) |
Increase in long-term assets | (11) | |
(Decrease) increase in accounts payable | (766) | 674 |
Increase (decrease) in accrued salaries and bonus | 228 | (248) |
Increase (decrease) in accrued liabilities | 981 | (680) |
Increase in long-term liabilities | 446 | 182 |
Net cash used in operating activities | (12,556) | (6,800) |
Cash Flows From Investing Activity | ||
Acquisition of Biopharma, net of expenses | (13,829) | |
Purchase of property and equipment | (105) | (388) |
Sale of property and equipment | 13 | |
Net cash used in investing activity | (13,921) | (388) |
Cash Flows From Financing Activities | ||
Issuance of common stock, net of expenses | 5,962 | |
Issuance of preferred shares, net of expenses | 13,087 | |
Cash paid for repurchase of restricted shares | (32) | (9) |
Borrowings on Line of Credit | 3,750 | |
Net cash provided by (used in) financing activities | 22,767 | (9) |
Net decrease in cash and cash equivalents | (3,710) | (7,197) |
Cash and cash equivalents - beginning | 6,068 | 15,199 |
Cash and cash equivalents - ending | $ 2,358 | $ 8,002 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2019 | |
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 Biosciences, Inc. (formerly known as Interpace Diagnostics Group, Inc.) (the “Company” or “Interpace”), and its wholly-owned subsidiaries, Interpace Diagnostics Lab Inc., Interpace Diagnostics Corporation, Interpace Pharma Solutions, Inc. (formerly known as Interpace BioPharma, Inc.) 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, 2018, as filed with the U.S. Securities and Exchange Commission (“SEC”) on March 21, 2019 (the “Form 10-K”) and the special purpose statements and Pro Forma financial information in Form 8-K/A filed on September 20, 2019. 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, or 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, 2019 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2019. |
Acquisition
Acquisition | 9 Months Ended |
Sep. 30, 2019 | |
Business Combinations [Abstract] | |
Acquisition | 2. ACQUISITION On July 15, 2019, the Company entered into an Asset Purchase Agreement (“APA”) to acquire certain assets and assumed certain liabilities relating to Cancer Genetics, Inc.’s (“CGI”) BioPharma services business (“BioPharma”) for $23.5 million less certain closing adjustments of $1.98 million (the “Base Purchase Price”). At the closing the Company used the proceeds from an initial tranche of preferred stock financing and paid $13.8 million. Additionally, the Company issued a subordinated seller note to CGI in the amount of $7,692,300. The BioPharma business (presently known as Interpace Pharma Solutions, Inc. or “Pharma Solutions”) provides pharmaceutical and biotech companies and non-profit entities performing clinical trials with lab testing services for patient stratification and treatment selection through an extensive suite of molecular and biomarker-based testing services, DNA- and RNA- extraction and customized assay development and trial design consultation. The Base Purchase Price is subject to two additional adjustments following the closing: for the finalized net worth (assets less liabilities) of BioPharma as of June 30, 2019 (the “NWA”), subject to a cap of $775,000, and for certain older accounts receivable, in the aggregate amount of approximately $830,000, still uncollected as of December 31, 2019 (the “ARA”). Any amounts due to the Company under the NWA were to be set off against the Excess Consideration Note (see Note 19, Subsequent Events, The transaction is being accounted for using the acquisition method of accounting for business combinations in accordance with GAAP. Under this method, the total consideration transferred to consummate the acquisition is being allocated to the identifiable tangible and intangible assets acquired and liabilities assumed based on their respective fair values as of the closing date of the acquisition. The acquisition method of accounting requires extensive use of estimates and judgments to allocate the consideration transferred to the identifiable tangible and intangible assets acquired and liabilities assumed. In connection with the transaction, the Company has preliminarily recorded $8.3 million of goodwill and $7.3 million of finite lived intangible assets. Finite lived intangible assets have a combined weighted-average amortization period of 8.4 years, which consists of ten years for tradenames and eight years for customer relationships. Goodwill results largely from a trained workforce in place and expected synergies from new lines of business. Goodwill recorded in conjunction with the acquisition is deductible for income tax purposes. See Note 5, Goodwill and Other Intangible Assets The reconciliation of consideration given for BioPharma to the preliminary allocation of the purchase price of assets and liabilities acquired based on their relative fair values is as follows: Cash $ 13,829 Subordinated note payable 6,822 Total consideration $ 20,651 Assets acquired Accounts receivable $ 3,731 Accrued revenue 289 Lab supplies 877 Prepaid expenses 266 Property and equipment 6,412 Operating lease assets 2,187 Acquired identifiable intangible assets: Trademarks and trade name 1,600 Customer relationships 5,700 Total acquired identifiable intangible assets 7,300 Goodwill 8,273 Total assets acquired 29,335 Liabilities assumed Accounts payable (4,535 ) Accrued liabilities (435 ) Deferred revenue (1,076 ) Operating lease liabilities (2,187 ) Finance lease liabilities (451 ) Total liabilities assumed (8,684 ) Net assets acquired $ 20,651 The estimated fair values of assets acquired and liabilities assumed are considered preliminary and are based on the most recent information available. The provisional measurements of fair value set forth above are subject to change. We expect to finalize the valuation as soon as practicable, but no later than one-year from the acquisition date. The following unaudited pro forma consolidated revenues for the three and nine months ended September 30, 2019 and 2018 assume that the Company had acquired the BioPharma business as of January 1, 2018. The pro forma revenues include estimates and assumptions which management believes are reasonable. However, pro forma revenues are not necessarily indicative of the revenues that would have occurred if the acquisition had been consummated as of the date indicated, nor are they necessarily indicative of future revenues. Three Months Ended September 30, 2019 Nine Months Ended September 30, 2019 Three Months Ended September 30, 2018 Nine Months Ended September 30, 2018 Revenue $ 8,010 $ 27,648 $ 9,741 $ 27,551 The BioPharma business had not historically been accounted for as a separate entity, subsidiary or division of CGI. In addition, stand-alone financial statements related to BioPharma have not been prepared previously as CGI’s financial system was not designed to provide complete financial information of BioPharma. Therefore, the Company was not able to estimate the pro forma impact to net loss or the net loss per share of BioPharma (presently called Interpace Pharma Solutions) for the three and nine months ended September 30, 2019 and 2018. |
Liquidity
Liquidity | 9 Months Ended |
Sep. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Liquidity | 3. LIQUIDITY As of September 30, 2019, the Company had cash and cash equivalents of $2.4 million, net accounts receivable of $14.7 million, total current assets of $20.6 million and total current liabilities of $17.3 million. For the nine months ended September 30, 2019, the Company had a net loss of $16.0 million and cash used in operating activities was $12.6 million. On July 15, 2019 the Company entered into a Securities Purchase Agreement for $27 million in Preferred Stock closing in two tranches on July 15, 2019 for $14 million and on October 16, 2019 for $13 million. After the purchase price of $23.5 million less certain closing adjustments of $1.98 million was paid to Cancer Genetics, Inc. the balance of the proceeds were used to pay down a $3.75 million balance in the revolving line of credit and for general corporate purposes, including the integration of the BioPharma business. On September 20, 2019, the Company entered into an Equity Distribution Agreement (the “Agreement”) with Oppenheimer & Co. Inc., as sales agent (the “Agent”), pursuant to which the Company may, from time to time, issue and sell shares of its common stock, par value $0.01 per share, in an aggregate offering price of up to $4.8 million (the “Shares”) through the Agent. To date, no shares have been sold under the Agreement. The Company does not expect to generate positive cash flows from operations for the year ending December 31, 2019. The Company intends to meet ongoing capital needs by using proceeds under the Securities Purchase Agreement, additional borrowings under the line of credit resulting from the additional accounts receivable acquired in the BioPharma acquisition, selling shares under the Agreement, revenue growth and margin improvement, collecting accounts receivable, containing costs as well as exploring other financing options. Management believes that the Company has sufficient cash on hand and available to sustain operations through at least November 30, 2020. However, there is no guarantee that additional capital can be raised to fund our future operations. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 4. 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 The Company is a leader in enabling personalized medicine, offering specialized services along the therapeutic value chain from early diagnosis and prognostic planning to targeted therapeutic applications. The Company’s primary source of revenue is generated from the performance of its proprietary molecular diagnostic tests for its clinical customers (Interpace Diagnostics) and its DNA-based pharma testing services in support of clinical trials for its biopharma customers (Interpace Pharma Solutions). Our Diagnostics business is a fully integrated commercial and bioinformatics business unit that provides clinically useful molecular diagnostic tests, bioinformatics and pathology services for evaluating risk of cancer by leveraging the latest technology in personalized medicine for improved patient diagnosis and management. The genomic tests that we develop and commercialize as well as related first line assays are principally focused on early detection of patients with indeterminate biopsies and at high risk of cancer. Our tests and services provide mutational analysis of genomic material contained in these “suspicious” cysts, nodules and lesions with the goal of better informing treatment decisions in patients at risk of thyroid, pancreatic, and other cancers and in many cases avoiding unnecessary surgical treatment in patients at low risk. We currently have four commercialized molecular diagnostic tests in the marketplace for which we are receiving reimbursement: PancraGEN ® ® ® ® ® ® ® ® BarreGEN ® ® ® Our recently acquired BioPharma or now called Pharma Solutions business provides pharmacogenomics testing, genotyping, biorepository and other customized services to the pharmaceutical and biotech industries and advances personalized medicine by partnering with pharmaceutical, academic, and technology leaders to effectively integrate pharmacogenomics into their drug development and clinical trial programs with the goals of delivering safer, more effective drugs to market more quickly, and improving patient care. Therefore, the Company’s primary source of revenue is generated from the performance of its proprietary molecular diagnostic tests for its clinical customers and its DNA-based pharma testing services in support of clinical trials for its BioPharma customers. The Company’s performance obligation is fulfilled upon completion, review and release of test results and subsequent billing to the third-party payer, hospital or contracting customer. Clinical Performance Obligations and Revenue Recognition Under ASC 606, the Company recognizes revenue for billings less contractual allowances and estimated uncollectable amounts for all third party payer groups on the accrual basis based upon a thorough analysis of historical receipts. The net amount derived and used for revenue recognition is referred to as the Net Realizable Value (NRV) for the particular test and payer group from which reimbursement is received. This derived NRV is evaluated quarterly or as needed and then applied to future periods until recalculated. BIoPharma Performance Obligations and Revenue Recognition Performance obligations are satisfied at a point in time as the Company processes samples delivered by the customer. Project level activities, including study setup and project management, are satisfied over the life of the contract. Revenues are recognized at a point in time when the test results or other deliverables are reported to the customer. Project level fee revenue is recognized ratably over the life of the contract. Deferred revenue from BioPharma Contracts is recorded at fair value and represents payments received in advance of services rendered. Revenue from Contracts with Customers (ASC 606) Our Diagnostics business derives its revenues from the performance of its proprietary assays or 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 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. To the extent the transaction price includes variable consideration, for all third party and direct-bill payers and proprietary tests, 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. For our Diagnostics business, we regularly review the ultimate amounts received from the third-party and direct-bill payers and related estimated reimbursement rates and adjust the NRV’s and related contractual allowances accordingly. If actual collections and related NRV’s vary significantly 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. Deferred Revenue Deferred revenue is recorded at fair value and represents payments received in advance of services rendered. Financing and Payment For non-Medicare claims, our payment terms vary by payer category. Payment terms for direct-payers in our clinical or diagnostics business are typically thirty days and in our BioPharma business, up to sixty days. Commercial third-party-payers are required to respond to a claim within a time period established by their respective state regulations, generally between thirty to sixty days. However, payment for commercial third-party claims may be subject to a denial and appeal process, which could take up to two years in some instances where multiple appeals are submitted. The Company generally appeals all denials from commercial third-party payers. 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 receivable represent unconditional rights to consideration and are generated using its clinical or diagnostics and BioPharma 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 directly bills the hospital or contracting customer. Accounts receivable is 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 rate set by third party payers, including Medicare, commercial payers, or amounts billed directly to hospitals and service providers. Specific accounts may be written off after several appeals, which in some cases may take longer than twelve months. Leases The Company determines if an arrangement contains a lease in whole or in part at the inception of the contract. Right-of-use (“ROU”) assets represent the Company’s right to use an underlying asset for the lease term while lease liabilities represent our obligation to make lease payments arising from the lease. All leases with terms greater than twelve months result in the recognition of a ROU asset and a liability at the lease commencement date based on the present value of the lease payments over the lease term. Unless a lease provides all of the information required to determine the implicit interest rate, we use our incremental borrowing rate based on the information available at the commencement date in determining the present value of the lease payments. We use the implicit interest rate in the lease when readily determinable. Our lease terms include all non-cancelable periods and may include options to extend (or to not terminate) the lease when it is reasonably certain that we will exercise that option. Leases with terms of twelve months or less at the commencement date are expensed on a straight-line basis over the lease term and do not result in the recognition of an asset or liability. See Note 7, Leases Other Current Assets Other current assets consisted of the following as of September 30, 2019 and December 31, 2018: September 30, 2019 December 31, 2018 (unaudited) Indemnification assets $ 875 $ 875 Prepaid expenses 2,571 1,230 Other 76 65 Total other current assets $ 3,522 $ 2,170 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 ten 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, par value $0.01 per share (the “Common Stock”) used in the calculation of basic and diluted loss per share for the three- and nine-month periods ended September 30, 2019 and 2018 is as follows: Three Months Ended Nine Months Ended September 30, September 30, 2019 2018 2019 2018 (unaudited) Basic weighted average number of of common shares 38,196 28,215 37,169 28,002 Potential dilutive effect of stock-based awards - - - - Diluted weighted average number of common shares 38,196 28,215 37,169 28,002 The following outstanding stock-based awards were excluded from the computation of the effect of dilutive securities on loss per share for the following periods because they would have been anti-dilutive: Three Months Ended Nine Months Ended September 30, September 30, 2019 2018 2019 2018 (unaudited) Options 3,936 2,256 3,936 2,256 Stock-settled stock appreciation rights (SARs) 22 59 22 59 Restricted stock units (RSUs) 544 220 544 220 Warrants 14,196 13,542 14,196 13,542 18,698 16,077 18,698 16,077 |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 9 Months Ended |
Sep. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | 5. GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill is attributable to the acquisition of the BioPharma business from CGI in July 2019. The carrying value of the intangible assets acquired was $15.6 million, with goodwill of approximately $8.3 million and identifiable intangible assets of approximately $7.3 million. The net carrying value of the identifiable intangible assets from all acquisitions as of September 30, 2019 and December 31, 2018 are as follows: As of September 30, 2019 As of December 31, 2018 (unaudited) Life Carrying Carrying (Years) Amount Amount 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 BioPharma acquisition: Trademarks 10 1,600 - Customer relationships 8 5,700 - CLIA Lab 2.3 $ 609 $ 609 Total $ 50,920 $ 43,620 Accumulated Amortization $ (16,388 ) $ (13,767 ) Net Carrying Value $ 34,532 $ 29,853 Amortization expense was approximately $1.0 million and $0.8 million for the three-month periods ended September 30, 2019 and 2018, respectively, and approximately $2.6 million and $2.4 million for the nine-month periods ended September 30, 2019 and 2018, 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: 2019 2020 2021 2022 2023 2024 (remaining) $ 1,031 $ 5,145 $ 5,781 $ 3,859 $ 3,859 $ 3,149 |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 6. 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 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, is set forth in the tables below: As of September 30, 2019 Fair Value Measurements Carrying Fair As of September 30, 2019 Amount Value Level 1 Level 2 Level 3 (unaudited) Liabilities: Contingent consideration: Asuragen (1) $ 3,024 $ 3,024 $ - $ - $ 3,024 Other long-term liabilities: Warrant liability (2) 326 326 - - 326 $ 3,350 $ 3,350 $ - $ - $ 3,350 As of December 31, 2018 Fair Value Measurements Carrying Fair As of December 31, 2018 Amount Value Level 1 Level 2 Level 3 Liabilities: Contingent consideration: Asuragen (1) $ 3,127 $ 3,127 $ - $ - $ 3,127 Other long-term liabilities: Warrant liability (2) 361 361 - - 361 $ 3,488 $ 3,488 $ - $ - $ 3,488 (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 issued 575,000 Underwriters Warrants, related to a public offering on the same date that included a cash settlement feature in the event of certain circumstances. Accordingly, the Underwriters Warrants are classified as liabilities and were fair valued using the Black Scholes Option-Pricing Model, the inputs for which include 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 exchange agreement. Changes to the fair value of the warrant liabilities were recorded in Other income (expense), net. A roll forward of the carrying value of the Contingent Consideration Liability and the Underwriters’ Warrants to September 30, 2019 is as follows: Cancellation Adjustment of Obligation/ to Fair Value/ December 31, 2018 Payments Accretion Conversions Mark to September 30, 2019 (unaudited) Asuragen $ 3,127 $ (434 ) $ 331 $ - $ - $ 3,024 Underwriters Warrants 361 - - - (35 ) 326 $ 3,488 $ (434 ) $ 331 $ - $ (35 ) $ 3,350 Certain of the Company’s non-financial assets, such as other intangible assets and goodwill, are measured at fair value on a nonrecurring basis when there is an indicator of impairment and recorded at fair value only when an impairment charge is recognized. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Leases | 7. LEASES In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which establishes a ROU model that requires a lessee to record a ROU asset and a lease liability, measured on a discounted basis, on the balance sheet for all leases with terms longer than 12 months. Effective January 1, 2019, the Company adopted the provisions of Topic 842 using the alternative modified transition method, with a cumulative effect adjustment to the opening balance of retained earnings on the date of adoption, and prior periods not restated, as allowed under the provisions of Topic 842. The Company also elected to use the practical expedients permitted under the transition guidance of Topic 842, which provides for the following: the carryforward of the Company’s historical lease classification, no requirement for reassessment of whether an expired or existing contract contains an embedded lease, no reassessment of initial direct costs for any leases that exist prior to the adoption of the new standard, and the election to consolidate lease and non-lease components. The Company also elected to keep all leases with an initial term of 12 months or less off the balance sheet. The Company recorded $2.4 million of right-of-use lease assets and $2.5 million of lease liabilities upon adoption, primarily relating to rentals of space for our corporate headquarters and laboratories, as well as equipment leases, all under operating leases. In addition, the Company recorded a cumulative adjustment to opening accumulated deficit of $0.1 million. With the acquisition of the BioPharma business of CGI in 2019, the Company added $2.2 million of operating lease assets and liabilities and $0.5 million of finance lease assets and liabilities to its balance sheet. Finance lease assets are included in fixed assets, net of accumulated depreciation. The table below presents the lease-related assets and liabilities recorded in the Condensed Consolidated Balance Sheet: Classification on the Balance Sheet September 30, 2019 (unaudited) Assets Financing lease assets Property and equipment, net $ 998 Operating lease assets Operating lease assets 4,212 Total lease assets $ 5,210 Liabilities Current Financing lease liabilities Other accrued expenses $ 247 Operating lease liabilities Other accrued expenses 1,367 Total current lease liabilities $ 1,614 Noncurrent Financing lease liabilities Other long-term liabilities 173 Operating lease liabilities Operating lease liabilities 2,791 Total long-term lease liabilities 2,964 Total lease liabilities $ 4,578 The weighted average remaining lease term for the Company’s operating leases was 2.8 years as of September 30, 2019 and the weighted average discount rate for those leases was 6.0%. The Company’s operating lease expenses are recorded within cost of revenue and general and administrative expenses. The table below reconciles the undiscounted cash flows to the lease liabilities recorded on the Company’s Condensed Consolidated Balance Sheet as of September 30, 2019: Operating Leases Financing Leases 2019 (remaining) $ 412 $ 90 2020 1,431 226 2021 1,258 120 2022 1,192 13 2023 344 - Total minimum lease payments 4,637 449 Less: amount of lease payments representing effects of discounting 479 29 Present value of future minimum lease payments 4,158 420 Less: current obligations under leases 1,367 247 Long-term lease obligations $ 2,791 $ 173 As of December 31, 2018, contractual obligations with terms exceeding one year and estimated minimum future rental payments required by non-cancelable operating leases with initial or remaining lease terms exceeding one year were as follows: Less than 1 to 3 3 to 5 After Total 1 Year Years Years 5 Years Operating lease obligations $ 2,814 $ 613 $ 1,322 $ 879 $ - |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 8. 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 or services 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 and related intellectual property. 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, 2019, the Company’s accrual for litigation and threatened litigation was not material to the condensed consolidated financial statements. |
Accrued Expenses and Long-term
Accrued Expenses and Long-term Liabilities | 9 Months Ended |
Sep. 30, 2019 | |
Payables and Accruals [Abstract] | |
Accrued Expenses and Long-term Liabilities | 9. ACCRUED EXPENSES AND LONG-TERM LIABILITIES Other accrued expenses consisted of the following as of September 30, 2019 and December 31, 2018: September 30, 2019 December 31, 2018 (unaudited) Accrued royalties $ 2,000 $ 1,399 Indemnification liability 875 875 Contingent consideration 559 434 Accrued professional fees 1,318 701 Operating lease liability 1,367 - Deferred revenue 480 - Taxes payable 287 285 Unclaimed property 565 565 All others 1,972 832 Total other accrued expenses $ 9,423 $ 5,091 Long-term liabilities consisted of the following as of September 30, 2019 and December 31, 2018: September 30, 2019 December 31, 2018 (unaudited) Warrant liability $ 326 $ 361 Uncertain tax positions 4,011 3,838 Deferred revenue 294 - Other 160 120 Total other long-term liabilities $ 4,791 $ 4,319 |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation | 10. 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, stock appreciation rights (“SARs”) and restricted shares from the Interpace Biosciences, Inc. 2019 Equity Incentive Plan, (the “Stock Incentive Plan”). No new grants may be made under the Company’s prior stock incentive plan, the Interpace Diagnostics Group, Inc. Amended and Restated 2004 Stock Award and Incentive Plan (the “2004 Plan”). Unless earlier terminated by action of the Company’s board of directors, the 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 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. 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 (“RSUs”) 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 RSUs granted to Board members generally have a three-year graded vesting period and are subject to accelerated vesting and forfeiture under certain circumstances. During the first quarter of 2019, members of the Company’s management team were granted stock options to purchase an aggregate of 1,105,440 shares of Common Stock with an exercise price of $0.98 per share and 276,360 RSUs, subject generally to such member’s continued service with the Company, which vest one-third each year over a period of three years. 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, 2019 and 2018. Nine Months Ended September 30, 2019 September 30, 2018 (unaudited) Risk-free interest rate 2.51 % 2.65 % Expected life 6.0 years 6.0 years Expected volatility 127.81 % 126.93 % Dividend yield - - The Company recognized approximately $0.3 million and $0.4 million of stock-based compensation expense during the three-month periods ended September 30, 2019 and 2018, respectively, and approximately $1.2 million and $1.6 million for the nine-month periods ended September 30, 2019 and 2018, respectively. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 11. 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, 2019 and 2018: Three Months Ended Nine Months Ended September 30, September 30, 2019 2018 2019 2018 (unaudited) (unaudited) Provision for income tax $ 9 $ 7 $ 19 $ 21 Effective income tax rate 0.1 % 0.2 % 0.1 % 0.3 % Income tax expense for the three- and nine-month periods ended September 30, 2019 and 2018 was primarily due to minimum state and local taxes. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
Segment Information | 12. SEGMENT INFORMATION We view our operations and manage our business in one operating segment, which is the business of developing and selling diagnostic tests and biopharma services. The Company’s reporting segment structure is currently 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. |
Discontinued Operations
Discontinued Operations | 9 Months Ended |
Sep. 30, 2019 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | 13. DISCONTINUED OPERATIONS The components of liabilities classified as discontinued operations relate to Commercial Services and consist of the following as of September 30, 2019 and December 31, 2018: September 30, 2019 December 31, 2018 (unaudited) Accounts payable $ 69 $ 192 Other 697 726 Current liabilities from discontinued operations 766 918 Total liabilities $ 766 $ 918 |
Line of Credit
Line of Credit | 9 Months Ended |
Sep. 30, 2019 | |
Line of Credit Facility [Abstract] | |
Line of Credit | 14. LINE OF CREDIT On November 13, 2018 the Company, Interpace Diagnostics Corporation, and Interpace Diagnostics, LLC entered into a Loan and Security Agreement (the “SVB Loan Agreement”) with Silicon Valley Bank (“SVB”), which provides for up to $4.0 million of debt financing consisting of a 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 amount that may be borrowed under the Revolving Line is the lower of (i) $4.0 million or (ii) 80% of the Company’s eligible accounts receivable (as adjusted by SVB). Revolving Line outstanding amounts incur interest at a rate per annum equal to the Wall Street Journal 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 term loan portion of the SVB Loan Agreement has a maturity date of May 2, 2022, and the Revolving Line has a maturity date three years from the effective date, or November 13, 2021. As of September 30, 2019, the Company has drawn $3.75 million of the available funds with the Revolving Line which is the maximum allowed and has no remaining availability as $250,000 of the Line of Credit is used to secure the issuance of a standby letter of credit by SVB. See also Note 19, Subsequent Events – Revolving line of credit. |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 9 Months Ended |
Sep. 30, 2019 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental Cash Flow Information | 15. SUPPLEMENTAL CASH FLOW INFORMATION The following table represents cash flows used in the Company’s discontinued operations for the nine months ended September 30, 2019 and 2018: Nine Months Ended September 30, 2019 2018 (unaudited) Net cash used in operating activities of discontinued operations $ (30 ) $ (376 ) Nine Months Ended September 30, 2019 2018 (unaudited) Operating Adoption of ASC 606 $ - $ 2,500 Prepaid stock grants issued to vendors $ 72 $ 257 Adoption of ASC 842 - right of use asset $ 2,449 $ - Adoption of ASC 842 - operating lease liability $ 2,536 $ - Investing Acquisition of property and equipment $ - $ 12 Excess consideration note $ 6,822 $ - |
Equity
Equity | 9 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
Equity | 16. EQUITY Public Offering On January 25, 2019, the Company entered into an underwriting agreement (the “Underwriting Agreement”) with H.C. Wainwright & Co., LLC (“Wainwright”) with respect to the issuance and sale of an aggregate of 9,333,334 shares (the “Firm Shares”) of the Company’s Common Stock in an underwritten public offering. Pursuant to the Underwriting Agreement, the Company also granted Wainwright an option, exercisable for 30 days, to purchase an additional 1,400,000 shares of Common Stock. The option expired unexercised. The Firm Shares were offered to the public at a price of $0.75 per Share. Wainwright purchased the Firm Shares from the Company pursuant to the Underwriting Agreement at an effective price of $0.6975 per share. The Company received net proceeds, after deducting underwriter discounts and commissions and other expenses related to the offering, in the amount of approximately $6.0 million. The Company used the net proceeds from the offering for working capital, capital expenditures, business development and research and development expenditures, and the acquisition (in part) of the BioPharma business. Preferred Stock Issuance The Company entered into a Securities Purchase Agreement (the “Securities Purchase Agreement”) on July 15, 2019 with Ampersand 2018 Limited Partnership (the “Investor”), a fund managed by Ampersand Capital Partners, providing for the issuance and sale to the Investor of up to an aggregate of $27,000,000 in convertible preferred stock, par value $0.01 per share, of the Company consisting of two series, Series A (“Series A”) and Series A-1 (“Series A-1” and together with the Series A, the “Preferred Stock”), both at an issuance price per share of $100,000 (the “Stated Value”), to be funded at up to two different closings (the “Investment”). The initial closing, which was consummated promptly after the execution of the Securities Purchase Agreement, involved the issuance of 60 newly created shares of Series A at an aggregate purchase price of $6,000,000, and 80 newly created shares of Series A-1 at an aggregate purchase price of $8,000,000, for net proceeds of approximately $13.1 million. The Securities Purchase Agreement contemplated a second closing (the “Second Closing”), which would only be effected following the fulfillment to the Investor’s satisfaction of customary conditions, including, among others, the approval by the stockholders of the Company, as required under the rules of the Nasdaq Stock Market LLC (the “Nasdaq Listing Rules”), of the issuance of shares of Common Stock upon conversion of the Preferred Stock (the “Conversion Issuances”) in excess of the aggregate number of shares of Common Stock that the Company may issue upon conversion of the Preferred Stock without breaching its obligations under the Nasdaq Listing Rules (the “Stockholder Approval”). The terms of the Series A-1 provided that each share of Series A-1 would automatically convert into one share of Series A upon the Company obtaining the Stockholder Approval. See Note 19, Subsequent Events ATM program On September 20, 2019, the Company entered into an Equity Distribution Agreement (the “Agreement”) with Oppenheimer & Co. Inc., as sales agent (the “Agent”), pursuant to which the Company may, from time to time, issue and sell shares of its Common Stock, at an aggregate offering price of up to $4.8 million (the “Shares”) through the Agent. Under the terms of the Agreement, the Agent may sell the Shares at market prices by any method that is deemed to be an “at the market offering” as defined in Rule 415 under the Securities Act, as amended. Subject to the terms and conditions of the Agreement, the Agent will use its commercially reasonable efforts to sell the Shares from time to time, based upon the Company’s instructions. The Company has no obligation to sell any of the Shares, and may at any time suspend sales under the Agreement or terminate the Agreement in accordance with its terms. The Company has provided the Agent with customary indemnification rights, and the Agent will be entitled to a fixed commission of 3.0% of the aggregate gross proceeds from the Shares sold. The Agreement contains customary representations and warranties, and the Company is required to deliver customary closing documents and certificates in connection with sales of the Shares. To date, no shares have been sold under this agreement. |
Warrants
Warrants | 9 Months Ended |
Sep. 30, 2019 | |
Warrants | |
Warrants | 17. WARRANTS In connection with the Wainwright underwritten public offering, the Company issued to Wainwright’s designees warrants (the “Underwriter Warrants”) to purchase up to 654,334 shares of Common Stock (representing 7% of the aggregate number of Firm Shares), at an exercise price of $0.9375 per share (representing 125% of the public offering price). The Underwriter Warrants are exercisable immediately and expire three years from the date of issuance. There was no warrant exercise activity for the nine months ended September 30, 2019. Warrants outstanding for the period ended September 30, 2019 are as follows: Description Classification Exercise Price Expiration Date Warrants Issued Warrants Exercised Warrants Cancelled/ Expired Balance December 31, 2018 Balance 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 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 Underwriters Warrants,issued January 25, 2019 Equity $ 0.9375 January 2022 654,334 - - - 654,334 19,909,334 (5,672,852 ) (40,000 ) 13,542,148 14,196,482 |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Changes and Error Corrections [Abstract] | |
Recent Accounting Pronouncements | 18. RECENT ACCOUNTING PRONOUNCEMENTS Recently adopted standards In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which is effective for public companies for annual reporting periods beginning after December 15, 2018, including interim periods within those fiscal years. Topic 842 establishes a right-of-use model that requires a lessee to record a right-of-use asset and a lease liability, measured on a discounted basis, on the balance sheet for all leases with terms longer than 12 months. Leases are to be classified as either finance or operating leases, with such classification affecting the pattern or expense recognition in the statement of operations. We adopted this new standard as of January 1, 2019, by using the alternative modified transition method. See Note 3, Significant Accounting Policies Standards not yet effective In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Accounting for Goodwill Impairment |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | 19. SUBSEQUENT EVENTS Additional financing received Stockholder Approval was obtained on October 10, 2019 for the Securities Purchase Agreement (discussed in Note 16, Equity On October 16, 2019, the Company and the Investor consummated the Second Closing. At the Second Closing, the Company issued to the Investor 130 newly created shares of Series A at an aggregate gross purchase price of $13,000,000. The Company used the proceeds from the Second Closing to make the maturity date payment, subject to certain holdbacks, with respect to the promissory note issued by a subsidiary of the Company to Cancer Genetics, Inc., and expects to use the remaining proceeds for general corporate purposes, including the integration of the Biopharma services business. The Company issued the aforementioned note in connection with the acquisition of its BioPharma services business. The Series A was offered and sold pursuant to an exemption from registration under Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”) and Rule 506 of Regulation D promulgated thereunder. The shares to be issued upon conversion of the Series A have not been registered under the Securities Act and may not be offered or sold in the United States in the absence of an effective registration statement or exemption from the registration requirements. Revolving line of credit Using the proceeds received from the Second Closing described above, the Company paid off the line of credit balance of $3.75 million that was outstanding as of September 30, 2019 in October 2019. Excess consideration note As part of the purchase of the BioPharma business from CGI and the consideration given for the purchased assets, $7,692,300 was in the form of a subordinated seller note (the “ Excess Consideration Note Note 2, Acquisition In October 2019, the excess consideration note balance was paid to CGI amounting to $6,024,489 million which included the following adjustments: an indemnification holdback of $735,000 (less paid indemnity claims) due to be released to CGI in January 2020, less the remaining accounts receivable holdback of $152,858 also due to be released by January 2020, less the final post-closing net-worth adjustment of $775,000, less repayment of certain advances made by the Company on behalf of the BioPharma business to CGI regarding certain pre-closing liabilities totaling $317,628, plus $289,000 of unbilled accounts receivable as of July 15, 2019 that were not included in the original financial schedules, plus unpaid and accrued interest under the excess consideration note of $23,674. The indemnification and accounts receivable holdbacks were deposited into separate escrow accounts until released or settled which is due by December 31, 2019. Nasdaq notification On October 15, 2019, the Company received notice from Nasdaq indicating that, while the Company has not regained compliance with the minimum bid price requirement, the staff of Nasdaq (the “Staff”) has determined that the Company is eligible for an additional 180-day period, or until April 13, 2020, to regain compliance. The Staff’s determination was based on (i) the Company meeting the continued listing requirement for market value of its publicly held shares and all other applicable initial listing standards for the Nasdaq Capital Market, with the exception of the bid price requirement, and (ii) the Company providing written notice to Nasdaq of its intent to cure the deficiency during this second compliance period by effecting a reverse stock split, if necessary. If at any time during this second, 180-day period the closing bid price of the Company’s Common Stock is at least $1.00 per share for at least a minimum of 10 consecutive business days, the Staff will provide written confirmation of compliance. If compliance cannot be demonstrated by April 13, 2020, Nasdaq will provide written notification to the Company that its Common Stock will be subject to delisting. At that time, the Company may appeal the delisting determination to a Nasdaq hearings panel. There can be no assurance that the Company will regain compliance with the Rule or maintain compliance with other Nasdaq continued listing requirements. Reverse Stock Split On November 14, 2019, the Company filed a definitive proxy statement on Schedule 14A for a special meeting of stockholders to be held on December 13, 2019 to approve an amendment to the Company’s certificate of incorporation to effect a reverse stock split of common stock, at a ratio in the range from one-for-five to one-for-fifteen, with such specific ratio to be determined by the Company’s board of directors following the special meeting. The Company is not obligated to effect the reverse stock split. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
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 The Company is a leader in enabling personalized medicine, offering specialized services along the therapeutic value chain from early diagnosis and prognostic planning to targeted therapeutic applications. The Company’s primary source of revenue is generated from the performance of its proprietary molecular diagnostic tests for its clinical customers (Interpace Diagnostics) and its DNA-based pharma testing services in support of clinical trials for its biopharma customers (Interpace Pharma Solutions). Our Diagnostics business is a fully integrated commercial and bioinformatics business unit that provides clinically useful molecular diagnostic tests, bioinformatics and pathology services for evaluating risk of cancer by leveraging the latest technology in personalized medicine for improved patient diagnosis and management. The genomic tests that we develop and commercialize as well as related first line assays are principally focused on early detection of patients with indeterminate biopsies and at high risk of cancer. Our tests and services provide mutational analysis of genomic material contained in these “suspicious” cysts, nodules and lesions with the goal of better informing treatment decisions in patients at risk of thyroid, pancreatic, and other cancers and in many cases avoiding unnecessary surgical treatment in patients at low risk. We currently have four commercialized molecular diagnostic tests in the marketplace for which we are receiving reimbursement: PancraGEN ® ® ® ® ® ® ® ® BarreGEN ® ® ® Our recently acquired BioPharma or now called Pharma Solutions business provides pharmacogenomics testing, genotyping, biorepository and other customized services to the pharmaceutical and biotech industries and advances personalized medicine by partnering with pharmaceutical, academic, and technology leaders to effectively integrate pharmacogenomics into their drug development and clinical trial programs with the goals of delivering safer, more effective drugs to market more quickly, and improving patient care. Therefore, the Company’s primary source of revenue is generated from the performance of its proprietary molecular diagnostic tests for its clinical customers and its DNA-based pharma testing services in support of clinical trials for its BioPharma customers. The Company’s performance obligation is fulfilled upon completion, review and release of test results and subsequent billing to the third-party payer, hospital or contracting customer. Clinical Performance Obligations and Revenue Recognition Under ASC 606, the Company recognizes revenue for billings less contractual allowances and estimated uncollectable amounts for all third party payer groups on the accrual basis based upon a thorough analysis of historical receipts. The net amount derived and used for revenue recognition is referred to as the Net Realizable Value (NRV) for the particular test and payer group from which reimbursement is received. This derived NRV is evaluated quarterly or as needed and then applied to future periods until recalculated. BIoPharma Performance Obligations and Revenue Recognition Performance obligations are satisfied at a point in time as the Company processes samples delivered by the customer. Project level activities, including study setup and project management, are satisfied over the life of the contract. Revenues are recognized at a point in time when the test results or other deliverables are reported to the customer. Project level fee revenue is recognized ratably over the life of the contract. Deferred revenue from BioPharma Contracts is recorded at fair value and represents payments received in advance of services rendered. Revenue from Contracts with Customers (ASC 606) Our Diagnostics business derives its revenues from the performance of its proprietary assays or 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 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. To the extent the transaction price includes variable consideration, for all third party and direct-bill payers and proprietary tests, 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. For our Diagnostics business, we regularly review the ultimate amounts received from the third-party and direct-bill payers and related estimated reimbursement rates and adjust the NRV’s and related contractual allowances accordingly. If actual collections and related NRV’s vary significantly 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. Deferred Revenue Deferred revenue is recorded at fair value and represents payments received in advance of services rendered. Financing and Payment For non-Medicare claims, our payment terms vary by payer category. Payment terms for direct-payers in our clinical or diagnostics business are typically thirty days and in our BioPharma business, up to sixty days. Commercial third-party-payers are required to respond to a claim within a time period established by their respective state regulations, generally between thirty to sixty days. However, payment for commercial third-party claims may be subject to a denial and appeal process, which could take up to two years in some instances where multiple appeals are submitted. The Company generally appeals all denials from commercial third-party payers. 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 receivable represent unconditional rights to consideration and are generated using its clinical or diagnostics and BioPharma 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 directly bills the hospital or contracting customer. Accounts receivable is 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 rate set by third party payers, including Medicare, commercial payers, or amounts billed directly to hospitals and service providers. Specific accounts may be written off after several appeals, which in some cases may take longer than twelve months. |
Leases | Leases The Company determines if an arrangement contains a lease in whole or in part at the inception of the contract. Right-of-use (“ROU”) assets represent the Company’s right to use an underlying asset for the lease term while lease liabilities represent our obligation to make lease payments arising from the lease. All leases with terms greater than twelve months result in the recognition of a ROU asset and a liability at the lease commencement date based on the present value of the lease payments over the lease term. Unless a lease provides all of the information required to determine the implicit interest rate, we use our incremental borrowing rate based on the information available at the commencement date in determining the present value of the lease payments. We use the implicit interest rate in the lease when readily determinable. Our lease terms include all non-cancelable periods and may include options to extend (or to not terminate) the lease when it is reasonably certain that we will exercise that option. Leases with terms of twelve months or less at the commencement date are expensed on a straight-line basis over the lease term and do not result in the recognition of an asset or liability. See Note 7, Leases |
Other Current Assets | Other Current Assets Other current assets consisted of the following as of September 30, 2019 and December 31, 2018: September 30, 2019 December 31, 2018 (unaudited) Indemnification assets $ 875 $ 875 Prepaid expenses 2,571 1,230 Other 76 65 Total other current assets $ 3,522 $ 2,170 |
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 ten 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, par value $0.01 per share (the “Common Stock”) used in the calculation of basic and diluted loss per share for the three- and nine-month periods ended September 30, 2019 and 2018 is as follows: Three Months Ended Nine Months Ended September 30, September 30, 2019 2018 2019 2018 (unaudited) Basic weighted average number of of common shares 38,196 28,215 37,169 28,002 Potential dilutive effect of stock-based awards - - - - Diluted weighted average number of common shares 38,196 28,215 37,169 28,002 The following outstanding stock-based awards were excluded from the computation of the effect of dilutive securities on loss per share for the following periods because they would have been anti-dilutive: Three Months Ended Nine Months Ended September 30, September 30, 2019 2018 2019 2018 (unaudited) Options 3,936 2,256 3,936 2,256 Stock-settled stock appreciation rights (SARs) 22 59 22 59 Restricted stock units (RSUs) 544 220 544 220 Warrants 14,196 13,542 14,196 13,542 18,698 16,077 18,698 16,077 |
Acquisition (Tables)
Acquisition (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Business Combinations [Abstract] | |
Schedule of Assets Acquired and Liabilities Assumed | The reconciliation of consideration given for BioPharma to the preliminary allocation of the purchase price of assets and liabilities acquired based on their relative fair values is as follows: Cash $ 13,829 Subordinated note payable 6,822 Total consideration $ 20,651 Assets acquired Accounts receivable $ 3,731 Accrued revenue 289 Lab supplies 877 Prepaid expenses 266 Property and equipment 6,412 Operating lease assets 2,187 Acquired identifiable intangible assets: Trademarks and trade name 1,600 Customer relationships 5,700 Total acquired identifiable intangible assets 7,300 Goodwill 8,273 Total assets acquired 29,335 Liabilities assumed Accounts payable (4,535 ) Accrued liabilities (435 ) Deferred revenue (1,076 ) Operating lease liabilities (2,187 ) Finance lease liabilities (451 ) Total liabilities assumed (8,684 ) Net assets acquired $ 20,651 |
Schedule of ProForma Information | Three Months Ended September 30, 2019 Nine Months Ended September 30, 2019 Three Months Ended September 30, 2018 Nine Months Ended September 30, 2018 Revenue $ 8,010 $ 27,648 $ 9,741 $ 27,551 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Schedule of Other Current Assets | Other current assets consisted of the following as of September 30, 2019 and December 31, 2018: September 30, 2019 December 31, 2018 (unaudited) Indemnification assets $ 875 $ 875 Prepaid expenses 2,571 1,230 Other 76 65 Total other current assets $ 3,522 $ 2,170 |
Schedule of Weighted Average Number of Shares | A reconciliation of the number of shares of common stock, par value $0.01 per share (the “Common Stock”) used in the calculation of basic and diluted loss per share for the three- and nine-month periods ended September 30, 2019 and 2018 is as follows: Three Months Ended Nine Months Ended September 30, September 30, 2019 2018 2019 2018 (unaudited) Basic weighted average number of of common shares 38,196 28,215 37,169 28,002 Potential dilutive effect of stock-based awards - - - - Diluted weighted average number of common shares 38,196 28,215 37,169 28,002 |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following outstanding stock-based awards were excluded from the computation of the effect of dilutive securities on loss per share for the following periods because they would have been anti-dilutive: Three Months Ended Nine Months Ended September 30, September 30, 2019 2018 2019 2018 (unaudited) Options 3,936 2,256 3,936 2,256 Stock-settled stock appreciation rights (SARs) 22 59 22 59 Restricted stock units (RSUs) 544 220 544 220 Warrants 14,196 13,542 14,196 13,542 18,698 16,077 18,698 16,077 |
Goodwill And Other Intangible_2
Goodwill And Other Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Identifiable Intangible Assets Carrying Value | The net carrying value of the identifiable intangible assets from all acquisitions as of September 30, 2019 and December 31, 2018 are as follows: As of September 30, 2019 As of December 31, 2018 (unaudited) Life Carrying Carrying (Years) Amount Amount 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 BioPharma acquisition: Trademarks 10 1,600 - Customer relationships 8 5,700 - CLIA Lab 2.3 $ 609 $ 609 Total $ 50,920 $ 43,620 Accumulated Amortization $ (16,388 ) $ (13,767 ) Net Carrying Value $ 34,532 $ 29,853 |
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: 2019 2020 2021 2022 2023 2024 (remaining) $ 1,031 $ 5,145 $ 5,781 $ 3,859 $ 3,859 $ 3,149 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
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, is set forth in the tables below: As of September 30, 2019 Fair Value Measurements Carrying Fair As of September 30, 2019 Amount Value Level 1 Level 2 Level 3 (unaudited) Liabilities: Contingent consideration: Asuragen (1) $ 3,024 $ 3,024 $ - $ - $ 3,024 Other long-term liabilities: Warrant liability (2) 326 326 - - 326 $ 3,350 $ 3,350 $ - $ - $ 3,350 As of December 31, 2018 Fair Value Measurements Carrying Fair As of December 31, 2018 Amount Value Level 1 Level 2 Level 3 Liabilities: Contingent consideration: Asuragen (1) $ 3,127 $ 3,127 $ - $ - $ 3,127 Other long-term liabilities: Warrant liability (2) 361 361 - - 361 $ 3,488 $ 3,488 $ - $ - $ 3,488 (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’ Warrants to September 30, 2019 is as follows: Cancellation Adjustment of Obligation/ to Fair Value/ December 31, 2018 Payments Accretion Conversions Mark to September 30, 2019 (unaudited) Asuragen $ 3,127 $ (434 ) $ 331 $ - $ - $ 3,024 Underwriters Warrants 361 - - - (35 ) 326 $ 3,488 $ (434 ) $ 331 $ - $ (35 ) $ 3,350 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Schedule of Operating Leases | The table below presents the lease-related assets and liabilities recorded in the Condensed Consolidated Balance Sheet: Classification on the Balance Sheet September 30, 2019 (unaudited) Assets Financing lease assets Property and equipment, net $ 998 Operating lease assets Operating lease assets 4,212 Total lease assets $ 5,210 Liabilities Current Financing lease liabilities Other accrued expenses $ 247 Operating lease liabilities Other accrued expenses 1,367 Total current lease liabilities $ 1,614 Noncurrent Financing lease liabilities Other long-term liabilities 173 Operating lease liabilities Operating lease liabilities 2,791 Total long-term lease liabilities 2,964 Total lease liabilities $ 4,578 |
Schedule of Maturities of Operating and Financing Lease Liabilties | The table below reconciles the undiscounted cash flows to the lease liabilities recorded on the Company’s Condensed Consolidated Balance Sheet as of September 30, 2019: Operating Leases Financing Leases 2019 (remaining) $ 412 $ 90 2020 1,431 226 2021 1,258 120 2022 1,192 13 2023 344 - Total minimum lease payments 4,637 449 Less: amount of lease payments representing effects of discounting 479 29 Present value of future minimum lease payments 4,158 420 Less: current obligations under leases 1,367 247 Long-term lease obligations $ 2,791 $ 173 |
Schedule of Future Minimum Lease Payments Under Non-Cancellable Leases | As of December 31, 2018, contractual obligations with terms exceeding one year and estimated minimum future rental payments required by non-cancelable operating leases with initial or remaining lease terms exceeding one year were as follows: Less than 1 to 3 3 to 5 After Total 1 Year Years Years 5 Years Operating lease obligations $ 2,814 $ 613 $ 1,322 $ 879 $ - |
Accrued Expenses and Long-ter_2
Accrued Expenses and Long-term Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Payables and Accruals [Abstract] | |
Schedule of Other Accrued Expenses | Other accrued expenses consisted of the following as of September 30, 2019 and December 31, 2018: September 30, 2019 December 31, 2018 (unaudited) Accrued royalties $ 2,000 $ 1,399 Indemnification liability 875 875 Contingent consideration 559 434 Accrued professional fees 1,318 701 Operating lease liability 1,367 - Deferred revenue 480 - Taxes payable 287 285 Unclaimed property 565 565 All others 1,972 832 Total other accrued expenses $ 9,423 $ 5,091 |
Schedule of Long Term Liabilities | Long-term liabilities consisted of the following as of September 30, 2019 and December 31, 2018: September 30, 2019 December 31, 2018 (unaudited) Warrant liability $ 326 $ 361 Uncertain tax positions 4,011 3,838 Deferred revenue 294 - Other 160 120 Total other long-term liabilities $ 4,791 $ 4,319 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Share-based Payment Arrangement [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, 2019 and 2018. Nine Months Ended September 30, 2019 September 30, 2018 (unaudited) Risk-free interest rate 2.51 % 2.65 % Expected life 6.0 years 6.0 years Expected volatility 127.81 % 126.93 % Dividend yield - - |
Income Taxes (Tables)
Income Taxes (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
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, 2019 and 2018: Three Months Ended Nine Months Ended September 30, September 30, 2019 2018 2019 2018 (unaudited) (unaudited) Provision for income tax $ 9 $ 7 $ 19 $ 21 Effective income tax rate 0.1 % 0.2 % 0.1 % 0.3 % |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
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, 2019 and December 31, 2018: September 30, 2019 December 31, 2018 (unaudited) Accounts payable $ 69 $ 192 Other 697 726 Current liabilities from discontinued operations 766 918 Total liabilities $ 766 $ 918 |
Supplemental Cash Flow Inform_2
Supplemental Cash Flow Information (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Supplemental Cash Flow Elements [Abstract] | |
Schedule of Supplemental Disclosure of Cash flow Information | The following table represents cash flows used in the Company’s discontinued operations for the nine months ended September 30, 2019 and 2018: Nine Months Ended September 30, 2019 2018 (unaudited) Net cash used in operating activities of discontinued operations $ (30 ) $ (376 ) Nine Months Ended September 30, 2019 2018 (unaudited) Operating Adoption of ASC 606 $ - $ 2,500 Prepaid stock grants issued to vendors $ 72 $ 257 Adoption of ASC 842 - right of use asset $ 2,449 $ - Adoption of ASC 842 - operating lease liability $ 2,536 $ - Investing Acquisition of property and equipment $ - $ 12 Excess consideration note $ 6,822 $ - |
Warrants (Tables)
Warrants (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Warrants | |
Schedule of Warrants Outstanding and Warrants Activity | There was no warrant exercise activity for the nine months ended September 30, 2019. Warrants outstanding for the period ended September 30, 2019 are as follows: Description Classification Exercise Price Expiration Date Warrants Issued Warrants Exercised Warrants Cancelled/ Expired Balance December 31, 2018 Balance 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 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 Underwriters Warrants,issued January 25, 2019 Equity $ 0.9375 January 2022 654,334 - - - 654,334 19,909,334 (5,672,852 ) (40,000 ) 13,542,148 14,196,482 |
Acquisition (Details Narrative)
Acquisition (Details Narrative) - USD ($) | Jul. 30, 2019 | Jul. 15, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2019 | Dec. 31, 2018 |
Proceeds from preferred stock financing | $ 13,087,000 | |||||
Goodwill | $ 8,300,000 | 8,273,000 | ||||
Finite lived intangible assets | $ 7,300,000 | $ 7,600,000 | ||||
Finite lived intangible assets weighted-average amortization period | 8 years 4 months 24 days | |||||
Business transaction | $ 2,500,000 | |||||
Trademarks [Member] | ||||||
Finite lived intangible assets weighted-average amortization period | 10 years | |||||
Customer Relationships [Member] | ||||||
Finite lived intangible assets weighted-average amortization period | 8 years | |||||
CGI Bio Pharma [Member] | ||||||
Business combination consideration amount | $ 775,000 | |||||
CGI Bio Pharma [Member] | Forecast [Member] | ||||||
Accounts receivable | $ 830,000 | |||||
Asset Purchase Agreement [Member] | Inital Tranche [Member] | ||||||
Proceeds from preferred stock financing | $ 13,800,000 | |||||
Asset Purchase Agreement [Member] | CGI Bio Pharma [Member] | ||||||
Assets and assumed certain liabilities | 23,500,000 | |||||
Proceeds from preferred stock financing | 7,692,300 | |||||
Asset Purchase Agreement [Member] | CGI Bio Pharma [Member] | Base Purchase Price [Member] | ||||||
Assets and assumed certain liabilities | $ 19,800,000 |
Acquisition - Schedule of Asset
Acquisition - Schedule of Assets Acquired and Liabilities Assumed (Details) - USD ($) | Jul. 15, 2019 | Sep. 30, 2019 | Dec. 31, 2018 |
Business Acquisition [Line Items] | |||
Total acquired identifiable intangible assets | $ 7,300,000 | $ 7,600,000 | |
Goodwill | 8,300,000 | $ 8,273,000 | |
BioPharma Acquisition [Member] | |||
Business Acquisition [Line Items] | |||
Cash | 13,829,000 | ||
Subordinated note payable | 6,822,000 | ||
Total consideration | 20,651,000 | ||
Accounts receivable | 3,731,000 | ||
Accrued revenue | 289,000 | ||
Lab supplies | 877,000 | ||
Prepaid expenses | 266,000 | ||
Property and equipment | 6,412,000 | ||
Operating lease assets | 2,187,000 | ||
Total acquired identifiable intangible assets | 7,300,000 | ||
Goodwill | 8,273,000 | ||
Total assets acquired | 29,335,000 | ||
Accounts payable | (4,535,000) | ||
Accrued liabilities | (435,000) | ||
Deferred revenue | (1,076,000) | ||
Operating lease liabilities | (2,187,000) | ||
Finance lease liabilities | (451,000) | ||
Total liabilities assumed | (8,684,000) | ||
Net assets acquired | 20,651,000 | ||
BioPharma Acquisition [Member] | Trademarks and Trade Name [Member] | |||
Business Acquisition [Line Items] | |||
Total acquired identifiable intangible assets | 1,600,000 | ||
BioPharma Acquisition [Member] | Customer Relationships [Member] | |||
Business Acquisition [Line Items] | |||
Total acquired identifiable intangible assets | $ 5,700,000 |
Acquisition - Schedule of ProFo
Acquisition - Schedule of ProForma Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Business Combinations [Abstract] | ||||
Revenue | $ 8,010 | $ 9,741 | $ 27,648 | $ 27,551 |
Liquidity (Details Narrative)
Liquidity (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | Sep. 20, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Oct. 16, 2019 | Jul. 15, 2019 | Dec. 31, 2018 |
Cash and cash equivalents | $ 2,358 | $ 2,358 | $ 6,068 | |||||
Accounts receivable, net | 14,701 | 14,701 | 9,483 | |||||
Total current assets | 20,581 | 20,581 | 17,721 | |||||
Total current liabilities | 17,296 | 17,296 | $ 8,492 | |||||
Net loss | $ 7,362 | $ 3,042 | 16,001 | $ 8,152 | ||||
Net cash used in operating activities | $ 12,556 | $ 6,800 | ||||||
Common stock, par value | $ 0.01 | $ 0.01 | $ 0.01 | |||||
Security Purchase Agreement [Member] | ||||||||
Preferred Stock value | $ 27,000 | |||||||
Business combination consideration amount | $ 23,500 | |||||||
Closing adjustments paid | $ 1,980 | |||||||
Security Purchase Agreement [Member] | Tranche One [Member] | ||||||||
Preferred Stock value | $ 14,000 | |||||||
Security Purchase Agreement [Member] | Tranche Two [Member] | ||||||||
Preferred Stock value | $ 13,000 | |||||||
Equity Distribution Agreement [Member] | ||||||||
Proceeds from pay down of line of credit | $ 3,750 | |||||||
Common stock, par value | $ 0.01 | |||||||
Aggregate offering price | $ 4,800 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details Narrative)) | 9 Months Ended |
Sep. 30, 2019 | |
Minimum [Member] | |
Estimated useful life | 2 years |
Maximum [Member] | |
Estimated useful life | 10 years |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Schedule of Other Current Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Accounting Policies [Abstract] | ||
Indemnification assets | $ 875 | $ 875 |
Prepaid assets | 2,571 | 1,230 |
Other | 76 | 65 |
Total other current assets | $ 3,522 | $ 2,170 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Schedule of Weighted Average Number of Shares (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Accounting Policies [Abstract] | ||||
Basic weighted average number of common shares | 38,196 | 28,215 | 37,169 | 28,002 |
Potential dilutive effect of stock-based awards | ||||
Diluted weighted average number of common shares | 38,196 | 28,215 | 37,169 | 28,002 |
Summary of Significant Accoun_7
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, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share | 18,698 | 16,077 | 18,698 | 16,077 |
Options [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share | 3,936 | 2,256 | 3,936 | 2,256 |
Stock-Settled Stock Appreciation Rights (SARs) [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share | 22 | 59 | 22 | 59 |
Restricted Stock Units (RSUs) [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share | 544 | 220 | 544 | 220 |
Warrants [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share | 14,196 | 13,542 | 14,196 | 13,542 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Jul. 15, 2019 | Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||
Intangible assets | $ 15,600,000 | |||||
Goodwill | $ 8,273,000 | 8,273,000 | $ 8,300,000 | |||
Identifiable intangible assets | 7,600,000 | 7,600,000 | $ 7,300,000 | |||
Amortization expense | $ 100,000 | $ 800,000 | $ 2,600,000 | $ 2,400,000 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets - Schedule of Identifiable Intangible Assets Carrying Value (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Finite-lived Intangible Assets, Gross | $ 50,920 | $ 43,620 |
Finite-lived Intangible Assets, Accumulated Amortization | (16,388) | (13,767) |
Finite-lived Intangible Assets, Net Carrying Value | $ 34,532 | $ 29,853 |
CLIA Lab [Member] | ||
Finite-lived Intangible Asset, Useful Life (Years) | 2 years 3 months 19 days | 2 years 3 months 19 days |
Finite-lived Intangible Assets, Gross | $ 609 | $ 609 |
Asuragen Acquisition [Member] | Thyroid [Member] | ||
Finite-lived Intangible Asset, Useful Life (Years) | 9 years | 9 years |
Finite-lived Intangible Assets, Gross | $ 8,519 | $ 8,519 |
RedPath Acquisition [Member] | Pancreas Test [Member] | ||
Finite-lived Intangible Asset, Useful Life (Years) | 7 years | 7 years |
Finite-lived Intangible Assets, Gross | $ 16,141 | $ 16,141 |
RedPath Acquisition [Member] | Barrett's Test [Member] | ||
Finite-lived Intangible Asset, Useful Life (Years) | 9 years | 9 years |
Finite-lived Intangible Assets, Gross | $ 18,351 | $ 18,351 |
BioPharma Acquisition [Member] | Trademarks [Member] | ||
Finite-lived Intangible Asset, Useful Life (Years) | 10 years | 10 years |
Finite-lived Intangible Assets, Gross | $ 1,600 | |
BioPharma Acquisition [Member] | Customer Relationships [Member] | ||
Finite-lived Intangible Asset, Useful Life (Years) | 8 years | 8 years |
Finite-lived Intangible Assets, Gross | $ 5,700 |
Goodwill and Other Intangible_5
Goodwill and Other Intangible Assets - Schedule of Future Estimated Amortization Expense (Details) $ in Thousands | Sep. 30, 2019USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2019 (remaining) | $ 1,031 |
2020 | 5,145 |
2021 | 5,781 |
2022 | 3,859 |
2023 | 3,859 |
2024 | $ 3,149 |
Fair Value Measurements (Detail
Fair Value Measurements (Details Narrative) | Jun. 21, 2017shares |
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, 2019 | Dec. 31, 2018 | |
Reported Value Measurement [Member] | |||
Warrant liability | [1] | $ 326 | $ 361 |
Fair value of liabilities | 3,350 | 3,488 | |
Fair Value Measurements [Member] | |||
Warrant liability | [1] | 326 | 361 |
Fair value of liabilities | 3,350 | 3,488 | |
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] | 326 | 361 |
Fair value of liabilities | 3,350 | 3,488 | |
Asuragen [Member] | |||
Contingent consideration | [1] | 3,024 | 3,127 |
Asuragen [Member] | Fair Value Measurements [Member] | |||
Contingent consideration | [1] | 3,024 | 3,127 |
Asuragen [Member] | Level 1 [Member] | |||
Contingent consideration | [1] | ||
Asuragen [Member] | Level 2 [Member] | |||
Contingent consideration | [1] | ||
Asuragen [Member] | Level 3 [Member] | |||
Contingent consideration | [1] | $ 3,024 | $ 3,127 |
[1] | See Note 9, 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, 2019USD ($) | |
Beginning Balance | $ 3,488 |
Payments | (434) |
Accretion | 331 |
Cancellation of Obligation/Conversions Exercises | |
Adjustment to Fair Value/Mark to Market | (35) |
Ending Balance | 3,350 |
Underwriter Warrants[Member] | |
Beginning Balance | 361 |
Payments | |
Accretion | |
Cancellation of Obligation/Conversions Exercises | |
Adjustment to Fair Value/Mark to Market | (35) |
Ending Balance | 326 |
Asuragen [Member] | |
Beginning Balance | 3,127 |
Payments | (434) |
Accretion | 331 |
Cancellation of Obligation/Conversions Exercises | |
Adjustment to Fair Value/Mark to Market | |
Ending Balance | $ 3,024 |
Leases (Details Narrative)
Leases (Details Narrative) - USD ($) $ in Thousands | Sep. 30, 2019 | Jan. 02, 2019 |
Lease liabilities | $ 4,158 | |
Finance lease liabilities | $ 420 | |
ASU 2016-02 [Member] | ||
Right-of-use lease assets | $ 2,400 | |
Lease liabilities | 2,500 | |
Cumulative adjustment to opening accumulated deficit | $ 100 | |
Operating lease term | 2 years 9 months 18 days | |
Weighted average discount rate leases percentage | 6.00% | |
ASU 2016-02 [Member] | BioPharma Acquisition [Member] | ||
Right-of-use lease assets | $ 2,200 | |
Lease liabilities | 2,200 | |
Finance lease assets | 500 | |
Finance lease liabilities | $ 500 |
Leases - Schedule of Operating
Leases - Schedule of Operating Leases (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Operating lease assets | $ 4,212 | |
Total lease assets | 5,210 | |
Current financing lease liabilities | 247 | |
Current operating lease liabilities | 1,367 | |
Total current lease liabilities | 1,614 | |
Noncurrent financing lease liabilities | 173 | |
Noncurrent operating lease liabilities | 2,791 | |
Total long-term lease liabilities | 2,964 | |
Total lease liabilities | 4,578 | |
Property and Equipment, Net [Member] | ||
Financing lease assets | 998 | |
Operating Lease Assets [Member] | ||
Operating lease assets | 4,212 | |
Other Accrued Expenses [Member] | ||
Current financing lease liabilities | 247 | |
Current operating lease liabilities | 1,367 | |
Operating Lease Liabilities [Member] | ||
Noncurrent financing lease liabilities | 173 | |
Noncurrent operating lease liabilities | $ 2,791 |
Leases - Schedule of Maturities
Leases - Schedule of Maturities of Operating and Financing Lease Liabilties (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Leases [Abstract] | ||
2019 (remaining) | $ 412 | |
2020 | 1,431 | |
2021 | 1,258 | |
2022 | 1,192 | |
2023 | 344 | |
Total minimum lease payments | 4,637 | |
Less: amount of lease payments representing effects of discounting | 479 | |
Present value of future minimum lease payments | 4,158 | |
Less: current obligations under leases | 1,367 | |
Total lease liabilities | 2,791 | |
2019 (remaining) | 90 | |
2020 | 226 | |
2021 | 120 | |
2022 | 13 | |
2023 | ||
Total minimum lease payments | 449 | |
Less: amount of lease payments representing effects of discounting | 29 | |
Present value of future minimum lease payments | 420 | |
Less: current obligations under leases | 247 | |
Total lease liabilities | $ 173 |
Leases - Schedule of Future Min
Leases - Schedule of Future Minimum Lease Payments Under Non-Cancelable Leases (Details) $ in Thousands | Sep. 30, 2019USD ($) |
Leases [Abstract] | |
Operating lease obligations, Less than 1 Year | $ 613 |
Operating lease obligations, 1 to 3 Years | 1,322 |
Operating lease obligations, 3 to 5 Years | 879 |
Operating lease obligations, After 5 Years | |
Operating lease obligations, Total | $ 2,814 |
Accrued Expenses and Long-ter_3
Accrued Expenses and Long-term Liabilities - Schedule of Other Accrued Expenses (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Payables and Accruals [Abstract] | ||
Accrued royalties | $ 2,000 | $ 1,399 |
Indemnification liability | 875 | 875 |
Contingent consideration | 559 | 434 |
Accrued professional fees | 1,318 | 701 |
Operating lease liability | 1,367 | |
Deferred revenue | 480 | |
Taxes payable | 287 | 285 |
Unclaimed property | 565 | 565 |
All others | 1,972 | 832 |
Total other accrued expenses | $ 9,423 | $ 5,091 |
Accrued Expenses and Long-ter_4
Accrued Expenses and Long-term Liabilities - Schedule of Long Term Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Payables and Accruals [Abstract] | ||
Warrant liability | $ 326 | $ 361 |
Uncertain tax positions | 4,011 | 3,838 |
Deferred revenue | 294 | |
Other | 160 | 120 |
Total other long-term liabilities | $ 4,791 | $ 4,319 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Share-based compensation expense | $ 300 | $ 400 | $ 1,246 | $ 1,564 | |
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. 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 ("RSUs") 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 | 1,105,440 | ||||
Share-based compensation arrangements, options, grants in period, weighted average exercise price | $ 0.98 | ||||
Stock Incentive Plan [Member] | Restricted Stock Units (RSUs) [Member] | |||||
Share-based compensation arrangement, options, grants in period, gross | 276,360 | ||||
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, 2019 | Sep. 30, 2018 | |
Share-based Payment Arrangement [Abstract] | ||
Risk-free interest rate | 2.51% | 2.65% |
Expected life | 6 years | 6 years |
Expected volatility | 127.81% | 126.93% |
Dividend yield | 0.00% | 0.00% |
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, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | ||||
Provision for income tax | $ 9 | $ 7 | $ 19 | $ 21 |
Effective income tax rate | 0.10% | 0.20% | 0.10% | 0.30% |
Discontinued Operations - Sched
Discontinued Operations - Schedule of Discontinued Operations Amount Recognized in Balance Sheet (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Discontinued Operations and Disposal Groups [Abstract] | ||
Accounts payable | $ 69 | $ 192 |
Other | 697 | 726 |
Current liabilities from discontinued operations | 766 | 918 |
Total liabilities | $ 766 | $ 918 |
Line of Credit (Details Narrati
Line of Credit (Details Narrative) - USD ($) $ in Thousands | 9 Months Ended | |||
Sep. 30, 2019 | Aug. 14, 2019 | Dec. 31, 2018 | Nov. 13, 2018 | |
Line of credit | $ 3,750 | |||
Silicon Valley Bank [Member] | ||||
Line of credit outstanding accounts receivable | $ 250 | |||
Line of credit facility, description | The amount that may be borrowed under the Revolving Line is the lower of (i) $4.0 million or (ii) 80% of the Company's eligible accounts receivable (as adjusted by SVB). Revolving Line outstanding amounts incur interest at a rate per annum equal to the Wall Street Journal 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. As of September 30, 2019, the Company has drawn $3.75 million of the available funds with the Revolving Line which is the maximum allowed and has no remaining availability as $250,000 of the Line of Credit is used to secure the issuance of a standby letter of credit by SVB. | |||
Revolving Line facility fee monthly in arrears, percentage | 0.35% | |||
Line of credit, maturity date | May 2, 2022 | |||
Maturity date, description | Revolving Line has a maturity date three years from the effective date, or Nov 13, 2021. | |||
Withdrawn of available funds | $ 3,750 | |||
Silicon Valley Bank [Member] | Prime Rate [Member] | ||||
Line of credit, percentage | 0.50% | |||
Loan and Security Agreement [Member] | Silicon Valley Bank [Member] | ||||
Line of credit | $ 4,000 | |||
Line of credit outstanding accounts receivable | 4,000 | |||
Loan and Security Agreement [Member] | Silicon Valley Bank [Member] | Term Loan [Member] | ||||
Line of credit | $ 850 |
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, 2019 | Sep. 30, 2018 | |
Supplemental Cash Flow Elements [Abstract] | ||
Net cash used in operating activities of discontinued operations | $ (30) | $ (376) |
Adoption of ASC 606 | 2,500 | |
Prepaid stock grants issued to vendors | 72 | 257 |
Adoption of ASC 842 - right of use asset | 2,449 | |
Adoption of ASC 842 - operating lease liability | 2,536 | |
Acquisition of property and equipment | 12 | |
Excess consideration note | $ 6,822 |
Equity (Details Narrative)
Equity (Details Narrative) - USD ($) | Jul. 15, 2019 | Jan. 25, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 20, 2019 |
Received net proceeds | $ 5,962,000 | ||||
Proceeds from issuance of stock | 13,087,000 | ||||
Underwriting Agreement [Member] | |||||
Aggregate of shares issued | 9,333,334 | ||||
Options granted | 1,400,000 | ||||
Common stock price, per share | $ 0.75 | ||||
Effective price per share | $ 0.6975 | ||||
Received net proceeds | $ 6,000,000 | ||||
Security Purchase Agreement [Member] | |||||
Business combination consideration amount | $ 23,500,000 | ||||
Security Purchase Agreement [Member] | Convertible Preferred Stock [Member] | |||||
Preferred price per share | $ 0.01 | ||||
Preferred stock par value | $ 100,000 | ||||
Security Purchase Agreement [Member] | Convertible Preferred Stock [Member] | Maximum [Member] | |||||
Proceeds from preferred stock value | $ 27,000,000 | ||||
Security Purchase Agreement [Member] | 60 Newly Created Series A Preferred Stock [Member] | |||||
Business combination consideration amount | 6,000,000 | ||||
Security Purchase Agreement [Member] | 80 Newly Created Series A-1 Preferred Stock [Member] | |||||
Business combination consideration amount | 8,000,000 | ||||
Proceeds from issuance of stock | $ 13,100,000 | ||||
Equity Distribution Agreement [Member] | |||||
Aggregate offering price | $ 4,800,000 | ||||
Fixed percentage of commission | 3.00% |
Warrants (Details Narrative)
Warrants (Details Narrative) - Underwriting Agreement [Member] | 9 Months Ended |
Sep. 30, 2019$ / sharesshares | |
Warrants to purchase shares of common stock | shares | 654,334 |
Warrants exercise price description | The Company issued to Wainwright's designees warrants (the “Underwriter Warrants”) to purchase up to 654,334 shares of Common Stock (representing 7% of the aggregate number of Firm Shares), at an exercise price of $0.9375 per share (representing 125% of the public offering price). |
Percentage on aggregate number of firm shares issued | 7.00% |
Warrant exercise price | $ / shares | $ 0.9375 |
Percentage on public offering price issued | 125.00% |
Warrants - Schedule of Warrants
Warrants - Schedule of Warrants Outstanding and Warrants Activity (Details) - $ / shares | 9 Months Ended | |
Sep. 30, 2019 | Dec. 31, 2018 | |
Warrants Issued | 19,909,334 | |
Warrants Exercised | (5,672,852) | |
Warrants Cancelled/Expired | (40,000) | |
Warrants | 14,196,482 | 13,542,148 |
Private Placement Warrants[Member] | ||
Description | Private Placement Warrants, issued January 25, 2017 | |
Classification | Equity | |
Exercise Price | $ 4.69 | |
Expiration Date | June 2022 | |
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 2022 | |
Warrants Issued | 100,000 | |
Warrants Exercised | ||
Warrants Cancelled/Expired | ||
Warrants | 100,000 | 100,000 |
Underwriter Warrants[Member] | ||
Description | Underwriters Warrants, issued June 21, 2017 | |
Classification | Liability | |
Exercise Price | $ 1.32 | |
Expiration Date | December 2022 | |
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 2022 | |
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 2020 | |
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 2022 | |
Warrants Issued | 3,200,000 | |
Warrants Exercised | ||
Warrants Cancelled/Expired | ||
Warrants | 3,200,000 | 3,200,000 |
Underwriters Warrants [Member] | ||
Description | Underwriters Warrants,issued January 25, 2019 | |
Classification | Equity | |
Exercise Price | $ 0.9375 | |
Expiration Date | January 2022 | |
Warrants Issued | 654,334 | |
Warrants Exercised | ||
Warrants Cancelled/Expired | ||
Warrants | 654,334 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | Nov. 02, 2019 | Oct. 31, 2019 | Oct. 16, 2019 | Jul. 15, 2019 | Oct. 31, 2019 | Sep. 30, 2019 | Dec. 31, 2018 |
Subsequent Event [Line Items] | |||||||
Excess consideration note | $ 6,822,000 | ||||||
BioPharma Acquisition [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Business combination consideration amount | $ 20,651,000 | ||||||
Security Purchase Agreement [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Business combination consideration amount | $ 23,500,000 | ||||||
Subsequent Event [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Reverse stock split, description | effect a reverse stock split of common stock, at a ratio in the range from one-for-five to one-for-fifteen | ||||||
Subsequent Event [Member] | BioPharma Acquisition [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Business combination consideration amount | $ 7,692,300 | ||||||
Payment to acquire subordinated seller note | 6,024,000 | ||||||
Business combination indemnification holdback | 735,000 | ||||||
Accounts receivable | 152,858 | $ 152,858 | |||||
Business combination closing net worth adjustment | 775,000 | ||||||
Pre closing liabilities | 317,628 | 317,628 | |||||
Unbilled accounts receivable | 289,000 | 289,000 | |||||
Excess consideration note | $ 23,674 | 23,674 | |||||
Subsequent Event [Member] | Revolving Line of Credit [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Payment of line of credit | $ 3,750 | ||||||
Subsequent Event [Member] | Security Purchase Agreement [Member] | 130 Newly Created Series A-1 Preferred Stock [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Business combination consideration amount | $ 13,000,000 | ||||||
Subsequent Event [Member] | Nasdaq Notification [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Nasdaq notification decsription | (i) the Company meeting the continued listing requirement for market value of its publicly held shares and all other applicable initial listing standards for the Nasdaq Capital Market, with the exception of the bid price requirement, and (ii) the Company providing written notice to Nasdaq of its intent to cure the deficiency during this second compliance period by effecting a reverse stock split, if necessary. If at any time during this second, 180-day period the closing bid price of the Company's Common Stock is at least $1.00 per share for at least a minimum of 10 consecutive business days, the Staff will provide written confirmation of compliance. |