Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2018 | Aug. 01, 2018 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | FLGT | |
Entity Registrant Name | Fulgent Genetics, Inc. | |
Entity Central Index Key | 1,674,930 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 18,019,499 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Current assets | ||
Cash and cash equivalents | $ 3,654 | $ 6,490 |
Marketable securities | 26,949 | 19,994 |
Trade accounts receivable, net of allowance for doubtful accounts of $516 and $287, as of June 30, 2018 and December 31, 2017, respectively | 5,055 | 4,005 |
Other current assets | 2,537 | 2,438 |
Total current assets | 38,195 | 32,927 |
Marketable securities, long term | 7,460 | 14,883 |
Equity method investments | 1,956 | 1,937 |
Fixed assets, net | 7,325 | 7,272 |
Deferred tax asset | 592 | 126 |
Other long-term assets | 20 | 39 |
Total assets | 55,548 | 57,184 |
Current liabilities | ||
Accounts payable | 1,794 | 2,089 |
Accrued liabilities | 1,184 | 911 |
Total current liabilities | 2,978 | 3,000 |
Other long-term liabilities | 9 | 6 |
Total liabilities | 2,987 | 3,006 |
Commitments and contingencies (Note 8) | ||
Stockholders’ equity | ||
Common stock, $0.0001 par value per share, 50,000 shares authorized, 17,963 and 17,847 shares issued and outstanding at June 30, 2018 and December 31, 2017, respectively. | 2 | 2 |
Preferred stock, $0.0001 par value per share, 1,000 shares authorized, no shares issued or outstanding at June 30, 2018 and December 31, 2017 | ||
Additional paid-in capital | 113,011 | 111,884 |
Accumulated other comprehensive income (loss) | (82) | (44) |
Accumulated deficit | (60,370) | (57,664) |
Total stockholders’ equity | 52,561 | 54,178 |
Total liabilities and stockholders’ equity | $ 55,548 | $ 57,184 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Statement Of Financial Position [Abstract] | ||
Allowance for doubtful accounts receivable | $ 516 | $ 287 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares issued | 17,963,000 | 17,847,000 |
Common stock, shares outstanding | 17,963,000 | 17,847,000 |
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Income Statement [Abstract] | ||||
Revenue | $ 5,400 | $ 4,640 | $ 10,053 | $ 9,946 |
Cost of revenue | 2,544 | 1,879 | 5,316 | 3,738 |
Gross profit | 2,856 | 2,761 | 4,737 | 6,208 |
Operating expenses: | ||||
Research and development | 1,212 | 920 | 2,670 | 1,771 |
Selling and marketing | 1,279 | 851 | 2,409 | 1,742 |
General and administrative | 1,366 | 1,140 | 2,853 | 2,626 |
Total operating expenses | 3,857 | 2,911 | 7,932 | 6,139 |
Operating income (loss) | (1,001) | (150) | (3,195) | 69 |
Interest and other income | 98 | 120 | 193 | 239 |
Income (loss) before income taxes and equity loss in investee | (903) | (30) | (3,002) | 308 |
Provision for (benefit from) income taxes | (100) | (110) | (534) | (4) |
Income (loss) before equity loss in investee | (803) | 80 | (2,468) | 312 |
Equity loss in investee | (246) | (105) | (491) | (105) |
Net income (loss) | $ (1,049) | $ (25) | $ (2,959) | $ 207 |
Net income (loss) per common share: | ||||
Basic | $ (0.06) | $ 0 | $ (0.17) | $ 0.01 |
Diluted | $ (0.06) | $ 0 | $ (0.17) | $ 0.01 |
Weighted-average common shares: | ||||
Basic | 17,919 | 17,711 | 17,891 | 17,694 |
Diluted | 17,919 | 17,711 | 17,891 | 18,156 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Statement Of Income And Comprehensive Income [Abstract] | ||||
Net income (loss) | $ (1,049) | $ (25) | $ (2,959) | $ 207 |
Other comprehensive income (loss), net of tax: | ||||
Foreign currency translation gain (loss) | (43) | (21) | ||
Net unrealized gain (loss) on marketable securities | 48 | 17 | (17) | 35 |
Comprehensive income (loss) | $ (1,044) | $ (8) | $ (2,997) | $ 242 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Stockholders' Equity (unaudited) - USD ($) $ in Thousands | Total | Stockholders' Equity | Additional Paid-In Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit |
Beginning Balance at Dec. 31, 2016 | $ 54,479 | $ 2 | $ 109,734 | $ (103) | $ (55,154) |
Beginning Balance, Shares at Dec. 31, 2016 | 17,676,000 | ||||
Equity-based compensation | 2,119 | 2,119 | |||
Exercise of common stock options | 31 | 31 | |||
Exercise of common stock options, Shares | 81,000 | ||||
Restricted stock awards, Shares | 90,000 | ||||
Other comprehensive income, net | 59 | 59 | |||
Net income (loss) | (2,510) | (2,510) | |||
Ending Balance at Dec. 31, 2017 | $ 54,178 | $ 2 | 111,884 | (44) | (57,664) |
Ending Balance, Shares at Dec. 31, 2017 | 17,847,000 | 17,847,000 | |||
Equity-based compensation | $ 1,118 | 1,118 | |||
Exercise of common stock options | 9 | 9 | |||
Exercise of common stock options, Shares | 23,000 | ||||
Restricted stock awards, Shares | 93,000 | ||||
Cumulative effect of accounting change | 327 | 327 | |||
Cumulative tax effect of accounting change | (74) | (74) | |||
Other comprehensive income, net | (38) | (38) | |||
Net income (loss) | (2,959) | (2,959) | |||
Ending Balance at Jun. 30, 2018 | $ 52,561 | $ 2 | $ 113,011 | $ (82) | $ (60,370) |
Ending Balance, Shares at Jun. 30, 2018 | 17,963,000 | 17,963,000 |
Condensed Consolidated Stateme7
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Cash flow from operating activities: | ||
Net (loss) income | $ (2,959) | $ 207 |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
Equity-based compensation | 1,118 | 989 |
Depreciation | 1,078 | 817 |
Loss on disposal of fixed asset | 55 | 5 |
Amortization of premium of marketable securities | 160 | 196 |
Provision for bad debt | 230 | |
Deferred taxes | (535) | |
Equity loss in investee | 491 | 105 |
Other | 38 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | (990) | 178 |
Other current assets | 22 | (825) |
Accounts payable | (1,344) | (555) |
Taxes payable | (123) | |
Accrued liabilities | 1,288 | 1,078 |
Net cash (used in) provided by operations | (1,348) | 2,072 |
Cash flow from investing activities: | ||
Purchases of fixed assets | (1,152) | (1,517) |
Sale of marketable securities | 3,781 | |
Purchase of marketable securities | (11,470) | (3,582) |
Maturities of marketable securities | 11,656 | 3,600 |
Purchase of equipment contributed to Equity Method Investee | (510) | |
Net cash provided by (used in) investing activities | (1,476) | 2,282 |
Cash flow from financing activities: | ||
Payment of initial public offering costs | (801) | |
Proceeds from exercise of stock options | 9 | 23 |
Net cash provided by (used in) financing activities | 9 | (778) |
Effect of exchange rate changes on cash and cash equivalents | (21) | |
Net decrease in cash | (2,836) | 3,576 |
Cash balance at beginning of period | 6,490 | 7,897 |
Cash balance at end of period | 3,654 | 11,473 |
Supplemental disclosures of cash flow information: | ||
Income taxes paid | 1 | 756 |
Supplemental disclosures of non-cash investing and financing activities: | ||
Fixed assets included in accounts payable | $ 1,011 | $ 943 |
Overview and Basis of Presentat
Overview and Basis of Presentation | 6 Months Ended |
Jun. 30, 2018 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Overview and Basis of Presentation | Note 1. Overview and Basis of Presentation The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). These financial statements include the assets, liabilities, revenues and expenses of all wholly-owned subsidiaries and entities in which the Company has a controlling financial interest or is deemed to be the primary beneficiary. In determining whether the Company is the primary beneficiary of an entity, the Company applies a qualitative approach that determines whether it has both (1) the power to direct the economically significant activities of the entity and (2) the obligation to absorb losses of, or the right to receive benefits from, the entity that could potentially be significant to that entity. The Company uses the equity method to account for its investments in entities that it does not control, but in which it has the ability to exercise significant influence over operating and financial policies. All significant intercompany accounts and transactions are eliminated from the accompanying condensed consolidated financial statements. Nature of the Business Fulgent Genetics, Inc., together with its subsidiaries (collectively referred to as the “Company,” unless otherwise noted or the context otherwise requires), is a growing technology company with an initial focus on offering comprehensive genetic testing to provide physicians with clinically actionable diagnostic information they can use to improve the quality of patient care. The Company has developed a proprietary technology platform that allows it to offer a broad and flexible test menu and continually expand and improve its proprietary genetic reference library. The Company’s current test menu offers single-gene tests and pre-established, multi-gene, disease-specific panels that collectively test for many genetic conditions, including various cancers, cardiovascular diseases, neurological disorders and pediatric conditions. The Company’s existing customer base consists primarily of hospitals and medical institutions, which are frequent and high-volume users of genetic tests and which typically pay the Company directly for its tests. Unaudited Interim Financial Information The accompanying unaudited interim condensed consolidated financial statements have been prepared on the same basis as the Company’s financial statements and, in the opinion of management, all adjustments, which normal recurring , necessary for a fair of the financial position and results of results for periods are not necessarily indicative of the results be expected for The accompanying condensed consolidated balance sheet as of December 31, 2017 has been derived from the Company’s audited consolidated financial statements at that date but does not include all of the disclosures required by U.S. GAAP. with the Company’s audited consolidated financial statements included in the 2017 Annual Report, including the notes thereto. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 2. Summary of Significant Accounting Policies See the summary Company’s significant accounting policies set forth in the notes to its consolidated included in the 2017 Annual Report. Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenue and expenses during the reporting periods. These estimates, judgments and assumptions are based on historical data and experience available at the date of the accompanying condensed consolidated financial statements, as well as various other factors management believes to be reasonable under the circumstances. Actual results could differ from these estimates. On an on-going basis, management evaluates its estimates, primarily those related to: (i) revenue recognition criteria, (ii) accounts receivable and allowances for doubtful accounts, (iii) the useful lives of fixed assets, (iv) estimates of tax liabilities and (v) equity method investments. Foreign Currency Translation and Foreign Currency Transactions The Company translates the assets and liabilities of its non-U.S. dollar functional currency subsidiaries into U.S. dollars using exchange rates in effect at the end of each period. Expenses for these subsidiaries are translated using rates that approximate those in effect during the period. Gains and losses from these translations are recognized in foreign currency translation included in other comprehensive income (loss) in the accompanying condensed consolidated statements of stockholders’ equity. Losses from these translations were $43,000 and $21,000 35,000 and $67,000 Concentration of Customers In certain periods, a small number of customers has accounted for a significant portion of the Company’s revenue. In the three and six months ended June 30, 2018, after aggregating customers that are under common control or are affiliates, one customer contributed 13% of our revenue. aggregating customers that are under common control or are affiliates, two customers contributed 13% and 12% of our revenue, and another two customers represent one customer for concentration disclosure purposes as they are managed by the same foreign governmental body, which contributed 11% of our revenue collectively. aggregating customers that are under common control or are affiliates, three customers contributed 12%, 11% and 11% of our revenue, and the first customer and another customer represent one customer for concentration disclosure purposes as they are managed by the same foreign governmental body and contributed, which contributed 21% of our revenue collectively. Revenue Recognition Effective January 1, 2018, the Company began recognizing revenue in accordance with FASB ASC Topic 606, Revenue from Contracts with Customers Performance Obligations Genetic Testing Services Clinical – Institutional Our clinical institutional contracts included within genetic testing services typically have a single performance obligation to deliver genetic testing services to the ordering facility or patient. Some arrangements involve the delivery of genetic testing services to research institutions, which we refer to as “sequencing as a service.” In arrangements with hospitals, medical or research institutions, the transaction price is stated within the contract and is therefore fixed consideration. For most of our clinical volume, we identified the hospital, medical, or research institution as the customer in Step 1 of the model and have determined a contract exists with the institution in Step 1. As these contracts typically have a single performance obligation, no allocation of the transaction price is required in Step 4 of the model. Control over genetic testing services is transferred to our ordering institutions at a point in time. Specifically, we determined the customer obtains control of the promised service upon our delivery of test results. Clinical – Insurance Our clinical insurance contracts included within genetic testing services typically have a single performance obligation to deliver genetic testing services to the ordering facility or patient. For most of our clinical insurance volume, we identified the patient as the customer in Step 1 of the model and have determined a contract exists with the patient in Step 1. In arrangements with insurance patients, the transaction price is stated within the contract, however, we accept payments from third-party payors that are less than the contractually stated price Certain incremental costs pertaining to both clinical insurance and institutional, such as commissions, are incurred in obtaining clinical contracts. Historically contract costs have not been significant to the financial statements. We have elected to utilize the practical expedient to expense incremental costs of obtaining a contract that meet the capitalization criteria, as the amortization period of any contract acquisition asset would be one year or less due to the short-term nature of the customer life. Significant Judgments and Contract Estimates Genetic Testing Services Accounting for clinical insurance contracts includes estimation of the transaction price, defined as the amount we expect to be entitled to receive in exchange for providing the services under the contract. Due to our out-of-network status with the majority of payors, estimation of the transaction price represents variable consideration. In order to estimate variable consideration, we utilize a portfolio approach in which payors with similar reimbursement experience are grouped into portfolios. Our estimates of variable consideration are based primarily on historical reimbursement data. Certain assumptions will also be adjusted based on known and anticipated factors not reflected in the historical reimbursement data. We monitor these accrual estimates at each reporting period based on actual cash collections in order to assess whether a revision to the estimate is required. Both the initial accrual estimate and any subsequent revision to the estimate contain uncertainty and require the use of judgment in the estimation of the transaction price and application of the constraint for variable consideration. If actual results in the future vary from the Company’s estimates, the Company will adjust these estimates, which would affect revenue and earnings in the period such variances become known. Accounting Pronouncements Recently Adopted ASU 2014-09 The Company adopted ASU 2014-09 Revenue from Contracts with Customers and all related amendments (collectively codified as ASC 606) on January 1, 2018 utilizing the modified retrospective method, meaning the cumulative effect of applying the standard to all contracts completed as of the date of initial application was recognized to opening retained earnings as of January 1, 2018. Comparative information from prior periods has not been restated and continues to be reported under the accounting standards in effect for those periods. Financial Statement Impact of Adoption ASC 606 The cumulative effect of changes made to the Condensed Consolidated Balance Sheet at January 1, 2018 for the adoption of ASC 606 were as follows: Balance at December 31, 2017 Adjustments Due to ASC 606 Balance at January 1, 2018 (in thousands) Condensed Consolidated Balance Sheet data Assets: Accounts receivable $ 4,005 $ 327 $ 4,332 Deferred tax asset / (liability) 126 (74 ) 52 Equity: Accumulated deficit $ (57,664 ) $ 253 $ (57,411 ) In accordance with ASC 606 requirements under the modified retrospective method of adoption, the disclosure of the impacts to condensed consolidated financial statements as of and for the three and six months ended June 30, 2018 were as follows: As reported Adjustments Due to ASC 606 Balances without the adoption of Topic 606 (in thousands) Condensed Consolidated Balance Sheet data Assets: Accounts receivable $ 5,055 $ (144 ) $ 4,911 Deferred tax asset 592 74 666 Equity: Accumulated deficit $ (60,370 ) $ (70 ) $ (60,440 ) For the Three Months ended June 30, 2018 As reported Adjustments Due to ASC 606 Balances without the adoption of Topic 606 (in thousands, except per share data) Condensed Consolidated Statement of Operations data: Total revenue $ 5,400 $ 6 * $ 5,406 Provision for (benefit from) income taxes (100 ) 1 (99 ) Net income (loss) (1,049 ) 5 (1,044 ) Net income (loss) per common share: Basic & Diluted $ (0.06 ) $ 0.00 $ (0.06 ) For the Six Months ended June 30, 2018 As reported Adjustments Due to ASC 606 Balances without the adoption of Topic 606 (in thousands, except per share data) Condensed Consolidated Statement of Operations data: Total revenue $ 10,053 $ 183 * $ 10,236 Provision for (benefit from) income taxes (534 ) 32 (502 ) Net income (loss) (2,959 ) 151 (2,808 ) Net income (loss) per common share: Basic & Diluted $ (0.17 ) $ 0.01 $ (0.16 ) * Revenue under ASC 605 would have been greater than under ASC 606 because the amount of cash receipts in 2018 from current and prior period insurance billings was greater than the estimated collections for services delivered and billed in 2018. There was no impact on the condensed consolidated statements of cash flows for the six months ended June 30, 2018. Disaggregation of Revenue The Company classifies its customers by payor type, including them in either Clinical Institutional or Clinical Insurance, as we believe this best depicts how the nature, amount, timing, and uncertainty of our revenue and cash flows are affected by economic factors. The following table summarizes revenue from contracts with customers by payor type for the three and six months ended June 30, 2018. Three months ended Six months ended June 30, 2018 June 30, 2018 (in thousands) Genetic Testing Services by payor Institutional $ 4,938 $ 9,519 Insurance 462 534 Total Revenue $ 5,400 $ 10,053 There was no material variable consideration recognized in the current period that relates to performance obligations that were completed in the prior period. Transaction Price Allocated to Future Performance Obligations ASC 606 requires that the Company disclose the aggregate amount of transaction price that is allocated to performance obligations that have not yet been satisfied as June 30, 2018. ASC 606 provides certain practical expedients that limit the requirement to disclose the aggregate amount of transaction price allocated to unsatisfied performance obligations. The Company applied the practical expedient to not disclose the amount of transaction price allocated to unsatisfied performance obligations when the performance obligation is part of a contract that has an original expected duration of one year or less. The Company does not have material future obligations associated with Genetic Testing Services that extend beyond one year. ASU No. 2016-01 In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities, which addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments, including a provision that requires equity investments (except for investments accounted for under the equity method of accounting) to be measured at fair value, with changes in fair value recognized in current earnings. The ASU was effective for the Company in the first quarter of 2018, with early adoption permitted. The adoption of this update did not have a material impact on our Consolidated Financial Statements. ASU No. 2016-15 In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230). The standard clarifies the way certain cash receipts and cash payments are classified with the objective of reducing the existing diversity in practice. The standard is effective for fiscal years and interim periods beginning after December 15, 2017. Early adoption is permitted for all periods beginning after December 15, 2016. The adoption of this update did not have a material impact on our Consolidated Financial Statements. Recent Accounting Pronouncements We evaluate all Accounting Standards Updates (ASUs) issued by the Financial Accounting Standards Board (FASB) for consideration of their applicability. ASUs not included in our disclosures were assessed and determined to be either not applicable or are not expected to have a material impact on our Consolidated Financial Statements. ASU No. 2016-02 In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). The update is aimed at making leasing activities more transparent and comparable and requires substantially all leases be recognized by lessees on their balance sheet as a right-of-use asset and corresponding lease liability, including leases currently accounted for as operating leases. This guidance will become effective for interim and annual reporting periods beginning with the year ending December 31, 2019. The standard requires the use of a modified retrospective transition approach for existing leases. Early adoption is permitted. We will adopt the standard using the modified retrospective approach and are still evaluating whether we will elect the practical expedients allowed in the standard. We continue to evaluate the impact of the adoption of ASU 2016-02 on our consolidated financial statements; however, we expect that the adoption of ASU 2016-02 will primarily impact our real-estate leases. ASU No. 2016-13 In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses: Measurement of Credit Losses on Financial Instruments. ASU No. 2016-13 replaces the incurred loss impairment methodology in current U.S. GAAP with a methodology that reflects expected credit losses. The update is intended to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. Entities will apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. The standard will be effective for annual reporting periods beginning after December 15, 2019, including interim periods within those reporting periods. Early adoption is permitted. The Company has not yet evaluated the effect this ASU will have on its consolidated financial statements and related disclosures. ASU No. 2017-08 In March 2017, the FASB issued ASU No. 2017-08, Receivables–Nonrefundable Fees and Other Costs (Subtopic 310-20). Under the ASU, entities must amortize to the earliest call date the premium on certain purchased callable debt securities. The ASU does not require any accounting change for debt securities held at a discount. The guidance calls for a modified retrospective transition approach under which a cumulative-effect adjustment will be made to retained earnings as of the beginning of the first reporting period in which the guidance is adopted. The ASU is effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted for all entities, including in an interim period. The Company has not yet evaluated the effect this ASU will have on its consolidated financial statements and related disclosures. ASU No. 2018-02 In February 2018, the FASB issued ASU No. 2018-02, Income Statement–Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, which allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act enacted by the U.S. federal government on December 22, 2017 (the “2017 Tax Act”). Consequently, the amendments eliminate the stranded tax effects resulting from the 2017 Tax Act and will improve the usefulness of information reported to financial statement users. The amendments in this ASU are effective for all entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted, including adoption in any interim period, (1) for public business entities for reporting periods for which financial statements have not yet been issued and (2) for all other entities for reporting periods for which financial statements have not yet been made available for issuance. The Company is currently evaluating the effect this ASU will have on its consolidated financial statements and related disclosures. |
Marketable Securities
Marketable Securities | 6 Months Ended |
Jun. 30, 2018 | |
Investments Debt And Equity Securities [Abstract] | |
Marketable Securities | Note 3. Marketable Securities The Company’s marketable securities consisted of the following: June 30, 2018 Amortized Cost Basis Unrealized Gains Unrealized Losses Aggregate Fair Value (in thousands) Marketable securities: Short-term Money market accounts $ 206 $ — $ — $ 206 Commercial paper 895 — — 895 United States Treasury 899 — — 899 Corporate debt securities 25,237 1 (83 ) 25,155 Less: cash equivalents (206 ) — — (206 ) Total short-term marketable securities 27,031 1 (83 ) 26,949 Corporate debt securities 7,562 — (102 ) 7,460 Total long-term marketable securities 7,562 — (102 ) 7,460 Total marketable securities $ 34,593 $ 1 $ (185 ) $ 34,409 December 31, 2017 Amortized Cost Basis Unrealized Gains Unrealized Losses Aggregate Fair Value (in thousands) Marketable securities: Short-term Money market accounts $ 723 $ — $ — $ 723 Corporate debt securities 20,040 2 (48 ) 19,994 Less: cash equivalents (723 ) — — (723 ) Total short-term marketable securities 20,040 2 (48 ) 19,994 Corporate debt securities 14,999 — (116 ) 14,883 Total long-term marketable securities 14,999 — (116 ) 14,883 Total marketable securities $ 35,039 $ 2 $ (164 ) $ 34,877 Management determined that the gross unrealized losses of $185,000 on the Company’s marketable securities as of June 30, 2018 were temporary in nature. Gross unrealized losses on the Company’s marketable securities were $164,000 as of December 31, 2017. The Company currently does not intend to sell these securities prior to maturity and does not consider these investments to be other-than-temporarily impaired as of June 30, 2018. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Note 4. Fair Value Measurements The authoritative guidance on fair value measurements establishes a framework with respect to measuring assets and liabilities at fair value on a recurring basis and non-recurring basis. Under the framework, fair value is defined as the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants, as of the measurement date. The framework also establishes a three-tier hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs market participants would use in valuing the asset or liability and are developed based on market data obtained from sources independent of our Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the factors market participants would use in valuing the asset or liability and are developed based on the best information available in the circumstances. The hierarchy consists of the following three levels: Level 1: Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity can access at the measurement date. Level 2: Inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3: Inputs are unobservable inputs for the asset or liability. The following table presents information about our financial assets measured at fair value on a recurring basis, based on the three-tier fair value hierarchy: June 30, 2018 Total Level 1 Level 2 Level 3 (in thousands) Marketable securities: Money market accounts $ 206 $ 206 $ — $ — Commercial paper 895 895 United States Treasury 899 899 Corporate debt securities 32,615 — 32,615 — Total marketable securities $ 34,615 $ 206 $ 34,409 $ — December 31, 2017 Total Level 1 Level 2 Level 3 (in thousands) Marketable securities: Money market accounts $ 723 $ 723 $ — $ — Corporate debt securities 34,877 — 34,877 — Total marketable securities $ 35,600 $ 723 $ 34,877 $ — The Company’s Level 1 assets include money market instruments and are valued based upon observable market prices. Level 2 assets consist of commercial paper, United States Treasury and corporate debt securities. Level 2 securities are valued based upon observable inputs that include reported trades, broker/dealer quotes, bids and offers. As of June 30, 2018, the Company had no investments that were measured using unobservable (Level 3) inputs. There were no transfers between fair value measurement levels during the six months ended June 30, 2018. Gross unrealized gains or losses for cash equivalents and marketable securities as of June 30, 2018 June 30, 2018 |
Fixed Assets
Fixed Assets | 6 Months Ended |
Jun. 30, 2018 | |
Property Plant And Equipment [Abstract] | |
Fixed Assets | Note 5. Fixed Assets Major classes of fixed assets consisted of the following: June 30, December 31, Useful Lives 2018 2017 (in thousands) Computer hardware 3 Years $ 1,500 $ 1,435 Computer software 3 Years 468 463 Medical lab equipment 5 Years 8,136 7,145 Furniture and fixtures 5 Years 199 159 Leasehold improvements Shorter of lease term or estimated useful life 803 763 Assets not yet placed in service 1,068 1,074 Total 12,174 11,039 Less: Accumulated depreciation (4,849 ) (3,767 ) Property and equipment, net $ 7,325 $ 7,272 Depreciation expense on fixed assets totaled $562,000 and $405,000 for the three months ended and $1.1 million and $817,000 for the six months ended June 30, 2018 and 2017, respectively. |
Other Current Assets
Other Current Assets | 6 Months Ended |
Jun. 30, 2018 | |
Deferred Costs Capitalized Prepaid And Other Assets Disclosure [Abstract] | |
Other Current Assets | Note 6. Other Current Assets Other current assets consisted of the following: June 30, 2018 December 31, 2017 (in thousands) Reagents $ 407 $ 231 Prepaid expenses 568 624 Prepaid income taxes 1,313 1,313 Marketable securities interest receivable 207 204 Other receivable 42 66 Total $ 2,537 $ 2,438 Reagents are used for DNA sequencing applications in the Company’s DNA sequencing equipment. |
Reporting Segment and Geographi
Reporting Segment and Geographic Information | 6 Months Ended |
Jun. 30, 2018 | |
Segment Reporting [Abstract] | |
Reporting Segment and Geographic Information | Note 7. Reporting Segment and Geographic Information The Company views its operations and manages its business in one reporting segment. All long-lived assets were located in the United States during the three and six months ended June 30, 2018 and 2017. Revenue by region was as follows: Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 (in thousands) Revenue: United States $ 3,299 $ 2,286 $ 5,826 $ 4,377 Foreign: Canada 1,070 1,148 2,040 2,231 People's Republic of China ("PRC") 25 522 49 2,047 Other Countries 1,006 684 2,138 1,291 Total $ 5,400 $ 4,640 $ 10,053 $ 9,946 |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2018 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 8. Commitments and Contingencies Operating Leases The Company has commitments under various non-cancelable operating leases with varying terms through May 2023. The Company has options to renew some of these leases for three years after their expiration. The Company’s headquarters is located in Temple City, California, which is comprised of various corporate offices and a laboratory certified under the Clinical Laboratory Improvement Amendments of 1988 (“CLIA”), accredited by the College of American Pathologists (“CAP”) and licensed by the State of California Department of Public Health. Additional offices are located in El Monte, California and Atlanta, Georgia and are used for certain research and development, customer service, report generation and other administrative functions. Rent expense was approximately $119,000 and $61,000 for the three months ended and $228,000 and $114,000 for the six months ended June 30, 2018 and 2017, respectively. In January 2018, we entered into a lease renewal of our headquarters in Temple City, California, which commenced on February 1, 2018 and expires on January 31, 2021. The total annual rent under the lease is approximately $269,000. In June 2018, we entered into a lease of office space in El Monte, California, which commenced on June 1, 2018 and expires on May 31, 2023. The total annual rent under the lease is approximately $279,000. FF Gene Biotech See Note 14 for a description of the Company’s commitments related to its joint venture, FF Gene Biotech (as defined in Note 14). Purchase Obligations As of June 30, 2018, the Company had purchase obligations of $2.3 million for reagents, payable within the next twelve months. Contingencies From time to time, the Company may be subject to legal proceedings and claims arising in the ordinary course of business. 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. |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Jun. 30, 2018 | |
Equity [Abstract] | |
Stockholders' Equity | Note 9. Stockholders’ Equity Components of Comprehensive Income (Loss) Comprehensive income (loss) consists of two components: net income (loss), and other comprehensive income (loss) (“OCI”). OCI refers to revenue, expenses, gains and losses that, in conformity with U.S. GAAP, are recorded as in the Company’s consolidated statements of stockholders’ equity but are excluded from the Company’s consolidated statements of operations, and as a result, its net income (loss). The Company’s OCI consists of foreign currency translation adjustments from its subsidiaries not using the U.S. dollar as their functional currency and unrealized gains and losses on marketable securities classified as available-for-sale , net of taxes. The tax effects related to unrealized holding gains (losses) on marketable securities were $(14,000) and $5,000 for three and six months ended June 30, 2018 |
Equity-Based Compensation
Equity-Based Compensation | 6 Months Ended |
Jun. 30, 2018 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Equity-Based Compensation | Note 10. Equity-Based Compensation Equity-based compensation expense for awards granted to employees is measured based on the fair value of the award on the grant date and is recognized in the Company’s consolidated statements of operations over the period during which the employee is required to perform services in exchange for the award (generally, the vesting period of the award). Compensation expense for awards with both a service and performance condition are recognized over the period required to achieve both conditions using the accelerated attribution method. The Company estimates the fair value of stock options using the Black-Scholes option valuation model. The Company measures the fair value of Restricted Stock Units (“RSUs”) and share awards based on the fair value of the underlying shares on the date of grant. The Company has included equity-based compensation expense as part of cost of revenue and operating expenses in the accompanying condensed consolidated statements of operations as follows: Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 (in thousands) Cost of revenue $ 151 $ 62 $ 275 $ 208 Research and development 171 197 303 408 Selling and marketing 113 51 221 120 General and administrative 138 114 319 253 Total $ 573 $ 424 $ 1,118 $ 989 Increase in Number of Shares Authorized for Issuance The Company adopted the Fulgent Genetics, Inc. 2016 Omnibus Incentive Plan (the “2016 Plan”) on September 16, 2016 in connection with its initial public offering. The 2016 Plan provides for the grant of incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock, restricted stock units, dividend equivalent rights and other stock and cash-based awards (including annual cash incentives and long-term cash incentives), and it is designed to attract and retain the best available personnel, to provide additional incentives to our service providers and to promote the success of our business. In May 2018, the Board and the Company’s stockholders approved an amendment and restatement of the 2016 Plan to increase the number of shares of common stock available for issuance under the 2016 Plan by 2,000,000 shares. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 11. Income Taxes This provision for income taxes consists of U.S. federal and state income taxes. A deferred tax liability is recognized for all taxable temporary differences, and a deferred tax asset is recognized for all deductible temporary differences, operating losses and tax credit carryforwards. A valuation allowance is provided when it is more likely than not that some portion or all of a deferred tax asset will not be realized. The 2017 Tax Act, which was signed into law on December 22, 2017, has resulted in significant changes to the U.S. corporate income tax system. These changes include, among others, a federal statutory rate reduction from 35% to 21%, the elimination or reduction of certain domestic deductions and credits and limitations on the deductibility of interest expenses and executive compensation expenses. The 2017 Tax Act also transitions international taxation from a worldwide system to a modified territorial system and includes base erosion prevention measures on non-U.S. earnings. These changes are effective beginning in 2018. The Company accounts for changes in tax rates and tax laws in the period of enactment. On December 22, 2017, SEC Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act ("SAB 118"), was issued to address the application of generally accepted accounting principles in the United States of America in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the 2017 Act. In accordance with SAB 118, for 2017, due to the reduction in the corporate income tax rate with the enactment of the 2017 Tax Act, the Company recorded a tax expense of $22,000 related to the revaluation of its net deferred tax assets. The Company has determined that the various other provisions of the 2017 Tax Act are not expected to have a material impact on the Company’s results of operations or financial condition, largely because of the amount of the Company’s net operating loss carryover and the Company has no unrepatriated foreign earnings. In order to determine the Company’s quarterly provision for income taxes, the Company used an estimated annual effective tax rate for the full fiscal year ending December 31, 2018, which is based on expected annual income and statutory tax rates in the various jurisdictions in which the Company operates, adjusted for discrete items recognized during the period. Certain significant or unusual items are separately recognized in the quarter during which they occur and can cause the effective tax rate to vary from quarter to quarter. The Company’s effective tax rate was 11% for the three months ended June 30, 2018, compared with 367% for the three months ended June 30, 2017. The effective tax rate was 18% for the six months ended June 30, 2018, compared with (1)% for the six months ended June 30, 2017. The change in effective tax rate for the three and six months ended June 30, 2018, was primarily attributable to the reduction of the U.S. federal corporate income tax rate pursuant to the 2017 Tax Act legislation which makes significant changes to the U.S. tax law, including a reduction in the corporate tax rate from 35% to 21% starting in 2018, offset by the net effect of state income taxes and certain expenses or adjustments related to equity-based compensation. The Company will file income tax returns in the U.S. federal jurisdiction, and various states and foreign jurisdictions for the year ending December 31, 2018. As of June 30, 2018, there were no pending tax audits in any jurisdiction. |
Income (Loss) Per Share
Income (Loss) Per Share | 6 Months Ended |
Jun. 30, 2018 | |
Earnings Per Share [Abstract] | |
Income (Loss) per Share | Note 12. Income (Loss) per Share The following table presents the calculation of basic and diluted income (loss) per share : Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 (in thousands, except per share data) Net income (loss) $ (1,049 ) $ (25 ) $ (2,959 ) $ 207 Weighted-average common shares—outstanding, basic 17,919 17,711 17,891 17,694 Weighted-average common shares—outstanding, diluted 17,919 17,711 17,891 18,156 Net income (loss) per common share, basic $ (0.06 ) $ (0.00 ) $ (0.17 ) $ 0.01 Net income (loss) per common share, diluted $ (0.06 ) $ (0.00 ) $ (0.17 ) $ 0.01 The following securities have been excluded from the calculation of diluted income (loss) per share because their effect would have been anti-dilutive: Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 (in thousands) Options 436 487 433 21 RSUs 1,055 487 961 15 The anti-dilutive shares described above were calculated using the treasury stock method. During the three and six months ended June 30, 2018, the Company had outstanding stock options and RSUs that were excluded from the weighted-average share calculation due to the Company’s net loss position. |
Related Party
Related Party | 6 Months Ended |
Jun. 30, 2018 | |
Related Party Transactions [Abstract] | |
Related Party | Note 13. Related Party Dr. Yun Yen, who is a member of the Company’s Board of Directors and a stockholder, serves as the President and Chairman of the Board for the Sino-American Cancer Foundation (the “Foundation”) and served as the President for the Taipei Medical University (the “University”), from August 1, 2011 through July 31, 2016 and currently serves as a Chair Professor for the University. From time to time, the Company performs research testing services for the Foundation. The Company did not recognize any revenue during the three and six months ended June 30, 2018 or 2017 as consideration for such services. Additionally, the Company subleases certain of its headquarters facilities to the Foundation. The Company recognized zero and $7,000 in the three months ended and $8,000 and $7,000 for the six months ended June 30, 2018 and 2017, respectively, as consideration for such sublease. As of June 30, 2018, and December 31, 2017, zero was owed to the Company by the Foundation in connection with these relationships. From time to time, the Company performs genetic sequencing services for the University. The Company recognized $7,000 and $24,000 as consideration for such services in the three months ended and $16,000 and $36,000 for the six months ended June 30, 2018 and 2017, respectively. As of June 30, 2018, and December 31, 2017, $34,000 and $40,000, respectively, was owed to the Company by the University in connection with this relationship. As more fully described in Note 14, in April 2017, the Company, through an affiliated company formed for the purpose of the relationship, entered into a cooperation agreement (the “JV Agreement”) with Xilong Scientific Co., Ltd. (“Xilong Scientific”) and Fuzhou Jinqiang Investment Partnership (LP) (“FJIP”) to form a joint venture under the laws of the People’s Republic of China (“PRC”) called Fujian Fujun Gene Biotech Co., Ltd. (“FF Gene Biotech”). Xilong Scientific is an affiliate of Xi Long USA, Inc., a large stockholder of the Company that, as of June 30, 2018, owned 11% of the outstanding shares of the Company’s common stock, and FJIP is owned by key management of FF Gene Biotech, including Dr. Han Lin Gao, the Chief Scientific Officer and a large stockholder of the Company and the owner of approximately 25% of FJIP. Fulgent Pharma utilizes space in the facility at which our laboratory and corporate headquarters are located. Since the completion of the Pharma Split-Off, Fulgent Pharma reimburses us for the portion of the rent we pay that is attributable to the space it uses, which amounts are not significant. As of June 30, 2018, and December 31, 2017, $19,000 and $3,000, respectively, was due from Fulgent Pharma as a result of this arrangement, which is recorded in Other receivable in Other current assets in the accompanying condensed consolidated balance sheets. |
Equity Method Investments
Equity Method Investments | 6 Months Ended |
Jun. 30, 2018 | |
Equity Method Investments And Joint Ventures [Abstract] | |
Equity Method Investments | Note 14. Equity Method Investments In April 2017, the Company, through an affiliated company formed for the purpose of the relationship, entered into the JV Agreement with Xilong Scientific and FJIP to form FF Gene Biotech, a joint venture formed under the laws of the PRC to offer genetic testing services to customers in the PRC. Pursuant to the terms of the JV Agreement, the Company has agreed to contribute to FF Gene Biotech genetic sequencing and other equipment with a total cost of 60,000,000 renminbi (“ RMB”) over a three-year period for a 30% ownership interest in FF Gene Biotech, Xilong Scientific has agreed to contribute to FF Gene Biotech 102,000,000 RMB over a three-year period for a 51% ownership interest in the FF Gene Biotech, and FJIP has agreed to contribute to FF Gene Biotech 19,000,000 RMB over a five-year period for a 19% ownership interest in FF Gene Biotech. The Company’s maximum exposure to fund losses of FF Gene Biotech as a result of its minority ownership of this entity is equal to its contribution obligation under the JV Agreement as described above. As of June 30, 2018, 40.3 million RMB (or approximately $6.1 million U.S. dollars) remains to be contributed to the investee under the terms of the JV agreement. To date, the Company has purchased and contributed equipment with an aggregate fair value of $3.0 million pursuant to its contribution commitment under the JV Agreement. The Company accounted for this contribution in accordance with ASC 845, Nonmonetary Transactions, and recorded an investment based on the fair value of the contributed equipment, which is the same as carryover basis. The Company concluded FF Gene Biotech is a variable interest entity not have significant and Judgment regarding the level of influence over FF Gene Biotech includes consideration of key factors such as the Company's ownership interest, representation on the board of directors or other management body and participation in policy-making decisions. The Company accounts for its 30% interest in FF Gene Biotech using the equity method of accounting. The Company recorded its proportionate share of the losses of FF Gene Biotech in the three and six months ended June 30, 2018 in the accompanying condensed consolidated statements of operations, and recorded its contribution to date, net of its proportionate share in the accumulated losses of FF Gene Biotech, in the accompanying condensed consolidated balance sheet as of June 30, 2018. The Company entered into a license agreement with FF Gene Biotech, pursuant to which it granted FF Gene Biotech a license to use certain of the Company’s clinical molecular diagnostic gene detection technology and related software and proprietary reference library of genetic information, along with any improvements on this technology that they may develop during the term of the license agreement. Under the license agreement, FF Gene Biotech will pay to the Company, on a quarterly basis, certain royalties based on the revenues of FF Gene Biotech. The Company earned $17,000 and $35,000 for royalties under the license agreement for the three and six months ended June 30, 2018. In November 2017, FF Gene Biotech invested and formed a majority-owned subsidiary that focuses on sales and marketing for FF Gene Biotech. Equity method investments as of June 30, 2018 and December 31, 2017 consisted of the following: June 30, 2018 December 31, 2017 Carrying Value Ownership Percentage Carrying Value Ownership Percentage (in thousands) FF Gene Biotech $ 1,956 30 % $ 1,937 30 % Total equity method investments $ 1,956 30 % $ 1,937 30 % |
Summary of Significant Accoun22
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenue and expenses during the reporting periods. These estimates, judgments and assumptions are based on historical data and experience available at the date of the accompanying condensed consolidated financial statements, as well as various other factors management believes to be reasonable under the circumstances. Actual results could differ from these estimates. On an on-going basis, management evaluates its estimates, primarily those related to: (i) revenue recognition criteria, (ii) accounts receivable and allowances for doubtful accounts, (iii) the useful lives of fixed assets, (iv) estimates of tax liabilities and (v) equity method investments. |
Foreign Currency Translation and Foreign Currency Transactions | Foreign Currency Translation and Foreign Currency Transactions The Company translates the assets and liabilities of its non-U.S. dollar functional currency subsidiaries into U.S. dollars using exchange rates in effect at the end of each period. Expenses for these subsidiaries are translated using rates that approximate those in effect during the period. Gains and losses from these translations are recognized in foreign currency translation included in other comprehensive income (loss) in the accompanying condensed consolidated statements of stockholders’ equity. Losses from these translations were $43,000 and $21,000 35,000 and $67,000 |
Concentration of Customers | Concentration of Customers In certain periods, a small number of customers has accounted for a significant portion of the Company’s revenue. In the three and six months ended June 30, 2018, after aggregating customers that are under common control or are affiliates, one customer contributed 13% of our revenue. aggregating customers that are under common control or are affiliates, two customers contributed 13% and 12% of our revenue, and another two customers represent one customer for concentration disclosure purposes as they are managed by the same foreign governmental body, which contributed 11% of our revenue collectively. aggregating customers that are under common control or are affiliates, three customers contributed 12%, 11% and 11% of our revenue, and the first customer and another customer represent one customer for concentration disclosure purposes as they are managed by the same foreign governmental body and contributed, which contributed 21% of our revenue collectively. |
Revenue Recognition | Revenue Recognition Effective January 1, 2018, the Company began recognizing revenue in accordance with FASB ASC Topic 606, Revenue from Contracts with Customers Performance Obligations Genetic Testing Services Clinical – Institutional Our clinical institutional contracts included within genetic testing services typically have a single performance obligation to deliver genetic testing services to the ordering facility or patient. Some arrangements involve the delivery of genetic testing services to research institutions, which we refer to as “sequencing as a service.” In arrangements with hospitals, medical or research institutions, the transaction price is stated within the contract and is therefore fixed consideration. For most of our clinical volume, we identified the hospital, medical, or research institution as the customer in Step 1 of the model and have determined a contract exists with the institution in Step 1. As these contracts typically have a single performance obligation, no allocation of the transaction price is required in Step 4 of the model. Control over genetic testing services is transferred to our ordering institutions at a point in time. Specifically, we determined the customer obtains control of the promised service upon our delivery of test results. Clinical – Insurance Our clinical insurance contracts included within genetic testing services typically have a single performance obligation to deliver genetic testing services to the ordering facility or patient. For most of our clinical insurance volume, we identified the patient as the customer in Step 1 of the model and have determined a contract exists with the patient in Step 1. In arrangements with insurance patients, the transaction price is stated within the contract, however, we accept payments from third-party payors that are less than the contractually stated price Certain incremental costs pertaining to both clinical insurance and institutional, such as commissions, are incurred in obtaining clinical contracts. Historically contract costs have not been significant to the financial statements. We have elected to utilize the practical expedient to expense incremental costs of obtaining a contract that meet the capitalization criteria, as the amortization period of any contract acquisition asset would be one year or less due to the short-term nature of the customer life. Significant Judgments and Contract Estimates Genetic Testing Services Accounting for clinical insurance contracts includes estimation of the transaction price, defined as the amount we expect to be entitled to receive in exchange for providing the services under the contract. Due to our out-of-network status with the majority of payors, estimation of the transaction price represents variable consideration. In order to estimate variable consideration, we utilize a portfolio approach in which payors with similar reimbursement experience are grouped into portfolios. Our estimates of variable consideration are based primarily on historical reimbursement data. Certain assumptions will also be adjusted based on known and anticipated factors not reflected in the historical reimbursement data. We monitor these accrual estimates at each reporting period based on actual cash collections in order to assess whether a revision to the estimate is required. Both the initial accrual estimate and any subsequent revision to the estimate contain uncertainty and require the use of judgment in the estimation of the transaction price and application of the constraint for variable consideration. If actual results in the future vary from the Company’s estimates, the Company will adjust these estimates, which would affect revenue and earnings in the period such variances become known. |
Accounting Pronouncements Recently Adopted and Recent Accounting Pronouncements | Accounting Pronouncements Recently Adopted ASU 2014-09 The Company adopted ASU 2014-09 Revenue from Contracts with Customers and all related amendments (collectively codified as ASC 606) on January 1, 2018 utilizing the modified retrospective method, meaning the cumulative effect of applying the standard to all contracts completed as of the date of initial application was recognized to opening retained earnings as of January 1, 2018. Comparative information from prior periods has not been restated and continues to be reported under the accounting standards in effect for those periods. Financial Statement Impact of Adoption ASC 606 The cumulative effect of changes made to the Condensed Consolidated Balance Sheet at January 1, 2018 for the adoption of ASC 606 were as follows: Balance at December 31, 2017 Adjustments Due to ASC 606 Balance at January 1, 2018 (in thousands) Condensed Consolidated Balance Sheet data Assets: Accounts receivable $ 4,005 $ 327 $ 4,332 Deferred tax asset / (liability) 126 (74 ) 52 Equity: Accumulated deficit $ (57,664 ) $ 253 $ (57,411 ) In accordance with ASC 606 requirements under the modified retrospective method of adoption, the disclosure of the impacts to condensed consolidated financial statements as of and for the three and six months ended June 30, 2018 were as follows: As reported Adjustments Due to ASC 606 Balances without the adoption of Topic 606 (in thousands) Condensed Consolidated Balance Sheet data Assets: Accounts receivable $ 5,055 $ (144 ) $ 4,911 Deferred tax asset 592 74 666 Equity: Accumulated deficit $ (60,370 ) $ (70 ) $ (60,440 ) For the Three Months ended June 30, 2018 As reported Adjustments Due to ASC 606 Balances without the adoption of Topic 606 (in thousands, except per share data) Condensed Consolidated Statement of Operations data: Total revenue $ 5,400 $ 6 * $ 5,406 Provision for (benefit from) income taxes (100 ) 1 (99 ) Net income (loss) (1,049 ) 5 (1,044 ) Net income (loss) per common share: Basic & Diluted $ (0.06 ) $ 0.00 $ (0.06 ) For the Six Months ended June 30, 2018 As reported Adjustments Due to ASC 606 Balances without the adoption of Topic 606 (in thousands, except per share data) Condensed Consolidated Statement of Operations data: Total revenue $ 10,053 $ 183 * $ 10,236 Provision for (benefit from) income taxes (534 ) 32 (502 ) Net income (loss) (2,959 ) 151 (2,808 ) Net income (loss) per common share: Basic & Diluted $ (0.17 ) $ 0.01 $ (0.16 ) * Revenue under ASC 605 would have been greater than under ASC 606 because the amount of cash receipts in 2018 from current and prior period insurance billings was greater than the estimated collections for services delivered and billed in 2018. There was no impact on the condensed consolidated statements of cash flows for the six months ended June 30, 2018. Disaggregation of Revenue The Company classifies its customers by payor type, including them in either Clinical Institutional or Clinical Insurance, as we believe this best depicts how the nature, amount, timing, and uncertainty of our revenue and cash flows are affected by economic factors. The following table summarizes revenue from contracts with customers by payor type for the three and six months ended June 30, 2018. Three months ended Six months ended June 30, 2018 June 30, 2018 (in thousands) Genetic Testing Services by payor Institutional $ 4,938 $ 9,519 Insurance 462 534 Total Revenue $ 5,400 $ 10,053 There was no material variable consideration recognized in the current period that relates to performance obligations that were completed in the prior period. Transaction Price Allocated to Future Performance Obligations ASC 606 requires that the Company disclose the aggregate amount of transaction price that is allocated to performance obligations that have not yet been satisfied as June 30, 2018. ASC 606 provides certain practical expedients that limit the requirement to disclose the aggregate amount of transaction price allocated to unsatisfied performance obligations. The Company applied the practical expedient to not disclose the amount of transaction price allocated to unsatisfied performance obligations when the performance obligation is part of a contract that has an original expected duration of one year or less. The Company does not have material future obligations associated with Genetic Testing Services that extend beyond one year. ASU No. 2016-01 In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities, which addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments, including a provision that requires equity investments (except for investments accounted for under the equity method of accounting) to be measured at fair value, with changes in fair value recognized in current earnings. The ASU was effective for the Company in the first quarter of 2018, with early adoption permitted. The adoption of this update did not have a material impact on our Consolidated Financial Statements. ASU No. 2016-15 In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230). The standard clarifies the way certain cash receipts and cash payments are classified with the objective of reducing the existing diversity in practice. The standard is effective for fiscal years and interim periods beginning after December 15, 2017. Early adoption is permitted for all periods beginning after December 15, 2016. The adoption of this update did not have a material impact on our Consolidated Financial Statements. Recent Accounting Pronouncements We evaluate all Accounting Standards Updates (ASUs) issued by the Financial Accounting Standards Board (FASB) for consideration of their applicability. ASUs not included in our disclosures were assessed and determined to be either not applicable or are not expected to have a material impact on our Consolidated Financial Statements. ASU No. 2016-02 In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). The update is aimed at making leasing activities more transparent and comparable and requires substantially all leases be recognized by lessees on their balance sheet as a right-of-use asset and corresponding lease liability, including leases currently accounted for as operating leases. This guidance will become effective for interim and annual reporting periods beginning with the year ending December 31, 2019. The standard requires the use of a modified retrospective transition approach for existing leases. Early adoption is permitted. We will adopt the standard using the modified retrospective approach and are still evaluating whether we will elect the practical expedients allowed in the standard. We continue to evaluate the impact of the adoption of ASU 2016-02 on our consolidated financial statements; however, we expect that the adoption of ASU 2016-02 will primarily impact our real-estate leases. ASU No. 2016-13 In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses: Measurement of Credit Losses on Financial Instruments. ASU No. 2016-13 replaces the incurred loss impairment methodology in current U.S. GAAP with a methodology that reflects expected credit losses. The update is intended to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. Entities will apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. The standard will be effective for annual reporting periods beginning after December 15, 2019, including interim periods within those reporting periods. Early adoption is permitted. The Company has not yet evaluated the effect this ASU will have on its consolidated financial statements and related disclosures. ASU No. 2017-08 In March 2017, the FASB issued ASU No. 2017-08, Receivables–Nonrefundable Fees and Other Costs (Subtopic 310-20). Under the ASU, entities must amortize to the earliest call date the premium on certain purchased callable debt securities. The ASU does not require any accounting change for debt securities held at a discount. The guidance calls for a modified retrospective transition approach under which a cumulative-effect adjustment will be made to retained earnings as of the beginning of the first reporting period in which the guidance is adopted. The ASU is effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted for all entities, including in an interim period. The Company has not yet evaluated the effect this ASU will have on its consolidated financial statements and related disclosures. ASU No. 2018-02 In February 2018, the FASB issued ASU No. 2018-02, Income Statement–Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, which allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act enacted by the U.S. federal government on December 22, 2017 (the “2017 Tax Act”). Consequently, the amendments eliminate the stranded tax effects resulting from the 2017 Tax Act and will improve the usefulness of information reported to financial statement users. The amendments in this ASU are effective for all entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted, including adoption in any interim period, (1) for public business entities for reporting periods for which financial statements have not yet been issued and (2) for all other entities for reporting periods for which financial statements have not yet been made available for issuance. The Company is currently evaluating the effect this ASU will have on its consolidated financial statements and related disclosures. |
Summary of Significant Accoun23
Summary of Significant Accounting Policies (Tables) - Accounting Standards Update 2014-09 | 6 Months Ended |
Jun. 30, 2018 | |
Summary of Impact on Financial Statement | The cumulative effect of changes made to the Condensed Consolidated Balance Sheet at January 1, 2018 for the adoption of ASC 606 were as follows: Balance at December 31, 2017 Adjustments Due to ASC 606 Balance at January 1, 2018 (in thousands) Condensed Consolidated Balance Sheet data Assets: Accounts receivable $ 4,005 $ 327 $ 4,332 Deferred tax asset / (liability) 126 (74 ) 52 Equity: Accumulated deficit $ (57,664 ) $ 253 $ (57,411 ) In accordance with ASC 606 requirements under the modified retrospective method of adoption, the disclosure of the impacts to condensed consolidated financial statements as of and for the three and six months ended June 30, 2018 were as follows: As reported Adjustments Due to ASC 606 Balances without the adoption of Topic 606 (in thousands) Condensed Consolidated Balance Sheet data Assets: Accounts receivable $ 5,055 $ (144 ) $ 4,911 Deferred tax asset 592 74 666 Equity: Accumulated deficit $ (60,370 ) $ (70 ) $ (60,440 ) For the Three Months ended June 30, 2018 As reported Adjustments Due to ASC 606 Balances without the adoption of Topic 606 (in thousands, except per share data) Condensed Consolidated Statement of Operations data: Total revenue $ 5,400 $ 6 * $ 5,406 Provision for (benefit from) income taxes (100 ) 1 (99 ) Net income (loss) (1,049 ) 5 (1,044 ) Net income (loss) per common share: Basic & Diluted $ (0.06 ) $ 0.00 $ (0.06 ) For the Six Months ended June 30, 2018 As reported Adjustments Due to ASC 606 Balances without the adoption of Topic 606 (in thousands, except per share data) Condensed Consolidated Statement of Operations data: Total revenue $ 10,053 $ 183 * $ 10,236 Provision for (benefit from) income taxes (534 ) 32 (502 ) Net income (loss) (2,959 ) 151 (2,808 ) Net income (loss) per common share: Basic & Diluted $ (0.17 ) $ 0.01 $ (0.16 ) * Revenue under ASC 605 would have been greater than under ASC 606 because the amount of cash receipts in 2018 from current and prior period insurance billings was greater than the estimated collections for services delivered and billed in 2018. |
Summary of Revenue from Contracts with Customers by Payor Type | The following table summarizes revenue from contracts with customers by payor type for the three and six months ended June 30, 2018. Three months ended Six months ended June 30, 2018 June 30, 2018 (in thousands) Genetic Testing Services by payor Institutional $ 4,938 $ 9,519 Insurance 462 534 Total Revenue $ 5,400 $ 10,053 |
Marketable Securities (Tables)
Marketable Securities (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Investments Debt And Equity Securities [Abstract] | |
Summary of Marketable Securities | The Company’s marketable securities consisted of the following: June 30, 2018 Amortized Cost Basis Unrealized Gains Unrealized Losses Aggregate Fair Value (in thousands) Marketable securities: Short-term Money market accounts $ 206 $ — $ — $ 206 Commercial paper 895 — — 895 United States Treasury 899 — — 899 Corporate debt securities 25,237 1 (83 ) 25,155 Less: cash equivalents (206 ) — — (206 ) Total short-term marketable securities 27,031 1 (83 ) 26,949 Corporate debt securities 7,562 — (102 ) 7,460 Total long-term marketable securities 7,562 — (102 ) 7,460 Total marketable securities $ 34,593 $ 1 $ (185 ) $ 34,409 December 31, 2017 Amortized Cost Basis Unrealized Gains Unrealized Losses Aggregate Fair Value (in thousands) Marketable securities: Short-term Money market accounts $ 723 $ — $ — $ 723 Corporate debt securities 20,040 2 (48 ) 19,994 Less: cash equivalents (723 ) — — (723 ) Total short-term marketable securities 20,040 2 (48 ) 19,994 Corporate debt securities 14,999 — (116 ) 14,883 Total long-term marketable securities 14,999 — (116 ) 14,883 Total marketable securities $ 35,039 $ 2 $ (164 ) $ 34,877 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Information about Financial Assets Measured at Fair Value on Recurring Basis Based on Three-Tier Fair Value Hierarchy | The following table presents information about our financial assets measured at fair value on a recurring basis, based on the three-tier fair value hierarchy: June 30, 2018 Total Level 1 Level 2 Level 3 (in thousands) Marketable securities: Money market accounts $ 206 $ 206 $ — $ — Commercial paper 895 895 United States Treasury 899 899 Corporate debt securities 32,615 — 32,615 — Total marketable securities $ 34,615 $ 206 $ 34,409 $ — December 31, 2017 Total Level 1 Level 2 Level 3 (in thousands) Marketable securities: Money market accounts $ 723 $ 723 $ — $ — Corporate debt securities 34,877 — 34,877 — Total marketable securities $ 35,600 $ 723 $ 34,877 $ — |
Fixed Assets (Tables)
Fixed Assets (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Property Plant And Equipment [Abstract] | |
Major Classes of Fixed Assets | Major classes of fixed assets consisted of the following: June 30, December 31, Useful Lives 2018 2017 (in thousands) Computer hardware 3 Years $ 1,500 $ 1,435 Computer software 3 Years 468 463 Medical lab equipment 5 Years 8,136 7,145 Furniture and fixtures 5 Years 199 159 Leasehold improvements Shorter of lease term or estimated useful life 803 763 Assets not yet placed in service 1,068 1,074 Total 12,174 11,039 Less: Accumulated depreciation (4,849 ) (3,767 ) Property and equipment, net $ 7,325 $ 7,272 |
Other Current Assets (Tables)
Other Current Assets (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Deferred Costs Capitalized Prepaid And Other Assets Disclosure [Abstract] | |
Schedule of Other Current Assets | Other current assets consisted of the following: June 30, 2018 December 31, 2017 (in thousands) Reagents $ 407 $ 231 Prepaid expenses 568 624 Prepaid income taxes 1,313 1,313 Marketable securities interest receivable 207 204 Other receivable 42 66 Total $ 2,537 $ 2,438 |
Reporting Segment and Geograp28
Reporting Segment and Geographic Information (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Segment Reporting [Abstract] | |
Summary of Revenue by Geographic Region | Revenue by region was as follows: Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 (in thousands) Revenue: United States $ 3,299 $ 2,286 $ 5,826 $ 4,377 Foreign: Canada 1,070 1,148 2,040 2,231 People's Republic of China ("PRC") 25 522 49 2,047 Other Countries 1,006 684 2,138 1,291 Total $ 5,400 $ 4,640 $ 10,053 $ 9,946 |
Equity-Based Compensation (Tabl
Equity-Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Summary of Equity-Based Compensation | The Company has included equity-based compensation expense as part of cost of revenue and operating expenses in the accompanying condensed consolidated statements of operations as follows: Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 (in thousands) Cost of revenue $ 151 $ 62 $ 275 $ 208 Research and development 171 197 303 408 Selling and marketing 113 51 221 120 General and administrative 138 114 319 253 Total $ 573 $ 424 $ 1,118 $ 989 |
Income (Loss) Per Share (Tables
Income (Loss) Per Share (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Earnings Per Share [Abstract] | |
Reconciliation of the Basic and Diluted Income (Loss) Per Share Computations | The following table presents the calculation of basic and diluted income (loss) per share : Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 (in thousands, except per share data) Net income (loss) $ (1,049 ) $ (25 ) $ (2,959 ) $ 207 Weighted-average common shares—outstanding, basic 17,919 17,711 17,891 17,694 Weighted-average common shares—outstanding, diluted 17,919 17,711 17,891 18,156 Net income (loss) per common share, basic $ (0.06 ) $ (0.00 ) $ (0.17 ) $ 0.01 Net income (loss) per common share, diluted $ (0.06 ) $ (0.00 ) $ (0.17 ) $ 0.01 |
Anti-dilutive Securities Excluded from Calculation of Diluted Income (Loss) Per Share | The following securities have been excluded from the calculation of diluted income (loss) per share because their effect would have been anti-dilutive: Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 (in thousands) Options 436 487 433 21 RSUs 1,055 487 961 15 |
Equity Method Investments (Tabl
Equity Method Investments (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Equity Method Investments And Joint Ventures [Abstract] | |
Schedule of Equity Method Investments | Equity method investments as of June 30, 2018 and December 31, 2017 consisted of the following: June 30, 2018 December 31, 2017 Carrying Value Ownership Percentage Carrying Value Ownership Percentage (in thousands) FF Gene Biotech $ 1,956 30 % $ 1,937 30 % Total equity method investments $ 1,956 30 % $ 1,937 30 % |
Summary of Significant Accoun32
Summary of Significant Accounting Policies - Additional Information (Detail) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018USD ($)Customer | Jun. 30, 2017Customer | Jun. 30, 2018USD ($)Customer | Jun. 30, 2017Customer | Jan. 01, 2018USD ($) | |
Summary Of Significant Accounting Policies [Line Items] | |||||
Foreign currency translation gain (loss) | $ (43,000) | $ (21,000) | |||
Adjustment to accumulated deficit and deferred taxes | $ 74,000 | ||||
Practical expedient not to disclose amount of transaction price allocated to unsatisfied performance obligations | true | ||||
Accounting Standards Update 2014-09 | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Change in accounting principle, adjustment to accumulated deficit and accounts receivable | $ 327,000 | ||||
Revenue | Customer Concentration Risk | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Number of customers | Customer | 1 | 2 | 1 | 3 | |
Revenue | Customer Concentration Risk | Customer One | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Concentration risk, percentage | 13.00% | 13.00% | 13.00% | 12.00% | |
Revenue | Customer Concentration Risk | Customer Two | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Concentration risk, percentage | 12.00% | 11.00% | |||
Revenue | Customer Concentration Risk | Customer Three | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Concentration risk, percentage | 11.00% | ||||
Revenue | Customer Concentration Risk | Foreign Governmental Body | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Number of customers | Customer | 1 | 1 | |||
Concentration risk, percentage | 11.00% | 21.00% | |||
Remeasurement | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Foreign currency translation gain (loss) | $ (35,000) | $ (67,000) |
Summary of Significant Accoun33
Summary of Significant Accounting Policies -Summary of Cumulative Effect of Changes Made to the Condensed Consolidated Balance Sheet (Detail) - USD ($) $ in Thousands | Jun. 30, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Assets | |||
Accounts receivable | $ 5,055 | $ 4,005 | |
Deferred tax asset / (liability) | 592 | 126 | |
Equity: | |||
Accumulated deficit | (60,370) | $ (57,664) | |
Accounting Standards Update 2014-09 | |||
Assets | |||
Accounts receivable | $ 4,332 | ||
Deferred tax asset / (liability) | 52 | ||
Equity: | |||
Accumulated deficit | (57,411) | ||
Accounting Standards Update 2014-09 | Adjustments due to ASC 606 | |||
Assets | |||
Accounts receivable | (144) | 327 | |
Deferred tax asset / (liability) | 74 | (74) | |
Equity: | |||
Accumulated deficit | $ (70) | $ 253 |
Summary of Significant Accoun34
Summary of Significant Accounting Policies -Summary of Disclosure of the Impacts to Condensed Consolidated Financial Statements (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | Jan. 01, 2018 | |
Assets | ||||||
Accounts receivable | $ 5,055 | $ 5,055 | $ 4,005 | |||
Deferred tax asset | 592 | 592 | 126 | |||
Equity: | ||||||
Accumulated deficit | (60,370) | (60,370) | (57,664) | |||
Total revenue | 5,400 | $ 4,640 | 10,053 | $ 9,946 | ||
Provision for (benefit from) income taxes | (100) | (110) | (534) | (4) | ||
Net income (loss) | $ (1,049) | $ (25) | $ (2,959) | $ 207 | $ (2,510) | |
Net income (loss) per common share: | ||||||
Basic & Diluted | $ (0.06) | $ (0.17) | ||||
Accounting Standards Update 2014-09 | ||||||
Assets | ||||||
Accounts receivable | $ 4,332 | |||||
Deferred tax asset | 52 | |||||
Equity: | ||||||
Accumulated deficit | (57,411) | |||||
Accounting Standards Update 2014-09 | Adjustments due to ASC 606 | ||||||
Assets | ||||||
Accounts receivable | $ (144) | $ (144) | 327 | |||
Deferred tax asset | 74 | 74 | (74) | |||
Equity: | ||||||
Accumulated deficit | (70) | (70) | $ 253 | |||
Total revenue | 6 | 183 | ||||
Provision for (benefit from) income taxes | 1 | 32 | ||||
Net income (loss) | $ 5 | $ 151 | ||||
Net income (loss) per common share: | ||||||
Basic & Diluted | $ 0 | $ 0.01 | ||||
Accounting Standards Update 2014-09 | Balances without the Adoption of Topic 606 | ||||||
Assets | ||||||
Accounts receivable | $ 4,911 | $ 4,911 | ||||
Deferred tax asset | 666 | 666 | ||||
Equity: | ||||||
Accumulated deficit | (60,440) | (60,440) | ||||
Total revenue | 5,406 | 10,236 | ||||
Provision for (benefit from) income taxes | (99) | (502) | ||||
Net income (loss) | $ (1,044) | $ (2,808) | ||||
Net income (loss) per common share: | ||||||
Basic & Diluted | $ (0.06) | $ (0.16) |
Summary of Significant Accoun35
Summary of Significant Accounting Policies - Summary of Revenue from Contracts with Customers by Payor Type (Detail) - Accounting Standards Update 2014-09 - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2018 | Jun. 30, 2018 | |
Disaggregation Of Revenue [Line Items] | ||
Revenue from contracts with customers by payor type | $ 5,400 | $ 10,053 |
Genetic Testing Services | Institutional | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue from contracts with customers by payor type | 4,938 | 9,519 |
Genetic Testing Services | Insurance | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue from contracts with customers by payor type | $ 462 | $ 534 |
Marketable Securities - Summary
Marketable Securities - Summary of Marketable Securities (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Schedule of Available For Sale Securities [Line Items] | ||
Marketable securities, Amortized Cost Basis | $ 34,593 | $ 35,039 |
Marketable securities, Unrealized Gains | 1 | 2 |
Marketable securities, Unrealized Loses | (185) | (164) |
Marketable securities, Aggregate Fair Value | 34,409 | 34,877 |
Cash and cash equivalents | 3,654 | 6,490 |
Less: cash equivalents | (206) | (723) |
Short-Term Marketable Securities | ||
Schedule of Available For Sale Securities [Line Items] | ||
Marketable securities, Amortized Cost Basis | 27,031 | 20,040 |
Marketable securities, Unrealized Gains | 1 | 2 |
Marketable securities, Unrealized Loses | (83) | (48) |
Marketable securities, Aggregate Fair Value | 26,949 | 19,994 |
Short-Term Marketable Securities | Corporate Debt Securities | ||
Schedule of Available For Sale Securities [Line Items] | ||
Marketable securities, Amortized Cost Basis | 25,237 | 20,040 |
Marketable securities, Unrealized Gains | 1 | 2 |
Marketable securities, Unrealized Loses | (83) | (48) |
Marketable securities, Aggregate Fair Value | 25,155 | 19,994 |
Short-Term Marketable Securities | Commercial Paper | ||
Schedule of Available For Sale Securities [Line Items] | ||
Marketable securities, Amortized Cost Basis | 895 | |
Marketable securities, Aggregate Fair Value | 895 | |
Short-Term Marketable Securities | United States Treasury | ||
Schedule of Available For Sale Securities [Line Items] | ||
Marketable securities, Amortized Cost Basis | 899 | |
Marketable securities, Aggregate Fair Value | 899 | |
Short-Term Marketable Securities | Money Market Accounts | ||
Schedule of Available For Sale Securities [Line Items] | ||
Cash and cash equivalents | 206 | 723 |
Cash and cash equivalents fair value disclosure | 206 | 723 |
Long-Term Marketable Securities | ||
Schedule of Available For Sale Securities [Line Items] | ||
Marketable securities, Amortized Cost Basis | 7,562 | 14,999 |
Marketable securities, Unrealized Loses | (102) | (116) |
Marketable securities, Aggregate Fair Value | 7,460 | 14,883 |
Long-Term Marketable Securities | Corporate Debt Securities | ||
Schedule of Available For Sale Securities [Line Items] | ||
Marketable securities, Amortized Cost Basis | 7,562 | 14,999 |
Marketable securities, Unrealized Loses | (102) | (116) |
Marketable securities, Aggregate Fair Value | $ 7,460 | $ 14,883 |
Marketable Securities - Additio
Marketable Securities - Additional Information (Details) - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2018 | Dec. 31, 2017 | |
Investments Debt And Equity Securities [Abstract] | ||
Gross unrealized loss | $ 185,000 | $ 164,000 |
Fair Value Measurements - Infor
Fair Value Measurements - Information about Financial Assets Measured at Fair Value on Recurring Basis Based on Three-Tier Fair Value Hierarchy (Details) - Fair Value Measurements Recurring - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total marketable securities | $ 34,615 | $ 35,600 |
Level 1 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents fair value disclosure | 206 | 723 |
Level 2 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total marketable securities | 34,409 | 34,877 |
Level 3 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total marketable securities | 0 | 0 |
Money Market Accounts | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents fair value disclosure | 206 | 723 |
Money Market Accounts | Level 1 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents fair value disclosure | 206 | 723 |
Money Market Accounts | Level 2 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents fair value disclosure | 0 | 0 |
Money Market Accounts | Level 3 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents fair value disclosure | 0 | 0 |
Commercial Paper | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total marketable securities | 895 | |
Commercial Paper | Level 1 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total marketable securities | 0 | |
Commercial Paper | Level 2 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total marketable securities | 895 | |
Commercial Paper | Level 3 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total marketable securities | 0 | |
United States Treasury | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total marketable securities | 899 | |
United States Treasury | Level 1 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total marketable securities | 0 | |
United States Treasury | Level 2 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total marketable securities | 899 | |
United States Treasury | Level 3 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total marketable securities | 0 | |
Corporate Debt Securities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total marketable securities | 32,615 | 34,877 |
Corporate Debt Securities | Level 1 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total marketable securities | 0 | 0 |
Corporate Debt Securities | Level 2 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total marketable securities | 32,615 | 34,877 |
Corporate Debt Securities | Level 3 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total marketable securities | $ 0 | $ 0 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Details) | 6 Months Ended |
Jun. 30, 2018USD ($) | |
Fair Value Disclosures [Abstract] | |
Fair value asset, investments measured using unobservable inputs | $ 0 |
Fair value assets, transfers between levels, amount | 0 |
Unrealized losses for securities in an unrealized loss position for more than 12 months | 121,000 |
Other-than-temporary impairment losses related to marketable securities | $ 0 |
Fixed Assets - Major Classes of
Fixed Assets - Major Classes of Fixed Assets (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2018 | Dec. 31, 2017 | |
Property Plant And Equipment [Line Items] | ||
Fixed assets, gross | $ 12,174 | $ 11,039 |
Less: Accumulated depreciation | (4,849) | (3,767) |
Fixed assets, net | 7,325 | 7,272 |
Computer Hardware | ||
Property Plant And Equipment [Line Items] | ||
Fixed assets, gross | $ 1,500 | 1,435 |
Useful life in years | 3 years | |
Computer Software | ||
Property Plant And Equipment [Line Items] | ||
Fixed assets, gross | $ 468 | 463 |
Useful life in years | 3 years | |
Medical Lab Equipment | ||
Property Plant And Equipment [Line Items] | ||
Fixed assets, gross | $ 8,136 | 7,145 |
Useful life in years | 5 years | |
Furniture and Fixtures | ||
Property Plant And Equipment [Line Items] | ||
Fixed assets, gross | $ 199 | 159 |
Useful life in years | 5 years | |
Leasehold Improvements | ||
Property Plant And Equipment [Line Items] | ||
Fixed assets, gross | $ 803 | 763 |
Useful life in years | Shorter of lease term or estimated useful life | |
Assets Not Yet Placed in Service | ||
Property Plant And Equipment [Line Items] | ||
Fixed assets, gross | $ 1,068 | $ 1,074 |
Fixed Assets - Additional Infor
Fixed Assets - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Property Plant And Equipment [Abstract] | ||||
Depreciation expense on fixed assets | $ 562 | $ 405 | $ 1,078 | $ 817 |
Other Current Assets - Schedule
Other Current Assets - Schedule of Other Current Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Deferred Costs Capitalized Prepaid And Other Assets Disclosure [Abstract] | ||
Reagents | $ 407 | $ 231 |
Prepaid expenses | 568 | 624 |
Prepaid income taxes | 1,313 | 1,313 |
Marketable securities interest receivable | 207 | 204 |
Other receivable | 42 | 66 |
Total | $ 2,537 | $ 2,438 |
Reporting Segment and Geograp43
Reporting Segment and Geographical Information - Additional Information (Details) | 6 Months Ended |
Jun. 30, 2018Segment | |
Segment Reporting [Abstract] | |
Number of reporting segments | 1 |
Reporting Segment and Geograp44
Reporting Segment and Geographical Information - Summary of Revenue by Geographic Region (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Segment Reporting Information [Line Items] | ||||
Revenue | $ 5,400 | $ 4,640 | $ 10,053 | $ 9,946 |
United States | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 3,299 | 2,286 | 5,826 | 4,377 |
Canada | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 1,070 | 1,148 | 2,040 | 2,231 |
People's Republic of China ("PRC") | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 25 | 522 | 49 | 2,047 |
Other Countries | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | $ 1,006 | $ 684 | $ 2,138 | $ 1,291 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018 | Jan. 31, 2018 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Commitments And Contingencies [Line Items] | ||||||
Operating leases, rent expense | $ 119,000 | $ 61,000 | $ 228,000 | $ 114,000 | ||
Reagents | ||||||
Commitments And Contingencies [Line Items] | ||||||
Purchase obligations, payable within next twelve months | $ 2,300,000 | $ 2,300,000 | $ 2,300,000 | |||
California | ||||||
Commitments And Contingencies [Line Items] | ||||||
Operating leases, rent expense | $ 279,000 | $ 269,000 | ||||
Lease commencement date | Jun. 1, 2018 | Feb. 1, 2018 | ||||
Lease expiration date | May 31, 2023 | Jan. 31, 2021 | ||||
Non Cancelable Operating Lease | ||||||
Commitments And Contingencies [Line Items] | ||||||
Operating leases term of expiration | 2023-05 | |||||
Operating leases, renewal term | 3 years | 3 years | 3 years |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Equity [Abstract] | ||||
Unrealized holding gains (losses) on marketable securities | $ (14,000) | $ 7,000 | $ 5,000 | $ 17,000 |
Equity-Based Compensation - Sum
Equity-Based Compensation - Summary of Equity-Based Compensation Expenses as Part of Cost of Revenue and Operating Expenses (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Equity-based compensation expense | $ 573 | $ 424 | $ 1,118 | $ 989 |
Cost of Revenue | ||||
Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Equity-based compensation expense | 151 | 62 | 275 | 208 |
Research and Development | ||||
Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Equity-based compensation expense | 171 | 197 | 303 | 408 |
Selling and Marketing | ||||
Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Equity-based compensation expense | 113 | 51 | 221 | 120 |
General and Administrative | ||||
Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Equity-based compensation expense | $ 138 | $ 114 | $ 319 | $ 253 |
Equity-Based Compensation - Add
Equity-Based Compensation - Additional Information (Details) | 1 Months Ended |
May 30, 2018shares | |
Equity-Based Compensation | 2016 Plan | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Additional shares for issuance | 2,000,000 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||||
Federal statutory income tax rate | 21.00% | 35.00% | |||
Tax Cuts and Jobs Act of 2017, income tax expense related to revaluation of net deferred tax assets | $ 22,000 | ||||
Tax Cuts and Jobs Act of 2017, unrepatriated foreign earnings | $ 0 | ||||
Effective income tax rate | 11.00% | 367.00% | 18.00% | (1.00%) |
Income (Loss) Per Share - Recon
Income (Loss) Per Share - Reconciliation of Basic and Diluted Income (Loss) Per Share Computations (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |||||
Net income (loss) | $ (1,049) | $ (25) | $ (2,959) | $ 207 | $ (2,510) |
Weighted-average common shares—outstanding, basic | 17,919 | 17,711 | 17,891 | 17,694 | |
Weighted-average common shares—outstanding, diluted | 17,919 | 17,711 | 17,891 | 18,156 | |
Net income (loss) per common share, basic | $ (0.06) | $ 0 | $ (0.17) | $ 0.01 | |
Net income (loss) per common share, diluted | $ (0.06) | $ 0 | $ (0.17) | $ 0.01 |
Income (Loss) Per Share - Anti-
Income (Loss) Per Share - Anti-dilutive Securities Excluded from Calculation of Diluted Income (Loss) Per Share (Details) - shares shares in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Options | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities excluded from continuing operations of diluted income (loss) per share | 436 | 487 | 433 | 21 |
Restricted Stock Units (RSUs) | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities excluded from continuing operations of diluted income (loss) per share | 1,055 | 487 | 961 | 15 |
Related Party - Additional Info
Related Party - Additional Information (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Xilong Scientific | |||||
Related Party Transaction [Line Items] | |||||
Ownership percentage | 11.00% | 11.00% | |||
Fulgent Pharma | |||||
Related Party Transaction [Line Items] | |||||
Due from related parties | $ 19,000 | $ 19,000 | $ 3,000 | ||
Dr. Han Lin Gao | FF Gene Biotech | FJIP | |||||
Related Party Transaction [Line Items] | |||||
Ownership percentage | 25.00% | 25.00% | |||
Research Testing Services | |||||
Related Party Transaction [Line Items] | |||||
Revenue from related parties | $ 0 | $ 0 | |||
Foundation | |||||
Related Party Transaction [Line Items] | |||||
Revenue from related parties | 0 | 7,000 | $ 8,000 | $ 7,000 | |
Due from related parties | 0 | ||||
University | |||||
Related Party Transaction [Line Items] | |||||
Revenue from related parties | 7,000 | $ 24,000 | 16,000 | $ 36,000 | |
Due from related parties | $ 34,000 | $ 34,000 | $ 40,000 |
Equity Method Investments - Add
Equity Method Investments - Additional Information (Details) | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||
Apr. 30, 2017CNY (¥) | Jun. 30, 2018USD ($) | Jun. 30, 2018USD ($) | Jun. 30, 2018CNY (¥) | Dec. 31, 2017USD ($) | |
Schedule Of Equity Method Investments [Line Items] | |||||
Contribution to be made in joint venture | $ 1,956,000 | $ 1,956,000 | $ 1,937,000 | ||
Ownership interest to be made in joint venture | 30.00% | 30.00% | 30.00% | 30.00% | |
Royalty | License Agreement | |||||
Schedule Of Equity Method Investments [Line Items] | |||||
Royalty earned | $ 17,000 | $ 35,000 | |||
FF Gene Biotech | |||||
Schedule Of Equity Method Investments [Line Items] | |||||
Contribution to be made in joint venture | ¥ 60,000,000 | $ 1,956,000 | $ 1,956,000 | $ 1,937,000 | |
Contribution period in joint venture | 3 years | ||||
Ownership interest to be made in joint venture | 30.00% | 30.00% | 30.00% | 30.00% | 30.00% |
Contributions remain for joint venture | $ 6,100,000 | $ 6,100,000 | ¥ 40,300,000 | ||
FF Gene Biotech | Equipment | |||||
Schedule Of Equity Method Investments [Line Items] | |||||
Contributions made to joint venture | $ 3,000,000 | ||||
Xilong Scientific | FF Gene Biotech | |||||
Schedule Of Equity Method Investments [Line Items] | |||||
Contribution period in joint venture | 3 years | ||||
Ownership interest to be made in joint venture | 51.00% | ||||
Contribution to be made in joint venture | ¥ | ¥ 102,000,000 | ||||
FJIP | FF Gene Biotech | |||||
Schedule Of Equity Method Investments [Line Items] | |||||
Contribution period in joint venture | 5 years | ||||
Ownership interest to be made in joint venture | 19.00% | ||||
Contribution to be made in joint venture | ¥ | ¥ 19,000,000 |
Equity Method Investments - Sch
Equity Method Investments - Schedule of Equity Method Investments (Details) $ in Thousands | Jun. 30, 2018USD ($) | Dec. 31, 2017USD ($) | Apr. 30, 2017CNY (¥) |
Schedule Of Equity Method Investments [Line Items] | |||
Carrying Value | $ 1,956 | $ 1,937 | |
Ownership Percentage | 30.00% | 30.00% | |
FF Gene Biotech | |||
Schedule Of Equity Method Investments [Line Items] | |||
Carrying Value | $ 1,956 | $ 1,937 | ¥ 60,000,000 |
Ownership Percentage | 30.00% | 30.00% | 30.00% |