Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2020 | Jul. 31, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2020 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q2 | |
Entity Registrant Name | DERMTECH, INC. | |
Entity Central Index Key | 0001651944 | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 001-38118 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 84-2870849 | |
Entity Address, Address Line One | 11099 N. Torrey Pines Road | |
Entity Address, Address Line Two | Suite 100 | |
Entity Address, City or Town | La Jolla | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 92037 | |
City Area Code | 858 | |
Local Phone Number | 450-4222 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Common Stock, Shares Outstanding | 18,229,364 | |
Title of 12(b) Security | Common Stock, par value $0.0001 per share | |
Trading Symbol | DMTK | |
Security Exchange Name | NASDAQ |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 61,102 | $ 15,374 |
Accounts receivable | 722 | 680 |
Inventory | 83 | 35 |
Prepaid expenses and other current assets | 547 | 1,061 |
Total current assets | 62,454 | 17,150 |
Property and equipment, net | 2,069 | 977 |
Other assets | 167 | 84 |
Total assets | 64,690 | 18,211 |
Current liabilities: | ||
Accounts payable | 813 | 1,609 |
Accrued compensation | 1,264 | 1,142 |
Accrued liabilities | 1,305 | 218 |
Deferred revenue | 1,017 | 1,390 |
Deferred underwriting fees | 1,363 | 1,363 |
Total current and total liabilities | 5,762 | 5,722 |
Commitments and contingencies: | ||
Stockholders’ equity: | ||
Common stock, $0.0001 par value per share; 50,000,000 shares authorized as of June 30, 2020 and December 31, 2019; 18,229,364 and 12,344,818 shares issued and outstanding at June 30, 2020 and December 31, 2019 | 2 | 1 |
Additional paid-in capital | 166,455 | 103,599 |
Accumulated deficit | (107,529) | (91,111) |
Total stockholders’ equity | 58,928 | 12,489 |
Total liabilities, convertible preferred stock and stockholders’ equity | 64,690 | 18,211 |
Series A Convertible Preferred Stock | ||
Current liabilities: | ||
Convertible preferred stock | ||
Series B-2 Convertible Preferred Stock | ||
Current liabilities: | ||
Convertible preferred stock |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Convertible preferred stock, par value | $ 0.0001 | |
Convertible preferred stock, shares authorized | 5,000,000 | |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares issued | 18,229,364 | 12,344,818 |
Common stock, shares outstanding | 18,229,364 | 12,344,818 |
Series A Convertible Preferred Stock | ||
Convertible preferred stock, par value | $ 0.0001 | $ 0.0001 |
Convertible preferred stock, shares authorized | 1,250 | 1,250 |
Convertible preferred stock, shares issued | 1,231 | 1,231 |
Convertible preferred stock, shares outstanding | 1,231 | 1,231 |
Convertible preferred stock, liquidation preference | $ 8,100,000 | $ 7,600,000 |
Series B-2 Convertible Preferred Stock | ||
Convertible preferred stock, par value | $ 0.0001 | $ 0.0001 |
Convertible preferred stock, shares authorized | 525 | 0 |
Convertible preferred stock, shares issued | 524 | 0 |
Convertible preferred stock, shares outstanding | 524 | 0 |
Convertible preferred stock, liquidation preference | $ 6,900,000 | $ 0 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Revenues: | ||||
Total revenues | $ 844 | $ 614 | $ 2,401 | $ 1,210 |
Cost of revenues | 1,445 | 686 | 2,648 | 1,320 |
Gross profit/(loss) | (601) | (72) | (247) | (110) |
Operating expenses: | ||||
Sales and marketing | 3,433 | 1,032 | 6,377 | 1,896 |
Research and development | 864 | 518 | 1,761 | 1,090 |
General and administrative | 4,529 | 1,706 | 8,043 | 3,235 |
Total operating expenses | 8,826 | 3,256 | 16,181 | 6,221 |
Loss from operations | (9,427) | (3,328) | (16,428) | (6,331) |
Other expense: | ||||
Interest income/(expense) | 10 | (324) | 10 | (2,292) |
Other expense | (40) | (224) | ||
Total other income/(expense) | 10 | (364) | 10 | (2,516) |
Net loss and comprehensive loss | $ (9,417) | $ (3,692) | $ (16,418) | $ (8,847) |
Weighted average shares outstanding used in computing net loss per share, basic and diluted | 16,149,496 | 4,419,781 | 14,625,069 | 4,415,553 |
Net loss per common share outstanding, basic and diluted | $ (0.58) | $ (0.84) | $ (1.12) | $ (2) |
Assay Revenue | ||||
Revenues: | ||||
Total revenues | $ 648 | $ 285 | $ 1,445 | $ 520 |
Contract Revenue | ||||
Revenues: | ||||
Total revenues | $ 196 | $ 329 | $ 956 | $ 690 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders' Equity (Deficit) (Unaudited) - USD ($) $ in Thousands | Total | Private placement | Cumulative Effect Adjustment of Accounting Method Change | Series C Convertible Preferred Stock | Series A Convertible Preferred Stock | Series B-1 Convertible Preferred Stock | Series B-2 Convertible Preferred Stock | Common stock | Common stockPrivate placement | Additional paid-in capital | Additional paid-in capitalPrivate placement | Accumulated deficit | Accumulated deficitCumulative Effect Adjustment of Accounting Method Change |
Balance at Dec. 31, 2018 | $ (5,355) | $ (45) | $ 1 | $ 66,021 | $ (71,377) | $ (45) | |||||||
Balance, Shares at Dec. 31, 2018 | 1,524,122 | 4,411,567 | |||||||||||
Stock-based compensation | 258 | 258 | |||||||||||
Net loss | (5,156) | (5,156) | |||||||||||
Balance at Mar. 31, 2019 | (10,298) | $ 1 | 66,279 | (76,578) | |||||||||
Balance, Shares at Mar. 31, 2019 | 1,524,122 | 4,411,567 | |||||||||||
Balance at Dec. 31, 2018 | (5,355) | $ (45) | $ 1 | 66,021 | (71,377) | $ (45) | |||||||
Balance, Shares at Dec. 31, 2018 | 1,524,122 | 4,411,567 | |||||||||||
Net loss | (8,847) | ||||||||||||
Balance at Jun. 30, 2019 | (13,691) | $ 1 | 66,578 | (80,270) | |||||||||
Balance, Shares at Jun. 30, 2019 | 1,524,122 | 4,448,831 | |||||||||||
Balance at Mar. 31, 2019 | (10,298) | $ 1 | 66,279 | (76,578) | |||||||||
Balance, Shares at Mar. 31, 2019 | 1,524,122 | 4,411,567 | |||||||||||
Issuance of common stock from option exercises | 41 | 41 | |||||||||||
Issuance of common stock from option exercises, Shares | 37,264 | ||||||||||||
Stock-based compensation | 258 | 258 | |||||||||||
Net loss | (3,692) | (3,692) | |||||||||||
Balance at Jun. 30, 2019 | (13,691) | $ 1 | 66,578 | (80,270) | |||||||||
Balance, Shares at Jun. 30, 2019 | 1,524,122 | 4,448,831 | |||||||||||
Balance at Dec. 31, 2019 | 12,489 | $ 1 | 103,599 | (91,111) | |||||||||
Balance, Shares at Dec. 31, 2019 | 1,231 | 12,344,818 | |||||||||||
Issuance of stock, net of issuance costs | $ 23,891 | $ 23,891 | |||||||||||
Issuance of common and preferred stock, net of issuance costs, Shares | 3,199 | 524 | 2,467,724 | ||||||||||
Issuance of Series B-1 convertible preferred stock | 30,971 | 30,971 | |||||||||||
Issuance of Series B-2 convertible preferred stock | 5,071 | 5,071 | |||||||||||
Issuance of common stock from option exercises | 253 | 253 | |||||||||||
Issuance of common stock from option exercises, Shares | 85,061 | ||||||||||||
Issuance of common stock from warrant exercises | 11 | 11 | |||||||||||
Issuance of common stock from warrant exercises, Shares | 2,098 | ||||||||||||
Issuance costs in connection with Form S-1 registration statement | (77) | (77) | |||||||||||
Stock-based compensation | 1,022 | 1,022 | |||||||||||
Net loss | (7,001) | (7,001) | |||||||||||
Balance at Mar. 31, 2020 | 66,630 | $ 1 | 164,741 | (98,112) | |||||||||
Balance, Shares at Mar. 31, 2020 | 1,231 | 3,199 | 524 | 14,899,701 | |||||||||
Balance at Dec. 31, 2019 | 12,489 | $ 1 | 103,599 | (91,111) | |||||||||
Balance, Shares at Dec. 31, 2019 | 1,231 | 12,344,818 | |||||||||||
Net loss | (16,418) | ||||||||||||
Balance at Jun. 30, 2020 | 58,928 | $ 2 | 166,455 | (107,529) | |||||||||
Balance, Shares at Jun. 30, 2020 | 1,231 | 524 | 18,229,364 | ||||||||||
Balance at Mar. 31, 2020 | 66,630 | $ 1 | 164,741 | (98,112) | |||||||||
Balance, Shares at Mar. 31, 2020 | 1,231 | 3,199 | 524 | 14,899,701 | |||||||||
Issuance of common stock through conversion | 1 | $ 1 | |||||||||||
Issuance of common stock through conversion, Shares | (3,199) | 3,198,949 | |||||||||||
Issuance of common stock from option exercises and RSU releases | 123 | 123 | |||||||||||
Issuance of common stock from option exercises and RSU releases, Shares | 81,277 | ||||||||||||
Issuance of common stock from warrant exercises | 471 | 471 | |||||||||||
Issuance of common stock from warrant exercises, Shares | 49,437 | ||||||||||||
Issuance costs in connection with Form S-1 registration statement | (5) | (5) | |||||||||||
Stock-based compensation | 1,125 | 1,125 | |||||||||||
Net loss | (9,417) | (9,417) | |||||||||||
Balance at Jun. 30, 2020 | $ 58,928 | $ 2 | $ 166,455 | $ (107,529) | |||||||||
Balance, Shares at Jun. 30, 2020 | 1,231 | 524 | 18,229,364 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders' Equity (Deficit) (Unaudited) (Parenthetical) $ in Millions | 3 Months Ended |
Mar. 31, 2020USD ($)$ / shares | |
Common Stock | |
Issuance price per share | $ / shares | $ 10.50 |
Issuance costs | $ | $ 2 |
Series B-1 Convertible Preferred Stock | |
Issuance price per share | $ / shares | $ 10,500 |
Issuance costs | $ | $ 2.6 |
Series B-2 Convertible Preferred Stock | |
Issuance price per share | $ / shares | $ 10,500 |
Issuance costs | $ | $ 0.4 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Cash flows from operating activities: | ||
Net loss | $ (16,418,000) | $ (8,847,000) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 148,000 | 38,000 |
Stock-based compensation | 2,147,000 | 515,000 |
Amortization of debt discount and issuance costs | 1,832,000 | |
Change in fair value of derivative liability | 224,000 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | (42,000) | 142,000 |
Inventory | (48,000) | (3,000) |
Prepaid expenses and other current assets | 432,000 | (36,000) |
Accounts payable and accrued compensation | (712,000) | 685,000 |
Accrued liabilities and deferred revenue | 713,000 | 190,000 |
Net cash used in operating activities | (13,780,000) | (5,260,000) |
Cash flows from investing activities: | ||
Purchases of property and equipment | (1,201,000) | (12,000) |
Net cash used in investing activities | (1,201,000) | (12,000) |
Cash flows from financing activities: | ||
Payments of issuance costs in connection with Form S-1 registration statement | (77,000) | |
Proceeds from exercise of common stock warrants | 482,000 | |
Proceeds from exercise of stock options | 376,000 | 41,000 |
Proceeds from convertible notes payable | 2,600,000 | |
Net cash provided by financing activities | 60,709,000 | 2,641,000 |
Net increase/(decrease) in cash and cash equivalents | 45,728,000 | (2,631,000) |
Cash and cash equivalents, beginning of period | 15,374,000 | 4,753,000 |
Cash and cash equivalents, end of period | 61,102,000 | 2,122,000 |
Supplemental cash flow information: | ||
Purchases of property and equipment recorded in accounts payable | 39,000 | |
Debt discount and derivative liability at issuance of convertible notes payable | $ 270,000 | |
Private placement | ||
Cash flows from financing activities: | ||
Proceeds from issuance of common stock in connection with private placement offering, net | 23,889,000 | |
Series B-1 Convertible Preferred Stock | ||
Cash flows from financing activities: | ||
Proceeds from issuance of Convertible Preferred Stock, net | 30,968,000 | |
Series B-2 Convertible Preferred Stock | ||
Cash flows from financing activities: | ||
Proceeds from issuance of Convertible Preferred Stock, net | $ 5,071,000 |
The Company and a Summary of it
The Company and a Summary of its Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2020 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
The Company and a Summary of its Significant Accounting Policies | 1. The Company and a Summary of its Significant Accounting Policies (a) On August 29, 2019, DermTech, Inc., formerly known as Constellation Alpha Capital Corp, (the “Company”), and DermTech Operations, Inc., formerly known as DermTech, Inc., (“DermTech Operations”), consummated the transactions contemplated by the Agreement and Plan of Merger, dated as of May 29, 2019, by and among the Company, DT Merger Sub, Inc., a wholly owned subsidiary of the Company (“Merger Sub”), and DermTech Operations. The Company refers to this agreement, as amended by that certain First Amendment to Agreement and Plan of Merger dated as of August 1, 2019, as the Merger Agreement. Pursuant to the Merger Agreement, Merger Sub merged with and into DermTech Operations, with DermTech Operations surviving as a wholly-owned subsidiary of the Company. The Company refers to this transaction as the Business Combination. In connection with and two days prior to the completion of the Business Combination, the Company domesticated from the British Virgin Islands to Delaware. DermTech Operations changed its name from DermTech, Inc. to DermTech Operations, Inc. shortly before the completion of the Business Combination. On August 29, 2019, immediately following the completion of the Business Combination, the Company changed its name from Constellation Alpha Capital Corp. to DermTech, Inc., and then effected a one-for-two reverse stock split of its common stock (“Reverse Stock Split”). The Company is an emerging growth molecular diagnostic company developing and marketing its Clinical Laboratory Improvement Amendments of 1988 (“CLIA”) laboratory services including molecular pathology tests to facilitate the diagnosis of dermatologic conditions including melanoma. The Company has developed a proprietary, non-invasive technique for sampling the surface layers of the skin using an adhesive patch in order to collect individual biological information for commercial applications in the medical diagnostic field. During and following the first and second quarters of 2020, there has been a widespread worldwide impact from the COVID-19 pandemic. The Company is considered an essential business due to the importance of early melanoma detection, which has allowed the Company’s CLIA laboratory to remain fully operational. The Company has implemented additional safety measures and social distancing with its CLIA laboratory operations and has transitioned administrative functions to working remotely. Beginning in March 2020 and continuing through the second quarter of 2020, the ongoing COVID-19 pandemic has reduced patient access to clinician offices for in-person testing, which has resulted in a reduced volume of billable samples received during the second quarter of 2020. The Company expects the impact to billable sample volume to continue until patient access to in-person testing fully resumes or telemedicine options are more widely adopted. Additionally, the ongoing COVID-19 pandemic has negatively affected and will continue to negatively affect the Company’s pharmaceutical customers’ clinical trials. The extent of such effect on the Company’s future revenue is uncertain and will depend on the duration and extent of the effects of the ongoing COVID-19 pandemic on the Company’s pharmaceutical customers’ clinical trials. (b) These condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). In the opinion of management, all adjustments, which include only normal recurring adjustments considered necessary for a fair presentation, have been included. (c) The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires that management make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the amounts of revenues and expenses reported during the period. On an ongoing basis, management evaluates these estimates and judgments, including those related to assay revenue, stock-based compensation, accounts receivable and the realization of deferred tax assets. Actual results may differ from those estimates. (d) The Company considers all highly liquid investments with remaining maturities of three months or less when purchased to be cash equivalents. The Company maintains its cash balances at banks and financial institutions. The balances are insured up to the legal limit. The Company maintains cash balances that may, at times, exceed this insured limit. (e) Property and equipment is recorded at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, which range from two to five years. Leasehold improvements are depreciated over the shorter of the remaining term of the lease or the useful life of the asset. The Company recorded depreciation expense of $0.1 million and $19,000 for the three months ended June 30, 2020 and 2019, respectively, and $0.1 million and $38,000 during the six months ended June 30, 2020 and 2019, respectively. No property or equipment was disposed of during the three or six months ended June 30, 2020 and 2019. The Company assesses its long-lived assets, consisting primarily of property and equipment, for impairment when material events or changes in circumstances indicate that the carrying value may not be recoverable. There were no impairment losses for the three or six months ended June 30, 2020 and 2019. (f) Costs incurred in connection with research and development (“R&D”) activities are expensed as incurred. R&D expenses consist of (i) employee-related expenses, including salaries, benefits, travel and stock compensation expense; (ii) and facilities and other expenses, which include direct and allocated expenses for rent and maintenance of facilities and laboratory and other supplies. The Company expenses all costs as incurred in connection with patent applications (including direct application fees and the legal and consulting expenses related to making such applications), and such costs are included in general and administrative expenses. (g) Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents. As of June 30, 2020, the Company maintained $61.1 million in a sweep account, which maintains cash balances throughout various interest bearing bank accounts under the $250,000 insurance limit provided by the Federal Deposit Insurance Corporation for one federally insured financial institution. The Company has not experienced any losses in such accounts. (h) The Company provides for federal and state income taxes on the asset and liability approach which requires deferred tax assets and liabilities to be recognized based on temporary differences between the condensed consolidated financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the temporary differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance when, in management’s opinion, it is more likely than not that some portion or all of the deferred tax assets will not be realized. The Company considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. The Company’s valuation allowance is based on available evidence, including its current year and prior year operating losses, evaluation of positive and negative evidence with respect to certain specific deferred tax assets including evaluation sources of future taxable income to support the realization of the deferred tax assets. The Company has established a full valuation allowance on the deferred tax assets as of June 30, 2020. Current and deferred tax assets and liabilities are recognized based on the tax positions taken or expected to be taken in the Company’s income tax returns. U.S. GAAP requires that the tax benefits of an uncertain tax position can only be recognized when it is more likely than not that the tax position will be sustained upon examination by the relevant taxing authority. Tax benefits related to tax positions that do not meet this criterion are not recognized in the condensed consolidated financial statements, of which there are none. The Company recognizes interest and penalties related to income tax matters in income tax expense. (i) The Company’s revenue is generated from two revenue streams: contract revenue and assay revenue. The Company accounts for revenue in accordance with Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers (Topic 606) Assay Revenue The Company generates revenues from its Pigmented Lesion Assay (“PLA”) and Nevome services it provides to healthcare clinicians in various states throughout the United States to assist in a clinician’s diagnosis of melanoma. The Company provides prescribing clinicians with its adhesive sample collection kits to perform non-invasive skin biopsies of clinically ambiguous pigmented skin lesions on patients. The Company also offers clinicians a telemedicine solution where they can request the PLA collection kit be sent to the patient’s home for a clinician-guided remote collection on ambiguous pigmented skin lesions. Once the sample is collected by the healthcare clinician or the patient via the telemedicine solution, it is returned to the Company’s CLIA laboratory for analysis. The patient RNA and deoxyribonucleic acid (“DNA”) is extracted from the adhesive patch collection kit and analyzed using gene expression technology to determine if the pigmented skin lesion contains certain genomic features indicative of melanoma. Upon completion of the gene expression analysis, a final report is drafted and provided to the dermatologists detailing the test results for the pigmented skin lesion indicating whether the sample collected is indicative of melanoma or not. Contract Revenue Contract revenue is generated from the sale of laboratory services and adhesive sample collection kits to third party companies through contract research agreements. Revenues are generated from providing gene expression tests to facilitate the development of drugs designed to treat dermatologic conditions. The provision of gene expression services may include sample collection using the Company’s patented adhesive patch biopsy devices, assay development for research partners, ribonucleic acid (“RNA”) isolation, expression, amplification and detection, including data analysis and reporting. (a) Disaggregation of Revenue The following table presents the Company’s revenues disaggregated by revenue source during the three and six months ended June 30, 2020 and 2019, respectively, (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Assay Revenue PLA Test $ 648 $ 285 $ 1,445 $ 520 Contract Revenue Adhesive Patch kits 24 169 38 335 RNA Extractions 94 85 764 200 Project Management Fees 78 75 154 153 Other — — — 2 Total Revenue $ 844 $ 614 $ 2,401 $ 1,210 (b) Contract Balances and Deferred Revenue The timing of revenue recognition, billings and cash collections results in billed accounts receivable and deferred revenue on the condensed consolidated balance sheets. In a majority of agreements that produce contract revenue, the Company receives a substantial up-front payment and additional payments upon the achievement of various milestones over the life of the agreement. This results in deferred revenue and is relieved upon delivery of the applicable adhesive patch kits or RNA extraction results. Changes in accounts receivable and deferred revenue were not materially impacted by any other factors. The Company records a deferred revenue liability if a customer pays consideration before the Company transfers a good or service to the customer. Deferred revenue primarily represents upfront milestone payments, for which consideration is received prior to when goods/services are completed or delivered. Deferred revenue at June 30, 2020 and December 31, 2019 was $1.0 million and $1.4 million, respectively. (j) Assay Accounts Receivable Due to the nature of the Company’s assay revenue, it can take a significant amount of time to collect upon billed PLA services. The Company prepares an analysis on reimbursement collections and data obtained for each financial reporting period to determine the amount of receivables to be recorded relating to PLA services performed in the applicable period. The Company generally does not perform evaluations of customers’ financial condition and generally does not require collateral. Accounts receivable are written off when all efforts to collect the balance have been exhausted. Adjustments for implicit price concessions attributable to variable consideration are incorporated into the measurement of the accounts receivable balances. Contract Accounts Receivable Contract accounts receivable are recorded at the net invoice value and are not interest bearing. The Company reserves specific receivables if collectability is no longer reasonably assured, and as of June 30, 2020, the Company did not maintain any reserve over contract receivables as they deal with large established credit worthy customers. The Company re-evaluates such reserves on a regular basis and adjusts its reserves as needed. Once a receivable is deemed to be uncollectible, such balance is charged against the reserve. The Company recorded $36,000 and $0.3 million of contract accounts receivable as of June 30, 2020 and December 31, 2019, respectively. (k) The Company records outbound freight and shipping costs for its contract and assay revenues in cost of revenues. (l) Comprehensive income / (loss) is defined as a change in equity during a period from transactions and other events and circumstances from non-owner sources. The Company’s comprehensive loss was the same as its reported net loss for all periods presented. (m) 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. (n) Basic and diluted net loss per common share is determined by dividing net loss applicable to common shareholders by the weighted average common shares outstanding during the period. Because there is a net loss attributable to common shareholders during the three and six months ended June 30, 2020 and 2019, the outstanding common stock warrants, stock options, restricted stock units and preferred stock have been excluded from the calculation of diluted loss per common share because their effect would be anti-dilutive. Therefore, the weighted average shares used to calculate both basic and diluted loss per share are the same. Diluted net loss per common share for the six months ended June 30, 2020 excludes the effect of anti-dilutive equity instruments including 1,139,194 shares of common stock issuable upon conversion of the Company’s the Company’s (o) Effective January 1, 2020, the Company elected an accounting policy change to no longer estimate forfeitures in connection with expense recognition of stock options and RSUs. All stock options and RSUs granted on or subsequent to January 1, 2020 will recognize forfeitures when they occur in accordance with Accounting Standards Update (“ASU”) 2016-09, Compensation - Stock Compensation (Topic 718) Compensation costs associated with stock option awards and other forms of equity compensation are measured at the grant-date fair value of the awards and recognized over the requisite service period of the awards on a ratable basis. The Company grants stock options to purchase common stock to employees with exercise prices equal to the fair market value of the underlying stock, as determined by the board of directors, management and outside valuation experts prior to the Business Combination. The board of directors and outside valuation experts determined the fair value of the underlying stock by considering a number of factors, including historical and projected financial results, the risks the Company faced at the time, the preferences of the Company’s debt holders and preferred stockholders, and the lack of liquidity of the Company’s common stock. Subsequent to the close of the Business Combination, the fair market value of stock options is based on the closing stock price on the grant date. The fair value of each stock option award is estimated using the Black-Scholes-Merton valuation model. Such value is recognized as expense over the requisite service period using the ratable method. The expected term of options is based on the simplified method which defines the expected term as the average of the contractual term of the options and the weighted average vesting period for all option tranches. The expected volatility of stock options is based upon the historical volatility of a number of related publicly traded companies in similar stages of development as well as the volatility of the Company’s common stock. The risk-free interest rate is based on the average yield of U.S. Treasury securities with remaining terms similar to the expected term of the share-based awards. The assumed dividend yield was based on the Company’s expectation of not paying dividends in the foreseeable future. The Company accounts for stock options to non-employees using the fair value approach. The fair value of these options is measured using the Black-Scholes-Merton option pricing model, reflecting the same assumptions applied to employee options, other than expected life, which is assumed to be the remaining contractual life of the award. Options that are granted to employees generally have a requisite service period of three to four years. Equity instruments awarded to non-employees are periodically re-measured as the underlying awards vest unless the instruments are fully vested, immediately exercisable, and non-forfeitable on the date of grant. RSUs are considered restricted stock. The fair value of restricted stock is equal to the fair market value of the underlying stock, as determined by the board of directors, management and input from outside valuation experts prior to the Business Combination. Subsequent to the close of the Business Combination, the fair market value of RSUs is based on the closing stock price on the grant date. The Company recognizes stock-based compensation expense based on the fair value on a ratable basis over the requisite service periods of the awards. RSUs that are granted to employees have a requisite service period typically between two and four years. All stock options and RSUs granted prior to January 1, 2020 will maintain the estimated forfeiture approach and will be recognized over the requisite service period using the straight-line method. The fair value of each option for employees was estimated on the date of grant using the following assumptions: Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Assumed risk-free interest rate 0.43% - 0.44% 2.24% 0.43% - 1.69% 2.24% - 2.51% Assumed volatility 68.34% 73.20% 64.03% - 68.34% 72.30% - 73.20% Expected option term 5.55 - 6.25 6.08 5.04 - 6.25 6.04 - 6.08 Expected dividend yield — — — — The Company recorded stock-based compensation expense for employee options, RSUs, common stock warrants, and consultant options of $1.1 million and $0.3 million for the three months ended June 30, 2020 and 2019, respectively, and $2.1 million and $0.5 million for the six months ended June 30, 2020 and 2019, respectively. The total compensation cost related to non-vested awards not yet recognized at June 30, 2020 was $12.6 million, ( p ) The Company uses a three-tier fair value hierarchy to prioritize the inputs used in the Company’s fair value measurements. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets for identical assets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. There were no other assets or liabilities that were measured at fair value on a recurring basis as of June 30, 2020 or December 31, 2019. The Company believes the carrying amount of cash and cash equivalents, accounts payable and accrued expenses approximate their estimated fair values due to the short-term nature of these accounts. ( q ) In June 2019, the Financial Accounting Standards Board (“FASB”) issued ASU 2018-07, Compensation-Stock Compensation (Topic 718) – Improvements to Nonemployee Share-Based Payment Accounting In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement ( r ) In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) Codification Improvements to Topic 842, Leases Leases (Topic 842): Targeted Improvements Narrow-Scope Improvements for Lessors Lease (Topic 842): Codification Improvements In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes |
Balance Sheet Details
Balance Sheet Details | 6 Months Ended |
Jun. 30, 2020 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Balance Sheet Details | 2. Balance Sheet Details Condensed consolidated balance sheet details are as follows (in thousands): June 30, 2020 December 31, 2019 Prepaid expenses and other current assets: Prepaid insurance $ 345 $ 951 Prepaid trade shows 15 85 Prepaid advertising fees 55 — Prepaid subscription fees 82 21 Other current assets 50 4 Total prepaid expenses and other current assets $ 547 $ 1,061 Property and equipment, gross: Laboratory equipment $ 1,756 $ 1,135 Computer equipment 41 15 Furniture and fixtures 63 34 Leasehold improvements 596 32 Total property and equipment, gross 2,456 1,216 Less accumulated depreciation (387 ) (239 ) Total property and equipment, net $ 2,069 $ 977 June 30, 2020 December 31, 2019 Accrued compensation: Accrued paid time off $ 459 $ 309 Accrued bonus and deferred compensation 796 465 Accrued severance 9 368 Total accrued compensation $ 1,264 $ 1,142 Accrued liabilities: Accrued consulting services $ 41 $ 37 Accrued lawsuit settlement 1,011 — Accrued printing fees — 55 Deferred rent 96 88 Other accrued expenses 157 38 Total accrued liabilities $ 1,305 $ 218 |
Debt
Debt | 6 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Debt | 3. Debt 2018 Convertible Bridge Notes From August to November 2018, DermTech Operations issued $6.8 million aggregate principal amount of convertible bridge notes (“2018 Bridge Notes”), resulting in $6.6 million in net proceeds. The 2018 Bridge Notes carried a 10% interest rate and matured on March 31, 2019. Since the 2018 Bridge Notes were not paid or converted by March 31, 2019, the interest rate increased to 15%. The 2018 Bridge Notes were subject to automatic conversion into equity securities of DermTech Operations at the closing of a single capital raising transaction or series of related capital raising transactions in which DermTech Operations issued equity securities with aggregate gross proceeds to DermTech Operations of at least $20 million (“Qualified Financing”) that occurred on or prior to the maturity date. Upon automatic conversion of these 2018 Bridge Notes, the note holders were entitled to receive shares of DermTech Operations’ equity securities equal to the quotient obtained by dividing the unpaid principal amount of these 2018 Bridge Notes plus interest accrued but unpaid by the lesser of: 1) the lowest price per share of the new stock paid in the Qualified Financing by investors multiplied by 2) the price per share obtained by dividing $ Several of the embedded features of the 2018 Bridge Notes were identified as meeting the criteria of a derivative and ultimately bifurcated from the host contract. DermTech Operations accounted for this by separating the derivative component of the 2018 Bridge Notes as a derivative liability on the condensed consolidated balance sheet. DermTech Operations assigned a value to the debt component of the 2018 Bridge Notes equal to the difference between the estimated fair value of the 2018 Bridge Notes with and without the conversion features, which resulted in DermTech Operations recording the 2018 Bridge Notes at a discount. The total debt discount amount as of the respective date of issuance of the 2018 Bridge Notes was determined to be $2.5 million. DermTech Operations amortized the debt discount over the contractual life (i.e., March 31, 2019) of the 2018 Bridge Notes as additional non-cash interest expense utilizing the effective interest method. At each financial reporting period, DermTech Operations remeasured the fair value of the embedded features bifurcated from the 2018 Bridge Notes (i.e., the derivative liability) and changes in the fair value are recognized in earnings. Losses relating to the change in fair value of the derivative liability recognized as other expense on the Statement of Operations and Comprehensive Loss were zero and $36,000 for the three months ended June 30, 2020 and 2019, respectively, and zero and $0.2 million for the six months ended June 30, 2020 and 2019, respectively. On May 23, 2019, DermTech Operations DermTech Operations; In addition, immediately prior to the consummation of a DermTech Operations DermTech Operations share equal to 70% of the Merger Consideration. For purposes of the preceding sentence, the “Merger Consideration” means (i) the lesser of $6.46 and (ii) the offering price per share of the private investment in public equity transaction to be consummated concurrently with the consummation of the Qualifying Merger (the “2019 PIPE Financing”) multiplied by the Conversion Ratio. For the purposes of the preceding sentence, the “Conversion Ratio” means the quotient resulting from dividing 8,000,000 by the number of fully diluted shares of the Company as of immediately after the conversion of the notes. This new embedded Qualifying Merger feature of the 2018 Bridge Notes was identified as meeting the criteria of a derivative and ultimately bifurcated from the host contract with the previously identified embedded features that met the criteria of being a derivative. In addition, this amendment was accounted for as a debt modification of the existing 2018 Bridge Notes. 2019 Convertible Bridge Notes Between June 5 th th DermTech Operations DermTech Operations DermTech Operations The unpaid principal amount of these convertible bridge notes together with any interest accrued but unpaid thereon, would automatically be converted into shares of DermTech Operations’ DermTech Operations DermTech Operations’ DermTech Operations Several of the embedded features of the 2019 Bridge Notes were identified as meeting the criteria of a derivative and ultimately bifurcated from the host contract. DermTech Operations DermTech Operations DermTech Operations DermTech Operations Exchange of Convertible Debt for Common Shares On August 29, 2019, immediately prior to the completion of the Business Combination, all unpaid principal and interest on the 2019 Bridge Notes and the 2018 Bridge Notes (collectively, “the Bridge Notes”) was converted into 2,267,042 common shares of DermTech Operations The conversion of the Bridge Notes debt for common shares of DermTech Operations DermTech Operations DermTech Operations’ The net carrying amounts of the Bridge Notes, including remaining unamortized debt discount and issuance costs, and the bifurcated embedded derivative liability were extinguished on the date of the Business Combination. A gain on debt extinguishment of $0.9 million was recognized, which represented the unamortized debt discounts and issuance costs remaining at the time of the debt extinguishment. There was no liability balance for the Company’s 2019 Bridge Notes or 2018 Bridge Notes as of June 30, 2020 and December 31, 2019. |
Convertible Preferred Stock and
Convertible Preferred Stock and Stockholders’ Equity | 6 Months Ended |
Jun. 30, 2020 | |
Stockholders Equity Note [Abstract] | |
Convertible Preferred Stock and Stockholders’ Equity | 4. Convertible Preferred Stock and Stockholders’ Equity (a) The Company’s amended and restated certificate of incorporation authorizes it to issue 50,000,000 shares of common stock and 5,000,000 shares of preferred stock. Both classes of stock have a par value of $0.0001 per share. Pursuant to the Business Combination, the Company issued shares of its common stock to DermTech Operations common stockholders at an exchange ratio of approximately 1.16 shares of the Company’s common stock for each share of DermTech Operations common stock. In connection with and immediately following the Business Combination, the Company filed a certificate of amendment to its amended and restated certificate of incorporation to affect a one-for-two reverse stock split of its common stock. All stock information presented throughout this document have been adjusted to reflect these capital structure changes. (b) DermTech Operations Series C Convertible Preferred Stock Financing DermTech Operations conducted a Series C Convertible Preferred Stock private offering in August of 2016 for a total offering amount of $15 million at a price per share of $9.54. During 2017, 559,849 shares of Series C Convertible Preferred Stock were issued for gross cash proceeds of $5.3 million, reduced by issuance costs of $0.4 million. In addition, 102,740 common stock warrants were issued in connection with this offering, exclusive of compensatory warrants issued to the placement agent. During 2018, 506,539 shares of Series C Convertible Preferred Stock were issued for gross cash proceeds of $4.8 million, reduced by issuance costs of $0.3 million. On May 23, 2019, agreed to an amendment with the Series C Convertible Preferred Stockholders that immediately prior the consummation of a merger with or into the Company or any of its subsidiaries on or before September 24, 2019, the outstanding Series C Convertible Preferred Stock would convert into common stock at a one to one ratio in accordance with amended and restated certificate of incorporation. ( c ) In connection with the 2019 PIPE Financing and on August 29, 2019, immediately following the completion of the Business Combination, the Company filed a Certificate of Designation of Preferences, Rights and Limitations for the Company’s Series A Convertible Preferred Stock (the “Series A Certificate of Designation”). An aggregate of 1,231 shares of Series A Convertible Preferred Stock for an aggregate purchase price of $4.0 million were issued to certain accredited investors. Preferred Dividends Holders of the Company’s Series A Convertible Preferred Stock (the “Series A Convertible Preferred Stock”) are entitled to receive dividends on an as-converted basis equal to and in the same form as dividends paid on shares of the Company’s common stock when, as and if these dividends are paid on the Company’s common stock. Preferred Liquidation Preference Holders of the Series A Convertible Preferred Stock will participate pari passu with the holders of the Company’s common stock on an as-converted basis in the event of dissolution, liquidation or winding up of the Company. Redemption The Series A Convertible Preferred Stock does not contain any mandatory redemption features. The Series A Convertible Preferred Stock has been classified as temporary equity in the accompanying condensed consolidated balance sheets in accordance with authoritative guidance for the classification and measurement of potentially redeemable securities whose redemption is based upon certain change in beneficial ownership events outside of the Company’s control. The Company has determined not to adjust the carrying values of the convertible preferred stock to the liquidation preferences of such shares because of the uncertainty of whether or when such events would occur. Conversion Each share of the Company’s Series A Convertible Preferred Stock is convertible into 500 shares of the Company’s common stock at a conversion price, as adjusted for the Reverse Stock Split, of $6.50 per share, subject to adjustment as set forth in the Series A Certificate of Designation, and provided that in no event may any shares of the Series A Convertible Preferred Stock be convertible if the conversion would result in the holder beneficially owning more than 9.99% of the Company’s then-outstanding shares of common stock. Voting Rights The shares of the Series A Convertible Preferred Stock have no voting rights, except with respect to certain protective provisions set forth in the Series A Certificate of Designation relating to the powers, preferences and rights of such shares. ( d ) 2020 PIPE Financing On February 28, 2020, the Company, entered into a securities purchase agreement with certain institutional investors for a private placement of the Company’s equity securities (the “2020 PIPE Financing”). Cowen and Company, LLC served as lead placement agent for the 2020 PIPE Financing, with William Blair & Company, L.L.C. acting as joint placement agent. Lake Street Capital Markets, LLC acted as co-placement agent. The 2020 PIPE Financing closed on March 4, 2020. The 2020 PIPE Financing consisted of 2,467,724 shares of common stock at a price of $10.50 per share, 3,199 shares of Series B-1 Convertible Preferred Stock (the “Series B-1 Shares”) at a price of $10,500 per share, and 524 shares of Series B-2 Convertible Preferred Stock (the “Series B-2 Shares”) at a price of $10,500 per share, for aggregate gross proceeds of approximately $65.0 million, reduced by $5.1 million in issuance costs. Prior to the closing of the 2020 PIPE Financing, the Company designated (i) 3,200 shares of its authorized and unissued preferred stock as Series B-1 Convertible Preferred Stock by filing the Series B-1 Certificate of Designation with the Delaware Secretary of State and (ii) 525 shares of its authorized and unissued preferred stock as Series B-2 Convertible Preferred Stock by filing the Series B-2 Certificate of Designation with the Delaware Secretary of State. ( e ) Series B-1 Convertible Preferred Stock Issued in Connection with 2020 PIPE Financing In connection with the 2020 PIPE Financing transaction and on March 2, 2020, the Company filed a Certificate of Designation of Preferences, Rights and Limitations for the Company’s Series B-1 Convertible Preferred Stock (the “Series B-1 Certificate of Designation”). An aggregate of 3,199 shares of Series B-1 Convertible Preferred Stock for an aggregate purchase price of $33.6 million were issued to certain accredited investors. At the Company’s annual meeting held on May 26, 2020, the Company’s stockholders voted to approve the 2020 PIPE Financing. As a result, on May 27, 2020 the 3,199 3,198,949 Preferred Dividends Holders of the Company’s Series B-1 Convertible Preferred Stock (the “Series B-1 Convertible Preferred Stock”) were entitled to receive dividends on an as-converted basis equal to and in the same form as dividends paid on shares of the Company’s common stock when, as and if these dividends were paid on the Company’s common stock. Preferred Liquidation Preference Holders of the Series B-1 Convertible Preferred Stock were to participate pari passu with the holders of the Company’s common stock on an as-converted basis in the event of dissolution, liquidation or winding up of the Company. Redemption The Series B-1 Convertible Preferred Stock did not contain any mandatory redemption features. The Series B-1 Convertible Preferred Stock was classified as temporary equity in the accompanying condensed consolidated balance sheets in accordance with authoritative guidance for the classification and measurement of potentially redeemable securities whose redemption is based upon certain change in beneficial ownership events outside of the Company’s control. The Company previously determined not to adjust the carrying values of the convertible preferred stock to the liquidation preferences of such shares because of the uncertainty of whether or when such events would occur. Conversion Each Series B-1 Share was converted into 1,000 shares of the Company’s common stock at a conversion price of $10.50 on May 27, 2020, which was the first trading day after the approval of the 2020 PIPE Financing by the stockholders of the Company (the “Stockholder Approval”). Voting Rights The Series B-1 Shares had no voting rights, except with respect to certain protective provisions set forth in the Series B-1 Certificate of Designation relating to the powers, preferences and rights of such shares. ( f ) Series B-2 Convertible Preferred Stock Issued in Connection with 2020 PIPE Financing In connection with the 2020 PIPE Financing transaction and on March 2, 2020, the Company filed a Certificate of Designation of Preferences, Rights and Limitations for the Company’s Series B-2 Convertible Preferred Stock (the “Series B-2 Certificate of Designation”). An aggregate of 524 shares of Series B-2 Convertible Preferred Stock for an aggregate purchase price of $5.5 million were issued to certain accredited investors. Preferred Dividends Holders of the Company’s Series B-2 Convertible Preferred Stock (the “Series B-2 Convertible Preferred Stock”) are entitled to receive dividends on an as-converted basis equal to and in the same form as dividends paid on shares of the Company’s common stock when, as and if these dividends are paid on the Company’s common stock. Preferred Liquidation Preference Holders of the Series B-2 Convertible Preferred Stock will participate pari passu with the holders of the Company’s common stock on an as-converted basis in the event of dissolution, liquidation or winding up of the Company. Redemption The Series B-2 Convertible Preferred Stock does not contain any mandatory redemption features. The Company’s Series B-2 Convertible Preferred Stock has been classified as temporary equity in the accompanying condensed consolidated balance sheets in accordance with authoritative guidance for the classification and measurement of potentially redeemable securities whose redemption is based upon certain change in beneficial ownership events outside of the Company’s control. The Company has determined not to adjust the carrying values of the convertible preferred stock to the liquidation preferences of such shares because of the uncertainty of whether or when such events would occur. Conversion Each Series B-2 Share is convertible into 1,000 shares of the Company’s common stock at a conversion price equal to $10.50, subject to adjustment as provided in the Series B-2 Certificate of Designation. Each Series B-2 Share is convertible into Company common stock at the option of the holder, provided that conversion will be prohibited (i) until the first trading day after the Stockholder Approval, which occurred on May 27, 2020, and (ii) following the Stockholder Approval, if, as a result of any such conversion, the holder would beneficially own in excess of 9.99% of the total number of shares of Company common stock outstanding immediately after giving effect to such conversion. The Company refers to the conversion limitation described in clause (ii) of the preceding sentence as the Beneficial Ownership Limitation. A holder of Series B-2 Shares may reset the Beneficial Ownership Limitation to a higher or lower number upon providing written notice to the Company. Any such notice providing for an increase to such Holder’s Beneficial Ownership Limitation will be effective on the 61st day after its delivery to the Company. Voting Rights The Series B-2 Shares have no voting rights, except with respect to certain protective provisions set forth in the Series B-2 Certificate of Designation relating to the powers, preferences and rights of such shares. ( g ) Accelerated Vesting in Association with Business Combination On January 4, 2019, in contemplation of the Business Combination (refer to Note 8), DermTech Operations modified certain provisions of its stock-based compensation awards to all employees and certain non-employees to accelerate the vesting period for various outstanding stock awards. In connection with the modifications, the incremental fair value of certain unvested stock option grants was measured at the date of the modification. For any options in which the fair value immediately after the modification was lower than the fair value immediately prior to the modification, no additional compensation expense was or will be recognized. For options in which the fair value increased as a result of the modification and the award was not fully vested, the incremental fair value will be recognized as an expense over the remaining service period. For options that were modified and became fully vested as a result of the accelerated vesting, the Company recognized an expense for the remaining unrecognized grant date fair value. As a result of the accelerated vesting, the Company recognized stock-based compensation expense of $0.4 million related to this modification. ( h ) Public Warrants The Company previously issued 14,936,250 warrants to purchase common stock in public and private placement offerings which were consummated on June 23, 2017 (the “Public Warrants”). The Public Warrants have a five year life from the date the Business Combination was consummated and every four Public Warrants entitle the holder to purchase one share at an exercise price of $23.00 per whole share (as adjusted for the Reverse Stock Split). Outstanding Public Warrants totaled 14,936,250 at June 30, 2020 and December 31, 2019. Series C Warrants In connection with DermTech Operations’ Series C Preferred Stock financing that took place between 2016 and 2018, investors that purchased at least $1 million of Series C Convertible Preferred Stock in a single closing received a three-year warrant to purchase common shares at an exercise price of $9.54 in the amount equal to 20% of shares of Series C Preferred Stock purchased. Outstanding Series C warrants totaled 143,222 and 202,897 at June 30, 2020 and December 31, 2019, respectively. Placement Agent Warrants In connection with several of DermTech Operations’ financings that took place between 2015 and 2018, DermTech Operations engaged a registered placement agent to assist in marketing and selling of common and preferred units. From 2015 to 2016, 168,522 seven-year warrants were issued to purchase one common share at an exercise price of $8.68. From 2016 to 2018, 72,658 seven-year warrants were issued to purchase one common share at an exercise price of $9.54. In 2020, the Company issued 15,724 seven-year warrants to purchase one common share at an exercise price of $9.54 in connection with the Company’s 2018 Bridge Note financing. Outstanding placement agent warrants totaled 254,026 and 241,217 at June 30, 2020 and December 31, 2019, respectively. ( i ) 2010 Stock Option Plan In connection with the Business Combination, the Company adopted DermTech Operations’ Amended and Restated 2010 Stock Option Plan (the “2010 Plan”), which provided for the granting of incentive and non-statutory stock options and restricted stock purchase rights and bonus awards. Under the 2010 Plan, incentive and non-statutory stock options were granted at not less than 100% of the fair market value of the Company’s common stock on the date of grant. For incentive stock options granted to a ten percent shareholder under the 2010 Plan, the exercise price was not less than 110% of the fair market value of a share of stock on the effective date of grant. DermTech Operations initially reserved 1.0 million shares of common stock for issuance to its employees, non-employee directors and consultants. The 2010 Plan included a provision which annually increased the amount of common stock reserved for issuance under the 2010 Plan. The contractual term of options granted under the 2010 Plan was ten years. Vesting provisions varied based on the specific terms of the individual option awards. At the Company’s annual meeting held on May 26, 2020, the Company’s shareholders voted to approve the DermTech, Inc. 2020 Equity Incentive Plan (the “2020 Plan”), which terminated the 2010 Plan. No additional awards will be granted under the 2010 Plan, however, all outstanding awards under the 2010 Plan remain in effect. Zero and 0.1 million options remained available for future grant under the 2010 Plan as of June 30, 2020 and December 31, 2019, respectively. 2020 Equity Incentive Plan On May 26, 2020, the Company’s stockholders approved the adoption of the 2020 Plan, which provides for the granting of incentive and non-qualified stock options, restricted stock and stock-based awards. The 2020 Plan authorizes the Company to issue up to 1,900,000 shares of the Company’s common stock pursuant to awards granted under the 2020 Plan, plus the number of shares underlying any stock option and other stock-based awards previously granted under the 2010 Plan that are forfeited, canceled, or terminated (other than by exercise) on or after May 26, 2020; provided that no more than 1,400,000 shares may be added to the 2020 Plan pursuant to such forfeitures, cancellations and terminations. In addition, the number of shares available for issuance under the 2020 Plan will automatically increase on the first day of each fiscal year beginning in fiscal year 2021 and ending on the second day of fiscal year 2025, by an amount equal to the smaller of (i) 3.5% of the number of shares of common stock outstanding on such date and (ii) an amount determined by the administrator of the 2020 Plan. The 2020 Plan will expire on April 12, 2030 or an earlier date approved by a vote of the Company’s stockholders or board of directors. The contractual term of options granted under the 2020 Plan is not more than ten years. Vesting provisions vary based on the specific terms of the individual option awards. 1,401,802 shares remained available for future grant under the 2020 Plan as of June 30, 2020. 2020 Employee Stock Purchase Plan On May 26, 2020, the Company’s stockholders approved the adoption of the Company’s 2020 Employee Stock Purchase Plan (the “ESPP”), which allows for full-time and certain part-time employees of the Company to purchase shares of common stock at a discount to fair market value. Eligible employees enroll in a six-month offering period during the open enrollment period prior to the start of that offering period. A new offering period begins approximately every March 1 and September 1. At the end of each offering period, the accumulated deductions are used to purchase shares of the Company’s common stock. Shares are purchased at a price equal to 85% of the lower of: (i) the fair market value of our common stock on the first business day of an offering period or (ii) the fair market value of our common stock on the last business day of an offering period. The ESPP authorizes the Company to issue up to 400,000 shares of the Company’s common stock. In addition, the number of shares available for issuance under the ESPP will automatically increase on the first day of each of the Company’s fiscal years beginning in 2021 and ending on the first day of 2030, in an amount equal to the lesser of (i) 300,000 shares, (ii) 1% of the shares of Company common stock outstanding on the last day of the immediately preceding fiscal year, or (iii) such lesser number of shares as is determined by the Board of Directors, subject to adjustment upon changes in capitalization of the Company. 400,000 shares remained available for future grant under the ESPP as of June 30, 2020. Management Warrants Warrants to purchase DermTech Operations common stock were issued to executive officers of DermTech Operations in lieu of issuing certain stock options (the “Management Warrants”). The Management Warrants were assumed by the Company in connection with the Business Combination. The Management Warrants have a ten-year life and are exercisable for Company common stock at $1.08 per common share. The Management Warrants vested monthly over a four-year period. Outstanding Management Warrants totaled 22,320 at June 30, 2020 and December 31, 2019. Common Stock Reserved for Future Issuance Common stock reserved for future issuance consists of the following at June 30, 2020 and December, 31 2019 (in thousands): June 30, 2020 December 31, 2019 Warrants to purchase common stock 420 466 Public Warrants to purchase common stock* 3,734 3,734 Stock options issued and outstanding 1,160 444 RSUs issued and outstanding 639 — Authorized for future option grants 1,402 143 Authorized for future ESPP purchases 400 — Total common stock reserved for future issuance 7,755 4,787 * Four Public Warrants are needed to purchase one share of common stock. The numbers presented above reflect the amount of shares of common stock underlying Public Warrants. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 5. Income Taxes The Company has reported net losses since inception and therefore, the minimum provision for state income taxes has been recorded. The federal statutory rate was 21% at June 30, 2020 and December 31, 2019, respectively, and the effective income tax rate for the Company’s provision for income taxes was 0% at June 30, 2020 and December 31, 2019, respectively. The utilization of NOL and tax credit carryforwards to offset future taxable income may be subject to an annual limitation as a result of ownership changes that have occurred previously or may occur in the future. Under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, (“IRC”), a corporation that undergoes an ownership change may be subject to limitations on its ability to utilize its pre-change NOLs and other tax attributes otherwise available to offset future taxable income and/or tax liability. An ownership change is defined as a cumulative change of 50% or more in the ownership positions of certain stockholders during a rolling three-year period. The Company has not completed a formal study to determine if any ownership changes within the meaning of IRC Section 382 and 383 have occurred. If an ownership change has occurred, the Company’s ability to use its NOL or tax credit carryforwards may be restricted, which could require the Company to pay federal or state income taxes earlier than would be required if such limitations were not in effect. The Company conducts intensive research and experimentation activities, generating research tax credits for federal and state purposes under IRC Section 41. The Company has not performed a formal study validating these credits claimed in the tax returns. Once a study is prepared, the amount of R&D, tax credits available could vary from what was originally claimed on the tax returns. Due to the net operating loss carryforwards, the U.S. federal and state returns are open to examination for all years since inception. Business Combination Tax Implications In connection with the Business Combination, the Company changed its jurisdiction of incorporation from the British Virgin Islands to the State of Delaware. This reincorporation constituted a tax-free reorganization within the meaning of Section 368(a)(1)(F) of the IRC. The IRC provides that corporations and shareholders do not recognize gain with respect to certain qualifying reorganizations. To satisfy the requirements for this nonrecognition benefit, a transaction must meet one of the statutory definitions of a “reorganization” set forth in IRC Section 368(a)(1). IRC Section 368(a)(1)(F) provides that a reorganization includes a mere change in identity, form, or place of organization. As a result of the reincorporation, the Company will be treated as a U.S. corporation for federal income tax purposes. For federal income tax purposes, the Business Combination qualified as a reverse triangular merger within the meaning IRC Sections 368(a) and 368(a)(2)(E). Additionally, the Company, Merger Sub, and DermTech Operations were all parties to the reorganization under IRC Section 368(b). As the transaction qualified as reorganization under IRC Section 368(a), there were no tax consequences to either DermTech Operations or the Company and all tax attributes retained carryover basis. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2020 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 6. Commitments and Contingencies Operating Leases In January 2013, DermTech Operations entered into a non-cancelable lease agreement for its operating facilities. In January 2014, DermTech Operations signed an amendment to the lease to extend the term through January 2017. In November 2016, DermTech Operations signed a second amendment to the lease to extend the term through March 2022. In August 2019, DermTech Operations signed a third amendment to the lease to add additional space, and in September 2019, the Company signed a fourth amendment to the lease to add additional space. In February 2020, the Company signed a fifth amendment to the lease to add additional space. In connection with the Business Combination, the Company assumed all obligations under the lease, as amended, from DermTech Operations. As part of the fifth amendment, the Company is entitled to a tenant improvement allowance for certain costs incurred while performing these improvements in the amount of $0.3 million, which amount may be increased by up to $0.1 million at the Company’s election and subject to a corresponding increase in rent. The Company records rent expense on a straight line basis over the life of the lease and the difference between the average rent expense and cash payments for rent is recorded as deferred rent and is included in accrued liabilities on the condensed consolidated balance sheet. Rent and associated common area maintenance expense totaled $0.6 million and $0.2 million for the three months ended June 30, 2020 and 2019, respectively and $0.8 million and $0.3 million for the six months ended June 30, 2020 and 2019, respectively. Future minimum operating lease payments for the operating facilities as of June 30, 2020 were (in thousands): Remainder of 2020 $ 670 2021 1,371 2022 1,411 2023 478 Total future minimum lease payments $ 3,930 Deferred Underwriting Fees In connection with the execution of the Merger Agreement, the Company, DermTech Operations and Cowen and Company, LLC (“Cowen”) entered into a letter agreement, dated May 29, 2019, (the “Deferred Underwriting Fee Assignment Agreement”), pursuant to which the Company agreed to assign to DermTech Operations, and DermTech Operations agreed to assume, the Company’s obligations under the Underwriting Agreement, dated as of June 19, 2017 (the “Underwriting Agreement”), by and among the Company and Cowen. On September 4, 2019, the Company, DermTech Operations and Cowen amended the Deferred Underwriting Fee Assignment Agreement, pursuant to which the Company paid Cowen $0.8 million for the reduction of the balance owed by the Company to Cowen under the Underwriting Agreement to $1.4 million. Pursuant to the terms of the Deferred Underwriting Fee Assignment Agreement, as amended, if the Company raises at least $15.0 million in proceeds received from equity financings consummated prior to the one-year anniversary of the Business Combination, excluding the proceeds received from any financing consummated prior to or simultaneous with the Business Combination, then the Company will pay to the underwriters $1.4 million within one week of the one-year anniversary of the Business Combination. In connection with the Company’s 2020 PIPE Financing, the Company raised $65.0 million in gross proceeds, which satisfied this condition of the Deferred Underwriting Fee Assignment Agreement. The Company’s payment to the Underwriters of $1.4 million by September 5, 2020 will satisfy the Company’s obligation to pay Cowen the deferred underwriting fees in full, and no further payment will be required of the Company in connection with the deferred underwriting fees. Legal Proceedings On July 7, 2020, the Company and LifeSci Capital LLC (“LifeSci”) participated in a mediation regarding a dispute that arose between them relating to the Business Combination and the 2019 PIPE Financing. During such mediation, the Company and LifeSci informally agreed to settle all claims and disputes between them. On July 14, 2020, the Company and LifeSci entered into a formal settlement agreement, pursuant to which the Company agreed to issue on or about September 4, 2020 in a private placement a variable number of shares of the Company’s common stock to LifeSci in the aggregate value of $1.0 million based upon the fair market value of a share of the Company’s common stock (the “Settlement Agreement”). Under the Settlement Agreement, the “fair market value of a share of common stock” shall be deemed to be the average of the closing prices of the Company’s common stock on the Nasdaq Capital Market over the five-day period ending on September 3, 2020. In lieu of paying LifeSci the full settlement amount in shares, the Company may, at its discretion, pay 50% of the settlement amount in cash and the remaining 50% in common shares. The Company determined that the Settlement Agreement constitutes a recognized subsequent event and was accrued for as of June 30, 2020. The Company is not currently party to any material legal proceedings. |
Retirement Plan
Retirement Plan | 6 Months Ended |
Jun. 30, 2020 | |
Compensation And Retirement Disclosure [Abstract] | |
Retirement Plan | 7. Retirement Plan The Company has an IRC Section 401(k) retirement plan, covering all employees. The Company does not offer a contribution percentage match. |
Business Combination with DermT
Business Combination with DermTech Operations | 6 Months Ended |
Jun. 30, 2020 | |
Business Combinations [Abstract] | |
Business Combination with DermTech Operations | 8. Business Combination with DermTech Operations On August 29, 2019, the Company completed the Business Combination with DermTech Operations. Upon the closing of the Business Combination, DermTech Operations became a wholly-owned subsidiary of the Company. The Business Combination was accounted for as a reverse acquisition in accordance with ASC 805-40, Business Combinations, Reverse Acquisitions, as the stockholders of DermTech Operations obtained effective control of the Company through (1) a majority of the voting common stock of the post-merger company, (2) appointment of a majority of the board of directors, (3) continued business operations of DermTech Operations, including certain directors and management, and (4) the ability to appoint the executive officers of the combined company. Accordingly, the assets, liabilities and results of operations prior periods presented before the Business Combination reflect those of DermTech Operations. Since the Business Combination, the assets, liabilities, and results of operations have been presented on a consolidated basis. Historical stockholders’ (deficit) equity of the Company prior to the Business Combination has been retroactively adjusted for the equivalent number of shares received by the stockholders of DermTech Operations after giving effect to any difference in par value of the Company and the DermTech Operations’ stock, with any such difference recognized as additional paid-in capital. Retained earnings and other equity balances of the Company/DermTech Operations have been carried forward after the Business Combination. Certain direct costs incurred in connection with the Business Combination were expensed in the period that such costs were incurred and services were received. Approximately $0.3 million in printer fees related to the Business Combination were treated as a reduction of the total amount of equity raised as an offset to additional paid in capital. |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 9. Related Party Transactions During 2019 and 2020, the Company engaged EVERSANA Life Science Services, LLC (“EVERSANA”) to provide certain marketing services to the Company. Leana Wood, the spouse of Todd Wood, the Company’s Chief Commercial Offer, is an employee of EVERSANA. The Company incurred $0.3 million and zero in costs for the three months ended June 30, 2020 and 2019, respectively, and $0.6 million and zero in costs for the six months ended June 30, 2020 and 2019, respectively. On October 1, 2019, the Company entered into a consulting agreement with Michael Dobak pursuant to which the Company will compensate Michael Dobak, in an amount not to exceed $100,000, for certain public relations and marketing services. On July 28, 2020, the Company and Michael Dobak entered into an amendment to such consulting agreement to modify the terms of Michael Dobak’s compensation. The amended consulting agreement compensates Michael Dobak $15,000 per month for the period May 11, 2020 through September 30, 2020 and also grants him a restricted stock unit award that fully vests in a single installment on August 31, 2020 and represents the contingent right to receive 5,000 shares of common stock on January 2, 2021. Michael Dobak is the brother of Dr. John Dobak, the Company’s Chief Executive Officer. The Company incurred $47,000 and zero in costs for the three months ended June 30, 2020 and 2019, respectively, and $0.1 million and zero in costs for the six months ended June 30, 2020 and 2019, respectively. There were no other related party transactions identified in 2020 and 2019. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | 10. Subsequent Events On July 14, 2020, the Company entered into the Settlement Agreement with LifeSci. Refer to Note 6 – Legal Proceedings The Company considered subsequent |
The Company and a Summary of _2
The Company and a Summary of its Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2020 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Nature of Operations | (a) On August 29, 2019, DermTech, Inc., formerly known as Constellation Alpha Capital Corp, (the “Company”), and DermTech Operations, Inc., formerly known as DermTech, Inc., (“DermTech Operations”), consummated the transactions contemplated by the Agreement and Plan of Merger, dated as of May 29, 2019, by and among the Company, DT Merger Sub, Inc., a wholly owned subsidiary of the Company (“Merger Sub”), and DermTech Operations. The Company refers to this agreement, as amended by that certain First Amendment to Agreement and Plan of Merger dated as of August 1, 2019, as the Merger Agreement. Pursuant to the Merger Agreement, Merger Sub merged with and into DermTech Operations, with DermTech Operations surviving as a wholly-owned subsidiary of the Company. The Company refers to this transaction as the Business Combination. In connection with and two days prior to the completion of the Business Combination, the Company domesticated from the British Virgin Islands to Delaware. DermTech Operations changed its name from DermTech, Inc. to DermTech Operations, Inc. shortly before the completion of the Business Combination. On August 29, 2019, immediately following the completion of the Business Combination, the Company changed its name from Constellation Alpha Capital Corp. to DermTech, Inc., and then effected a one-for-two reverse stock split of its common stock (“Reverse Stock Split”). The Company is an emerging growth molecular diagnostic company developing and marketing its Clinical Laboratory Improvement Amendments of 1988 (“CLIA”) laboratory services including molecular pathology tests to facilitate the diagnosis of dermatologic conditions including melanoma. The Company has developed a proprietary, non-invasive technique for sampling the surface layers of the skin using an adhesive patch in order to collect individual biological information for commercial applications in the medical diagnostic field. During and following the first and second quarters of 2020, there has been a widespread worldwide impact from the COVID-19 pandemic. The Company is considered an essential business due to the importance of early melanoma detection, which has allowed the Company’s CLIA laboratory to remain fully operational. The Company has implemented additional safety measures and social distancing with its CLIA laboratory operations and has transitioned administrative functions to working remotely. Beginning in March 2020 and continuing through the second quarter of 2020, the ongoing COVID-19 pandemic has reduced patient access to clinician offices for in-person testing, which has resulted in a reduced volume of billable samples received during the second quarter of 2020. The Company expects the impact to billable sample volume to continue until patient access to in-person testing fully resumes or telemedicine options are more widely adopted. Additionally, the ongoing COVID-19 pandemic has negatively affected and will continue to negatively affect the Company’s pharmaceutical customers’ clinical trials. The extent of such effect on the Company’s future revenue is uncertain and will depend on the duration and extent of the effects of the ongoing COVID-19 pandemic on the Company’s pharmaceutical customers’ clinical trials. |
Basis of Presentation | (b) These condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). In the opinion of management, all adjustments, which include only normal recurring adjustments considered necessary for a fair presentation, have been included. |
Use of Estimates | (c) The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires that management make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the amounts of revenues and expenses reported during the period. On an ongoing basis, management evaluates these estimates and judgments, including those related to assay revenue, stock-based compensation, accounts receivable and the realization of deferred tax assets. Actual results may differ from those estimates. |
Cash and Cash Equivalents | (d) The Company considers all highly liquid investments with remaining maturities of three months or less when purchased to be cash equivalents. The Company maintains its cash balances at banks and financial institutions. The balances are insured up to the legal limit. The Company maintains cash balances that may, at times, exceed this insured limit. |
Property and Equipment | (e) Property and equipment is recorded at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, which range from two to five years. Leasehold improvements are depreciated over the shorter of the remaining term of the lease or the useful life of the asset. The Company recorded depreciation expense of $0.1 million and $19,000 for the three months ended June 30, 2020 and 2019, respectively, and $0.1 million and $38,000 during the six months ended June 30, 2020 and 2019, respectively. No property or equipment was disposed of during the three or six months ended June 30, 2020 and 2019. The Company assesses its long-lived assets, consisting primarily of property and equipment, for impairment when material events or changes in circumstances indicate that the carrying value may not be recoverable. There were no impairment losses for the three or six months ended June 30, 2020 and 2019. |
Research and Development | (f) Costs incurred in connection with research and development (“R&D”) activities are expensed as incurred. R&D expenses consist of (i) employee-related expenses, including salaries, benefits, travel and stock compensation expense; (ii) and facilities and other expenses, which include direct and allocated expenses for rent and maintenance of facilities and laboratory and other supplies. The Company expenses all costs as incurred in connection with patent applications (including direct application fees and the legal and consulting expenses related to making such applications), and such costs are included in general and administrative expenses. |
Concentration of Credit Risk | (g) Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents. As of June 30, 2020, the Company maintained $61.1 million in a sweep account, which maintains cash balances throughout various interest bearing bank accounts under the $250,000 insurance limit provided by the Federal Deposit Insurance Corporation for one federally insured financial institution. The Company has not experienced any losses in such accounts. |
Income Taxes | (h) The Company provides for federal and state income taxes on the asset and liability approach which requires deferred tax assets and liabilities to be recognized based on temporary differences between the condensed consolidated financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the temporary differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance when, in management’s opinion, it is more likely than not that some portion or all of the deferred tax assets will not be realized. The Company considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. The Company’s valuation allowance is based on available evidence, including its current year and prior year operating losses, evaluation of positive and negative evidence with respect to certain specific deferred tax assets including evaluation sources of future taxable income to support the realization of the deferred tax assets. The Company has established a full valuation allowance on the deferred tax assets as of June 30, 2020. Current and deferred tax assets and liabilities are recognized based on the tax positions taken or expected to be taken in the Company’s income tax returns. U.S. GAAP requires that the tax benefits of an uncertain tax position can only be recognized when it is more likely than not that the tax position will be sustained upon examination by the relevant taxing authority. Tax benefits related to tax positions that do not meet this criterion are not recognized in the condensed consolidated financial statements, of which there are none. The Company recognizes interest and penalties related to income tax matters in income tax expense. |
Revenue Recognition | (i) The Company’s revenue is generated from two revenue streams: contract revenue and assay revenue. The Company accounts for revenue in accordance with Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers (Topic 606) Assay Revenue The Company generates revenues from its Pigmented Lesion Assay (“PLA”) and Nevome services it provides to healthcare clinicians in various states throughout the United States to assist in a clinician’s diagnosis of melanoma. The Company provides prescribing clinicians with its adhesive sample collection kits to perform non-invasive skin biopsies of clinically ambiguous pigmented skin lesions on patients. The Company also offers clinicians a telemedicine solution where they can request the PLA collection kit be sent to the patient’s home for a clinician-guided remote collection on ambiguous pigmented skin lesions. Once the sample is collected by the healthcare clinician or the patient via the telemedicine solution, it is returned to the Company’s CLIA laboratory for analysis. The patient RNA and deoxyribonucleic acid (“DNA”) is extracted from the adhesive patch collection kit and analyzed using gene expression technology to determine if the pigmented skin lesion contains certain genomic features indicative of melanoma. Upon completion of the gene expression analysis, a final report is drafted and provided to the dermatologists detailing the test results for the pigmented skin lesion indicating whether the sample collected is indicative of melanoma or not. Contract Revenue Contract revenue is generated from the sale of laboratory services and adhesive sample collection kits to third party companies through contract research agreements. Revenues are generated from providing gene expression tests to facilitate the development of drugs designed to treat dermatologic conditions. The provision of gene expression services may include sample collection using the Company’s patented adhesive patch biopsy devices, assay development for research partners, ribonucleic acid (“RNA”) isolation, expression, amplification and detection, including data analysis and reporting. (a) Disaggregation of Revenue The following table presents the Company’s revenues disaggregated by revenue source during the three and six months ended June 30, 2020 and 2019, respectively, (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Assay Revenue PLA Test $ 648 $ 285 $ 1,445 $ 520 Contract Revenue Adhesive Patch kits 24 169 38 335 RNA Extractions 94 85 764 200 Project Management Fees 78 75 154 153 Other — — — 2 Total Revenue $ 844 $ 614 $ 2,401 $ 1,210 (b) Contract Balances and Deferred Revenue The timing of revenue recognition, billings and cash collections results in billed accounts receivable and deferred revenue on the condensed consolidated balance sheets. In a majority of agreements that produce contract revenue, the Company receives a substantial up-front payment and additional payments upon the achievement of various milestones over the life of the agreement. This results in deferred revenue and is relieved upon delivery of the applicable adhesive patch kits or RNA extraction results. Changes in accounts receivable and deferred revenue were not materially impacted by any other factors. The Company records a deferred revenue liability if a customer pays consideration before the Company transfers a good or service to the customer. Deferred revenue primarily represents upfront milestone payments, for which consideration is received prior to when goods/services are completed or delivered. Deferred revenue at June 30, 2020 and December 31, 2019 was $1.0 million and $1.4 million, respectively. |
Accounts Receivable | (j) Assay Accounts Receivable Due to the nature of the Company’s assay revenue, it can take a significant amount of time to collect upon billed PLA services. The Company prepares an analysis on reimbursement collections and data obtained for each financial reporting period to determine the amount of receivables to be recorded relating to PLA services performed in the applicable period. The Company generally does not perform evaluations of customers’ financial condition and generally does not require collateral. Accounts receivable are written off when all efforts to collect the balance have been exhausted. Adjustments for implicit price concessions attributable to variable consideration are incorporated into the measurement of the accounts receivable balances. Contract Accounts Receivable Contract accounts receivable are recorded at the net invoice value and are not interest bearing. The Company reserves specific receivables if collectability is no longer reasonably assured, and as of June 30, 2020, the Company did not maintain any reserve over contract receivables as they deal with large established credit worthy customers. The Company re-evaluates such reserves on a regular basis and adjusts its reserves as needed. Once a receivable is deemed to be uncollectible, such balance is charged against the reserve. The Company recorded $36,000 and $0.3 million of contract accounts receivable as of June 30, 2020 and December 31, 2019, respectively. |
Freight and Shipping Costs | (k) The Company records outbound freight and shipping costs for its contract and assay revenues in cost of revenues. |
Comprehensive Income / (Loss) | (l) Comprehensive income / (loss) is defined as a change in equity during a period from transactions and other events and circumstances from non-owner sources. The Company’s comprehensive loss was the same as its reported net loss for all periods presented. |
Segment Reporting | (m) 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. |
Net Loss Per Share | (n) Basic and diluted net loss per common share is determined by dividing net loss applicable to common shareholders by the weighted average common shares outstanding during the period. Because there is a net loss attributable to common shareholders during the three and six months ended June 30, 2020 and 2019, the outstanding common stock warrants, stock options, restricted stock units and preferred stock have been excluded from the calculation of diluted loss per common share because their effect would be anti-dilutive. Therefore, the weighted average shares used to calculate both basic and diluted loss per share are the same. Diluted net loss per common share for the six months ended June 30, 2020 excludes the effect of anti-dilutive equity instruments including 1,139,194 shares of common stock issuable upon conversion of the Company’s the Company’s |
Stock-Based Compensation | (o) Effective January 1, 2020, the Company elected an accounting policy change to no longer estimate forfeitures in connection with expense recognition of stock options and RSUs. All stock options and RSUs granted on or subsequent to January 1, 2020 will recognize forfeitures when they occur in accordance with Accounting Standards Update (“ASU”) 2016-09, Compensation - Stock Compensation (Topic 718) Compensation costs associated with stock option awards and other forms of equity compensation are measured at the grant-date fair value of the awards and recognized over the requisite service period of the awards on a ratable basis. The Company grants stock options to purchase common stock to employees with exercise prices equal to the fair market value of the underlying stock, as determined by the board of directors, management and outside valuation experts prior to the Business Combination. The board of directors and outside valuation experts determined the fair value of the underlying stock by considering a number of factors, including historical and projected financial results, the risks the Company faced at the time, the preferences of the Company’s debt holders and preferred stockholders, and the lack of liquidity of the Company’s common stock. Subsequent to the close of the Business Combination, the fair market value of stock options is based on the closing stock price on the grant date. The fair value of each stock option award is estimated using the Black-Scholes-Merton valuation model. Such value is recognized as expense over the requisite service period using the ratable method. The expected term of options is based on the simplified method which defines the expected term as the average of the contractual term of the options and the weighted average vesting period for all option tranches. The expected volatility of stock options is based upon the historical volatility of a number of related publicly traded companies in similar stages of development as well as the volatility of the Company’s common stock. The risk-free interest rate is based on the average yield of U.S. Treasury securities with remaining terms similar to the expected term of the share-based awards. The assumed dividend yield was based on the Company’s expectation of not paying dividends in the foreseeable future. The Company accounts for stock options to non-employees using the fair value approach. The fair value of these options is measured using the Black-Scholes-Merton option pricing model, reflecting the same assumptions applied to employee options, other than expected life, which is assumed to be the remaining contractual life of the award. Options that are granted to employees generally have a requisite service period of three to four years. Equity instruments awarded to non-employees are periodically re-measured as the underlying awards vest unless the instruments are fully vested, immediately exercisable, and non-forfeitable on the date of grant. RSUs are considered restricted stock. The fair value of restricted stock is equal to the fair market value of the underlying stock, as determined by the board of directors, management and input from outside valuation experts prior to the Business Combination. Subsequent to the close of the Business Combination, the fair market value of RSUs is based on the closing stock price on the grant date. The Company recognizes stock-based compensation expense based on the fair value on a ratable basis over the requisite service periods of the awards. RSUs that are granted to employees have a requisite service period typically between two and four years. All stock options and RSUs granted prior to January 1, 2020 will maintain the estimated forfeiture approach and will be recognized over the requisite service period using the straight-line method. The fair value of each option for employees was estimated on the date of grant using the following assumptions: Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Assumed risk-free interest rate 0.43% - 0.44% 2.24% 0.43% - 1.69% 2.24% - 2.51% Assumed volatility 68.34% 73.20% 64.03% - 68.34% 72.30% - 73.20% Expected option term 5.55 - 6.25 6.08 5.04 - 6.25 6.04 - 6.08 Expected dividend yield — — — — The Company recorded stock-based compensation expense for employee options, RSUs, common stock warrants, and consultant options of $1.1 million and $0.3 million for the three months ended June 30, 2020 and 2019, respectively, and $2.1 million and $0.5 million for the six months ended June 30, 2020 and 2019, respectively. The total compensation cost related to non-vested awards not yet recognized at June 30, 2020 was $12.6 million, |
Fair Value Measurements | ( p ) The Company uses a three-tier fair value hierarchy to prioritize the inputs used in the Company’s fair value measurements. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets for identical assets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. There were no other assets or liabilities that were measured at fair value on a recurring basis as of June 30, 2020 or December 31, 2019. The Company believes the carrying amount of cash and cash equivalents, accounts payable and accrued expenses approximate their estimated fair values due to the short-term nature of these accounts. |
Accounting Pronouncement Recently Adopted | ( q ) In June 2019, the Financial Accounting Standards Board (“FASB”) issued ASU 2018-07, Compensation-Stock Compensation (Topic 718) – Improvements to Nonemployee Share-Based Payment Accounting In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement |
Accounting Pronouncements Issued But Not Yet Effective | ( r ) In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) Codification Improvements to Topic 842, Leases Leases (Topic 842): Targeted Improvements Narrow-Scope Improvements for Lessors Lease (Topic 842): Codification Improvements In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes |
The Company and a Summary of _3
The Company and a Summary of its Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Schedule of Revenues Disaggregated by Revenue Source | The following table presents the Company’s revenues disaggregated by revenue source during the three and six months ended June 30, 2020 and 2019, respectively, (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Assay Revenue PLA Test $ 648 $ 285 $ 1,445 $ 520 Contract Revenue Adhesive Patch kits 24 169 38 335 RNA Extractions 94 85 764 200 Project Management Fees 78 75 154 153 Other — — — 2 Total Revenue $ 844 $ 614 $ 2,401 $ 1,210 |
Assumptions Used to Estimate Fair Value of Each Option for Employees on Date of Grant | The fair value of each option for employees was estimated on the date of grant using the following assumptions: Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Assumed risk-free interest rate 0.43% - 0.44% 2.24% 0.43% - 1.69% 2.24% - 2.51% Assumed volatility 68.34% 73.20% 64.03% - 68.34% 72.30% - 73.20% Expected option term 5.55 - 6.25 6.08 5.04 - 6.25 6.04 - 6.08 Expected dividend yield — — — — |
Balance Sheet Details (Tables)
Balance Sheet Details (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Schedule of Condensed Consolidated Balance Sheet Details | Condensed consolidated balance sheet details are as follows (in thousands): June 30, 2020 December 31, 2019 Prepaid expenses and other current assets: Prepaid insurance $ 345 $ 951 Prepaid trade shows 15 85 Prepaid advertising fees 55 — Prepaid subscription fees 82 21 Other current assets 50 4 Total prepaid expenses and other current assets $ 547 $ 1,061 Property and equipment, gross: Laboratory equipment $ 1,756 $ 1,135 Computer equipment 41 15 Furniture and fixtures 63 34 Leasehold improvements 596 32 Total property and equipment, gross 2,456 1,216 Less accumulated depreciation (387 ) (239 ) Total property and equipment, net $ 2,069 $ 977 June 30, 2020 December 31, 2019 Accrued compensation: Accrued paid time off $ 459 $ 309 Accrued bonus and deferred compensation 796 465 Accrued severance 9 368 Total accrued compensation $ 1,264 $ 1,142 Accrued liabilities: Accrued consulting services $ 41 $ 37 Accrued lawsuit settlement 1,011 — Accrued printing fees — 55 Deferred rent 96 88 Other accrued expenses 157 38 Total accrued liabilities $ 1,305 $ 218 |
Convertible Preferred Stock a_2
Convertible Preferred Stock and Stockholders’ Equity (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Stockholders Equity Note [Abstract] | |
Summary of Common Stock Reserved for Future Issuance | Common stock reserved for future issuance consists of the following at June 30, 2020 and December, 31 2019 (in thousands): June 30, 2020 December 31, 2019 Warrants to purchase common stock 420 466 Public Warrants to purchase common stock* 3,734 3,734 Stock options issued and outstanding 1,160 444 RSUs issued and outstanding 639 — Authorized for future option grants 1,402 143 Authorized for future ESPP purchases 400 — Total common stock reserved for future issuance 7,755 4,787 * Four Public Warrants are needed to purchase one share of common stock. The numbers presented above reflect the amount of shares of common stock underlying Public Warrants. |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Commitments And Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Operating Lease Payments for Operating Facilities | Future minimum operating lease payments for the operating facilities as of June 30, 2020 were (in thousands): Remainder of 2020 $ 670 2021 1,371 2022 1,411 2023 478 Total future minimum lease payments $ 3,930 |
The Company and a Summary of _4
The Company and a Summary of its Significant Accounting Policies - Additional Information (Details) | Aug. 29, 2019 | Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2020USD ($)Revenue_StreamSegmentshares | Jun. 30, 2019USD ($)shares | Dec. 31, 2019USD ($) |
The Company and Summary of its Significant Accounting Policies [Line Items] | ||||||
Conversion ratio of reverse stock split | 0.5 | 0.5 | ||||
Description of reverse stock split of common stock | one-for-two | |||||
Depreciation expense | $ 19,000 | $ 100,000 | $ 148,000 | $ 38,000 | ||
Disposal of plant or equipment | 0 | 0 | 0 | 0 | ||
Impairment losses | 0 | 0 | 0 | 0 | ||
Sweep account | 61,100,000 | 61,100,000 | ||||
Insured amount by FDIC | 250,000 | $ 250,000 | ||||
Number of revenue streams | Revenue_Stream | 2 | |||||
Deferred revenue | 1,017,000 | $ 1,017,000 | $ 1,390,000 | |||
Accounts receivable | 722,000 | $ 722,000 | 680,000 | |||
Number of operating segments | Segment | 1 | |||||
Stock-based compensation expense | 1,100,000 | $ 300,000 | $ 2,100,000 | $ 500,000 | ||
Compensation cost related to non-vested awards not yet recognized | 12,600,000 | $ 12,600,000 | ||||
Weighted average term expected to be recognized | 3 years 1 month 17 days | |||||
Fair value other assets measured on recurring basis | 0 | $ 0 | ||||
Fair value liabilities measured on recurring basis | 0 | $ 0 | ||||
Conversion of Preferred Stock | ||||||
The Company and Summary of its Significant Accounting Policies [Line Items] | ||||||
Anti-dilutive equity instruments excluded from diluted net loss per common share | shares | 1,139,194 | 1,524,122 | ||||
Common Stock Warrants | ||||||
The Company and Summary of its Significant Accounting Policies [Line Items] | ||||||
Anti-dilutive equity instruments excluded from diluted net loss per common share | shares | 4,153,631 | 646,886 | ||||
Stock Options and Restricted Stock Units | ||||||
The Company and Summary of its Significant Accounting Policies [Line Items] | ||||||
Anti-dilutive equity instruments excluded from diluted net loss per common share | shares | 1,798,900 | 1,567,011 | ||||
Assay Revenue | ||||||
The Company and Summary of its Significant Accounting Policies [Line Items] | ||||||
Accounts receivable gross | 700,000 | $ 700,000 | 500,000 | |||
Contract Revenue | ||||||
The Company and Summary of its Significant Accounting Policies [Line Items] | ||||||
Accounts receivable | $ 36,000 | $ 36,000 | $ 300,000 | |||
Minimum | ||||||
The Company and Summary of its Significant Accounting Policies [Line Items] | ||||||
Useful life of the assets | 2 years | |||||
Minimum | Stock Options | ||||||
The Company and Summary of its Significant Accounting Policies [Line Items] | ||||||
Requisite service period | 3 years | |||||
Minimum | Restricted Stock Units | ||||||
The Company and Summary of its Significant Accounting Policies [Line Items] | ||||||
Requisite service period | 2 years | |||||
Maximum | ||||||
The Company and Summary of its Significant Accounting Policies [Line Items] | ||||||
Useful life of the assets | 5 years | |||||
Maximum | Stock Options | ||||||
The Company and Summary of its Significant Accounting Policies [Line Items] | ||||||
Requisite service period | 4 years | |||||
Maximum | Restricted Stock Units | ||||||
The Company and Summary of its Significant Accounting Policies [Line Items] | ||||||
Requisite service period | 4 years |
The Company and a Summary of _5
The Company and a Summary of its Significant Accounting Policies - Schedule of Revenues Disaggregated by Revenue Source (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Disaggregation Of Revenue [Line Items] | ||||
Total Revenue | $ 844 | $ 614 | $ 2,401 | $ 1,210 |
Assay Revenue, PLA Test | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total Revenue | 648 | 285 | 1,445 | 520 |
Contract Revenue, Adhesive Patch kits | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total Revenue | 24 | 169 | 38 | 335 |
Contract Revenue, RNA Extractions | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total Revenue | 94 | 85 | 764 | 200 |
Contract Revenue, Project Management Fees | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total Revenue | $ 78 | $ 75 | $ 154 | 153 |
Contract Revenue, Other | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total Revenue | $ 2 |
The Company and a Summary of _6
The Company and a Summary of its Significant Accounting Policies - Assumptions Used to Estimate Fair Value of Each Option for Employees on Date of Grant (Details) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Assumed risk-free interest rate | 2.24% | |||
Assumed risk-free interest rate,minimum | 0.43% | 0.43% | 2.24% | |
Assumed risk-free interest rate,maximum | 0.44% | 1.69% | 2.51% | |
Assumed volatility | 68.34% | 73.20% | ||
Assumed volatility,minimum | 64.03% | 72.30% | ||
Assumed volatility,maximum | 68.34% | 73.20% | ||
Expected option term | 6 years 29 days | |||
Minimum | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Expected option term | 5 years 6 months 18 days | 5 years 14 days | 6 years 14 days | |
Maximum | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Expected option term | 6 years 3 months | 6 years 3 months | 6 years 29 days |
Balance Sheet Details - Schedul
Balance Sheet Details - Schedule of Condensed Consolidated Balance Sheet Details (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Prepaid expenses and other current assets: | ||
Prepaid insurance | $ 345 | $ 951 |
Prepaid trade shows | 15 | 85 |
Prepaid advertising fees | 55 | |
Prepaid subscription fees | 82 | 21 |
Other current assets | 50 | 4 |
Total prepaid expenses and other current assets | 547 | 1,061 |
Property and equipment, gross: | ||
Laboratory equipment | 1,756 | 1,135 |
Computer equipment | 41 | 15 |
Furniture and fixtures | 63 | 34 |
Leasehold improvements | 596 | 32 |
Total property and equipment, gross | 2,456 | 1,216 |
Less accumulated depreciation | (387) | (239) |
Total property and equipment, net | 2,069 | 977 |
Accrued compensation: | ||
Accrued paid time off | 459 | 309 |
Accrued bonus and deferred compensation | 796 | 465 |
Accrued severance | 9 | 368 |
Total accrued compensation | 1,264 | 1,142 |
Accrued liabilities: | ||
Accrued consulting services | 41 | 37 |
Accrued lawsuit settlement | 1,011 | |
Accrued printing fees | 55 | |
Deferred rent | 96 | 88 |
Other accrued expenses | 157 | 38 |
Total accrued liabilities | $ 1,305 | $ 218 |
Debt - Additional Information (
Debt - Additional Information (Details) | Sep. 24, 2019$ / shares | Sep. 23, 2019USD ($)$ / shares | Aug. 29, 2019USD ($)shares | Jun. 10, 2019USD ($) | Nov. 30, 2018USD ($) | Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | Dec. 31, 2019USD ($) |
Debt Instrument [Line Items] | ||||||||||
Proceeds from issuance of convertible note | $ 2,600,000 | |||||||||
Convertible debt converted in to common shares | shares | 2,267,042 | |||||||||
Gain on debt extinguishment | $ 900,000 | |||||||||
2018 Convertible Bridge Notes | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Convertible note, principal amount | $ 6,800,000 | |||||||||
Proceeds from issuance of convertible note | $ 6,600,000 | |||||||||
Debt instrument, interest rate | 10.00% | |||||||||
Debt maturity date | Mar. 31, 2019 | |||||||||
Increase in interest rate if bridge notes not paid or converted | 15.00% | |||||||||
Percentage of multiplier on price per share of new stock paid in qualified financing by investors | 70.00% | |||||||||
Denominator for calculating capitalization value for price per share | $ 45,000,000 | $ 45,000,000 | ||||||||
Debt discount | 2,500,000 | $ 2,500,000 | ||||||||
Maturity date, description | As part of the amendment, the maturity dates of the notes were extended to the earliest of (i) September 24, 2019; (ii) the occurrence of an Event of Default (as defined in the 2018 Bridge Notes); (iii) the consummation of a liquidation or dissolution of DermTech Operations; (iv) a Liquidation Transaction (as defined in the 2018 Bridge Notes); or (v) the consummation of a merger with or into the Company or any of its subsidiaries. | |||||||||
Convertible notes conversion ratio | 0.70 | |||||||||
Description of merger consideration | “Merger Consideration” means (i) the lesser of $6.46 and (ii) the offering price per share of the private investment in public equity transaction to be consummated concurrently with the consummation of the Qualifying Merger (the “2019 PIPE Financing”) multiplied by the Conversion Ratio. | |||||||||
Merger consideration maximum price per share | $ / shares | $ 6.46 | |||||||||
Debt Conversion Ratio Number Used As Numerator to Derive Quotient | $ 8,000,000 | |||||||||
Liability balance | 0 | $ 0 | $ 0 | |||||||
2018 Convertible Bridge Notes | Other Expense | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Loss on change in fair value of derivative liability | 0 | $ 36,000,000,000 | 0 | 200,000 | ||||||
2018 Convertible Bridge Notes | Minimum | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Gross proceeds from issuance of equity securities | 20,000,000 | |||||||||
2019 Convertible Bridge Notes | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument, interest rate | 10.00% | |||||||||
Debt discount | 300,000 | $ 300,000 | ||||||||
Maturity date, description | These convertible bridge notes carried an interest rate of 10% and matured after the earliest to occur of: (i) September 25, 2019; (ii) the occurrence of an Event of Default (as defined in the 2019 Bridge Notes); (iii) the consummation of a liquidation or dissolution of DermTech Operations; (iv) a Liquidation Transaction (as defined in the 2019 Bridge Notes); or (v) the consummation of a merger of DermTech Operations with DT Merger Sub, Inc., a previous subsidiary of the Company, in accordance with the Merger Agreement. | |||||||||
Debt Conversion Ratio Number Used As Numerator to Derive Quotient | $ 8,000,000 | |||||||||
Proceeds from issuance of convertible note | $ 2,600,000 | |||||||||
Debt conversion feature | Upon the conversion of these notes, the note holders were entitled to receive a number of shares of DermTech Operations’ common stock equal to the quotient obtained by dividing (i) the unpaid principal amount of these notes plus interest accrued but unpaid thereon, by (1) if the Qualifying Merger consummates prior to the maturity date, the lesser of (x) $5.80 and (y) 90% of the Merger Consideration (as defined below), or (2) if the Qualifying Merger consummates on or after the maturity date, the lesser of (x) $4.51 and (y) 70% of the Merger Consideration. | |||||||||
Liability balance | 0 | $ 0 | $ 0 | |||||||
2019 Convertible Bridge Notes | Other Expense | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Loss on change in fair value of derivative liability | $ 0 | $ 3,000 | $ 0 | $ 3,000 | ||||||
2019 Convertible Bridge Notes | Maximum | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Convertible notes conversion ratio | 0.70 | 0.90 | ||||||||
Convertible notes conversion price | $ / shares | $ 4.51 | $ 5.80 |
Convertible Preferred Stock a_3
Convertible Preferred Stock and Stockholders Equity - Additional Information (Details) | May 27, 2020shares | Mar. 02, 2020USD ($)shares | Feb. 28, 2020USD ($)$ / sharesshares | Sep. 24, 2019 | Aug. 29, 2019USD ($)shares | Jan. 04, 2019USD ($) | Jun. 23, 2017shares | Aug. 31, 2016USD ($)$ / shares | Jun. 30, 2020$ / sharesshares | Mar. 31, 2020shares | Jun. 30, 2020USD ($)Warrant$ / sharesshares | Dec. 31, 2018USD ($)$ / sharesshares | Dec. 31, 2017USD ($)shares | Dec. 31, 2016$ / sharesshares | Dec. 31, 2018$ / sharesshares | Dec. 31, 2019$ / sharesshares | May 29, 2019shares |
Class of Stock [Line Items] | |||||||||||||||||
Common stock, shares authorized | 50,000,000 | 50,000,000 | 50,000,000 | ||||||||||||||
Preferred stock, shares authorized | 5,000,000 | 5,000,000 | |||||||||||||||
Common stock, par value per share | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||||||||||||
Preferred stock, par value per share | $ / shares | $ 0.0001 | $ 0.0001 | |||||||||||||||
Business combination shares issued for each share of common stock | 1.16 | ||||||||||||||||
Conversion ratio of reverse stock split | 0.5 | 0.5 | |||||||||||||||
Preferred stock, issuance costs | $ | $ 77,000 | ||||||||||||||||
Common stock warrants issued | 102,740 | ||||||||||||||||
Stock-based compensation expense recognized as a result of accelerated vesting | $ | $ 400,000 | ||||||||||||||||
Common stock available for issuance | 7,755 | 7,755 | 4,787 | ||||||||||||||
2010 Stock Option Plan | |||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||
Common stock initially reserved for issuance | 1,000,000 | 1,000,000 | |||||||||||||||
Contractual term of options granted | 10 years | ||||||||||||||||
Options remain available for future grant | 0 | 0 | 100,000 | ||||||||||||||
2010 Stock Option Plan | Incentive Stock Options | |||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||
Options granted to shareholder, percentage | 10.00% | ||||||||||||||||
2020 Equity Incentive Plan | |||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||
Common stock, shares authorized | 1,900,000 | 1,900,000 | |||||||||||||||
Contractual term of options granted | 10 years | ||||||||||||||||
Options remain available for future grant | 1,401,802 | 1,401,802 | |||||||||||||||
Common stock outstanding percentage | 3.50% | ||||||||||||||||
2020 Employee Stock Purchase Plan | |||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||
Options remain available for future grant | 400,000 | 400,000 | |||||||||||||||
Shares, issued | 300,000 | 300,000 | |||||||||||||||
Common stock outstanding percentage | 1.00% | ||||||||||||||||
Percentage of price at shares purchased | 85.00% | ||||||||||||||||
Maximum | 2020 Equity Incentive Plan | |||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||
Shares, issued | 1,400,000 | 1,400,000 | |||||||||||||||
Term of the option | 5 years | ||||||||||||||||
Maximum | 2020 Employee Stock Purchase Plan | |||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||
Common stock available for issuance | 400,000 | 400,000 | |||||||||||||||
Minimum | 2010 Stock Option Plan | Incentive and Non-statutory Stock Options | |||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||
Options granted, exercise price expressed as a percentage of fair market value | 100.00% | ||||||||||||||||
Minimum | 2010 Stock Option Plan | Incentive Stock Options | |||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||
Options granted, exercise price expressed as a percentage of fair market value | 110.00% | ||||||||||||||||
Minimum | 2020 Equity Incentive Plan | Incentive Stock Options | |||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||
Options granted, exercise price expressed as a percentage of fair market value | 110.00% | ||||||||||||||||
Minimum | 2020 Equity Incentive Plan | Incentive and Non-qualified Stock Options | |||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||
Options granted, exercise price expressed as a percentage of fair market value | 100.00% | ||||||||||||||||
Public Warrants | |||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||
Warrants issued to purchase common stock | 14,936,250 | ||||||||||||||||
Warrants expiration period | 5 years | 5 years | |||||||||||||||
Number of warrants entitle holder to purchase one share | Warrant | 4 | ||||||||||||||||
Warrants outstanding | 14,936,250 | 14,936,250 | 14,936,250 | ||||||||||||||
Series C Warrants | |||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||
Warrants expiration period | 3 years | 3 years | |||||||||||||||
Warrants outstanding | 143,222 | 143,222 | 202,897 | ||||||||||||||
Placement Agent Warrants | |||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||
Warrants issued to purchase common stock | 168,522 | 72,658 | |||||||||||||||
Warrants expiration period | 7 years | 7 years | 7 years | ||||||||||||||
Warrants outstanding | 241,217 | ||||||||||||||||
Placement Agent Warrants | 2018 Convertible Bridge Notes | |||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||
Warrants issued to purchase common stock | 15,724 | ||||||||||||||||
Warrants expiration period | 7 years | 7 years | |||||||||||||||
Warrants outstanding | 254,026 | 254,026 | |||||||||||||||
Management Warrants | |||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||
Warrants expiration period | 10 years | 10 years | |||||||||||||||
Warrants outstanding | 22,320 | 22,320 | 22,320 | ||||||||||||||
Securities Purchase Agreement | |||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||
Preferred stock, issuance costs | $ | $ 5,100,000 | ||||||||||||||||
Gross proceeds from PIPE financing | $ | $ 65,000,000 | ||||||||||||||||
2020 PIPE Financing | Securities Purchase Agreement | |||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||
PIPE financing closing date | Mar. 4, 2020 | ||||||||||||||||
Common Stock | |||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||
Issuance of common stock through conversion, Shares | 3,198,949 | ||||||||||||||||
Common Stock | Public Warrants | |||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||
Number of shares issued for each warrant | 0.25 | 0.25 | |||||||||||||||
Exercise price of warrant | $ / shares | $ 23 | $ 23 | |||||||||||||||
Common Stock | Series C Warrants | |||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||
Exercise price of warrant | $ / shares | $ 9.54 | $ 9.54 | |||||||||||||||
Common Stock | Placement Agent Warrants | |||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||
Number of shares issued for each warrant | 1 | 1 | 1 | ||||||||||||||
Exercise price of warrant | $ / shares | $ 9.54 | $ 8.68 | $ 9.54 | ||||||||||||||
Common Stock | Placement Agent Warrants | 2018 Convertible Bridge Notes | |||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||
Number of shares issued for each warrant | 1 | 1 | |||||||||||||||
Exercise price of warrant | $ / shares | $ 9.54 | $ 9.54 | |||||||||||||||
Common Stock | Management Warrants | |||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||
Exercise price of warrant | $ / shares | $ 1.08 | $ 1.08 | |||||||||||||||
Warrants vesting period | 4 years | ||||||||||||||||
Common Stock | 2020 PIPE Financing | Securities Purchase Agreement | |||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||
Issuance of preferred stock, price per share | $ / shares | $ 10.50 | ||||||||||||||||
Issuance of stock | 2,467,724 | ||||||||||||||||
Issuance price per share | $ / shares | $ 10.50 | ||||||||||||||||
Series C convertible preferred stock | |||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||
Issuance of preferred stock, total offering amount | $ | $ 15,000,000 | ||||||||||||||||
Issuance of preferred stock, price per share | $ / shares | $ 9.54 | ||||||||||||||||
Preferred stock, shares issued during period | 506,539 | 559,849 | |||||||||||||||
Proceeds from issuance of Convertible Preferred Stock | $ | $ 4,800,000 | $ 5,300,000 | |||||||||||||||
Preferred stock, issuance costs | $ | $ 300,000 | $ 400,000 | |||||||||||||||
Issuance price per share | $ / shares | $ 9.54 | ||||||||||||||||
Series C convertible preferred stock | Series C Warrants | |||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||
Percentage of warrants issued in connection with preferred stock purchased | 20.00% | ||||||||||||||||
Series C convertible preferred stock | Series C Warrants | Minimum | |||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||
Preferred stock value of shares purchased in single closing | $ | $ 1,000,000 | ||||||||||||||||
Series C convertible preferred stock | Common Stock | |||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||
Series c convertible preferred stock convert into common stock shares, conversion ratio | 1 | ||||||||||||||||
Convertible preferred stock convertible into shares of common stock | 1 | ||||||||||||||||
Series A Convertible Preferred Stock | |||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||
Preferred stock, shares authorized | 1,250 | 1,250 | 1,250 | ||||||||||||||
Preferred stock, par value per share | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||||||||||||
Preferred stock, shares issued during period | 1,231 | ||||||||||||||||
Convertible preferred stock convertible into shares of common stock | 500 | 500 | |||||||||||||||
Issuance of preferred stock, total offering amount | $ | $ 4,000,000 | ||||||||||||||||
Convertible preferred stock convertible into shares of common stock, conversion price per share | $ / shares | $ 6.50 | ||||||||||||||||
Event of convertible preferred stock be convertible if holder beneficially owning outstanding shares of common stock percentage | 9.99% | ||||||||||||||||
Voting rights of preferred stock holder | The shares of the Series A Convertible Preferred Stock have no voting rights, except with respect to certain protective provisions set forth in the Series A Certificate of Designation relating to the powers, preferences and rights of such shares. | ||||||||||||||||
Convertible preferred stock, shares outstanding | 1,231 | 1,231 | 1,231 | ||||||||||||||
Series B-1 Convertible Preferred Stock | |||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||
Preferred stock, shares issued during period | 3,199 | ||||||||||||||||
Proceeds from issuance of Convertible Preferred Stock | $ | $ 30,968,000 | ||||||||||||||||
Convertible preferred stock convertible into shares of common stock | 1,000 | 1,000 | |||||||||||||||
Convertible preferred stock convertible into shares of common stock, conversion price per share | $ / shares | $ 10.50 | ||||||||||||||||
Voting rights of preferred stock holder | The Series B-1 Shares had no voting rights, except with respect to certain protective provisions set forth in the Series B-1 Certificate of Designation relating to the powers, preferences and rights of such shares. | ||||||||||||||||
Issuance of common stock through conversion, Shares | (3,199) | ||||||||||||||||
Series B-1 Convertible Preferred Stock | 2020 PIPE Financing | |||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||
Preferred stock, shares issued during period | 3,199 | ||||||||||||||||
Issuance of preferred stock, total offering amount | $ | $ 33,600,000 | ||||||||||||||||
Convertible preferred stock, shares outstanding | 3,199 | ||||||||||||||||
Issuance of common stock through conversion, Shares | 3,198,949 | ||||||||||||||||
Series B-1 Convertible Preferred Stock | 2020 PIPE Financing | Securities Purchase Agreement | |||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||
Issuance of preferred stock, price per share | $ / shares | $ 10,500 | ||||||||||||||||
Issuance of stock | 3,199 | ||||||||||||||||
Issuance price per share | $ / shares | $ 10,500 | ||||||||||||||||
Preferred stock designated shares authorized and unissued | 3,200 | ||||||||||||||||
Series B-2 Convertible Preferred Stock | |||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||
Preferred stock, shares authorized | 525 | 525 | 0 | ||||||||||||||
Preferred stock, par value per share | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||||||||||||
Preferred stock, shares issued during period | 524 | ||||||||||||||||
Proceeds from issuance of Convertible Preferred Stock | $ | $ 5,071,000 | ||||||||||||||||
Convertible preferred stock convertible into shares of common stock | 1,000 | 1,000 | |||||||||||||||
Convertible preferred stock convertible into shares of common stock, conversion price per share | $ / shares | $ 10.50 | ||||||||||||||||
Event of convertible preferred stock be convertible if holder beneficially owning outstanding shares of common stock percentage | 9.99% | ||||||||||||||||
Voting rights of preferred stock holder | The Series B-2 Shares have no voting rights, except with respect to certain protective provisions set forth in the Series B-2 Certificate of Designation relating to the powers, preferences and rights of such shares. | ||||||||||||||||
Convertible preferred stock, shares outstanding | 524 | 524 | 0 | ||||||||||||||
Conversion of stock description | Each Series B-2 Share is convertible into Company common stock at the option of the holder, provided that conversion will be prohibited (i) until the first trading day after the Stockholder Approval, which occurred on May 27, 2020, and (ii) following the Stockholder Approval, if, as a result of any such conversion, the holder would beneficially own in excess of 9.99% of the total number of shares of Company common stock outstanding immediately after giving effect to such conversion. | ||||||||||||||||
Series B-2 Convertible Preferred Stock | 2020 PIPE Financing | |||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||
Preferred stock, shares issued during period | 524 | ||||||||||||||||
Issuance of preferred stock, total offering amount | $ | $ 5,500,000 | ||||||||||||||||
Series B-2 Convertible Preferred Stock | 2020 PIPE Financing | Securities Purchase Agreement | |||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||
Issuance of preferred stock, price per share | $ / shares | $ 10,500 | ||||||||||||||||
Issuance of stock | 524 | ||||||||||||||||
Issuance price per share | $ / shares | $ 10,500 | ||||||||||||||||
Preferred stock designated shares authorized and unissued | 525 |
Convertible Preferred Stock a_4
Convertible Preferred Stock and Stockholders Equity - Summary of Common Stock Reserved for Future Issuance (Detail) - shares | Jun. 30, 2020 | Dec. 31, 2019 |
Class of Stock [Line Items] | ||
Common stock reserved for future issuance | 7,755 | 4,787 |
Warrants to Purchase Common Stock | ||
Class of Stock [Line Items] | ||
Common stock reserved for future issuance | 420 | 466 |
Public Warrants to Purchase Common Stock | ||
Class of Stock [Line Items] | ||
Common stock reserved for future issuance | 3,734 | 3,734 |
Stock Options | ||
Class of Stock [Line Items] | ||
Common stock reserved for future issuance | 1,160 | 444 |
RSUs | ||
Class of Stock [Line Items] | ||
Common stock reserved for future issuance | 639 | |
Authorized for Future Option Grants | ||
Class of Stock [Line Items] | ||
Common stock reserved for future issuance | 1,402 | 143 |
Authorized for Future ESPP Purchases | ||
Class of Stock [Line Items] | ||
Common stock reserved for future issuance | 400 |
Convertible Preferred Stock a_5
Convertible Preferred Stock and Stockholders Equity - Summary of Common Stock Reserved for Future Issuance (Parenthetical) (Details) - Public Warrants | 6 Months Ended |
Jun. 30, 2020Warrantshares | |
Class of Stock [Line Items] | |
Number of warrants entitle holder to purchase one share | Warrant | 4 |
Common Stock | |
Class of Stock [Line Items] | |
Number of shares issued for each warrant | shares | 0.25 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Operating Loss Carryforwards [Line Items] | ||
Federal statutory rate | 21.00% | 21.00% |
Effective income tax rate | 0.00% | 0.00% |
Minimum | ||
Operating Loss Carryforwards [Line Items] | ||
Ownership interest | 50.00% |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) - USD ($) | Jul. 14, 2020 | Sep. 04, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 |
Commitments And Contingencies [Line Items] | |||||||
Operating leases, description | In January 2013, DermTech Operations entered into a non-cancelable lease agreement for its operating facilities. In January 2014, DermTech Operations signed an amendment to the lease to extend the term through January 2017. In November 2016, DermTech Operations signed a second amendment to the lease to extend the term through March 2022. In August 2019, DermTech Operations signed a third amendment to the lease to add additional space, and in September 2019, the Company signed a fourth amendment to the lease to add additional space. In February 2020, the Company signed a fifth amendment to the lease to add additional space. In connection with the Business Combination, the Company assumed all obligations under the lease, as amended, from DermTech Operations. | ||||||
Tenant improvement allowance | $ 300,000 | $ 300,000 | |||||
Rent and common area maintenance expense | 600,000 | $ 200,000 | 800,000 | $ 300,000 | |||
Underwriting fees | 1,363,000 | 1,363,000 | $ 1,363,000 | ||||
Loss contingency, Aggregate value of common stock | 2,000 | 2,000 | $ 1,000 | ||||
Private placement | Settlement Agreement | LifeSci Capital LLC | Subsequent Event | |||||||
Commitments And Contingencies [Line Items] | |||||||
Loss contingency, Aggregate value of common stock | $ 1,000,000 | ||||||
Average closing market price, Common stock, Period | 5 days | ||||||
Loss contingency, Percentage of settlement amount in cash | 50.00% | ||||||
Loss contingency, Percentage of settlement amount in common shares | 50.00% | ||||||
Cowen | |||||||
Commitments And Contingencies [Line Items] | |||||||
Payments for deferred underwriting fees | $ 800,000 | ||||||
Underwriting fees | $ 1,400,000 | 1,400,000 | 1,400,000 | ||||
Proceeds from equity financing | 15,000,000 | ||||||
Gross proceeds from PIPE financing | 65,000,000 | ||||||
Deferred underwriting fee equity payable if equity financing limit not raised | $ 0 | 0 | |||||
Maximum | |||||||
Commitments And Contingencies [Line Items] | |||||||
Increase in tenant improvement allowance | $ 100,000 |
Commitments and Contingencies_2
Commitments and Contingencies - Schedule of Future Minimum Operating Lease Payments for Operating Facilities (Details) $ in Thousands | Jun. 30, 2020USD ($) |
Commitments And Contingencies Disclosure [Abstract] | |
Remainder of 2020 | $ 670 |
2021 | 1,371 |
2022 | 1,411 |
2023 | 478 |
Total future minimum lease payments | $ 3,930 |
Business Combination with Der_2
Business Combination with DermTech Operations - Additional Information (Details) - USD ($) $ in Thousands | Aug. 29, 2019 | Jun. 30, 2020 |
Business Acquisition [Line Items] | ||
Printer fees related to business combination | $ 77 | |
DermTech Operations | ||
Business Acquisition [Line Items] | ||
Effective date of acquisition | Aug. 29, 2019 | |
Printer fees related to business combination | $ 300 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Details) - USD ($) | Oct. 01, 2019 | Sep. 30, 2020 | Aug. 31, 2020 | Jul. 31, 2020 | Jun. 30, 2020 | May 31, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Jan. 02, 2021 | Dec. 31, 2019 |
Related Party Transaction [Line Items] | ||||||||||||
Common stock, shares issued | 18,229,364 | 18,229,364 | 18,229,364 | 12,344,818 | ||||||||
Related party transaction, other | $ 0 | $ 0 | ||||||||||
EVERSANA | Leana Wood | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Related party certain marketing cost | $ 300,000 | $ 0 | 600,000 | 0 | ||||||||
DermTech Operations | Michael Dobak | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Related party certain marketing cost | $ 15,000 | $ 15,000 | $ 47,000 | $ 0 | $ 100,000 | $ 0 | ||||||
DermTech Operations | Michael Dobak | Scenario Forecast | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Related party certain marketing cost | $ 15,000 | $ 15,000 | ||||||||||
Common stock, shares issued | 5,000 | |||||||||||
DermTech Operations | Michael Dobak | Subsequent Event | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Related party certain marketing cost | $ 15,000 | |||||||||||
DermTech Operations | Michael Dobak | Maximum | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Related party certain marketing cost | $ 100,000 |