Cover Page
Cover Page - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Feb. 23, 2024 | Jun. 30, 2023 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Current Fiscal Year End Date | --12-31 | ||
Document Period End Date | Dec. 31, 2023 | ||
Document Transition Report | false | ||
Entity File Number | 001-38118 | ||
Entity Registrant Name | DERMTECH, INC. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 84-2870849 | ||
Entity Address, Address Line One | 12340 El Camino Real | ||
Entity Address, City or Town | San Diego | ||
Entity Address, State or Province | CA | ||
Entity Address, Postal Zip Code | 92130 | ||
City Area Code | 858 | ||
Local Phone Number | 450‑4222 | ||
Title of 12(b) Security | Common Stock, par value $0.0001 per share | ||
Trading Symbol | DMTK | ||
Security Exchange Name | NASDAQ | ||
Entity Well Known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | false | ||
Document Financial Statement Error Correction [Flag] | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 85,237,006 | ||
Entity Common Stock, Shares Outstanding | 34,623,443 | ||
Documents Incorporated by Reference | DOCUMENTS INCORPORATED BY REFERENCE The registrant intends to file a definitive proxy statement pursuant to Regulation 14A within 120 days after the end of the fiscal year ended December 31, 2023. Portions of such proxy statement are incorporated by reference into Part III of this Form 10‑K. | ||
Entity Central Index Key | 0001651944 | ||
Document Fiscal Year Focus | 2023 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2023 | |
Audit Information [Abstract] | |
Auditor Firm ID | 185 |
Auditor Name | KPMG LLP |
Auditor Location | San Diego, CA |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 36,741 | $ 77,757 |
Short-term marketable securities | 19,123 | 48,411 |
Accounts receivable | 2,584 | 4,172 |
Inventory | 1,004 | 1,757 |
Prepaid expenses and other current assets | 2,300 | 3,940 |
Total current assets | 61,752 | 136,037 |
Property and equipment, net | 4,988 | 6,375 |
Operating lease right-of-use assets | 51,722 | 56,007 |
Restricted cash | 3,468 | 3,488 |
Other assets | 0 | 168 |
Total assets | 121,930 | 202,075 |
Current liabilities: | ||
Accounts payable | 1,484 | 2,419 |
Accrued compensation | 6,664 | 7,894 |
Accrued liabilities | 2,017 | 3,464 |
Short-term deferred revenue | 196 | 109 |
Current portion of operating lease liabilities | 3,069 | 1,634 |
Current portion of finance lease obligations | 17 | 116 |
Total current liabilities | 13,447 | 15,636 |
Warrant liability | 0 | 5 |
Long-term finance lease obligations, less current portion | 38 | 53 |
Operating lease liabilities, long-term | 51,270 | 54,028 |
Total liabilities | 64,755 | 69,722 |
Stockholders’ equity: | ||
Common stock, $0.0001 par value per share; 100,000,000 and 50,000,000 shares authorized as of December 31, 2023 and 2022, respectively; 34,524,677 and 30,297,408 shares issued and outstanding at December 31, 2023 and 2022, respectively | 3 | 3 |
Additional paid-in capital | 480,929 | 456,171 |
Accumulated other comprehensive income/(loss) | 178 | (774) |
Accumulated deficit | (423,935) | (323,047) |
Total stockholders’ equity | 57,175 | 132,353 |
Total liabilities and stockholders’ equity | $ 121,930 | $ 202,075 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 100,000,000 | 50,000,000 |
Common stock, shares issued (in shares) | 34,524,677 | 30,297,408 |
Common stock, shares outstanding (in shares) | 34,524,677 | 30,297,408 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Revenues: | ||
Total revenues | $ 15,296 | $ 14,518 |
Cost of revenues: | ||
Cost of revenues: | 15,020 | 13,871 |
Gross profit | 276 | 647 |
Operating expenses: | ||
Sales and marketing | 44,995 | 58,674 |
Research and development | 15,239 | 24,052 |
General and administrative | 43,781 | 36,086 |
Total operating expenses | 104,015 | 118,812 |
Loss from operations | (103,739) | (118,165) |
Other income: | ||
Interest income, net | 2,846 | 1,341 |
Change in fair value of warrant liability | 5 | 141 |
Total other income | 2,851 | 1,482 |
Net loss | $ (100,888) | $ (116,683) |
Weighted average shares outstanding used in computing net loss per share, basic (in shares) | 32,641,376 | 30,038,959 |
Weighted average shares outstanding used in computing net loss per share, diluted (in shares) | 32,641,376 | 30,038,959 |
Net loss per share of common stock outstanding, basic (in dollars per share) | $ (3.09) | $ (3.88) |
Net loss per share of common stock outstanding, diluted (in dollars per share) | $ (3.09) | $ (3.88) |
Test revenue | ||
Revenues: | ||
Total revenues | $ 14,384 | $ 13,790 |
Cost of revenues: | ||
Cost of revenues: | 14,792 | 13,702 |
Contract revenue | ||
Revenues: | ||
Total revenues | 912 | 728 |
Cost of revenues: | ||
Cost of revenues: | $ 228 | $ 169 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Statement of Comprehensive Income [Abstract] | ||
Net loss | $ (100,888) | $ (116,683) |
Unrealized net gain/(loss) on marketable securities and cash equivalents | 952 | (650) |
Comprehensive loss | $ (99,936) | $ (117,333) |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders’ Equity - USD ($) $ in Thousands | Total | Common stock | Additional paid-in capital | Accumulated other comprehensive loss | Accumulated deficit |
Beginning balance (in shares) at Dec. 31, 2021 | 29,772,922 | ||||
Beginning balance at Dec. 31, 2021 | $ 229,698 | $ 3 | $ 436,183 | $ (124) | $ (206,364) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Issuance of common stock from option exercises and RSU releases (in shares) | 356,078 | ||||
Issuance of common stock from option exercises and RSU releases | 40 | 40 | |||
Issuance of common stock from warrant exercises (in shares) | 20,320 | ||||
Issuance of common stock from warrant exercises | 22 | 22 | |||
Issuance of common stock from Employee Stock Purchase Plan (in shares) | 148,088 | ||||
Issuance of common stock from Employee Stock Purchase Plan | 992 | 992 | |||
Unrealized net gain on available-for-sale marketable securities and cash equivalents | (650) | (650) | |||
Stock-based compensation | 18,934 | 18,934 | |||
Net loss | (116,683) | (116,683) | |||
Ending balance (in shares) at Dec. 31, 2022 | 30,297,408 | ||||
Ending balance at Dec. 31, 2022 | 132,353 | $ 3 | 456,171 | (774) | (323,047) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Issuance of common stock at a weighted average price of $2.66 through at-the-market offering, net of $0.5 million in issuance costs (in shares) | 2,169,259 | ||||
Issuance of common stock at a weighted average price of $2.66 through at-the-market offering, net of $0.5 million in issuance costs | 5,248 | 5,248 | |||
Issuance of common stock from option exercises and RSU releases (in shares) | 1,725,318 | ||||
Issuance of common stock from option exercises and RSU releases | 58 | 58 | |||
Issuance of common stock from Employee Stock Purchase Plan (in shares) | 332,692 | ||||
Issuance of common stock from Employee Stock Purchase Plan | 887 | 887 | |||
Unrealized net gain on available-for-sale marketable securities and cash equivalents | 952 | 952 | |||
Stock-based compensation | 18,565 | 18,565 | |||
Net loss | (100,888) | (100,888) | |||
Ending balance (in shares) at Dec. 31, 2023 | 34,524,677 | ||||
Ending balance at Dec. 31, 2023 | $ 57,175 | $ 3 | $ 480,929 | $ 178 | $ (423,935) |
Consolidated Statements of St_2
Consolidated Statements of Stockholders’ Equity (Parenthetical) - Common stock $ in Millions | 12 Months Ended |
Dec. 31, 2023 USD ($) $ / shares | |
Issuance price (in dollars per share) | $ / shares | $ 2.66 |
Issuance costs | $ | $ 0.5 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Cash flows from operating activities: | ||
Net loss | $ (100,888) | $ (116,683) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 1,824 | 1,634 |
Change in fair value of warrant liability | (5) | (141) |
Amortization of operating lease right-of-use assets | 4,022 | 2,826 |
Stock-based compensation | 18,565 | 18,934 |
(Accretion) Amortization of (discount) premium on marketable securities | (526) | 402 |
Loss on disposal of equipment | 18 | 324 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 1,588 | (325) |
Inventory | 753 | (1,277) |
Prepaid expenses and other current assets | 1,808 | (774) |
Operating lease right-of-use assets and liabilities, net | (1,060) | (3,028) |
Accounts payable, accrued liabilities and deferred revenue | (1,848) | 1,882 |
Accrued compensation | (1,230) | 966 |
Net cash used in operating activities | (76,979) | (95,260) |
Cash flows from investing activities: | ||
Purchases of marketable securities | (34,393) | (31,498) |
Maturities and sales of marketable securities | 65,159 | 30,484 |
Purchases of property and equipment, net | (902) | (3,305) |
Net cash provided by/(used in) investing activities | 29,864 | (4,319) |
Cash flows from financing activities: | ||
Proceeds from issuance of common stock in connection with at-the-market offering, net | 5,248 | 0 |
Proceeds from exercise of common stock warrants | 0 | 22 |
Proceeds from exercise of stock options | 58 | 40 |
Proceeds from contributions to the employee stock purchase plan | 887 | 992 |
Principal repayments of finance lease obligations | (114) | (137) |
Net cash provided by financing activities | 6,079 | 917 |
Net decrease in cash, cash equivalents and restricted cash | (41,036) | (98,662) |
Cash, cash equivalents and restricted cash, beginning of period | 81,245 | 179,907 |
Cash, cash equivalents and restricted cash, end of period | 40,209 | 81,245 |
Reconciliation of cash, cash equivalents and restricted cash, end of period: | ||
Cash and cash equivalents | 36,741 | 77,757 |
Restricted cash | 3,468 | 3,488 |
Total cash, cash equivalents and restricted cash | 40,209 | 81,245 |
Supplemental cash flow information: | ||
Cash paid for interest on finance lease obligations | 5 | 13 |
Supplemental disclosure of noncash investing and financing activities: | ||
Purchases of property and equipment recorded in accounts payable | 0 | 431 |
Right-of-use assets obtained in exchange for lease obligations | 0 | 51,089 |
Property and equipment acquired under finance leases | 0 | 48 |
Change in unrealized net gains/(losses) on available-for-sale marketable securities | $ 960 | $ (650) |
The Company and a Summary of it
The Company and a Summary of its Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
The Company and a Summary of its Significant Accounting Policies | The Company and a Summary of its Significant Accounting Policies (a) Nature of Operations 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 a 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 melanoma and management of skin cancer. The Company has developed a proprietary, non-invasive technique for sampling the surface layers of the skin using an adhesive patch called the DermTech Smart Sticker™ (the “Smart Sticker”) in order to collect individual biological information for commercial applications in the medical diagnostic field. (b) Basis of Presentation The consolidated financial statements include the accounts of DermTech, Inc. and its subsidiaries. All intercompany balances and transactions among the consolidated entity have been eliminated in consolidation. These 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) Going Concern At each reporting period, the Company evaluates whether there are conditions or events that raise substantial doubt about the Company’s ability to continue as a going concern within 12 months after the date that the financial statements are issued (this 12-month period from the date of issuance, the “Evaluation Period”). The Company’s evaluation is based on the facts and circumstances then in existence and available to or known by management and entails analyzing prospective operating budgets and forecasts for expectations of the Company’s cash needs and comparing those needs to the current cash and cash equivalent balances. The Company is required to make certain additional disclosures if it concludes substantial doubt exists and it is not alleviated by the Company’s plans or when its plans alleviate substantial doubt about the Company’s ability to continue as a going concern. In accordance with Accounting Standards Codification ("ASC") 205-40, Going Concern, the Company evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about its ability to continue as a going concern within the Evaluation Period. This evaluation initially does not take into consideration the potential mitigating effect of management’s plans that have not been fully implemented as of the date the financial statements are issued. When substantial doubt exists under this methodology, management evaluates whether the mitigating effect of its plans sufficiently alleviates substantial doubt about the Company’s ability to continue as a going concern. The mitigating effect of management’s plans, however, is only considered if both (1) it is probable that the plans will be effectively implemented within one year after the date that the financial statements are issued, and (2) it is probable that the plans, when implemented, will mitigate the relevant conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that these consolidated financial statements are issued. The Company has incurred operating losses since inception and has an accumulated deficit of $423.9 million as of December 31, 2023. As of December 31, 2023, cash and cash equivalents totaled approximately $36.7 million and short-term marketable securities totaled approximately $19.1 million. For the year ended December 31, 2023, The Company reported a net loss of $100.9 million and cash used in operating activities of $77.0 million. The Company's transition to profitable operations is dependent upon achieving a level of revenues adequate to support its cost structure. The timing and amount of the Company's actual expenditures will be based on many factors, including cash flows from operations and the potential growth of its business, and may vary from current estimates. The Company's management expects that based on its currently planned business operations and considering the restructuring activities (Note 5) implemented in June 2023, currently available resources will not provide sufficient funds to meet its anticipated operating costs within the Evaluation Period. The Company currently anticipates that it will need to raise additional capital, increase average selling prices and revenues and may need to further reduce operating costs following the Evaluation Period. Accordingly, the Company has concluded that substantial doubt exists about the Company's ability to continue as a going concern for a period of at least 12 months from the date of issuance of the consolidated financial statements for the year ended December 31, 2023. If we are unable to obtain additional funding on acceptable terms when and as needed, we may be forced to delay or reduce the scope of our commercial and sales activities, extend payment terms with suppliers, liquidate assets where possible at a potentially lower amount than as recorded in our financial statements, further curtail planned operations or cease operations entirely and wind down our business. Any of these could materially and adversely affect the Company's liquidity, financial condition and business prospects and, as a result, our stockholders may not receive full value, or may receive no value, for their investment. In light of our existing cash and cash equivalents and our current obligations, such a liquidation or disposition process may occur subject to bankruptcy protections, which may further reduce the value that we may receive for our assets. The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the ordinary course of business. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of the uncertainties described above. (d) Use of Estimates The preparation of 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 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 but not limited to, those related to test revenue, stock-based compensation, short-term marketable securities, accounts receivable, warrant liability, right-of-use (“ROU”) assets and the realization of deferred tax assets. Actual results may differ from those estimates. (e) Cash, Cash Equivalents and Restricted Cash 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 Federal Deposit Insurance Corporation legal limit. The Company maintains cash balances that may, at times, exceed this insured limit. Restricted cash consists of cash deposited with a financial institution as collateral for the Company’s letters of credit for its facility leases. Restricted cash is classified as non-current based on the terms of the underlying lease arrangement. (f) Marketable Securities The Company considers securities with maturities of greater than 90 days at the time of purchase to be marketable securities. The Company has the ability, if necessary, to liquidate any of its cash equivalents and marketable securities to meet its liquidity needs in the next 12 months. Accordingly, such marketable securities are classified as current assets on the accompanying consolidated balance sheets even if they have contractual maturities greater than one year from the date of purchase. The Company’s marketable securities consist of U.S. Treasury and agency securities, commercial paper, and corporate debt securities. Marketable securities are recorded at fair value and unrealized gains and losses are recorded within accumulated other comprehensive loss. The estimated fair value of the marketable securities is determined based on quoted market prices or rates for similar instruments. The Company evaluates securities with unrealized losses to determine whether such losses, if any, are due to credit-related factors. The Company records an allowance for credit losses when unrealized losses are due to credit-related factors. Realized gains and losses are calculated using the specific identification method and recorded as interest income or expense. The Company does not generally intend to sell the investments and it is more likely than not that the Company will not be required to sell the investments before recovery of their amortized cost basis, which may occur at maturity. (g) Property and Equipment, Net Property and equipment is recorded at cost less accumulated depreciation. Maintenance and repairs are expensed as incurred, and improvements are capitalized. Property and equipment consists mainly of assets such as leasehold improvements, office, computer and laboratory equipment, including laboratory equipment acquired under finance lease arrangements. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, which range from two 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 years ended December 31, 2023 and 2022. (h) Leases The Company acts as lessee in its lease agreements, which include operating leases for corporate offices and finance leases for certain laboratory and office equipment. In accordance with Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842), as adopted on January 1, 2021, the Company determines if an arrangement is a lease at inception. Finance leases are included in the consolidated balance sheets as property and equipment, net and finance lease obligations at the present value of the lease payments. Operating leases are included in the consolidated balance sheet as ROU assets and operating lease liabilities at the present value of the lease payments. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent an obligation to make lease payments based on the present value of lease payments over the lease term. Classification of lease liabilities as either current or non-current is based on the expected timing of payments due under the Company’s obligations. As most of the Company’s leases do not provide an implicit interest rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The incremental borrowing rate is the rate of interest that a lessee would have to pay to borrow on a collateralized basis over a similar term and at an amount equal to the lease payments in a similar economic environment. In order to determine the appropriate incremental borrowing rates, the Company has used a number of factors including the credit rating, and the lease term. The ROU asset also consists of any lease incentives received. The lease terms used to calculate the ROU asset and related lease liability include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that opti on. “Reasonably certain” is assessed internally based on economic, industry, company, strategic and contractual factors. Operatin g lease expense and amortization of finance lease ROU assets are recognized on a straight-line basis over the lease term as an operating expense. Finance lease interest expense is recorded as interest income, net on the Company’s consolidated statements of operations. The Company has taken advantage of certain practical expedients offered to registrants at adoption of ASC 842. The Company does not apply the recognition requirements of ASC 842 to short-term leases. Instead, those lease payments are recognized in profit or loss on a straight-line basis over the lease term. Further, as a practical expedient, all lease contracts are accounted for as one single lease component, as opposed to separating lease and non-lease components to allocate the consideration within a single lease contract. (i) Research and Development 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-based compensation expense; and (ii) 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. (j) Concentration of Credit Risk Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents and available-for-sale marketable securities. The Company invests its cash balances in major financial institutions that it believes have high credit quality and are insured with the Federal Deposit Insurance Corporation (“FDIC”). At times throughout the year, cash deposits might exceed FDIC insurance limits. The Company has not experienced any losses and does not believe it is exposed to any significant credit risk. (k) Income Taxes 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 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 December 31, 2023. 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 consolidated financial statements, of which there are none. The Company recognizes interest and penalties related to income tax matters in income tax expense. (l) Revenue Recognition The Company’s revenue is generated from two revenue streams: contract revenue and test revenue. The Company accounts for revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”). The core principle of ASC 606 is that the Company recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The ASC 606 revenue recognition model consists of the following five steps: (1) identify the contracts with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract and (5) recognize revenue when (or as) the entity satisfies a performance obligation. The Company recognizes revenue from its test and contract services in accordance with the core principles and key aspects considered by the Company. These considerations are described in detail below, first for Test Revenue and then for Contract Revenue. Test Revenue The Company generates revenues from its DermTech Melanoma Test or “DMT” which may consist at the option of the ordering clinician of either (i) the DMT or (ii) the DMT with the TERT add-on test (which add-on test will be discontinued effective March 1, 2024), which assists a clinician’s diagnosis of melanoma in patients. The Company provides prescribing clinicians with its Smart Sticker 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 Smart Sticker collection kit be sent to the patient’s home for a clinician-guided remote collection on ambiguous pigmented skin lesions. A patient can also initiate the process by downloading the Company’s telemedicine app, DermTech Connect, which uses store-and-forward technology to allow the patient to take a picture of a suspicious lesion with their phone and have the picture reviewed by an independent clinician who is subscribing to the DermTech Connect platform to assess the suspicious lesion, and if medically necessary, order a DMT where a collection kit would be sent to the patient’s home. The DermTech Connect app and telemedicine service were initially beta tested in Florida and is currently available in most states where permitted by law and applicable standards of practice guidelines. Once the sample is collected by the patient via the telemedicine solution or by a healthcare clinician in person, it is returned to the Company’s CLIA laboratory for analysis. The patient’s ribonucleic acid (“RNA”) and deoxyribonucleic acid (“DNA”) are extracted from the Smart Sticker and analyzed using gene expression and sequencing 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 clinician detailing the test results for the pigmented skin lesion indicating whether the sample collected is indicative of melanoma or not. Contracts The Company’s customer is the patient. However, the Company does not enter into a formal reimbursement agreement with a patient, as formal reimbursement agreements are more commonly established with insurance payors. Accordingly, the Company establishes an agreement with a patient in accordance with other customary business practices. • Approval of an agreement is established by the use of the Company’s Smart Sticker on a patient by an ordering clinician, which is then sent to the Company’s central lab for testing. • The Company is obligated to perform the Company’s laboratory services upon receipt of a sample from a clinician, and the patient and/or applicable payor are obligated to reimburse the Company for services rendered based on the patient’s insurance benefits. • Payment terms are a function of a patient’s existing insurance benefits. • Once the Company delivers a patient’s test result to the ordering physician, the Company is legally able to collect payment and bill an insurer and/or patient, depending on payor agreement status or patient insurance benefit status. • The Company’s consideration is deemed to be variable, and the Company considers collection of such consideration to be probable to the extent that it is unconstrained. Performance Obligations A performance obligation is a promise in an agreement to transfer a distinct good or service (or a bundle of goods or services) to the customer. The customer is able to order a DMT, which is treated as a single performance obligation. Transaction Price The transaction price is the amount of consideration that the Company expects to collect in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of third parties (for example, some sales taxes). The consideration expected from an agreement with a customer may include fixed amounts, variable amounts, or both. The consideration derived from the Company’s agreements is deemed to be variable, though the variability is not explicitly stated in any agreement. Rather, the implied variability is due to several factors, such as the amount of contractual adjustments, any patient co-payments, deductibles or patient compliance incentives, the existence of secondary payors and claim denials. The Company estimates the amount of variable consideration using the expected value method, which represents the sum of probability-weighted amounts in a range of possible consideration amounts. When estimating the amount of variable consideration, the Company considers several factors, such as historical collections experience, patient insurance eligibility and payor reimbursement agreements. The Company limits the amount of variable consideration included in the transaction price to the unconstrained portion of such consideration. In other words, the Company recognizes revenue up to the amount of variable consideration that is not subject to a significant reversal until additional information is obtained or the uncertainty associated with the additional payments or refunds is subsequently resolved. Differences between original estimates and subsequent revisions, including final settlements, represent changes in the estimate of variable consideration and are included in test revenue in the period in which such revisions are made. The Company monitors its estimates of transaction price to depict conditions that exist at each reporting date. If the Company subsequently determines that it will collect more consideration than it originally estimated for an agreement with a patient, it will account for the change as an increase in the estimate of the transaction price (i.e., an upward revenue adjustment) in the period identified. Similarly, if the Company subsequently determines that the amount it expects to collect from a patient is less than it originally estimated, it will generally account for the change as a decrease in the estimate of the transaction price (i.e., a downward revenue adjustment) in the period identified. When the Company does not have significant historical experience or that experience has limited predictive value, the constraint over estimates of variable consideration may result in no revenue being recognized upon delivery of a patient’s test result to the ordering physician, with recognition, generally occurring at the date of cash receipt. The Company periodically updates its estimate of the variable consideration recognized for previously delivered performance obligations. These updates resulted in a decrease of $1.2 million and $1.8 million of revenue reported for the years ended December 31, 2023 and December 31, 2022, respectively . These amounts included (i) adjustments for actual collections versus estimated variable consideration as of the beginning of the reporting period and (ii) cash collections and the related recognition of revenue in the current period for tests delivered in prior periods due to the release of the constraint on variable consideration, offset by (iii) reductions in revenue for the accrual for reimbursement claims and settlements. Allocate the Transaction Price The entire transaction price is allocated entirely to the single performance obligation contained within the agreement with a patient. Recognize Revenue The Company’s single performance obligation is satisfied at a point in time, and that point in time is defined as the date a patient’s successful test result is delivered to the patient’s ordering physician. The Company considers this date to be the time at which the patient obtains control of the final results of the promised test service. Contract Revenue Contract revenue is generated from the sale of laboratory services and Smart Stickers 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 Smart Sticker, assay development for research partners, RNA extraction, isolation, expression, amplification and detection, including data analysis and reporting. Contracts As part of the Company’s contract revenue, the Company has established agreements and work orders with the Company’s third-party partners that fall under the scope of ASC 606. Performance Obligations ASC 606 requires an entity to assess the goods or services promised in a contract and identify as a performance obligation each promise to transfer to the customer either a good or service (or a bundle of goods or services) that is distinct, or a series of distinct goods or services that are substantially the same and that have the same pattern of transfer to the customer. Based upon review of existing contracts, a majority of the Company’s contract revenue agreements contain three performance obligations: (1) Smart Stickers (2) RNA extractions and analysis (3) Certain project management fees Many of the Company’s contract revenue agreements contain promises such as start-up activities and quality system setup fees, which are activities that the Company performs to fulfill the agreement. These promises encompass the administrative tasks associated with beginning and initiating a new project or study with a third-party company. In accordance with ASC 606, an entity does not account for these activities as a promised good or service within the agreement nor evaluate whether they are a performance obligation. Transaction Price The transaction price is the amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer. The consideration promised in an agreement with a customer may include fixed amounts, variable amounts, or both. The transaction prices of the Company’s performance obligations are listed in its agreements on a per unit basis and are fixed for adhesive sample collection kits and RNA extractions and analysis. The project management fees are assessed based on a monthly service fee which range within the agreements depending on certain factors which include length of the project and the amount of Smart Stickers or RNA extractions and analysis promised within the agreement. The fixed and variable rates are materially consistent within the Company’s agreements. Therefore, the Company utilizes the prices listed in its agreements as the transaction price for each performance obligation. In determining the transaction price, ASC 606 requires an entity to adjust the promised amount of consideration for the effects of the time value of money if the agreement contains a significant financing component. The Company’s agreements state fixed transaction prices for each deliverable associated with the agreement and do not qualify for the significant financing component of ASC 606. Allocate the Transaction Price The Company’s contracts have a directly observable transaction price pertaining to each promised good or service. Those prices are consistent across agreements for Smart Stickers and RNA extractions and analysis, with the exception of the Company’s project management fees, which the Company’s believes encompass a sufficiently narrow range of prices that are dictated upon factors of each agreement previously discussed above. Therefore, the Company relies on those transaction prices as the basis to allocate the stand-alone selling prices to the performance obligations of the agreement. Most of the Company’s agreements contain a discount that is allocated to items within the agreement, whether they are performance obligations or not. Those items that are not performance obligations (e.g., quality system setup and start up fees) have the associated discount allocated to the transaction prices of the performance obligations evenly. Recognize Revenue An entity should recognize revenue when (or as) it satisfies a performance obligation by transferring a promised good or service to a customer. A good or service is transferred when (or as) the customer obtains control of that good or service. The Smart Stickers are recognized at a point in time when shipped to the customer. The RNA extraction and analysis are recognized at a point in time when the extraction and analysis process is complete and the results are sent to the customer. The Company provides its project management service over the life of the agreement, providing equal benefit to the customer throughout the life of the project or study. Therefore, the revenue related to the Company’s project management fees is recognized straight-line over the life of the agreement. (a) Disaggregation of Revenue The following table presents the Company’s revenues disaggregated by revenue source during the years ended December 31, 2023 and 2022 , respectively (in thousands): Year Ended December 31, 2023 2022 Test Revenue DermTech Melanoma Test $ 14,384 $ 13,790 Contract Revenue Smart Stickers 592 152 RNA extractions 230 261 Project management fees 90 315 Total revenues $ 15,296 $ 14,518 The following table sets forth the percentages of total revenue or accounts receivable for customers that represent 10% or more of the respective amounts for the periods shown: Total Revenue Accounts Receivable Year Ended December 31, As of December 31, 2023 2022 2023 2022 Test Revenue Payor A 52 % 48 % 37 % 20 % Payor B * * * 10 % * Less than 10% There were no other payors or customers that individually accounted for more than 10% of total revenue or accounts receivable for the periods shown in the table above. (b) Deferred Revenue and Remaining Performance Obligations The timing of revenue recognition, billings and cash collections results in billed accounts receivable and deferred revenue on the consolidated balance sheets. In a majority of historical agreements that produced contract revenue, the Company received 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 Smart Stickers or RNA extraction results. Changes in accounts receivable and deferred revenu |
Balance Sheet Details
Balance Sheet Details | 12 Months Ended |
Dec. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Balance Sheet Details | Balance Sheet Details Short-Term Marketable Securities The amortized cost, gross unrealized holding gains, gross unrealized holding losses, and fair value of debt securities classified as available-for-sale securities by major security type and class of security as of December 31, 2023 were as follows (in thousands): December 31, 2023 Amortized Cost Gross Unrealized Gross Unrealized Estimated Market Short-term marketable securities, available-for-sale: Corporate debt securities $ 598 $ — $ (3) $ 595 U.S. government debt securities 18,367 208 (47) 18,528 Total short-term marketable securities, available-for-sale $ 18,965 $ 208 $ (50) $ 19,123 As of December 31, 2023, all debt securities with estimated market value of $19.1 million have contractual maturities of less than twelve months. The amortized cost, gross unrealized holding gains, gross unrealized holding losses and fair value of debt securities classified as available-for-sale securities by major security type and class of security as of December 31, 2022 were as follows (in thousands): December 31, 2022 Amortized Cost Gross Unrealized Gross Unrealized Estimated Market Short-term marketable securities, available-for-sale: Corporate debt securities $ 13,535 $ 2 $ (236) $ 13,301 Municipal debt securities 1,001 — (8) 993 U.S. government debt securities 34,675 10 (568) 34,117 Total short-term marketable securities, available-for-sale $ 49,211 $ 12 $ (812) $ 48,411 As of December 31, 2022, the estimated market value of debt securities with contractual maturities of less than twelve months was $40.2 million; the remaining debt securities that the Company held at that date had an estimated market value of $8.2 million and contractual maturities of up to 23 months. The Company evaluates securities with unrealized losses to determine whether such losses, if any, are due to credit-related factors. It was determined that no credit losses existed as of December 31, 2023 or December 31, 2022, because the change in market value for those securities in an unrealized loss position has resulted from fluctuating interest rates rather than a deterioration of the credit worthiness of the issuers. Gross realized gains and losses on the Company’s debt securities for the years ended December 31, 2023 and 2022 were not significant. The following tables present gross unrealized losses and fair values for those investments that were in an unrealized loss position as of December 31, 2023 and December 31, 2022, aggregated by investment category and the length of time that individual securities have been in a continuous loss position: December 31, 2023 Less Than 12 Months 12 Months or Greater Total Fair Value Gross Unrealized Loss Fair Value Gross Unrealized Loss Fair Value Gross Unrealized Loss Short-term marketable securities, available-for-sale: Corporate debt securities $ 596 $ (3) $ — $ — $ 596 $ (3) U.S. government debt securities 1,991 (6) 5,566 (41) 7,557 (47) Total short-term marketable securities, available-for-sale $ 2,587 $ (9) $ 5,566 $ (41) $ 8,153 $ (50) December 31, 2022 Less Than 12 Months 12 Months or Greater Total Fair Value Gross Unrealized Loss Fair Value Gross Unrealized Loss Fair Value Gross Unrealized Loss Short-term marketable securities, available-for-sale: Corporate debt securities $ 6,533 $ (105) $ 5,503 $ (131) $ 12,036 $ (236) Municipal debt securities — — 992 (8) 992 (8) U.S. government debt securities 10,907 (196) 19,026 (372) 29,933 (568) Total short-term marketable securities, available-for-sale $ 17,440 $ (301) $ 25,521 $ (511) $ 42,961 $ (812) Prepaid Expenses and Property and Equipment, Net Consolidated balance sheet details are as follows (in thousands): December 31, December 31, Prepaid expenses and other current assets: Prepaid expenses $ 1,719 $ 3,207 Other current assets 581 733 Total prepaid expenses and other current assets $ 2,300 $ 3,940 Property and equipment, gross: Laboratory equipment $ 6,100 $ 6,250 Computer equipment 831 872 Furniture and fixtures 1,248 913 Leasehold improvements 604 1,344 Total property and equipment, gross 8,783 9,379 Less accumulated depreciation (3,795) (3,004) Total property and equipment, net $ 4,988 $ 6,375 Depreciation expense for the years ended December 31, 2023 and 2022 was $1.8 million and $1.6 million, respectively. Loss on disposal of property and equipment during the years ended December 31, 2023 and 2022 recorded in operating expenses was $18,000 and $324,000, respectively. Accrued Compensation and Accrued Liabilities Consolidated balance sheet details are as follows (in thousands): December 31, December 31, Accrued compensation: Accrued bonus and commissions $ 3,534 $ 3,257 Accrued salaries and wages 3,130 4,637 Total accrued compensation $ 6,664 $ 7,894 Accrued liabilities: Accrued consulting services $ 262 $ 894 Customer refund liability 1,008 980 Restructuring liability 10 — Other accrued expenses 737 1,590 Total accrued liabilities $ 2,017 $ 3,464 |
Stockholders_ Equity
Stockholders’ Equity | 12 Months Ended |
Dec. 31, 2023 | |
Stockholders' Equity Note [Abstract] | |
Stockholders’ Equity | Stockholders’ Equity (a) Classes of Stock The Company’s amended and restated certificate of incorporation authorizes it to issue 100,000,000 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. On June 2, 2023, the Company filed an amendment to its Amended and Restated Certificate of Incorporation, as amended, with the Secretary of State of Delaware to increase the authorized number of shares of common stock of the Company from 50,000,000 to 100,000,000 shares (the “Amended Certificate”). The Amended Certificate was approved by the Company’s stockholders at the 2023 Annual Meeting. (b) At-The Market Offering On November 10, 2020, the Company entered into a sales agreement (the “2020 Sales Agreement”) with Cowen and Company, LLC (“Cowen”) relating to the sale of shares of the Company’s common stock from time to time with an aggregate offering price of up to $50.0 million. Through December 31, 2021, the Company issued an aggregate of 1,482,343 shares of common stock pursuant to the 2020 Sales Agreement at a weighted average purchase price of $30.05, net of $1.6 million in issuance costs resulting in net proceeds to the Company of approximately $42.9 million. During 2022, the Company did not issue or sell any shares of common stock pursuant to the 2020 Sales Agreement. During 2023, the Company issued an aggregate of 2,038,661 shares of common stock pursuant to the 2020 Sales Agreement at a weighted average purchase price of $2.68 resulting in aggregate gross proceeds of approximately $5.5 million, reduced by $0.3 million in issuance costs, resulting in net proceeds to the Company of approximately $5.2 million. As of December 31, 2023, the 2020 Sales Agreement has been fully utilized, and no additional shares of common stock may be sold pursuant to the 2020 Sales Agreement. On August 8, 2022, the Company entered into a second sales agreement (the “2022 Sales Agreement”) with Cowen relating to the sale of shares of the Company’s common stock from time to time with an aggregate offering price of up to $75.0 million under a second at-the-market offering program. For the year ended December 31, 2022, the Company did not issue any shares pursuant to the 2022 Sales Agreement. During the year ended December 31, 2023, the Company issued an aggregate of 130,598 shares of common stock pursuant to the 2022 Sales Agreement at a weighted average purchase price of $2.49 resulting in aggregate gross proceeds of approximately $0.3 million, reduced by $0.2 million in issuance costs, resulting in net proceeds to the Company of approximately $0.1 million. As of December 31, 2023, $74.7 million is available pursuant to the Company's 2022 Sales Agreement. (c) Warrants SPAC Warrants The Company previously issued a total of 14,936,250 SPAC Warrants to purchase common stock in public offering and private placement offerings which were consummated on June 23, 2017. As part of the public offering, the Company issued 14,375,000 Public SPAC Warrants and as part of the private placement offering, the Company issued 561,250 Private SPAC Warrants. The SPAC Warrants have a five-year life from the date the Business Combination was consummated and every four SPAC Warrants entitle the holder to purchase one whole share of common stock at an exercise price of $23.00 per whole share. The Private SPAC Warrants are identical to the Public SPAC Warrants, but they (i) are exercisable either for cash or on a cashless basis at the holder’s option, (ii) are not redeemable by the Company as long as such warrants are held by the initial purchasers or their affiliates and permitted transferees, and (iii) may be subject to the limitations on exercise as specified in the warrant agreement. As a result of these difference in features between the Public SPAC Warrants and Private SPAC Warrants, the Company concluded that the Private SPAC Warrants should be classified as a liability, if still held by the original Private SPAC Warrant holder, and marked to market each financial reporting period in the Company’s statement of operations. In 2021, a total of 12,120,397 SPAC Warrants were exercised, resulting in the Company’s issuance of 3,030,092 shares of common stock and the receipt of $69.7 million in gross proceeds. Outstanding SPAC Warrants totaled 2,815,853 as of December 31, 2023 and 2022. Private SPAC Warrants that were still owned by the original holder totaled 80,350 as of December 31, 2023 and 2022. 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, DermTech Operations issued 168,522 seven-year warrants to purchase one share of common stock each at an exercise price of $8.68 per share. From 2016 to 2018, DermTech Operations issued 72,658 seven-year warrants to purchase one share of common stock at an exercise price of $9.54 per share. In 2020, the Company issued 15,724 seven-year warrants to purchase one share of common stock at an exercise price of $9.54 per share in connection with the Company’s 2018 bridge note financing. Outstanding placement agent warrants totaled 570 and 4,510 as of December 31, 2023 and 2022, respectively. 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 share. The Management Warrants vested monthly over a four-year period. In 2022, the Company issued 20,320 shares of common stock pursuant to the exercise of Management Warrants. Outstanding Management Warrants totaled zero at both December 31, 2023 and 2022. (d) Stock-Based Compensation Plans Equity Incentive Plans In May 2020, the Company adopted the 2020 Equity Incentive Plan (the “2020 Plan”), which replaced its Amended and Restated 2010 Stock Plan and provides for the granting of incentive and non-qualified stock options, restricted stock and stock-based awards to employees, directors and consultants providing services to the Company. Under the 2020 Plan, incentive and non-qualified stock options may be granted at not less than 100% of the fair market value of the Company’s common stock on the date of grant. If an incentive stock option is granted to an individual who owns more than 10% of the combined voting power of all classes of the Company’s capital stock, the exercise price may not be less than 110% of the fair market value of the Company’s common stock on the date of grant and the term of the option may not be longer than five years. 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 Evergreen Provision”. In May 2023, the 2020 Plan Evergreen Provision was amended to the smaller of (i) 5.0% 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. On January 1, 2023, the shares reserved for future grants under the 2020 Plan increased by 1,060,409 pursuant to the 2020 Plan Evergreen Provision. In March 2022, the Company’s board of directors adopted the 2022 Inducement Equity Incentive Plan (as amended, the “Inducement Plan”), pursuant to which the Company reserved 950,000 shares of its common stock (subject to customary adjustments in the event of a change in capital structure of the Company) for the issuance of equity awards under the Inducement Plan. In September 2022, the Company amended and restated the Inducement Plan to reserve an additional 1,000,000 shares of its common stock. In May 2023, the Company amended and restated the Inducement Plan to reserve an additional 500,000 shares of its common stock. The Inducement Plan and its amendment were approved by the Company’s board of directors without stockholder approval pursuant to Rule 5635(c)(4) of the Nasdaq Listing Rules. The Inducement Plan may be used exclusively for grants of awards to individuals who were not previously employees or directors of the Company, or following a bona fide period of non-employment, as an inducement material to the individual’s entry into employment with the Company within the meaning of Rule 5635(c)(4) of the Nasdaq Listing Rules. As of December 31, 2023, 1,094,034 shares remained available for future grant under the Company's equity incentive plans. The following table summarizes stock option transactions for the years ended December 31, 2023 and 2022: Total options Weighted Weighted Aggregate Outstanding at December 31, 2022 1,687,625 $ 18.92 7.19 $ 9,821 Granted 590,000 2.37 Exercised (33,361) 2.97 Forfeited (410,624) 20.53 Outstanding at December 31, 2023 1,833,640 $ 13.52 6.55 $ 9,745 Options vested and expected to vest as of December 31, 2023 1,833,640 $ 13.52 6.55 $ 9,745 Options exercisable as of December 31, 2023 983,551 $ 18.26 4.71 $ 4,345 The following table summarizes RSU transactions for the years ended December 31, 2023 and 2022: Total RSUs Weighted Outstanding at December 31, 2022 3,149,514 $ 12.11 Granted 2,005,952 3.58 Released (1,705,692) 10.72 Forfeited (1,099,393) 9.10 Outstanding at December 31, 2023 2,350,381 RSUs vested and expected to vest as of December 31, 2023 2,350,381 $ 7.24 RSUs vested, but not yet issued as of December 31, 2023 135,822 $ 3.31 Employee Stock Purchase Plan In May 2020, the Company adopted the 2020 Employee Stock Purchase Plan (as amended, the "2020 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. The 2020 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 2020 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 Company's board of directors, subject to adjustment upon changes in capitalization of the Company. The 2020 ESPP permits eligible employees to purchase discounted shares of our common stock at semi-annual intervals through periodic payroll deductions. Shares are purchased at a price equal to 85% of the lower of: (i) the fair market value of the Company’s common stock on the first business day of an offering period or (ii) the fair market value of the Company’s common stock on the last business day of an offering period. A new offering period commences every year on approximately March 1 and September 1. At the end of each offering period, the accumulated contributions are used to purchase shares of the Company’s common stock. The last business day of each purchase period is referred to as the purchase date. Purchase dates are every six months on February 28 or February 29 and August 31. In August 2022, the Company’s board of directors approved an amendment to the 2020 ESPP. Effective September 1, 2022, each offering period is twenty-four On February 28, 2022 and August 31, 2022, the Company issued 47,339 and 100,749 shares of its common stock, respectively, pursuant to scheduled purchases under the 2020 ESPP. As of December 31, 2022, 698,930 shares of common stock were reserved for future issuance under the 2020 ESPP. On January 1, 2023, an additional 300,000 shares of common stock became available under the 2020 ESPP Plan Evergreen Provision. On February 28, 2023 and August 31, 2023, the Company issued 174,025 and 158,667 shares of its common stock, respectively, pursuant to scheduled purchases under the 2020 ESPP. As of December 31, 2023, 666,238 shares of common stock remained available for future grants under the 2020 ESPP. Common Stock Reserved for Future Issuance Common stock reserved for future issuance consists of the following as of December 31, 2023 and 2022 (in thousands): December 31, December 31, Warrants to purchase common stock 2 5 SPAC Warrants to purchase common stock* 704 704 Stock options issued and outstanding 1,834 1,688 Restricted stock units issued and outstanding 2,350 3,150 Authorized for future equity grants 1,094 1,106 Authorized for future ESPP purchases 666 699 Total common stock reserved for future issuance 6,650 7,352 * Four SPAC Warrants are needed to purchase one share of common stock. The numbers presented above reflect the amount of shares of common stock underlying SPAC Warrants. (e) Stock-Based Compensation Stock-based compensation expense for employee options, RSUs, the purchase rights issued under the 2020 ESPP, and consultant options was recorded in the consolidated statements of operations as follows (in thousands): Year Ended December 31, 2023 2022 Cost of revenue $ 1,610 $ 1,389 Sales and marketing 4,369 5,391 Research and development 2,602 3,807 General and administrative 9,984 8,347 Total stock-based compensation $ 18,565 $ 18,934 The total compensation cost related to non-vested awards not yet recognized as of December 31, 2023 was $18.1 million, which is expected to be recognized over a weighted average term of 2.11 years. Departure of Former Chief Executive Officer Stock-based compensation expense for the year ended December 31, 2023 included accelerated expense $3.0 million in connection with the transition agreement dated March 1, 2023, between the Company and its former Chief Executive Officer, John Dobak, M.D. (the "Transition Agreement"). The accelerated expense is included within general and administrative expenses in the condensed consolidated statement of operations. Dr. Dobak resigned from his position as Chief Executive Officer and member of the board of directors of the Company (the "Board") effective May 8, 2023 and agreed to serve as a consultant to the Company on an as needed basis until January 1, 2024. The terms of the Transition Agreement allow for continuing vesting of Dr. Dobak's equity awards through the end of the consulting period on January 1, 2024. At the termination of the consulting period, consistent with Dr. Dobak's change of control and severance plan, he immediately received an additional 10 months vesting of equity awards and the period to exercise his vested stock options was increased from 90 days to 12 months. The Company assessed the consulting services under the Transition Agreement as nonsubstantive pursuant to ASC 718, Compensation – Stock Compensation (ASC 718) and recognized all stock-based compensation expense related to Dr. Dobak's equity awards vesting in connection with the Transition Agreement upon his resignation. Valuation Assumptions The Company estimates the fair value of our stock-based equity awards using the Black-Scholes valuation model. Assumptions used in the Black-Scholes valuation model were as follows: Year Ended December 31, 2023 2022 Stock Options: Assumed risk-free interest rate 3.50% - 4.49% 2.97% - 3.92% Assumed volatility 93.22% - 94.58% 81.65% - 85.41% Expected option term 5.88 years - 6.09 years 6.08 years Expected dividend yield — — ESPP: Assumed risk-free interest rate 4.87% - 5.47% 0.22% - 3.51% Assumed volatility 104.36% - 153.96% 52.58% - 115.33% Expected option term 0.49 - 2.00 years 0.49 - 2.00 years Expected dividend yield — — |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company has reported net losses since inception, and therefore, the minimum provision for state income taxes has been recorded. The following table provides a reconciliation between income taxes computed at the federal statutory rate of 21% as of December 31, 2023 and 2022, and the Company’s provision for income taxes. Year ended December 31 2023 2022 Income tax at statutory rate 21.0 % 21.0 % State tax, net of federal tax benefit 4.5 4.0 Permanent items (3.8) (1.6) Tax credits 0.8 0.4 Other (0.3) (0.1) Valuation allowance increase (22.2) (23.7) Income tax expense — % — % Significant components of the Company’s deferred tax assets and liabilities from federal and state income taxes as of December 31, 2023 and 2022 are shown below (in thousands): December 31, December 31, Deferred tax assets: Net operating loss $ 87,436 $ 67,791 Research and development credits 4,303 3,129 Stock based compensation 3,227 3,849 Operating lease liability 13,825 14,091 R&E expenditures 6,234 4,371 Deferred revenue 32 28 Accruals and other 745 1,163 Total deferred tax assets 115,802 94,422 Deferred tax liabilities: Depreciation and amortization (204) (55) Operating lease right-of-use assets (13,161) (14,178) Total deferred tax liabilities (13,365) (14,233) Net deferred tax assets before valuation allowance 102,437 80,189 Less: valuation allowance (102,437) (80,189) Net deferred tax assets $ — $ — The Company maintains a full valuation allowance against its net deferred tax assets as realization of such assets is not more likely than not. As of December 31, 2023 and 2022, the Company had federal tax net operating loss (“NOL”) carryforwards of approximately $342.0 million and $267.0 million, respectively, as well as state tax NOL carryforwards as of December 31, 2023 and 2022, of approximately $257.4 million and $196.7 million, respectively. Federal NOL carryforwards began to expire during 2023 while the Company’s state NOL carryforwards will begin to expire during various years, dependent on the jurisdiction. The Company also had federal research and development tax credit carryforwards as of December 31, 2023 and 2022 of approximately $2.6 million and $1.8 million, respectively, and state research and development tax credits of approximately $2.1 million and $1.6 million as of December 31, 2023 and 2022, respectively. The federal credit carryforwards began to expire during 2023 and the state credit carryforwards do not expire. The Company has not performed a formal study validating its federal and state R&D tax credits and upon preparation, such tax credit carryforwards could vary from what was originally claimed on applicable income tax returns. 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 such credits claimed on its tax returns. Once a study is completed, the amount of R&D tax credits available could vary from what was originally claimed on the tax returns. Due to generation of NOLs, since inception of the Company, U.S. federal and state returns are open to examination for all years, in which NOLs exist. The Company’s policy is to record any penalties or interest related to any unrecognized tax benefits as a component of the income tax provision. As of December 31, 2023 and 2022, the Company has unrecognized tax benefits. |
Leases, Commitments and Conting
Leases, Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Leases, Commitments and Contingencies | Leases, Commitments and Contingencies Finance Leases The Company leases certain laboratory equipment from various third parties, through equipment finance leases. These leases either include a bargain purchase option or the terms of the leases are at least 75 percent of the useful lives of the assets and are therefore classified as finance leases. These leases are capitalized in property and equipment, net on the accompanying consolidated balance sheets. Initial asset values and finance lease obligations are based on the present value of future minimum lease payments. Gross assets recorded under finance leases were $0.4 million and $0.4 million as of December 31, 2023 and 2022, respectively. Accumulated amortization associated with finance leases was $0.2 million and $0.2 million as of December 31, 2023 and 2022, respectively. Total finance lease interest expense was approximately $5,000 and $13,000 for the years ended December 31, 2023 and 2022, respectively, and is included within interest income, net on the consolidated statements of operations. Long-term finance lease obligations are as follows (in thousands): December 31, December 31, Gross finance lease obligations $ 60 $ 180 Less: imputed interest (5) (11) Present value of net minimum lease payments 55 169 Less: current portion of finance lease obligations (17) (116) Total long-term finance lease obligations $ 38 $ 53 Operating Leases Del Mar Heights Lease On July 1, 2021, the Company entered into an Office Lease (the “Del Mar Lease”) with Kilroy Realty, L.P. (the “Landlord”), with respect to an aggregate of 95,997 rentable square feet consisting of the entire building located at 12340 El Camino Real, San Diego, California 92130 (the “Entire Premises”). The Entire Premises covered by the Lease will serve as the Company’s new principal office. The Del Mar Lease provides for a tenant improvement allowance of $125.00 per rentable square foot of the Entire Premises for a total of $12.0 million that the Landlord would use to fund the installation and/or construction of certain improvements to the Entire Premises in four phases, with each phase pertaining to a specified portion of the Entire Premises. The initial term of the Del Mar Lease is ten years and six months beginning on the earlier to occur of (i) January 1, 2023 and (ii) the date that Landlord tenders possession of the Phase III Premises (as defined in the Del Mar Lease) to the Company following the substantial completion of the improvements to the Phase III Premises required by the Del Mar Lease. The Company has the option to extend the term of the Lease for two additional five-year periods, subject to the terms of the Del Mar Lease. As the Landlord tenders possession of each portion of the Entire Premises for which the applicable improvements required by the Del Mar Lease are substantially complete, the Company will be obligated to make monthly payments of base rent with respect to such portion of the Entire Premises as set forth on Schedule 1 to the Del Mar Lease. In the event the Company exercises its option to extend the Del Mar Lease term, the Lease provides for monthly rent payments during the additional five-year periods at the then-current market rent as determined in accordance with the Del Mar Lease. In addition to rent, the Del Mar Lease requires the Company to pay additional rent amounts for taxes, insurance, maintenance and other expenses. During the year ended December 31, 2021, the Company took initial possession of the first phase of what is expected to become its corporate headquarters, and the Company capitalized a right-of-use asset and related lease liability of $5.7 million associated with the first phase. In March 2022, the lease for the second phase of the Company’s corporate headquarters commenced and the Company capitalized a ROU asset and related lease liability of $15.8 million. The extension option periods were not considered in the determination of the ROU asset or the lease liability as the Company did not consider it reasonably certain that it would exercise such extension options. Del Mar Lease Amendments During April 2022, the Company amended the Del Mar Lease through the execution of the First Amendment to Office Lease (the "First Amendment") and the Second Amendment to Office Lease (the "Second Amendment") (collectively, the "Del Mar Lease Amendments"). Pursuant to the First Amendment to the Del Mar Lease, the Company elected to utilize a one-time increase in an additional improvement allowance of $25.00 per rentable square foot, which increased the tenant improvement allowance by $2.4 million to $14.4 million, provided under the Del Mar Lease to make certain improvements to the Entire Premises. As a result, the Company will pay an increased monthly base rent to the Landlord, in order to repay costs relating to the additional design and construction. Pursuant to the Second Amendment, the Company elected to expand the Entire Premises to include 14,085 rentable square feet comprising the executive parking level (the “Expansion Premises”), which increased the tenant improvement allowance by $2.1 million to $16.5 million. The Landlord will tender possession of the Expansion Premises following substantial completion of improvements, pursuant to an agreed upon work letter and will run contemporaneously with the term of the Existing Premises. The Company intends to use the additional space for general office and laboratory use. As the Landlord tenders possession of the Expansion Premises, the Company is obligated to pay the Landlord increased monthly installments of base rent for the Expansion Premises. Upon inclusion of the Expansion Premises, the Company leased approximately 110,082 rentable square feet from the Landlord. The Del Mar Lease Amendments were negotiated with a single commercial objective and are treated as a combined contract for accounting purposes. The Company evaluated the Del Mar Lease Amendments under ASC 842 and concluded that the Del Mar Lease Amendments would be accounted for as a single contract with the Del Mar Lease because the additional lease payments related to the tenant improvement allowance due to the Del Mar Lease Amendments were not commensurate with ROU asset granted to the Company. Accordingly, the Company remeasured the lease liability using the additional monthly rent payments and the incremental borrowing rate at the effective date of the modification of 6.50%. The remeasurement for the modification resulted in an increase to the lease liability and the ROU asset of approximately $1.2 million. In November 2022, the lease for the remaining phases of the Company’s corporate headquarters commenced and the Company capitalized a ROU asset of $34.1 million and related lease liability of $32.1 million. The extension option periods were not considered in the determination of the ROU asset or the lease liability as the Company did not consider it reasonably certain that it would exercise such extension options. In connection with the original lease agreement, in lieu of a cash security deposit, the Company’s bank issued a letter of credit on its behalf, which is secured by a deposit, of $3.0 million and is included in restricted cash on the consolidated balance sheet based on the term of the underlying lease. In April 2022, pursuant to the Second Amendment, the Company’s bank increased the letter of credit on its behalf by $0.5 million, totaling $3.5 million. As of December 31, 2023, none of the standby letter of credit amount has been used. The components of lease expense for the years ended December 31, 2023 and 2022 were as follows (in thousands): Year ended December 31 2023 2022 Operating lease cost Operating lease cost $ 8,700 $ 4,672 Variable lease costs (1) 1,025 869 Sublease income (2) (192) — Total operating lease cost, net of sublease income $ 9,533 $ 5,541 Finance lease cost Amortization of leased assets $ 85 $ 83 Interest on lease liabilities 5 13 Total finance lease cost $ 90 $ 96 (1) Variable lease costs are primarily related to common area maintenance charges and property taxes. (2) Sublease income is related to a sublease of 1,802 square feet of office and laboratory space related to the Del Mar Lease. The sublease will expire on September 30, 2024, and the parties have no option to extend the sublease. Other information related to leases was as shown in the table below. Year ended December 31 2023 2022 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 5,609 $ 4,356 Operating cash flows from finance leases $ 5 $ 13 Financing cash flows from finance leases $ 114 $ 137 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ — $ 51,089 Finance leases $ — $ 48 Weighted average remaining lease term in years: Operating leases 9.40 10.41 Finance leases 3.10 2.28 Weighted average discount rate: Operating leases 8.72 % 8.67 % Finance leases 6.25 % 5.84 % The Company’s future minimum lease payments under operating and finance leases as of December 31, 2023 are as follows (in thousands): Operating Leases Finance Leases Total Year ending December 31: 2024 $ 7,569 $ 19 $ 7,588 2025 7,778 19 7,797 2026 8,000 18 8,018 2027 8,228 4 8,232 2028 8,464 — 8,464 Thereafter 40,362 — 40,362 Total minimum lease payments 80,401 60 80,461 Less: imputed interest (26,062) (5) (26,067) Total lease obligation 54,339 55 54,394 Less: current lease obligations (3,069) (17) (3,086) Long-term lease obligations $ 51,270 $ 38 $ 51,308 2023 Restructuring Plan On June 26, 2023, the Company's board of directors approved a restructuring plan (the “2023 Restructuring Plan”) to prioritize growth opportunities for the DMT, streamline operations, suspend pipeline programs, and significantly reduce overall operating expenses. The 2023 Restructuring Plan included a reduction of the Company’s workforce by approximately 15%. The actions associated with the employee restructuring under the 2023 Restructuring Plan were substantially completed in the third quarter of 2023. The Company incurred $2.1 million in restructuring charges in connection with the 2023 Restructuring Plan for the twelve months ended December 31, 2023, which consist of $1.8 million in charges related to severance payments and employee benefits and $0.3 million in charges related to stock-based compensation for the acceleration of share-based awards. Restructuring charges are included in general and administrative expenses in the consolidated statement of operations. The restructuring liability as of December 31, 2023 was $10,000 and is included within accrued liabilities in the consolidated balance sheets. Legal Proceedings From time to time, the Company may be subject to legal proceedings and claims arising in the ordinary course of business. Because legal proceedings are inherently uncertain, we are unable to predict the ultimate outcome of these matters, management does not believe that the outcome of any of these matters will have a material effect on the Company’s consolidated financial position, results of operations or cash flows. However, there can be no assurance as to the ultimate outcome of these matters. On October 16, 2023, a putative class action lawsuit titled Bagheri v. DermTech, Inc., et al. , Case No. 23-cv-1885-DMS-JLB, was filed in the United States District Court for the Southern District of California against the Company and certain of its current and/or former officers (collectively, the “Defendants”). The complaint was filed on behalf of persons who purchased or otherwise acquired the Company’s publicly traded securities between May 3, 2022 and November 3, 2022 (collectively, the “Plaintiffs”). The Plaintiffs alleged in the complaint that the Defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 by making false and misleading statements regarding the Company’s business, operations, and prospects. The action includes claims for damages and an award of reasonable costs and attorneys’ fees and expert fees. On December 5, 2023, another putative class action lawsuit titled Quarford v. DermTech, Inc. et al. , Case No. 23-cv-2221-JES-DDL was filed in the United States District Court for the Southern District of California against the same Defendants and alleging same causes of action as the Bagheri lawsuit. The Quarford lawsuit expanded the class period to include as Plaintiffs persons who purchased or otherwise acquired the Company’s publicly traded securities from March 8, 2021 to November 3, 2022. On January 17, 2024, the Court consolidated the two actions, which is now titled In re Dermtech, Inc. Securities Litigation , Case No. 3:23-cv-1885-DMS-JLB. The consolidated complaint is now due April 1, 2024 and Defendants' responses are due May 31, 2024. Given the early stage of this litigation, the probability of a particular outcome cannot be determined at this time. The Company intends to vigorously defend against all claims. On December 15, 2023, Joseph Fleischman filed a shareholder derivative lawsuit titled Fleischman v. DermTech, Inc ., et al. |
Retirement Plan
Retirement Plan | 12 Months Ended |
Dec. 31, 2023 | |
Retirement Benefits [Abstract] | |
Retirement Plan | Retirement Plan The Company has an IRC Section 401(k) retirement plan, covering all eligible employees. Under the terms of the 401(k) Plan, the Company may elect to match a discretionary percentage of contributions. The Company did not offer a contribution percentage match during 2023. Total matching contributions were $1.5 million for the year ended December 31, 2022. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2023 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions During 2023 and 2022, the Company engaged EVERSANA Life Science Services, LLC and its subsidiary Intouch Group, LLC (collectively, “EVERSANA”) to provide certain marketing services to the Company. Leana Wood, the spouse of Todd Wood, the Company’s former Chief Commercial Officer, is an employee of EVERSANA. Mr. Wood's last day of employment as Chief Commercial Officer of the Company was July 3, 2023. The Company incurred $0.9 million and $3.2 million in costs for the years ended December 31, 2023 and 2022, respectively. Amount due to EVERSANA were zero and $0.3 million as of December 31, 2023 and 2022, respectively. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On January 29, 2024, the Company's board of directors approved a restructuring plan (the “2024 Restructuring Plan”) to continue to align the Company’s resources with its previously announced strategic prioritization for the DMT in June 2023. The 2024 Restructuring Plan included a reduction of the Company’s workforce by approximately 15%. The Company estimates that it will incur aggregate pre-tax charges of approximately $1.3 million in connection with the 2024 Restructuring Plan, primarily consisting of severance payments, employee benefits, outplacement services and related costs. The actions associated with the employee restructuring under the 2024 Restructuring Plan are expected to be substantially complete in the first quarter of 2024. |
The Company and a Summary of _2
The Company and a Summary of its Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Nature of Operations | Nature of Operations 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 a 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 melanoma and management of skin cancer. The Company has developed a proprietary, non-invasive technique for sampling the surface layers of the skin using an adhesive patch called the DermTech Smart Sticker™ (the “Smart Sticker”) in order to collect individual biological information for commercial applications in the medical diagnostic field. |
Basis of Presentation | Basis of Presentation The consolidated financial statements include the accounts of DermTech, Inc. and its subsidiaries. All intercompany balances and transactions among the consolidated entity have been eliminated in consolidation. These 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. |
Going Concern | Going Concern At each reporting period, the Company evaluates whether there are conditions or events that raise substantial doubt about the Company’s ability to continue as a going concern within 12 months after the date that the financial statements are issued (this 12-month period from the date of issuance, the “Evaluation Period”). The Company’s evaluation is based on the facts and circumstances then in existence and available to or known by management and entails analyzing prospective operating budgets and forecasts for expectations of the Company’s cash needs and comparing those needs to the current cash and cash equivalent balances. The Company is required to make certain additional disclosures if it concludes substantial doubt exists and it is not alleviated by the Company’s plans or when its plans alleviate substantial doubt about the Company’s ability to continue as a going concern. In accordance with Accounting Standards Codification ("ASC") 205-40, Going Concern, the Company evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about its ability to continue as a going concern within the Evaluation Period. This evaluation initially does not take into consideration the potential mitigating effect of management’s plans that have not been fully implemented as of the date the financial statements are issued. When substantial doubt exists under this methodology, management evaluates whether the mitigating effect of its plans sufficiently alleviates substantial doubt about the Company’s ability to continue as a going concern. The mitigating effect of management’s plans, however, is only considered if both (1) it is probable that the plans will be effectively implemented within one year after the date that the financial statements are issued, and (2) it is probable that the plans, when implemented, will mitigate the relevant conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that these consolidated financial statements are issued. The Company has incurred operating losses since inception and has an accumulated deficit of $423.9 million as of December 31, 2023. As of December 31, 2023, cash and cash equivalents totaled approximately $36.7 million and short-term marketable securities totaled approximately $19.1 million. For the year ended December 31, 2023, The Company reported a net loss of $100.9 million and cash used in operating activities of $77.0 million. The Company's transition to profitable operations is dependent upon achieving a level of revenues adequate to support its cost structure. The timing and amount of the Company's actual expenditures will be based on many factors, including cash flows from operations and the potential growth of its business, and may vary from current estimates. The Company's management expects that based on its currently planned business operations and considering the restructuring activities (Note 5) implemented in June 2023, currently available resources will not provide sufficient funds to meet its anticipated operating costs within the Evaluation Period. The Company currently anticipates that it will need to raise additional capital, increase average selling prices and revenues and may need to further reduce operating costs following the Evaluation Period. Accordingly, the Company has concluded that substantial doubt exists about the Company's ability to continue as a going concern for a period of at least 12 months from the date of issuance of the consolidated financial statements for the year ended December 31, 2023. If we are unable to obtain additional funding on acceptable terms when and as needed, we may be forced to delay or reduce the scope of our commercial and sales activities, extend payment terms with suppliers, liquidate assets where possible at a potentially lower amount than as recorded in our financial statements, further curtail planned operations or cease operations entirely and wind down our business. Any of these could materially and adversely affect the Company's liquidity, financial condition and business prospects and, as a result, our stockholders may not receive full value, or may receive no value, for their investment. In light of our existing cash and cash equivalents and our current obligations, such a liquidation or disposition process may occur subject to bankruptcy protections, which may further reduce the value that we may receive for our assets. |
Use of Estimates | Use of EstimatesThe preparation of 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 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 but not limited to, those related to test revenue, stock-based compensation, short-term marketable securities, accounts receivable, warrant liability, right-of-use (“ROU”) assets and the realization of deferred tax assets. Actual results may differ from those estimates. |
Cash, Cash Equivalents and Restricted Cash | Cash, Cash Equivalents and Restricted Cash 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 Federal Deposit Insurance Corporation legal limit. The Company maintains cash balances that may, at times, exceed this insured limit. Restricted cash consists of cash deposited with a financial institution as collateral for the Company’s letters of credit for its facility leases. Restricted cash is classified as non-current based on the terms of the underlying lease arrangement. |
Marketable Securities | Marketable Securities The Company considers securities with maturities of greater than 90 days at the time of purchase to be marketable securities. The Company has the ability, if necessary, to liquidate any of its cash equivalents and marketable securities to meet its liquidity needs in the next 12 months. Accordingly, such marketable securities are classified as current assets on the accompanying consolidated balance sheets even if they have contractual maturities greater than one year from the date of purchase. The Company’s marketable securities consist of U.S. Treasury and agency securities, commercial paper, and corporate debt securities. Marketable securities are recorded at fair value and unrealized gains and losses are recorded within accumulated other comprehensive loss. The estimated fair value of the marketable securities is determined based on quoted market prices or rates for similar instruments. The Company evaluates securities with unrealized losses to determine whether such losses, if any, are due to credit-related factors. The Company records an allowance for credit losses when unrealized losses are due to credit-related factors. Realized gains and losses are calculated using the specific identification method and recorded as interest income or expense. The Company does not generally intend to sell the investments and it is more likely than not that the Company will not be required to sell the investments before recovery of their amortized cost basis, which may occur at maturity. |
Property and Equipment, Net | Property and Equipment, Net Property and equipment is recorded at cost less accumulated depreciation. Maintenance and repairs are expensed as incurred, and improvements are capitalized. Property and equipment consists mainly of assets such as leasehold improvements, office, computer and laboratory equipment, including laboratory equipment acquired under finance lease arrangements. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, which range from two |
Leases | Leases The Company acts as lessee in its lease agreements, which include operating leases for corporate offices and finance leases for certain laboratory and office equipment. In accordance with Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842), as adopted on January 1, 2021, the Company determines if an arrangement is a lease at inception. Finance leases are included in the consolidated balance sheets as property and equipment, net and finance lease obligations at the present value of the lease payments. Operating leases are included in the consolidated balance sheet as ROU assets and operating lease liabilities at the present value of the lease payments. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent an obligation to make lease payments based on the present value of lease payments over the lease term. Classification of lease liabilities as either current or non-current is based on the expected timing of payments due under the Company’s obligations. As most of the Company’s leases do not provide an implicit interest rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The incremental borrowing rate is the rate of interest that a lessee would have to pay to borrow on a collateralized basis over a similar term and at an amount equal to the lease payments in a similar economic environment. In order to determine the appropriate incremental borrowing rates, the Company has used a number of factors including the credit rating, and the lease term. The ROU asset also consists of any lease incentives received. The lease terms used to calculate the ROU asset and related lease liability include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that opti on. “Reasonably certain” is assessed internally based on economic, industry, company, strategic and contractual factors. Operatin g lease expense and amortization of finance lease ROU assets are recognized on a straight-line basis over the lease term as an operating expense. Finance lease interest expense is recorded as interest income, net on the Company’s consolidated statements of operations. The Company has taken advantage of certain practical expedients offered to registrants at adoption of ASC 842. The Company does not apply the recognition requirements of ASC 842 to short-term leases. Instead, those lease payments are recognized in profit or loss on a straight-line basis over the lease term. Further, as a practical expedient, all lease contracts are accounted for as one single lease component, as opposed to separating lease and non-lease components to allocate the consideration within a single lease contract. |
Research and Development | Research and Development 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-based compensation expense; and (ii) facilities and other expenses, which include direct and allocated expenses for rent and maintenance of facilities and laboratory and other supplies. |
Concentration of Credit Risk | Concentration of Credit RiskFinancial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents and available-for-sale marketable securities. The Company invests its cash balances in major financial institutions that it believes have high credit quality and are insured with the Federal Deposit Insurance Corporation (“FDIC”). At times throughout the year, cash deposits might exceed FDIC insurance limits. The Company has not experienced any losses and does not believe it is exposed to any significant credit risk. |
Income Taxes | Income Taxes 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 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 December 31, 2023. 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 consolidated financial statements, of which there are none. |
Revenue Recognition | Revenue Recognition The Company’s revenue is generated from two revenue streams: contract revenue and test revenue. The Company accounts for revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”). The core principle of ASC 606 is that the Company recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The ASC 606 revenue recognition model consists of the following five steps: (1) identify the contracts with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract and (5) recognize revenue when (or as) the entity satisfies a performance obligation. The Company recognizes revenue from its test and contract services in accordance with the core principles and key aspects considered by the Company. These considerations are described in detail below, first for Test Revenue and then for Contract Revenue. Test Revenue The Company generates revenues from its DermTech Melanoma Test or “DMT” which may consist at the option of the ordering clinician of either (i) the DMT or (ii) the DMT with the TERT add-on test (which add-on test will be discontinued effective March 1, 2024), which assists a clinician’s diagnosis of melanoma in patients. The Company provides prescribing clinicians with its Smart Sticker 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 Smart Sticker collection kit be sent to the patient’s home for a clinician-guided remote collection on ambiguous pigmented skin lesions. A patient can also initiate the process by downloading the Company’s telemedicine app, DermTech Connect, which uses store-and-forward technology to allow the patient to take a picture of a suspicious lesion with their phone and have the picture reviewed by an independent clinician who is subscribing to the DermTech Connect platform to assess the suspicious lesion, and if medically necessary, order a DMT where a collection kit would be sent to the patient’s home. The DermTech Connect app and telemedicine service were initially beta tested in Florida and is currently available in most states where permitted by law and applicable standards of practice guidelines. Once the sample is collected by the patient via the telemedicine solution or by a healthcare clinician in person, it is returned to the Company’s CLIA laboratory for analysis. The patient’s ribonucleic acid (“RNA”) and deoxyribonucleic acid (“DNA”) are extracted from the Smart Sticker and analyzed using gene expression and sequencing 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 clinician detailing the test results for the pigmented skin lesion indicating whether the sample collected is indicative of melanoma or not. Contracts The Company’s customer is the patient. However, the Company does not enter into a formal reimbursement agreement with a patient, as formal reimbursement agreements are more commonly established with insurance payors. Accordingly, the Company establishes an agreement with a patient in accordance with other customary business practices. • Approval of an agreement is established by the use of the Company’s Smart Sticker on a patient by an ordering clinician, which is then sent to the Company’s central lab for testing. • The Company is obligated to perform the Company’s laboratory services upon receipt of a sample from a clinician, and the patient and/or applicable payor are obligated to reimburse the Company for services rendered based on the patient’s insurance benefits. • Payment terms are a function of a patient’s existing insurance benefits. • Once the Company delivers a patient’s test result to the ordering physician, the Company is legally able to collect payment and bill an insurer and/or patient, depending on payor agreement status or patient insurance benefit status. • The Company’s consideration is deemed to be variable, and the Company considers collection of such consideration to be probable to the extent that it is unconstrained. Performance Obligations A performance obligation is a promise in an agreement to transfer a distinct good or service (or a bundle of goods or services) to the customer. The customer is able to order a DMT, which is treated as a single performance obligation. Transaction Price The transaction price is the amount of consideration that the Company expects to collect in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of third parties (for example, some sales taxes). The consideration expected from an agreement with a customer may include fixed amounts, variable amounts, or both. The consideration derived from the Company’s agreements is deemed to be variable, though the variability is not explicitly stated in any agreement. Rather, the implied variability is due to several factors, such as the amount of contractual adjustments, any patient co-payments, deductibles or patient compliance incentives, the existence of secondary payors and claim denials. The Company estimates the amount of variable consideration using the expected value method, which represents the sum of probability-weighted amounts in a range of possible consideration amounts. When estimating the amount of variable consideration, the Company considers several factors, such as historical collections experience, patient insurance eligibility and payor reimbursement agreements. The Company limits the amount of variable consideration included in the transaction price to the unconstrained portion of such consideration. In other words, the Company recognizes revenue up to the amount of variable consideration that is not subject to a significant reversal until additional information is obtained or the uncertainty associated with the additional payments or refunds is subsequently resolved. Differences between original estimates and subsequent revisions, including final settlements, represent changes in the estimate of variable consideration and are included in test revenue in the period in which such revisions are made. The Company monitors its estimates of transaction price to depict conditions that exist at each reporting date. If the Company subsequently determines that it will collect more consideration than it originally estimated for an agreement with a patient, it will account for the change as an increase in the estimate of the transaction price (i.e., an upward revenue adjustment) in the period identified. Similarly, if the Company subsequently determines that the amount it expects to collect from a patient is less than it originally estimated, it will generally account for the change as a decrease in the estimate of the transaction price (i.e., a downward revenue adjustment) in the period identified. When the Company does not have significant historical experience or that experience has limited predictive value, the constraint over estimates of variable consideration may result in no revenue being recognized upon delivery of a patient’s test result to the ordering physician, with recognition, generally occurring at the date of cash receipt. The Company periodically updates its estimate of the variable consideration recognized for previously delivered performance obligations. These updates resulted in a decrease of $1.2 million and $1.8 million of revenue reported for the years ended December 31, 2023 and December 31, 2022, respectively . These amounts included (i) adjustments for actual collections versus estimated variable consideration as of the beginning of the reporting period and (ii) cash collections and the related recognition of revenue in the current period for tests delivered in prior periods due to the release of the constraint on variable consideration, offset by (iii) reductions in revenue for the accrual for reimbursement claims and settlements. Allocate the Transaction Price The entire transaction price is allocated entirely to the single performance obligation contained within the agreement with a patient. Recognize Revenue The Company’s single performance obligation is satisfied at a point in time, and that point in time is defined as the date a patient’s successful test result is delivered to the patient’s ordering physician. The Company considers this date to be the time at which the patient obtains control of the final results of the promised test service. Contract Revenue Contract revenue is generated from the sale of laboratory services and Smart Stickers 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 Smart Sticker, assay development for research partners, RNA extraction, isolation, expression, amplification and detection, including data analysis and reporting. Contracts As part of the Company’s contract revenue, the Company has established agreements and work orders with the Company’s third-party partners that fall under the scope of ASC 606. Performance Obligations ASC 606 requires an entity to assess the goods or services promised in a contract and identify as a performance obligation each promise to transfer to the customer either a good or service (or a bundle of goods or services) that is distinct, or a series of distinct goods or services that are substantially the same and that have the same pattern of transfer to the customer. Based upon review of existing contracts, a majority of the Company’s contract revenue agreements contain three performance obligations: (1) Smart Stickers (2) RNA extractions and analysis (3) Certain project management fees Many of the Company’s contract revenue agreements contain promises such as start-up activities and quality system setup fees, which are activities that the Company performs to fulfill the agreement. These promises encompass the administrative tasks associated with beginning and initiating a new project or study with a third-party company. In accordance with ASC 606, an entity does not account for these activities as a promised good or service within the agreement nor evaluate whether they are a performance obligation. Transaction Price The transaction price is the amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer. The consideration promised in an agreement with a customer may include fixed amounts, variable amounts, or both. The transaction prices of the Company’s performance obligations are listed in its agreements on a per unit basis and are fixed for adhesive sample collection kits and RNA extractions and analysis. The project management fees are assessed based on a monthly service fee which range within the agreements depending on certain factors which include length of the project and the amount of Smart Stickers or RNA extractions and analysis promised within the agreement. The fixed and variable rates are materially consistent within the Company’s agreements. Therefore, the Company utilizes the prices listed in its agreements as the transaction price for each performance obligation. In determining the transaction price, ASC 606 requires an entity to adjust the promised amount of consideration for the effects of the time value of money if the agreement contains a significant financing component. The Company’s agreements state fixed transaction prices for each deliverable associated with the agreement and do not qualify for the significant financing component of ASC 606. Allocate the Transaction Price The Company’s contracts have a directly observable transaction price pertaining to each promised good or service. Those prices are consistent across agreements for Smart Stickers and RNA extractions and analysis, with the exception of the Company’s project management fees, which the Company’s believes encompass a sufficiently narrow range of prices that are dictated upon factors of each agreement previously discussed above. Therefore, the Company relies on those transaction prices as the basis to allocate the stand-alone selling prices to the performance obligations of the agreement. Most of the Company’s agreements contain a discount that is allocated to items within the agreement, whether they are performance obligations or not. Those items that are not performance obligations (e.g., quality system setup and start up fees) have the associated discount allocated to the transaction prices of the performance obligations evenly. Recognize Revenue An entity should recognize revenue when (or as) it satisfies a performance obligation by transferring a promised good or service to a customer. A good or service is transferred when (or as) the customer obtains control of that good or service. The Smart Stickers are recognized at a point in time when shipped to the customer. The RNA extraction and analysis are recognized at a point in time when the extraction and analysis process is complete and the results are sent to the customer. The Company provides its project management service over the life of the agreement, providing equal benefit to the customer throughout the life of the project or study. Therefore, the revenue related to the Company’s project management fees is recognized straight-line over the life of the agreement. (a) Disaggregation of Revenue The following table presents the Company’s revenues disaggregated by revenue source during the years ended December 31, 2023 and 2022 , respectively (in thousands): Year Ended December 31, 2023 2022 Test Revenue DermTech Melanoma Test $ 14,384 $ 13,790 Contract Revenue Smart Stickers 592 152 RNA extractions 230 261 Project management fees 90 315 Total revenues $ 15,296 $ 14,518 The following table sets forth the percentages of total revenue or accounts receivable for customers that represent 10% or more of the respective amounts for the periods shown: Total Revenue Accounts Receivable Year Ended December 31, As of December 31, 2023 2022 2023 2022 Test Revenue Payor A 52 % 48 % 37 % 20 % Payor B * * * 10 % * Less than 10% There were no other payors or customers that individually accounted for more than 10% of total revenue or accounts receivable for the periods shown in the table above. (b) Deferred Revenue and Remaining Performance Obligations The timing of revenue recognition, billings and cash collections results in billed accounts receivable and deferred revenue on the consolidated balance sheets. In a majority of historical agreements that produced contract revenue, the Company received 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 Smart Stickers 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. Upfront fees that are estimated to be recognized as revenue more than one year from the date of collection are classified as long-term deferred revenue. Short-term deferred revenue was $0.2 million and $0.1 million as of December 31, 2023 and December 31, 2022, respectively. As of December 31, 2022 we reclassified $1.0 million of short-term deferred revenue to accrued liabilities for a customer refund obligation in connection with cancellation of future services. Remaining performance obligations include deferred revenue and amounts the Company expects to receive for goods and services that have not yet been delivered or provided under existing agreements. For agreements that have an original duration of one year or less, the Company has elected the practical expedient applicable to such agreements and does not disclose the remaining performance obligations at the end of each reporting period. As of December 31, 2023 |
Accounts Receivable | Accounts Receivable Test Accounts Receivable Due to the nature of the Company’s test revenue, it can take a significant amount of time to collect upon billed tests. 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 tests 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. The Company recorded $2.5 million and $4.1 million of net test accounts receivable as of December 31, 2023 and 2022, respectively. 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 December 31, 2023, the Company did not maintain any reserves over contract receivables as they relate to 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 $0.1 million and $0.1 million of contract accounts receivable as of December 31, 2023 and 2022, respectively. Allowance for Credit Losses The Company accrues an allowance for credit losses against our accounts receivable based on management’s current estimate of amounts that will not be collected. Management’s estimates are typically based on historical loss information adjusted for current conditions. The Company generally does not perform evaluations of customers’ financial condition and generally do not require collateral. Historically, the Company's credit losses have not been significant. The allowance for credit losses was zero as of December 31, 2023 and 2022. Adjustments for implicit price concessions attributable to variable consideration, as discussed above, are incorporated into the measurement of the accounts receivable balances and are not part of the allowance for credit losses. |
Freight and Shipping Costs | Freight and Shipping CostsThe Company records outbound freight and shipping costs for its contract and test revenues in cost of revenues. |
Comprehensive Loss | Comprehensive LossComprehensive loss is defined as a change in equity during a period from transactions and other events and circumstances from non-owner sources. The Company reports net loss and the components of other comprehensive loss, including unrealized gains and losses on marketable securities, net of their related tax effect to arrive at total comprehensive loss. |
Segment Reporting | Segment ReportingOperating 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 | Net Loss Per ShareBasic and diluted net loss per share of common stock is determined by dividing net loss applicable to holders of common stock by the weighted average number of shares of common stock outstanding during the period. Because there is a net loss attributable to holders of common stock during the years ended December 31, 2023 and December 31, 2022, the outstanding common stock warrants, stock options and restricted stock units (“RSUs”) have been excluded from the calculation of diluted loss per share of common stock 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. |
Stock-Based Compensation | Stock-Based Compensation 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. Forfeitures are accounted as they occur by reversing any share-based compensation expense related to awards that will not vest. The Company grants stock options to purchase common stock to employees with exercise prices equal to the fair market value of the underlying stock. 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 RSUs are considered restricted stock. 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 |
Warrant Liability | Warrant Liability The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”) ASC Topic 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815-40. The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815-40, including whether the warrants are indexed to the Company’s own common stock, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding. Warrant liabilities are classified as non-current liabilities as their liquidation is not reasonably expected to require the use of current assets or require the creation of current liabilities. For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants classified as liabilities and are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a component of other income/(expense) in the consolidated statements of operations. The fair value of the warrants is estimated using a Black-Scholes-Merton valuation model. The Company will continue to adjust the liability for changes in fair value until the earlier of the exercise or expiration of its warrants. At that time, the portion of the warrant liability related to the Company’s warrants will be reclassified to additional paid-in capital. |
Fair Value Measurements | Fair Value Measurements The Company measures certain financial assets and liabilities at fair value on a recurring basis. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date. The 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. The following table provides a summary of the assets and liabilities that are measured at fair value on a recurring basis as of December 31, 2023 and 2022 (in thousands): Fair Value Measurements at Reporting Date December 31, 2023 Level 1 Level 2 Level 3 Total Assets: Cash equivalents: Money Market $ 5,518 $ — $ — $ 5,518 U.S. government debt securities — 9,481 — 9,481 Total cash equivalents 5,518 9,481 — 14,999 Marketable securities, available for sale: Corporate debt securities — 595 — 595 U.S. government debt securities — 18,528 — 18,528 Total marketable securities, available for sale — 19,123 — 19,123 Total assets measured at fair value on a recurring basis $ 5,518 $ 28,604 $ — $ 34,122 December 31, 2022 Level 1 Level 2 Level 3 Total Assets: Cash equivalents: Money Market $ 9,365 $ — $ — $ 9,365 Corporate debt securities — 7,374 — 7,374 U.S. government debt securities — 18,396 — 18,396 Total cash equivalents 9,365 25,770 — 35,135 Marketable securities, available for sale: Corporate debt securities — 13,301 — 13,301 Municipal debt securities — 993 — 993 U.S. government debt securities — 34,117 — 34,117 Total marketable securities, available for sale — 48,411 — 48,411 Total assets measured at fair value on a recurring basis $ 9,365 $ 74,181 $ — $ 83,546 The Company’s marketable debt securities are classified as available-for-sale securities based on management's intentions and are at level 2 of the fair value hierarchy, as these investment securities are valued based upon quoted prices for identical or similar instruments in markets that are not active. The Company has classified marketable securities with original maturities of greater than one year as short-term investments based upon the Company’s ability to use all of those marketable securities to satisfy the liquidity needs of the Company’s current operations. As of December 31, 2023 and 2022, the Company maintains letters of credit of $3.5 million and $3.5 million, respectively, related to its lease arrangements, which are secured by money market accounts in accordance with certain of our lease agreements. 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 Pronouncements Issued But Not Yet Effective | Accounting Pronouncements Issued But Not Yet Effective In June 2022, the FASB issued Accounting Standards Update (“ASU”) 2022-03, Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions (“ASU 2022-03“). Under the guidance of ASU 2022-03, a contractual restriction on the sale of an equity security is not considered in measuring the security’s fair value. ASU 2022-03 also requires certain disclosures for equity securities that are subject to contractual restrictions. For public business entities, the provisions of ASU 2022-03 are effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. Early adoption is permitted for both interim and annual financial statements that have not yet been issued or made available for issuance. The Company is still evaluating the impact of this pronouncement on the consolidated financial statements. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures ("ASU 2023-09"). The amendments in ASU 2023-09 address investor requests for enhanced income tax information primarily through changes to the rate reconciliation and income taxes paid information. Early adoption is permitted. A public entity should apply the amendments in ASU 2023-09 prospectively to all annual periods beginning after December 15, 2024. The Company is currently evaluating the impact of this pronouncement on the consolidated financial statements. The Company does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material impact on its consolidated financial statements or disclosures. |
Reclassifications | Reclassifications Certain prior year amounts have been reclassified to conform to the current year presentation in the consolidated financial statements and accompanying notes to the consolidated financial statements. |
The Company and a Summary of _3
The Company and a Summary of its Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Schedule of Revenues Disaggregated by Revenue Source | The following table presents the Company’s revenues disaggregated by revenue source during the years ended December 31, 2023 and 2022 , respectively (in thousands): Year Ended December 31, 2023 2022 Test Revenue DermTech Melanoma Test $ 14,384 $ 13,790 Contract Revenue Smart Stickers 592 152 RNA extractions 230 261 Project management fees 90 315 Total revenues $ 15,296 $ 14,518 |
Summary of Percentages of Total Revenue or Accounts Receivable for Third Party Payers and Pharmaceutical Customers | The following table sets forth the percentages of total revenue or accounts receivable for customers that represent 10% or more of the respective amounts for the periods shown: Total Revenue Accounts Receivable Year Ended December 31, As of December 31, 2023 2022 2023 2022 Test Revenue Payor A 52 % 48 % 37 % 20 % Payor B * * * 10 % * |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | Outstanding anti-dilutive securities not included in diluted net loss per share (in thousands): Year Ended December 31, 2023 2022 Shares issuable upon exercise of common stock warrants 706 709 Shares issuable upon exercise of stock options 1,834 1,688 Shares issuable upon the release of restricted stock units 2,350 3,150 4,890 5,547 |
Summary of Assets Measured at Fair Value On Recurring Basis | The following table provides a summary of the assets and liabilities that are measured at fair value on a recurring basis as of December 31, 2023 and 2022 (in thousands): Fair Value Measurements at Reporting Date December 31, 2023 Level 1 Level 2 Level 3 Total Assets: Cash equivalents: Money Market $ 5,518 $ — $ — $ 5,518 U.S. government debt securities — 9,481 — 9,481 Total cash equivalents 5,518 9,481 — 14,999 Marketable securities, available for sale: Corporate debt securities — 595 — 595 U.S. government debt securities — 18,528 — 18,528 Total marketable securities, available for sale — 19,123 — 19,123 Total assets measured at fair value on a recurring basis $ 5,518 $ 28,604 $ — $ 34,122 December 31, 2022 Level 1 Level 2 Level 3 Total Assets: Cash equivalents: Money Market $ 9,365 $ — $ — $ 9,365 Corporate debt securities — 7,374 — 7,374 U.S. government debt securities — 18,396 — 18,396 Total cash equivalents 9,365 25,770 — 35,135 Marketable securities, available for sale: Corporate debt securities — 13,301 — 13,301 Municipal debt securities — 993 — 993 U.S. government debt securities — 34,117 — 34,117 Total marketable securities, available for sale — 48,411 — 48,411 Total assets measured at fair value on a recurring basis $ 9,365 $ 74,181 $ — $ 83,546 |
Balance Sheet Details (Tables)
Balance Sheet Details (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Short-Term Marketable Securities | The amortized cost, gross unrealized holding gains, gross unrealized holding losses, and fair value of debt securities classified as available-for-sale securities by major security type and class of security as of December 31, 2023 were as follows (in thousands): December 31, 2023 Amortized Cost Gross Unrealized Gross Unrealized Estimated Market Short-term marketable securities, available-for-sale: Corporate debt securities $ 598 $ — $ (3) $ 595 U.S. government debt securities 18,367 208 (47) 18,528 Total short-term marketable securities, available-for-sale $ 18,965 $ 208 $ (50) $ 19,123 As of December 31, 2023, all debt securities with estimated market value of $19.1 million have contractual maturities of less than twelve months. The amortized cost, gross unrealized holding gains, gross unrealized holding losses and fair value of debt securities classified as available-for-sale securities by major security type and class of security as of December 31, 2022 were as follows (in thousands): December 31, 2022 Amortized Cost Gross Unrealized Gross Unrealized Estimated Market Short-term marketable securities, available-for-sale: Corporate debt securities $ 13,535 $ 2 $ (236) $ 13,301 Municipal debt securities 1,001 — (8) 993 U.S. government debt securities 34,675 10 (568) 34,117 Total short-term marketable securities, available-for-sale $ 49,211 $ 12 $ (812) $ 48,411 The following tables present gross unrealized losses and fair values for those investments that were in an unrealized loss position as of December 31, 2023 and December 31, 2022, aggregated by investment category and the length of time that individual securities have been in a continuous loss position: December 31, 2023 Less Than 12 Months 12 Months or Greater Total Fair Value Gross Unrealized Loss Fair Value Gross Unrealized Loss Fair Value Gross Unrealized Loss Short-term marketable securities, available-for-sale: Corporate debt securities $ 596 $ (3) $ — $ — $ 596 $ (3) U.S. government debt securities 1,991 (6) 5,566 (41) 7,557 (47) Total short-term marketable securities, available-for-sale $ 2,587 $ (9) $ 5,566 $ (41) $ 8,153 $ (50) December 31, 2022 Less Than 12 Months 12 Months or Greater Total Fair Value Gross Unrealized Loss Fair Value Gross Unrealized Loss Fair Value Gross Unrealized Loss Short-term marketable securities, available-for-sale: Corporate debt securities $ 6,533 $ (105) $ 5,503 $ (131) $ 12,036 $ (236) Municipal debt securities — — 992 (8) 992 (8) U.S. government debt securities 10,907 (196) 19,026 (372) 29,933 (568) Total short-term marketable securities, available-for-sale $ 17,440 $ (301) $ 25,521 $ (511) $ 42,961 $ (812) |
Schedule of Prepaid Expenses and PP&E | Consolidated balance sheet details are as follows (in thousands): December 31, December 31, Prepaid expenses and other current assets: Prepaid expenses $ 1,719 $ 3,207 Other current assets 581 733 Total prepaid expenses and other current assets $ 2,300 $ 3,940 Property and equipment, gross: Laboratory equipment $ 6,100 $ 6,250 Computer equipment 831 872 Furniture and fixtures 1,248 913 Leasehold improvements 604 1,344 Total property and equipment, gross 8,783 9,379 Less accumulated depreciation (3,795) (3,004) Total property and equipment, net $ 4,988 $ 6,375 |
Schedule of Accrued Compensation and Accrued Liabilities | Consolidated balance sheet details are as follows (in thousands): December 31, December 31, Accrued compensation: Accrued bonus and commissions $ 3,534 $ 3,257 Accrued salaries and wages 3,130 4,637 Total accrued compensation $ 6,664 $ 7,894 Accrued liabilities: Accrued consulting services $ 262 $ 894 Customer refund liability 1,008 980 Restructuring liability 10 — Other accrued expenses 737 1,590 Total accrued liabilities $ 2,017 $ 3,464 |
Stockholders_ Equity (Tables)
Stockholders’ Equity (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Stockholders' Equity Note [Abstract] | |
Summary of Stock Options Transactions | The following table summarizes stock option transactions for the years ended December 31, 2023 and 2022: Total options Weighted Weighted Aggregate Outstanding at December 31, 2022 1,687,625 $ 18.92 7.19 $ 9,821 Granted 590,000 2.37 Exercised (33,361) 2.97 Forfeited (410,624) 20.53 Outstanding at December 31, 2023 1,833,640 $ 13.52 6.55 $ 9,745 Options vested and expected to vest as of December 31, 2023 1,833,640 $ 13.52 6.55 $ 9,745 Options exercisable as of December 31, 2023 983,551 $ 18.26 4.71 $ 4,345 |
Summary of Restricted Stock Units Award Transactions | The following table summarizes RSU transactions for the years ended December 31, 2023 and 2022: Total RSUs Weighted Outstanding at December 31, 2022 3,149,514 $ 12.11 Granted 2,005,952 3.58 Released (1,705,692) 10.72 Forfeited (1,099,393) 9.10 Outstanding at December 31, 2023 2,350,381 RSUs vested and expected to vest as of December 31, 2023 2,350,381 $ 7.24 RSUs vested, but not yet issued as of December 31, 2023 135,822 $ 3.31 |
Summary of Common Stock Reserved for Future Issuance | Common stock reserved for future issuance consists of the following as of December 31, 2023 and 2022 (in thousands): December 31, December 31, Warrants to purchase common stock 2 5 SPAC Warrants to purchase common stock* 704 704 Stock options issued and outstanding 1,834 1,688 Restricted stock units issued and outstanding 2,350 3,150 Authorized for future equity grants 1,094 1,106 Authorized for future ESPP purchases 666 699 Total common stock reserved for future issuance 6,650 7,352 * |
Summary of Share-Based Compensation Arrangements by Share-Based Payment Award | Stock-based compensation expense for employee options, RSUs, the purchase rights issued under the 2020 ESPP, and consultant options was recorded in the consolidated statements of operations as follows (in thousands): Year Ended December 31, 2023 2022 Cost of revenue $ 1,610 $ 1,389 Sales and marketing 4,369 5,391 Research and development 2,602 3,807 General and administrative 9,984 8,347 Total stock-based compensation $ 18,565 $ 18,934 |
Schedule of Valuation Assumptions | The Company estimates the fair value of our stock-based equity awards using the Black-Scholes valuation model. Assumptions used in the Black-Scholes valuation model were as follows: Year Ended December 31, 2023 2022 Stock Options: Assumed risk-free interest rate 3.50% - 4.49% 2.97% - 3.92% Assumed volatility 93.22% - 94.58% 81.65% - 85.41% Expected option term 5.88 years - 6.09 years 6.08 years Expected dividend yield — — ESPP: Assumed risk-free interest rate 4.87% - 5.47% 0.22% - 3.51% Assumed volatility 104.36% - 153.96% 52.58% - 115.33% Expected option term 0.49 - 2.00 years 0.49 - 2.00 years Expected dividend yield — — |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Schedule of Reconciliation of Income Tax Rate | The following table provides a reconciliation between income taxes computed at the federal statutory rate of 21% as of December 31, 2023 and 2022, and the Company’s provision for income taxes. Year ended December 31 2023 2022 Income tax at statutory rate 21.0 % 21.0 % State tax, net of federal tax benefit 4.5 4.0 Permanent items (3.8) (1.6) Tax credits 0.8 0.4 Other (0.3) (0.1) Valuation allowance increase (22.2) (23.7) Income tax expense — % — % |
Schedule of Deferred Tax Assets and Liabilities from Federal and State income Taxes | Significant components of the Company’s deferred tax assets and liabilities from federal and state income taxes as of December 31, 2023 and 2022 are shown below (in thousands): December 31, December 31, Deferred tax assets: Net operating loss $ 87,436 $ 67,791 Research and development credits 4,303 3,129 Stock based compensation 3,227 3,849 Operating lease liability 13,825 14,091 R&E expenditures 6,234 4,371 Deferred revenue 32 28 Accruals and other 745 1,163 Total deferred tax assets 115,802 94,422 Deferred tax liabilities: Depreciation and amortization (204) (55) Operating lease right-of-use assets (13,161) (14,178) Total deferred tax liabilities (13,365) (14,233) Net deferred tax assets before valuation allowance 102,437 80,189 Less: valuation allowance (102,437) (80,189) Net deferred tax assets $ — $ — |
Leases, Commitments and Conti_2
Leases, Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Long Term Finance Lease Obligations | Long-term finance lease obligations are as follows (in thousands): December 31, December 31, Gross finance lease obligations $ 60 $ 180 Less: imputed interest (5) (11) Present value of net minimum lease payments 55 169 Less: current portion of finance lease obligations (17) (116) Total long-term finance lease obligations $ 38 $ 53 |
Components of Lease Expense | The components of lease expense for the years ended December 31, 2023 and 2022 were as follows (in thousands): Year ended December 31 2023 2022 Operating lease cost Operating lease cost $ 8,700 $ 4,672 Variable lease costs (1) 1,025 869 Sublease income (2) (192) — Total operating lease cost, net of sublease income $ 9,533 $ 5,541 Finance lease cost Amortization of leased assets $ 85 $ 83 Interest on lease liabilities 5 13 Total finance lease cost $ 90 $ 96 (1) Variable lease costs are primarily related to common area maintenance charges and property taxes. (2) Sublease income is related to a sublease of 1,802 square feet of office and laboratory space related to the Del Mar Lease. The sublease will expire on September 30, 2024, and the parties have no option to extend the sublease. Other information related to leases was as shown in the table below. Year ended December 31 2023 2022 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 5,609 $ 4,356 Operating cash flows from finance leases $ 5 $ 13 Financing cash flows from finance leases $ 114 $ 137 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ — $ 51,089 Finance leases $ — $ 48 Weighted average remaining lease term in years: Operating leases 9.40 10.41 Finance leases 3.10 2.28 Weighted average discount rate: Operating leases 8.72 % 8.67 % Finance leases 6.25 % 5.84 % |
Finance Lease, Liability, Fiscal Year Maturity | The Company’s future minimum lease payments under operating and finance leases as of December 31, 2023 are as follows (in thousands): Operating Leases Finance Leases Total Year ending December 31: 2024 $ 7,569 $ 19 $ 7,588 2025 7,778 19 7,797 2026 8,000 18 8,018 2027 8,228 4 8,232 2028 8,464 — 8,464 Thereafter 40,362 — 40,362 Total minimum lease payments 80,401 60 80,461 Less: imputed interest (26,062) (5) (26,067) Total lease obligation 54,339 55 54,394 Less: current lease obligations (3,069) (17) (3,086) Long-term lease obligations $ 51,270 $ 38 $ 51,308 |
Lessee, Operating Lease, Liability, Maturity | The Company’s future minimum lease payments under operating and finance leases as of December 31, 2023 are as follows (in thousands): Operating Leases Finance Leases Total Year ending December 31: 2024 $ 7,569 $ 19 $ 7,588 2025 7,778 19 7,797 2026 8,000 18 8,018 2027 8,228 4 8,232 2028 8,464 — 8,464 Thereafter 40,362 — 40,362 Total minimum lease payments 80,401 60 80,461 Less: imputed interest (26,062) (5) (26,067) Total lease obligation 54,339 55 54,394 Less: current lease obligations (3,069) (17) (3,086) Long-term lease obligations $ 51,270 $ 38 $ 51,308 |
The Company and a Summary of _4
The Company and a Summary of its Significant Accounting Policies - Additional Information (Details) | 12 Months Ended | ||
Aug. 29, 2019 | Dec. 31, 2023 USD ($) segment revenueStream | Dec. 31, 2022 USD ($) | |
The Company and Summary of its Significant Accounting Policies [Line Items] | |||
Conversion ratio of reverse stock split | 0.5 | ||
Accumulated deficit | $ (423,935,000) | $ (323,047,000) | |
Cash and cash equivalents | 36,741,000 | 77,757,000 | |
Short-term marketable securities | 19,123,000 | 48,411,000 | |
Net loss | (100,888,000) | (116,683,000) | |
Net cash provided by (used in) operating activities | (76,979,000) | (95,260,000) | |
Impairment losses | $ 0 | 0 | |
Number of revenue streams | revenueStream | 2 | ||
Performance obligation satisfied, variable consideration updated, increase (decrease) in revenue | $ (1,200,000) | (1,800,000) | |
Short-term deferred revenue | 196,000 | 109,000 | |
Reclassification of short-term deferred revenue to accrued liabilities | 1,000,000 | ||
Remaining performance obligation, estimated revenue expected to be recognized | 0 | ||
Accounts receivable | 2,584,000 | 4,172,000 | |
Allowance for credit loss | $ 0 | 0 | |
Number of operating segments | segment | 1 | ||
Level 1 | Restricted cash | |||
The Company and Summary of its Significant Accounting Policies [Line Items] | |||
Letters of credit | $ 3,500,000 | 3,500,000 | |
Contract revenue | |||
The Company and Summary of its Significant Accounting Policies [Line Items] | |||
Accounts receivable | 100,000 | 100,000 | |
Test revenue | |||
The Company and Summary of its Significant Accounting Policies [Line Items] | |||
Accounts receivable gross | $ 2,500,000 | $ 4,100,000 | |
Minimum | |||
The Company and Summary of its Significant Accounting Policies [Line Items] | |||
Useful life of the assets (in years) | 2 years | ||
Minimum | Stock options | |||
The Company and Summary of its Significant Accounting Policies [Line Items] | |||
Requisite service period (in years) | 3 years | ||
Minimum | RSUs | |||
The Company and Summary of its Significant Accounting Policies [Line Items] | |||
Requisite service period (in years) | 2 years | ||
Maximum | |||
The Company and Summary of its Significant Accounting Policies [Line Items] | |||
Useful life of the assets (in years) | 7 years | ||
Maximum | Stock options | |||
The Company and Summary of its Significant Accounting Policies [Line Items] | |||
Requisite service period (in years) | 4 years | ||
Maximum | RSUs | |||
The Company and Summary of its Significant Accounting Policies [Line Items] | |||
Requisite service period (in years) | 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 | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Disaggregation Of Revenue [Line Items] | ||
Total revenues | $ 15,296 | $ 14,518 |
Test revenue | ||
Disaggregation Of Revenue [Line Items] | ||
Total revenues | 14,384 | 13,790 |
Smart Stickers | ||
Disaggregation Of Revenue [Line Items] | ||
Total revenues | 592 | 152 |
RNA extractions | ||
Disaggregation Of Revenue [Line Items] | ||
Total revenues | 230 | 261 |
Project management fees | ||
Disaggregation Of Revenue [Line Items] | ||
Total revenues | $ 90 | $ 315 |
The Company and a Summary of _6
The Company and a Summary of its Significant Accounting Policies - Summary of Percentages of Total Revenue or Accounts Receivable for Third Party Payers and Pharmaceutical Customers (Details) - Customer Concentration Risk | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Payor A | Total Revenue | ||
Product Information [Line Items] | ||
Concentration risk, percentage | 52% | 48% |
Payor A | Accounts Receivable | ||
Product Information [Line Items] | ||
Concentration risk, percentage | 37% | 20% |
Payor B | Accounts Receivable | ||
Product Information [Line Items] | ||
Concentration risk, percentage | 10% |
The Company and a Summary of _7
The Company and a Summary of its Significant Accounting Policies - Schedule of Anti-Dilutive Securities (Details) - shares shares in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive equity instruments excluded from diluted net loss per common share (in shares) | 4,890 | 5,547 |
Common stock warrants | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive equity instruments excluded from diluted net loss per common share (in shares) | 706 | 709 |
Stock option | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive equity instruments excluded from diluted net loss per common share (in shares) | 1,834 | 1,688 |
Restricted stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive equity instruments excluded from diluted net loss per common share (in shares) | 2,350 | 3,150 |
The Company and a Summary of _8
The Company and a Summary of its Significant Accounting Policies - Summary of Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Marketable securities, available for sale: | ||
Total marketable securities, available for sale | $ 19,123 | $ 48,411 |
Fair Value, Recurring | ||
Assets: | ||
Total cash equivalents | 14,999 | 35,135 |
Marketable securities, available for sale: | ||
Total marketable securities, available for sale | 19,123 | 48,411 |
Total assets measured at fair value on a recurring basis | 34,122 | 83,546 |
Fair Value, Recurring | Money Market | ||
Assets: | ||
Total cash equivalents | 5,518 | 9,365 |
Fair Value, Recurring | Corporate debt securities | ||
Assets: | ||
Total cash equivalents | 7,374 | |
Fair Value, Recurring | U.S. government debt securities | ||
Assets: | ||
Total cash equivalents | 9,481 | 18,396 |
Fair Value, Recurring | Level 1 | ||
Assets: | ||
Total cash equivalents | 5,518 | 9,365 |
Marketable securities, available for sale: | ||
Total marketable securities, available for sale | 0 | 0 |
Total assets measured at fair value on a recurring basis | 5,518 | 9,365 |
Fair Value, Recurring | Level 1 | Money Market | ||
Assets: | ||
Total cash equivalents | 5,518 | 9,365 |
Fair Value, Recurring | Level 1 | Corporate debt securities | ||
Assets: | ||
Total cash equivalents | 0 | |
Fair Value, Recurring | Level 1 | U.S. government debt securities | ||
Assets: | ||
Total cash equivalents | 0 | 0 |
Fair Value, Recurring | Level 2 | ||
Assets: | ||
Total cash equivalents | 9,481 | 25,770 |
Marketable securities, available for sale: | ||
Total marketable securities, available for sale | 19,123 | 48,411 |
Total assets measured at fair value on a recurring basis | 28,604 | 74,181 |
Fair Value, Recurring | Level 2 | Money Market | ||
Assets: | ||
Total cash equivalents | 0 | 0 |
Fair Value, Recurring | Level 2 | Corporate debt securities | ||
Assets: | ||
Total cash equivalents | 7,374 | |
Fair Value, Recurring | Level 2 | U.S. government debt securities | ||
Assets: | ||
Total cash equivalents | 9,481 | 18,396 |
Fair Value, Recurring | Level 3 | ||
Assets: | ||
Total cash equivalents | 0 | 0 |
Marketable securities, available for sale: | ||
Total marketable securities, available for sale | 0 | 0 |
Total assets measured at fair value on a recurring basis | 0 | 0 |
Fair Value, Recurring | Level 3 | Money Market | ||
Assets: | ||
Total cash equivalents | 0 | 0 |
Fair Value, Recurring | Level 3 | Corporate debt securities | ||
Assets: | ||
Total cash equivalents | 0 | |
Fair Value, Recurring | Level 3 | U.S. government debt securities | ||
Assets: | ||
Total cash equivalents | 0 | 0 |
Corporate debt securities | ||
Marketable securities, available for sale: | ||
Total marketable securities, available for sale | 595 | 13,301 |
Corporate debt securities | Fair Value, Recurring | ||
Marketable securities, available for sale: | ||
Total marketable securities, available for sale | 595 | 13,301 |
Corporate debt securities | Fair Value, Recurring | Level 1 | ||
Marketable securities, available for sale: | ||
Total marketable securities, available for sale | 0 | 0 |
Corporate debt securities | Fair Value, Recurring | Level 2 | ||
Marketable securities, available for sale: | ||
Total marketable securities, available for sale | 595 | 13,301 |
Corporate debt securities | Fair Value, Recurring | Level 3 | ||
Marketable securities, available for sale: | ||
Total marketable securities, available for sale | 0 | 0 |
Municipal debt securities | ||
Marketable securities, available for sale: | ||
Total marketable securities, available for sale | 993 | |
Municipal debt securities | Fair Value, Recurring | ||
Marketable securities, available for sale: | ||
Total marketable securities, available for sale | 993 | |
Municipal debt securities | Fair Value, Recurring | Level 1 | ||
Marketable securities, available for sale: | ||
Total marketable securities, available for sale | 0 | |
Municipal debt securities | Fair Value, Recurring | Level 2 | ||
Marketable securities, available for sale: | ||
Total marketable securities, available for sale | 993 | |
Municipal debt securities | Fair Value, Recurring | Level 3 | ||
Marketable securities, available for sale: | ||
Total marketable securities, available for sale | 0 | |
U.S. government debt securities | ||
Marketable securities, available for sale: | ||
Total marketable securities, available for sale | 18,528 | 34,117 |
U.S. government debt securities | Fair Value, Recurring | ||
Marketable securities, available for sale: | ||
Total marketable securities, available for sale | 18,528 | 34,117 |
U.S. government debt securities | Fair Value, Recurring | Level 1 | ||
Marketable securities, available for sale: | ||
Total marketable securities, available for sale | 0 | 0 |
U.S. government debt securities | Fair Value, Recurring | Level 2 | ||
Marketable securities, available for sale: | ||
Total marketable securities, available for sale | 18,528 | 34,117 |
U.S. government debt securities | Fair Value, Recurring | Level 3 | ||
Marketable securities, available for sale: | ||
Total marketable securities, available for sale | $ 0 | $ 0 |
Balance Sheet Details - Schedul
Balance Sheet Details - Schedule of Short-Term Marketable Securities (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Investment Holdings [Line Items] | ||
Amortized Cost | $ 18,965 | $ 49,211 |
Gross Unrealized Gain | 208 | 12 |
Gross Unrealized Loss | (50) | (812) |
Total marketable securities, available for sale | 19,123 | 48,411 |
Corporate debt securities | ||
Investment Holdings [Line Items] | ||
Amortized Cost | 598 | 13,535 |
Gross Unrealized Gain | 0 | 2 |
Gross Unrealized Loss | (3) | (236) |
Total marketable securities, available for sale | 595 | 13,301 |
Municipal debt securities | ||
Investment Holdings [Line Items] | ||
Amortized Cost | 1,001 | |
Gross Unrealized Gain | 0 | |
Gross Unrealized Loss | (8) | |
Total marketable securities, available for sale | 993 | |
U.S. government debt securities | ||
Investment Holdings [Line Items] | ||
Amortized Cost | 18,367 | 34,675 |
Gross Unrealized Gain | 208 | 10 |
Gross Unrealized Loss | (47) | (568) |
Total marketable securities, available for sale | $ 18,528 | $ 34,117 |
Balance Sheet Details - Additio
Balance Sheet Details - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Estimated market value of debt securities with contractual maturities of less than 12 months | $ 19,100 | $ 40,200 |
Estimated market value of remaining debt securities with contractual maturities of up to 23 months | 8,200 | |
Depreciation | 1,824 | 1,634 |
Gain (loss) on disposition of property plant equipment | $ (18) | $ (324) |
Balance Sheet Details - Continu
Balance Sheet Details - Continuous Loss Position (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Investment Holdings [Line Items] | ||
AFS, Less than 12 months, Fair Value | $ 2,587 | $ 17,440 |
AFS, Less than 12 months, Gross Unrealized Loss | (9) | (301) |
AFS, Greater than 12 months, Fair Value | 5,566 | 25,521 |
AFS, Greater than 12 months, Gross Unrealized Loss | (41) | (511) |
AFS, Total, Fair Value | 8,153 | 42,961 |
AFS, Total, Gross Unrealized Loss | (50) | (812) |
Corporate debt securities | ||
Investment Holdings [Line Items] | ||
AFS, Less than 12 months, Fair Value | 596 | 6,533 |
AFS, Less than 12 months, Gross Unrealized Loss | (3) | (105) |
AFS, Greater than 12 months, Fair Value | 0 | 5,503 |
AFS, Greater than 12 months, Gross Unrealized Loss | 0 | (131) |
AFS, Total, Fair Value | 596 | 12,036 |
AFS, Total, Gross Unrealized Loss | (3) | (236) |
Municipal debt securities | ||
Investment Holdings [Line Items] | ||
AFS, Less than 12 months, Fair Value | 0 | |
AFS, Less than 12 months, Gross Unrealized Loss | 0 | |
AFS, Greater than 12 months, Fair Value | 992 | |
AFS, Greater than 12 months, Gross Unrealized Loss | (8) | |
AFS, Total, Fair Value | 992 | |
AFS, Total, Gross Unrealized Loss | (8) | |
U.S. government debt securities | ||
Investment Holdings [Line Items] | ||
AFS, Less than 12 months, Fair Value | 1,991 | 10,907 |
AFS, Less than 12 months, Gross Unrealized Loss | (6) | (196) |
AFS, Greater than 12 months, Fair Value | 5,566 | 19,026 |
AFS, Greater than 12 months, Gross Unrealized Loss | (41) | (372) |
AFS, Total, Fair Value | 7,557 | 29,933 |
AFS, Total, Gross Unrealized Loss | $ (47) | $ (568) |
Balance Sheet Details - Sched_2
Balance Sheet Details - Schedule of Prepaid Expenses and PP&E (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Prepaid expenses and other current assets: | ||
Prepaid expenses | $ 1,719 | $ 3,207 |
Other current assets | 581 | 733 |
Total prepaid expenses and other current assets | 2,300 | 3,940 |
Property and equipment, gross: | ||
Laboratory equipment | 6,100 | 6,250 |
Computer equipment | 831 | 872 |
Furniture and fixtures | 1,248 | 913 |
Leasehold improvements | 604 | 1,344 |
Total property and equipment, gross | 8,783 | 9,379 |
Less accumulated depreciation | (3,795) | (3,004) |
Total property and equipment, net | $ 4,988 | $ 6,375 |
Balance Sheet Details - Sched_3
Balance Sheet Details - Schedule of Accrued Compensation and Accrued Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Accrued compensation: | ||
Accrued bonus and commissions | $ 3,534 | $ 3,257 |
Accrued salaries and wages | 3,130 | 4,637 |
Total accrued compensation | 6,664 | 7,894 |
Accrued liabilities: | ||
Accrued consulting services | 262 | 894 |
Customer refund liability | 1,008 | 980 |
Restructuring liability | 10 | 0 |
Other accrued expenses | 737 | 1,590 |
Total accrued liabilities | $ 2,017 | $ 3,464 |
Stockholders_ Equity - Addition
Stockholders’ Equity - Additional Information (Details) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | 14 Months Ended | 24 Months Ended | 36 Months Ended | |||||||||||||||||
Jan. 01, 2024 | Sep. 01, 2022 period | Aug. 31, 2022 shares | Aug. 08, 2022 USD ($) | Feb. 28, 2022 shares | Nov. 10, 2020 USD ($) | Jun. 23, 2017 shares | May 31, 2023 shares | Sep. 30, 2022 shares | Dec. 31, 2023 USD ($) warrant $ / shares shares | Dec. 31, 2022 USD ($) $ / shares shares | Dec. 31, 2021 USD ($) shares | Dec. 31, 2020 $ / shares shares | Dec. 31, 2021 USD ($) $ / shares shares | Dec. 31, 2016 $ / shares shares | Dec. 31, 2018 $ / shares shares | Aug. 31, 2023 shares | Jun. 02, 2023 shares | Jun. 01, 2023 shares | Feb. 28, 2023 shares | Jan. 01, 2023 shares | Mar. 31, 2022 shares | |
Class of Stock [Line Items] | ||||||||||||||||||||||
Common stock, shares authorized (in shares) | 100,000,000 | 50,000,000 | 100,000,000 | 50,000,000 | ||||||||||||||||||
Preferred stock, shares authorized (in shares) | 5,000,000 | |||||||||||||||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | ||||||||||||||||||||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.0001 | |||||||||||||||||||||
Issuance of preferred stock, total offering amount | $ | $ 5,248 | |||||||||||||||||||||
Proceeds from issuance of common stock in connection with at-the-market offering, net | $ | 5,248 | $ 0 | ||||||||||||||||||||
Proceeds from exercise of common stock warrants | $ | $ 0 | $ 22 | ||||||||||||||||||||
Common stock available for issuance (in shares) | 6,650 | 7,352 | ||||||||||||||||||||
Common stock, shares issued (in shares) | 34,524,677 | 30,297,408 | ||||||||||||||||||||
Compensation cost related to non-vested awards not yet recognized | $ | $ 18,100 | |||||||||||||||||||||
Weighted average term expected to be recognized (in years) | 2 years 1 month 9 days | |||||||||||||||||||||
Share-based payment arrangement, accelerated cost | $ | $ 3,000 | |||||||||||||||||||||
Subsequent Event | ||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||
Additional award vesting period (in years) | 10 months | |||||||||||||||||||||
Cowen and Company LLC | ||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||
Sale of stock, aggregate amount remaining | $ | $ 74,700 | |||||||||||||||||||||
Employee Stock | ||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||
Duration of offering period (in months) | 24 months | |||||||||||||||||||||
Number of 6 month purchase periods | period | 4 | |||||||||||||||||||||
Purchase period (in months) | 6 months | 6 months | 6 months | |||||||||||||||||||
2020 Equity Incentive Plan | ||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||
Common stock, shares authorized (in shares) | 1,900,000 | |||||||||||||||||||||
Common stock outstanding percentage (in percent) | 5% | 3.50% | ||||||||||||||||||||
Contractual term of options granted (in years) | 10 years | |||||||||||||||||||||
Increase in shares reserved for future grants (in shares) | 1,060,409 | |||||||||||||||||||||
Options remain available for future grant (in shares) | 1,094,034 | |||||||||||||||||||||
2020 Employee Stock Purchase Plan | Employee Stock | ||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||
Preferred stock, shares issued (in shares) | 100,749 | 47,339 | ||||||||||||||||||||
Shares issued (in shares) | 300,000 | |||||||||||||||||||||
Common stock outstanding percentage (in percent) | 1% | |||||||||||||||||||||
Percentage of price at shares purchased (in percent) | 85% | |||||||||||||||||||||
Options remain available for future grant (in shares) | 666,238 | 698,930 | 300,000 | |||||||||||||||||||
Common stock, shares issued (in shares) | 158,667 | 174,025 | ||||||||||||||||||||
2022 Inducement Equity Incentive Plan | ||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||
Common stock initially reserved for issuance (in shares) | 950,000 | |||||||||||||||||||||
Number of additional shares authorized | 500,000 | 1,000,000 | ||||||||||||||||||||
Minimum | Subsequent Event | ||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||
Share-based compensation arrangement by share-based payment award, options, exercisable, additional exercise period (in years) | 90 days | |||||||||||||||||||||
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 (in percent) | 110% | |||||||||||||||||||||
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 (in percent) | 100% | |||||||||||||||||||||
Ownership percentage (in percent) | 0.10 | |||||||||||||||||||||
Maximum | Subsequent Event | ||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||
Share-based compensation arrangement by share-based payment award, options, exercisable, additional exercise period (in years) | 12 months | |||||||||||||||||||||
Maximum | 2020 Equity Incentive Plan | ||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||
Term of the option (in years) | 5 years | |||||||||||||||||||||
Shares issued (in shares) | 1,400,000 | |||||||||||||||||||||
Maximum | 2020 Employee Stock Purchase Plan | Employee Stock | ||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||
Common stock available for issuance (in shares) | 400,000 | |||||||||||||||||||||
SPAC Warrants | ||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||
Warrants issued to purchase common stock (in shares) | 14,936,250 | |||||||||||||||||||||
Number of warrants entitle holder to purchase one share | warrant | 4 | |||||||||||||||||||||
Total number exercised of public warrants (in shares) | 12,120,397 | 12,120,397 | ||||||||||||||||||||
Common shares issued upon exercise of warrants (in shares) | 3,030,092 | |||||||||||||||||||||
Proceeds from exercise of common stock warrants | $ | $ 69,700 | |||||||||||||||||||||
Warrants outstanding (in shares) | 2,815,853 | 2,815,853 | ||||||||||||||||||||
Public SPAC Warrants | ||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||
Warrants issued to purchase common stock (in shares) | 14,375,000 | |||||||||||||||||||||
Expected term (in years) | 5 years | |||||||||||||||||||||
Private SPAC Warrants | ||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||
Warrants issued to purchase common stock (in shares) | 561,250 | |||||||||||||||||||||
Warrants outstanding (in shares) | 80,350 | 80,350 | ||||||||||||||||||||
Placement Agent Warrants | ||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||
Warrants issued to purchase common stock (in shares) | 168,522 | 72,658 | ||||||||||||||||||||
Expected term (in years) | 7 years | 7 years | ||||||||||||||||||||
Placement Agent Warrants | 2018 Convertible Bridge Notes | ||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||
Warrants issued to purchase common stock (in shares) | 15,724 | |||||||||||||||||||||
Expected term (in years) | 7 years | |||||||||||||||||||||
Warrants outstanding (in shares) | 570 | 4,510 | ||||||||||||||||||||
Management Warrants | ||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||
Expected term (in years) | 10 years | |||||||||||||||||||||
Warrants outstanding (in shares) | 0 | 0 | ||||||||||||||||||||
Cowen and Company LLC | ||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||
Issuance of preferred stock, total offering amount | $ | $ 75,000 | |||||||||||||||||||||
Preferred stock, shares issued (in shares) | 0 | |||||||||||||||||||||
Common stock | ||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||
Preferred stock, shares issued (in shares) | 2,169,259 | |||||||||||||||||||||
Common stock | SPAC Warrants | ||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||
Exercise price of warrant (in dollars per share) | $ / shares | $ 23 | |||||||||||||||||||||
Common stock | Placement Agent Warrants | ||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||
Exercise price of warrant (in dollars per share) | $ / shares | $ 8.68 | $ 9.54 | ||||||||||||||||||||
Number of shares issued for each warrant (in shares) | 1 | 1 | ||||||||||||||||||||
Common stock | Placement Agent Warrants | 2018 Convertible Bridge Notes | ||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||
Exercise price of warrant (in dollars per share) | $ / shares | $ 9.54 | |||||||||||||||||||||
Number of shares issued for each warrant (in shares) | 1 | |||||||||||||||||||||
Common stock | Management Warrants | ||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||
Exercise price of warrant (in dollars per share) | $ / shares | $ 1.08 | |||||||||||||||||||||
Number of shares issued for each warrant (in shares) | 20,320 | |||||||||||||||||||||
Warrants vesting period (in years) | 4 years | |||||||||||||||||||||
At-The Market Offering | Cowen and Company LLC | ||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||
Issuance of preferred stock, total offering amount | $ | $ 50,000 | |||||||||||||||||||||
At The Market Offering - 2020 Sales Agreement | Cowen and Company LLC | ||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||
Preferred stock, shares issued (in shares) | 2,038,661 | 0 | 1,482,343 | |||||||||||||||||||
Issuance price (in dollars per share) | $ / shares | $ 2.68 | $ 30.05 | ||||||||||||||||||||
Payments of stock issuance costs | $ | $ 1,600 | |||||||||||||||||||||
Gross proceeds from issuance of common stock | $ | $ 5,500 | $ 42,900 | ||||||||||||||||||||
Decrease in issuance costs | $ | 300 | |||||||||||||||||||||
Proceeds from issuance of common stock in connection with at-the-market offering, net | $ | $ 5,200 | |||||||||||||||||||||
At The Market Offering - 2022 Sales Agreement | Cowen and Company LLC | ||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||
Preferred stock, shares issued (in shares) | 130,598 | |||||||||||||||||||||
Issuance price (in dollars per share) | $ / shares | $ 2.49 | |||||||||||||||||||||
Payments of stock issuance costs | $ | $ 200 | |||||||||||||||||||||
Gross proceeds from issuance of common stock | $ | 300 | |||||||||||||||||||||
Proceeds from issuance of common stock in connection with at-the-market offering, net | $ | $ 100 |
Stockholders_ Equity - Summary
Stockholders’ Equity - Summary of Stock Options Transactions (Details) - Employee Stock - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Total options | ||
Beginning balance (in shares) | 1,687,625 | |
Granted (in shares) | 590,000 | |
Exercised (in shares) | (33,361) | |
Forfeited (in shares) | (410,624) | |
Ending balance (in shares) | 1,833,640 | 1,687,625 |
Weighted average exercise price | ||
Weighted average exercise price, beginning balance (in dollars per share) | $ 18.92 | |
Weighted average exercise price, granted (in dollars per share) | 2.37 | |
Weighted average exercise price, exercised (in dollars per share) | 2.97 | |
Weighted average exercise price, forfeited (in dollars per share) | 20.53 | |
Weighted average exercise price, ending balance (in dollars per share) | $ 13.52 | $ 18.92 |
Weighted average remaining contractual term (in years) | 6 years 6 months 18 days | 7 years 2 months 8 days |
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Additional Disclosures [Abstract] | ||
Options vested and expected to vest (in shares) | 1,833,640 | |
Options exercisable (in shares) | 983,551 | |
Options vested and expected to vest, weighted average exercise price (in dollars per share) | $ 13.52 | |
Options exercisable, weighted average exercise price (in dollars per share) | $ 18.26 | |
Options vested and expected to vest, weighted average remaining contractual term (in years) | 6 years 6 months 18 days | |
Options exercisable, weighted average remaining contractual term (in years) | 4 years 8 months 15 days | |
Aggregate intrinsic value, outstanding | $ 9,745 | $ 9,821 |
Options vested and expected to vest, aggregate intrinsic value | 9,745 | |
Options exercisable, aggregate intrinsic value | $ 4,345 |
Stockholders_ Equity - Summar_2
Stockholders’ Equity - Summary of Restricted Stock Units Award Transactions (Details) - RSUs | 12 Months Ended |
Dec. 31, 2023 $ / shares shares | |
Total RSUs | |
Beginning balance (in shares) | shares | 3,149,514 |
Granted (in shares) | shares | 2,005,952 |
Released (in shares) | shares | (1,705,692) |
Forfeited (in shares) | shares | (1,099,393) |
Ending balance (in shares) | shares | 2,350,381 |
Weighted average grant date fair value per share | |
Beginning balance, weighted average grant date fair value per share (in dollars per share) | $ / shares | $ 12.11 |
Granted, weighted average grant date fair value per share (in dollars per share) | $ / shares | 3.58 |
Released, weighted average grant date fair value per share (in dollars per share) | $ / shares | 10.72 |
Forfeited, weighted average grant date fair value per share (in dollars per share) | $ / shares | 9.10 |
Ending balance, weighted average grant date fair value per share (in dollars per share) | $ / shares | |
RSUs vested and expected to vest (in shares) | shares | 2,350,381 |
RSUs vested, but not yet issued (in shares) | shares | 135,822 |
RSUs vested and expected to vest, weighted average grant date fair value per share (in dollars per share) | $ / shares | $ 7.24 |
RSUs vested, but not yet issued, weighted average grant date fair value per share (in dollars per share) | $ / shares | $ 3.31 |
Stockholders_ Equity - Summar_3
Stockholders’ Equity - Summary of Common Stock Reserved for Future Issuance (Detail) | 12 Months Ended | |
Dec. 31, 2023 warrant shares | Dec. 31, 2022 shares | |
Class of Stock [Line Items] | ||
Total common stock reserved for future issuance (in shares) | 6,650 | 7,352 |
SPAC Warrants | ||
Class of Stock [Line Items] | ||
Number of warrants entitle holder to purchase one share | warrant | 4 | |
Warrants to purchase common stock | ||
Class of Stock [Line Items] | ||
Total common stock reserved for future issuance (in shares) | 2 | 5 |
SPAC Warrants to purchase common stock | ||
Class of Stock [Line Items] | ||
Total common stock reserved for future issuance (in shares) | 704 | 704 |
Stock options issued and outstanding | ||
Class of Stock [Line Items] | ||
Total common stock reserved for future issuance (in shares) | 1,834 | 1,688 |
Restricted stock units issued and outstanding | ||
Class of Stock [Line Items] | ||
Total common stock reserved for future issuance (in shares) | 2,350 | 3,150 |
Authorized for future equity grants | ||
Class of Stock [Line Items] | ||
Total common stock reserved for future issuance (in shares) | 1,094 | 1,106 |
Authorized for future ESPP purchases | ||
Class of Stock [Line Items] | ||
Total common stock reserved for future issuance (in shares) | 666 | 699 |
Stockholders_ Equity - Share-Ba
Stockholders’ Equity - Share-Based Compensation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Total stock-based compensation | $ 18,565 | $ 18,934 |
Cost of revenue | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Total stock-based compensation | 1,610 | 1,389 |
Sales and marketing | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Total stock-based compensation | 4,369 | 5,391 |
Research and development | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Total stock-based compensation | 2,602 | 3,807 |
General and administrative | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Total stock-based compensation | $ 9,984 | $ 8,347 |
Stockholders_ Equity - Schedule
Stockholders’ Equity - Schedule of Valuation Assumptions (Details) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Employee Stock Options | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Assumed risk-free interest rate, minimum (in percent) | 3.50% | 2.97% |
Assumed risk-free interest rate, maximum (in percent) | 4.49% | 3.92% |
Assumed volatility, minimum (in percent) | 93.22% | 81.65% |
Assumed volatility, maximum (in percent) | 94.58% | 85.41% |
Expected term (in years) | 6 years 29 days | |
Expected dividend yield (in percent) | 0% | 0% |
Employee Stock | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Assumed risk-free interest rate, minimum (in percent) | 4.87% | 0.22% |
Assumed risk-free interest rate, maximum (in percent) | 5.47% | 3.51% |
Assumed volatility, minimum (in percent) | 104.36% | 52.58% |
Assumed volatility, maximum (in percent) | 153.96% | 115.33% |
Expected dividend yield (in percent) | 0% | 0% |
Minimum | Employee Stock Options | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Expected term (in years) | 5 years 10 months 17 days | |
Minimum | Employee Stock | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Expected term (in years) | 5 months 26 days | 5 months 26 days |
Maximum | Employee Stock Options | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Expected term (in years) | 6 years 1 month 2 days | |
Maximum | Employee Stock | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Expected term (in years) | 2 years | 2 years |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Operating Loss Carryforwards [Line Items] | ||
Federal statutory rate (in percent) | 21% | 21% |
Unrecognized tax benefits | ||
Minimum | ||
Operating Loss Carryforwards [Line Items] | ||
Uncertain tax positions (in percent) | ||
Domestic tax authority | ||
Operating Loss Carryforwards [Line Items] | ||
Operating loss carryforwards | $ 342 | 267 |
Tax credit carryforwards | 2.6 | 1.8 |
State and local jurisdiction | ||
Operating Loss Carryforwards [Line Items] | ||
Operating loss carryforwards | 257.4 | 196.7 |
Tax credit carryforwards | $ 2.1 | $ 1.6 |
Income Taxes - Schedule of Reco
Income Taxes - Schedule of Reconciliation of Income Tax Rate (Details) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
Income tax at statutory rate | 21% | 21% |
State tax, net of federal tax benefit | 4.50% | 4% |
Permanent items | (3.80%) | (1.60%) |
Tax credits | 0.80% | 0.40% |
Other | (0.30%) | (0.10%) |
Valuation allowance increase | (22.20%) | (23.70%) |
Income tax expense | 0% | 0% |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets and Liabilities from Federal and State Income Taxes (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Deferred tax assets: | ||
Net operating loss | $ 87,436 | $ 67,791 |
Research and development credits | 4,303 | 3,129 |
Stock based compensation | 3,227 | 3,849 |
Operating lease liability | 13,825 | 14,091 |
R&E expenditures | 6,234 | 4,371 |
Deferred revenue | 32 | 28 |
Accruals and other | 745 | 1,163 |
Total deferred tax assets | 115,802 | 94,422 |
Deferred tax liabilities: | ||
Depreciation and amortization | (204) | (55) |
Operating lease right-of-use assets | (13,161) | (14,178) |
Total deferred tax liabilities | (13,365) | (14,233) |
Net deferred tax assets before valuation allowance | 102,437 | 80,189 |
Less: valuation allowance | (102,437) | (80,189) |
Net deferred tax assets | $ 0 | $ 0 |
Leases, Commitments and Conti_3
Leases, Commitments and Contingencies - Additional Information (Details) | 1 Months Ended | 12 Months Ended | |||||
Jun. 26, 2023 | Jul. 01, 2021 USD ($) ft² $ / ft² | Apr. 30, 2022 USD ($) ft² $ / ft² | Dec. 31, 2023 USD ($) period phase | Dec. 31, 2022 USD ($) | Nov. 30, 2022 USD ($) | Mar. 31, 2022 USD ($) | |
Commitments And Contingencies [Line Items] | |||||||
Percentage of useful lives of assets (in percent) | 75% | ||||||
Gross assets | $ 8,783,000 | $ 9,379,000 | |||||
Accumulated amortization | 200,000 | 200,000 | |||||
Interest on lease liabilities | $ 5,000 | 13,000 | |||||
Number of improvement phases | phase | 4 | ||||||
Operating lease right-of-use assets | $ 51,722,000 | 56,007,000 | $ 34,100,000 | ||||
Total lease obligation | 54,339,000 | $ 32,100,000 | |||||
Restructuring liability | 10,000 | 0 | |||||
Restructuring Plan | |||||||
Commitments And Contingencies [Line Items] | |||||||
Restructuring and related cost, number of positions eliminated, period percent (in percent) | 15% | ||||||
Restructuring charges | 2,100,000 | ||||||
Severance costs | 1,800,000 | ||||||
Restructuring and related cost, accelerated depreciation | 300,000 | ||||||
Restructuring liability | $ 10,000 | ||||||
Kilroy Realty, L.P | |||||||
Commitments And Contingencies [Line Items] | |||||||
Area of building | ft² | 95,997 | 110,082 | |||||
Tenant improvement allowance per rentable square foot | $ / ft² | 125 | ||||||
Tenant improvements | $ 12,000,000 | ||||||
Remaining lease term (in years) | 10 years 6 months | ||||||
Number of renewal terms | period | 2 | ||||||
Extension period (in years) | 5 years | ||||||
Operating lease right-of-use assets | $ 5,700,000 | $ 15,800,000 | |||||
Total lease obligation | 5,700,000 | $ 15,800,000 | |||||
Incremental borrowing rate (percent) | 6.50% | ||||||
Operating lease right-of-use assets and liabilities, net | $ 1,200,000 | ||||||
Increase (decrease) in operating lease, right-of-use-asset | 1,200,000 | ||||||
Kilroy Realty, L.P | Letter of Credit | Demand Deposits | |||||||
Commitments And Contingencies [Line Items] | |||||||
Letter of credit increase | 500,000 | ||||||
Restricted cash and cash equivalents | 3,500,000 | ||||||
Kilroy Realty, L.P | Standby Letter of Credit | Demand Deposits | |||||||
Commitments And Contingencies [Line Items] | |||||||
Restricted cash and cash equivalents | 0 | ||||||
Kilroy Realty, L.P | Restricted cash | Letter of Credit | |||||||
Commitments And Contingencies [Line Items] | |||||||
Security deposit | 3,000,000 | ||||||
Kilroy Realty, L.P | First Amendment | |||||||
Commitments And Contingencies [Line Items] | |||||||
Tenant improvements | $ 14,400,000 | ||||||
Increase in tenant improvement allowance per rentable square foot | $ / ft² | 25 | ||||||
Increase in tenant improvement allowance | $ 2,400,000 | ||||||
Kilroy Realty, L.P | Second Amendment | |||||||
Commitments And Contingencies [Line Items] | |||||||
Tenant improvements | 16,500,000 | ||||||
Increase in tenant improvement allowance | $ 2,100,000 | ||||||
Rentable and usable square feet | ft² | 14,085 | ||||||
Interest Income, Net | |||||||
Commitments And Contingencies [Line Items] | |||||||
Interest on lease liabilities | 5,000 | 13,000 | |||||
Assets recorded under finance leases | |||||||
Commitments And Contingencies [Line Items] | |||||||
Gross assets | $ 400,000 | $ 400,000 |
Leases, Commitments and Conti_4
Leases, Commitments and Contingencies - Schedule of Long Term Finance Lease Obligations (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Commitments and Contingencies Disclosure [Abstract] | ||
Gross finance lease obligations | $ 60 | $ 180 |
Less: imputed interest | (5) | (11) |
Present value of net minimum lease payments | 55 | 169 |
Less: current portion of finance lease obligations | (17) | (116) |
Long-term finance lease obligations, less current portion | $ 38 | $ 53 |
Leases, Commitments and Conti_5
Leases, Commitments and Contingencies - Components of Lease Expense (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 USD ($) ft² | Dec. 31, 2022 USD ($) | |
Operating lease cost | ||
Operating lease cost | $ 8,700 | $ 4,672 |
Variable lease costs | 1,025 | 869 |
Sublease income (2) | (192) | 0 |
Total operating lease cost, net of sublease income | 9,533 | 5,541 |
Finance lease cost | ||
Amortization of leased assets | 85 | 83 |
Interest on lease liabilities | 5 | 13 |
Total finance lease cost | $ 90 | 96 |
Rentable square feet | ft² | 1,802 | |
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash flows from operating leases | $ 5,609 | 4,356 |
Operating cash flows from finance leases | 5 | 13 |
Financing cash flows from finance leases | 114 | 137 |
Right-of-use assets obtained in exchanged for operating lease obligations | 0 | 51,089 |
Right-of-use assets obtained in exchanged for finance lease obligations | $ 0 | $ 48 |
Weighted average remaining lease term of operating leases (in years) | 9 years 4 months 24 days | 10 years 4 months 28 days |
Weighted average remaining lease term of finance leases (in years) | 3 years 1 month 6 days | 2 years 3 months 10 days |
Weighted average discount rate for operating leases (in percent) | 8.72% | 8.67% |
Weighted average discount rate for finance leases (in percent) | 6.25% | 5.84% |
Leases, Commitments and Conti_6
Leases, Commitments and Contingencies - Schedule of Future Minimum Lease Payments Under Operating and Finance Leases (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 | Nov. 30, 2022 |
Operating Leases | |||
2024 | $ 7,569 | ||
2025 | 7,778 | ||
2026 | 8,000 | ||
2027 | 8,228 | ||
2028 | 8,464 | ||
Thereafter | 40,362 | ||
Total minimum lease payments | 80,401 | ||
Less: imputed interest | (26,062) | ||
Total lease obligation | 54,339 | $ 32,100 | |
Less: current lease obligations | (3,069) | $ (1,634) | |
Long-term lease obligations | 51,270 | 54,028 | |
Finance Leases | |||
2024 | 19 | ||
2025 | 19 | ||
2026 | 18 | ||
2027 | 4 | ||
2028 | 0 | ||
Thereafter | 0 | ||
Total minimum lease payments | 60 | ||
Less: imputed interest | (5) | (11) | |
Present value of net minimum lease payments | 55 | 169 | |
Less: current lease obligations | (17) | (116) | |
Long-term lease obligations | 38 | $ 53 | |
Total | |||
2024 | 7,588 | ||
2025 | 7,797 | ||
2026 | 8,018 | ||
2027 | 8,232 | ||
2028 | 8,464 | ||
Thereafter | 40,362 | ||
Total minimum lease payments | 80,461 | ||
Less: imputed interest | (26,067) | ||
Total lease obligation | 54,394 | ||
Less: current lease obligations | (3,086) | ||
Long-term lease obligations | $ 51,308 |
Retirement Plan (Details)
Retirement Plan (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2023 USD ($) | |
Retirement Benefits [Abstract] | |
Matching contribution | $ 1.5 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Related Party Transaction [Line Items] | ||
Sales and marketing | $ 44,995,000 | $ 58,674,000 |
Accounts payable | 1,484,000 | 2,419,000 |
Related Party | ||
Related Party Transaction [Line Items] | ||
Sales and marketing | 900,000 | 3,200,000 |
Accounts payable | $ 0 | $ 300,000 |
Subsequent Events - Narrative (
Subsequent Events - Narrative (Details) - 2024 Restructuring Plan - Subsequent Event - USD ($) $ in Millions | 3 Months Ended | |
Jan. 29, 2024 | Mar. 31, 2024 | |
Subsequent Event [Line Items] | ||
Restructuring and related cost, number of positions eliminated, period percent (in percent) | 15% | |
Forecast | ||
Subsequent Event [Line Items] | ||
Restructuring charges | $ 1.3 |