Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Jun. 30, 2021 | |
Cover [Abstract] | ||
Document Type | 10-K | |
Amendment Flag | false | |
Document Period End Date | Dec. 31, 2021 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | FY | |
Entity Registrant Name | PROGENITY, INC. | |
Entity Central Index Key | 0001580063 | |
Entity Well-known Seasoned Issuer | No | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Current Fiscal Year End Date | --12-31 | |
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 Public Float | $ 125,774,520 | |
Entity Common Stock, Shares Outstanding | 184,125,819 | |
Entity File Number | 001-39334 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 27-3950390 | |
Entity Address, Address Line One | 4330 La Jolla Village Drive | |
Entity Address, Address Line Two | Suite 300 | |
Entity Address, City or Town | San Diego | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 92122 | |
City Area Code | 855 | |
Local Phone Number | 293-2639 | |
Document Annual Report | true | |
Document Transition Report | false | |
Title of 12(b) Security | Common Stock, par value $0.001 per share | |
Trading Symbol | PROG | |
Security Exchange Name | NASDAQ | |
Documents Incorporated by Reference | Portions of the registrant's definitive proxy statement relating to its 2022 Annual Meeting of Stockholders, to be held on or about June 15, 2022, are incorporated by reference into Part III of this Annual Report on Form 10-K where indicated. Such proxy statement will be filed with the U.S. Securities and Exchange Commission within 120 days after the end of the fiscal year to which this report relates. | |
Auditor Name | KPMG LLP | |
Auditor Location | San Diego, California | |
Auditor Firm ID | 185 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 88,397 | $ 92,076 |
Accounts receivable, net | 653 | 6,634 |
Prepaid expenses and other current assets | 7,232 | 8,632 |
Current assets of disposal group held for sale | 2,147 | 18,996 |
Total current assets | 98,429 | 126,338 |
Property and equipment, net | 4,012 | 8,106 |
Other assets | 326 | 169 |
Goodwill | 6,072 | 6,072 |
Long-term assets of disposal group held for sale | 13,755 | |
Total assets | 108,839 | 154,440 |
Current liabilities: | ||
Accounts payable | 8,709 | 17,379 |
Accrued expenses and other current liabilities | 34,157 | 54,437 |
Warrant liability | 18,731 | |
Current portion of mortgages payable | 72 | |
Current portion of capital lease obligations | 12 | 266 |
Current liabilities of disposal group held for sale | 516 | |
Total current liabilities | 61,609 | 72,670 |
Capital lease obligations, net of current portion | 42 | |
Mortgages payable, net of current portion | 1,275 | |
Convertible notes, net of unamortized discount of $XXX and $9,614 as of December 31, 2021 and December 31, 2020, respectively | 126,392 | 158,886 |
Embedded derivative liability | 18,370 | |
Other long-term liabilities | 5,814 | 8,667 |
Long-term liabilities of disposal group held for sale | 1,524 | |
Total liabilities | 193,815 | 261,434 |
Commitments and contingencies (Note 11) | ||
Stockholders' deficit: | ||
Common stock - $0.001 par value. 350,000,000 shares authorized as of December 31, 2021 and December 31, 2020, respectively; XXX and 59,287,331 shares issued as of December 31, 2021 and December 31, 2020, respectively; XXX and 55,772,303 shares outstanding as of December 31, 2021 and December 31, 2020, respectively | 146 | 59 |
Additional paid-in capital | 722,646 | 452,992 |
Accumulated deficit | (788,686) | (541,274) |
Treasury stock - at cost; XXX shares of common stock as of December 31, 2021 and 3,515,028 shares of common stock as of December 31, 2020 | (19,082) | (18,771) |
Total stockholders' deficit | (84,976) | (106,994) |
Total liabilities and stockholders' deficit | $ 108,839 | $ 154,440 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Unamortized discount | $ 6,300 | $ 9,600 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 350,000,000 | 350,000,000 |
Common stock, shares issued | 185,736,890 | 59,287,331 |
Common stock, shares outstanding | 181,872,676 | 55,772,303 |
Treasury stock, at cost shares | 3,864,214 | 3,515,028 |
Convertible Notes | ||
Unamortized discount | $ 6,333 | $ 9,614 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income Statement [Abstract] | ||
Revenues | $ 1,247 | $ 162 |
Cost of sales | 0 | 0 |
Gross profit | 1,247 | 162 |
Operating expenses: | ||
Research and development | 45,785 | 47,743 |
Selling and marketing | 4,758 | 5,949 |
General and administrative | 68,541 | 54,089 |
Total operating expenses | 119,084 | 107,781 |
Loss from operations | (117,837) | (107,619) |
Interest income (expense), net | (12,636) | (9,915) |
Loss on warrant liability | (54,157) | 0 |
Other income (expense), net | 5,990 | (25,084) |
Loss before income taxes | (178,640) | (142,618) |
Income tax benefit | (119) | (37,532) |
Loss from continuing operations | (178,521) | (105,086) |
Loss from discontinued operations | (68,891) | (87,442) |
Net loss | (247,412) | (192,528) |
Dividend paid to preferred stockholders | 0 | (268) |
Net loss attributable to common stockholders | $ (247,412) | $ (192,796) |
Net loss per share from continuing operations, basic and diluted | $ (1.86) | $ (3.82) |
Net loss per share from discontinued operations, basic and diluted | (0.72) | (3.18) |
Net loss per share, basic and diluted | (2.57) | (7) |
Net loss per share attributable to common stockholders, basic and diluted | $ (2.57) | $ (7.01) |
Weighted average shares outstanding, basic and diluted | 96,154,672 | 27,512,876 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Deficit - USD ($) $ in Thousands | Total | Secondary Public Offering | IPO | Common Stock | Common StockSecondary Public Offering | Common StockIPO | Preferred StockSeries A and A-1 Preferred Stock | Preferred StockSeries B Preferred Stock | Additional Paid-In Capital | Additional Paid-In CapitalSecondary Public Offering | Additional Paid-In CapitalIPO | Accumulated Deficit | Treasury Stock |
Beginning Balance at Dec. 31, 2019 | $ (83,874) | $ 9 | $ 4 | $ 102 | $ 283,260 | $ (348,478) | $ (18,771) | ||||||
Beginning Balance, shares at Dec. 31, 2019 | 8,451,415 | 4,120,000 | 101,867,405 | (3,474,572) | |||||||||
Exercise of common stock options | 626 | 626 | |||||||||||
Exercise of common stock options, shares | 543,218 | ||||||||||||
Issuance of stock, net | 24,005 | $ 26,938 | $ 88,665 | $ 9 | $ 7 | $ 10 | 23,995 | $ 26,929 | $ 88,658 | ||||
Issuance of stock, net, shares | 8,792,047 | 6,666,667 | 10,478,240 | ||||||||||
Automatic conversion of preferred stock | $ 33 | $ (4) | $ (112) | 83 | |||||||||
Automatic conversion of preferred stock, shares | 33,443,562 | (4,120,000) | (112,345,645) | ||||||||||
Issuance of common stock upon conversion of debt | 18,750 | $ 1 | 18,749 | ||||||||||
Issuance of common stock upon conversion of debt, shares | 1,250,000 | ||||||||||||
Issuance of common stock warrants | 268 | (268) | |||||||||||
Issuance of common stock upon vesting of restricted stock units | (244) | (244) | |||||||||||
Issuance of common stock upon vesting of restricted stock units, shares | 140,422 | (40,456) | |||||||||||
Stock-based compensation expense | 10,668 | 10,668 | |||||||||||
Net loss | (192,528) | (192,528) | |||||||||||
Ending Balance at Dec. 31, 2020 | (106,994) | $ 59 | 452,992 | (541,274) | $ (18,771) | ||||||||
Ending Balance, shares at Dec. 31, 2020 | 59,287,331 | (3,515,028) | |||||||||||
Exercise of common stock options | $ 222 | $ 1 | 532 | $ (311) | |||||||||
Exercise of common stock options, shares | 323,266 | 323,266 | (102,720) | ||||||||||
Issuance of stock, net | $ 46,554 | $ 35 | 46,519 | ||||||||||
Issuance of stock, net, shares | 4,336,938 | 75,162,049 | |||||||||||
Issuance of common stock under employee stock purchase plan, shares | 316,746 | ||||||||||||
Issuance of common stock under employee stock purchase plan | $ 712 | $ 1 | 711 | ||||||||||
Exercise of common stock warrants, shares | 35,281,291 | ||||||||||||
Exercise of common stock warrants | 118,010 | $ 35 | 117,975 | ||||||||||
Issuance of common stock upon conversion of debt | 44,606 | $ 13 | 44,593 | ||||||||||
Issuance of common stock upon conversion of debt, shares | 13,278,592 | ||||||||||||
Issuance of common stock warrants | 42,864 | 42,864 | |||||||||||
Issuance of common stock upon vesting of restricted stock units | (721) | $ 1 | (722) | ||||||||||
Issuance of common stock upon vesting of restricted stock units, shares | 819,499 | (246,466) | |||||||||||
Issuance of common stock upon conversion of interest, net, shares | 1,268,116 | ||||||||||||
Issuance of common stock upon conversion of interest, net | 3,627 | $ 1 | 3,626 | ||||||||||
Stock-based compensation expense | 13,556 | 13,556 | |||||||||||
Net loss | (247,412) | (247,412) | |||||||||||
Ending Balance at Dec. 31, 2021 | $ (84,976) | $ 146 | $ 722,646 | $ (788,686) | $ (19,082) | ||||||||
Ending Balance, shares at Dec. 31, 2021 | 185,736,890 | (3,864,214) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Operating Activities: | ||
Net loss | $ (247,412) | $ (192,528) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Loss from discontinued operations | 68,891 | 87,442 |
Non-cash revenue reserve | 979 | 33,549 |
Depreciation and amortization | 1,437 | 1,438 |
Stock-based compensation expense | 11,962 | 8,244 |
Loss on extinguishment of convertible notes | 946 | 10,952 |
Amortization of debt discount and non-cash interest | 1,572 | 3,656 |
Inducement Loss on Convertible Note | 11,265 | 0 |
Inventory write-down | 0 | 143 |
Loss on disposal of property and equipment | 99 | 67 |
Change in fair value of derivative liability | (18,365) | 13,860 |
Change in fair value of warrant liability | 54,157 | 0 |
Changes in operating assets and liabilities: | ||
Income tax receivable | 0 | (635) |
Prepaid expenses and other current assets | (1,399) | 3,016 |
Other assets | (158) | 0 |
Accounts payables | (8,686) | 2,826 |
Accrued expenses and other liabilities | (22,910) | (61,847) |
Income tax payable | 79 | 0 |
Other long-term liabilities | 4,412 | 1,622 |
Net cash used in operating activities - continuing operations | (140,333) | (92,957) |
Net cash used in operating activities - discontinued operations | (27,153) | (72,787) |
Net cash used in operating activities | (167,486) | (165,744) |
Investing Activities: | ||
Purchases of property and equipment | (855) | (3,871) |
Net cash used in investing activities - continuing operations | (855) | (3,871) |
Net cash used in investing activities - discontinued operations | (387) | (1,073) |
Net cash used in investing activities | (1,242) | (4,944) |
Financing Activities: | ||
Proceeds from issuance of common stock, net | 46,776 | 116,435 |
Proceeds from issuance of common stock warrants | 79,448 | 0 |
Proceeds from exercise of common stock warrants | 46,000 | 0 |
Proceeds from issuance of Series B Preferred Stock and warrant, net | 0 | 21,307 |
Proceeds from issuance of convertible notes, net | 0 | 99,708 |
Payments for financing of insurance premiums | (3,750) | (6,745) |
Principal payments on mortgages payable | (1,348) | (68) |
Principal payments on capital lease obligations | (295) | (668) |
Net cash provided by financing activities - continuing operations | 166,831 | 229,969 |
Net cash used in financing activities - discontinued operations | (1,782) | (247) |
Net cash provided by financing activities | 165,049 | 229,722 |
Net (decrease) increase in cash and cash equivalents | (3,679) | 59,034 |
Cash and cash equivalents at beginning of period | 92,076 | 33,042 |
Cash and cash equivalents at end of period | 88,397 | 92,076 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 7,536 | 3,927 |
Cash paid for income taxes | 367 | 62 |
Supplemental schedule of non-cash investing and financing activities: | ||
Exchange of note payable for convertible notes | 0 | 75,000 |
Settlement of Warrant Liability | 72,010 | 0 |
Issuance of common stock in settlement of accrued expenses | 712 | 0 |
Conversion of convertible note | 44,606 | 18,750 |
Issuance Of Common Stock Upon Conversion Of Interest | 3,627 | 0 |
Issuance of preferred stock in settlement of interest payable | 0 | 2,698 |
Equity financing issuance costs incurred but not paid | 200 | 205 |
Debt issuance costs incurred but not paid | 0 | 239 |
Issuance of stock options in settlement of accrued bonuses | 754 | |
Purchases of property and equipment in accounts payable | $ 16 | $ 1,204 |
Organization and Description of
Organization and Description of Business | 12 Months Ended |
Dec. 31, 2021 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Organization and Description of Business | Note 1. Organization and Description of Business Progenity, Inc. (the “Company” or “Progenity”), a Delaware corporation, commenced operations in 2010 with its corporate office located in San Diego, California. Progenity’s historical operations included a licensed Clinical License Improvement Amendment and College of American Pathologists certified laboratory located in Michigan specializing in the molecular testing markets serving women’s health providers in the obstetric, gynecological, fertility, and maternal fetal medicine specialty areas in the United States. Previously, the Company’s core business was focused on the prenatal carrier screening and noninvasive prenatal test market, targeting preconception planning, and routine pregnancy management for genetic disease risk assessment. Through its former affiliation with Mattison Pathology, LLP (“Mattison”), a Texas limited liability partnership doing business as Avero Diagnostics (“Avero”), located in Lubbock and Dallas, Texas, the Company’s operations also included anatomic and molecular pathology testing products in the United States. In order to refocus efforts and resources on the Company's research and development pipeline, in June 2021, the Company announced a strategic transformation ("Strategic Transformation") that included the closure of the Progenity genetics lab in Ann Arbor, Michigan and indicated that the Company is seeking strategic alternatives for Avero, together referred to as the Laboratory Operations. In December 2021, the Company entered into an asset purchase agreement with Northwest Pathology to sell Avero. The Company has excluded from continuing operations for all periods presented in this report revenues and expenses associated with its Laboratory Operations, which are reported as discontinued operations. See Note 4 for additional information on the Laboratory Operations. Liquidity As of December 31, 2021, the Company had cash and cash equivalents of $ 88.4 million and an accumulated deficit of $ 788.7 million. For the year ended December 31, 2021, the Company reported a net loss of $ 247.4 million and cash used in operating activities of $ 167.5 million. The Company’s primary sources of capital have historically been the sale of common stock and warrants, private placements of preferred stock and incurrence of debt. As of December 31, 2021, the Company had $ 126.4 million of convertible senior notes ("Convertible Notes") outstanding (see Note 8). As a result of the Strategic Transformation announced, management believes that future operating expenses have been reduced. However, as the Strategic Transformation was announced in June of 2021 and the Company completed the sale of Avero in December of 2021, the Company has not completely eliminated the risks surrounding its ability to fund operations for at least 12 months from the issuance date of the consolidated financial statements for the year ended December 31, 2021, without relying on additional funding. As a result, there is substantial doubt about the Company’s ability to continue as a going concern for 12 months following the issuance date of the consolidated financial statements for the year ended December 31, 2021. The Company’s ability to continue as a going concern is dependent upon its ability to raise additional funding. Management believes that the Company’s liquidity position as of the date of this filing provides sufficient runway to achieve critical research and development pipeline milestones. Management intends to raise additional capital through equity offerings and/or debt financings, or from other potential sources of liquidity, which may include new collaborations, licensing or other commercial agreements for one or more of the Company’s research programs or patent portfolios or divestitures of the Company's assets. Adequate funding, if needed, may not be available to the Company on acceptable terms, or at all. The Company’s ability to raise additional funds may be adversely impacted by potential worsening global economic conditions and the disruptions to, and volatility in, the credit and financial markets in the United States and worldwide resulting from the ongoing COVID-19 pandemic. If the Company is unable to raise capital when needed or on attractive terms, it would be forced to delay, reduce, or eliminate its research and development programs or other operations. If any of these events occur, the Company’s ability to achieve its operational goals would be adversely affected. Uncertainties Related to the COVID-19 Pandemic The ongoing COVID‑19 pandemic has negatively impacted the global economy, disrupted global supply chains and created significant volatility and disruption of financial markets. The Company has been materially and negatively affected by the COVID-19 pandemic; however, the extent of the impact of the COVID-19 pandemic on the Company’s operational and financial performance, including its ability to execute its business strategies and initiatives in the expected time frame, will depend on future developments, including the duration and continued spread of the pandemic which is uncertain and cannot be predicted. The Company could be further negatively affected by the widespread outbreak of an illness or any other communicable disease, or any other public health crisis that results in economic and trade disruptions, including the disruption of global supply chains. An extended period of global supply chain and economic disruption could materially affect the Company’s business, results of operations, access to sources of liquidity and financial condition. The estimates used for, but not limited to, determining the amount to be collected for accounts receivable, fair value of long-lived assets, and fair value of goodwill could be impacted by the pandemic. While the full impact of the COVID-19 pandemic is unknown at this time, the Company has made appropriate estimates based on the facts and circumstances available as of the reporting date. These estimates may change as new events occur and additional information is obtained. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 2. Summary of Significant Accounting Policies Basis of Presentation The Company’s financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and include the accounts of Progenity, Inc., its wholly owned subsidiaries, and an affiliated professional partnership with Avero with respect to which the Company currently has a specific management arrangement. The Company has determined that Avero is a variable interest entity and that the Company is the primary beneficiary resulting in the consolidation of Avero as required by the accounting guidance for consolidation (see Note 3). All significant intercompany balances and transactions have been eliminated in consolidation. Certain amounts in prior periods have been reclassified to reflect the impact of the discontinued operations treatment of the Company's Laboratory Operations in order to conform to the current period presentation. As a result of the divestiture of the Laboratory Operations, the Company has retrospectively revised the consolidated statements of operations and the consolidated statement of cash flows for the year ended December 31, 2020 and the consolidated balance sheet as of December 31, 2020 , to reflect the operations and cash flows of the Laboratory Operations as discontinued operations and the related assets and liabilities as held for sale. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant items subject to such estimates include the estimate of variable consideration in connection with the recognition of revenue, the valuation of stock options, the valuation of goodwill and intangible assets, the valuation of the derivative liability associated with the Convertible Notes, accrual for reimbursement claims and settlements, the valuation of warrant liabilities, the valuation of assets held for sale, assessing future tax exposure and the realization of deferred tax assets, and the useful lives and the recoverability of property and equipment. The Company bases these estimates on historical and anticipated results, trends, and various other assumptions that the Company believes are reasonable under the circumstances, including assumptions as to future events. These estimates form the basis for making judgments about the carrying values of assets and liabilities and recorded revenues and expenses that are not readily apparent from other sources. Actual results could differ from those estimates and assumptions. Operating Segments 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 or decision-making group in making decisions on how to allocate resources and assess performance. The Company views its operations and manages its business as one operating segment. All revenues are attributable to U.S.-based operations and all assets are held in the United States. Assets Held for Sale and Discontinued Operations Assets and liabilities are classified as held for sale when all of the following criteria for a plan of sale have been met: (1) management, having the authority to approve the action, commits to a plan to sell the assets; (2) the assets are available for immediate sale, in their present condition, subject only to terms that are usual and customary for sales of such assets; (3) an active program to locate a buyer and other actions required to complete the plan to sell the assets have been initiated; (4) the sale of the assets is probable and is expected to be completed within one year; (5) the assets are being actively marketed for a price that is reasonable in relation to their current fair value; and (6) actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or the plan will be withdrawn. When all of these criteria have been met, the assets and liabilities are classified as held for sale in the consolidated balance sheet. Assets classified as held for sale are reported at the lower of their carrying value or fair value less costs to sell. Depreciation and amortization of assets ceases upon designation as held for sale. Discontinued operations comprise activities that were disposed of, discontinued or held for sale at the end of the period, represent a separate major line of business that can be clearly distinguished for operational and financial reporting purposes and represent a strategic business shift having a major effect on the Company’s operations and financial results according to Accounting Standard Codification (“ASC”) Topic 205, Presentation of Financial Statements . Additional details surrounding the Company's assets and liabilities held for sale and discontinued operations are included in Note 4 . Revenue Recognition Revenue is recognized in accordance with the Financial Accounting Standards Board (“FASB”) ASC Topic 606 , Revenue from Contracts with Customers (“ASC 606”). In accordance with ASC 606, the Company follows a five-step process to recognize revenues: 1) identify the contract with the customer, 2) identify the performance obligations, 3) determine the transaction price, 4) allocate the transaction price to the performance obligations and 5) recognize revenues when the performance obligations are satisfied. Revenue is primarily derived from providing molecular testing products, which are reimbursed through arrangements with third-party payors, laboratory distribution partners, and amounts from individual patients. Third-party payors include commercial payors, such as health insurance companies, health maintenance organizations and government health benefit programs, such as Medicare and Medicaid. The Company’s contracts generally contain a single performance obligation, which is the delivery of the test results, and the Company satisfies its performance obligation at a point in time upon the delivery of the results, which then triggers the billing for the product. The amount of revenue recognized reflects the amount of consideration the Company expects to be entitled to the transaction price and considers the effects of variable consideration. Revenue is recognized when control of the promised product is transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those products. The Company applies the following practical expedients and exemptions: • Incremental costs incurred to obtain a contract are expensed as incurred because the related amortization period would be one year or less. The costs are included in selling and marketing expenses. • No adjustments to amounts of promised consideration are made for the effects of a significant financing component because the Company expects, at contract inception, that the period between the transfer of a promised good or service and customer payment for that good or service will be one year or less. Payor Concentration The Company relies upon reimbursements from third-party government payors and private-payor insurance companies to collect accounts receivable. The Company’s significant third-party payors and their related accounts receivable balances and revenues as a percentage of total accounts receivable balances and revenues are as follows: Percentage of Accounts Receivable December 31, December 31, Blue Shield of Texas 4.0 % 17.8 % Aetna * 4.0 % United Healthcare 7.2 % 6.6 % Government Health Benefits Programs 55.8 % 26.2 % Anthem * 3.5 % * Less than 1% Percentage of Revenue (1) Year Ended December 31, 2021 2020 Blue Shield of Texas 10.7 % 35.6 % Aetna 7.3 % 11.0 % Cigna 5.7 % 7.6 % United Healthcare 6.7 % 6.7 % Government Health Benefits Programs 23.2 % 3.7 % (1) Percentage of revenue table shows amounts as a percentage of total revenue, including revenue classified as discontinued operations. Refer to Note 5 for details of the breakdown of revenue. Accounts Receivable Accounts receivable is recorded at the transaction price and considers the effects of variable consideration. The total consideration the Company expects to collect is an estimate and may be fixed or variable. Variable consideration includes reimbursement from third-party payors, laboratory distribution partners, and amounts from individual patients, and is adjusted for disallowed cases, discounts, and refunds using the expected value approach. The Company monitors these estimates at each reporting period based on actual cash collections in order to assess whether a revision to the estimate is required. Amounts included in accounts receivable consist of receivables generated from Progenity’s genetics laboratory in Ann Arbor, Michigan. The Company plans to continue to collect these receivables and has not included these amounts as assets held for sale. Cost of Sales The components of the Company’s cost of sales are materials and service costs, personnel costs, including stock-based compensation expense, equipment, and infrastructure expenses associated with processing blood and other samples, quality control analyses, shipping charges to transport samples and specimens from ordering physicians, clinics or individuals, third-party laboratory testing products, and allocated overhead including rent, information technology costs, equipment depreciation, and utilities. Costs associated with performing tests are recorded when the test is processed regardless of whether and when revenues are recognized with respect to such test. All costs of sales are associated with the Laboratory Operations and have been included in discontinued operations. Cash and Cash Equivalents including Concentration of Credit Risk The Company considers all highly liquid investment instruments purchased with an initial maturity of three months or less to be cash equivalents. The Company limits its exposure to credit loss by placing its cash and cash equivalents in financial institutions with high credit ratings. The Company’s cash and cash equivalents may consist of deposits held with banks, money market funds, or other highly liquid investments that may at times exceed federally insured limits. Cash equivalents are financial instruments that potentially subject the Company to concentrations of risk, to the extent of amounts recorded in the balance sheets. The Company performs evaluations of its cash equivalents and the relative credit standing of these financial institutions and limits the amount of credit exposure with any one institution. Management believes that the Company is not exposed to significant credit risk due to the financial position of the depository institutions in which those deposits are held. Inventory Inventory is stated at lower of cost (first-in, first-out method) or net realizable value. Inventory consists entirely of supplies, which are consumed when the Company is providing its test reports, and therefore the Company does not maintain any work in process or finished goods inventory. The Company reviews its inventory on a regular basis for excess and obsolete inventory based on an estimate for future consumption. Write-downs or losses of inventory are generally due to technological advances or new product introductions in the Company’s laboratory testing products. The Company believes that the estimates used in calculating the inventory provision are reasonable and properly reflect the risk of excess and obsolete inventory. All inventory is related to the Laboratory Operations and has been included in assets held for sale. Inventory write-downs amounted to $ 5.9 million and $ 0.1 million in the years ended December 31, 2021 and 2020, respectively. Write-downs for the year ended December 31, 2021 are included in discontinued operations. Property and Equipment, Net Property and equipment are stated at cost. Assets acquired under capital leases are stated at the present value of future minimum lease payments. Depreciation is recognized on a straight-line basis over the estimated useful lives of the related assets as follows: Property and Equipment Estimated Useful Life (in years) Computers and software 3 Laboratory equipment 5 Furniture, fixtures, and office equipment 8 Building 15 Assets acquired under capital leases and leasehold improvements are amortized on a straight-line basis over the shorter of the lease term or the useful life of the asset. Land is not depreciated. Goodwill Goodwill is an asset representing the future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized. Goodwill is not amortized but instead is tested annually for impairment at the reporting unit level, or more frequently when events or changes in circumstances indicate that fair value of the reporting unit has been reduced to less than its carrying value. The Company may choose to perform a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform a quantitative assessment. If, after assessing qualitative factors, the Company determines it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then performing the two-step impairment test is unnecessary. If deemed necessary, a two-step test is used to identify the potential impairment and to measure the amount of goodwill impairment, if any. The first step is to compare the fair value of the reporting unit with its carrying amount, including goodwill. If the fair value of the reporting unit exceeds its carrying amount, goodwill is considered not impaired; otherwise, there is an indication that goodwill may be impaired and the amount of the loss, if any, is measured by performing step two. Under step two, the impairment loss, if any, is measured by comparing the implied fair value of the reporting unit goodwill with the carrying amount of goodwill. No impairment was recorded for the years ended December 31, 2021 and 2020. Intangible Assets, Net Intangible assets consist of identifiable intangible assets acquired through acquisitions. Identifiable intangible assets include payor relationships, trade names, and noncompete agreements. The Company amortizes payor relationships and trade names using the straight-line method over their useful lives. The Company amortizes noncompete covenants using the straight-line method over the terms of the related agreements. The Company reviews impairment for intangible assets with definite useful lives whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Recoverability of these assets is measured by a comparison of the carrying amounts to the undiscounted future cash flows the assets are expected to generate. If such review indicates that the carrying amount of intangible assets is not recoverable, the carrying amount of such assets is reduced to fair value. No impairment was recorded for the years ended December 31, 2021 and 2020. The amortization periods for the acquired intangible assets are: Intangible Assets Estimated Useful Life (in years) Trade names 10 Payor relationships 10 Noncompete agreements 6 There are no intangible assets remaining as of December 31, 2021 as they were included as part of the sale of Avero. Impairment of Long-Lived Assets The Company accounts for the impairment of long-lived assets, such as property and equipment, by reviewing these assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If circumstances require a long-lived asset or asset group to be tested for possible impairment, the Company first compares undiscounted future cash flows expected to be generated by that asset or asset group to its carrying value. If the carrying value of the long-lived asset or asset group is not recoverable on an undiscounted-cash-flow basis, an impairment is recognized to the extent that the carrying value exceeds its fair value. No impairment was recorded as of December 31, 2021 and 2020 . Fair Value of Financial Instruments The Company’s financial assets and liabilities are carried at fair value or at amounts that, because of their short-term nature, approximate current fair value, with the exception of its Convertible Notes, which are carried at amortized cost. The carrying value of the Company’s accounts receivable, accounts payable, and accrued expenses and other current liabilities are considered to be representative of their respective fair values because of their short-term nature (see Note 7). The carrying value of the Company’s mortgages payable approximates their estimated fair values because the instruments bear interest at rates, and have terms that are comparable to those available to the Company for similar loan instruments at December 31, 2020 . There were no mortgages payable outstanding as of December 31, 2021. Embedded Derivative Related to Convertible Notes During 2020, the Company issued Convertible Notes with an embedded derivative that is required to be bifurcated from the host contract and remeasured to fair value at each balance sheet date. Any resulting gain or loss related to the change in the fair value of the embedded derivative is recorded to other income (expense), net in the consolidated statements of operations. Changes in the Company’s inputs and assumptions, such as the Company’s stock price and volatility of common stock, could result in material changes in the valuation in future periods. Common Stock Warrant Liability The Company accounts for common stock warrants issued as freestanding instruments in accordance with applicable accounting guidance as either liabilities or as equity instruments depending on the specific terms of the warrant agreements. Warrants classified as liabilities are remeasured each period until settled or until classified as equity. Any resulting gain or loss related to the change in the fair value of the warrant liability is recorded to gain (loss) on warrant liability in the consolidated statements of operations. Changes in the Company’s inputs and assumptions, such as the Company’s stock price and volatility of common stock, could result in material changes in the valuation in future periods. Repair and Maintenance The Company incurs maintenance costs on its major equipment. Repair and maintenance costs are expensed as incurred. Research and Development Research and development expenses consist primarily of costs associated with performing research and development activities to develop new products. Research and development expenses also consist of personnel expenses, including salaries, bonuses, stock-based compensation expense, and benefits, and allocated overhead costs. Research and development expenses are expensed as incurred. Selling and Marketing Selling and marketing expenses consist primarily of costs for communication, advertising, conferences, and other marketing events. Selling and marketing expenses also consist of personnel expenses, including salaries, bonuses, stock-based compensation expense, benefits, and allocated overhead costs. Selling and marketing expenses are expensed as incurred. Advertising expense for the years ended December 31, 2021 and 2020 amounted t o $ 0.6 million and $ 1.6 million, respectively. General and Administrative General and administrative expenses consist primarily of personnel costs, including salaries, bonuses, stock-based compensation expense, and benefits, for the Company’s finance and accounting, legal, human resources, and other administrative teams. Additionally, these expenses include professional fees, including audit, legal, and recruiting services. General and administrative expenses are expensed as incurred. Stock-Based Compensation Stock-based compensation related to stock options, restricted stock units (“RSUs”) and the 2020 Employee Stock Purchase Plan (“ESPP”) awards granted to the Company’s employees is measured at the grant date based on the fair value of the award. The fair value is recognized as expense over the requisite service period, which is generally the vesting period of the respective awards. Compensation related to service-based awards is recognized starting on the grant date on a straight-line basis over the vesting period, which is typically four years . For the ESPP, the requisite service period is generally the period of time from the offering date to the purchase date. In addition, the Company grants stock option awards that vest upon achievement of certain performance criteria ("Performance Awards"). The fair value is recognized as expense over the requisite service period when the Company has concluded that achieving the performance criteria is probable. The probability of achieving the performance criteria is assessed each reporting period. The Company accounts for the forfeitures in the period in which they occur. The fair value of RSUs is estimated based on the closing price of the Company's common stock on the date of the grant. The fair value of stock options, ESPP awards and Performance Awards is estimated using the Black-Scholes option-pricing model and is affected by the Company’s assumptions regarding a number of complex and subjective variables. These variables include, but are not limited to, the fair value of the common stock at the date of grant, the expected term of the awards, the expected stock price volatility over the term of the awards, risk-free interest rate, and dividend rate. The Company’s inputs and assumptions with respect to these variables are as follows: Fair Value of Common Stock — Prior to the IPO, the Company’s common stock was not publicly traded, therefore the Company estimated the fair value of its common stock. Following the IPO, the fair value of the Company’s common stock for awards with service-based vesting is the closing price of its common stock on the date of grant or other relevant determination date. Expected Term —The expected term represents the period that the stock-based awards are expected to be outstanding. The Company determines the expected term using the simplified method. The simplified method deems the term to be the average of the time-to-vesting and the contractual life of the options. For stock options granted to non-employees, the expected term equals the remaining contractual term of the option from the vesting date. For the ESPP, the expected term is the period of time from the offering date to the purchase date. Expected Volatility —Given the limited period of time the Company’s stock has been traded in an active market, the expected volatility is estimated by taking the average historical volatility for industry peers, consisting of several public companies in the Company’s industry that are similar in size, stage, or financial leverage, over a period of time commensurate with the expected term of the awards. Risk-Free Interest Rate —The risk-free interest rate is calculated using the average of the published interest rates of U.S. Treasury zero-coupon issues with maturities that are commensurate with the expected term. Dividend Rate —The dividend yield assumption is zero , as the Company has no plans to pay dividends. Net Loss Per Share Basic and diluted net loss per share attributable to common stockholders is presented in conformity with the two-class method required for participating securities. The Company considers all series of preferred stock to be participating securities as the holders of such stock are entitled to receive non-cumulative dividends on an as-converted basis in the event that a dividend is paid on common stock. Under the two-class method, the net loss attributable to common stockholders is not allocated to the preferred stock as the holders of preferred stock do not have a contractual obligation to share in the Company’s losses. Under the two-class method, net income is attributed to common stockholders and participating securities based on their participation rights. Basic 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 shares of common stock outstanding during the period. Net loss attributable to common stockholders is calculated by adjusting net loss with dividends to preferred stockholders, if any. As the Company has reported net losses for all periods presented, all potentially dilutive securities are antidilutive and, accordingly, basic net loss per share equals diluted net loss per share. Income Taxes The Company accounts for income taxes under the asset-and-liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50 % likely of being realized. Changes in recognition or measurement are recognized in the period in which the change in judgment occurs. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. Comprehensive Loss The Company did no t have any other comprehensive income or loss for any of the periods presented, and therefore comprehensive loss was the same as the Company’s net loss. Emerging Growth Company Status The Company is an emerging growth company (“EGC”), as defined in the Jumpstart Our Business Startups Act of 2012 (“JOBS Act”). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. The Company has elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that it (i) is no longer an emerging growth company or (ii) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act. As a result, these consolidated financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates. Recent Accounting Pronouncements Adopted In December 2019, FASB issued Accounting Standards Update (“ASU”) No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes , which simplified income tax accounting in various areas. The Company adopted this standard on January 1, 2021 , which did no t have a material impact on the consolidated financial statements. Recent Accounting Pronouncements Not Yet Adopted In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) , which supersedes FASB ASC Topic 840, Leases (Topic 840) , and provides principles for the recognition, measurement, presentation and disclosure of leases for both lessees and lessors. The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method for finance leases or on a straight-line basis over the term of the lease for operating leases. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases. In June 2020, the FASB issued ASU No. 2020-05, Revenue from Contracts with Customers (Topic 606) and Leases (Topic 842): Effective Dates for Certain Entities, which further defers the effective date for certain entities. As a result, the ASU is effective for EGCs for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. The Company adopted the provisions of this guidance on January 1, 2022, using the effective date method. As a result of adopting ASC 842, the Company recognized right-of-use assets and lease liabilities of $ 2.1 million and $ 2.2 million, respectively, on January 1, 2022. The difference between the right-of-use assets and lease liabilities is attribut ed to the elimination of deferred rent. There was no adjustment to the opening balance of accumulated deficit as a result of the adoption. The Company elected to use the package of practical expedients available in the new lease standard, allowing it not to reassess: (a) whether expired or existing contracts contain leases under the new definition of a lease; (b) lease classification for expired or existing leases; and (c) whether previously capitalized initial direct costs would qualify for capitalization under the new lease standard. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses , which requires the measurement of expected credit losses for financial instruments carried at amortized cost, such as accounts receivable, held at the reporting date based on historical experience, current conditions and reasonable forecasts. The main objective of this standard 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 No. 2018-19, Codification Improvements to Topic 326, Financing Instruments–Credit Losses , which included an amendment of the effective date. The standard is effective for the Company for annual reporting periods beginning after December 15, 2022. The Company does not expect the adoption of this standard to have a significant impact on its consolidated financial statements. In August 2020, the FASB issued ASU No. 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)-Accounting for Convertible Instruments and Contracts in an Entity's Own Equity , which simplifies the accounting for convertible instruments, amends the guidance on derivative scope exceptions for contracts in an entity's own equity, and modifies the guidance on diluted earnings per share calculations as a result of these changes. The standard is effective for the Company for annual reporting periods beginning after December 15, 2023. The Company is currently evaluating the impact the adoption of this standard may have on its consolidated financial statements. In May 2021, the FASB issued ASU No. 2021-04 , Issuer's Accounting for Certain Modification or Exchanges of Freestanding Equity-Classified Written Call Options , which provides a principles-based framework to determine whether an issuer should recognize the modification or exchange as an adjustment to equity or an expense. The amendments in the update are effective for the Company for fiscal years beginning January 1, 2022, including interim periods within those fiscal years with early adoption permitted. The Company does not expect the adoption of this standard to have a significant impact on its consolidated financial statements. |
Variable Interest Entity
Variable Interest Entity | 12 Months Ended |
Dec. 31, 2021 | |
Variable Interest Entities [Abstract] | |
Variable Interest Entity | Note 3. Variable Interest Entity In June 2015, the Company, through a wholly-owned subsidiary, entered into a series of agreements with Avero. The subsidiary entity entered into a purchase agreement to acquire certain assets from Mattison used in the operations of Avero. The purchase agreement was accounted for under the acquisition method in accordance with the provisions of ASC Topic 805, Business Combinations . The subsidiary entity also entered into a nominee agreement which provided it with the right, but not the obligation, to purchase, or to designate a person(s) to purchase, the stock of Avero at any time for a nominal amount. In December 2021, the Company entered into an asset purchase agreement with Northwest Pathology to sell certain assets and liabilities of Avero Diagnostics for $ 10.9 million. The Company no longer has a controlling interest in Avero and therefore does not consolidate Avero as of December 31, 2021. Prior to the date of sale, Avero income statement activity is included in discontinued operations in the consolidated statements of operations. In June 2015, t he Company's subsidiary entity entered into a management services arrangement that authorized the Company to perform the management services in the manner that it deemed reasonably appropriate to meet the day-to-day business needs of Avero. The management services included funding ongoing operational needs, directing activities related to contract negotiation, billing, human resources, and legal and administrative matters and processes, among others. In exchange for the management services provided, the Company's subsidiary entity was entitled to receive an annual management fee equal to the amount of the net operating income of Avero. The agreement had a 10 year term, but was terminated at the time of the sale of Avero. Through the management services arrangement with Avero, the Company had (1) the power to direct the activities of Avero that most significantly impact its economic performance, and (2) the obligation to absorb losses of Avero or the right to receive benefits from Avero that could potentially be significant to Avero. Based on these determinations, the Company determined that Avero was a variable interest entity and that the Company was the primary beneficiary. The Company did not own any equity interest in Avero; however, as these agreements provide the Company the controlling financial interest in Avero, the Company consolidated Avero’s balances and activities within its consolidated financial statements. In December 2018, Avero entered into a settlement agreement with Cigna. The Company provided financial support to Avero in the amount of $ 3.0 million during the year ended December 31, 2020 related to the Cigna settlement obligation, which was fully settled as of December 31, 202 0. The Company did no t provide any additional financial support to Avero during the years ended December 31, 2021 and 2020, other than the Cigna settlement obligation and agreed upon management services. The following table presents the assets and liabilities of Avero that are included in the Company’s consolidated balance sheets as of December 31, 2020 (in thousands). The assets and liabilities that were included in the sale of Avero in December 2021 are included in assets and liabilities held for sale (see Note 4). The assets and liabilities exclude intercompany balances that eliminate in consolidation: December 31, Assets of Avero that can only be used to settle obligations of Avero Cash and cash equivalents $ 556 Accounts receivable, net 6,047 Inventory 3,382 Prepaid expenses and other current assets 1,254 Property and equipment, net 5,436 Other assets 30 Goodwill 147 Other intangible assets, net 3,843 Total assets of Avero that can only be used to settle obligations of Avero $ 20,695 Liabilities of Avero Accounts payable $ 4,722 Accrued expenses and other accrued liabilities 3,472 Current portion of capital lease obligations 46 Current portion of mortgage payable 199 Capital lease obligations, net of current portion 4 Mortgage payable, net of current portion 1,520 Other long-term liabilities 428 Total liabilities of Avero $ 10,391 |
Assets Held for Sale and Discon
Assets Held for Sale and Discontinued Operations | 12 Months Ended |
Dec. 31, 2021 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Assets Held for Sale and Discontinued Operations | Note 4. Assets Held for Sale and Discontinued Operations In June 2021, the Company announced its Strategic Transformation plan to reallocate resources to research and development to better position the business for future growth. The plan includes the closure of the Progenity genetics laboratory in Ann Arbor, Michigan and the divestiture of Avero. This plan represents a strategic business shift having a major effect on the Company's operations and financial results. The Company stopped providing genetic laboratory-developed test services in its Ann Arbor, Michigan laboratory and determined that the Laboratory Operations, including Avero, met the requirements of discontinued operations. The Company has classified the results of its Laboratory Operations as discontinued operations in its consolidated statements of operations and consolidated statements of cash flows for all periods presented. Additionally, the related assets and liabilities have been reported as assets and liabilities held for sale in the Company’s consolidated balance sheet as of December 31, 2021 and December 31, 2020. The Company recognized a loss of $ 19.3 million fo r the year ended December 31, 2021 for contract terminations, severance, inventory and fixed asset write-downs in discontinued operations related to the Progenity genetics laboratory shutdown. In December 2021, the Company entered into an asset purchase agreement to sell certain assets and liabilities of Avero and recognized a loss o f $ 6.0 million for the year ended December 31, 2021 and is included in discontinued operations. The loss on sale is calculated based on proceeds of $ 10.9 million less net assets of $ 15.1 million and transaction costs of $ 1.8 million. The following table presents the combined results of discontinued operations of the Laboratory Operations (in thousands): Year Ended December 31, 2021 2020 Revenues $ 59,362 $ 74,151 Cost of sales 63,741 93,433 Gross loss ( 4,379 ) ( 19,282 ) Operating expenses: Research and development 1,590 — Selling and marketing 38,753 46,938 General and administrative 18,247 21,349 Total operating expenses 58,590 68,287 Other income (expense), net ( 5,922 ) 127 Net loss from discontinued operations $ ( 68,891 ) $ ( 87,442 ) The following table presents the carrying amounts of the classes of assets and liabilities held for sale related to the Laboratory Operations as of December 31, 2021 and December 31, 2020 (in thousands): December 31, December 31, Carrying amounts of assets of disposal group held for sale Current assets: Accounts receivable, net $ — $ 6,047 Inventory — 12,220 Prepaid expenses and other current assets — 729 Total current assets of disposal group held for sale (1) 18,996 Property and equipment, net 2,147 9,735 Other assets — 30 Goodwill — 147 Other intangible assets, net — 3,843 Total assets of disposal group held for sale (1) $ 2,147 $ 32,751 Carrying amounts of liabilities of disposal group held for sale Current liabilities: Accrued expenses and other current liabilities — 272 Current portion of mortgages payable — 198 Current portion of capital lease obligations — 46 Total current liabilities of disposal group held for sale 516 Capital lease obligations, net of current portion — 4 Mortgages payable, net of current portion — 1,520 Total liabilities of disposal group held for sale $ — $ 2,040 (1) The assets of the remaining Progenity Laboratory Operations are classified as held for sale and are classified as current in the consolidated balance sheet at December 31, 2021 , because they are expected to be sold within one year. |
Revenues
Revenues | 12 Months Ended |
Dec. 31, 2021 | |
Revenue From Contract With Customer [Abstract] | |
Revenues | Note 5. Revenues The Company’s revenues are generated primarily through collaboration agreements. Under ASC 606, revenue is recognized when a customer obtains control of promised goods or services. The amount of revenue recognized reflects the consideration that the Company expects to be entitled to receive in exchange for these services. The Company analyzes the nature of these performance obligations in the context of individual agreements in order to assess the distinct performance obligations. The Company applies the following five steps to recognize revenue: (1) identify the contract with the customer, (2) identify the performance obligations, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations and (5) recognize revenues when the performance obligations are satisfied. The Company evaluates all promised goods and services within a customer contract and determines which of such goods and services are separate performance obligations. This evaluation includes an assessment of whether the good or service is capable of being distinct and whether the good or service is separable from other promises in the contract. The transaction price is determined based on the consideration to which the Company will be entitled in exchange for transferring goods and services to the customer. A contract may contain variable consideration, including potential payments for both milestone and research and development services. For certain potential milestone payments, the Company estimates the amount of variable consideration by using the most likely amount method. Each reporting period the Company re-evaluates the probability of achievement of such variable consideration and any related constraints. Progenity will include variable consideration, without constraint, in the transaction price to the extent it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price among the performance obligations on a relative standalone selling price basis unless the transaction price is variable and meets the criteria to be allocated entirely to a performance obligation or to a distinct good or service that forms part of a single performance obligation. Revenues historically were derived from contracts with healthcare insurers, government payors, laboratory partners and patients in connection with sales of prenatal genetic, anatomic or molecular pathology tests. The Company entered into contracts with healthcare insurers related to tests provided to patients who had health insurance coverage. Insurance carriers are considered third-party payors on behalf of the patients, and the patients who receive genetic, anatomic or molecular pathology test products are considered the customers. Tests were billed to insurance carriers, patients, or a combination of insurance carriers and patients. The Company also sold tests to laboratory partners, which are considered customers. The Company evaluated its contracts with healthcare insurers, government payors, laboratory partners and patients and identified a single performance obligation, the delivery of a test result. The Company satisfied its performance obligation at a point in time upon the delivery of the test result, at which point the Company can bill for its products. The amount of revenue recognized reflects the transaction price and considers the effects of variable consideration, which is discussed below. Once the Company satisfied its performance obligations upon delivery of a test result and billed for the product, the timing of the collection of payments may vary based on the payment practices of the third-party payor. The Company billed patients directly for co-pays and deductibles that they are responsible for and also billed patients directly in cases where the customer did not have insurance. All of the historical test revenue is part of the Company's Laboratory Operations and has been included in discontinued operations on the consolidated statements of operations. The Company had established an accrual for refunds of payments previously made by healthcare insurers based on historical experience and executed settlement agreements with healthcare insurers. Any refunds are accounted for as reductions in revenues in the statement of operations as an element of variable consideration. In the United States, the American Medical Association (“AMA”) generally assigns specific billing codes for laboratory tests under a coding system known as Current Procedure Terminology (“CPT”), which the Company and its ordering healthcare providers must use to bill and receive reimbursement for molecular tests. Effective January 1, 2019, the AMA issued a CPT code for genetic testing for severe inherited conditions that includes sequencing of at least 15 genes, which affects potential reimbursement for the Company’s Preparent expanded carrier screening tests. As part of the Company’s work to improve its compliance program, including its internal auditing and monitoring function, the Company commissioned a third-party review of its billing processes. In connection with that audit, the Company identified that it had not effectively transitioned to the implementation of the new CPT code in 2019, and as a result the Company received an overpayment of approximately $ 10.0 million from government payors during 2019 and early 2020. As of December 31, 2020, the Company settled all existing obligations to the relevant government programs as due. The transaction price was an estimate and could be fixed or variable. Variable consideration includes reimbursement from healthcare insurers, government payors, and patients and is adjusted for estimates of disallowed cases, discounts, and refunds using the expected value approach. Tests billed to healthcare insurers and directly to patients can take up to nine months to collect and the Company may be paid less than the full amount billed or not paid at all. For insurance carriers and government payors, management utilizes the expected value method using a portfolio of relevant historical data for payors with similar reimbursement characteristics. The portfolio estimate is developed using historical reimbursement data from payors and patients, as well as known current reimbursement trends not reflected in the historical data. Such 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 monitors these estimates at each reporting period based on actual cash collections and the status of settlement agreements with third-party payors, in order to assess whether a revision to the estimate is required. Both the initial estimate and any subsequent revision to the estimate contain uncertainty and require the use of judgment in the estimation of the transaction price and application of the constraint for variable consideration. If actual results in the future vary from the Company’s estimates, the Company will adjust these estimates, which would affect revenue and earnings in the period such variances become known. The consideration expected from laboratory partners is generally a fixed amount. The Company periodically updates its estimate of the variable consideration recognized for previously delivered performance obligations. These updates resulted in additional revenue of $ 6.6 million and a revenue reduction of $ 26.9 million for the years ended December 31, 2021 and 2020, respectively. These amounts included (i) adjustments for actual collections versus estimated variable consideration as of the beginning of the reporting period and (ii) cash collections and the related recognition of revenue in the current period for tests delivered in prior periods due to the release of the constraint on variable consideration, offset by (iii) reductions in revenue for the accrual for reimbursement claims and settlements described in Note 11. Disaggregation of Revenues The following tables show revenues disaggregated by payor type and revenue classification (in thousands): Year Ended December 31, 2021 2020 Commercial third-party payors $ 42,100 $ 64,433 Government health benefit programs (1) 14,085 2,731 Patient/laboratory distribution partners 4,424 7,149 Total revenues $ 60,609 $ 74,313 (1) The revenue amounts include accruals for reimbursement claims and settlements included in the estimates of variable consideration recorded during the years ended December 31, 2021 and 2020 . Revenues recognized reflect the effects of variable consideration, and include adjustments for estimates of disallowed cases, discounts, and refunds. The variable consideration includes reductions in revenues for the accrual for reimbursement claims and settlements. Year Ended December 31, Classification 2021 2020 Revenue from continuing operations $ 1,247 $ 162 Revenue from discontinued operations 59,362 74,151 Total revenues $ 60,609 $ 74,313 |
Balance Sheet Components
Balance Sheet Components | 12 Months Ended |
Dec. 31, 2021 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Balance Sheet Components | Note 6. Balance Sheet Components Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consisted of the following (in thousands): December 31, December 31, Prepaid expenses $ 6,123 $ 8,521 Other current assets 1,109 111 Total $ 7,232 $ 8,632 Property and Equipment, Net Property and equipment, net consisted of the following (in thousands): December 31, December 31, Computers and software $ 5,004 $ 6,150 Building and leasehold improvements 437 437 Laboratory equipment 2,688 3,044 Furniture, fixtures, and office equipment 1,142 1,143 Construction in progress 16 2,774 Land 346 346 Total property and equipment 9,633 13,894 Less accumulated depreciation and amortization ( 5,621 ) ( 5,788 ) Property and equipment, net $ 4,012 $ 8,106 Depreciation expense included in continuing operations was $ 1.4 million and $ 1.4 million for the years ended December 31, 2021 and 2020, respectively. Goodwill As part of the sale of Avero, the Company allocated goodwill using the relative fair value method to both the Avero business that was sold and the remaining Progenity business. The $0.1 million allocated to Avero was included in the carrying value to determine the loss on sale. A summary of the activity in goodwill is presented below (in thousands): Balance at December 31, 2020 (1) $ 6,219 Reduction of goodwill related to disposition ( 147 ) Balance at December 31, 2021 $ 6,072 (1) The beginning balance as of December 31, 2020 includes the amount of Goodwill classified in assets held for sale. Intangible Assets, Net All intangible assets have been classified as assets held for sale (see Note 4 ) as of December 31, 2020 and were included as part of the sale of Avero in December 2021. Amortization expense of intangible assets was $ 0.5 million and $ 0.9 million for the years ended December 31, 2021 and 2020, respectively, and is included in discontinued operations. Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consisted of the following (in thousands): December 31, December 31, Accrual for reimbursement claims and settlements, current (1) $ 18,127 $ 30,487 Commissions and bonuses 3,883 4,619 Vacation and payroll benefits 6,894 8,896 Accrued professional services 652 3,385 Accrued interest 802 855 Insurance financing 489 2,070 Contract liabilities 301 378 Other (2) 3,009 3,747 Total $ 34,157 $ 54,437 (1) All of the Company's revenues related to Progenity's Laboratory Operations have been discontinued, amounts related to the revenue reserve generated from the Progenity Laboratory Operations are not included in liabilities held for sale. (2) Included in this amount are contracts that Progenity will be responsible for that cannot be terminated, as there is no future benefit to the Company, they have been expensed in discontinued operations, but are not included in liabilities held for sale. Other Long-term Liabilities Other long-term liabilities consisted of the following (in thousands): December 31, December 31, Accrual for reimbursement claims and settlements, net of current portion (1) $ 192 $ 7,053 Other (2) 5,622 1,614 Total $ 5,814 $ 8,667 (1) All of the Company's revenues related to Progenity's Laboratory Operations have been discontinued, amounts related to the revenue reserve generated from the Progenity Laboratory Operations are not included in liabilities held for sale. (2) Included in this amount are contracts that Progenity will be responsible for that cannot be terminated, as there is no future benefit to the Company, they have been expensed in discontinued operations, but are not included in liabilities held for sale. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Note 7. Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date. The authoritative guidance establishes a three-level valuation hierarchy that prioritizes the inputs to valuation techniques used to measure fair value based upon whether such inputs are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect market assumptions made by the reporting entity. This hierarchy requires the Company to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value. The three-level hierarchy for the inputs to valuation techniques is summarized as follows: Level 1 - Quoted prices in active markets for identical assets and liabilities that the Company has the ability to access. Level 2 - Observable market-based inputs or unobservable inputs that are corroborated by market data, such as quoted prices, interest rates, and yield curves. Level 3 - Inputs that are unobservable data points that are no t corroborated by market data. There were no significant transfers between these fair value measurement classifications during the years ended December 31, 2021 and 2020. Fair Value of Financial Instruments The Company’s Level 3 liabilities consist of the embedded derivative liability associated with the Company’s Convertible Notes (see Note 8) and the warrant liability resulting from the August 2021 issuance of warrants (see Note 12). The Convertible Notes conversion feature was bifurcated and recorded as an embedded derivative liability with a corresponding discount at the date of issuance that is netted against the principal amount of the Convertible Notes. The Company utilizes a Monte Carlo simulation method to determine the fair value of the conversion feature, which utilizes inputs including the common stock price, volatility of common stock, the risk-free interest rate and the probability of conversion to common shares at the conversion rate in the event of a major transaction (e.g. a change in control). Due to the use of significant unobservable inputs, the overall fair value measurement of the conversion feature is classified as Level 3. The Company uses the Black-Scholes Model to value the Level 3 warrant liability at inception and on subsequent valuation dates. This model incorporates transaction details such as the Company’s stock price, contractual terms, maturity, risk free rates, and volatility. The significant unobservable input for the Level 3 warrant liability includes volatility. Given the limited period of time the Company’s stock has been traded in an active market, the expected volatility is estimated by taking the average historical price volatility for industry peers, consisting of several public companies in the Company’s industry that are similar in size, stage, or financial leverage, over a period of time commensurate to the expected term of the warrants. At December 31, 2021, the fair value of warrant liability was estimated using the Black-Scholes Model with the following inputs and assumptions: December 31, Risk-free interest rate 1.30 % Expected volatility 91.9 % Stock price $ 2.09 Expected life (years) 4.6 The following table presents information about the Company’s assets and liabilities that are measured at fair value on a recurring basis and indicates the fair value hierarchy of the valuation techniques utilized to determine such fair value (in thousands): Level 1 Level 2 Level 3 December 31, 2021 Money market funds (1) $ 85,866 $ — $ — Warrant Liability $ — $ — $ 18,731 December 31, 2020 Money market funds (1) $ 90,254 $ — $ — Embedded derivative liability (2) $ — $ — $ 18,370 (1) Included in cash and cash equivalents in the accompanying consolidated balance sheets. (2) The fair value of the embedded derivative liability was zero as of December 31, 2021 . The carrying value of the Company’s Convertible Notes does not approximate its fair value because the carrying value of the Convertible Notes reflects the balance of unamortized discount related to the derivative liability associated with the value of the conversion feature assessed at inception. The carrying value of the Company’s Convertible Notes, net of discount, was $ 126.4 million and $ 158.9 million at December 31, 2021 and 2020, respectively. Based on unadjusted quoted prices in active market obtained from third-party pricing services, the Company determined the fair value of the Convertible Notes was $ 86.6 million and $ 250.2 million as of December 31, 2021 and 2020 , respectively. |
Convertible Notes
Convertible Notes | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
Convertible Notes | Note 8. Convertible Notes In December 2020, the Company issued a total of $ 168.5 million principal amount of Convertible Notes in a private offering of pursuant to Rule 144A under the Securities Act. The Convertible Notes were issued pursuant to, and are governed by, an indenture, dated as of December 7, 2020 , by and between the Company and The Bank of New York Mellon Trust Company, N.A., as trustee ("Indenture"). The Convertible Notes are due on December 1, 2025 , unless earlier repurchased, redeemed or converted, and accrue interest at a rate per annum equal to 7.25 % payable semi-annually in arrears on June 1 and December 1 of each year, with the initial payment on June 1, 2021 . During the year ended December 31, 2021 the Company recognized interest expense on the Convertible Notes of $ 11.7 million. The Convertible Notes are the Company's senior, unsecured obligations and are (i) equal in right of payment with our existing and future senior, unsecured indebtedness; (ii) senior in right of payment to our existing and future indebtedness that is expressly subordinated to the Notes; (iii) effectively subordinated to our existing and future secured indebtedness, to the extent of the value of the collateral securing that indebtedness; and (iv) structurally subordinated to all existing and future indebtedness and other liabilities, including trade payables, and (to the extent we are not a holder thereof) preferred equity, if any, of our subsidiaries. At any time, noteholders may convert their Convertible Notes at their option into shares of the Company’s common stock, together, if applicable, with cash in lieu of any fractional share, at the then-applicable conversion rate. The initial conversion rate is 278.0094 shares of common stock per $1,000 principal amount of Convertible Notes, which represents an initial conversion price of approximately $ 3.60 per share of common stock. Noteholders that convert their Convertible Notes before December 1, 2022 will, in certain circumstances, be entitled to an additional cash payment representing the present value of any remaining interest payments on the Convertible Notes through December 1, 2022. The conversion rate and conversion price are subject to customary adjustments upon the occurrence of certain dilutive events. In addition, if certain corporate events that constitute a “Make-Whole Fundamental Change” (as defined in the Indenture) occur, then the conversion rate will, in certain circumstances, be increased for a specified period of time. The Convertible Notes are redeemable, in whole and not in part, at the Company’s option at any time on or after December 1, 2023 , at a cash redemption price equal to the principal amount of the Convertible Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date, but only if the last reported sale price per share of the Company’s common stock exceeds 130 % of the conversion price on (i) each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the trading day immediately before the date the Company sends the related redemption notice; and (ii) the trading day immediately before the date the Company sends such notice. In addition, calling the Convertible Notes will constitute a Make-Whole Fundamental Change, which will result in an increase to the conversion rate in certain circumstances for a specified period of time. The Convertible Notes have customary provisions relating to the occurrence of “Events of Default” (as defined in the Indenture), which include the following: (i) certain payment defaults on the Convertible Notes (which, in the case of a default in the payment of interest on the Convertible Notes, will be subject to a 30-day cure period); (ii) the Company’s failure to send certain notices under the Indenture within specified periods of time; (iii) the Company’s failure to comply with certain covenants in the Indenture relating to the Company’s ability to consolidate with or merge with or into, or sell, lease or otherwise transfer, in one transaction or a series of transactions, all or substantially all of the assets of the Company and its subsidiaries, taken as a whole, to another person; (iv) a default by the Company in its other obligations or agreements under the Indenture or the Convertible Notes if such default is not cured or waived within 60 days after notice is given in accordance with the Indenture; (v) certain defaults by the Company or any of its subsidiaries with respect to indebtedness for borrowed money of at least $ 7.5 million; (vi) the rendering of certain judgments against the Company or any of its subsidiaries for the payment of at least $7.5 million, where such judgments are not discharged or stayed within 60 days after the date on which the right to appeal has expired or on which all rights to appeal have been extinguished; and (vii) certain events of bankruptcy, insolvency and reorganization involving the Company or any of the Company’s significant subsidiaries . As of December 31, 2021 and December 31, 2020, the Company was in compliance with all such covenants. The Convertible Notes have a conversion option which was required to be bifurcated upon issuance and then periodically remeasured to fair value separately as an embedded derivative. The conversion option includes additional interest payments payable to the noteholders if converted prior to December 1, 2022 (the "Early Voluntary Conversion Option"). The conversion feature was bifurcated as recorded separately as an embedded derivative as (1) the conversion feature is not clearly and closely related to the debt instrument and is not considered to be indexed to the Company’s equity, (2) the conversion feature standing alone meets the definition of a derivative, and (3) the Convertible Notes are not remeasured at fair value each reporting period with changes in fair value recorded in the consolidated statement of operations. The initial embedded derivative liability of $ 4.6 million on the issuance date was recorded as a noncurrent liability in the consolidated balance sheet and is remeasured to fair value at each balance sheet date with a resulting gain or loss related to the change in the fair value being charged to other income (expense), net in the consolidated statement of operations. As of December 31, 2020, the fair value of the derivative liability was $ 18.4 million. As a result of the derivative liability and issuance costs of $ 9.7 million, a corresponding debt discount was recorded on the issuance date, which was netted against the principal amount of the Convertible Notes. As of December 31, 2020, the unamortized debt discount was $ 9.6 million. The Company amortizes the debt discount using the effective interest method over the term of the Convertible Notes, at a resulting effective interest rate of approximately 8.7 %. For the year ended December 31, 2020, the amortization of the Convertible Notes debt discount was $ 0.1 million, and was included in interest income (expense), net in the consolidated statements of operations. As of December 31, 2021 the fair value of the derivative liability was zero . The change in the fair value of the derivativ e liability of $ 18.4 million is included in other income (expense), net in the consolidated statement of operations for the year ended December 31, 2021. As of December 31, 2021 the unamortized debt discount was $ 6.3 million. For the year ended December 31, 2021 the amortization of the Convertible Notes debt discount was $ 1.6 million and is included in interest income (expense), net in the consolidated statements of operations. In October 2021, holders of Convertible Notes exchanged an aggregate of $ 20.2 million principal amount for 8,513,850 shares of the Company's common stock. As the Convertible Notes were exchanged for an amount over the fair value of shares issuable under the original conversion terms, the Company recorded an inducement loss of $ 9.8 million, included in other income (expense) in the consolidated statements of operations. In addition, the Company issued an aggregate of 427,804 shares of common stock to certain investors in consideration for a waiver of certain contractual lock-up provisions to which the Company agreed to in connection with prior offerings of its securities. The Company recorded an inducement loss of $ 1.4 million in other income (expense), net, in the consolidated statements of operations, related to these shares. In addition to the transaction discussed above, holders of Convertible Notes exchanged an aggregate of $ 15.6 million principal amount for 4,336,938 shares of the Company's common stock during the year ended December 31, 2021 . The Convertible Notes were converted under the Early Voluntary Conversion Option and the Company recognized a $ 0.9 million extinguishment loss, which is included in other income (expense), net in the consolidated statements of operations. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2021 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 9. Related Party Transactions On October 27, 2017, the Company entered into a Credit and Security Agreement and a Series B Convertible Preferred Stock Purchase Agreement with a private equity firm (“2017 Transaction”). The 2017 Transaction provided for the 2017 Term Loan, the issuance of Series B Preferred Stock (“Series B Preferred Stock”), and the issuance of a warrant to purchase Series B Preferred Stock (“Series B Preferred Stock Purchase Warrant”). The 2017 Term Loan accrued interest at a rate per annum equal to 9.5 % and was due October 27, 2022 . The 2017 Term Loan contained customary covenants, including a requirement to maintain a minimum unrestricted cash balance at all times of at least $ 5.0 million and was secured by all tangible and intangible property and assets of the Company, with the exception of its intellectual property. The total proceeds of $ 124.2 million from the 2017 Transaction were allocated to the 2017 Term Loan, Series B Preferred Stock, and the Series B Preferred Stock Purchase Warrant based on the relative fair value of the term loan, equity, and warrant issued. As a result, the Company allocated proceeds of $ 65.7 million to the 2017 Term Loan. As the proceeds allocated to the 2017 Term Loan are lower than the stated loan amount of $ 75.0 million, the resulting $ 9.3 million discount was amortized as interest expense using the effective interest method over the term of the loan. During the year ended December 31, 2020, the Company recognized interest expense of $ 7.5 million, inclusive of $ 2.1 million of discount amortization, respectively. The Term Loan was discharged in December 2020 in connection with the offering of Convertible Notes. In connection with the Company's initial public offering ("IPO"), on June 18, 2020, the Series B Preferred Stock Purchase Warrant became exercisable for 400,160 shares of common stock . On March 31, 2020, the Company entered into the First Amendment to the Credit Agreement (“Credit Agreement Amendment”), with the collateral agent and lender party thereto, providing for the payment of interest due and payable as of March 31, 2020 in shares of Series B Preferred Stock, and further providing for the payment of interest due and payable as of June 30, 2020 in shares of the Series B Preferred Stock in the event the IPO has not been consummated by such date. Pursuant to the Credit Agreement Amendment, the Company concurrently entered into a Series B Preferred Stock Subscription Agreement (the “Subscription Agreement”), with the lender, which provided for the issuance of 967,130 shares of Series B Preferred Stock at a subscription price of $ 2.25 per share, as payment for interest due and payable as of March 31, 2020 and all applicable fees as set forth in the Credit Agreement Amendment. On May 8, 2020, the Company entered into an unsecured convertible promissory note (“Note”) with the same private equity firm pursuant to a note purchase agreement, in an aggregate principal amount of $ 15.0 million, with an annual interest rate of 8.0 % and a maturity date of May 8, 2022 . The Note was convertible into (i) common stock upon an initial public offering at the lesser of the conversion price then in effect and a conversion price equal to 80 % of the public offering price (or, if not a “qualified IPO” as defined in the Company’s certificate of incorporation, at the election of a majority of the holders), (ii) on the maturity date or at the election of a majority of the holders, Series B preferred stock at an initial conversion price of $ 13.90 per share subject to certain adjustments, or (iii) at the election of a majority of the holders, shares of another class of equity securities issued by the Company in a future financing at 80 % of the price per share of such class of equity securities issued in such offering. Interest under the Note was not generally payable except that if the Note is not converted pursuant to its terms on or prior to the maturity date and there are not sufficient authorized and unissued shares of Series B preferred stock for issuance upon the conversion of the Note on the maturity date, then the Company is required to pay all outstanding principal and any accrued and unpaid interest under the Note in cash. If the holders of the Note have not elected to convert the Note prior to, or in connection with, any sale transaction or a liquidation, dissolution or winding up of the Company, either voluntary or involuntary, then, upon any such sale transaction or liquidation, dissolution or winding up of the Company, the Company would have been required to pay in cash the outstanding principal balance of the Note, together with accrued and unpaid interest thereon, plus a make whole premium of 50 % of the aggregate principal amount (less accrued and unpaid interest). The Company evaluated the economic features embedded in the Note and identified features that were required to be bifurcated and accounted for separately as a derivative. Accordingly, a derivative liability of $ 3.6 million was recorded on the issuance date of the Note and $ 3.8 million was subsequently reclassified to equity representing the fair value of the derivative liability on the date of extinguishment. The change in the fair value of the derivative liability of $ 0.2 million is included in other income (expense), net in the accompanying consolidated statements of operations. In June 2020, in connection with completion of the IPO, the Note was converted into 1,250,000 shares of common stock and all obligations under the Note were extinguished. Upon the conversion, the Company recorded a $ 3.6 million loss on extinguishment of the debt, which represented the difference between the carrying value of the Note and the derivative liability and the fair value of the shares of common stock issued to the Note holder of $ 3.4 million combined with amortization of the related debt discount of $ 0.2 million. The loss on extinguishment of debt was included in other income (expense), net in the accompanying consolidated statement of operations for the year ended December 31, 2020. The same private equity firm participated in the IPO and acquired 3,333,333 shares at a price of $ 15.00 per share, which was at par with the price to other investors. In December 2020, the private equity firm discharged any and all amounts owed and any obligations outstanding under the 2017 Term Loan in exchange for $ 78.5 million principal amount of Convertible Notes issued by the Company. The exchange was accounted for as an extinguishment of the 2017 Term Loan and resulted in $ 7.6 million of loss on extinguishment, which was included in other income (expense), net in the accompanying consolidated statement of operations for the year ended December 31, 2020 . This private equity firm also acquired an additional $ 25.0 million principal amount of Convertible Notes for cash in this private offering, which resulted in $ 103.5 million aggregate principal amount of the Convertible Notes acquired by this private equity firm (see Note 8). During the year ended December 31, 2021 the private equity firm entered into an agreement with the Company to waive its interest due of $ 3.6 million through June 1, 2021 and received 1,268,116 shares of common stock. For the years ended December 31, 2021 and 2020, the accrued interest expense related to the Convertible Notes held by this private equity firm wa s $ 0.6 million and $ 0.5 million, respectively. In December 2020, the same private equity firm participated in an underwritten public offering and acquired 4,128,440 shares as a price of $ 3.27 per share resulting in the proceeds to the Company of $ 13.2 million before expenses. In June 2021, this private equity firm participated in a private placement and acquired 8,097,166 units, representing 8,097,166 shares of common stock and warrants to purchase up to 8,097,166 shares of common stock at a price of $ 2.47 per unit (see Note 12 ). |
Mortgages Payable
Mortgages Payable | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
Mortgages Payable | Note 10. Mortgages Payable In January 2014, the Company executed a mortgage with Comerica Bank for $ 1.8 million for the purpose of acquiring property located in Ann Arbor, Michigan, which is used for laboratory testing and research purposes. The mortgage matured in 2024 and required monthly principal and interest payments at a fixed interest rate of 2.94 % plus a floating rate at LIBOR. As of December 31, 2020, the outstanding balance of this mortgage was $ 1.3 million. The Company paid off the remaining mortgage in November 2021. The Company also had a mortgage with American Bank of Commerce (originally executed in February 2008) outstanding on Avero’s property located in Lubbock, Texas, that matured in 2029 and required monthly principal and interest payments at an interest rate of 3.25 %. As of December 31, 2020 , the outstanding balance of this mortgage was $ 1.7 million and is included in liabilities held for sale. The remaining mortgage was paid off in December 2021 prior to the sale of Avero. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2021 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 11. Commitments and Contingencies Operating Leases The Company has entered into various noncancelable operating lease agreements, primarily for office space, laboratory space, and vehicles, which expire over the next one to five years . Minimum rent payments under operating leases are recognized on a straight-line basis over the term of the lease. Rent expense included in continuing operations for operating leases was $ 5.1 million and $ 5.9 million, for the years ended December 31, 2021 and 2020, respectively. As of December 31, 2021, net minimum payments under the non-cancelable operating leases were as follows (in thousands): Year ending December 31, Minimum 2022 $ 2,141 2023 1,086 2024 237 2025 208 2026 and thereafter 251 Total future minimum lease payments $ 3,923 Contingencies The Company, in the ordinary course of its business, can be involved in lawsuits, threats of litigation, and audit and investigative demands from third parties. While management is unable to predict the exact outcome of such matters, it is management’s current belief, that any potential liabilities of Avero or Progenity resulting from these contingencies, individually or in the aggregate, could have a material impact on the Company’s financial position and results of operations. The regulations governing government reimbursement programs (e.g., Medicaid, Tricare, and Medicare) and commercial payor reimbursement programs are complex and may be subject to interpretation. As a former provider of services to patients covered under government and commercial payor programs, post payment review audits, and other forms of reviews and investigations are routine. The Company believes it complies in all material respects with the statutes, regulations, and other requirements applicable to its laboratory operations. Federal Investigations In April 2018, the Company received a civil investigative demand from an Assistant U.S. Attorney (“AUSA”) for the Southern District of New York (“SDNY”) and a Health Insurance Portability and Accountability Act subpoena issued by an AUSA for the Southern District of California (“SDCA”) around legacy commercial practices. In May 2018, the Company received a subpoena from the State of New York Medicaid Fraud Control Unit. On July 21, 2020, July 23, 2020, and October 1, 2020, the Company entered into agreements ("the Agreements") with certain governmental agencies and the 45 states participating in the settlement (“State AGs”) to resolve, with respect to such agencies and State AGs, all of such agencies’ and State AGs’ outstanding civil, and, where applicable, federal criminal investigations described above. The Company paid approximately $ 5.0 million and $ 36.9 million as required by the Agreements during the years ended December 31, 2021 and 2020, respectively. The remaini ng amounts payable to the government will be subject to interest at a rate of 1.25 % per annum, and any or all amounts may be paid earlier at the option of the Company. Furthermore, the Company has agreed that, if during calendar years 2020 through 2023, and so long as amounts payable to the government remain unpaid, the Company receives any civil settlement, damages awards, or tax refunds, to the extent that the amounts exceed $ 5.0 million in a calendar year, it will pay 26 % of the amount received in such civil settlement, damages award, or tax refunds as an accelerated payment of the scheduled amounts set forth above, up to a maximum total acceleration of $ 4.1 million. During the year ended December 31, 2020, the Company received a tax refund of approximately $ 37.7 million related to the NOL carryback provisions available under the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) and made accelerated payments of approximately $ 7.5 million under the Agreements. The Company did no t receive any tax refunds during the year ended December 31, 2021. Non-Prosecution Agreement Effective July 21, 2020, the Company entered into the Non-Prosecution Agreement, pursuant to which the Company agreed with the DOJ to (i) pay the restitution provided for under the SDCA Civil Settlement Agreement, (ii) not commit any felonies, (iii) continue to implement a compliance and ethics program designed to prevent and detect violations of applicable fraud and kickback laws throughout its operations and (iv) fulfill certain other disclosure, reporting and cooperation obligations. The DOJ agreed that it will not prosecute the Company for any conduct described in the Non-Prosecution Agreement provided that the Company performs its obligations under the Non-Prosecution Agreement during the period from July 21, 2020 through July 21, 2021. The Non-Prosecution Agreement expired on July 21, 2021. Corporate Integrity Agreement In connection with the resolution of the investigated matters, and in exchange for the OIG’s agreement not to exercise its authority to permissively exclude the Company from participating in federal healthcare programs, effective July 21, 2020, the Company entered into a five-year Corporate Integrity Agreement with the OIG. The Corporate Integrity Agreement requires, among other matters, that the Company maintain a Compliance Officer, a Compliance Committee, board review and oversight of certain federal healthcare compliance matters, compliance programs, and disclosure programs; provide management certifications and compliance training and education; engage an independent review organization to conduct claims and arrangements reviews; and implement a risk assessment and internal review process. In view of the Company’s Strategic Transformation, including cessation of its Laboratory Operations, effective March 16, 2022 the OIG agreed to suspend the Company’s obligations under the Corporate Integrity Agreement except for the Company’s obligation to continue its engagement of an independent review organization to conduct billing claims reviews and reporting of those reviews to OIG with respect to ongoing reimbursement payments being received from federal healthcare programs for historical laboratory services performed by the Company prior to the Company’s cessation of services in the summer of 2021. The Company’s failure to comply with its remaining obligations under the Corporate Integrity Agreement could result in monetary penalties and/or the Company being excluded from participating in federal healthcare programs. Settlement Accruals As of December 31, 2020 , the Company had accrued an aggregate of $ 12.1 million associated with a potential settlement with the DOJ and the participating State Attorney Generals within accrued expenses and other current liabilities and as a reduction of revenue as reflected on the consolidated balance sheets as of December 31, 2020 and consolidated statement of operations for the year ended December 31, 2020. As of December 31, 2021, the Company’s accrual consists of $ 6.9 m illion in accrued expenses and other current liabilities and $ 0.2 million in other long-term liabilities. Colorado Recoupment On July 21, 2021, the Company received a letter from the Colorado Department of Health Care Policy and Financing, or the Department, informing the Company that, as a result of a post-payment review of Medicaid claims from October 2014 to June 2018, the Department is seeking recoupment for historical payments in an aggregate amount of approximately $ 5.7 million. In December 2021, the Company received additional correspondence informing them that the Department is seeking recoupment for an additional $ 3.3 million of historical payments from 2018. The historical payments for which the Department is seeking recoupment primarily related to the Company's Preparent expanded carrier screening tests primarily on the basis that such tests were not medically necessary. The Company previously entered into settlement agreements with 45 states including the State of Colorado as part of a settlement with respect to certain civil claims related to the Company's discontinued legacy billing practices for its non-invasive prenatal tests and microdeletion tests and the provision of alleged kickbacks or inducements to physicians and patients. The Company has disputed these claims of recoupment with the Department, filed an administrative complaint with the State of Colorado Office of Administrative Courts, and also seeks to offset such claims by an amount of approximately $ 1.9 million previously paid to the Department in connection with the state settlement agreements referred to above. At this preliminary stage, the Company is unable to predict the ultimate outcome of this action, and therefore cannot estimate the reasonably possible loss or range of loss, if any, that may result from this action. California Subpoena On July 19, 2021, the Company received a subpoena from the California Attorney General’s Office, Division of Public Rights, requesting documents and information related to Progenity’s former genetic testing practices, including NIPT, particularly those with a nexus to California patients. The subpoena is captioned “In the Matter of the Investigation of: Prenatal Genetic Testing Companies.” The Company continues to cooperate and provide information requested by the subpoena. At this preliminary stage, the Company is unable to predict the ultimate outcome of this action, and therefore cannot estimate the reasonably possible loss or range of loss, if any, that may result from any unfavorable outcome related to this action. Payor Settlement Agreements In December 2018 , the Company and Cigna entered into a settlement agreement whereby Avero agreed to pay an aggregate amount of $ 12.0 million. As of December 31, 2020 the settlement has been fully paid. In November 2019 , the Company and Aetna entered into a settlement agreement for $ 15.0 million. As of December 31, 2021 the settlement has been fully paid. On September 30, 2019 , the Company entered into a settlement agreement with United HealthCare Services, Inc. and UnitedHealthcare Insurance Company in which the Company agreed to pay an aggregate amount of $ 30.0 million. As of December 31, 2021 the settlement has been fully paid. Payor Recoveries As noted above, the regulations governing government reimbursement programs (e.g., Medicaid, Tricare, and Medicare) and commercial payor reimbursement programs are complex and may be subject to interpretation. As a former provider of services to patients covered under government reimbursement and commercial payor programs, the Company is routinely subject to post-payment review audits and other forms of reviews and investigations. If a third-party payor successfully challenges that a payment to the Company for prior testing was in breach of contract or otherwise contrary to policy or law, they may recoup such payment. The Company may also decide to negotiate and settle with a third-party payor in order to resolve an allegation of overpayment. In the ordinary course of business, the Company addresses and evaluates a number of such claims from payors. In the past, the Company has negotiated and settled these types of claims with third-party payors. The Company may be required to resolve further disputes in the future. While management is unable to predict the exact outcome of any such claims, it is management’s current belief that any potential liabilities resulting from these contingencies, individually or in the aggregate, could have a material impact on the Company’s financial position and results of operations. In connection with the third-party review of the Company’s coding and billing processes described in Note 5, which identified that the Company had not effectively transitioned to the implementation of the new CPT code for reimbursement for the Company’s Preparent expanded carrier screening tests during 2019 and early 2020, the Company reviewed its reimbursement from commercial payors for these tests over the same time period. The Company may need to engage with payors in order to determine if any amounts could be subject to recovery or recoupment, as it is customarily done with commercial payors. Any amounts subject to recovery or recoupment will depend on the interpretation of widely variable payor medical and billing policies. The Company will not know if any overpayments exist until it completes this engagement with individual commercial payors. If negotiations with payors result in claims or conclusions that overpayments have been made, this could have a material impact on the Company’s financial results and position. The Company is unable to predict the outcome of this matter and is unable to make a meaningful estimate of the amount or range of loss, if any, that could result from any unfavorable outcome related to this matter. Payor Dispute On November 16, 2020, the Company received a letter from Anthem, Inc. ("Anthem") informing the Company that Anthem is seeking recoupment for historical payments made by Anthem in an aggregate amount of approximately $ 27.4 million. The historical payments for which Anthem is seeking recoupment are claimed to relate primarily to discontinued legacy billing practices for the Company’s former NIPT and microdeletion tests and secondarily to the implementation of the new CPT code for reimbursement for the Company’s former Preparent expanded carrier screening tests. As noted above, the Company has historically negotiated and settled similar claims with third-party payors. Although the Company’s practice in resolving disputes with other similar large commercial payors has generally led to agreed settlement amounts substantially less than the originally claimed amount, there can be no assurance that the Company will be successful in a similar settlement amount in any ongoing or future dispute. Historical settlement amounts and payment time periods may not be indicative of the final settlement terms with Anthem, if any. Management disputes this claim of recoupment with Anthem in substantial part based on expired statutes of limitations and seeks to offset any amounts owed by Anthem to the Company. The Company has an accrual for the estimated probable loss for this matter as of December 31, 2021. OIG Inquiry On October 16, 2019, the Company received an inquiry from the Texas Health & Human Services Commission Office of Inspector General (“TX OIG”) alleging that the Company did not hold the required CLIA Laboratory Certificate of Accreditation to perform, bill for, or be reimbursed by the Texas Medicaid Program for certain tests performed by us from January 1, 2015 through December 31, 2018. The Company submitted a written response to the inquiry on October 23, 2019. In October 2021, the Company received a letter from the TX OIG asking the Company to renew its engagement on the matter. The Company continues to cooperate with TX OIG toward resolution of the matter. Although management believes that the Company holds and have held all required CLIA certificates and/or subcontract with third-party laboratories that hold and have held such certificates to perform all of the tests subject to the TX OIG inquiry, there can be no assurance that the TX OIG will agree with this position. The Company has recorded an accrual of $ 0.4 million for the estimated probable loss for this matter as of December 31, 2021. Natera Settlement On June 17, 2020, Natera, Inc. filed suit in the Western District of Texas (W.D. Texas Civil Action No. 6:20-cv-532) asserting the Company’s infringement of six Natera patents based on a portion of the Company’s NIPT product offering. In August 2021, the Company and Natera entered into a settlement agreement and thereafter the matter (and all related matters) were ordered dismissed by the courts in August 2021. The settlement agreement does not require a cash payment by the Company. Ravgen Lawsuit On December 22, 2020, Ravgen, Inc. ("Ravgen") filed suit in the District of Delaware (D. Del. Civil Action No. 1:20-cv-1734) two Ravgen patents based on the Company's former NIPT testing business. The complaint seeks monetary damages and injunctive relief. The Company responded to the complaint on March 23, 2021. Management believes the claims in Ravgen’s complaint are without merit, and the Company is vigorously defending against them. On March 1, 2022 the court ordered a stay of the litigation pending resolution of patent validity challenges made against the two patents in inter partes review proceedings currently pending before the Patent Trial and Appeal Board of the United States Patent and Trademark Office. IPO Litigation On June 23, 2020, the Company closed its IPO. Lawsuits were filed on August 28, 2020 and September 11, 2020 against the Company, certain of its executive officers and directors, and the underwriters of the IPO. On December 3, 2020, the U.S. District Court for the Southern District of California consolidated the two actions, appointed Lin Shen, Lingjun Lin and Fusheng Lin to serve as Lead Plaintiffs, and approved Glancy Prongay & Murray LLP to be Lead Plaintiffs’ Counsel. Lead Plaintiffs filed their first amended complaint on February 4, 2021. Together with the underwriters of the IPO, the Company moved to dismiss the first amended complaint. On September 1, 2021, the court granted the Company's motion to dismiss, dismissing Lead Plaintiffs’ claims without prejudice. On September 22, 2021, Lead Plaintiffs filed their second amended complaint. It alleges that the Company’s registration statement and related prospectus for the IPO contained false and misleading statements and omissions in violation of the Securities Act of 1933 by failing to disclose that (i) the Company had overbilled government payors for Preparent tests beginning in 2019 and ending in or before early 2020; (ii) there was a high probability that the Company had received, and would have to refund, a material amount of overpayments from government payors for Preparent tests; (iii) in February 2020 the Company ended a supposedly improper marketing practice on which the competitiveness of the Company's business depended; and (iv) the Company was suffering from material negative trends with respect to testing volumes, average selling prices for its tests, and revenues. Lead Plaintiffs seek certification as a class, unspecified compensatory damages, interest, costs and expenses including attorneys’ fees, and unspecified extraordinary, equitable, and/or injunctive relief. Together with the underwriters of the IPO, the Company moved to dismiss the second amended complaint on November 15, 2021. Lead Plaintiffs filed an opposition to the motion on January 14, 2022, and the Company filed a reply in support of the motion on February 22, 2022. The Company intends to continue to vigorously defend against these claims. Subject to a reservation of rights, the Company is advancing expenses subject to indemnification to the underwriters of the IPO. On June 4, 2021, a purported shareholder filed a lawsuit in the U.S. District Court for the Southern District of California, claiming to sue derivatively on behalf of the Company. The complaint names certain of the Company’s officers and directors as defendants, and names the Company as a nominal defendant. Premised largely on the same allegations as the above-described securities lawsuit, it alleges that the individual defendants breached their fiduciary duties to the Company, wasted corporate assets, and caused the Company to issue a misleading proxy statement in violation of the Securities Exchange Act of 1934. The complaint seeks the award of unspecified damages to the Company, equitable and injunctive remedies, and an order directing the Company to reform and improve its internal controls and board oversight. It also seeks the costs and disbursements associated with bringing suit, including attorneys’, consultants’, and experts’ fees. The case is stayed pending the outcome of the motion to dismiss in the above-described securities lawsuit. The Company intends to vigorously defend against these claims. On August 17, 2021, the Company received a letter purportedly on behalf of a stockholder of the Company demanding that the Company's Board of Directors investigate and take action against certain of the Company’s current and former officers and directors to recover damages for alleged breaches of fiduciary duties and related claims arising out of the IPO litigation discussed above. This matter is pending the outcome of the companion securities litigation. Given the uncertainty of litigation, the preliminary stages of the Ravgen and IPO litigations, and the legal standards that must be met for, among other things, success on the merits, the Company is unable to predict the ultimate outcome of these actions, and therefore cannot estimate the reasonably possible loss or range of loss, if any, that may result from these actions. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2021 | |
Stockholders Equity Note [Abstract] | |
Stockholders' Equity | Note 12. Stockholders’ Equity Common Stock Pursuant to the Company’s eighth amended and restated certificate of incorporation, which went into effect immediately prior to the completion of the IPO, the Company is authorized to issue 350,000,000 shares of common stock and 10,000,000 shares of undesignated preferred stock . Each holder of common stock is entitled to one vote per share of common stock held. On June 18, 2020, the Company completed its IPO. In the IPO, the Company issued and sold 6,666,667 shares of its common stock, at a price to the public of $ 15.00 per share. The Company received approximately $ 88.7 million in net proceeds, after deducting $ 7.0 million in underwriting discounts and commissions and $ 4.3 million in other offering expenses payable by the Company. Other offering costs consisted primarily of legal and accounting fees, which were direct and incremental fees related to the IPO. In December 2020, the Company issued and sold 8,792,047 shares of its common stock in an underwritten public offering, at a price of $ 3.27 per share. The Company received approximately $ 26.9 million in net proceeds, after deducting underwriting discounts and commissions and other offering expenses payable by the Company. In February 2021, the Company entered into a Securities Purchase Agreement for a private placement with certain institutional and accredited investors (“February Purchasers”). Pursuant to the Securities Purchase Agreement, the February Purchasers purchased an aggregate of 4,370,629 units (“February Units”), representing (i) 4,370,629 shares of the Company’s common stock and (ii) warrants to purchase up to 4,370,629 shares of common stock. The purchase price for each February Unit was $ 5.72 , for an aggregate purchase price of approximately $ 25.0 million. The warrants are exercisable for cash at an exercise price of $ 6.86 per share, subject to adjustments as provided under the terms of the warrants. The warrants are exercisable at any time for cash and expire on the fifth anniversary of the date of issuance. If exercised for cash, the warrants would result in additional gross proceeds to the Company of approximately $ 30.0 million. Pursuant to ASC 815-40, Derivatives and Hedging – Contracts in Entity’s Own Equity ("ASC 815"), the Company deemed the warrants to be liability classified and allocated the proceeds from issuance between the warrants and common stock using the with-and-without method. $ 12.8 million of the proceeds, equal to the fair value of the warrants determined using the Black-Scholes Model, were allocated to the warrant liability, and the remaining proceeds of $ 12.2 million were allocated to the common stock. The Company incurred a total of $ 1.4 million in issuance costs, which were allocated between the warrants and common stock on a relative fair value basis, $ 0.5 million and $ 0.9 million, respectively. The warrant liability was remeasured at $ 10.2 million as of March 31, 2021 and the Company recognized a gain on warrant liability in the amount of $ 2.6 million associated with this transaction during the three months ended March 31, 2021. On April 1, 2021, the registration statement to register the shares of common stock underlying the warrants was declared effective by the SEC. As a result, the warrants met the conditions to be classified in equity and the related warrant liability was reclassified from liability to equity on April 1, 2021. In June 2021, the Company entered into a Securities Purchase Agreement for a private placement with certain institutional and accredited investors (“June Purchasers”). Pursuant to the Securities Purchase Agreement, the June Purchasers purchased an aggregate of 16,194,332 units (“June Units”), representing (i) 15,694,332 shares of the Company’s common stock (ii) warrants to purchase up to 16,194,332 shares of common stock and (iii) pre-funded warrants to purchase up to 500,000 shares of common stock. The purchase price for each June Unit was $ 2.47 , for an aggregate purchase price of approximately $ 40.0 million. The warrants are exercisable for cash at an exercise price of $ 2.84 per share, subject to adjustments as provided under the terms of the warrants. The warrants are exercisable at any time and expire on the fifth anniversary of the date of issuance. If exercised for cash, the warrants would result in additional gross proceeds to the Company of approximately $ 46.0 million. The pre-funded warrants are exercisable at an exercise price of $ 0.001 per share and have no expiration date. In July 2021, the Company issued 500,000 shares of common stock as a result of the exercise of the outstanding pre-funded warrants at an exercise price of $ 0.001 per share. During the year ended December 31, 2021 , the Company issued 6,097,166 shares of common stock as a result of the exercise of outstanding warrants at an exercise price of $ 2.84 per share for proceeds of $ 17.3 million. Pursuant to ASC 815, the Company deemed the warrants to be liability classified and allocated the proceeds from issuance between the warrants and common stock using the with-and-without method. $ 26.6 million of the proceeds, equal to the fair value of the warrants determined using the Black-Scholes Model, were allocated to the warrant liability, and the remaining proceeds of $ 13.4 million were allocated to the common stock. The Company incurred a total of $ 2.1 million in issuance costs, which were allocated between the warrants and common stock on a relative fair value basis, $ 0.7 million and $ 1.4 million, respectively. The warrant liability was remeasured at $ 31.8 million as of June 30, 2021 and the Company recognized a loss on warrant liability in the amount of $ 5.1 million in the consolidated statements of operations during the three months ended June 30, 2021. On June 30, 2021, the registration statement to register the shares of common stock underlying the warrants was declared effective by the SEC. As a result, the warrants met the conditions to be classified in equity and the related warrant liability was reclassified from liability to equity on June 30, 2021. In August 2021, in order to raise capital to fund the Company's planned expenditures and meet its obligations, the Company issued and sold an aggregate of (i) 40,000,000 shares of common stock and (ii) warrants to purchase 40,000,000 shares of common stock in an underwritten public offering. Each share was sold together with one warrant to purchase one share of common stock at a combined public offering price of $ 1.00 per share of the common stock and the accompanying warrant. The warrants have an exercise price of $ 1.00 per share, are exercisable at any time, and will expire five years following the date of issuance. In addition, the Company granted the underwriter a 30-day option to purchase up to 6,000,000 shares of common stock ("Overallotment Stock Option") and/or warrants to purchase 6,000,000 shares of common stock (“Overallotment Warrant Option”) at a price of $ 0.99 per share of common stock and/or $ 0.01 per warrant. The warrants and Overallotment Warrant Options were issued in the money based on the public offering terms. The Company received approximately $ 37.4 million in net proceeds, after deducting underwriting discounts and commissions and other offering expenses payable by the Company. Pursuant to ASC 815, the Company deemed the Overallotment Stock Option to meet the scope exception for equity classification, and the warrants and Overallotment Warrant Option to be classified as a liability (collectively "the Warrant Liability") at fair value initially with subsequent changes in fair value recorded in earnings. The warrants were recorded at a fair value of $ 41.8 million and the Overallotment Warrant Option at a fair value of $ 6.2 million, both determined using the Black-Scholes Model. As the total fair value of the Warrant Liability exceeds the total proceeds of $ 37.4 million, the Company recorded a loss of the $ 8.1 million excess to loss on warrant liability in the consolidated statements of operations. Accordingly, there were no proceeds allocated to the common stock issued or the Overallotment Stock Option granted as part of this transaction. The Company incurred a total of $ 2.8 million in issuance costs, which were allocated between the warrants, Overallotment Warrant Option, common stock and Overallotment Stock Option on a relative fair value basis and expensed in the consolidated statements of operations. The Overallotment Warrant Option was partially exercised in August for warrants to purchase an aggregate of 1,932,000 shares of common stock and the Company recognized a gain on the warrant liability in the amount of $ 3.4 million in the consolidated statements of operations. The remaining Overallotment Warrant Option expired in September 2021 and the Company recognized a gain of $ 1.9 million in the consolidated statements of operations. The Warrant Liability was remeasured a t $ 18.7 million as of December 31, 2021 and the Company recognized a loss on warrant liability in the amount of $ 6.7 million i n the consolidated statements of operations during the year ended December 31, 2021. During the year ended December 31, 2021 , the Company issued 28,684,125 shares of c ommon stock as a result of the exercise of outstanding warrants at an exercise price of $ 1.00 per share for proceeds of $28.7 million. The Warrant Liability was remeasured upon exercise of the warrants throughout the period, resulting in a loss on warrant liability in the amount of $ 41.6 million in the consolidated statements of operations during the year ended December 31, 2021. In October 2021, the Company entered into a securities purchase agreement with certain institutional and accredited investors for the purchase and sale of 13,333,334 shares of the Company's common stock, at a purchase price of $ 1.50 per share in a registered direct offering. The Company received approximately $ 18.7 million in net proceeds, after deducting placement agent fees and other offering expenses payable by the Company. In November 2021, the Company entered into an At Market Issuance Sales Agreement ("ATM Sale Agreement") with B. Riley Securities, Inc., BTIG, LLC, and H.C. Wainwright & Co. LLC ("Agents"), pursuant to which the Company may offer and sell shares of common stock having an aggregate offering price of up to $ 90,000,000 , from time to time, in “at the market” offerings through the Agents. Sales of the shares of common stock, if any, will be made at prevailing market prices at the time of sale, or as otherwise agreed with the Agents. The Agents will receive a commission from the Company of up to 3.0 % of the gross proceeds of any shares of common stock sold under the ATM Sale Agreement. During the three months ended December 31, 2021, we received net proceeds of $ 4.6 million, after deducting commissions and other offering expenses, from the sale of 1,763,754 shares under the ATM Sale Agreement. The Company sold such shares at a weighted average purchase price of $ 2.84 per share. Convertible Preferred Stock As of December 31, 2019, the Company had outstanding Series A Preferred Stock and Series B Preferred Stock. In February 2020, the Company issued and sold an aggregate of 5,066,666 shares of Series B Preferred Stock at a purchase price of $ 2.25 per share to existing investors in exchange for aggregate consideration of approximately $ 11.4 million. On March 31, 2020, in connection with the Credit Agreement Amendment, which provided for the payment of interest due and payable as of March 31, 2020 and June 30, 2020 (only in the event the IPO had not been consummated by such date) in shares of Series B Preferred Stock, the Company issued an aggregate of 967,130 shares of Series B Preferred Stock at a subscription price of $ 2.25 per share to existing investors as payment for interest due and payable as of March 31, 2020 and all applicable fees. On April 3, 2020, the Company issued and sold an aggregate of 4,444,444 shares of its Series B Preferred Stock at a purchase price of $ 2.25 per share to existing investors in exchange for aggregate consideration of approximately $ 10.0 million in cash. The fair value of the preferred stock was estimated using a hybrid between a probability-weighted expected return method (“PWERM”) and option pricing model (“OPM”), estimating the probability weighted value across multiple scenarios, while using an OPM to estimate the allocation of value within one or more of these scenarios. Under a PWERM, the value of the Company’s various classes of stock was estimated based upon an analysis of future values for the Company assuming various future outcomes, including two IPO scenarios and one scenario contemplating the continued operation of the Company as a privately held enterprise. Guideline public company multiples were used to value the Company under its various scenarios. Share value for each class of stock was based upon the probability-weighted present value of expected future share values, considering each of these possible future outcomes, as well as the rights of each share class. The significant unobservable inputs into the valuation model used to estimate the fair value of the preferred stock include the timing of potential events (primarily the IPO) and their probability of occurring, the selection of guideline public company multiples, a discount for the lack of marketability of the common stock, and the discount rate used to calculate the present value of the estimated equity value allocated to each share class. In connection with the IPO, on June 18, 2020, all outstanding Series A Preferred Stock and Series B Preferred Stock converted into 33,443,562 shares of common stock, including the issuance of 2,045,522 shares of common stock pursuant to an adjustment in the conversion rate of all of the shares of Series B Preferred Stock outstanding immediately prior to the IPO. Upon conversion of the convertible preferred stock, the Company reclassified their carrying value to common stock and additional paid-in capital. Common Stock Reserved for Future Issuance The Company reserved shares of common stock, on an as-if-converted basis, for future issuance as follows: December 31, December 31, Outstanding stock options to purchase common stock 8,640,951 4,268,945 Restricted stock units outstanding 3,879,110 1,468,765 Available for future issuance under equity incentive plans 13,649,346 2,938,616 Common stock warrants 26,183,830 400,160 Common stock issuable upon conversion of convertible notes 40,588,672 51,529,036 Total 92,941,909 60,605,522 |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2021 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock-Based Compensation | Note 13. Stock-Based Compensation In February 2018, the Company adopted the 2018 Equity Incentive Plan (“2018 Plan”). The 2018 Plan is the successor to and continuation of the Second Amended and Restated 2012 Stock Plan (“2012 Plan”) and the 2015 Consultant Stock Plan (“2015 Plan”) and is administered with either stock options or restricted stock units. The Board of Directors administers the plans. Upon adoption of the 2018 Plan, no new stock options or awards are issuable under the 2012 Plan, as amended, or the 2015 Plan. The 2018 Plan also provides for other types of equity to issue awards, which at this time the Company does not plan to utilize. The 2018 Plan was amended in March 2019 with 1,100,000 shares available for future grant. In December 2019, the Company adopted the Second Amended and Restated 2018 Equity Incentive Plan, which increased the number of shares available for future grant to 2,700,000 shares. On March 4, 2020, the Board of Directors adopted the Third Amended and Restated 2018 Equity Incentive Plan (“2018 Third Amended Plan”), which increased the number of shares available for future grant to a total of 7,615,733 shares and was approved by stockholders on March 5, 2020. The 2018 Third Amended Plan provides for automatic annual increase in the number of shares of common stock reserved for issuance, which resulted in an additional 4,537,676 shares reserved for future issuance effective January 1, 2021. On May 5, 2021, holders of a majority of the outstanding common stock executed a written consent approving the Fourth Amended and Restated 2018 Equity Incentive Plan ("2018 Fourth Amended Plan") and an increase of 7,700,000 shares authorized for issuance, resulting in a total of 19,853,409 shares authorized for issuance under the 2018 Fourth Amended Plan. On November 3, 2021, the Board of Directors approved and adopted the Company’s 2021 Inducement Plan ("2021 Inducement Plan") to provide for the reservation of 6,500,000 shares of the Company’s common stock to be used exclusively for the grant of awards to individuals not previously an employee or non-employee director of the Company. As of December 31, 2021, 13,649,346 shares were available for grant under the 2018 Fourth Amended Plan and the 2021 Inducement Plan. Stock Options The following table summarizes stock option activity, which includes Performance Awards, under the 2012 Plan, the 2015 Plan, the 2018 Fourth Amended Plan and the 2021 Inducement Plan during the year ended December 31, 2021: Stock Options Weighted- Weighted- Aggregate Balance at December 31, 2020 4,268,945 $ 8.14 Options granted 11,175,962 $ 3.52 Options exercised ( 323,266 ) $ 2.04 Options forfeited/cancelled ( 6,480,690 ) $ 5.01 Balance at December 31, 2021 8,640,951 $ 4.74 8.17 $ 235 Vested and expected to vest at December 31, 2021 8,640,951 $ 4.74 8.17 $ 235 Vested and exercisable at December 31, 2021 2,155,157 $ 7.35 4.63 $ 72 The aggregate intrinsic value in the above table is calculated as the difference between the closing price of our common stock at December 31, 2021 of $ 2.09 per share and the exercise price of stock options that had strike prices below the closing price. The intrinsic value of all stock options exercised during the year ended December 31, 2021 was $ 0.8 million. In January 2020 the Board of Directors approved the modification of the exercise price of certain outstanding stock options under the existing incentive plans. As a result of this modification, an additional stock-based compensation expense of $ 0.9 million is being recognized over the remaining vesting period for the outstanding stock options. The Company uses the Black-Scholes option pricing model to estimate the fair value of each option grant on the date of grant or any other measurement date. The following table sets forth the assumptions used to determine the fair value of stock options granted during the years ended December 31, 2021 and 2020: Year ended 2021 2020 Risk-free interest rate 0.6 % - 1.4 % 0.4 % - 1.7 % Expected volatility 52.9 % - 77.0 % 57.0 % - 71.0 % Expected dividend yield ― ― Expected life (years) 3.0 - 6.3 4.0 - 6.3 The weighted-average grant date fair value of options granted during the years ended December 31, 2021 and 2020 was $ 2.11 per option and $ 5.15 per option, respectively. Restricted Stock Units The following table summarizes RSU activity for the year ended December 31, 2021: Number of Shares Weighted- Balance at December 31, 2020 1,468,765 $ 8.73 Granted 5,810,122 $ 3.33 Vested ( 819,499 ) $ 6.69 Forfeited/cancelled ( 2,580,278 ) $ 4.63 Balance at December 31, 2021 3,879,110 $ 3.80 2020 Employee Stock Purchase Plan In June 2020, the Company’s board of directors adopted the ESPP with 510,000 shares of common stock reserved for future issuance under the ESPP. The ESPP also provides for automatic annual increases in the number of shares of common stock reserved for issuance, which resulted in an additional 557,723 shares reserved for future issuance effective January 1, 2021. As of December 31, 2021 there were 750,977 total shar es of common stock reserved for future issuance. The Company commenced a series of offerings under the ESPP on December 1, 2020. The initial offering began December 1, 2020, ends on November 30, 2022 (unless terminated earlier, as described below) and consists of four purchase periods. The purchase periods end on the last trading day of May and November of each year. Eligible employees who enroll in the initial offering or any subsequent offering will be able to purchase shares of the Company’s common stock at a discount through payroll deductions, subject to certain limitations. The purchase price of the shares of common stock will be the lesser of (i) 85 % of the fair market value of such shares on the offering date and (ii) 85 % of the fair market value of such shares on the purchase date. Following the commencement of the initial offering, a new 24 -month offering with four six-month purchase periods will automatically begin approximately every six months thereafter over the term of the ESPP. Offerings will be concurrent, but in the event the fair market value of a share of common stock on the first day of any purchase period during an offering (the “New Offering”) is less than or equal to the fair market value of a share of common stock on the offering date for an ongoing offering (the “Ongoing Offering”), then the Ongoing Offering terminates immediately following the purchase of shares on the purchase date immediately preceding the New Offering and the participants in the terminated Ongoing Offering are automatically enrolled in the New Offering. Notwithstanding the above, the Company’s board of directors (or an authorized committee thereof) may modify the terms of or suspend any future offerings prior to their commencement. The Company issues new shares for purchases of stock made pursuant to the ESPP. Stock-Based Compensation Expense The following table presents total stock-based compensation expense included in each functional line item in the accompanying consolidated statements of operations (in thousands): Year Ended 2021 2020 Cost of sales $ — $ — Research and development 3,584 2,804 Selling and marketing 224 215 General and administrative 8,154 5,225 Discontinued operations 1,594 2,424 Total stock-based compensation expense $ 13,556 $ 10,668 At December 31, 2021 there was $ 13.6 million of compensation cost related to unvested stock options expected to be recognized over a remaining weighted average vesting period of 2.94 years and $ 12.6 million of compensation cost related to unvested RSUs expected to be recognized over a remaining weighted average vesting period of 3.27 years. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 14. Income Taxes The provision for income taxes consists of the following (in thousands): Year Ended 2021 2020 Current provision: Federal $ — $ ( 37,697 ) State — 82 — ( 37,615 ) Deferred expense: Federal ( 119 ) 22 State — 61 ( 119 ) 83 Net income tax provision $ ( 119 ) $ ( 37,532 ) The components of income tax benefit fro m continuing operations relate to the following (in thousands): Year Ended 2021 2020 Income tax benefit at U.S. federal statutory rate $ ( 37,514 ) $ ( 29,950 ) NOL carryback and other true ups — ( 15,517 ) Government litigation settlements — 4,611 Federal research and development credit 2,978 ( 2,978 ) Convertible debt and warrant liability 12,225 740 Stock-based compensation 1,700 84 Change in valuation allowance 18,211 5,418 Other 2,281 60 Total income tax benefit $ ( 119 ) $ ( 37,532 ) Deferred income taxes reflect the net tax effects of (a) temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes, and (b) operating losses and tax credit carryforwards. Significant components of the Company's deferred tax assets and deferred tax liabilities as of December 31, 2021 and 2020 are presented below (in thousands): December 31, December 31, Deferred tax assets: Net operating losses and carryforwards $ 124,230 $ 87,329 Reserves 3,454 7,211 Intangible assets 1,571 3,878 Accrued expenses 1,447 1,816 Stock-based compensation 2,603 2,289 Convertible debt — 3,290 Other, net 112 — Total deferred tax assets 133,417 105,813 Deferred tax liabilities: Fixed assets ( 864 ) ( 1,698 ) Prepaid expenses ( 1,123 ) ( 1,146 ) Goodwill — ( 402 ) Adoption of ASC 606 ( 1,341 ) ( 2,824 ) Convertible debt ( 677 ) Other, net ( 33 ) — Total deferred tax liabilities ( 4,038 ) ( 6,070 ) Net deferred tax assets 129,379 99,743 Less: valuation allowance ( 129,379 ) ( 99,862 ) Net deferred tax assets (liabilities) $ — $ ( 119 ) The Company has established a valuation allowance against net deferred tax assets due to the uncertainty that such assets will be realized. The Company periodically evaluates the recoverability of the deferred assets. At such time as it is determined that it is more likely than not that the deferred tax asset will be realized, the valuation allowance will be reduced. The change in the valuation allowance for the year ended December 31, 2021 was an incre ase of $ 29.5 million . At December 31, 2021, the Company had federal and state income tax net operating loss (“NOL”) carryforwards of approximate ly $ 458.2 million and $ 221.7 million, respectively. The U.S. federal net operating losses will be carried forward indefinitely and state net operating losses will begin to expire in various years, depending on the applicable jurisdiction. Federal net operating loss carryforwards generated post TCJA may be carried forward indefinitely, subject to the 80 % taxable income limitation on the utilization of the carryforwards. In addition, the Company had federal and state research and expenditure credit carryforwards of approximately $ 8.7 million and $ 1.4 million, respe ctively, as of December 31, 2021 . The federal research and expenditure credit will begin to expire after 2033 if unused and the state research and expenditure credit may be carried forward indefinitely. Pursuant to Section 382 and Section 383 of the Internal Revenue Code, annual use of the Company’s net operating loss carryforwards and tax credit carryforwards may be limited as a result of cumulative changes of ownership resulting in a change of control of the Company. The Company performed a formal study through the date of the IPO and determined future utilization of tax attribute carryforwards are not limited per Section 382 of the Internal Revenue Code. The Company has not updated their 382 study since the IPO offering 2020. Any future changes may limit future utilization of tax attribute carryforwards. Due to the existence of the valuation allowance, limitations created by future ownership changes, if any, will not impact the Company's effective tax rate. In accordance with ASC 740-10, Income Taxes—Overall, the impact of an uncertain income tax position on the income tax return must be recognized at the largest amount that is more likely than not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will not be recognized if it has less than a 50 % likelihood of being sustained . The Company has no uncertain tax positions at December 31, 2021. The Company is subject to taxation in the United States, various US state jurisdictions. Multiple tax years remain open to examination depending on the applicable jurisdiction. The Company’s policy is to recognize interest and penalties related to income tax matters in the provision for income taxes. At December 31, 2021 , there were no interest and penalties related to uncertain tax positions. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was enacted. The CARES Act includes several significant provisions for corporations, including those pertaining to net operating loss carryforwards, interest deductions and payroll tax benefits. Corporate taxpayers may carryback NOLs originating during 2018 through 2020 for up to five years . During the first quarter of 2020, the Company recorded a discrete tax benefit of $ 37.7 million related to the NOL carryback provisions available under the CARES Act legislation corresponding to anticipated tax refunds applicable to taxable years 2013, 2014, 2015, and 2017. If any tax refund is received that is more than $ 5.0 million in a single year, along with other civil settlements, damages awards, and tax refunds, the Company has agreed to pay 65 % of all such amounts received to accelerate payments to the government in connection with our government settlement (see Note 11 ). During the year ended December 31, 2020, we received a full tax refund related to the NOL carryback provisions available under the CARES Act. There is no additional carryback for the year ended December 31, 2021 . |
Net Loss Per Share
Net Loss Per Share | 12 Months Ended |
Dec. 31, 2021 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | Note 15. Net Loss Per Share Net loss per share is computed by dividing net loss attributable to common stockholders for the period by the weighted average number of common shares outstanding during the period. Diluted loss per share reflects the additional dilution from potential issuances of common stock, such as stock issuable pursuant to the exercise of stock options, as well as from the possible conversion of the Company’s preferred stock and exercise of the outstanding warrant. The treasury stock and if-converted methods are used to calculate the potential dilutive effect of these common stock equivalents. However, potentially dilutive shares are excluded from the computation of diluted loss per share when their effect is antidilutive. Due to the Company reporting a net loss attributable to common stockholders for all periods presented, all potentially dilutive securities were antidilutive and have been excluded from the computation of diluted loss per share. The table below provides potentially dilutive securities in equivalent common shares not included in the Company’s calculation of diluted loss per share because to do so would be antidilutive: Year Ended 2021 2020 Stock options to purchase common stock 8,640,951 4,268,945 Restricted stock units 3,879,110 1,468,765 Common stock warrant 26,183,830 400,160 Common stock issuable upon conversion of Convertible Notes 40,588,672 51,529,036 Total 79,292,563 57,666,906 |
Employee Benefit Plan
Employee Benefit Plan | 12 Months Ended |
Dec. 31, 2021 | |
Compensation And Retirement Disclosure [Abstract] | |
Employee Benefit Plan | Note 16. Employee Benefit Plan The Company has a qualified 401(k) employee savings plan for the benefit of its employees ("401(k) Plan"). Substantially all employees are eligible to participate in the 401(k) Plan. Under the 401(k) Plan, employees can contribute and defer taxes on compensation contributed. The Company has the option to make discretionary profit-sharing contributions to the 401(k) Plan. The Company made employer contributions to the 401(k) Plan of $ 2.4 million and $ 2.9 million for the years ended December 31, 2021 and 2020 , respectively. |
Quarterly Financial Data (Unaud
Quarterly Financial Data (Unaudited) | 12 Months Ended |
Dec. 31, 2021 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Data (Unaudited) | Note 17. Quarterly Financial Data (Unaudited) The following tables present selected quarterly financial data for the years presented (in thousands, except per share data): Three Months Ended 2021 December 31, September 30, June 30, March 31, Revenues $ 435 $ 182 $ 463 $ 167 Loss from continuing operations ( 82,787 ) ( 36,874 ) ( 41,400 ) ( 17,460 ) Loss from discontinued operations ( 10,087 ) ( 6,870 ) ( 37,131 ) ( 14,803 ) Net loss ( 92,874 ) ( 43,744 ) ( 78,531 ) ( 32,263 ) Net loss attributable to common stockholders ( 92,874 ) ( 43,744 ) ( 78,531 ) ( 32,263 ) Net loss per share, basic and diluted ( 0.56 ) ( 0.46 ) ( 1.23 ) ( 0.56 ) 2020 Revenues $ 106 $ 56 $ — $ — Loss from continuing operations ( 52,526 ) ( 33,142 ) ( 32,627 ) 13,209 Loss from discontinued operations ( 23,002 ) ( 13,923 ) ( 20,156 ) ( 30,361 ) Net loss ( 75,528 ) ( 47,065 ) ( 52,783 ) ( 17,152 ) Net loss attributable to common stockholders ( 75,528 ) ( 47,065 ) ( 53,051 ) ( 17,152 ) Net loss per share, basic and diluted ( 1.53 ) ( 1.01 ) ( 6.11 ) ( 3.43 ) |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 18. Subsequent Events From January 1, 2022 thro ugh February 9, 2022, the Company received net proceeds of $ 3.6 million, after deducting commissions and other offering expenses, from the sale of 2,130,327 shares under the ATM Sale Agreement. The Company sold such shares at a weighted average purchase price of $ 1.76 per share. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The Company’s financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and include the accounts of Progenity, Inc., its wholly owned subsidiaries, and an affiliated professional partnership with Avero with respect to which the Company currently has a specific management arrangement. The Company has determined that Avero is a variable interest entity and that the Company is the primary beneficiary resulting in the consolidation of Avero as required by the accounting guidance for consolidation (see Note 3). All significant intercompany balances and transactions have been eliminated in consolidation. Certain amounts in prior periods have been reclassified to reflect the impact of the discontinued operations treatment of the Company's Laboratory Operations in order to conform to the current period presentation. As a result of the divestiture of the Laboratory Operations, the Company has retrospectively revised the consolidated statements of operations and the consolidated statement of cash flows for the year ended December 31, 2020 and the consolidated balance sheet as of December 31, 2020 , to reflect the operations and cash flows of the Laboratory Operations as discontinued operations and the related assets and liabilities as held for sale. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant items subject to such estimates include the estimate of variable consideration in connection with the recognition of revenue, the valuation of stock options, the valuation of goodwill and intangible assets, the valuation of the derivative liability associated with the Convertible Notes, accrual for reimbursement claims and settlements, the valuation of warrant liabilities, the valuation of assets held for sale, assessing future tax exposure and the realization of deferred tax assets, and the useful lives and the recoverability of property and equipment. The Company bases these estimates on historical and anticipated results, trends, and various other assumptions that the Company believes are reasonable under the circumstances, including assumptions as to future events. These estimates form the basis for making judgments about the carrying values of assets and liabilities and recorded revenues and expenses that are not readily apparent from other sources. Actual results could differ from those estimates and assumptions. |
Operating Segments | Operating Segments 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 or decision-making group in making decisions on how to allocate resources and assess performance. The Company views its operations and manages its business as one operating segment. All revenues are attributable to U.S.-based operations and all assets are held in the United States. |
Assets Held for Sale and Discontinued Operations | Assets Held for Sale and Discontinued Operations Assets and liabilities are classified as held for sale when all of the following criteria for a plan of sale have been met: (1) management, having the authority to approve the action, commits to a plan to sell the assets; (2) the assets are available for immediate sale, in their present condition, subject only to terms that are usual and customary for sales of such assets; (3) an active program to locate a buyer and other actions required to complete the plan to sell the assets have been initiated; (4) the sale of the assets is probable and is expected to be completed within one year; (5) the assets are being actively marketed for a price that is reasonable in relation to their current fair value; and (6) actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or the plan will be withdrawn. When all of these criteria have been met, the assets and liabilities are classified as held for sale in the consolidated balance sheet. Assets classified as held for sale are reported at the lower of their carrying value or fair value less costs to sell. Depreciation and amortization of assets ceases upon designation as held for sale. Discontinued operations comprise activities that were disposed of, discontinued or held for sale at the end of the period, represent a separate major line of business that can be clearly distinguished for operational and financial reporting purposes and represent a strategic business shift having a major effect on the Company’s operations and financial results according to Accounting Standard Codification (“ASC”) Topic 205, Presentation of Financial Statements . Additional details surrounding the Company's assets and liabilities held for sale and discontinued operations are included in Note 4 . |
Revenue Recognition | Revenue Recognition Revenue is recognized in accordance with the Financial Accounting Standards Board (“FASB”) ASC Topic 606 , Revenue from Contracts with Customers (“ASC 606”). In accordance with ASC 606, the Company follows a five-step process to recognize revenues: 1) identify the contract with the customer, 2) identify the performance obligations, 3) determine the transaction price, 4) allocate the transaction price to the performance obligations and 5) recognize revenues when the performance obligations are satisfied. Revenue is primarily derived from providing molecular testing products, which are reimbursed through arrangements with third-party payors, laboratory distribution partners, and amounts from individual patients. Third-party payors include commercial payors, such as health insurance companies, health maintenance organizations and government health benefit programs, such as Medicare and Medicaid. The Company’s contracts generally contain a single performance obligation, which is the delivery of the test results, and the Company satisfies its performance obligation at a point in time upon the delivery of the results, which then triggers the billing for the product. The amount of revenue recognized reflects the amount of consideration the Company expects to be entitled to the transaction price and considers the effects of variable consideration. Revenue is recognized when control of the promised product is transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those products. The Company applies the following practical expedients and exemptions: • Incremental costs incurred to obtain a contract are expensed as incurred because the related amortization period would be one year or less. The costs are included in selling and marketing expenses. • No adjustments to amounts of promised consideration are made for the effects of a significant financing component because the Company expects, at contract inception, that the period between the transfer of a promised good or service and customer payment for that good or service will be one year or less. |
Payor Concentration | Payor Concentration The Company relies upon reimbursements from third-party government payors and private-payor insurance companies to collect accounts receivable. The Company’s significant third-party payors and their related accounts receivable balances and revenues as a percentage of total accounts receivable balances and revenues are as follows: Percentage of Accounts Receivable December 31, December 31, Blue Shield of Texas 4.0 % 17.8 % Aetna * 4.0 % United Healthcare 7.2 % 6.6 % Government Health Benefits Programs 55.8 % 26.2 % Anthem * 3.5 % * Less than 1% Percentage of Revenue (1) Year Ended December 31, 2021 2020 Blue Shield of Texas 10.7 % 35.6 % Aetna 7.3 % 11.0 % Cigna 5.7 % 7.6 % United Healthcare 6.7 % 6.7 % Government Health Benefits Programs 23.2 % 3.7 % (1) Percentage of revenue table shows amounts as a percentage of total revenue, including revenue classified as discontinued operations. Refer to Note 5 for details of the breakdown of revenue. |
Accounts Receivable | Accounts Receivable Accounts receivable is recorded at the transaction price and considers the effects of variable consideration. The total consideration the Company expects to collect is an estimate and may be fixed or variable. Variable consideration includes reimbursement from third-party payors, laboratory distribution partners, and amounts from individual patients, and is adjusted for disallowed cases, discounts, and refunds using the expected value approach. The Company monitors these estimates at each reporting period based on actual cash collections in order to assess whether a revision to the estimate is required. Amounts included in accounts receivable consist of receivables generated from Progenity’s genetics laboratory in Ann Arbor, Michigan. The Company plans to continue to collect these receivables and has not included these amounts as assets held for sale. |
Cost of Sales | Cost of Sales The components of the Company’s cost of sales are materials and service costs, personnel costs, including stock-based compensation expense, equipment, and infrastructure expenses associated with processing blood and other samples, quality control analyses, shipping charges to transport samples and specimens from ordering physicians, clinics or individuals, third-party laboratory testing products, and allocated overhead including rent, information technology costs, equipment depreciation, and utilities. Costs associated with performing tests are recorded when the test is processed regardless of whether and when revenues are recognized with respect to such test. All costs of sales are associated with the Laboratory Operations and have been included in discontinued operations. |
Cash and Cash Equivalents including Concentration of Credit Risk | Cash and Cash Equivalents including Concentration of Credit Risk The Company considers all highly liquid investment instruments purchased with an initial maturity of three months or less to be cash equivalents. The Company limits its exposure to credit loss by placing its cash and cash equivalents in financial institutions with high credit ratings. The Company’s cash and cash equivalents may consist of deposits held with banks, money market funds, or other highly liquid investments that may at times exceed federally insured limits. Cash equivalents are financial instruments that potentially subject the Company to concentrations of risk, to the extent of amounts recorded in the balance sheets. The Company performs evaluations of its cash equivalents and the relative credit standing of these financial institutions and limits the amount of credit exposure with any one institution. Management believes that the Company is not exposed to significant credit risk due to the financial position of the depository institutions in which those deposits are held. |
Inventory | Inventory Inventory is stated at lower of cost (first-in, first-out method) or net realizable value. Inventory consists entirely of supplies, which are consumed when the Company is providing its test reports, and therefore the Company does not maintain any work in process or finished goods inventory. The Company reviews its inventory on a regular basis for excess and obsolete inventory based on an estimate for future consumption. Write-downs or losses of inventory are generally due to technological advances or new product introductions in the Company’s laboratory testing products. The Company believes that the estimates used in calculating the inventory provision are reasonable and properly reflect the risk of excess and obsolete inventory. All inventory is related to the Laboratory Operations and has been included in assets held for sale. Inventory write-downs amounted to $ 5.9 million and $ 0.1 million in the years ended December 31, 2021 and 2020, respectively. Write-downs for the year ended December 31, 2021 are included in discontinued operations. |
Property and Equipment, Net | Property and Equipment, Net Property and equipment are stated at cost. Assets acquired under capital leases are stated at the present value of future minimum lease payments. Depreciation is recognized on a straight-line basis over the estimated useful lives of the related assets as follows: Property and Equipment Estimated Useful Life (in years) Computers and software 3 Laboratory equipment 5 Furniture, fixtures, and office equipment 8 Building 15 Assets acquired under capital leases and leasehold improvements are amortized on a straight-line basis over the shorter of the lease term or the useful life of the asset. Land is not depreciated. |
Goodwill | Goodwill Goodwill is an asset representing the future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized. Goodwill is not amortized but instead is tested annually for impairment at the reporting unit level, or more frequently when events or changes in circumstances indicate that fair value of the reporting unit has been reduced to less than its carrying value. The Company may choose to perform a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform a quantitative assessment. If, after assessing qualitative factors, the Company determines it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then performing the two-step impairment test is unnecessary. If deemed necessary, a two-step test is used to identify the potential impairment and to measure the amount of goodwill impairment, if any. The first step is to compare the fair value of the reporting unit with its carrying amount, including goodwill. If the fair value of the reporting unit exceeds its carrying amount, goodwill is considered not impaired; otherwise, there is an indication that goodwill may be impaired and the amount of the loss, if any, is measured by performing step two. Under step two, the impairment loss, if any, is measured by comparing the implied fair value of the reporting unit goodwill with the carrying amount of goodwill. No impairment was recorded for the years ended December 31, 2021 and 2020. |
Intangible Assets | Intangible Assets, Net Intangible assets consist of identifiable intangible assets acquired through acquisitions. Identifiable intangible assets include payor relationships, trade names, and noncompete agreements. The Company amortizes payor relationships and trade names using the straight-line method over their useful lives. The Company amortizes noncompete covenants using the straight-line method over the terms of the related agreements. The Company reviews impairment for intangible assets with definite useful lives whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Recoverability of these assets is measured by a comparison of the carrying amounts to the undiscounted future cash flows the assets are expected to generate. If such review indicates that the carrying amount of intangible assets is not recoverable, the carrying amount of such assets is reduced to fair value. No impairment was recorded for the years ended December 31, 2021 and 2020. The amortization periods for the acquired intangible assets are: Intangible Assets Estimated Useful Life (in years) Trade names 10 Payor relationships 10 Noncompete agreements 6 There are no intangible assets remaining as of December 31, 2021 as they were included as part of the sale of Avero. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The Company accounts for the impairment of long-lived assets, such as property and equipment, by reviewing these assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If circumstances require a long-lived asset or asset group to be tested for possible impairment, the Company first compares undiscounted future cash flows expected to be generated by that asset or asset group to its carrying value. If the carrying value of the long-lived asset or asset group is not recoverable on an undiscounted-cash-flow basis, an impairment is recognized to the extent that the carrying value exceeds its fair value. No impairment was recorded as of December 31, 2021 and 2020 . |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company’s financial assets and liabilities are carried at fair value or at amounts that, because of their short-term nature, approximate current fair value, with the exception of its Convertible Notes, which are carried at amortized cost. The carrying value of the Company’s accounts receivable, accounts payable, and accrued expenses and other current liabilities are considered to be representative of their respective fair values because of their short-term nature (see Note 7). The carrying value of the Company’s mortgages payable approximates their estimated fair values because the instruments bear interest at rates, and have terms that are comparable to those available to the Company for similar loan instruments at December 31, 2020 . There were no mortgages payable outstanding as of December 31, 2021. |
Embedded Derivative Related to Convertible Notes | Embedded Derivative Related to Convertible Notes During 2020, the Company issued Convertible Notes with an embedded derivative that is required to be bifurcated from the host contract and remeasured to fair value at each balance sheet date. Any resulting gain or loss related to the change in the fair value of the embedded derivative is recorded to other income (expense), net in the consolidated statements of operations. Changes in the Company’s inputs and assumptions, such as the Company’s stock price and volatility of common stock, could result in material changes in the valuation in future periods. |
Common Stock Warrant Liability | Common Stock Warrant Liability The Company accounts for common stock warrants issued as freestanding instruments in accordance with applicable accounting guidance as either liabilities or as equity instruments depending on the specific terms of the warrant agreements. Warrants classified as liabilities are remeasured each period until settled or until classified as equity. Any resulting gain or loss related to the change in the fair value of the warrant liability is recorded to gain (loss) on warrant liability in the consolidated statements of operations. Changes in the Company’s inputs and assumptions, such as the Company’s stock price and volatility of common stock, could result in material changes in the valuation in future periods. |
Repair and Maintenance | Repair and Maintenance The Company incurs maintenance costs on its major equipment. Repair and maintenance costs are expensed as incurred. |
Research and Development | Research and Development Research and development expenses consist primarily of costs associated with performing research and development activities to develop new products. Research and development expenses also consist of personnel expenses, including salaries, bonuses, stock-based compensation expense, and benefits, and allocated overhead costs. Research and development expenses are expensed as incurred. |
Selling and Marketing | Selling and Marketing Selling and marketing expenses consist primarily of costs for communication, advertising, conferences, and other marketing events. Selling and marketing expenses also consist of personnel expenses, including salaries, bonuses, stock-based compensation expense, benefits, and allocated overhead costs. Selling and marketing expenses are expensed as incurred. Advertising expense for the years ended December 31, 2021 and 2020 amounted t o $ 0.6 million and $ 1.6 million, respectively. |
General and Administrative | General and Administrative General and administrative expenses consist primarily of personnel costs, including salaries, bonuses, stock-based compensation expense, and benefits, for the Company’s finance and accounting, legal, human resources, and other administrative teams. Additionally, these expenses include professional fees, including audit, legal, and recruiting services. General and administrative expenses are expensed as incurred. |
Stock-Based Compensation | Stock-Based Compensation Stock-based compensation related to stock options, restricted stock units (“RSUs”) and the 2020 Employee Stock Purchase Plan (“ESPP”) awards granted to the Company’s employees is measured at the grant date based on the fair value of the award. The fair value is recognized as expense over the requisite service period, which is generally the vesting period of the respective awards. Compensation related to service-based awards is recognized starting on the grant date on a straight-line basis over the vesting period, which is typically four years . For the ESPP, the requisite service period is generally the period of time from the offering date to the purchase date. In addition, the Company grants stock option awards that vest upon achievement of certain performance criteria ("Performance Awards"). The fair value is recognized as expense over the requisite service period when the Company has concluded that achieving the performance criteria is probable. The probability of achieving the performance criteria is assessed each reporting period. The Company accounts for the forfeitures in the period in which they occur. The fair value of RSUs is estimated based on the closing price of the Company's common stock on the date of the grant. The fair value of stock options, ESPP awards and Performance Awards is estimated using the Black-Scholes option-pricing model and is affected by the Company’s assumptions regarding a number of complex and subjective variables. These variables include, but are not limited to, the fair value of the common stock at the date of grant, the expected term of the awards, the expected stock price volatility over the term of the awards, risk-free interest rate, and dividend rate. The Company’s inputs and assumptions with respect to these variables are as follows: Fair Value of Common Stock — Prior to the IPO, the Company’s common stock was not publicly traded, therefore the Company estimated the fair value of its common stock. Following the IPO, the fair value of the Company’s common stock for awards with service-based vesting is the closing price of its common stock on the date of grant or other relevant determination date. Expected Term —The expected term represents the period that the stock-based awards are expected to be outstanding. The Company determines the expected term using the simplified method. The simplified method deems the term to be the average of the time-to-vesting and the contractual life of the options. For stock options granted to non-employees, the expected term equals the remaining contractual term of the option from the vesting date. For the ESPP, the expected term is the period of time from the offering date to the purchase date. Expected Volatility —Given the limited period of time the Company’s stock has been traded in an active market, the expected volatility is estimated by taking the average historical volatility for industry peers, consisting of several public companies in the Company’s industry that are similar in size, stage, or financial leverage, over a period of time commensurate with the expected term of the awards. Risk-Free Interest Rate —The risk-free interest rate is calculated using the average of the published interest rates of U.S. Treasury zero-coupon issues with maturities that are commensurate with the expected term. Dividend Rate —The dividend yield assumption is zero , as the Company has no plans to pay dividends. |
Net Loss Per Share | Net Loss Per Share Basic and diluted net loss per share attributable to common stockholders is presented in conformity with the two-class method required for participating securities. The Company considers all series of preferred stock to be participating securities as the holders of such stock are entitled to receive non-cumulative dividends on an as-converted basis in the event that a dividend is paid on common stock. Under the two-class method, the net loss attributable to common stockholders is not allocated to the preferred stock as the holders of preferred stock do not have a contractual obligation to share in the Company’s losses. Under the two-class method, net income is attributed to common stockholders and participating securities based on their participation rights. Basic 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 shares of common stock outstanding during the period. Net loss attributable to common stockholders is calculated by adjusting net loss with dividends to preferred stockholders, if any. As the Company has reported net losses for all periods presented, all potentially dilutive securities are antidilutive and, accordingly, basic net loss per share equals diluted net loss per share. |
Income Taxes | Income Taxes The Company accounts for income taxes under the asset-and-liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50 % likely of being realized. Changes in recognition or measurement are recognized in the period in which the change in judgment occurs. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. |
Comprehensive Loss | Comprehensive Loss The Company did no t have any other comprehensive income or loss for any of the periods presented, and therefore comprehensive loss was the same as the Company’s net loss. |
Emerging Growth Company Status | Emerging Growth Company Status The Company is an emerging growth company (“EGC”), as defined in the Jumpstart Our Business Startups Act of 2012 (“JOBS Act”). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. The Company has elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that it (i) is no longer an emerging growth company or (ii) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act. As a result, these consolidated financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates. |
Recent Accounting Pronouncements Adopted | Recent Accounting Pronouncements Adopted In December 2019, FASB issued Accounting Standards Update (“ASU”) No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes , which simplified income tax accounting in various areas. The Company adopted this standard on January 1, 2021 , which did no t have a material impact on the consolidated financial statements. |
Recent Accounting Pronouncements Not Yet Adopted | Recent Accounting Pronouncements Not Yet Adopted In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) , which supersedes FASB ASC Topic 840, Leases (Topic 840) , and provides principles for the recognition, measurement, presentation and disclosure of leases for both lessees and lessors. The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method for finance leases or on a straight-line basis over the term of the lease for operating leases. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases. In June 2020, the FASB issued ASU No. 2020-05, Revenue from Contracts with Customers (Topic 606) and Leases (Topic 842): Effective Dates for Certain Entities, which further defers the effective date for certain entities. As a result, the ASU is effective for EGCs for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. The Company adopted the provisions of this guidance on January 1, 2022, using the effective date method. As a result of adopting ASC 842, the Company recognized right-of-use assets and lease liabilities of $ 2.1 million and $ 2.2 million, respectively, on January 1, 2022. The difference between the right-of-use assets and lease liabilities is attribut ed to the elimination of deferred rent. There was no adjustment to the opening balance of accumulated deficit as a result of the adoption. The Company elected to use the package of practical expedients available in the new lease standard, allowing it not to reassess: (a) whether expired or existing contracts contain leases under the new definition of a lease; (b) lease classification for expired or existing leases; and (c) whether previously capitalized initial direct costs would qualify for capitalization under the new lease standard. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses , which requires the measurement of expected credit losses for financial instruments carried at amortized cost, such as accounts receivable, held at the reporting date based on historical experience, current conditions and reasonable forecasts. The main objective of this standard 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 No. 2018-19, Codification Improvements to Topic 326, Financing Instruments–Credit Losses , which included an amendment of the effective date. The standard is effective for the Company for annual reporting periods beginning after December 15, 2022. The Company does not expect the adoption of this standard to have a significant impact on its consolidated financial statements. In August 2020, the FASB issued ASU No. 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)-Accounting for Convertible Instruments and Contracts in an Entity's Own Equity , which simplifies the accounting for convertible instruments, amends the guidance on derivative scope exceptions for contracts in an entity's own equity, and modifies the guidance on diluted earnings per share calculations as a result of these changes. The standard is effective for the Company for annual reporting periods beginning after December 15, 2023. The Company is currently evaluating the impact the adoption of this standard may have on its consolidated financial statements. In May 2021, the FASB issued ASU No. 2021-04 , Issuer's Accounting for Certain Modification or Exchanges of Freestanding Equity-Classified Written Call Options , which provides a principles-based framework to determine whether an issuer should recognize the modification or exchange as an adjustment to equity or an expense. The amendments in the update are effective for the Company for fiscal years beginning January 1, 2022, including interim periods within those fiscal years with early adoption permitted. The Company does not expect the adoption of this standard to have a significant impact on its consolidated financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Schedule of Accounts Receivable Balances and Revenues as Percentage of Total Accounts Receivable Balances and Revenues | The Company relies upon reimbursements from third-party government payors and private-payor insurance companies to collect accounts receivable. The Company’s significant third-party payors and their related accounts receivable balances and revenues as a percentage of total accounts receivable balances and revenues are as follows: Percentage of Accounts Receivable December 31, December 31, Blue Shield of Texas 4.0 % 17.8 % Aetna * 4.0 % United Healthcare 7.2 % 6.6 % Government Health Benefits Programs 55.8 % 26.2 % Anthem * 3.5 % * Less than 1% Percentage of Revenue (1) Year Ended December 31, 2021 2020 Blue Shield of Texas 10.7 % 35.6 % Aetna 7.3 % 11.0 % Cigna 5.7 % 7.6 % United Healthcare 6.7 % 6.7 % Government Health Benefits Programs 23.2 % 3.7 % (1) Percentage of revenue table shows amounts as a percentage of total revenue, including revenue classified as discontinued operations. Refer to Note 5 for details of the breakdown of revenue. |
Summary of Estimated Useful Life of Property and Equipment | Property and Equipment Estimated Useful Life (in years) Computers and software 3 Laboratory equipment 5 Furniture, fixtures, and office equipment 8 Building 15 |
Summary of Amortization Periods for Acquired Intangible Assets | The amortization periods for the acquired intangible assets are: Intangible Assets Estimated Useful Life (in years) Trade names 10 Payor relationships 10 Noncompete agreements 6 |
Variable Interest Entity (Table
Variable Interest Entity (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Variable Interest Entities [Abstract] | |
Schedule of Assets and Liabilities | The following table presents the assets and liabilities of Avero that are included in the Company’s consolidated balance sheets as of December 31, 2020 (in thousands). The assets and liabilities that were included in the sale of Avero in December 2021 are included in assets and liabilities held for sale (see Note 4). The assets and liabilities exclude intercompany balances that eliminate in consolidation: December 31, Assets of Avero that can only be used to settle obligations of Avero Cash and cash equivalents $ 556 Accounts receivable, net 6,047 Inventory 3,382 Prepaid expenses and other current assets 1,254 Property and equipment, net 5,436 Other assets 30 Goodwill 147 Other intangible assets, net 3,843 Total assets of Avero that can only be used to settle obligations of Avero $ 20,695 Liabilities of Avero Accounts payable $ 4,722 Accrued expenses and other accrued liabilities 3,472 Current portion of capital lease obligations 46 Current portion of mortgage payable 199 Capital lease obligations, net of current portion 4 Mortgage payable, net of current portion 1,520 Other long-term liabilities 428 Total liabilities of Avero $ 10,391 |
Assets Held for Sale and Disc_2
Assets Held for Sale and Discontinued Operations (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Summary of Results of Discontinued Operations and Class of Assets and Liabilities | The following table presents the combined results of discontinued operations of the Laboratory Operations (in thousands): Year Ended December 31, 2021 2020 Revenues $ 59,362 $ 74,151 Cost of sales 63,741 93,433 Gross loss ( 4,379 ) ( 19,282 ) Operating expenses: Research and development 1,590 — Selling and marketing 38,753 46,938 General and administrative 18,247 21,349 Total operating expenses 58,590 68,287 Other income (expense), net ( 5,922 ) 127 Net loss from discontinued operations $ ( 68,891 ) $ ( 87,442 ) The following table presents the carrying amounts of the classes of assets and liabilities held for sale related to the Laboratory Operations as of December 31, 2021 and December 31, 2020 (in thousands): December 31, December 31, Carrying amounts of assets of disposal group held for sale Current assets: Accounts receivable, net $ — $ 6,047 Inventory — 12,220 Prepaid expenses and other current assets — 729 Total current assets of disposal group held for sale (1) 18,996 Property and equipment, net 2,147 9,735 Other assets — 30 Goodwill — 147 Other intangible assets, net — 3,843 Total assets of disposal group held for sale (1) $ 2,147 $ 32,751 Carrying amounts of liabilities of disposal group held for sale Current liabilities: Accrued expenses and other current liabilities — 272 Current portion of mortgages payable — 198 Current portion of capital lease obligations — 46 Total current liabilities of disposal group held for sale 516 Capital lease obligations, net of current portion — 4 Mortgages payable, net of current portion — 1,520 Total liabilities of disposal group held for sale $ — $ 2,040 (1) The assets of the remaining Progenity Laboratory Operations are classified as held for sale and are classified as current in the consolidated balance sheet at December 31, 2021 , because they are expected to be sold within one year. |
Revenues (Tables)
Revenues (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Revenue From Contract With Customer [Abstract] | |
Summary of Disaggregation of Revenues by Payor | The following tables show revenues disaggregated by payor type and revenue classification (in thousands): Year Ended December 31, 2021 2020 Commercial third-party payors $ 42,100 $ 64,433 Government health benefit programs (1) 14,085 2,731 Patient/laboratory distribution partners 4,424 7,149 Total revenues $ 60,609 $ 74,313 (1) The revenue amounts include accruals for reimbursement claims and settlements included in the estimates of variable consideration recorded during the years ended December 31, 2021 and 2020 . Revenues recognized reflect the effects of variable consideration, and include adjustments for estimates of disallowed cases, discounts, and refunds. The variable consideration includes reductions in revenues for the accrual for reimbursement claims and settlements. Year Ended December 31, Classification 2021 2020 Revenue from continuing operations $ 1,247 $ 162 Revenue from discontinued operations 59,362 74,151 Total revenues $ 60,609 $ 74,313 |
Balance Sheet Components (Table
Balance Sheet Components (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Summary of Prepaid Expenses and Other Current Assets | Prepaid expenses and other current assets consisted of the following (in thousands): December 31, December 31, Prepaid expenses $ 6,123 $ 8,521 Other current assets 1,109 111 Total $ 7,232 $ 8,632 |
Summary of Property and Equipment, Net | Property and equipment, net consisted of the following (in thousands): December 31, December 31, Computers and software $ 5,004 $ 6,150 Building and leasehold improvements 437 437 Laboratory equipment 2,688 3,044 Furniture, fixtures, and office equipment 1,142 1,143 Construction in progress 16 2,774 Land 346 346 Total property and equipment 9,633 13,894 Less accumulated depreciation and amortization ( 5,621 ) ( 5,788 ) Property and equipment, net $ 4,012 $ 8,106 |
Summary of Goodwill Activity | A summary of the activity in goodwill is presented below (in thousands): Balance at December 31, 2020 (1) $ 6,219 Reduction of goodwill related to disposition ( 147 ) Balance at December 31, 2021 $ 6,072 (1) The beginning balance as of December 31, 2020 includes the amount of Goodwill classified in assets held for sale. |
Summary of Accrued Expenses and Other Current Liabilities | Accrued expenses and other current liabilities consisted of the following (in thousands): December 31, December 31, Accrual for reimbursement claims and settlements, current (1) $ 18,127 $ 30,487 Commissions and bonuses 3,883 4,619 Vacation and payroll benefits 6,894 8,896 Accrued professional services 652 3,385 Accrued interest 802 855 Insurance financing 489 2,070 Contract liabilities 301 378 Other (2) 3,009 3,747 Total $ 34,157 $ 54,437 (1) All of the Company's revenues related to Progenity's Laboratory Operations have been discontinued, amounts related to the revenue reserve generated from the Progenity Laboratory Operations are not included in liabilities held for sale. (2) Included in this amount are contracts that Progenity will be responsible for that cannot be terminated, as there is no future benefit to the Company, they have been expensed in discontinued operations, but are not included in liabilities held for sale. |
Summary of Other Long-term Liabilities | Other long-term liabilities consisted of the following (in thousands): December 31, December 31, Accrual for reimbursement claims and settlements, net of current portion (1) $ 192 $ 7,053 Other (2) 5,622 1,614 Total $ 5,814 $ 8,667 (1) All of the Company's revenues related to Progenity's Laboratory Operations have been discontinued, amounts related to the revenue reserve generated from the Progenity Laboratory Operations are not included in liabilities held for sale. (2) Included in this amount are contracts that Progenity will be responsible for that cannot be terminated, as there is no future benefit to the Company, they have been expensed in discontinued operations, but are not included in liabilities held for sale. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Summary of Inputs and Assumptions used to Determine Fair Value of Warrant Liability | At December 31, 2021, the fair value of warrant liability was estimated using the Black-Scholes Model with the following inputs and assumptions: December 31, Risk-free interest rate 1.30 % Expected volatility 91.9 % Stock price $ 2.09 Expected life (years) 4.6 |
Summary of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis | The following table presents information about the Company’s assets and liabilities that are measured at fair value on a recurring basis and indicates the fair value hierarchy of the valuation techniques utilized to determine such fair value (in thousands): Level 1 Level 2 Level 3 December 31, 2021 Money market funds (1) $ 85,866 $ — $ — Warrant Liability $ — $ — $ 18,731 December 31, 2020 Money market funds (1) $ 90,254 $ — $ — Embedded derivative liability (2) $ — $ — $ 18,370 (1) Included in cash and cash equivalents in the accompanying consolidated balance sheets. (2) The fair value of the embedded derivative liability was zero as of December 31, 2021 . |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Commitments And Contingencies Disclosure [Abstract] | |
Schedule of Net Minimum Payments Under Non-Cancelable Operating Leases | As of December 31, 2021, net minimum payments under the non-cancelable operating leases were as follows (in thousands): Year ending December 31, Minimum 2022 $ 2,141 2023 1,086 2024 237 2025 208 2026 and thereafter 251 Total future minimum lease payments $ 3,923 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Stockholders Equity Note [Abstract] | |
Schedule of Reserved Shares of Common Stock, On An As-if-converted Basis, for Future Issuance | The Company reserved shares of common stock, on an as-if-converted basis, for future issuance as follows: December 31, December 31, Outstanding stock options to purchase common stock 8,640,951 4,268,945 Restricted stock units outstanding 3,879,110 1,468,765 Available for future issuance under equity incentive plans 13,649,346 2,938,616 Common stock warrants 26,183,830 400,160 Common stock issuable upon conversion of convertible notes 40,588,672 51,529,036 Total 92,941,909 60,605,522 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Summary of Stock Options Activity under Plans | The following table summarizes stock option activity, which includes Performance Awards, under the 2012 Plan, the 2015 Plan, the 2018 Fourth Amended Plan and the 2021 Inducement Plan during the year ended December 31, 2021: Stock Options Weighted- Weighted- Aggregate Balance at December 31, 2020 4,268,945 $ 8.14 Options granted 11,175,962 $ 3.52 Options exercised ( 323,266 ) $ 2.04 Options forfeited/cancelled ( 6,480,690 ) $ 5.01 Balance at December 31, 2021 8,640,951 $ 4.74 8.17 $ 235 Vested and expected to vest at December 31, 2021 8,640,951 $ 4.74 8.17 $ 235 Vested and exercisable at December 31, 2021 2,155,157 $ 7.35 4.63 $ 72 |
Summary of Assumptions used to Determine Fair Value of Stock Options Granted | The following table sets forth the assumptions used to determine the fair value of stock options granted during the years ended December 31, 2021 and 2020: Year ended 2021 2020 Risk-free interest rate 0.6 % - 1.4 % 0.4 % - 1.7 % Expected volatility 52.9 % - 77.0 % 57.0 % - 71.0 % Expected dividend yield ― ― Expected life (years) 3.0 - 6.3 4.0 - 6.3 The weighted-average grant date fair value of options granted during the years ended December 31, 2021 and 2020 was $ 2.11 per option and $ 5.15 per option, respectively. |
Summary of Restricted Stock Units Activity | The following table summarizes RSU activity for the year ended December 31, 2021: Number of Shares Weighted- Balance at December 31, 2020 1,468,765 $ 8.73 Granted 5,810,122 $ 3.33 Vested ( 819,499 ) $ 6.69 Forfeited/cancelled ( 2,580,278 ) $ 4.63 Balance at December 31, 2021 3,879,110 $ 3.80 |
Schedule of Stock-based Compensation Expense | The following table presents total stock-based compensation expense included in each functional line item in the accompanying consolidated statements of operations (in thousands): Year Ended 2021 2020 Cost of sales $ — $ — Research and development 3,584 2,804 Selling and marketing 224 215 General and administrative 8,154 5,225 Discontinued operations 1,594 2,424 Total stock-based compensation expense $ 13,556 $ 10,668 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Summary of Provision for Income Taxes | The provision for income taxes consists of the following (in thousands): Year Ended 2021 2020 Current provision: Federal $ — $ ( 37,697 ) State — 82 — ( 37,615 ) Deferred expense: Federal ( 119 ) 22 State — 61 ( 119 ) 83 Net income tax provision $ ( 119 ) $ ( 37,532 ) |
Summary of Components of Income Tax Benefit | The components of income tax benefit fro m continuing operations relate to the following (in thousands): Year Ended 2021 2020 Income tax benefit at U.S. federal statutory rate $ ( 37,514 ) $ ( 29,950 ) NOL carryback and other true ups — ( 15,517 ) Government litigation settlements — 4,611 Federal research and development credit 2,978 ( 2,978 ) Convertible debt and warrant liability 12,225 740 Stock-based compensation 1,700 84 Change in valuation allowance 18,211 5,418 Other 2,281 60 Total income tax benefit $ ( 119 ) $ ( 37,532 ) |
Summary of Deferred Tax Assets and Deferred Tax Liabilities | Significant components of the Company's deferred tax assets and deferred tax liabilities as of December 31, 2021 and 2020 are presented below (in thousands): December 31, December 31, Deferred tax assets: Net operating losses and carryforwards $ 124,230 $ 87,329 Reserves 3,454 7,211 Intangible assets 1,571 3,878 Accrued expenses 1,447 1,816 Stock-based compensation 2,603 2,289 Convertible debt — 3,290 Other, net 112 — Total deferred tax assets 133,417 105,813 Deferred tax liabilities: Fixed assets ( 864 ) ( 1,698 ) Prepaid expenses ( 1,123 ) ( 1,146 ) Goodwill — ( 402 ) Adoption of ASC 606 ( 1,341 ) ( 2,824 ) Convertible debt ( 677 ) Other, net ( 33 ) — Total deferred tax liabilities ( 4,038 ) ( 6,070 ) Net deferred tax assets 129,379 99,743 Less: valuation allowance ( 129,379 ) ( 99,862 ) Net deferred tax assets (liabilities) $ — $ ( 119 ) |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Earnings Per Share [Abstract] | |
Summary of Potentially Dilutive Securities Not Included in Calculation of Diluted Loss Per Share | The table below provides potentially dilutive securities in equivalent common shares not included in the Company’s calculation of diluted loss per share because to do so would be antidilutive: Year Ended 2021 2020 Stock options to purchase common stock 8,640,951 4,268,945 Restricted stock units 3,879,110 1,468,765 Common stock warrant 26,183,830 400,160 Common stock issuable upon conversion of Convertible Notes 40,588,672 51,529,036 Total 79,292,563 57,666,906 |
Quarterly Financial Data (Una_2
Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Quarterly Financial Information Disclosure [Abstract] | |
Summary of Quarterly Financial Data | The following tables present selected quarterly financial data for the years presented (in thousands, except per share data): Three Months Ended 2021 December 31, September 30, June 30, March 31, Revenues $ 435 $ 182 $ 463 $ 167 Loss from continuing operations ( 82,787 ) ( 36,874 ) ( 41,400 ) ( 17,460 ) Loss from discontinued operations ( 10,087 ) ( 6,870 ) ( 37,131 ) ( 14,803 ) Net loss ( 92,874 ) ( 43,744 ) ( 78,531 ) ( 32,263 ) Net loss attributable to common stockholders ( 92,874 ) ( 43,744 ) ( 78,531 ) ( 32,263 ) Net loss per share, basic and diluted ( 0.56 ) ( 0.46 ) ( 1.23 ) ( 0.56 ) 2020 Revenues $ 106 $ 56 $ — $ — Loss from continuing operations ( 52,526 ) ( 33,142 ) ( 32,627 ) 13,209 Loss from discontinued operations ( 23,002 ) ( 13,923 ) ( 20,156 ) ( 30,361 ) Net loss ( 75,528 ) ( 47,065 ) ( 52,783 ) ( 17,152 ) Net loss attributable to common stockholders ( 75,528 ) ( 47,065 ) ( 53,051 ) ( 17,152 ) Net loss per share, basic and diluted ( 1.53 ) ( 1.01 ) ( 6.11 ) ( 3.43 ) |
Organization and Description _2
Organization and Description of Business - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | |
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | ||||||||||
Cash and cash equivalents | $ 88,397 | $ 92,076 | $ 88,397 | $ 92,076 | ||||||
Accumulated deficit | (788,686) | (541,274) | (788,686) | (541,274) | ||||||
Net loss | (92,874) | $ (43,744) | $ (78,531) | $ (32,263) | (75,528) | $ (47,065) | $ (52,783) | $ (17,152) | (247,412) | (192,528) |
Cash used in operating activities | (167,486) | (165,744) | ||||||||
7.25% Convertible Senior Notes due 2025 | ||||||||||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | ||||||||||
Principal amount | $ 126,400 | $ 168,500 | $ 126,400 | $ 168,500 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Additional Information (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021USD ($)Segment | Dec. 31, 2020USD ($) | Jan. 01, 2022USD ($) | |
Summary Of Significant Accounting Policies [Line Items] | |||
Number of operating segment | Segment | 1 | ||
Inventory write-downs | $ 0 | $ 143 | |
Impairment of intangible assets | 0 | 0 | |
Intangible Assets, Current | 0 | ||
Impairment of long-lived assets | 0 | 0 | |
Advertising expense | $ 600 | $ 1,600 | |
Vesting period of stock options | 4 years | ||
Expected dividend yield | 0.00% | 0.00% | |
Minimum percentage of Recognized income tax positions | 50.00% | ||
Other comprehensive income or loss | $ 0 | ||
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Assets Current | ||
Accumulated deficit | (788,686) | $ (541,274) | |
Laboratory Operations | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Inventory write-downs | $ 5,900 | $ 100 | |
Adoption of ASC 606 | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Change in accounting principle, accounting standards update, adopted [true false] | true | ||
Accounting Standards Update 2019-12 | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Change in accounting principle, accounting standards update, adopted [true false] | true | ||
Change in accounting principle, accounting standards update, adoption date | Jan. 1, 2021 | ||
Change in accounting principle, accounting standards update, immaterial effect [true false] | true | ||
Adoption of ASC 842 | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Change in accounting principle, accounting standards update, adopted [true false] | true | ||
Adoption of ASC 842 | Subsequent Event | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Right-of-use assets | $ 2,100 | ||
Lease liabilities | $ 2,200 | ||
Accounting Standards Update 2016-13 | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Change in accounting principle, accounting standards update, adopted [true false] | false | ||
Accounting Standards Update 2020-06 | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Change in accounting principle, accounting standards update, adopted [true false] | false | ||
Mortgages [Member] | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Mortgages payable outstanding | $ 0 | ||
Maximum | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Amortization period | 1 year |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Schedule of Accounts Receivable Balances and Revenues as Percentage of Total Accounts Receivable Balances and Revenues (Details) - Customer Concentration Risk | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | ||
Blue Shield of Texas | Accounts Receivable | |||
Concentration Risk [Line Items] | |||
Percentage of accounts receivable | 4.00% | 17.80% | |
Blue Shield of Texas | Revenue | |||
Concentration Risk [Line Items] | |||
Percentage of revenues | [1] | 10.70% | 35.60% |
Government Health Benefits Programs | Accounts Receivable | |||
Concentration Risk [Line Items] | |||
Percentage of accounts receivable | 55.80% | ||
Government Health Benefits Programs | Revenue | |||
Concentration Risk [Line Items] | |||
Percentage of revenues | [1] | 23.20% | 3.70% |
Aetna | Accounts Receivable | |||
Concentration Risk [Line Items] | |||
Percentage of accounts receivable | 4.00% | ||
Aetna | Revenue | |||
Concentration Risk [Line Items] | |||
Percentage of revenues | [1] | 7.30% | 11.00% |
Cigna | Accounts Receivable | |||
Concentration Risk [Line Items] | |||
Percentage of accounts receivable | 6.60% | ||
Cigna | Revenue | |||
Concentration Risk [Line Items] | |||
Percentage of revenues | [1] | 5.70% | 7.60% |
United Healthcare | Accounts Receivable | |||
Concentration Risk [Line Items] | |||
Percentage of accounts receivable | 7.20% | 26.20% | |
United Healthcare | Revenue | |||
Concentration Risk [Line Items] | |||
Percentage of revenues | [1] | 6.70% | 6.70% |
[1] | Percentage of revenue table shows amounts as a percentage of total revenue, including revenue classified as discontinued operations. Refer to Note 5 for details of the breakdown of revenue. |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Summary of Estimated Useful Life of Property and Equipment (Details) | 12 Months Ended |
Dec. 31, 2021 | |
Computers and Software | |
Property Plant And Equipment [Line Items] | |
Estimated useful life of property and equipment | 3 years |
Laboratory Equipment | |
Property Plant And Equipment [Line Items] | |
Estimated useful life of property and equipment | 5 years |
Furniture, Fixtures, and Office Equipment | |
Property Plant And Equipment [Line Items] | |
Estimated useful life of property and equipment | 8 years |
Building | |
Property Plant And Equipment [Line Items] | |
Estimated useful life of property and equipment | 15 years |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Summary of Amortization Periods for Acquired Intangible Assets (Details) | 12 Months Ended |
Dec. 31, 2021 | |
Trade Names | |
Property Plant And Equipment [Line Items] | |
Useful life of intangible assets | 10 years |
Payor Relationships | |
Property Plant And Equipment [Line Items] | |
Useful life of intangible assets | 10 years |
Noncompete Agreements | |
Property Plant And Equipment [Line Items] | |
Useful life of intangible assets | 6 years |
Variable Interest Entity - Addi
Variable Interest Entity - Additional Information (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Jun. 30, 2015 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2018 | |
Variable Interest Entity [Line Items] | ||||
Liabilities | $ 193,815,000 | $ 261,434,000 | ||
Asset Purchase Agreement with Northwest Pathology | ||||
Variable Interest Entity [Line Items] | ||||
Assets and liabilities held for sale | 10,900,000 | |||
Avero | ||||
Variable Interest Entity [Line Items] | ||||
Term of agreement | 10 years | |||
Litigation settlement amount agreed to pay to other party | $ 12,000,000 | |||
Additional Financial Support | $ 0 | 0 | ||
Liabilities | 10,391,000 | |||
Avero | Cigna Settlement Obligation | ||||
Variable Interest Entity [Line Items] | ||||
Financial support for obligation settlement | $ 3,000,000 |
Variable Interest Entity - Sche
Variable Interest Entity - Schedule of Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Assets | ||
Cash and cash equivalents | $ 88,397 | $ 92,076 |
Accounts receivable, net | 653 | 6,634 |
Prepaid expenses and other current assets | 7,232 | 8,632 |
Property and equipment, net | 4,012 | 8,106 |
Other assets | 326 | 169 |
Goodwill | 6,072 | 6,072 |
Total assets | 108,839 | 154,440 |
Liabilities | ||
Accounts payable | 8,709 | 17,379 |
Current portion of capital lease obligations | 12 | 266 |
Current portion of mortgage payable | 72 | |
Capital lease obligations, net of current portion | 42 | |
Mortgage payable, net of current portion | 1,275 | |
Other long-term liabilities | 5,814 | 8,667 |
Total liabilities | $ 193,815 | 261,434 |
Avero | ||
Assets | ||
Cash and cash equivalents | 556 | |
Accounts receivable, net | 6,047 | |
Inventory | 3,382 | |
Prepaid expenses and other current assets | 1,254 | |
Property and equipment, net | 5,436 | |
Other assets | 30 | |
Goodwill | 147 | |
Other intangible assets, net | 3,843 | |
Total assets | 20,695 | |
Liabilities | ||
Accounts payable | 4,722 | |
Accrued expenses and other accrued liabilities | 3,472 | |
Current portion of capital lease obligations | 46 | |
Current portion of mortgage payable | 199 | |
Capital lease obligations, net of current portion | 4 | |
Mortgage payable, net of current portion | 1,520 | |
Other long-term liabilities | 428 | |
Total liabilities | $ 10,391 |
Assets Held for Sale and Disc_3
Assets Held for Sale and Discontinued Operations (Additional Information) (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Discontinued Operations and Disposal Groups [Abstract] | |
Loss on contract termination | $ 19.3 |
Gain (loss) on disposal of discontinued operation | 6 |
Proceeds from Sale of Other Assets | 10.9 |
Net Assets | 15.1 |
transaction costs | $ 1.8 |
Assets Held for Sale and Disc_4
Assets Held for Sale and Discontinued Operations - Summary of Results of Discontinued Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | ||
Revenue | $ 59,362 | $ 74,151 |
Cost of sales | 63,741 | 93,433 |
Gross loss | (4,379) | (19,282) |
Research and development | 1,590 | 0 |
Selling and marketing | 38,753 | 46,938 |
General and administrative | 18,247 | 21,349 |
Total operating expenses | 58,590 | 68,287 |
Interest and other (expense) income, net | (5,922) | 127 |
Loss from discontinued operations before income taxes | $ (68,891) | $ (87,442) |
Assets Held for Sale and Disc_5
Assets Held for Sale and Discontinued Operations - Summary of Carrying Amounts of the Classes of Assets and Liabilities of Discontinued Operations (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 | |
Current assets: | |||
Total current assets of disposal group held for sale (1) | $ 2,147 | $ 18,996 | |
Current liabilities: | |||
Total current liabilities of disposal group held for sale (1) | 516 | ||
Discontinued Operations, Held-for-sale [Member] | |||
Current assets: | |||
Accounts receivable, net | 6,047 | ||
Inventory | 12,220 | ||
Prepaid expenses and other current assets | 729 | ||
Total current assets of disposal group held for sale (1) | [1] | 18,996 | |
Property and equipment, net | 2,147 | 9,735 | |
Other assets | 30 | ||
Goodwill | 147 | ||
Other intangible assets, net | 3,843 | ||
Total assets of disposal group held for sale (1) | [1] | $ 2,147 | 32,751 |
Current liabilities: | |||
Accrued expenses and other current liabilities | 272 | ||
Current portion of mortgages payable | 198 | ||
Current portion of capital lease obligations | 46 | ||
Total current liabilities of disposal group held for sale (1) | [1] | 516 | |
Capital lease obligations, net of current portion | 4 | ||
Mortgages payable, net of current portion | 1,520 | ||
Total liabilities of disposal group held for sale (1) | [1] | $ 2,040 | |
[1] | (1) The assets of the remaining Progenity Laboratory Operations are classified as held for sale and are classified as current in the consolidated balance sheet at December 31, 2021 , because they are expected to be sold within one year. |
Revenues - Additional Informati
Revenues - Additional Information (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | |
Revenue From Contract With Customer [Abstract] | |||
Amount of reimbursement overpayment received from government payors | $ 10,000,000 | ||
Performance obligations resulted in increase (decrease) of revenue | $ 6,600 | $ 26,900 |
Revenues - Summary of Disaggreg
Revenues - Summary of Disaggregation of Revenues by Payor (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | ||
Disaggregation of Revenue [Line Items] | |||
Total revenues | $ 60,609 | $ 74,313 | |
Commercial Third-party Payors | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues | 42,100 | 64,433 | |
Government Health Benefit Programs | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues | [1] | 14,085 | 2,731 |
Patient/Laboratory Distribution Partners | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues | $ 4,424 | $ 7,149 | |
[1] | The revenue amounts include accruals for reimbursement claims and settlements included in the estimates of variable consideration recorded during the years ended December 31, 2021 and 2020 . Revenues recognized reflect the effects of variable consideration, and include adjustments for estimates of disallowed cases, discounts, and refunds. The variable consideration includes reductions in revenues for the accrual for reimbursement claims and settlements. |
Revenues - Summary Of Disaggr_2
Revenues - Summary Of Disaggregation Of Revenue classification (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Disaggregation of Revenue [Line Items] | ||
Total revenues | $ 60,609 | $ 74,313 |
Revenue from continuing operations | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 1,247 | 162 |
Revenue from Discontinued Operations | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | $ 59,362 | $ 74,151 |
Balance Sheet Components - Summ
Balance Sheet Components - Summary of Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | ||
Prepaid expenses | $ 6,123 | $ 8,521 |
Other current assets | 1,109 | 111 |
Total | $ 7,232 | $ 8,632 |
Balance Sheet Components - Su_2
Balance Sheet Components - Summary of Property and Equipment, Net (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 9,633 | $ 13,894 |
Less accumulated depreciation and amortization | (5,621) | (5,788) |
Property and equipment, net | 4,012 | 8,106 |
Computers and Software | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 5,004 | 6,150 |
Building and Leasehold Improvements | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 437 | 437 |
Laboratory Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 2,688 | 3,044 |
Furniture, Fixtures, and Office Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 1,142 | 1,143 |
Construction in Progress | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 16 | 2,774 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 346 | $ 346 |
Balance Sheet Components - Su_3
Balance Sheet Components - Summary of Goodwill Activity (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | ||
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Beginning Blalance | [1] | $ 6,219 | |
Reduction of goodwill related to disposition | $ 147 | ||
Ending Balance | $ 6,072 | ||
[1] | The beginning balance as of December 31, 2020 includes the amount of Goodwill classified in assets held for sale. |
Balance Sheet Components - Addi
Balance Sheet Components - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | ||
Depreciation expense | $ 1.4 | $ 1.4 |
Amortization expense of intangible assets | $ 0.5 | $ 0.9 |
Balance Sheet Components - Su_4
Balance Sheet Components - Summary of Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |||
Accrual for reimbursement claims and settlements, current | [1] | $ 18,127 | $ 30,487 |
Commissions and bonuses | 3,883 | 4,619 | |
Vacation and payroll benefits | 6,894 | 8,896 | |
Accrued professional services | 652 | 3,385 | |
Accrued interest | 802 | 855 | |
Insurance financing | 489 | 2,070 | |
Contract liabilities | 301 | 378 | |
Other | [2] | 3,009 | 3,747 |
Total | $ 34,157 | $ 54,437 | |
[1] | All of the Company's revenues related to Progenity's Laboratory Operations have been discontinued, amounts related to the revenue reserve generated from the Progenity Laboratory Operations are not included in liabilities held for sale. | ||
[2] | Included in this amount are contracts that Progenity will be responsible for that cannot be terminated, as there is no future benefit to the Company, they have been expensed in discontinued operations, but are not included in liabilities held for sale. |
Balance Sheet Components - Su_5
Balance Sheet Components - Summary of Other Long-term Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |||
Accrual for reimbursement claims and settlements, net of current portion | [1] | $ 192 | $ 7,053 |
Other | [2] | 5,622 | 1,614 |
Total | $ 5,814 | $ 8,667 | |
[1] | All of the Company's revenues related to Progenity's Laboratory Operations have been discontinued, amounts related to the revenue reserve generated from the Progenity Laboratory Operations are not included in liabilities held for sale. | ||
[2] | Included in this amount are contracts that Progenity will be responsible for that cannot be terminated, as there is no future benefit to the Company, they have been expensed in discontinued operations, but are not included in liabilities held for sale. |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Inputs and Assumptions used to Determine Fair Value of Warrant Liability (Details) - Level 3 - Warrant Liability | Dec. 31, 2021$ / shares |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |
Stock price | $ 2.09 |
Expected life (years) | 4 years 7 months 6 days |
Risk-free interest rate | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |
Measurement inputs | 0.0130 |
Expected volatility | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |
Measurement inputs | 0.919 |
Fair Value Measurements - Sum_2
Fair Value Measurements - Summary of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - Fair Value on Recurring Basis - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 | |
Level 1 | Warrant Liability | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Total liabilities at fair value | $ 0 | ||
Level 1 | Money Market Funds | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Total assets at fair value | [1] | 85,866 | $ 90,254 |
Level 1 | Embedded Derivative | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Total liabilities at fair value | [2] | 0 | |
Level 2 | Warrant Liability | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Total liabilities at fair value | 0 | ||
Level 2 | Money Market Funds | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Total assets at fair value | [1] | 0 | 0 |
Level 2 | Embedded Derivative | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Total liabilities at fair value | [2] | 0 | |
Level 3 | Warrant Liability | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Total liabilities at fair value | 18,731 | ||
Level 3 | Money Market Funds | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Total assets at fair value | [1] | $ 0 | 0 |
Level 3 | Embedded Derivative | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Total liabilities at fair value | [2] | $ 18,370 | |
[1] | (1) Included in cash and cash equivalents in the accompanying consolidated balance sheets. | ||
[2] | (2) The fair value of the embedded derivative liability was zero as of December 31, 2021 . |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Transfer of assets from level 1 to level 2 | $ 0 | $ 0 |
Transfer of assets from level 2 to level 1 | 0 | 0 |
Transfer of liability into level 3 | 0 | 0 |
Transfer of liability out of level 3 | 0 | 0 |
Carrying value of convertible notes, net of discount | 126,392,000 | 158,886,000 |
Fair value of convertible notes | $ 86,600,000 | $ 250,200,000 |
Convertible Notes - Additional
Convertible Notes - Additional Information (Details) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||
Oct. 31, 2021USD ($)shares | Dec. 31, 2020USD ($)$ / shares | Dec. 31, 2021USD ($) | Dec. 31, 2021USD ($)TradingDaysshares | Dec. 31, 2020USD ($)$ / shares | Dec. 01, 2020USD ($) | |
Debt Instrument [Line Items] | ||||||
Derivative liabilities fair value | $ 18,400 | $ 0 | $ 0 | $ 18,400 | $ 4,600 | |
Issuance costs | 9,700 | 9,700 | ||||
Unamortized discount | $ 9,600 | 6,300 | 6,300 | $ 9,600 | ||
Debt instrument, effective interest rate | 8.70% | 8.70% | ||||
Amortization of debt discount and non-cash interest | 1,572 | $ 3,656 | ||||
Interest income (expense), net | 12,636 | 9,915 | ||||
Stock Issued During Period Value Conversion Of Convertible Securities | $ 20,200 | $ 44,606 | 18,750 | |||
Stock Issued During Period Shares New Issues | shares | 4,336,938 | |||||
Inducement Loss | $ 9,800 | |||||
Gains Losses On Extinguishment Of Debt | $ 946 | 10,952 | ||||
Interest Expense | ||||||
Debt Instrument [Line Items] | ||||||
Amortization of debt discount and non-cash interest | 1,600 | |||||
Interest and Other Income (Expense), Net | ||||||
Debt Instrument [Line Items] | ||||||
Change in fair value of derivative liability | 18,400 | |||||
Minimum | ||||||
Debt Instrument [Line Items] | ||||||
Inducement Loss | 1,400 | |||||
7.25% Convertible Senior Notes due 2025 | ||||||
Debt Instrument [Line Items] | ||||||
Principal amount | $ 168,500 | 126,400 | $ 126,400 | $ 168,500 | ||
Debt instrument, annual interest rate | 7.25% | 7.25% | ||||
Debt instrument, issuance date | Dec. 7, 2020 | |||||
Debt instrument, frequency of periodic payment | semi-annually | |||||
Debt instrument due date | Dec. 1, 2025 | |||||
Debt instrument, initial payment date | Jun. 1, 2021 | |||||
Debt instrument, convertible, initial conversion rate per $1,000 principal amount of convertible notes | 278.0094 | |||||
Debt instrument convertible initial conversion price | $ / shares | $ 3.60 | $ 3.60 | ||||
Debt instrument, redemption period, start date | Dec. 1, 2023 | |||||
Debt instrument, convertible, threshold percentage of stock price trigger | 130.00% | |||||
Debt instrument, convertible, threshold trading days | TradingDays | 20 | |||||
Debt instrument, convertible, threshold consecutive trading days | TradingDays | 30 | |||||
Events of default, description | The Convertible Notes have customary provisions relating to the occurrence of “Events of Default” (as defined in the Indenture), which include the following: (i) certain payment defaults on the Convertible Notes (which, in the case of a default in the payment of interest on the Convertible Notes, will be subject to a 30-day cure period); (ii) the Company’s failure to send certain notices under the Indenture within specified periods of time; (iii) the Company’s failure to comply with certain covenants in the Indenture relating to the Company’s ability to consolidate with or merge with or into, or sell, lease or otherwise transfer, in one transaction or a series of transactions, all or substantially all of the assets of the Company and its subsidiaries, taken as a whole, to another person; (iv) a default by the Company in its other obligations or agreements under the Indenture or the Convertible Notes if such default is not cured or waived within 60 days after notice is given in accordance with the Indenture; (v) certain defaults by the Company or any of its subsidiaries with respect to indebtedness for borrowed money of at least $7.5 million; (vi) the rendering of certain judgments against the Company or any of its subsidiaries for the payment of at least $7.5 million, where such judgments are not discharged or stayed within 60 days after the date on which the right to appeal has expired or on which all rights to appeal have been extinguished; and (vii) certain events of bankruptcy, insolvency and reorganization involving the Company or any of the Company’s significant subsidiaries | |||||
Amortization of debt discount and non-cash interest | $ 100 | |||||
Interest income (expense), net | $ 11,700 | |||||
7.25% Convertible Senior Notes due 2025 | Minimum | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, debt default, amount | $ 7,500 | 7,500 | ||||
Common Stock [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Stock Issued During Period Value Conversion Of Convertible Securities | $ 13 | $ 1 | ||||
Stock Issued During Period Shares New Issues | shares | 8,513,850 | 75,162,049 | ||||
Common Stock [Member] | Minimum | ||||||
Debt Instrument [Line Items] | ||||||
Stock Issued During Period Shares New Issues | shares | 427,804 | |||||
Common Stock [Member] | Early Voluntary Conversion Option | ||||||
Debt Instrument [Line Items] | ||||||
Stock Issued During Period Value Conversion Of Convertible Securities | $ 15,600 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | Jun. 01, 2021 | Dec. 07, 2020 | May 08, 2020 | Oct. 27, 2017 | Oct. 31, 2021 | Jun. 30, 2021 | Jun. 30, 2020 | Sep. 30, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Aug. 31, 2021 | Jul. 31, 2021 | Dec. 01, 2020 | Jun. 18, 2020 | Apr. 03, 2020 | Mar. 31, 2020 | Feb. 29, 2020 |
Related Party Transaction [Line Items] | |||||||||||||||||
Interest income (expense), net | $ 12,636 | $ 9,915 | |||||||||||||||
Debt discount amortization | $ 1,572 | 3,656 | |||||||||||||||
Warrants exercisable | 28,684,125 | 1,932,000 | 500,000 | ||||||||||||||
Derivative liabilities fair value | $ 0 | 18,400 | $ 4,600 | ||||||||||||||
Loss on extinguishment of debt | $ (946) | $ (10,952) | |||||||||||||||
Issuance of common stock | 4,336,938 | ||||||||||||||||
Interest and Other Income (Expense), Net | |||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||
Change in fair value of derivative liability | $ 18,400 | ||||||||||||||||
Unsecured Convertible Promissory Note | |||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||
Debt instrument due date | May 8, 2022 | ||||||||||||||||
Debt discount amortization | $ 200 | ||||||||||||||||
Principal amount | $ 15,000 | ||||||||||||||||
Debt instrument, annual interest rate | 8.00% | ||||||||||||||||
Conversion price percentage on IPO price | 80.00% | ||||||||||||||||
Percentage of premium on aggregate principal amount | 50.00% | ||||||||||||||||
Derivative liabilities fair value | $ 3,600 | $ 3,800 | |||||||||||||||
Fair value of common shares issued | 3,400 | ||||||||||||||||
Unsecured Convertible Promissory Note | Interest and Other Income (Expense), Net | |||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||
Change in fair value of derivative liability | $ 200 | ||||||||||||||||
Loss on extinguishment of debt | $ (3,600) | ||||||||||||||||
IPO | |||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||
Issuance of common stock | 3,333,333 | ||||||||||||||||
Shares issued, price per share | $ 15 | ||||||||||||||||
IPO | Unsecured Convertible Promissory Note | |||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||
Number of shares on debt conversion | 1,250,000 | ||||||||||||||||
Series B Preferred Stock | |||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||
Preferred stock, shares issued | 4,444,444 | 5,066,666 | |||||||||||||||
Shares issued, price per share | $ 2.25 | ||||||||||||||||
Series B Preferred Stock | Unsecured Convertible Promissory Note | |||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||
Debt instrument convertible initial conversion price | $ 13.90 | ||||||||||||||||
Percentage of price per share | 80.00% | ||||||||||||||||
Common Stock | |||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||
Issuance of common stock | 8,513,850 | 75,162,049 | |||||||||||||||
Common Stock | IPO | |||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||
Issuance of common stock | 6,666,667 | ||||||||||||||||
Shares issued, price per share | $ 15 | ||||||||||||||||
Common Stock | Private Placement | |||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||
Issuance of common stock | 8,097,166 | ||||||||||||||||
Common Stock | Series B Preferred Stock Purchase Warrant | IPO | |||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||
Warrants exercisable | 400,160 | ||||||||||||||||
Warrant [Member] | Private Placement | |||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||
Shares issued, price per share | $ 2.47 | ||||||||||||||||
Issuance of common stock | 8,097,166 | ||||||||||||||||
Minimum | Common Stock | |||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||
Issuance of common stock | 427,804 | ||||||||||||||||
2017 Term Loan | |||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||
Interest income (expense), net | $ 3,600 | ||||||||||||||||
Principal amount | $ 103,500 | ||||||||||||||||
Loss on extinguishment of debt | $ (7,600) | ||||||||||||||||
Issuance of common stock | 1,268,116 | ||||||||||||||||
Exchanged for principal amount of convertible notes | $ 78,500 | ||||||||||||||||
Acquired additional principal amount | $ 25,000 | ||||||||||||||||
Accrued interest expense | $ 600 | $ 500 | |||||||||||||||
2017 Term Loan | Common Stock | IPO | |||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||
Shares issued, price per share | $ 3.27 | ||||||||||||||||
Common stock issued underwritten public offering price acquired | 4,128,440 | ||||||||||||||||
Gross proceeds from issuance of common stock underwritten public offering price | $ 13,200 | ||||||||||||||||
Credit and Security Agreement and Series B Convertible Preferred Stock Purchase Agreement with Private Equity Firm | |||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||
Interest income (expense), net | 7,500 | ||||||||||||||||
Debt discount amortization | $ 9,300 | $ 2,100 | |||||||||||||||
Principal amount | 75,000 | ||||||||||||||||
Credit and Security Agreement and Series B Convertible Preferred Stock Purchase Agreement with Private Equity Firm | Series B Preferred Stock | |||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||
Proceeds from term loan, preferred stock and preferred stock purchase warrant | $ 124,200 | ||||||||||||||||
Credit and Security Agreement and Series B Convertible Preferred Stock Purchase Agreement with Private Equity Firm | 2017 Term Loan | |||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||
Debt instrument, interest rate per annum | 9.50% | ||||||||||||||||
Debt instrument due date | Oct. 27, 2022 | ||||||||||||||||
Debt instrument, covenant description | The 2017 Term Loan contained customary covenants, including a requirement to maintain a minimum unrestricted cash balance at all times of at least $5.0 million and was secured by all tangible and intangible property and assets of the Company, with the exception of its intellectual property. | ||||||||||||||||
Proceeds from term loan | $ 65,700 | ||||||||||||||||
Credit and Security Agreement and Series B Convertible Preferred Stock Purchase Agreement with Private Equity Firm | 2017 Term Loan | Minimum | |||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||
Unrestricted cash | $ 5,000 | ||||||||||||||||
Subscription Agreement with Lender | Series B Preferred Stock | |||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||
Preferred stock, shares issued | 967,130 | ||||||||||||||||
Shares issued, price per share | $ 2.25 |
Mortgages Payable - Additional
Mortgages Payable - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Jan. 31, 2014 | |
Comerica Bank | |||
Debt Instrument [Line Items] | |||
Mortgages Payable | $ 1.8 | ||
Outstanding balance | $ 1.3 | ||
Mortgage maturity year | 2024 | ||
Comerica Bank | London Interbank Offered Rate (LIBOR) | |||
Debt Instrument [Line Items] | |||
Interest rate | 2.94% | ||
American Bank of Commerce | |||
Debt Instrument [Line Items] | |||
Outstanding balance | $ 1.7 | ||
Interest rate | 3.25% | ||
Mortgage maturity year | 2029 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) | Jul. 21, 2021USD ($) | Dec. 22, 2020Case | Dec. 03, 2020Case | Jul. 23, 2020USD ($) | Nov. 30, 2019USD ($) | Sep. 30, 2019USD ($) | Dec. 31, 2018USD ($) | Mar. 31, 2020USD ($) | Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) | Nov. 16, 2020USD ($) | Jul. 21, 2020State |
Commitment And Contingencies [Line Items] | ||||||||||||
Rent expense for operating leases | $ 5,100,000 | $ 5,900,000 | ||||||||||
Number of states participating in settlement | State | 45 | |||||||||||
Amount of offsets | $ 1,900,000 | |||||||||||
Income taxes civil settlement damages awards and tax refund amount in single year, CARES Act | $ 5,000,000 | |||||||||||
Income taxes percentage of payments related to civil settlement damages awards and tax refund, CARES Act | 65.00% | |||||||||||
Income tax discrete benefit related to net operating loss, CARES Act | $ 37,700,000 | 0 | ||||||||||
Accrual settlement amount | 12,100,000 | |||||||||||
Aggregate amount of historical payments | $ 5,700,000 | 3,300,000 | $ 27,400,000 | |||||||||
Number of actions pending | Case | 2 | 2 | ||||||||||
Amount of reimbursement overpayment received from government payors | $ 10,000,000 | |||||||||||
Avero | ||||||||||||
Commitment And Contingencies [Line Items] | ||||||||||||
Litigation settlement amount agreed to pay to other party | $ 12,000,000 | |||||||||||
TX OIG | ||||||||||||
Commitment And Contingencies [Line Items] | ||||||||||||
Amount accrued for probable loss | 400,000 | |||||||||||
Accrued Expenses And Other Current Liabilities | ||||||||||||
Commitment And Contingencies [Line Items] | ||||||||||||
Remaining accrual balance | 6,900,000 | |||||||||||
Other Long Term Liabilities | ||||||||||||
Commitment And Contingencies [Line Items] | ||||||||||||
Remaining accrual balance | 200,000 | |||||||||||
Cigna Settlement Obligation | ||||||||||||
Commitment And Contingencies [Line Items] | ||||||||||||
Litigation settlement agreement date | December 2018 | |||||||||||
Aetna Settlement Agreement | ||||||||||||
Commitment And Contingencies [Line Items] | ||||||||||||
Litigation settlement agreement date | November 2019 | |||||||||||
Litigation settlement amount agreed to pay to other party | $ 15,000,000 | |||||||||||
United Health Group Settlement Agreement | ||||||||||||
Commitment And Contingencies [Line Items] | ||||||||||||
Litigation settlement agreement date | September 30, 2019 | |||||||||||
Litigation settlement amount agreed to pay to other party | $ 30,000,000 | |||||||||||
SDNY Civil Settlement Agreement | ||||||||||||
Commitment And Contingencies [Line Items] | ||||||||||||
Initial payment amount | 5,000,000 | 36,900,000 | ||||||||||
Interest rate | 1.25% | |||||||||||
Income taxes percentage of payments related to civil settlement damages awards and tax refund, CARES Act | 26.00% | |||||||||||
Maximum acceleration amount | 4,100,000 | |||||||||||
Income tax discrete benefit related to net operating loss, CARES Act | $ 0 | 37,700,000 | ||||||||||
Accelerated payments | $ 7,500,000 | |||||||||||
Minimum | ||||||||||||
Commitment And Contingencies [Line Items] | ||||||||||||
Noncancelable operating lease term | 1 year | |||||||||||
Minimum | SDNY Civil Settlement Agreement | ||||||||||||
Commitment And Contingencies [Line Items] | ||||||||||||
Income taxes civil settlement damages awards and tax refund amount in single year, CARES Act | $ 5,000,000 | |||||||||||
Maximum | ||||||||||||
Commitment And Contingencies [Line Items] | ||||||||||||
Noncancelable operating lease term | 5 years |
Commitments and Contingencies_2
Commitments and Contingencies - Schedule of Net Minimum Payments Under Non-Cancelable Operating Leases (Details) $ in Thousands | Dec. 31, 2021USD ($) |
Commitments And Contingencies Disclosure [Abstract] | |
2022 | $ 2,141 |
2023 | 1,086 |
2024 | 237 |
2025 | 208 |
2026 and thereafter | 251 |
Total future minimum lease payments | $ 3,923 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Details) | Aug. 31, 2021USD ($)$ / sharesshares | Jun. 18, 2020USD ($)$ / sharesshares | May 08, 2020$ / sharesshares | Apr. 03, 2020USD ($)$ / sharesshares | Feb. 29, 2020USD ($)$ / sharesshares | Feb. 09, 2022USD ($)shares | Nov. 30, 2021USD ($) | Oct. 31, 2021USD ($)$ / sharesshares | Sep. 30, 2021USD ($) | Jun. 30, 2021USD ($)$ / sharesshares | Feb. 28, 2021USD ($)$ / sharesshares | Dec. 31, 2020USD ($)$ / sharesshares | Dec. 31, 2021USD ($)$ / sharesshares | Jun. 30, 2021USD ($)$ / sharesshares | Mar. 31, 2021USD ($) | Jun. 30, 2021USD ($)$ / sharesshares | Dec. 31, 2021USD ($)Vote$ / sharesshares | Dec. 31, 2020USD ($)$ / sharesshares | Jan. 01, 2022$ / shares | Jul. 31, 2021$ / sharesshares | Mar. 31, 2020$ / sharesshares | Dec. 31, 2019shares |
Class Of Stock [Line Items] | ||||||||||||||||||||||
Common stock authorized to issue | shares | 350,000,000 | 350,000,000 | 350,000,000 | 350,000,000 | ||||||||||||||||||
Preferred stock, shares authorized | shares | 10,000,000 | 10,000,000 | ||||||||||||||||||||
Number of vote per share of common stock held | Vote | 1 | |||||||||||||||||||||
Proceeds from issuance of common stock, net | $ 18,700,000 | $ 46,776,000 | $ 116,435,000 | |||||||||||||||||||
Stock Issued During Period Shares New Issues | shares | 4,336,938 | |||||||||||||||||||||
Stock Issued During Period Value New Issues | $ 46,554,000 | 24,005,000 | ||||||||||||||||||||
Warrants exercise price per share | $ / shares | $ 1 | $ 1 | $ 0.001 | |||||||||||||||||||
Proceeds from issuance of common stock warrants | $ 79,448,000 | 0 | ||||||||||||||||||||
Total issuance cost | $ 2,800,000 | $ 1,400,000 | $ 2,100,000 | |||||||||||||||||||
Warrant issuance cost | $ 700,000 | 500,000 | ||||||||||||||||||||
Common stock issuance cost | 1,400,000 | 900,000 | ||||||||||||||||||||
Remeasurement of warrant liability | $ 31,800,000 | $ 18,700,000 | $ 31,800,000 | $ 10,200,000 | 31,800,000 | 18,700,000 | ||||||||||||||||
Gain loss on warrant liability | 3,400,000 | $ 1,900,000 | $ (5,100,000) | $ 2,600,000 | 6,700,000 | |||||||||||||||||
Fair value of warrant | $ 41,800,000 | 54,157,000 | 0 | |||||||||||||||||||
Proceeds from exercise of common stock warrants | 46,000,000 | 0 | ||||||||||||||||||||
Proceeds from Warrant Exercises | 46,000,000 | 0 | ||||||||||||||||||||
Accumulated deficit | $ 541,274,000 | $ 788,686,000 | 788,686,000 | 541,274,000 | ||||||||||||||||||
Amount received in exchange for issuance of shares of preferred stock | $ 0 | $ 21,307,000 | ||||||||||||||||||||
Adjusted common stock purchase warrant to purchase shares of common stock | shares | 1,932,000 | 28,684,125 | 28,684,125 | 500,000 | ||||||||||||||||||
Series B Preferred Stock | ||||||||||||||||||||||
Class Of Stock [Line Items] | ||||||||||||||||||||||
Preferred stock, shares issued | shares | 4,444,444 | 5,066,666 | ||||||||||||||||||||
Shares issued, price per share | $ / shares | $ 2.25 | |||||||||||||||||||||
Amount received in exchange for issuance of shares of preferred stock | $ 10,000,000 | $ 11,400,000 | ||||||||||||||||||||
Shares issued, price per share | $ / shares | $ 2.25 | |||||||||||||||||||||
Accounting Standards Update 2017-12 [Member] | ||||||||||||||||||||||
Class Of Stock [Line Items] | ||||||||||||||||||||||
Proceeds from issuance of common stock, net | $ 12,200,000 | |||||||||||||||||||||
Proceeds from issuance of common stock warrants | $ 12,800,000 | |||||||||||||||||||||
Common Stock | ||||||||||||||||||||||
Class Of Stock [Line Items] | ||||||||||||||||||||||
Stock Issued During Period Shares New Issues | shares | 8,513,850 | 75,162,049 | ||||||||||||||||||||
Stock Issued During Period Value New Issues | $ 35,000 | |||||||||||||||||||||
Proceeds from issuance of common stock warrants | 13,400,000 | |||||||||||||||||||||
Shares outstanding | shares | 59,287,331 | 185,736,890 | 185,736,890 | 59,287,331 | 8,451,415 | |||||||||||||||||
Number of shares issued on conversion/exchange | shares | 33,443,562 | 13,278,592 | 1,250,000 | |||||||||||||||||||
Number of shares issued to an adjustment in the conversion rate | shares | 2,045,522 | |||||||||||||||||||||
Common Stock | Minimum | ||||||||||||||||||||||
Class Of Stock [Line Items] | ||||||||||||||||||||||
Stock Issued During Period Shares New Issues | shares | 427,804 | |||||||||||||||||||||
Common Stock | Accounting Standards Update 2017-12 [Member] | ||||||||||||||||||||||
Class Of Stock [Line Items] | ||||||||||||||||||||||
Proceeds from issuance of common stock warrants | $ 26,600,000 | |||||||||||||||||||||
Over allotment Warrant Option | ||||||||||||||||||||||
Class Of Stock [Line Items] | ||||||||||||||||||||||
Proceeds from issuance of common stock warrants | $ 37,400,000 | |||||||||||||||||||||
Gain loss on warrant liability | 8,100,000 | |||||||||||||||||||||
Fair value of warrant | $ 6,200,000 | |||||||||||||||||||||
Warrant Liability | ||||||||||||||||||||||
Class Of Stock [Line Items] | ||||||||||||||||||||||
Fair value of warrant | $ 41,600,000 | |||||||||||||||||||||
Securities Purchase Agreement | ||||||||||||||||||||||
Class Of Stock [Line Items] | ||||||||||||||||||||||
Proceeds from issuance of common stock, net | $ 17,300,000 | |||||||||||||||||||||
Securities Purchase Agreement | Subsequent Event [Member] | ||||||||||||||||||||||
Class Of Stock [Line Items] | ||||||||||||||||||||||
Proceeds from issuance of common stock, net | $ 3,600,000 | |||||||||||||||||||||
Stock Issued During Period Shares New Issues | shares | 2,130,327 | |||||||||||||||||||||
Shares issued, price per share | $ / shares | $ 1.76 | |||||||||||||||||||||
Securities Purchase Agreement | Common Stock | ||||||||||||||||||||||
Class Of Stock [Line Items] | ||||||||||||||||||||||
Stock Issued During Period Shares New Issues | shares | 13,333,334 | |||||||||||||||||||||
Shares issued, price per share | $ / shares | $ 1.50 | |||||||||||||||||||||
Credit Agreement Amendment | Series B Preferred Stock | ||||||||||||||||||||||
Class Of Stock [Line Items] | ||||||||||||||||||||||
Preferred stock, shares issued | shares | 967,130 | |||||||||||||||||||||
Shares issued, price per share | $ / shares | $ 2.25 | |||||||||||||||||||||
ATM Sale Agreement | ||||||||||||||||||||||
Class Of Stock [Line Items] | ||||||||||||||||||||||
Common stock issued and sold | shares | 1,763,754 | |||||||||||||||||||||
Shares issued, price per share | $ / shares | $ 2.84 | $ 2.84 | ||||||||||||||||||||
Proceeds from Sale of Equity | $ 4,600,000 | |||||||||||||||||||||
ATM Sale Agreement | B. Riley Securities, Inc and Other Agents | ||||||||||||||||||||||
Class Of Stock [Line Items] | ||||||||||||||||||||||
Stock Issued During Period Value New Issues | $ 90,000,000 | |||||||||||||||||||||
Rate of Commission Proposed for Agents | 3.00% | |||||||||||||||||||||
IPO | ||||||||||||||||||||||
Class Of Stock [Line Items] | ||||||||||||||||||||||
Shares issued, price per share | $ / shares | $ 15 | |||||||||||||||||||||
Stock Issued During Period Shares New Issues | shares | 3,333,333 | |||||||||||||||||||||
Stock Issued During Period Value New Issues | $ 88,665,000 | |||||||||||||||||||||
IPO | Common Stock | ||||||||||||||||||||||
Class Of Stock [Line Items] | ||||||||||||||||||||||
Common stock issued and sold | shares | 6,666,667 | |||||||||||||||||||||
Shares issued, price per share | $ / shares | $ 15 | |||||||||||||||||||||
Proceeds from issuance of common stock, net | $ 88,700,000 | |||||||||||||||||||||
Underwriting discounts and commissions | 7,000,000 | |||||||||||||||||||||
Other offering expenses | $ 4,300,000 | |||||||||||||||||||||
Stock Issued During Period Shares New Issues | shares | 6,666,667 | |||||||||||||||||||||
Stock Issued During Period Value New Issues | $ 7,000 | |||||||||||||||||||||
IPO | Common Stock | Series B Preferred Stock Purchase Warrant | ||||||||||||||||||||||
Class Of Stock [Line Items] | ||||||||||||||||||||||
Adjusted common stock purchase warrant to purchase shares of common stock | shares | 400,160 | |||||||||||||||||||||
Underwritten Public Offering | ||||||||||||||||||||||
Class Of Stock [Line Items] | ||||||||||||||||||||||
Shares issued, price per share | $ / shares | $ 1 | |||||||||||||||||||||
Warrants exercise price per share | $ / shares | $ 1 | |||||||||||||||||||||
Class Of Warrant Or Right Number Of Securities Called By Each Warrant Or Right | shares | 1 | |||||||||||||||||||||
Option Warrants Available To Purchase For Underwriters | shares | 6,000,000 | |||||||||||||||||||||
Proceeds from Issuance Initial Public Offering | $ 37,400,000 | |||||||||||||||||||||
Shares issued, price per share | $ / shares | $ 0.01 | |||||||||||||||||||||
Shares issued, price per share | $ / shares | $ 0.99 | |||||||||||||||||||||
Adjusted common stock purchase warrant to purchase shares of common stock | shares | 40,000,000 | |||||||||||||||||||||
Underwritten Public Offering | Maximum | ||||||||||||||||||||||
Class Of Stock [Line Items] | ||||||||||||||||||||||
Option Shares Available To Purchase For Underwriter | shares | 6,000,000 | |||||||||||||||||||||
Underwritten Public Offering | Common Stock | ||||||||||||||||||||||
Class Of Stock [Line Items] | ||||||||||||||||||||||
Common stock issued and sold | shares | 40,000,000 | 8,792,047 | ||||||||||||||||||||
Shares issued, price per share | $ / shares | $ 3.27 | $ 3.27 | ||||||||||||||||||||
Proceeds from issuance of common stock, net | $ 26,900,000 | |||||||||||||||||||||
Private Placement | Common Stock | ||||||||||||||||||||||
Class Of Stock [Line Items] | ||||||||||||||||||||||
Stock Issued During Period Shares New Issues | shares | 8,097,166 | |||||||||||||||||||||
Private Placement | Warrant Liability | ||||||||||||||||||||||
Class Of Stock [Line Items] | ||||||||||||||||||||||
Stock Issued During Period Shares New Issues | shares | 8,097,166 | |||||||||||||||||||||
Shares issued, price per share | $ / shares | $ 2.47 | $ 2.47 | $ 2.47 | |||||||||||||||||||
Private Placement | Securities Purchase Agreement | ||||||||||||||||||||||
Class Of Stock [Line Items] | ||||||||||||||||||||||
Stock Issued During Period Shares New Issues | shares | 16,194,332 | 4,370,629 | ||||||||||||||||||||
Stock Issued During Period Value New Issues | $ 40,000,000 | $ 25,000,000 | ||||||||||||||||||||
Warrants exercise price per share | $ / shares | $ 2.84 | $ 6.86 | $ 2.84 | 2.84 | 2.84 | $ 2.84 | ||||||||||||||||
Proceeds from issuance of common stock warrants | $ 46,000,000 | $ 30,000,000 | ||||||||||||||||||||
Shares issued, price per share | $ / shares | $ 2.47 | $ 5.72 | $ 2.47 | $ 2.47 | ||||||||||||||||||
Adjusted common stock purchase warrant to purchase shares of common stock | shares | 16,194,332 | 4,370,629 | 6,097,166 | 16,194,332 | 16,194,332 | 6,097,166 | ||||||||||||||||
Private Placement | Securities Purchase Agreement | Common Stock | ||||||||||||||||||||||
Class Of Stock [Line Items] | ||||||||||||||||||||||
Stock Issued During Period Shares New Issues | shares | 15,694,332 | 4,370,629 | ||||||||||||||||||||
Private Placement | Securities Purchase Agreement | Pre Funded Warrants | ||||||||||||||||||||||
Class Of Stock [Line Items] | ||||||||||||||||||||||
Warrants exercise price per share | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | |||||||||||||||||||
Adjusted common stock purchase warrant to purchase shares of common stock | shares | 500,000 | 500,000 | 500,000 |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Reserved Shares of Common Stock, On An As-if-converted Basis, for Future Issuance (Details) - shares | Dec. 31, 2021 | Dec. 31, 2020 |
Class Of Stock [Line Items] | ||
Common Stock Capital Shares Reserved For Future Issuance | 92,941,909 | 60,605,522 |
Common Stock Issuable Upon Conversion of Convertible Notes | ||
Class Of Stock [Line Items] | ||
Common Stock Capital Shares Reserved For Future Issuance | 40,588,672 | 51,529,036 |
Common Stock Warrant | ||
Class Of Stock [Line Items] | ||
Common Stock Capital Shares Reserved For Future Issuance | 26,183,830 | 400,160 |
Options to Purchase Common Stock | ||
Class Of Stock [Line Items] | ||
Common Stock Capital Shares Reserved For Future Issuance | 8,640,951 | 4,268,945 |
Restricted Stock Units Outstanding | ||
Class Of Stock [Line Items] | ||
Common Stock Capital Shares Reserved For Future Issuance | 3,879,110 | 1,468,765 |
Available for Future Issuance under Equity Incentive Plan | ||
Class Of Stock [Line Items] | ||
Common Stock Capital Shares Reserved For Future Issuance | 13,649,346 | 2,938,616 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Details) $ / shares in Units, $ in Thousands | May 05, 2021shares | Jun. 30, 2020PurchasePeriodsshares | Jan. 31, 2020USD ($) | Dec. 31, 2021USD ($)$ / sharesshares | Dec. 31, 2020USD ($)$ / sharesshares | Nov. 03, 2021shares | Jan. 01, 2021shares | Mar. 04, 2020shares | Dec. 31, 2019shares | Mar. 31, 2019shares | Feb. 28, 2018shares |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||
Common stock shares reserved for future issuance | 92,941,909 | 60,605,522 | |||||||||
Common stock, shares authorized | 350,000,000 | 350,000,000 | |||||||||
Closing market price of common tock | $ / shares | $ 2.09 | ||||||||||
Intrinsic value of all stock options exercised | $ | $ 800 | ||||||||||
Stock-based compensation expense | $ | $ 900 | $ 13,556 | $ 10,668 | ||||||||
Weighted-average grant date fair value of options granted | $ / shares | $ 2.11 | $ 5.15 | |||||||||
Unrecognized compensation cost related to unvested stock options expected to be recognized amount | $ | $ 13,600 | ||||||||||
Unrecognized compensation cost related to unvested stock options and RSUs expected to be recognized over remaining weighted average vesting period | 2 years 11 months 8 days | ||||||||||
Restricted Stock Units (RSUs) | |||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||
Common stock shares reserved for future issuance | 3,879,110 | 1,468,765 | |||||||||
Unrecognized compensation cost related to restricted stock options expected to be recognized amount | $ | $ 12,600 | ||||||||||
Unrecognized compensation cost related to unvested stock options and RSUs expected to be recognized over remaining weighted average vesting period | 3 years 3 months 7 days | ||||||||||
2015 Consultant Stock Plan | |||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||
Stock options issuable under the plan | 0 | ||||||||||
2018 Equity Incentive Plan | |||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||
Shares available for future grant | 1,100,000 | ||||||||||
Second Amended and Restated 2018 Equity Incentive Plan | |||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||
Shares available for future grant | 2,700,000 | ||||||||||
Third Amended and Restated 2018 Equity Incentive Plan | |||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||
Shares available for future grant | 7,615,733 | ||||||||||
2018 Third Amended Plan | |||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||
Common stock shares reserved for future issuance | 4,537,676 | ||||||||||
Stock Issued During Period Shares Period Increase Decrease | 7,700,000 | ||||||||||
Common stock, shares authorized | 19,853,409 | ||||||||||
2020 Employee Stock Purchase Plan | |||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||
Common stock shares reserved for future issuance | 510,000 | 750,977 | 557,723 | ||||||||
Percentage of fair market value of shares on the offering date | 85.00% | ||||||||||
Percentage of fair market value of shares on the purchase date | 85.00% | ||||||||||
Maximum duration for purchase under employee stock purchase plan | 24 months | ||||||||||
Number of purchase periods | PurchasePeriods | 4 | ||||||||||
Duration of each purchase period | 6 months | ||||||||||
Inducement Plan | |||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||
Shares available for future grant | 6,500,000 | ||||||||||
2018 Fourth Amended Plan and 2021 Inducement Plan | |||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||
Shares available for future grant | 13,649,346 |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Stock Options Activity under Plans (Details) $ / shares in Units, $ in Thousands | 12 Months Ended |
Dec. 31, 2021USD ($)$ / sharesshares | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock Options Outstanding Balance at December 31, 2020 | shares | 4,268,945 |
Stock Options Outstanding Options granted | shares | 11,175,962 |
Stock Options Outstanding Options exercised | shares | (323,266) |
Stock Options Outstanding Options forfeited/cancelled | shares | (6,480,690) |
Stock Options Outstanding Balance at December 31, 2021 | shares | 8,640,951 |
Stock Options Outstanding Vested and expected to vest at December 31, 2021 | shares | 8,640,951 |
Stock Options Outstanding Vested and exercisable at December 31, 2021 | shares | 2,155,157 |
Weighted-Average Exercise Price Balance at December 31, 2020 | $ / shares | $ 8.14 |
Weighted-Average Exercise Price Options granted | $ / shares | 3.52 |
Weighted-Average Exercise Price Options exercised | $ / shares | 2.04 |
Weighted-Average Exercise Price Options forfeited/cancelled | $ / shares | 5.01 |
Weighted-Average Exercise Price Balance at December 31, 2021 | $ / shares | 4.74 |
Weighted-Average Exercise Price Vested and expected to vest at December 30, 2021 | $ / shares | 4.74 |
Weighted-Average Exercise Price Vested and exercisable at December 30, 2021 | $ / shares | $ 7.35 |
Weighted-Average Remaining Contractual Term (in years) Balance at December 31, 2021 | 8 years 2 months 1 day |
Weighted-Average Remaining Contractual Term (in years) Vested and expected to vest at December 31, 2021 | 8 years 2 months 1 day |
Weighted-Average Remaining Contractual Term (in years) Vested and exercisable at December 31, 2021 | 4 years 7 months 17 days |
Aggregate Intrinsic Value Balance at December 31, 2021 | $ | $ 235 |
Aggregate Intrinsic Value Vested and expected to vest at December 31, 2021 | $ | 235 |
Aggregate Intrinsic Value Vested and exercisable at December 31, 2021 | $ | $ 72 |
Stock-Based Compensation - Su_2
Stock-Based Compensation - Summary of Assumptions used to Determine Fair Value of Stock Options Granted (Details) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Risk-free interest rate, minimum | 0.60% | 0.40% |
Risk-free interest rate, maximum | 1.40% | 1.70% |
Expected volatility, minimum | 52.90% | 57.00% |
Expected volatility, maximum | 77.00% | 71.00% |
Expected dividend yield | 0.00% | 0.00% |
Minimum | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Expected life (years) | 3 years | 4 years |
Maximum | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Expected life (years) | 6 years 3 months 18 days | 6 years 3 months 18 days |
Stock-Based Compensation - Su_3
Stock-Based Compensation - Summary of Restricted Stock Units Activity (Details) - Restricted Stock Units (RSUs) | 12 Months Ended |
Dec. 31, 2021$ / sharesshares | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Number of Shares, Beginning Balance | shares | 1,468,765 |
Number of Shares, Granted | shares | 5,810,122 |
Number of Shares, Vested | shares | (819,499) |
Number of Shares, Forfeited/cancelled | shares | (2,580,278) |
Number of Shares, Ending Balance | shares | 3,879,110 |
Weighted Average Grant Date Fair Value beginning of period | $ / shares | $ 8.73 |
Weighted Average Grant Date Fair Value, Granted | $ / shares | 3.33 |
Weighted Average Grant Date Fair Value, Vested | $ / shares | 6.69 |
Weighted Average Grant Date Fair Value, Forfeited/cancelled | $ / shares | 4.63 |
Weighted Average Grant Date Fair Value end of period | $ / shares | $ 3.80 |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Stock-based Compensation Expense (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |
Jan. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | |
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Stock-based compensation expense | $ 900 | $ 13,556 | $ 10,668 |
Cost of Sales | |||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Stock-based compensation expense | 0 | 0 | |
Research and Development | |||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Stock-based compensation expense | 3,584 | 2,804 | |
Selling and Marketing | |||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Stock-based compensation expense | 224 | 215 | |
General and Administrative | |||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Stock-based compensation expense | 8,154 | 5,225 | |
Discontinued operations | |||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Stock-based compensation expense | $ 1,594 | $ 2,424 |
Income Taxes - Summary of Provi
Income Taxes - Summary of Provision for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Current provision: | ||
Federal | $ 0 | $ (37,697) |
State | 0 | 82 |
Current provision | 0 | (37,615) |
Deferred expense: | ||
Federal | (119) | 22 |
State | 0 | 61 |
Deferred expense | (119) | 83 |
Net income tax provision | $ (119) | $ (37,532) |
Income Taxes - Summary of Compo
Income Taxes - Summary of Components of Income Tax Benefit (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Expense Benefit Continuing Operations [Abstract] | ||
Income tax benefit at U.S. federal statutory rate | $ (37,514) | $ (29,950) |
NOL carryback and other true ups | 0 | (15,517) |
Government litigation settlements | 0 | 4,611 |
Federal research and development credit | (2,978) | (2,978) |
Convertible debt | 12,225 | 740 |
Stock-based compensation | 1,700 | 84 |
Change in valuation allowance | 18,211 | 5,418 |
Other | 2,281 | 60 |
Net income tax provision | $ (119) | $ (37,532) |
Income Taxes - Summary of Defer
Income Taxes - Summary of Deferred Tax Assets and Deferred Tax Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Deferred tax assets: | ||
Net operating losses and carryforwards | $ 124,230 | $ 87,329 |
Reserves | 3,454 | 7,211 |
Intangible assets | 1,571 | 3,878 |
Accrued expenses | 1,447 | 1,816 |
Stock-based compensation | 2,603 | 2,289 |
Convertible debt | 0 | 3,290 |
Other, net | 112 | 0 |
Total deferred tax assets | 133,417 | 105,813 |
Deferred tax liabilities: | ||
Fixed assets | (864) | (1,698) |
Prepaid expenses | (1,123) | (1,146) |
Goodwill | 0 | (402) |
Adoption of ASC 606 | (1,341) | (2,824) |
Convertible Debt | (677) | |
Other, net | (33) | 0 |
Total deferred tax liabilities | (4,038) | (6,070) |
Net deferred tax assets | 129,379 | 99,743 |
Less: valuation allowance | (129,379) | (99,862) |
Net deferred tax assets (liabilities) | $ 0 | $ (119) |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax [Line Items] | |||
Change in valuation allowance | $ 29,500 | ||
Deferred tax assets, valuation allowance | 129,379 | $ 99,862 | |
Federal, net operating loss carryforwards | 458,200 | ||
State income tax, net operating loss carryforwards | $ 221,700 | ||
Federal net operating loss carryforwards, percentage of taxable income | 80.00% | ||
Uncertain tax positions | $ 0 | ||
Uncertain income tax position, description | An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained | ||
Interest and penalties related to uncertain tax positions | $ 0 | ||
Net operating loss carryback period in CARES Act | 5 years | ||
Income tax discrete benefit related to net operating loss, CARES Act | $ 37,700 | $ 0 | |
Income taxes civil settlement damages awards and tax refund amount in single year CARES Act | $ 5,000 | ||
Income taxes percentage of payments related to civil settlement damages awards and tax refund CARES Act | 65.00% | ||
Minimum | |||
Income Tax [Line Items] | |||
Percentage of shift in stock ownership to determine whether ownership change occurred | 50.00% | ||
Federal | |||
Income Tax [Line Items] | |||
Research and expenditure credit carryforwards | $ 8,700 | ||
Federal | Research and Expenditure Credit Carryforwards | |||
Income Tax [Line Items] | |||
Net operating loss carryforwards, expiration date | Dec. 31, 2033 | ||
State and Local Jurisdiction | |||
Income Tax [Line Items] | |||
Research and expenditure credit carryforwards | $ 1,400 |
Net Loss Per Share - Summary of
Net Loss Per Share - Summary of Potentially Dilutive Securities Not Included in Calculation of Diluted Loss Per Share (Details) - shares | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Options to Purchase Common Stock | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Antidilutive securities not included in calculation of diluted loss per share | 8,640,951 | 4,268,945 |
Restricted Stock Units (RSUs) | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Antidilutive securities not included in calculation of diluted loss per share | 3,879,110 | 1,468,765 |
Common Stock Warrant | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Antidilutive securities not included in calculation of diluted loss per share | 26,183,830 | 400,160 |
Common Stock Issuable Upon Conversion Of Convertible Notes | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Antidilutive securities not included in calculation of diluted loss per share | 40,588,672 | 51,529,036 |
Series A Preferred Stock | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Antidilutive securities not included in calculation of diluted loss per share | 79,292,563 | 57,666,906 |
Employee Benefit Plan - Additio
Employee Benefit Plan - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Employee Benefits And Share Based Compensation [Abstract] | ||
Employee benefit plan, contributions by employer | $ 2.4 | $ 2.9 |
Quarterly Financial Data (Una_3
Quarterly Financial Data (Unaudited) - Summary of Quarterly Financial Data (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | |
Quarterly Financial Information Disclosure [Abstract] | ||||||||||
Revenues | $ 435 | $ 182 | $ 463 | $ 167 | $ 106 | $ 56 | $ 0 | $ 0 | $ 1,247 | $ 162 |
Loss from continuing operations | (82,787) | (36,874) | (41,400) | (17,460) | (52,526) | (33,142) | (32,627) | 13,209 | (178,521) | (105,086) |
Loss from discontinued operations | (10,087) | (6,870) | (37,131) | (14,803) | (23,002) | (13,923) | (20,156) | (30,361) | ||
Net loss | (92,874) | (43,744) | (78,531) | (32,263) | (75,528) | (47,065) | (52,783) | (17,152) | (247,412) | (192,528) |
Net loss attributable to common stockholders | $ (92,874) | $ (43,744) | $ (78,531) | $ (32,263) | $ (75,528) | $ (47,065) | $ (53,051) | $ (17,152) | $ (247,412) | $ (192,796) |
Net loss per share, basic and diluted | $ (0.56) | $ (0.46) | $ (1.23) | $ (0.56) | $ (1.53) | $ (1.01) | $ (6.11) | $ (3.43) | $ (2.57) | $ (7) |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | |||
Feb. 09, 2022 | Oct. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Jan. 01, 2022 | |
Subsequent Event [Line Items] | |||||
Proceeds from issuance of common stock, net | $ 18,700 | $ 46,776 | $ 116,435 | ||
Issuance of stock, net, shares | 4,336,938 | ||||
Securities Purchase Agreement | |||||
Subsequent Event [Line Items] | |||||
Proceeds from issuance of common stock, net | $ 17,300 | ||||
Subsequent Event | Securities Purchase Agreement | |||||
Subsequent Event [Line Items] | |||||
Proceeds from issuance of common stock, net | $ 3,600 | ||||
Issuance of stock, net, shares | 2,130,327 | ||||
Shares issued, price per share | $ 1.76 |