| SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 5. 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 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
clinical services derive its revenues from the performance of its proprietary assays or tests. The Company’s performance obligation
is fulfilled upon the 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. Under Accounting Standards Codification 606, revenue is recognized based on the estimated
transaction price or net realizable value, 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 clinical services, 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 affects net revenue in the period
such variances become known. The Company recorded an NRV adjustment of $ 0.7 Liquidity, For
our discontinued pharma services, project level activities, including study setup and project management, were satisfied over the life
of the contract while performance-related obligations were satisfied at a point in time as the Company processes samples delivered by
the customer. Revenues were recognized at a point in time when the test results or other deliverables are reported to the customer. Financing
and Payment For
non-Medicare claims, our payment terms vary by payer category. Payment terms for direct-payers in our clinical services are typically
thirty days and in our pharma services, were 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. We bill Medicare directly for tests performed
for Medicare patients and must accept Medicare’s fee schedule for the covered tests as payment in full. Costs
to Obtain or Fulfill a Customer Contract Sales
commissions are expensed in the period in which they have been earned. 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 services and
pharma services. The Company’s clinical services are fulfilled upon completion of the test, review and release of the test results.
In conjunction with fulfilling these services, the Company bills the third-party payer or direct-bill payer. Contractual adjustments
represent the difference between the list prices and the reimbursement rates set by third-party payers, including Medicare, commercial
payers, and amounts billed to direct-bill payers. Specific accounts may be written off after several appeals, which in some cases may
take longer than twelve months. Pharma services represented, primarily, the performance of laboratory tests in support of clinical trials
for pharma services customers. The Company billed these services directly to the customer. 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 June 30, 2023 and December 31, 2022: SCHEDULE OF OTHER CURRENT ASSETS
June 30, 2023 December 31, 2022
Lab supplies $ 1,177 $ 1,224
Prepaid expenses 642 390
Funds in escrow 500 500
Other 48 180
Total other current assets $ 2,367 $ 2,294 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. Basic
and Diluted Net Loss per Share A
reconciliation of the number of shares of common stock, par value $ 0.01 SCHEDULE OF BASIC AND DILUTED NET LOSS PER SHARE
2023 2022 2023 2022
Three Months Ended Six Months Ended
June 30, June 30,
2023 2022 2023 2022
Basic weighted average number of common shares 4,311 4,229 4,309 4,219
Potential dilutive effect of stock-based awards 5 - 4 -
Diluted weighted average number of common shares 4,316 4,229 4,313 4,219 The
Company’s Series B Redeemable Preferred Stock, on an as converted basis into common stock of 7,833,334 SCHEDULE OF ANTI-DILUTIVE SECURITIES EXCLUDED FROM COMPUTATION OF EARNINGS PER SHARE
2023 2022 2023 2022
Three Months Ended Six Months Ended
June 30, June 30,
2023 2022 2023 2022
Options 475 641 475 641
Restricted stock units (RSUs) 215 351 217 351
Warrants - 63 - 63
Antidilutive
securities excluded from computation of earnings per share 690 1,055 692 1,055 |
