Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2023 | Nov. 10, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-39049 | |
Entity Registrant Name | EXAGEN INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 20-0434866 | |
Entity Address, Address Line One | 1261 Liberty Way | |
Entity Address, City or Town | Vista, | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 92081 | |
City Area Code | (760) | |
Local Phone Number | 560-1501 | |
Title of 12(b) Security | Common Stock, par value $0.001 per share | |
Trading Symbol | XGN | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 17,045,827 | |
Entity Central Index Key | 0001274737 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
Unaudited Condensed Balance She
Unaudited Condensed Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 28,448 | $ 62,391 |
Accounts receivable, net | 17,044 | 6,077 |
Prepaid expenses and other current assets | 3,416 | 4,143 |
Total current assets | 48,908 | 72,611 |
Property and equipment, net | 7,214 | 8,197 |
Operating lease right-of-use assets | 4,168 | 4,885 |
Other assets | 638 | 528 |
Total assets | 60,928 | 86,221 |
Current liabilities: | ||
Accounts payable | 1,657 | 3,046 |
Accrued and other current liabilities | 7,063 | 5,347 |
Operating lease liabilities | 1,138 | 1,040 |
Borrowings-current portion | 261 | 190 |
Total current liabilities | 10,119 | 9,623 |
Borrowings-non-current portion, net of discounts and debt issuance costs | 19,193 | 28,778 |
Non-current operating lease liabilities | 3,628 | 4,493 |
Other non-current liabilities | 484 | 867 |
Total liabilities | 33,424 | 43,761 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Preferred stock, $0.001 par value per share; 10,000,000 shares authorized, no shares issued or outstanding as of September 30, 2023 and December 31, 2022 | 0 | 0 |
Common stock, $0.001 par value per share; 200,000,000 shares authorized as of September 30, 2023 and December 31, 2022; 16,931,894 and 16,549,984 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively | 17 | 17 |
Additional paid-in capital | 301,130 | 297,970 |
Accumulated deficit | (273,643) | (255,527) |
Total stockholders' equity | 27,504 | 42,460 |
Total liabilities and stockholders' equity | $ 60,928 | $ 86,221 |
Unaudited Condensed Balance S_2
Unaudited Condensed Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2023 | Dec. 31, 2022 |
Preferred stock | ||
Par value (in dollars per share) | $ 0.001 | $ 0.001 |
Shares authorized (in shares) | 10,000,000 | 10,000,000 |
Shares outstanding (in shares) | 0 | 0 |
Shares issued (in shares) | 0 | 0 |
Common stock | ||
Par value (in dollars per share) | $ 0.001 | $ 0.001 |
Shares authorized (in shares) | 200,000,000 | 200,000,000 |
Shares issued (in shares) | 16,931,894 | 16,549,984 |
Shares outstanding (in shares) | 16,931,894 | 16,549,984 |
Unaudited Condensed Statements
Unaudited Condensed Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Income Statement [Abstract] | ||||
Revenue | $ 13,416 | $ 14,726 | $ 38,783 | $ 32,726 |
Operating expenses: | ||||
Costs of revenue | 5,710 | 6,010 | 17,472 | 17,905 |
Selling, general and administrative expenses | 11,375 | 14,151 | 35,212 | 39,206 |
Research and development expenses | 1,400 | 2,382 | 3,789 | 7,175 |
Total operating expenses | 18,485 | 22,543 | 56,473 | 64,286 |
Loss from operations | (5,069) | (7,817) | (17,690) | (31,560) |
Interest expense | (557) | (618) | (1,769) | (1,822) |
Other income, net | 211 | 339 | 1,343 | 349 |
Net loss | $ (5,415) | $ (8,096) | $ (18,116) | $ (33,033) |
Net loss per share, basic (in dollars per share) | $ (0.31) | $ (0.47) | $ (1.03) | $ (1.94) |
Net loss per share, diluted (in dollars per share) | $ (0.31) | $ (0.47) | $ (1.03) | $ (1.94) |
Weighted-average number of shares used to compute net loss per share, basic (in shares) | 17,692,603 | 17,080,959 | 17,626,686 | 17,044,623 |
Weighted-average number of shares used to compute net loss per share, diluted (in shares) | 17,692,603 | 17,080,959 | 17,626,686 | 17,044,623 |
Unaudited Condensed Statement_2
Unaudited Condensed Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Accumulated Deficit |
Beginning balance (in shares) at Dec. 31, 2021 | 16,164,994 | |||
Beginning balance at Dec. 31, 2021 | $ 84,936 | $ 16 | $ 293,060 | $ (208,140) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Issuance of stock from vested restricted stock units and payment of employees' taxes (in shares) | 30,523 | |||
Issuance of stock from vested restricted stock units and payment of employees' taxes | (115) | (115) | ||
Issuance of stock under Employee Stock Purchase Plan (in shares) | 35,681 | |||
Issuance of stock under Employee Stock Purchase Plan | 231 | 231 | ||
Stock-based compensation | 1,376 | 1,376 | ||
Net loss | (10,272) | (10,272) | ||
Ending balance (in shares) at Mar. 31, 2022 | 16,231,198 | |||
Ending balance at Mar. 31, 2022 | 76,156 | $ 16 | 294,552 | (218,412) |
Beginning balance (in shares) at Dec. 31, 2021 | 16,164,994 | |||
Beginning balance at Dec. 31, 2021 | 84,936 | $ 16 | 293,060 | (208,140) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net loss | (33,033) | |||
Ending balance (in shares) at Sep. 30, 2022 | 16,305,475 | |||
Ending balance at Sep. 30, 2022 | 56,186 | $ 16 | 297,343 | (241,173) |
Beginning balance (in shares) at Mar. 31, 2022 | 16,231,198 | |||
Beginning balance at Mar. 31, 2022 | 76,156 | $ 16 | 294,552 | (218,412) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Issuance of stock from vested restricted stock units and payment of employees' taxes (in shares) | 27,609 | |||
Issuance of stock from vested restricted stock units and payment of employees' taxes | (107) | (107) | ||
Stock-based compensation | 1,440 | 1,440 | ||
Net loss | (14,665) | (14,665) | ||
Ending balance (in shares) at Jun. 30, 2022 | 16,258,807 | |||
Ending balance at Jun. 30, 2022 | 62,824 | $ 16 | 295,885 | (233,077) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Issuance of stock from vested restricted stock units and payment of employees' taxes (in shares) | 5,336 | |||
Issuance of stock from vested restricted stock units and payment of employees' taxes | (2) | (2) | ||
Issuance of stock under Employee Stock Purchase Plan (in shares) | 40,059 | |||
Issuance of stock under Employee Stock Purchase Plan | 154 | 154 | ||
Exercise of stock options (in shares) | 1,273 | |||
Stock-based compensation | 1,306 | 1,306 | ||
Net loss | (8,096) | (8,096) | ||
Ending balance (in shares) at Sep. 30, 2022 | 16,305,475 | |||
Ending balance at Sep. 30, 2022 | $ 56,186 | $ 16 | 297,343 | (241,173) |
Beginning balance (in shares) at Dec. 31, 2022 | 16,549,984 | 16,549,984 | ||
Beginning balance at Dec. 31, 2022 | $ 42,460 | $ 17 | 297,970 | (255,527) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Issuance of stock from vested restricted stock units and payment of employees' taxes (in shares) | 113,378 | |||
Issuance of stock under Employee Stock Purchase Plan (in shares) | 70,317 | |||
Issuance of stock under Employee Stock Purchase Plan | 152 | 152 | ||
Exercise of stock options (in shares) | 93,335 | |||
Exercise of stock options | 27 | 27 | ||
Stock-based compensation | 986 | 986 | ||
Net loss | (7,688) | (7,688) | ||
Ending balance (in shares) at Mar. 31, 2023 | 16,827,014 | |||
Ending balance at Mar. 31, 2023 | $ 35,937 | $ 17 | 299,135 | (263,215) |
Beginning balance (in shares) at Dec. 31, 2022 | 16,549,984 | 16,549,984 | ||
Beginning balance at Dec. 31, 2022 | $ 42,460 | $ 17 | 297,970 | (255,527) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net loss | $ (18,116) | |||
Ending balance (in shares) at Sep. 30, 2023 | 16,931,894 | 16,931,894 | ||
Ending balance at Sep. 30, 2023 | $ 27,504 | $ 17 | 301,130 | (273,643) |
Beginning balance (in shares) at Mar. 31, 2023 | 16,827,014 | |||
Beginning balance at Mar. 31, 2023 | 35,937 | $ 17 | 299,135 | (263,215) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Issuance of stock from vested restricted stock units and payment of employees' taxes (in shares) | 31,180 | |||
Stock-based compensation | 978 | 978 | ||
Net loss | (5,013) | (5,013) | ||
Ending balance (in shares) at Jun. 30, 2023 | 16,858,194 | |||
Ending balance at Jun. 30, 2023 | 31,902 | $ 17 | 300,113 | (268,228) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Issuance of stock from vested restricted stock units and payment of employees' taxes (in shares) | 14,424 | |||
Issuance of stock under Employee Stock Purchase Plan (in shares) | 59,276 | |||
Issuance of stock under Employee Stock Purchase Plan | 127 | 127 | ||
Stock-based compensation | 890 | 890 | ||
Net loss | $ (5,415) | (5,415) | ||
Ending balance (in shares) at Sep. 30, 2023 | 16,931,894 | 16,931,894 | ||
Ending balance at Sep. 30, 2023 | $ 27,504 | $ 17 | $ 301,130 | $ (273,643) |
Unaudited Condensed Statement_3
Unaudited Condensed Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Cash flows from operating activities: | ||
Net loss | $ (18,116) | $ (33,033) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 1,661 | 1,037 |
Amortization of debt discount and debt issuance costs | 119 | 119 |
Non-cash interest expense | 294 | 411 |
Loss on disposal of assets | 209 | 0 |
Non-cash lease expense | 717 | 738 |
Stock-based compensation | 2,854 | 4,122 |
Other | 0 | 33 |
Changes in assets and liabilities: | ||
Accounts receivable, net | (10,967) | (985) |
Prepaid expenses and other current assets | 727 | 921 |
Other assets | (120) | (100) |
Operating lease liabilities | (767) | (613) |
Accounts payable | (1,422) | 1,061 |
Accrued and other current liabilities | 2,000 | (121) |
Net cash used in operating activities | (22,811) | (26,410) |
Cash flows from investing activities: | ||
Purchases of property and equipment | (722) | (3,912) |
Proceeds from disposal of property and equipment | 2 | 0 |
Net cash used in investing activities | (720) | (3,912) |
Cash flows from financing activities: | ||
Proceeds from exercise of stock options | 27 | 0 |
Payments of taxes withheld on vested restricted stock units | 0 | (224) |
Proceeds from common stock issued under Employee Stock Purchase Plan | 279 | 385 |
Principal payments on finance lease obligations | (541) | (477) |
Principal payment on note payable obligations | (177) | 0 |
Principal payment on long-term debt | (10,000) | 0 |
Net cash used in financing activities | (10,412) | (316) |
Net change in cash, cash equivalents and restricted cash | (33,943) | (30,638) |
Cash, cash equivalents and restricted cash, beginning of period | 62,591 | 99,542 |
Cash, cash equivalents and restricted cash, end of period | 28,648 | 68,904 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 1,336 | 1,297 |
Supplemental disclosure of non-cash items: | ||
Equipment purchased under finance lease obligations | 0 | 709 |
Equipment purchased under notes payable obligations | 250 | 0 |
Costs incurred, but not paid, in connection with capital expenditures | $ 81 | $ 645 |
Organization
Organization | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | Organization Description of Business Exagen Inc. (the Company) is a commercial-stage diagnostics company which exists to provide clarity in autoimmune disease decision making with the goal of improving patients' clinical outcomes. Liquidity The Company has incurred recurring losses and negative cash flows from operating activities since inception. The Company anticipates that it will continue to incur net losses into the foreseeable future. As of September 30, 2023, the Company had cash and cash equivalents of $28.4 million and had an accumulated deficit of $273.6 million. Since inception, the Company has financed its operations primarily through a combination of equity financings, debt financing arrangements, and revenue from sales of the Company's products. Based on the Company's current business plan, management believes that its existing capital resources will be sufficient to fund the Company's obligations for at least twelve months following the issuance of these condensed financial statements. To execute its business plans, the Company may need additional funding to support its continuing operations and pursue its growth strategy. Until such time as the Company can achieve significant cash flows from operations, if ever, it expects to finance its operations through the sale of its stock, debt financings or other strategic transactions. Although the Company has been successful in raising capital in the past, there is no assurance that it will be successful in obtaining such additional financing on terms acceptable to the Company, if at all. The terms of any financing may adversely affect the holdings or the rights of the Company's stockholders. If the Company is unable to obtain funding, the Company could be forced to delay, reduce or eliminate some or all of its programs, product portfolio expansion plans or commercialization efforts, which could have a material adverse effect on the Company's business, operating results and financial condition and the Company's ability to achieve its intended business objectives. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation and Use of Estimates The accompanying interim condensed balance sheet as of September 30, 2023, condensed statements of operations and stockholders' equity for the three and nine months ended September 30, 2023 and 2022, cash flows for the nine months ended September 30, 2023 and 2022 and the related footnote disclosures are unaudited and have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (SEC), and with accounting principles generally accepted in the United States (GAAP) applicable to interim financial statements. These unaudited condensed financial statements and related footnote disclosures should be read in conjunction with the Company’s audited financial statements for the fiscal year ended December 31, 2022, included in its Annual Report on Form 10-K filed with the SEC on March 20, 2023. In management's opinion, the unaudited interim condensed financial statements have been prepared on the same basis as the audited financial statements and include all normal adjustments, necessary for the fair presentation of the Company's financial position as of September 30, 2023 and its results of operations for the periods presented. The results for the three and nine months ended September 30, 2023 are not necessarily indicative of the results expected for the full fiscal year or any other interim period. The year-end condensed balance sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP. The preparation of the accompanying condensed financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities as of the date of the condensed financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could materially differ from those estimates. Significant estimates and assumptions made in the accompanying condensed financial statements include, but are not limited to revenue recognition, the recoverability of its long-lived assets and net deferred tax assets (and related valuation allowance). The Company evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors and adjusts those estimates and assumptions when facts and circumstances dictate. Actual results could materially differ from those estimates. Concentration of Credit Risk and Other Risk and Uncertainties Financial instruments that potentially subject the Company to credit risk consist principally of cash, cash equivalents and accounts receivable. Substantially all the Company's cash and cash equivalents are held at one financial institution that management believes is of high credit quality. Such deposits may, at times, exceed federally insured limits. The Company has not experienced any losses on its cash or cash equivalents. Significant payors and customers are those which represent more than 10% of the Company's total revenue or accounts receivable balance at each respective balance sheet date. For each significant payor and customer, revenue as a percentage of total revenue and accounts receivable as a percentage of total accounts receivable are as follows: Revenue Three Months Ended Nine Months Ended 2023 2022 2023 2022 Medicare 37 % 62 % 35 % 37 % Medicare Advantage 15 % 12 % 17 % 15 % Accounts Receivable, Net September 30, 2023 December 31, 2022 Medicare 65 % 21 % Medicare Advantage * 13 % * Less than 10%. For the three months ended September 30, 2023 and 2022, approximately 89% and 87%, respectively, of the Company's revenue was related to the AVISE ® CTD test. Revenue related to the AVISE ® CTD test for the nine months ended September 30, 2023 and 2022 was approximately 88% and 84%, respectively. The Company is dependent on key suppliers for certain laboratory materials. For the three months ended September 30, 2023 and 2022, approximately 98% and 97%, respectively, of the Company's diagnostic testing supplies were purchased from two suppliers. For each of the nine months ended September 30, 2023 and 2022, approximately 97% of the Company's diagnostic testing supplies were purchased from two suppliers. An interruption in the supply of these materials would impact the Company's ability to perform testing services. Disaggregation of Revenue The following table includes the Company's revenues as disaggregated by payor and customer category (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Revenue: Commercial $ 6,090 $ 3,216 $ 17,789 $ 14,259 Government 4,955 9,228 13,570 12,242 Client(1) 2,319 2,046 6,999 5,496 Other(2) 52 236 425 729 Total revenue $ 13,416 $ 14,726 $ 38,783 $ 32,726 (1) Includes hospitals, other laboratories, etc. (2) Includes patient self-pay . Fair Value Measurements The carrying value of the Company's cash, cash equivalents and restricted cash, accounts receivable, prepaid expenses and other current assets, accounts payable and accrued and other current liabilities approximate their fair values due to their short-term nature, which are determined to be a Level 1 measurement. The estimated fair value of the Company's long-term borrowings is determined by Level 2 inputs and based primarily on quoted market prices for the same or similar issues. As of September 30, 2023, the 2017 Term Loan (as defined below) had a carrying value of $18.6 million and a fair value of $19.0 million. As of December 31, 2022, the 2017 Term Loan had a carrying value of $28.3 million and a fair value of $26.9 million. The estimated fair value of the 2017 Term Loan was determined based on a discounted cash flow approach using available market information on discount and borrowing rates with similar terms, maturities, and credit ratings. The carrying value of the Company's other long-term borrowing at September 30, 2023 and December 31, 2022 was $0.9 million and $0.8 million, respectively, and approximated its fair value. Cash, Cash Equivalents and Restricted Cash The Company considers all highly-liquid investments purchased with a remaining maturity date of three months or less upon acquisition to be cash equivalents. These investments are stated at cost, which approximates fair value. The Company has an arrangement with a financial institution with which it has an existing banking relationship, whereby in exchange for the issuance of corporate credit cards, the Company agreed to obtain a certificate of deposit with this financial institution in the amount of $0.2 million as collateral for the balances borrowed on these cards. The Company has classified the value of this certificate of deposit (including all interest earned thereon) within other assets in the accompanying balance sheets. The Company has the right to terminate the credit card program at any time. Upon termination of the credit card program and repayment of all outstanding balances owed, the Company may redeem the certificate of deposit (and all interest earned thereon). Cash, cash equivalents, and restricted cash presented in the accompanying statements of cash flows consist of the following (in thousands): September 30, 2023 December 31, 2022 Cash and cash equivalents $ 28,448 $ 62,391 Restricted cash 200 200 $ 28,648 $ 62,591 Long-lived Assets The Company’s long-lived assets are comprised principally of its property and equipment and operating lease assets. The Company amortizes all finite lived intangible assets over their respective estimated useful lives. Operating lease assets are amortized over the term of the leases. In considering whether long-lived assets are impaired, the company combines its intangible assets and other long-lived assets, into groupings, a determination which is made principally on the basis of whether the assets are specific to a particular test offered or technology being developed. If the Company identifies a change in the circumstances related to its long-lived assets that indicates the carrying value of any such asset may not be recoverable, the Company will perform an impairment analysis. A long-lived asset is deemed to be impaired when the undiscounted cash flows expected to be generated by the asset (or asset group) are less than the asset’s carrying amount. Management’s estimates of future cash flows are impacted by projected test volume and levels of reimbursement, as well as expectations related to the future cost structure of the entity. Any required impairment loss would be measured as the amount by which the asset’s carrying value exceeds its fair value, and would be recorded as a reduction in the carrying value of the related asset and a charge to operating expense. Revenue Recognition Substantially all of the Company's revenue has been derived from sales of its testing products and is primarily comprised of a high volume of relatively low-dollar transactions. The Company primarily markets its testing products to rheumatologists and their physician assistants in the United States. The healthcare professionals who order the Company's testing products and to whom test results are reported are generally not responsible for payment for these products. The parties that pay for these services (each, a payor) consist of commercial payors (healthcare insurers), government payors (primarily Medicare and Medicaid), client payors (i.e., hospitals, other laboratories, etc.) and patient self-pay. The Company's service is a single performance obligation that is completed upon the delivery of test results to the prescribing physician which triggers revenue recognition. Payors are billed at the Company's list price. Net revenues recognized consist of amounts billed net of allowances for differences between amounts billed and the estimated consideration the Company expects to receive from such payors. The process for estimating revenues and the ultimate collection of accounts receivable involves significant judgment and estimation. The Company follows a standard process, which considers historical denial and collection experience, insurance reimbursement policies and other factors, to estimate allowances and implicit price concessions. Adjustments are recorded in the current period as changes in estimates occur. Further adjustments to the allowances, based on actual receipts, are recorded upon settlement. Included in revenues for the three months ended September 30, 2023 and 2022 was a $2.5 million net revenue increase and a $3.7 million net revenue increase, respectively, associated with changes in estimated variable consideration related to performance obligations satisfied in previous periods. Included in revenues for the nine months ended September 30, 2023 and 2022 was a $2.6 million net revenue increase and a $2.5 million net revenue decrease, respectively, associated with changes in estimated variable consideration related to performance obligations satisfied in previous periods. The transaction price is estimated using an expected value method on a portfolio basis. Variable consideration is included in the transaction price only to the extent it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainties with respect to the amount are resolved. The Company's portfolios are grouped per payor (i.e. each individual commercial payor, Medicare, Medicaid, client payors, patient self-pay, etc.) and per test. Consideration may be constrained and excluded from the transaction price in situations where there is no contractually agreed upon reimbursement coverage or in absence of a predictable pattern and history of collectability with a payor. Accordingly, in such situations revenues are recognized on the basis of actual cash collections. Additionally, from time to time, the Company may issue refunds to payors for overpayments or amounts billed in error. Any refunds are accounted for as reductions in revenues in the statement of operations as an element of variable consideration. The estimated expected refunds are accrued as a liability on the Company’s balance sheet. Collection of the Company's net revenues from payors is normally a function of providing complete and correct billing information and any requested medical or other claims-related information to the healthcare insurers and generally occurs within 30 to 90 days of billing. However, the amount and timing of any reimbursements or collections for our billed tests may vary by payor and other circumstances. Contracts do not contain significant financing components based on the typical period of time between performance of services and collection of consideration. Accounts Receivable and Allowance for Credit Losses We accrue an allowance for credit losses against our accounts receivable based on management’s current estimate of amounts that will not be collected. Management’s estimates are typically based on historical loss information adjusted for current conditions. We generally do not perform evaluations of the financial condition of our customers and generally do not require collateral. The allowance for credit losses was zero as of September 30, 2023. Adjustments for implicit price concessions attributable to variable consideration, as discussed above, are incorporated into the measurement of the accounts receivable balances and are not part of the allowance for credit losses. Research and Development Costs associated with research and development activities are expensed as incurred and include, but are not limited to, personnel-related expenses, including stock-based compensation expense, materials, laboratory supplies, consulting costs, costs associated with setting up and conducting clinical studies and allocated overhead including rent and utilities. Advertising and Marketing Costs Costs associated with advertising and marketing activities are expensed as incurred. Total advertising and marketing costs were approximately $0.5 million and $1.3 million for the three months ended September 30, 2023 and 2022, respectively. For the nine months ended September 30, 2023 and 2022, total advertising and marketing costs were approximately $1.2 million and $2.2 million, respectively. These costs are included in selling, general and administrative expenses in the accompanying condensed statements of operations. Shipping and Handling Costs Costs incurred for shipping and handling are included in costs of revenue in the accompanying condensed statements of operations and totaled approximately $0.6 million and $0.7 million for the three months ended September 30, 2023 and 2022, respectively. For the nine months ended September 30, 2023 and 2022, shipping and handling costs were approximately $1.9 million and $2.1 million, respectively. Stock-Based Compensation The Company recognizes compensation expense for all stock-based awards to employees and directors based on the grant-date estimated fair values over the requisite service period of the awards (usually the vesting period) on a straight-line basis. The fair value of stock options and purchases under the Company's 2019 Employee Stock Purchase Plan (ESPP) rights is determined using the Black-Scholes-Merton (BSM) option pricing model, which requires management to make certain assumptions regarding a number of complex and subjective variables. Equity award forfeitures are recorded as they occur. The BSM option pricing model incorporates various inputs, including the fair value of the Company's common stock, expected volatility, expected term and risk-free interest rates. Volatility is based on the Company's historical calculated volatility since being publicly traded. The weighted-average expected term of options was calculated using the simplified method. The risk-free interest rate for periods within the contractual term of the option is based on the U.S. Treasury yield in effect at the time of grant. The dividend yield is zero, as the Company has never declared or paid dividends and has no plans to do so in the foreseeable future. The fair value of each restricted stock unit is determined on the grant date using the closing price of the Company's common stock on that date. The Company's restricted stock units generally vest in equal annual installments over four years from the date of grant or, for grants to new hires, date of hire. Vesting of restricted stock units is subject to the holder's continued service with the Company. The Company issues new shares to satisfy restricted stock units upon vesting. Comprehensive Loss Comprehensive loss is defined as a change in equity of a business enterprise during a period, resulting from transactions from nonowner sources. There have been no items qualifying as other comprehensive loss and, therefore, for all periods presented, the Company's comprehensive loss was the same as its reported net loss. Net Loss Per Share Basic net loss per share attributable to common stockholders is calculated by dividing the net loss attributable to common stockholders by the weighted-average number of common shares outstanding during the period. Diluted net loss per share attributable to common stockholders is computed by dividing the net loss attributable to common stockholders by the weighted-average number of common stock equivalents outstanding for the period determined using the treasury-stock and if-converted methods. The weighted-average number of shares used to compute basic and diluted shares includes shares issuable upon the exercise of pre-funded warrants at a nominal price. Potentially dilutive common stock equivalents are comprised of warrants for the purchase of common stock, stock options, restricted stock units outstanding under the Company's 2019 Incentive Award Plan (the 2019 Plan) and shares of the Company's common stock pursuant to the ESPP. For the three and nine months ended September 30, 2023 and 2022, there is no difference in the number of shares used to calculate basic and diluted shares outstanding, as the inclusion of the potentially dilutive securities would be antidilutive. Potentially dilutive securities not included in the calculation of diluted net loss per share, because to do so would be anti-dilutive, are as follows (in common stock equivalent shares): September 30, 2023 September 30, 2022 Warrants to purchase common stock 409,108 409,108 Common stock options 1,004,855 1,820,555 Restricted stock units 1,568,112 805,496 Employee stock purchase plan 12,542 17,204 Total 2,994,617 3,052,363 Segment Reporting Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker in making decisions regarding resource allocation and assessing performance. The Company views its operations as, and manages its business in, one operating segment. Recent Accounting Pronouncements From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (FASB), or other standard setting bodies and adopted by the Company as of the specified effective date. Under the Jumpstart Our Business Startups Act of 2012 (JOBS Act), the Company meets the definition of an emerging growth company. The Company has elected to use the extended transition period for complying with new or revised accounting standards pursuant to Section 107(b) of the JOBS Act. Unless otherwise discussed, the impact of recently issued standards that are not yet effective will not have a material impact on the Company's financial position or results of operations upon adoption. Recently Adopted Accounting Standards In June 2016, the FASB issued Accounting Standards Update (ASU) 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , which requires the measurement of expected credit losses (based on historical experience, current conditions and reasonable forecasts) for financial instruments (such as accounts receivable) held at the reporting date which are carried at amortized cost. The main objective of this ASU is to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. In November 2018, the FASB issued ASU 2018-19, Codification Improvements to Topic 326, Financing Instruments-Credit Losses , which included an amendment of the effective date for nonpublic entities. For emerging growth companies, ASU 2016-13 is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company adopted this pronouncement on January 1, 2023. The adoption did not have an impact on its condensed financial statements. In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40) . ASU 2020-06 eliminates the beneficial conversion and cash conversion accounting models for convertible instruments. It also amends the accounting for certain contracts in an entity’s own equity that are currently accounted for as derivatives because of specific settlement provisions. In addition, ASU 2020-06 modifies how particular convertible instruments and certain contracts that may be settled in cash or shares impact the diluted EPS computation. The amendments in ASU 2020-06 are effective for smaller reporting companies as defined by the SEC for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. The Company early adopted ASU 2020-06 as of January 1, 2023. The adoption did not have an impact on its condensed financial statements. |
Other Financial Information
Other Financial Information | 9 Months Ended |
Sep. 30, 2023 | |
Other Financial Information [Abstract] | |
Other Financial Information | Other Financial InformationPrepaid Expenses and Other Current Assets Prepaid expenses and other current assets consist of the following (in thousands): September 30, 2023 December 31, 2022 Diagnostic testing supplies $ 2,239 $ 1,795 Prepaid product royalties 38 40 Prepaid maintenance and insurance contracts 1,120 2,072 Other prepaid expenses and other current assets 19 236 Prepaid expenses and other current assets $ 3,416 $ 4,143 Property and Equipment Property and equipment consist of the following (in thousands): September 30, 2023 December 31, 2022 Furniture and fixtures $ 98 $ 98 Laboratory equipment 6,140 5,136 Computer equipment and software 1,793 1,482 Leasehold improvements 5,254 5,223 Construction in progress 415 1,382 Total property and equipment 13,700 13,321 Less: accumulated depreciation and amortization (6,486) (5,124) Property and equipment, net $ 7,214 $ 8,197 Depreciation and amortization expense for the three months ended September 30, 2023 and 2022 was approximately $0.6 million and $0.4 million, respectively. For the nine months ended September 30, 2023 and 2022, depreciation and amortization expense was approximately $1.7 million and $1.0 million, respectively. Accrued and Other Current Liabilities Accrued and other current liabilities consist of the following (in thousands): September 30, 2023 December 31, 2022 Accrued payroll and related expenses $ 3,666 $ 2,355 Accrued interest — 142 Accrued purchases of goods and services 589 803 Accrued royalties 281 514 Accrued clinical study activity 118 162 Finance lease obligations, current portion 535 700 Legal accrual 700 — Refund liability 302 445 Other accrued liabilities 872 226 Accrued and other current liabilities $ 7,063 $ 5,347 |
Borrowings
Borrowings | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Borrowings | Borrowings 2017 Term Loan In September 2017, the Company executed a term loan agreement (the 2017 Term Loan) with Innovatus Life Sciences Lending Fund I, LP (Innovatus), as amended (the Amended Loan Agreement), pursuant to which the Company borrowed $25.0 million. As of September 30, 2023, no additional amounts remained available to borrow under the 2017 Term Loan. On April 28, 2023, the Company entered into the Third Loan Amendment to the 2017 Term Loan (the Third Loan Amendment). The Third Loan Amendment was treated as a modification. Pursuant to the Third Loan Amendment, the interest rate on all borrowings under the Amended Loan Agreement is the sum (the Basic Rate) of (a) the greater of 8.0% or The Wall Street Journal prime rate (the Prime Rate), plus (b) 2.0%. Under the Amended Loan Agreement, an amount equal to 1.5% of the Basic Rate will be payable in-kind and capitalized to the principal amount of the outstanding term loan on a monthly basis until April 1, 2026, after which interest is scheduled to accrue at the Basic Rate. The maturity date of the loan was extended to December 31, 2026. As of September 30, 2023, the Company estimated the effective interest rate of this loan to be approximately 11.0%. Accrued interest is due and payable monthly, unless the Company elects to pay paid-in-kind interest. The outstanding principal and accrued interest under the Amended Loan Agreement is to be repaid in ten equal monthly installments commencing in April 2026. Upon repayment of the final installment under the Amended Loan Agreement, the Company is required to pay an additional fee of $1.0 million. This obligation is being accreted into interest expense over the term of the loan using the effective interest method. For each of the three months ended September 30, 2023 and 2022, the Company issued payment-in-kind (PIK) Loans totaling $0.1 million. For the nine months ended September 30, 2023 and 2022, the Company issued PIK Loans totaling $0.3 million and $0.4 million, respectively. The Amended Loan Agreement requires a prepayment premium of 2% of the aggregate outstanding principal and decreases by 1% on each of November 1, 2023 and 2024. However, this fee was waived on April 28, 2023, at which time the Company prepaid $10.0 million of principal (the Term Loan Prepayment). The Amended Loan Agreement is collateralized by a first priority security interest in substantially all of the Company's assets, including intellectual property. The affirmative covenants of the Amended Loan Agreement require that the Company timely file taxes, maintain good standing and government compliance, maintain liability and other insurance, provide prompt notification of significant corporate events, and furnish audited financial statements within 150 days of fiscal year end without qualification as to the scope of the audit or as to going concern and without any other similar qualification. The affirmative covenants require that the Company achieve a specified level of revenue, as measured quarterly on a rolling twelve-month basis, however the Company is not required to comply with the revenue covenant for any quarter during which it maintains a minimum aggregate cash balance equal to fifty percent of the aggregate principal amount of the 2017 Term Loan (excluding any capitalized interest paid-in-kind) at all times during such quarter. The consequences of failing to achieve the performance covenants, when applicable, will be cured if, (i) within thirty days of failing to achieve the performance covenant, the Company submits a new Board approved financial plan to Innovatus under which the Company is expected to break even on a cash flow basis prior to the maturity date, and (ii) within thirty days of the submission of such financial plan, the Company issues additional equity securities or subordinated debt with net proceeds sufficient to fund any cash flow deficiency generated from operations, as defined in the Amended Loan Agreement. The Amended Loan Agreement requires that the Company maintain certain levels of minimum liquidity and maintains an unrestricted cash balance of $2.0 million. The negative covenants provide, among other things, that without the prior consent of Innovatus, subject to certain exceptions, the Company may not dispose of certain assets, engage in certain business combinations or acquisitions, incur additional indebtedness or encumber any of the Company's property, pay dividends on the Company's capital stock or make prohibited investments. The Amended Loan Agreement provides that an event of default will occur if, among other triggers, (i) the Company defaults in the payment of any amount payable under the agreement when due, (ii) there occurs any circumstance(s) that could reasonably be expected to result in a material adverse effect on the Company's business, operations or condition, or on the Company's ability to perform its obligations under the agreement, (iii) the Company becomes insolvent, (iv) the Company undergoes a change in control or (v) the Company breaches any negative covenants or certain affirmative covenants in the agreement or, subject to a cure period, otherwise neglects to perform or observe any material item in the agreement. As of September 30, 2023, the Company was in compliance with all covenants of the Amended Loan Agreement. Upon an event of default in any of the Amended Loan Agreement covenants, the repayment of the 2017 Term Loan may be accelerated, and the applicable interest rate will be increased by 4.0% until the default is cured. Although repayment of the 2017 Term Loan can be accelerated under certain circumstances, the Company believes acceleration of this loan is not probable as of the date of these condensed financial statements. Accordingly, the Company has reflected the amounts of the Third Loan Amendment due beyond twelve months of the balance sheet date as non-current. 2022 Equipment Notes Payable In May 2022, the Company purchased laboratory equipment using notes payable. At September 30, 2023, the total notes payable balance related to this financed equipment was $0.9 million, with $0.3 million classified within borrowings-current portion and $0.6 million within borrowings-non-current portion, net of discounts and debt issuance costs in the accompanying balance sheets. The financed equipment is subject to a 5.28% effective interest rate and will mature on October 1, 2026. Future Minimum Payments on the Outstanding Borrowings As of September 30, 2023, future minimum aggregate payments, including interest, for outstanding borrowings are as follows (in thousands): 2023 (remaining) $ 487 2024 1,954 2025 1,974 2026 21,239 Total 25,654 Less: Unamortized debt discount and issuance costs (124) Interest (6,076) Total borrowings, net of discounts and debt issuance costs 19,454 Less: Borrowings-current portion (261) Borrowings-non-current portion, net of discounts and debt issuance costs $ 19,193 |
Commitment and Contingencies
Commitment and Contingencies | 9 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Acquisition-related liabilities In connection with the acquisition of the medical diagnostics division of Royalty Pharma Collection Trust (Royalty Pharma) (formerly known as Cypress Bioscience, Inc.) in 2010, the Company has ongoing royalty payment obligations of 2.5% on net sales of products which incorporate certain acquired technologies. Future royalties payable under these arrangements are limited to the lesser of (i) an aggregate of $1.2 million (including an upfront payment of $0.1 million) and (ii) the total royalties earned through January 1, 2024. Licensing Agreements The Company has licensed technology for use in its diagnostic tests. In addition to the milestone payments required by these agreements, individual license agreements generally provide for ongoing royalty payments ranging from 1.5% to 7.0% on net sales of products which incorporate licensed technology, as defined in such agreements. Royalties are accrued when incurred and recorded in costs of revenue in the accompanying condensed statements of operations. Collaboration Obligations In May 2021, the Company entered into a master research collaboration agreement with Allegheny Health Network Research Institute (AHN), pursuant to which the Company is required to pay AHN a collaboration fee of $0.4 million for each year during the initial term of the agreement. Collaboration expenses under the master research collaboration agreement were $0.1 million for each of the three months ended September 30, 2023 and 2022. For each of the nine months ended September 30, 2023 and 2022, collaboration expenses were $0.3 million. Collaboration expenses under the AHN collaboration are included in research and development expenses. Supply Agreements In December 2021, the Company amended a supply agreement with one supplier for reagents which includes minimum annual purchase commitments of $6.9 million, $8.0 million and $9.2 million for the years ending December 31, 2023, 2024 and 2025, respectively. Contingencies In the normal course of business, the Company enters into contracts and agreements that contain a variety of representations and warranties and provide for general indemnifications; including for subpoenas and other civil investigative demands, from governmental agencies, Medicare or Medicaid and managed care organizations reviewing billing practices or requesting comment on allegations of billing irregularities that are brought to their attention through billing audits or third parties. The Company's exposure under these agreements is unknown because it involves claims that may be made against the Company in the future, but have not yet been made or that the Company believes to be immaterial. The Company accrues a liability for such matters when it is probable that future expenditures will be made and such expenditures can be reasonably estimated. Litigation From time to time, the Company may be subject to various legal proceedings that arise in the ordinary course of business activities. The Company does not believe the outcome of any such matters will have a material effect on its financial position or results of operations. The Company has completed and executed a settlement agreement (the Settlement Agreement) with the U.S. Department of Justice (DOJ) and has received the final approval of the Office of Inspector General-HHS and the United States District Court for the Commonwealth of Massachusetts. The Settlement Agreement grants to the Company a dismissal with prejudice to the United States and whistleblower for the covered conduct and without prejudice to the United States as to all other claims in connection with the previously disclosed DOJ investigation, which has been pending since February of 2022. Pursuant to the Settlement Agreement, the Company made a single lump-sum remittance to the government in the amount of $0.7 million plus interest in October 2023. The Company has agreed to the settlement amount without admission of wrongdoing in order to resolve the allegations and to avoid the uncertainty and expense of protracted litigation. In connection with the settlement, the Company will not be required to enter into a corporate integrity agreement with the Office of Inspector General-HHS. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Fair value is defined as the exchange price that would be received for an asset or an exit price paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The three-levels of the valuation hierarchy for disclosure of fair value measurements are defined as follows: Level 1 - Unadjusted quoted prices in active markets for identical assets or liabilities; Level 2 - Inputs other than quoted prices included within Level I that are observable, unadjusted quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities; and Level 3 - Unobservable inputs that are supported by little or no market activity for the related assets or liabilities. The categorization of a financial instrument within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The following table sets forth the Company's financial instruments that were measured at fair value on a recurring basis within the fair value hierarchy (in thousands): September 30, 2023 Total Level 1 Level 2 Level 3 Assets: Money market funds, included in cash and cash equivalents $ 14,199 $ 14,199 $ — $ — December 31, 2022 Total Level 1 Level 2 Level 3 Assets: Money market funds, included in cash and cash equivalents $ 29,438 $ 29,438 $ — $ — Certificate of deposit, included in cash and cash equivalents 30,100 30,100 — — Total $ 59,538 $ 59,538 $ — $ — The fair value of the Company's money market funds is based on quoted market prices. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2023 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders' Equity Common Stock At The Market Sales Agreement On September 15, 2022, the Company entered into a sales agreement (the Sales Agreement) with Cowen and Company, LLC, pursuant to which the Company may offer and sell, from time to time, shares of Company common stock having an aggregate offering price of up to $50.0 million. The Company is not obligated to sell any shares of Company common stock in the offering. As of September 30, 2023, the Company has not sold any shares of its common stock pursuant to the Sales Agreement. Outstanding Warrants The following equity classified warrants to purchase common stock were outstanding as of September 30, 2023: Shares Exercise Price Issuance date Expiration date Common stock warrants 237,169 $ 1.84 January 19, 2016 January 19, 2026 Common stock warrants 67,086 $ 1.84 March 31, 2016 March 31, 2026 Common stock warrants 131 $ 1.84 April 1, 2016 April 1, 2026 Common stock warrants 83,778 $ 14.32 September 7, 2017 September 7, 2024 Common stock warrants 20,944 $ 14.32 December 7, 2018 December 7, 2025 Common stock warrants 804,951 $ 0.001 June 22, 2021 None 1,214,059 During the three and nine months ended September 30, 2023, no warrants to purchase common stock were exercised. |
Stock Option Plan
Stock Option Plan | 9 Months Ended |
Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Stock Option Plan | Stock Option Plan 2019 Incentive Award Plan In September 2019, the Board of Directors adopted, and the Company's stockholders approved, the 2019 Plan. Under the 2019 Plan, which expires in September 2029, the Company may grant stock options, stock appreciation rights, restricted stock, restricted stock units and other awards to individuals who are then employees, officers, non-employee directors or consultants of the Company or its subsidiaries. The options generally expire ten years after the date of grant and are exercisable to the extent vested. Vesting is established by the Board of Directors and is generally four years from the date of grant or, for grants to new hires, date of hire. The 2019 Plan contains an "evergreen provision" that allows annual increases in the number of shares available for issuance on the first day of each calendar year through January 1, 2029 in an amount equal to the lesser of: (i) 4% of the outstanding capital stock on each December 31st, or (ii) such lesser amount determined by the Board of Directors. As of September 30, 2023, 1,746,478 shares of common stock remained available for future awards under the 2019 Plan. 2019 Employee Stock Purchase Plan In September 2019, the Board of Directors adopted, and the Company's stockholders approved, the ESPP. The ESPP became effective on the day the ESPP was adopted by the Company's Board of Directors. The ESPP permits participants to purchase common stock through payroll deductions of up to 20% of their eligible compensation. The number of shares of common stock available for issuance under the ESPP will be annually increased on the first day of each calendar year during the term of the ESPP through January 1, 2029 in an amount equal to the lesser of (i) 1% of the outstanding capital stock on each December 31st, or (ii) such lesser amount determined by the Board of Directors. As of September 30, 2023, 449,332 shares of common stock remained available for issuance under the ESPP. Stock Options Stock option activity under the Company's 2019 Plan is set forth below: Number of Weighted- Weighted- Aggregate Outstanding, December 31, 2022 1,421,235 $ 12.94 7.09 $ 483 Granted 73,500 $ 3.04 Exercised (93,335) $ 0.26 Forfeited (34,450) $ 14.25 Expired (362,095) $ 17.00 Outstanding, September 30, 2023 1,004,855 $ 11.88 6.69 $ 286 Vested and expected to vest, September 30, 2023 1,004,855 $ 11.88 6.69 $ 286 Options exercisable, September 30, 2023 862,667 $ 12.37 6.41 $ 286 The intrinsic value is calculated as the difference between the fair value of the Company's common stock and the exercise price of the stock options. The aggregate intrinsic value of options exercised during the nine months ended September 30, 2023 was $0.2 million. There were no options exercised during the nine months ended September 30, 2022. As of September 30, 2023, total unrecognized compensation cost related to option awards was $0.6 million, which is expected to be recognized over a remaining weighted-average vesting period of 0.97 years. Restricted Stock Units Restricted stock unit activity under the Company's 2019 Plan is set forth below: Number of Weighted- Aggregate Outstanding, December 31, 2022 1,036,208 $ 7.28 $ 2,487 Awards granted 831,700 $ 2.42 Awards released (159,272) $ 11.63 Awards canceled (140,524) $ 7.80 Outstanding, September 30, 2023 1,568,112 $ 4.21 $ 3,795 As of September 30, 2023, all of the outstanding restricted stock units were unvested. The fair value of restricted stock units vested in the nine months ended September 30, 2023 and 2022 was $0.4 million and $0.7 million, respectively. The weighted average grant date fair value for restricted stock units granted in the nine months ended September 30, 2023 and 2022 was $2.42 and $8.61, respectively. As of September 30, 2023, total unrecognized compensation cost related to restricted stock units was $5.3 million, which is expected to be recognized over a remaining weighted-average vesting period of 3.1 years. Stock-Based Compensation Expense Total non-cash stock-based compensation expense recorded related to options granted, restricted stock units granted and stock purchase rights granted under the ESPP in the condensed statements of operations is as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Costs of revenue $ 45 $ 56 $ 161 $ 159 Selling, general and administrative 792 1,085 2,497 3,406 Research and development 53 165 196 557 Total $ 890 $ 1,306 $ 2,854 $ 4,122 |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Building Lease Assignment On October 24, 2023, the Company entered into an assignment and assumption of the Company’s previously executed lease agreement with Liberty Vista, LP (formerly known as Geiger Court, LLC) and Mindera Corporation (Mindera), pursuant to which the Company assigned to Mindera the lease of the property located at 1221 Liberty Way, Vista, CA 92081, which is located adjacent to the Company's headquarters (the Assignment and Assumption Agreement). At September 30, 2023, there was $0.9 million in payments remaining on the lease due through April 2027. Under the terms of the Assignment and Assumption Agreement, the Company will continue to pay rent and its proportional share of expenses under the lease until October 31, 2023, after which Mindera will assume those obligations. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Concentration of Credit Risk and Other Risk and Uncertainties | Concentration of Credit Risk and Other Risk and Uncertainties Financial instruments that potentially subject the Company to credit risk consist principally of cash, cash equivalents and accounts receivable. Substantially all the Company's cash and cash equivalents are held at one financial institution that management believes is of high credit quality. Such deposits may, at times, exceed federally insured limits. The Company has not experienced any losses on its cash or cash equivalents. |
Fair Value Measurements | Fair Value Measurements The carrying value of the Company's cash, cash equivalents and restricted cash, accounts receivable, prepaid expenses and other current assets, accounts payable and accrued and other current liabilities approximate their fair values due to their short-term nature, which are determined to be a Level 1 measurement. The estimated fair value of the Company's long-term borrowings is determined by Level 2 inputs and based primarily on quoted market prices for the same or similar issues. As of September 30, 2023, the 2017 Term Loan (as defined below) had a carrying value of $18.6 million and a fair value of $19.0 million. As of December 31, 2022, the 2017 Term Loan had a carrying value of $28.3 million and a fair value of $26.9 million. The estimated fair value of the 2017 Term Loan was determined based on a discounted cash flow approach using available market information on discount and borrowing rates with similar terms, maturities, and credit ratings. The carrying value of the Company's other long-term borrowing at September 30, 2023 and December 31, 2022 was $0.9 million and $0.8 million, respectively, and approximated its fair value. |
Cash, Cash Equivalents and Restricted Cash | Cash, Cash Equivalents and Restricted Cash The Company considers all highly-liquid investments purchased with a remaining maturity date of three months or less upon acquisition to be cash equivalents. These investments are stated at cost, which approximates fair value. |
Long-lived Assets | Long-lived Assets The Company’s long-lived assets are comprised principally of its property and equipment and operating lease assets. The Company amortizes all finite lived intangible assets over their respective estimated useful lives. Operating lease assets are amortized over the term of the leases. In considering whether long-lived assets are impaired, the company combines its intangible assets and other long-lived assets, into groupings, a determination which is made principally on the basis of whether the assets are specific to a particular test offered or technology being developed. If the Company identifies a change in the circumstances related to its long-lived assets that indicates the carrying value of any such asset may not be recoverable, the Company will perform an impairment |
Revenue Recognition | Revenue Recognition Substantially all of the Company's revenue has been derived from sales of its testing products and is primarily comprised of a high volume of relatively low-dollar transactions. The Company primarily markets its testing products to rheumatologists and their physician assistants in the United States. The healthcare professionals who order the Company's testing products and to whom test results are reported are generally not responsible for payment for these products. The parties that pay for these services (each, a payor) consist of commercial payors (healthcare insurers), government payors (primarily Medicare and Medicaid), client payors (i.e., hospitals, other laboratories, etc.) and patient self-pay. The Company's service is a single performance obligation that is completed upon the delivery of test results to the prescribing physician which triggers revenue recognition. Payors are billed at the Company's list price. Net revenues recognized consist of amounts billed net of allowances for differences between amounts billed and the estimated consideration the Company expects to receive from such payors. The process for estimating revenues and the ultimate collection of accounts receivable involves significant judgment and estimation. The Company follows a standard process, which considers historical denial and collection experience, insurance reimbursement policies and other factors, to estimate allowances and implicit price concessions. Adjustments are recorded in the current period as changes in estimates occur. Further adjustments to the allowances, based on actual receipts, are recorded upon settlement. Included in revenues for the three months ended September 30, 2023 and 2022 was a $2.5 million net revenue increase and a $3.7 million net revenue increase, respectively, associated with changes in estimated variable consideration related to performance obligations satisfied in previous periods. Included in revenues for the nine months ended September 30, 2023 and 2022 was a $2.6 million net revenue increase and a $2.5 million net revenue decrease, respectively, associated with changes in estimated variable consideration related to performance obligations satisfied in previous periods. The transaction price is estimated using an expected value method on a portfolio basis. Variable consideration is included in the transaction price only to the extent it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainties with respect to the amount are resolved. The Company's portfolios are grouped per payor (i.e. each individual commercial payor, Medicare, Medicaid, client payors, patient self-pay, etc.) and per test. Consideration may be constrained and excluded from the transaction price in situations where there is no contractually agreed upon reimbursement coverage or in absence of a predictable pattern and history of collectability with a payor. Accordingly, in such situations revenues are recognized on the basis of actual cash collections. Additionally, from time to time, the Company may issue refunds to payors for overpayments or amounts billed in error. Any refunds are accounted for as reductions in revenues in the statement of operations as an element of variable consideration. The estimated expected refunds are accrued as a liability on the Company’s balance sheet. Collection of the Company's net revenues from payors is normally a function of providing complete and correct billing information and any requested medical or other claims-related information to the healthcare insurers and generally occurs within 30 to 90 days of billing. However, the amount and timing of any reimbursements or collections for our billed tests may vary by payor and other circumstances. Contracts do not contain significant financing components based on the typical period of time between performance of services and collection of consideration. |
Accounts Receivable and Allowance for Credit Losses | Accounts Receivable and Allowance for Credit Losses We accrue an allowance for credit losses against our accounts receivable based on management’s current estimate of amounts that will not be collected. Management’s estimates are typically based on historical loss information adjusted for current conditions. We generally do not perform evaluations of the financial condition of our customers and generally do not require collateral. The allowance for credit losses was zero as of September 30, 2023. Adjustments for implicit price concessions attributable to variable consideration, as discussed above, are incorporated into the measurement of the accounts receivable balances and are not part of the allowance for credit losses. |
Research and Development | Research and Development Costs associated with research and development activities are expensed as incurred and include, but are not limited to, personnel-related expenses, including stock-based compensation expense, materials, laboratory supplies, consulting costs, costs associated with setting up and conducting clinical studies and allocated overhead including rent and utilities. |
Advertising and Marketing Costs | Advertising and Marketing Costs Costs associated with advertising and marketing activities are expensed as incurred. Total advertising and marketing costs were approximately $0.5 million and $1.3 million for the three months ended September 30, 2023 and 2022, respectively. For the nine months ended September 30, 2023 and 2022, total advertising and marketing costs were approximately $1.2 million and $2.2 million, respectively. These costs are included in selling, general and administrative expenses in the accompanying condensed statements of operations. |
Shipping and Handling Costs | Shipping and Handling Costs Costs incurred for shipping and handling are included in costs of revenue in the accompanying condensed statements of operations and totaled approximately $0.6 million and $0.7 million for the three months ended September 30, 2023 and 2022, respectively. For the nine months ended September 30, 2023 and 2022, shipping and handling costs were approximately $1.9 million and $2.1 million, respectively. |
Stock-Based Compensation | Stock-Based Compensation The Company recognizes compensation expense for all stock-based awards to employees and directors based on the grant-date estimated fair values over the requisite service period of the awards (usually the vesting period) on a straight-line basis. The fair value of stock options and purchases under the Company's 2019 Employee Stock Purchase Plan (ESPP) rights is determined using the Black-Scholes-Merton (BSM) option pricing model, which requires management to make certain assumptions regarding a number of complex and subjective variables. Equity award forfeitures are recorded as they occur. The BSM option pricing model incorporates various inputs, including the fair value of the Company's common stock, expected volatility, expected term and risk-free interest rates. Volatility is based on the Company's historical calculated volatility since being publicly traded. The weighted-average expected term of options was calculated using the simplified method. The risk-free interest rate for periods within the contractual term of the option is based on the U.S. Treasury yield in effect at the time of grant. The dividend yield is zero, as the Company has never declared or paid dividends and has no plans to do so in the foreseeable future. The fair value of each restricted stock unit is determined on the grant date using the closing price of the Company's common stock on that date. The Company's restricted stock units generally vest in equal annual installments over four years from the date of grant or, for grants to new hires, date of hire. Vesting of restricted stock units is subject to the holder's continued service with the Company. The Company issues new shares to satisfy restricted stock units upon vesting. |
Comprehensive Loss | Comprehensive Loss Comprehensive loss is defined as a change in equity of a business enterprise during a period, resulting from transactions from nonowner sources. There have been no items qualifying as other comprehensive loss and, therefore, for all periods presented, the Company's comprehensive loss was the same as its reported net loss. |
Net Loss Per Share | Net Loss Per Share Basic net loss per share attributable to common stockholders is calculated by dividing the net loss attributable to common stockholders by the weighted-average number of common shares outstanding during the period. Diluted net loss per share attributable to common stockholders is computed by dividing the net loss attributable to common stockholders by the weighted-average number of common stock equivalents outstanding for the period determined using the treasury-stock and if-converted methods. The weighted-average number of shares used to compute basic and diluted shares includes shares issuable upon the exercise of pre-funded warrants at a nominal price. Potentially dilutive common stock equivalents are comprised of warrants for the purchase of common stock, stock options, restricted stock units outstanding under the Company's 2019 Incentive Award Plan (the 2019 Plan) and shares of |
Segment Reporting | Segment Reporting Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker in making decisions regarding resource allocation and assessing performance. The Company views its operations as, and manages its business in, one operating segment. |
Recent Accounting Pronouncements and Recently Adopted Accounting Standards | Recent Accounting Pronouncements From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (FASB), or other standard setting bodies and adopted by the Company as of the specified effective date. Under the Jumpstart Our Business Startups Act of 2012 (JOBS Act), the Company meets the definition of an emerging growth company. The Company has elected to use the extended transition period for complying with new or revised accounting standards pursuant to Section 107(b) of the JOBS Act. Unless otherwise discussed, the impact of recently issued standards that are not yet effective will not have a material impact on the Company's financial position or results of operations upon adoption. Recently Adopted Accounting Standards In June 2016, the FASB issued Accounting Standards Update (ASU) 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , which requires the measurement of expected credit losses (based on historical experience, current conditions and reasonable forecasts) for financial instruments (such as accounts receivable) held at the reporting date which are carried at amortized cost. The main objective of this ASU is to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. In November 2018, the FASB issued ASU 2018-19, Codification Improvements to Topic 326, Financing Instruments-Credit Losses , which included an amendment of the effective date for nonpublic entities. For emerging growth companies, ASU 2016-13 is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company adopted this pronouncement on January 1, 2023. The adoption did not have an impact on its condensed financial statements. In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40) . ASU 2020-06 eliminates the beneficial conversion and cash conversion accounting models for convertible instruments. It also amends the accounting for certain contracts in an entity’s own equity that are currently accounted for as derivatives because of specific settlement provisions. In addition, ASU 2020-06 modifies how particular convertible instruments and certain contracts that may be settled in cash or shares impact the diluted EPS computation. The amendments in ASU 2020-06 are effective for smaller reporting companies as defined by the SEC for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. The Company early adopted ASU 2020-06 as of January 1, 2023. The adoption did not have an impact on its condensed financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Schedule of Concentration of Risk, by Risk Factor and Significant Payer | For each significant payor and customer, revenue as a percentage of total revenue and accounts receivable as a percentage of total accounts receivable are as follows: Revenue Three Months Ended Nine Months Ended 2023 2022 2023 2022 Medicare 37 % 62 % 35 % 37 % Medicare Advantage 15 % 12 % 17 % 15 % Accounts Receivable, Net September 30, 2023 December 31, 2022 Medicare 65 % 21 % Medicare Advantage * 13 % * Less than 10%. |
Schedule of Disaggregation of Revenue | The following table includes the Company's revenues as disaggregated by payor and customer category (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Revenue: Commercial $ 6,090 $ 3,216 $ 17,789 $ 14,259 Government 4,955 9,228 13,570 12,242 Client(1) 2,319 2,046 6,999 5,496 Other(2) 52 236 425 729 Total revenue $ 13,416 $ 14,726 $ 38,783 $ 32,726 (1) Includes hospitals, other laboratories, etc. (2) Includes patient self-pay . |
Schedule of Cash and Cash Equivalents | Cash, cash equivalents, and restricted cash presented in the accompanying statements of cash flows consist of the following (in thousands): September 30, 2023 December 31, 2022 Cash and cash equivalents $ 28,448 $ 62,391 Restricted cash 200 200 $ 28,648 $ 62,591 |
Schedule of Restricted Cash and Cash Equivalents | Cash, cash equivalents, and restricted cash presented in the accompanying statements of cash flows consist of the following (in thousands): September 30, 2023 December 31, 2022 Cash and cash equivalents $ 28,448 $ 62,391 Restricted cash 200 200 $ 28,648 $ 62,591 |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | Potentially dilutive securities not included in the calculation of diluted net loss per share, because to do so would be anti-dilutive, are as follows (in common stock equivalent shares): September 30, 2023 September 30, 2022 Warrants to purchase common stock 409,108 409,108 Common stock options 1,004,855 1,820,555 Restricted stock units 1,568,112 805,496 Employee stock purchase plan 12,542 17,204 Total 2,994,617 3,052,363 |
Other Financial Information (Ta
Other Financial Information (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Other Financial Information [Abstract] | |
Schedule of Prepaid Expenses and Other Current Assets | Prepaid expenses and other current assets consist of the following (in thousands): September 30, 2023 December 31, 2022 Diagnostic testing supplies $ 2,239 $ 1,795 Prepaid product royalties 38 40 Prepaid maintenance and insurance contracts 1,120 2,072 Other prepaid expenses and other current assets 19 236 Prepaid expenses and other current assets $ 3,416 $ 4,143 |
Schedule of Property and Equipment | Property and equipment consist of the following (in thousands): September 30, 2023 December 31, 2022 Furniture and fixtures $ 98 $ 98 Laboratory equipment 6,140 5,136 Computer equipment and software 1,793 1,482 Leasehold improvements 5,254 5,223 Construction in progress 415 1,382 Total property and equipment 13,700 13,321 Less: accumulated depreciation and amortization (6,486) (5,124) Property and equipment, net $ 7,214 $ 8,197 |
Schedule of Accrued and Other Current Liabilities | Accrued and other current liabilities consist of the following (in thousands): September 30, 2023 December 31, 2022 Accrued payroll and related expenses $ 3,666 $ 2,355 Accrued interest — 142 Accrued purchases of goods and services 589 803 Accrued royalties 281 514 Accrued clinical study activity 118 162 Finance lease obligations, current portion 535 700 Legal accrual 700 — Refund liability 302 445 Other accrued liabilities 872 226 Accrued and other current liabilities $ 7,063 $ 5,347 |
Borrowings (Tables)
Borrowings (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Future Minimum Aggregate Payments for Outstanding Borrowings | As of September 30, 2023, future minimum aggregate payments, including interest, for outstanding borrowings are as follows (in thousands): 2023 (remaining) $ 487 2024 1,954 2025 1,974 2026 21,239 Total 25,654 Less: Unamortized debt discount and issuance costs (124) Interest (6,076) Total borrowings, net of discounts and debt issuance costs 19,454 Less: Borrowings-current portion (261) Borrowings-non-current portion, net of discounts and debt issuance costs $ 19,193 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Financial Instrument Measured on a Recurring Basis | The following table sets forth the Company's financial instruments that were measured at fair value on a recurring basis within the fair value hierarchy (in thousands): September 30, 2023 Total Level 1 Level 2 Level 3 Assets: Money market funds, included in cash and cash equivalents $ 14,199 $ 14,199 $ — $ — December 31, 2022 Total Level 1 Level 2 Level 3 Assets: Money market funds, included in cash and cash equivalents $ 29,438 $ 29,438 $ — $ — Certificate of deposit, included in cash and cash equivalents 30,100 30,100 — — Total $ 59,538 $ 59,538 $ — $ — |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Equity [Abstract] | |
Schedule of Outstanding Warrants | The following equity classified warrants to purchase common stock were outstanding as of September 30, 2023: Shares Exercise Price Issuance date Expiration date Common stock warrants 237,169 $ 1.84 January 19, 2016 January 19, 2026 Common stock warrants 67,086 $ 1.84 March 31, 2016 March 31, 2026 Common stock warrants 131 $ 1.84 April 1, 2016 April 1, 2026 Common stock warrants 83,778 $ 14.32 September 7, 2017 September 7, 2024 Common stock warrants 20,944 $ 14.32 December 7, 2018 December 7, 2025 Common stock warrants 804,951 $ 0.001 June 22, 2021 None 1,214,059 |
Stock Option Plan (Tables)
Stock Option Plan (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Stock Option Activity | Stock option activity under the Company's 2019 Plan is set forth below: Number of Weighted- Weighted- Aggregate Outstanding, December 31, 2022 1,421,235 $ 12.94 7.09 $ 483 Granted 73,500 $ 3.04 Exercised (93,335) $ 0.26 Forfeited (34,450) $ 14.25 Expired (362,095) $ 17.00 Outstanding, September 30, 2023 1,004,855 $ 11.88 6.69 $ 286 Vested and expected to vest, September 30, 2023 1,004,855 $ 11.88 6.69 $ 286 Options exercisable, September 30, 2023 862,667 $ 12.37 6.41 $ 286 |
Schedule of Restricted Stock Unit Activity | Restricted stock unit activity under the Company's 2019 Plan is set forth below: Number of Weighted- Aggregate Outstanding, December 31, 2022 1,036,208 $ 7.28 $ 2,487 Awards granted 831,700 $ 2.42 Awards released (159,272) $ 11.63 Awards canceled (140,524) $ 7.80 Outstanding, September 30, 2023 1,568,112 $ 4.21 $ 3,795 |
Schedule of Non-Cash Stock-Based Compensation Expense | Total non-cash stock-based compensation expense recorded related to options granted, restricted stock units granted and stock purchase rights granted under the ESPP in the condensed statements of operations is as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Costs of revenue $ 45 $ 56 $ 161 $ 159 Selling, general and administrative 792 1,085 2,497 3,406 Research and development 53 165 196 557 Total $ 890 $ 1,306 $ 2,854 $ 4,122 |
Organization (Details)
Organization (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Cash and cash equivalents | $ 28,448 | $ 62,391 |
Accumulated deficit | $ (273,643) | $ (255,527) |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Revenue by Major Payers (Details) - Customer Concentration Risk | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Medicare | Revenue | |||||
Disaggregation of Revenue [Line Items] | |||||
Percent of total revenue | 37% | 62% | 35% | 37% | |
Medicare | Accounts Receivable | |||||
Disaggregation of Revenue [Line Items] | |||||
Percent of total revenue | 65% | 21% | |||
Medicare Advantage | Revenue | |||||
Disaggregation of Revenue [Line Items] | |||||
Percent of total revenue | 15% | 12% | 17% | 15% | |
Medicare Advantage | Accounts Receivable | |||||
Disaggregation of Revenue [Line Items] | |||||
Percent of total revenue | 13% |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Narrative (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) segment | Sep. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | |
New Accounting Pronouncement, Early Adoption [Line Items] | |||||
Long-term debt | $ 19,454 | $ 19,454 | |||
Restricted cash | 200 | 200 | $ 200 | ||
Revenue recognized in previous periods | 2,500 | $ 3,700 | 2,600 | $ (2,500) | |
Advertising expense | 500 | 1,300 | $ 1,200 | 2,200 | |
Number of operating segments | segment | 1 | ||||
Other Long Term Debt | |||||
New Accounting Pronouncement, Early Adoption [Line Items] | |||||
Debt instrument | 800 | ||||
Restricted stock units | |||||
New Accounting Pronouncement, Early Adoption [Line Items] | |||||
Stock options, vesting period | 4 years | ||||
2017 Term loan | Level 2 | Recurring | |||||
New Accounting Pronouncement, Early Adoption [Line Items] | |||||
Long-term debt | 18,600 | $ 18,600 | 28,300 | ||
Debt instrument | 19,000 | 19,000 | $ 26,900 | ||
Shipping and Handling | |||||
New Accounting Pronouncement, Early Adoption [Line Items] | |||||
Cost of revenue | $ 600 | $ 700 | $ 1,900 | $ 2,100 | |
Revenue | Product Concentration Risk | AVISE CTD Test | |||||
New Accounting Pronouncement, Early Adoption [Line Items] | |||||
Percent of total revenue | 89% | 87% | 88% | 84% | |
Revenue | Supplier Concentration Risk | Two Major Suppliers | |||||
New Accounting Pronouncement, Early Adoption [Line Items] | |||||
Percent of total revenue | 98% | 97% | 97% | 97% |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 13,416 | $ 14,726 | $ 38,783 | $ 32,726 |
Commercial | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 6,090 | 3,216 | 17,789 | 14,259 |
Government | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 4,955 | 9,228 | 13,570 | 12,242 |
Client | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 2,319 | 2,046 | 6,999 | 5,496 |
Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 52 | $ 236 | $ 425 | $ 729 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Dec. 31, 2021 |
Accounting Policies [Abstract] | ||||
Cash and cash equivalents | $ 28,448 | $ 62,391 | ||
Restricted cash | 200 | 200 | ||
Total cash, cash equivalents and restricted cash | $ 28,648 | $ 62,591 | $ 68,904 | $ 99,542 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Securities (Details) - shares | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Class of Stock [Line Items] | ||
Anti-dilutive securities excluded from computation (in shares) | 2,994,617 | 3,052,363 |
Warrants to purchase common stock | ||
Class of Stock [Line Items] | ||
Anti-dilutive securities excluded from computation (in shares) | 409,108 | 409,108 |
Common stock options | ||
Class of Stock [Line Items] | ||
Anti-dilutive securities excluded from computation (in shares) | 1,004,855 | 1,820,555 |
Restricted stock units | ||
Class of Stock [Line Items] | ||
Anti-dilutive securities excluded from computation (in shares) | 1,568,112 | 805,496 |
Employee stock purchase plan | ||
Class of Stock [Line Items] | ||
Anti-dilutive securities excluded from computation (in shares) | 12,542 | 17,204 |
Other Financial Information - P
Other Financial Information - Prepaid Expenses (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Other Financial Information [Abstract] | ||
Diagnostic testing supplies | $ 2,239 | $ 1,795 |
Prepaid product royalties | 38 | 40 |
Prepaid maintenance and insurance contracts | 1,120 | 2,072 |
Other prepaid expenses and other current assets | 19 | 236 |
Prepaid expenses and other current assets | $ 3,416 | $ 4,143 |
Other Financial Information -_2
Other Financial Information - Property and Equipment (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 13,700 | $ 13,321 |
Less: accumulated depreciation and amortization | (6,486) | (5,124) |
Property and equipment, net | 7,214 | 8,197 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 98 | 98 |
Laboratory equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 6,140 | 5,136 |
Computer equipment and software | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 1,793 | 1,482 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 5,254 | 5,223 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 415 | $ 1,382 |
Other Financial Information - N
Other Financial Information - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Other Financial Information [Abstract] | ||||
Depreciation and amortization | $ 0.6 | $ 0.4 | $ 1.7 | $ 1 |
Other Financial Information - A
Other Financial Information - Accrued and Other Current Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Other Financial Information [Abstract] | ||
Accrued payroll and related expenses | $ 3,666 | $ 2,355 |
Accrued interest | 0 | 142 |
Accrued purchases of goods and services | 589 | 803 |
Accrued royalties | 281 | 514 |
Accrued clinical study activity | 118 | 162 |
Finance lease obligations, current portion | 535 | 700 |
Legal accrual | 700 | 0 |
Refund liability | 302 | 445 |
Other accrued liabilities | 872 | 226 |
Accrued and other current liabilities | $ 7,063 | $ 5,347 |
Borrowings - Narrative (Details
Borrowings - Narrative (Details) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Apr. 28, 2023 USD ($) | Sep. 30, 2017 USD ($) | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) installment | Sep. 30, 2022 USD ($) | |
2017 Term loan | Innovatus Life Sciences Lending Fund | Loan payable | ||||||
Debt Instrument [Line Items] | ||||||
Term loan borrowings | $ 25,000,000 | |||||
Remaining borrowing capacity | $ 0 | $ 0 | ||||
Term loan, interest rate | 2% | |||||
Term loan, paid in-kind, interest rate | 1.50% | |||||
Term loan, effective interest rate | 11% | 11% | ||||
Number of monthly installments | installment | 10 | |||||
Term loan, fee incurred upon payment of final installment | $ 1,000,000 | $ 1,000,000 | ||||
Term loan, prepayment premium percentage | 2% | 2% | ||||
Term loan, annual reduction in prepayment penalty percentage | 1% | 1% | ||||
Prepayment of principal | $ 10,000,000 | |||||
Term loan, covenant, revenue performance period | 12 months | |||||
Debt instrument, minimum cash balance | 50% | |||||
Term loan, covenant, number of days to cure covenant if performance measure is not met | 30 days | |||||
Term loan covenant, minimum unrestricted cash balance | $ 2,000,000 | $ 2,000,000 | ||||
Term loan covenant, increase to interest rate | 4% | 4% | ||||
2017 Term loan | Innovatus Life Sciences Lending Fund | Loan payable | Prime Rate | ||||||
Debt Instrument [Line Items] | ||||||
Variable rate | 8% | |||||
2017 Term loan | Innovatus Life Sciences Lending Fund | Paid in-kind note | ||||||
Debt Instrument [Line Items] | ||||||
Term loan, paid in-kind loans issued | $ 100,000 | $ 100,000 | $ 300,000 | $ 400,000 | ||
Equipment Notes Payable | ||||||
Debt Instrument [Line Items] | ||||||
Term loan, effective interest rate | 5.28% | 5.28% | ||||
Notes payable | $ 900,000 | $ 900,000 | ||||
Notes payable, current | 300,000 | 300,000 | ||||
Notes payable, noncurrent | $ 600,000 | $ 600,000 |
Borrowings - Future Minimum Pay
Borrowings - Future Minimum Payments (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Debt Disclosure [Abstract] | ||
2023 (remaining) | $ 487 | |
2024 | 1,954 | |
2025 | 1,974 | |
2026 | 21,239 | |
Total | 25,654 | |
Unamortized debt discount and issuance costs | (124) | |
Interest | (6,076) | |
Total borrowings, net of discounts and debt issuance costs | 19,454 | |
Less: Borrowings-current portion | (261) | $ (190) |
Borrowings-non-current portion, net of discounts and debt issuance costs | $ 19,193 | $ 28,778 |
Commitment and Contingencies (D
Commitment and Contingencies (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||
Oct. 31, 2023 | May 31, 2021 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2021 | |
Loss Contingencies [Line Items] | |||||||
Purchase obligation, due in year one | $ 6.9 | ||||||
Purchase obligation, due in second year | 8 | ||||||
Purchase obligation, due in third year | $ 9.2 | ||||||
Subsequent Event | Settled Litigation | U.S. Department Of Justice Case | |||||||
Loss Contingencies [Line Items] | |||||||
Settlement payment | $ 0.7 | ||||||
AHN Collaboration | |||||||
Loss Contingencies [Line Items] | |||||||
Collaboration agreement, collaboration expenses | $ 0.1 | $ 0.1 | $ 0.3 | $ 0.3 | |||
Minimum | Licensing Agreements | |||||||
Loss Contingencies [Line Items] | |||||||
Royalty obligation, percent of net sales | 1.50% | 1.50% | |||||
Maximum | Licensing Agreements | |||||||
Loss Contingencies [Line Items] | |||||||
Royalty obligation, percent of net sales | 7% | 7% | |||||
Prometheus Laboratories | |||||||
Loss Contingencies [Line Items] | |||||||
Future minimum royalty commitment | $ 1.2 | $ 1.2 | |||||
Advance royalties payment | $ 0.1 | $ 0.1 | |||||
Prometheus Laboratories | Minimum | |||||||
Loss Contingencies [Line Items] | |||||||
Royalty obligation, percent of net sales | 2.50% | 2.50% | |||||
Allegheny Health Network Research Institute | |||||||
Loss Contingencies [Line Items] | |||||||
Collaboration fee | $ 0.4 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - Recurring - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Assets: | ||
Total | $ 59,538 | |
Money market funds, included in cash and cash equivalents | ||
Assets: | ||
Money market funds, included in cash and cash equivalents | $ 14,199 | 29,438 |
Certificate of deposit, included in cash and cash equivalents | ||
Assets: | ||
Money market funds, included in cash and cash equivalents | 30,100 | |
Level 1 | ||
Assets: | ||
Total | 59,538 | |
Level 1 | Money market funds, included in cash and cash equivalents | ||
Assets: | ||
Money market funds, included in cash and cash equivalents | 14,199 | 29,438 |
Level 1 | Certificate of deposit, included in cash and cash equivalents | ||
Assets: | ||
Money market funds, included in cash and cash equivalents | 30,100 | |
Level 2 | ||
Assets: | ||
Total | 0 | |
Level 2 | Money market funds, included in cash and cash equivalents | ||
Assets: | ||
Money market funds, included in cash and cash equivalents | 0 | 0 |
Level 2 | Certificate of deposit, included in cash and cash equivalents | ||
Assets: | ||
Money market funds, included in cash and cash equivalents | 0 | |
Level 3 | ||
Assets: | ||
Total | 0 | |
Level 3 | Money market funds, included in cash and cash equivalents | ||
Assets: | ||
Money market funds, included in cash and cash equivalents | $ 0 | 0 |
Level 3 | Certificate of deposit, included in cash and cash equivalents | ||
Assets: | ||
Money market funds, included in cash and cash equivalents | $ 0 |
Stockholders' Equity - Narrativ
Stockholders' Equity - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |
Sep. 15, 2022 | Sep. 30, 2023 | Sep. 30, 2023 | |
Class of Stock [Line Items] | |||
Exercise of common stock warrants (in shares) | 0 | 0 | |
Cowen Equity Distribution Agreement | |||
Class of Stock [Line Items] | |||
Proceeds from sale of stock | $ 50 |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Outstanding Warrants (Details) | Sep. 30, 2023 $ / shares shares |
Class of Stock [Line Items] | |
Warrants issued to purchase redeemable convertible preferred stock (in shares) | 1,214,059 |
Warrant expiration January 19, 2026 | |
Class of Stock [Line Items] | |
Warrants issued to purchase redeemable convertible preferred stock (in shares) | 237,169 |
Class of warrant or right, exercise price of warrants or rights (in dollars per share) | $ / shares | $ 1.84 |
Warrant expiration March 31, 2026 | |
Class of Stock [Line Items] | |
Warrants issued to purchase redeemable convertible preferred stock (in shares) | 67,086 |
Class of warrant or right, exercise price of warrants or rights (in dollars per share) | $ / shares | $ 1.84 |
Warrant expiration April 1, 2026 | |
Class of Stock [Line Items] | |
Warrants issued to purchase redeemable convertible preferred stock (in shares) | 131 |
Class of warrant or right, exercise price of warrants or rights (in dollars per share) | $ / shares | $ 1.84 |
Warrant expiration September 7, 2024 | |
Class of Stock [Line Items] | |
Warrants issued to purchase redeemable convertible preferred stock (in shares) | 83,778 |
Class of warrant or right, exercise price of warrants or rights (in dollars per share) | $ / shares | $ 14.32 |
Warrant expiration December 7, 2025 | |
Class of Stock [Line Items] | |
Warrants issued to purchase redeemable convertible preferred stock (in shares) | 20,944 |
Class of warrant or right, exercise price of warrants or rights (in dollars per share) | $ / shares | $ 14.32 |
No expiration | |
Class of Stock [Line Items] | |
Warrants issued to purchase redeemable convertible preferred stock (in shares) | 804,951 |
Class of warrant or right, exercise price of warrants or rights (in dollars per share) | $ / shares | $ 0.001 |
Stock Option Plan - Narrative (
Stock Option Plan - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Intrinsic value | $ 0.2 | $ 0 |
Stock options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock options, unrecognized compensation cost | $ 0.6 | |
Stock options, cost not yet recognized, remaining weighted average vesting period | 11 months 19 days | |
Employee stock purchase plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares authorized, percentage | 1% | |
Shares that remain available for future awards (in shares) | 449,332 | |
Maximum employee payroll deduction percentage | 20% | |
Restricted stock units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock options, vesting period | 4 years | |
Stock options, unrecognized compensation cost | $ 5.3 | |
Aggregate intrinsic value, vested | $ 0.4 | $ 0.7 |
Weighted-average grant date fair value (in dollars per share) | $ 2.42 | $ 8.61 |
Stock options, cost not yet recognized, remaining weighted average vesting period | 3 years 1 month 6 days | |
2019 Incentive Award Plan | Stock options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock options, expiration period | 10 years | |
Stock options, vesting period | 4 years | |
Shares authorized, percentage | 4% | |
Shares that remain available for future awards (in shares) | 1,746,478 |
Stock Option Plan - Stock Optio
Stock Option Plan - Stock Option Activity (Details) - Stock options - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Number of Options | ||
Outstanding, beginning of period (in shares) | 1,421,235 | |
Granted (in shares) | 73,500 | |
Exercised (in shares) | (93,335) | |
Forfeited (in shares) | (34,450) | |
Expired (in shares) | (362,095) | |
Outstanding, end of period (in shares) | 1,004,855 | 1,421,235 |
Vested and expected to vest, end of period (in shares) | 1,004,855 | |
Options exercisable, end of period (in shares) | 862,667 | |
Weighted- Average Exercise Price | ||
Outstanding, beginning of period (in dollars per share) | $ 12.94 | |
Granted (in dollars per share) | 3.04 | |
Exercised (in dollars per share) | 0.26 | |
Forfeited (in dollars per share) | 14.25 | |
Expired (in dollars per share) | 17 | |
Outstanding, end of period (in dollars per share) | 11.88 | $ 12.94 |
Vested and expected to vest, end of period (in shares), Weighted Average Exercise Price (in dollars per share) | 11.88 | |
Options exercised, end of period (in shares), Weighted Average Exercise Price (in dollars per share) | $ 12.37 | |
Stock Options, Additional Disclosures [Abstract] | ||
Outstanding, Weighted Average Remaining Contractual Term | 6 years 8 months 8 days | 7 years 1 month 2 days |
Vested and expected to vest, Weighted Average Remaining Contractual Term | 6 years 8 months 8 days | |
Options exercisable, Weighted Average Remaining Contractual Term | 6 years 4 months 28 days | |
Outstanding, Aggregate Intrinsic Value | $ 286 | $ 483 |
Vested and expected to vest, Aggregate Intrinsic Value | 286 | |
Options exercisable, Aggregate Intrinsic Value | $ 286 |
Stock Option Plan - Restricted
Stock Option Plan - Restricted Stock Units (Details) - Restricted stock units - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |||
Outstanding, beginning of period (in shares) | 1,036,208 | ||
Awards granted (in shares) | 831,700 | ||
Awards released (in shares) | (159,272) | ||
Awards canceled (in shares) | (140,524) | ||
Outstanding, end of period (in shares) | 1,568,112 | ||
Weighted- Average Grant Date Fair Value | |||
Outstanding, beginning of period (in dollars per share) | $ 7.28 | ||
Awards granted (in dollars per share) | 2.42 | $ 8.61 | |
Awards released (in dollars per share) | 11.63 | ||
Awards canceled (in dollars per share) | 7.80 | ||
Outstanding, end of period (in dollars per share) | $ 4.21 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Aggregate Intrinsic Value [Abstract] | |||
Outstanding, Aggregate Intrinsic Value | $ 3,795 | $ 2,487 |
Stock Option Plan - Stock-Based
Stock Option Plan - Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ 890 | $ 1,306 | $ 2,854 | $ 4,122 |
Costs of revenue | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | 45 | 56 | 161 | 159 |
Selling, general and administrative | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | 792 | 1,085 | 2,497 | 3,406 |
Research and development | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ 53 | $ 165 | $ 196 | $ 557 |
Subsequent Events (Details)
Subsequent Events (Details) $ in Millions | Sep. 30, 2023 USD ($) |
Subsequent Events [Abstract] | |
Remaining lease payments | $ 0.9 |