NeoGenomics (NEO) 10-Q 6 Nov 15 2015 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2015	Nov. 02, 2015
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2015
Document Fiscal Year Focus	2,015
Document Fiscal Period Focus	Q3
Trading Symbol	NEO
Entity Registrant Name	NEOGENOMICS INC
Entity Central Index Key	1,077,183
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		60,350,750

Consolidated Balance Sheets (Un

Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
CURRENT ASSETS
Cash and cash equivalents	$ 33,966	$ 33,689
Accounts receivable (net of allowance for doubtful accounts of $4,479 and $4,180, respectively)	21,556	20,475
Inventories	2,967	2,616
Deferred income tax asset, net	821	821
Other current assets	1,547	1,141
Total current assets	60,857	58,742
PROPERTY AND EQUIPMENT (net of accumulated depreciation of $24,791 and $19,822, respectively)	15,898	15,082
INTANGIBLE ASSETS, NET	3,928	4,212
GOODWILL	2,929	2,929
OTHER ASSETS	129	141
TOTAL ASSETS	83,741	81,106
CURRENT LIABILITIES
Accounts payable	5,026	6,294
Accrued compensation	4,767	3,897
Accrued expenses and other liabilities	1,332	1,208
Short-term portion of equipment capital lease obligations	4,203	3,224
Total current liabilities	15,328	14,623
LONG-TERM LIABILITIES
Long-term portion of equipment capital lease obligations	5,743	5,257
Deferred income tax liability, net	821	821
Total long-term liabilities	6,564	6,078
TOTAL LIABILITIES	$ 21,892	$ 20,701
COMMITMENTS AND CONTINGENCIES (SEE NOTE G)
STOCKHOLDERS' EQUITY
Common stock, $0.001 par value, (100,000,000 shares authorized; 60,598,616 and 60,242,818 shares issued and outstanding, respectively)	$ 61	$ 60
Additional paid-in capital	82,256	79,751
Accumulated deficit	(20,468)	(19,406)
Total stockholders’ equity	61,849	60,405
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$ 83,741	$ 81,106

Consolidated Balance Sheets (U3

Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Statement Of Financial Position [Abstract]
Accounts receivable, allowance for doubtful accounts	$ 4,479	$ 4,180
Property and equipment, accumulated depreciation	$ 24,791	$ 19,822
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	60,598,616	60,242,818
Common stock, shares outstanding	60,598,616	60,242,818

Consolidated Statements of Oper

Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Income Statement [Abstract]
NET REVENUE	$ 25,126	$ 23,217	$ 72,523	$ 62,070
COST OF REVENUE	13,955	12,923	40,995	32,826
GROSS MARGIN	11,171	10,294	31,528	29,244
OPERATING EXPENSES
General and administrative	7,438	6,370	21,036	17,295
Research and development	871	1,014	2,342	2,275
Sales and marketing	2,748	2,983	8,569	8,775
Total operating expenses	11,057	10,367	31,947	28,345
INCOME (LOSS) FROM OPERATIONS	114	(73)	(419)	899
INTEREST AND OTHER EXPENSE – NET	(239)	(218)	(623)	(736)
INCOME (LOSS) BEFORE INCOME TAXES	(125)	(291)	(1,042)	163
INCOME TAXES			20	78
NET INCOME (LOSS)	$ (125)	$ (291)	$ (1,062)	$ 85
NET INCOME (LOSS) PER SHARE – Basic	$ 0	$ (0.01)	$ (0.02)	$ 0
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING – Basic	60,537	54,444	60,414	51,272
NET INCOME (LOSS) PER SHARE – Diluted	$ 0	$ (0.01)	$ (0.02)	$ 0
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING – Diluted	60,537	54,444	60,414	53,926

Consolidated Statements of Cash

Consolidated Statements of Cash Flows (unaudited) - USD ($)	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)	$ (1,062,000)	$ 85,000
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Bad debt expense	1,849,000	2,044,000
Amortization of intangibles	283,000	200,000
Depreciation and amortization of property and equipment	4,971,000	3,938,000
Amortization of debt issue costs		66,000
Stock based compensation – options and restricted stock	1,588,000	566,000
Stock based compensation – warrants	319,000	173,000
Changes in assets and liabilities, net:
Accounts receivable, net of write-offs	(2,930,000)	12,000
Inventories	(351,000)	(582,000)
Other current assets	(409,000)	93,000
Other assets	12,000	39,000
Accounts payable and other liabilities	2,000	1,830,000
NET CASH PROVIDED BY OPERATING ACTIVITIES	4,272,000	8,464,000
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition, net of cash		(5,829,000)
Purchases of property and equipment	(1,682,000)	(2,719,000)
NET CASH USED IN INVESTING ACTIVITIES	(1,682,000)	(8,548,000)
CASH FLOWS FROM FINANCING ACTIVITIES
Payments on credit facility, net		(4,282,000)
Repayment of capital lease obligations	(2,912,000)	(2,632,000)
Issuance of common stock for cash, net of transaction expense		34,430,000
Issuance of common stock for the exercise of options, warrants and ESPP shares	599,000	2,100,000
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES	(2,313,000)	29,616,000
NET INCREASE IN CASH AND CASH EQUIVALENTS	277,000	29,532,000
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD	33,689,000	4,834,000
CASH AND CASH EQUIVALENTS, END OF PERIOD	33,966,000	34,366,000
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Interest paid	672,000	770,000
Income taxes paid	20,000	170,000
NON-CASH INVESTING AND FINANCING ACTIVITIES
Equipment leased under capital lease obligations and equipment loans	$ 4,377,000	$ 4,824,000

Nature of Business and Basis of

Nature of Business and Basis of Presentation	9 Months Ended
	Sep. 30, 2015
Organization Consolidation And Presentation Of Financial Statements [Abstract]
Nature of Business and Basis of Presentation	NOTE A — NATURE OF BUSINESS AND BASIS OF PRESENTATION NeoGenomics, Inc., a Nevada corporation (the “Parent”), and its subsidiaries, NeoGenomics Laboratories, Inc., a Florida corporation (“NEO”, “NeoGenomics Laboratories”) and Path Labs LLC., a Delaware limited liability company (“Path Logic”) (collectively referred to as “we”, “us”, “our”, “NeoGenomics”, or the “Company”), operates a network of anatomic pathology and certified “high complexity” clinical laboratories in accordance with the federal government’s Clinical Laboratory Improvement Act, as amended (“CLIA”), and is dedicated to the delivery of clinical diagnostic services to pathologists, oncologists, urologists, hospitals, and other laboratories throughout the United States. The accompanying interim consolidated financial statements are unaudited and have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information. These accompanying interim consolidated financial statements include the accounts of the Parent and its subsidiaries. All intercompany transactions and balances have been eliminated in the accompanying interim consolidated financial statements. Certain information and footnote disclosures normally included in the Company’s annual audited consolidated financial statements and accompanying notes have been condensed or omitted in these accompanying interim consolidated financial statements. Accordingly, the accompanying interim consolidated financial statements included herein should be read in conjunction with the audited consolidated financial statements and accompanying notes included in the Company’s annual report on Form 10-K for the year ended December 31, 2014, filed with the Securities and Exchange Commission (the “SEC”) on March 3, 2015 and as amended and filed with the SEC on April 30, 2015. The results of operations presented in this quarterly report on Form 10-Q are not necessarily indicative of the results of operations that may be expected for any future periods. In the opinion of management, these unaudited consolidated financial statements include all adjustments and accruals, consisting only of normal recurring adjustments that are necessary for a fair statement of the results of all interim periods reported herein.

Recently Issued Accounting Guid

Recently Issued Accounting Guidance	9 Months Ended
	Sep. 30, 2015
Accounting Changes And Error Corrections [Abstract]
Recently Issued Accounting Guidance	NOTE B — RECENTLY ISSUED ACCOUNTING GUIDANCE Management has determined that there has been no recently issued accounting guidance that will have a material impact on the consolidated financial statements.

Acquisitions

Acquisitions	9 Months Ended
	Sep. 30, 2015
Business Combinations [Abstract]
Acquisitions	NOTE C — ACQUISITIONS On July 8, 2014, NeoGenomics, Laboratories entered into a membership interest purchase agreement with Path Logic, and Path Labs Holdings, LLC, a Delaware limited liability company (“PL Holdings”), whereby the Company acquired all of the outstanding membership interests in Path Logic from PL Holdings for a purchase price (in thousands) of $5,908 (the “Acquisition”). NeoGenomics Laboratories paid the purchase price using cash on hand and borrowings on its revolving credit facility. The following table summarizes the final amounts for the fair values of the assets acquired and liabilities assumed at the acquisition date (in thousands): Fair Value July 8, 2014 Current assets, including cash and cash equivalents $ 1,722 Property, plant and equipment 577 Identifiable intangible assets – customer relationships 1,930 Long term deposits 28 Goodwill 2,929 Total assets acquired 7,186 Current liabilities (1,180 ) Long-term liabilities (98 ) Net assets acquired $ 5,908 The above estimated fair values of assets acquired and liabilities assumed are based on the information that was available as of the acquisition date to estimate the fair value of assets acquired and liabilities assumed. The measurement period adjustments were complete as of December 31, 2014. Acquired intangible assets of $1.93 million consist of customer relationships which are being amortized over thirteen years. We recorded approximately $37,000 and $111,000 of amortization expense for the three and nine months ended September 30, 2015, respectively. The estimated amortization expense related to the acquired intangible assets for each of the five succeeding fiscal years and thereafter as of September 30, 2015 is as follows (in thousands): Year Ending December 31, Remainder of 2015 $ 37 2016 148 2017 148 2018 148 2019 148 2020 148 Thereafter 970 Total $ 1,747 The goodwill arising from the Acquisition includes revenue synergies as a result of our existing customers and Path Logic’s customers having access to each other’s testing menus and capabilities. It also arises from the new product lines which Path Logic has added to the Company’s product portfolio. The total amount of goodwill which is expected to be deductible for tax purposes is approximately $3.7 million, which will be amortized on the Company’s tax returns over fifteen years . The following unaudited pro forma information (in thousands) have been provided for illustrative purposes only and are not necessarily indicative of results that would have occurred had the Acquisition been in effect since January 1, 2013, nor are they necessarily indicative of future results. Three Months Ended September 30, 2014 Nine Months Ended September 30, 2014 Revenue $ 23,405 $ 67,289 Net income (loss) (35 ) (450 ) Income (loss) per share Basic $ (0.00 ) $ (0.01 ) Diluted $ (0.00 ) $ (0.01 ) The unaudited pro forma consolidated results above have been prepared by adjusting our historical results to include the Acquisition as if it occurred on January 1, 2013. These unaudited pro forma consolidated historical results were then adjusted for the following: • Adjustments to reflect the impact of $361,000 of transaction costs related to the 2014 acquisition as of January 1, 2013, • A net reduction in amortization expense due to decreased intangible assets recorded related to the acquisition, • a net reduction in interest expense as we did not acquire the existing debt from the acquisition, offset by our interest expense on net borrowings under capital leases and notes payable, • a net reduction in depreciation expense due to decreased fixed asset values recorded related to the acquisition, • a net reduction in general and administrative to remove the management fees from the private equity company and the Chief Executive Officer’s salary from the results, • a net reduction to adjust for the tax effect of the losses that were acquired which is based on an estimate of the state income taxes and federal alternate minimum tax which would not be required based on the losses for all periods. As noted above, the unaudited pro forma results of operations do not purport to be indicative of the actual results that would have been achieved by the combined company for the periods presented or that may be achieved by the combined company in the future.

Goodwill and Intangible Assets

Goodwill and Intangible Assets	9 Months Ended
	Sep. 30, 2015
Goodwill And Intangible Assets Disclosure [Abstract]
Goodwill and Intangible Assets	NOTE D — GOODWILL AND INTANGIBLE ASSETS The Company has recorded Goodwill of $2,929 as of September 30, 2015. The changes in the carrying amount of goodwill for the nine month period ended September 30, 2015 and for the year ended December 31, 2014 are as follows (in thousands): September December 2015 2014 Balance as of January 1 $ 2,929 $ - Goodwill acquired during the period - 2,929 Balance at end of period $ 2,929 $ 2,929 Intangible assets as of September 30, 2015 and December 31, 2014 consisted of the following (in thousands): September 30, 2015 Amortization Period COST Accumulated Amortization Net Customer Relationships 156 months $ 1,930 $ 183 $ 1,747 Support Vector Machine (SVM) technology 108 months 500 199 301 Laboratory developed test (LDT) technology 164 months 1,482 389 1,093 Flow Cytometry and Cytogenetics technology 202 months 1,000 213 787 Total $ 4,912 $ 984 $ 3,928 December 31, 2014 Amortization Period COST Accumulated Amortization Net Customer Relationships 156 months $ 1,930 $ 71 $ 1,859 Support Vector Machine (SVM) technology 108 months 500 167 333 Laboratory developed test (LDT) technology 164 months 1,482 297 1,185 Flow Cytometry and Cytogenetics technology 202 months 1,000 165 835 Total $ 4,912 $ 700 $ 4,212 We recorded approximately $93,000 and $89,000 in straight-line amortization expense of intangibles in the three months ended September 30, 2015 and 2014, respectively. We recorded approximately $283,000 and $200,000 in straight-line amortization expense of intangibles in the nine months ended September 30, 2015 and 2014, respectively. The Company recorded amortization expense from customer relationships as a general and administrative expense. We will continue to record the amortization of the Support Vector Machine (SVM) technology, the Laboratory developed tests (LDT) technology and the Flow Cytometry and Cytogenetics technology intangibles as a research and development expense until the such time that we have products, services or cost savings directly attributable to these intangible assets that would require recordation in cost of goods sold. The estimated amortization expense related to amortizable intangible assets for each of the five succeeding fiscal years and thereafter as of September 30, 2015 is as follows (in thousands): Year Ending December 31, Remainder of 2015 $ 93 2016 372 2017 372 2018 372 2019 372 2020 372 Thereafter 1,975 Total $ 3,928

Revenue Recognition and Contrac

Revenue Recognition and Contractual Adjustments	9 Months Ended
	Sep. 30, 2015
Revenue Recognition [Abstract]
Revenue Recognition and Contractual Adjustments	NOTE E — REVENUE RECOGNITION AND CONTRACTUAL ADJUSTMENTS The Company recognizes revenues when (a) the price is fixed or determinable, (b) persuasive evidence of an arrangement exists, (c) the service is performed and (d) collectability of the resulting receivable is reasonably assured. The Company’s specialized diagnostic services are performed based on a written test requisition form or electronic equivalent, and revenues are recognized once the diagnostic services have been performed, and the results have been delivered to the ordering physician. These diagnostic services are billed to various payers, including Medicare, commercial insurance companies, other directly billed healthcare institutions such as hospitals and clinics, and individuals. The Company reports revenues from contracted payers, including Medicare, certain insurance companies and certain healthcare institutions, based on the contractual rate, or in the case of Medicare, published fee schedules. The Company reports revenues from non-contracted payers, including certain insurance companies and individuals, based on the amount expected to be collected. The difference between the amount billed and the amount estimated to be collected from non-contracted payers is recorded as an allowance to arrive at the reported net revenues. The expected revenues from non-contracted payers are based on the historical collection experience of each payer or payer group, as appropriate. The Company records revenues from patient pay tests net of a large discount and as a result recognizes minimal revenue on those tests. The Company regularly reviews its historical collection experience for non-contracted payers and adjusts its expected revenues for current and subsequent periods accordingly. The table below shows the adjustments made to gross service revenues to arrive at net revenues (in thousands), the amount reported on our statements of operations. Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Gross service revenues $ 57,192 $ 60,660 $ 167,525 $ 159,665 Total contractual adjustments and discounts (32,066 ) (37,443 ) (95,002 ) (97,595 ) Net revenues $ 25,126 $ 23,217 $ 72,523 $ 62,070

Equity

Equity	9 Months Ended
	Sep. 30, 2015
Equity [Abstract]
Equity	NOTE F — EQUITY Stock Options On May 4, 2015, the board of directors of Parent (the “Board of Directors”) further amended the Amended and Restated Equity Incentive Plan dated as of April 16, 2013 (the “Plan”) to add an additional 2,500,000 shares to the maximum aggregate number of shares of Parent common stock reserved and available for issuance under the Plan, bringing the total available from the Plan to 9,500,000 shares. This amendment was approved by the shareholders on June 12, 2015. On May 4, 2015, the Compensation Committee of the Board of Directors granted 1,645,000 options to certain executives and key employees of the Company. The options were granted at a price of $4.78 per share and had a weighted average fair market value of $1.80 per option for a total fair market value of $2,961,000. A summary of the stock option activity under the Company’s plans for the nine months ended September 30, 2015 is as follows: Number of Weighted shares exercise price Options outstanding at December 31, 2014 4,012,096 $ 2.04 Options granted 1,756,000 4.80 Less: Options exercised 289,125 1.61 Options canceled or expired 12,500 3.19 Options outstanding at September 30, 2015 5,466,471 2.95 Exercisable at September 30, 2015 2,686,247 $ 1.52 As of September 30, 2015, there was approximately $3.2 million of unrecognized share based compensation expense related to stock options that will be recognized over a weighted-average period of approximately 1.5 years. Stock based compensation expense recognized for stock options and restricted stock and included in the consolidated statements of operations was allocated as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Research and development expense $ 161 $ 200 $ 339 $ 269 General and administrative expense 667 120 1,395 297 Total stock based compensation expense $ 828 $ 320 $ 1,734 $ 566 Stock based compensation recorded in research and development relates to unvested options granted to a non-employee in connection with the licensed technology from Health Discovery Corporation. Common Stock Warrants A summary of the warrant activity for the nine months ended September 30, 2015 is as follows: Number of Weighted shares exercise price Warrants outstanding at December 31, 2014 650,000 $ 1.48 Warrants granted — — Less: Warrants exercised — — Warrants canceled or expired — — Warrants outstanding at September 30, 2015 650,000 $ 1.48 Exercisable at September 30, 2015 530,000 $ 1.49 During the three months ended September 30, 2015 and 2014, we recorded $58,000 and $137,000 of warrant compensation expense, respectively. During the nine months ended September 30, 2015 and 2014, we recorded $173,000 and $172,000 of warrant compensation expense, respectively. Warrant expense for the periods presented is recorded in research and development as the expense relates to unvested performance based warrants granted to a non-employee in connection with the licensed technology from Health Discovery Corporation. Restricted Stock Awards On April 16, 2015 the Company granted four directors of Parent each 2,080 shares of restricted stock. Such restricted stock will vest ratably over each of the next four quarters so long as the director still serves as a member of the Board of Directors. The fair market value of each grant of restricted stock on the award date was deemed to be $10,025 or $4.82 per share, which was the closing price of Parent’s common stock on the day before the grant was approved by the compensation committee of the Board of Directors . On June 16, 2015 the Company granted two newly elected directors of Parent each 1,560 shares of restricted stock. Such restricted stock will vest ratably over each of the next three quarters so long as the director still serves as a member of the Board of Directors. The fair market value of each grant of restricted stock on the award date was deemed to be $9,079 or $5.82 per share, which was the closing price of Parent’s common stock on the day before the grant was approved by the compensation committee of the Board of Directors .

Commitments

Commitments	9 Months Ended
	Sep. 30, 2015
Commitments And Contingencies Disclosure [Abstract]
Commitments	NOTE G — COMMITMENTS During the nine months ended September 30, 2015, the Company entered into agreements with Wells Fargo Equipment Finance to lease approximately $1.50 million of laboratory and computer equipment. One lease agreement for approximately $0.2 million includes a 36 month term with a $1.00 buyout option at the end of the term and an interest rate of 3.61%. The other lease agreement for approximately $1.30 million includes a 60 month term with a $1.00 buyout option at the end of term and an interest rate of 4.08%. The Company accounted for these lease agreements as capital leases. During the nine months ended September 30, 2015, the Company entered into agreements with several vendors to lease approximately $2.8 million of laboratory equipment, computer equipment and computer software. The leases have varying terms ranging from 34 to 60 months with $1.00 buyout options at the end of the terms and interest rates ranging between 4.00% and 13.5% with a weighted average interest rate of 5.47%. The Company accounted for these lease agreements as capital lease obligations.

Other Related Party Transaction

Other Related Party Transactions	9 Months Ended
	Sep. 30, 2015
Related Party Transactions [Abstract]
Other Related Party Transactions	NOTE H — OTHER RELATED PARTY TRANSACTIONS During the three months ended September 30, 2015 and 2014, Steven C. Jones, a director of Parent, earned approximately $66,000 and $67,000, respectively, for various consulting work performed in connection with his duties as Executive Vice President of Finance. During each of the nine months ended September 30, 2015 and 2014, Mr. Jones earned approximately $197,000 for various consulting work performed in connection with his duties as Executive Vice President of Finance. Mr. Jones also received $77,500 and $47,500 during the nine months ended September 30, 2015 and 2014, respectively as payment of his annual bonus compensation for the previous fiscal years. On May 4, 2015 Parent granted Steven C. Jones 225,000 stock options to purchase shares of Parent common stock. The options were granted at a price of $4.78 per share and had a weighted average fair market value of $1.80 per option. The options vest ratably over the next three years.

Subsequent Events

Subsequent Events	9 Months Ended
	Sep. 30, 2015
Subsequent Events [Abstract]
Subsequent Events	NOTE I —SUBSEQUENT EVENTS Acquisition On October 20, 2015, Parent and NeoGenomics Laboratories Inc., entered into a Stock Purchase Agreement with GE Medical Holding AB (“GE Medical”), a subsidiary of General Electric Company pursuant to which Parent (through NeoGenomics Laboratories) proposes to acquire from GE Medical all of the issued and outstanding shares of common stock, par value $0.01 per share, of Clarient, Inc., a Delaware company (“Clarient”). The purchase price consists of (i) $80.0 million in cash, (ii) 15.0 million shares of Parent’s common stockand (iii) 14,666,667 shares of the Parent’s Series A convertible preferred stock (‘the Series A Preferred Stock”). The cash portion of the purchase price is subject to adjustment for changes in Clarient’s working capital as of the closing of the acquisition and certain indebtedness and other customary adjustments that may be determined at or after the closing. The final determination of the allocation of the purchase price will be based on the fair values of assets and liabilities of Clarient as of the date the acquisition closes. The closing of the acquisition is subject to, among other things, stockholder approval and the receipt of all required authorizations, clearances, consents and governmental approvals. Assuming receipt of the foregoing, we expect the acquisition to be completed near the end of 2015 or early 2016. On or prior to the closing of the acquisition, the Company expects to enter into two separate credit facilities with separate lenders. The first is a revolving credit facility based on our accounts receivable which would provide for up to $25.0 million of availability of which we expect to use $10.0 million at closing to fund a portion of the cash consideration of the acquisition. The second credit facility is a $55.0 million Term Loan that the Company would use to fund a portion of the cash consideration of the acquisition. In the event the proposed acquisition is not closed, the Company will not enter into the $55.0 million term loan, however, the Company may still enter into the $25.0 million revolving credit facility of which would be used for operating liquidity and funding any future acquisitions. The closing of the acquisition is subject to various closing conditions including, without limitation, the approval by Parent’s stockholders of the transaction, the issuance of the common stock and Series A Preferred Stock, and the increase in authorized common stock and preferred stock. Covance Agreement On October 28, 2015, NeoGenomics Laboratories amended the Strategic Alliance Agreement that it originally entered into with Covance Central Laboratory Services as of November 18, 2013. As part of the amended agreement, the Company will receive $2 million during the fourth quarter of 2015. 2016 Medicare Physician Fee Schedule On October 30, 2015, the, the Centers for Medicare and Medicaid Services (“CMS”) released a public display copy of the CY 2016 Physician Fee Schedule (“PFS”) Final Rule with Comment Period. Comments on portions of the rule are being accepted by CMS through December 29, 2015, including comments on standard times for certain of the clinical labor tasks associated with pathology services and on recommended values for potentially mis-valued codes. If the so called "Final Rule" passes without further changes, it will result in significantly increased reimbursement by CMS in 2016 for the main FISH CPT codes that we perform and bill. There are reductions in certain other CPT codes that we frequently bill, including the main codes used for billing Flow Cytometry testing. For the first nine months of 2015 we billed Medicare $5.1 million for FISH testing, and we believe that reimbursement for FISH from Medicare will increase by approximately 75% if the final rule is passed without further changes. We also had billings for flow cytometry testing of $2.6 million to CMS for the first nine months of 2015, and we believe flow reimbursement will decline by approximately 18% if the final rule is passed without further changes. The final 2016 PFS rule will not be issued until January 2016. Significant rate changes by Medicare have historically influenced reimbursement rates set by commercial insurance payors.

Acquisitions (Tables)

Acquisitions (Tables)	9 Months Ended
	Sep. 30, 2015
Summary of Final Amounts for Fair Values of Assets Acquired and Liabilities Assumed	The following table summarizes the final amounts for the fair values of the assets acquired and liabilities assumed at the acquisition date (in thousands): Fair Value July 8, 2014 Current assets, including cash and cash equivalents $ 1,722 Property, plant and equipment 577 Identifiable intangible assets – customer relationships 1,930 Long term deposits 28 Goodwill 2,929 Total assets acquired 7,186 Current liabilities (1,180 ) Long-term liabilities (98 ) Net assets acquired $ 5,908
Estimated Amortization Expense	The estimated amortization expense related to amortizable intangible assets for each of the five succeeding fiscal years and thereafter as of September 30, 2015 is as follows (in thousands): Year Ending December 31, Remainder of 2015 $ 93 2016 372 2017 372 2018 372 2019 372 2020 372 Thereafter 1,975 Total $ 3,928
Schedule of Unaudited Pro Forma Information	The following unaudited pro forma information (in thousands) have been provided for illustrative purposes only and are not necessarily indicative of results that would have occurred had the Acquisition been in effect since January 1, 2013, nor are they necessarily indicative of future results. Three Months Ended September 30, 2014 Nine Months Ended September 30, 2014 Revenue $ 23,405 $ 67,289 Net income (loss) (35 ) (450 ) Income (loss) per share Basic $ (0.00 ) $ (0.01 ) Diluted $ (0.00 ) $ (0.01 )
Path Logic [Member]
Estimated Amortization Expense	The estimated amortization expense related to the acquired intangible assets for each of the five succeeding fiscal years and thereafter as of September 30, 2015 is as follows (in thousands): Year Ending December 31, Remainder of 2015 $ 37 2016 148 2017 148 2018 148 2019 148 2020 148 Thereafter 970 Total $ 1,747

Goodwill and Intangible Assets

Goodwill and Intangible Assets (Tables)	9 Months Ended
	Sep. 30, 2015
Goodwill And Intangible Assets Disclosure [Abstract]
Changes in Carrying Amount of Goodwill	The changes in the carrying amount of goodwill for the nine month period ended September 30, 2015 and for the year ended December 31, 2014 are as follows (in thousands): September December 2015 2014 Balance as of January 1 $ 2,929 $ - Goodwill acquired during the period - 2,929 Balance at end of period $ 2,929 $ 2,929
Classes of Intangible Assets	Intangible assets as of September 30, 2015 and December 31, 2014 consisted of the following (in thousands): September 30, 2015 Amortization Period COST Accumulated Amortization Net Customer Relationships 156 months $ 1,930 $ 183 $ 1,747 Support Vector Machine (SVM) technology 108 months 500 199 301 Laboratory developed test (LDT) technology 164 months 1,482 389 1,093 Flow Cytometry and Cytogenetics technology 202 months 1,000 213 787 Total $ 4,912 $ 984 $ 3,928 December 31, 2014 Amortization Period COST Accumulated Amortization Net Customer Relationships 156 months $ 1,930 $ 71 $ 1,859 Support Vector Machine (SVM) technology 108 months 500 167 333 Laboratory developed test (LDT) technology 164 months 1,482 297 1,185 Flow Cytometry and Cytogenetics technology 202 months 1,000 165 835 Total $ 4,912 $ 700 $ 4,212
Estimated Amortization Expense	The estimated amortization expense related to amortizable intangible assets for each of the five succeeding fiscal years and thereafter as of September 30, 2015 is as follows (in thousands): Year Ending December 31, Remainder of 2015 $ 93 2016 372 2017 372 2018 372 2019 372 2020 372 Thereafter 1,975 Total $ 3,928

Revenue Recognition and Contr17

Revenue Recognition and Contractual Adjustments (Tables)	9 Months Ended
	Sep. 30, 2015
Revenue Recognition [Abstract]
Adjustment of Transactions Revenue	The table below shows the adjustments made to gross service revenues to arrive at net revenues (in thousands), the amount reported on our statements of operations. Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Gross service revenues $ 57,192 $ 60,660 $ 167,525 $ 159,665 Total contractual adjustments and discounts (32,066 ) (37,443 ) (95,002 ) (97,595 ) Net revenues $ 25,126 $ 23,217 $ 72,523 $ 62,070

Equity (Tables)

Equity (Tables)	9 Months Ended
	Sep. 30, 2015
Equity [Abstract]
Summary of Stock Option Activity	A summary of the stock option activity under the Company’s plans for the nine months ended September 30, 2015 is as follows: Number of Weighted shares exercise price Options outstanding at December 31, 2014 4,012,096 $ 2.04 Options granted 1,756,000 4.80 Less: Options exercised 289,125 1.61 Options canceled or expired 12,500 3.19 Options outstanding at September 30, 2015 5,466,471 2.95 Exercisable at September 30, 2015 2,686,247 $ 1.52
Summary of Stock-Based Compensation Expense Recognized for Stock Options and Restricted Stock Included in Consolidated Statements of Operations	Stock based compensation expense recognized for stock options and restricted stock and included in the consolidated statements of operations was allocated as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Research and development expense $ 161 $ 200 $ 339 $ 269 General and administrative expense 667 120 1,395 297 Total stock based compensation expense $ 828 $ 320 $ 1,734 $ 566
Summary of Warrant Activity	A summary of the warrant activity for the nine months ended September 30, 2015 is as follows: Number of Weighted shares exercise price Warrants outstanding at December 31, 2014 650,000 $ 1.48 Warrants granted — — Less: Warrants exercised — — Warrants canceled or expired — — Warrants outstanding at September 30, 2015 650,000 $ 1.48 Exercisable at September 30, 2015 530,000 $ 1.49

Acquisitions - Additional Infor

Acquisitions - Additional Information (Detail) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Jul. 08, 2014
Business Acquisition [Line Items]
Amortization expense of intangibles	$ 93,000	$ 89,000	$ 283,000	$ 200,000
Path Logic [Member]
Business Acquisition [Line Items]
Business acquisition purchase price					$ 5,908,000
Acquired intangible assets					$ 1,930,000
Amortization expense of intangibles	37,000		$ 111,000
Intangible asset amortization period			13 years
Goodwill expected tax deductible amount	3,700,000		$ 3,700,000
Goodwill amortization period for tax purposes			15 years
Transaction costs related to acquisition	$ 361,000		$ 361,000

Acquisitions - Summary of Estim

Acquisitions - Summary of Estimated Fair Values of Assets Acquired and Liabilities Assumed (Detail) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014	Jul. 08, 2014
Business Acquisition [Line Items]
GOODWILL	$ 2,929	$ 2,929
Path Logic [Member]
Business Acquisition [Line Items]
Current assets, including cash and cash equivalents			$ 1,722
Property, plant and equipment			577
Identifiable intangible assets – customer relationships			1,930
Long term deposits			28
GOODWILL			2,929
Total assets acquired			7,186
Current liabilities			(1,180)
Long-term liabilities			(98)
Net assets acquired			$ 5,908

Acquisitions - Estimated Amorti

Acquisitions - Estimated Amortization Expense (Detail) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Finite-Lived Intangible Assets [Line Items]
Remainder of 2015	$ 93
2,016	372
2,017	372
2,018	372
2,019	372
2,020	372
Thereafter	1,975
Total	3,928	$ 4,212
Path Logic [Member]
Finite-Lived Intangible Assets [Line Items]
Remainder of 2015	37
2,016	148
2,017	148
2,018	148
2,019	148
2,020	148
Thereafter	970
Total	$ 1,747

Acquisitions-Schedule of Unaudi

Acquisitions-Schedule of Unaudited Pro forma Information (Detail) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2014
Business Acquisition Pro Forma Information [Abstract]
Revenue	$ 23,405	$ 67,289
Net income (loss)	$ (35)	$ (450)
Income (loss) per share
Basic	$ 0	$ (10)
Diluted	$ 0	$ (10)

Goodwill and Intangible Asset23

Goodwill and Intangible Assets - Additional Information (Detail) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014
Goodwill And Intangible Assets Disclosure [Abstract]
Goodwill	$ 2,929,000		$ 2,929,000		$ 2,929,000
Amortization of intangibles	$ 93,000	$ 89,000	$ 283,000	$ 200,000

Goodwill and Intangible Asset24

Goodwill and Intangible Assets - Changes in Carrying Amount of Goodwill (Detail) $ in Thousands	12 Months Ended
	Dec. 31, 2014USD ($)
Goodwill And Intangible Assets Disclosure [Abstract]
Goodwill acquired during the period	$ 2,929
Balance at end of period	$ 2,929

Goodwill and Intangible Asset25

Goodwill and Intangible Assets - Classes of Intangible Assets (Detail) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2015	Dec. 31, 2014
Finite-Lived Intangible Assets [Line Items]
COST	$ 4,912	$ 4,912
Accumulated Amortization	984	700
Total	$ 3,928	$ 4,212
Customer Relationships [Member]
Finite-Lived Intangible Assets [Line Items]
Amortization Period	156 months	156 months
COST	$ 1,930	$ 1,930
Accumulated Amortization	183	71
Total	$ 1,747	$ 1,859
Support Vector Machine (SVM) Technology [Member]
Finite-Lived Intangible Assets [Line Items]
Amortization Period	108 months	108 months
COST	$ 500	$ 500
Accumulated Amortization	199	167
Total	$ 301	$ 333
Laboratory Developed Test (LDT) Technology [Member]
Finite-Lived Intangible Assets [Line Items]
Amortization Period	164 months	164 months
COST	$ 1,482	$ 1,482
Accumulated Amortization	389	297
Total	$ 1,093	$ 1,185
Flow Cytometry and Cytogenetics Technology [Member]
Finite-Lived Intangible Assets [Line Items]
Amortization Period	202 months	202 months
COST	$ 1,000	$ 1,000
Accumulated Amortization	213	165
Total	$ 787	$ 835

Goodwill and Intangible Asset26

Goodwill and Intangible Assets - Estimated Amortization Expense (Detail) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Goodwill And Intangible Assets Disclosure [Abstract]
Remainder of 2015	$ 93
2,016	372
2,017	372
2,018	372
2,019	372
2,020	372
Thereafter	1,975
Total	$ 3,928	$ 4,212

Revenue Recognition and Contr27

Revenue Recognition and Contractual Adjustments - Adjustment of Transactions Revenue (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Revenue Recognition [Abstract]
Gross service revenues	$ 57,192	$ 60,660	$ 167,525	$ 159,665
Total contractual adjustments and discounts	(32,066)	(37,443)	(95,002)	(97,595)
Net revenues	$ 25,126	$ 23,217	$ 72,523	$ 62,070

Equity - Additional Information

Equity - Additional Information (Detail)	Jun. 16, 2015USD ($)Director$ / sharesshares	May. 04, 2015USD ($)$ / sharesshares	Apr. 16, 2015USD ($)Director$ / sharesshares	Sep. 30, 2015USD ($)	Sep. 30, 2014USD ($)	Sep. 30, 2015USD ($)$ / shares	Sep. 30, 2014USD ($)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options, grant date price | $ / shares						$ 4.80
Unrecognized stock-based compensation cost				$ 3,200,000		$ 3,200,000
Unrecognized share-based compensation expense, weighted-average recognition period						1 year 6 months
Stock compensation expense						$ 1,588,000	$ 566,000
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of directors | Director	2		4
Research And Development Expense | Warrant [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock compensation expense				$ 173,000	$ 172,000	$ 58,000	$ 137,000
Director One [Member] | Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted stock granted | shares	1,560		2,080
Fair market value restricted stock	$ 9,079		$ 10,025
Restricted stock price per share | $ / shares	$ 5.82		$ 4.82
Director Two [Member] | Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted stock granted | shares	1,560		2,080
Fair market value restricted stock	$ 9,079		$ 10,025
Restricted stock price per share | $ / shares	$ 5.82		$ 4.82
Director Three [Member] | Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted stock granted | shares			2,080
Fair market value restricted stock			$ 10,025
Restricted stock price per share | $ / shares			$ 4.82
Director Four [Member] | Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted stock granted | shares			2,080
Fair market value restricted stock			$ 10,025
Restricted stock price per share | $ / shares			$ 4.82
Amended and Restated Equity Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of additional shares authorized for issuance | shares		2,500,000
Aggregate number of shares available for issuance | shares		9,500,000
Amended and Restated Equity Incentive Plan [Member] | Certain Executives and Key Employees [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options, grant date price | $ / shares		$ 4.78
Options, weighted average fair market value | $ / shares		$ 1.80
Options, number granted | shares		1,645,000
Options granted, fair market value		$ 2,961,000

Equity - Summary of Stock Optio

Equity - Summary of Stock Option Activity (Detail)	9 Months Ended
	Sep. 30, 2015$ / sharesshares
Equity [Abstract]
Stock options, beginning balance | shares	4,012,096
Stock options, granted | shares	1,756,000
Stock options, exercised | shares	289,125
Stock options, canceled or expired | shares	12,500
Stock options, ending balance | shares	5,466,471
Stock options, exercisable, ending balance | shares	2,686,247
Weighted average exercise price, beginning balance	$ 2.04
Weighted average exercise price, granted	4.80
Weighted average exercise price, exercised	1.61
Weighted average exercise price, canceled or expired	3.19
Weighted average exercise price, ending balance	2.95
Weighted average exercise price, exercisable, ending balance	$ 1.52

Equity - Summary of Stock-Based

Equity - Summary of Stock-Based Compensation Expense Recognized for Stock Options and Restricted Stock Included in Consolidated Statements of Operations (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation expense	$ 828	$ 320	$ 1,734	$ 566
Research And Development Expense
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation expense	161	200	339	269
General and Administrative Expense [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation expense	$ 667	$ 120	$ 1,395	$ 297

Equity - Summary of Warrant Act

Equity - Summary of Warrant Activity (Detail) - Warrant [Member]	9 Months Ended
	Sep. 30, 2015$ / sharesshares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Warrants outstanding, beginning balance | shares	650,000
Warrants granted | shares	0
Warrants exercised | shares	0
Warrants canceled or expired | shares	0
Warrants outstanding, ending balance | shares	650,000
Warrants exercisable, ending balance | shares	530,000
Weighted average exercise price, warrants outstanding, beginning balance	$ 1.48
Weighted average exercise price, warrants granted	0
Weighted average exercise price, warrants exercised	0
Weighted average exercise price, warrants canceled or expired	0
Weighted average exercise price, warrants outstanding, ending balance	1.48
Weighted average exercise price, warrants exercisable, ending balance	$ 1.49

Commitments - Additional Inform

Commitments - Additional Information (Detail) - USD ($)	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Contractual Obligation [Line Items]
Agreement for purchase of equipment	$ 4,377,000	$ 4,824,000
Laboratory and Computer Equipment [Member] | Wells Fargo Equipment Finance [Member]
Contractual Obligation [Line Items]
Agreement for purchase of equipment	1,500,000
Laboratory and Computer Equipment [Member] | 36 Month Term [Member] | Wells Fargo Equipment Finance [Member]
Contractual Obligation [Line Items]
Agreement for purchase of equipment	$ 200,000
Lease term period	36 months
Buyout option	$ 1
Interest rate	3.61%
Laboratory and Computer Equipment [Member] | 60 Month Term [Member] | Wells Fargo Equipment Finance [Member]
Contractual Obligation [Line Items]
Agreement for purchase of equipment	$ 1,300,000
Lease term period	60 months
Buyout option	$ 1
Interest rate	4.08%
Laboratory Equipment, Computer Equipment and Computer Software [Member] | Other Lease Agreement [Member]
Contractual Obligation [Line Items]
Agreement for purchase of equipment	$ 2,800,000
Buyout option	$ 1
Weighted average interest rate	5.47%
Laboratory Equipment, Computer Equipment and Computer Software [Member] | Other Lease Agreement [Member] | Minimum [Member]
Contractual Obligation [Line Items]
Lease term period	34 months
Interest rate	4.00%
Laboratory Equipment, Computer Equipment and Computer Software [Member] | Other Lease Agreement [Member] | Maximum [Member]
Contractual Obligation [Line Items]
Lease term period	60 months
Interest rate	13.50%

Other Related Party Transacti33

Other Related Party Transactions - Additional Information (Detail) - USD ($)	May. 04, 2015	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Related Party Transaction [Line Items]
Options, grant date price				$ 4.80
Executive Vice President [Member]
Related Party Transaction [Line Items]
Fees for consulting work performed		$ 66,000	$ 67,000	$ 197,000	$ 197,000
Payment of annual bonus compensation				$ 77,500	$ 47,500
Options, grant date price	$ 4.78
Options, number granted	225,000
Options, weighted average fair market value	$ 1.80
Options, vesting period	3 years

Subsequent Events - Additional

Subsequent Events - Additional Information (Detail)	Oct. 20, 2015USD ($)Credit_Facility$ / sharesshares	Sep. 30, 2015USD ($)$ / shares	Oct. 28, 2015USD ($)	Dec. 31, 2014$ / shares
Subsequent Event [Line Items]
Common stock, par value | $ / shares		$ 0.001		$ 0.001
Fish [Member]
Subsequent Event [Line Items]
Revenue		$ 5,100,000
Percentage of estimated increase in medical reimbursements		75.00%
CMS [Member]
Subsequent Event [Line Items]
Revenue		$ 2,600,000
Percentage of estimated reduction in medical reimbursements		18.00%
Subsequent Event [Member]
Subsequent Event [Line Items]
Number of new credit facilities | Credit_Facility	2
Subsequent Event [Member] | Amended Strategic Alliance Agreement [Member] | Covance Central Laboratory Services [Member]
Subsequent Event [Line Items]
Amount receivable during the fourth quarter of 2015			$ 2,000,000
Subsequent Event [Member] | Revolving Credit Facility [Member]
Subsequent Event [Line Items]
Maximum borrowing capacity	$ 25,000,000
Subsequent Event [Member] | Clarient, Inc. [Member]
Subsequent Event [Line Items]
Common stock, par value | $ / shares	$ 0.01
Business acquisition, purchase price in cash payment	$ 80,000,000
Subsequent Event [Member] | Clarient, Inc. [Member] | Revolving Credit Facility [Member]
Subsequent Event [Line Items]
Expected amount used to fund the acquisition	10,000,000
Subsequent Event [Member] | Clarient, Inc. [Member] | Term Loan [Member]
Subsequent Event [Line Items]
Expected amount used to fund the acquisition	$ 55,000,000
Subsequent Event [Member] | Clarient, Inc. [Member] | Common Stock [Member]
Subsequent Event [Line Items]
Business acquisition, purchase price payment in share | shares	15,000,000
Subsequent Event [Member] | Clarient, Inc. [Member] | Series A Preferred Stock [Member]
Subsequent Event [Line Items]
Business acquisition, purchase price payment in share | shares	14,666,667