Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2022 | May 04, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2022 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q1 | |
Entity Registrant Name | Biora Therapeutics, Inc. | |
Entity Central Index Key | 0001580063 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 184,198,929 | |
Entity File Number | 001-39334 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 27-3950390 | |
Entity Address, Address Line One | 4330 La Jolla Village Drive | |
Entity Address, Address Line Two | Suite 300 | |
Entity Address, City or Town | San Diego | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 92122 | |
City Area Code | 855 | |
Local Phone Number | 293-2639 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Title of 12(b) Security | Common Stock, par value $0.001 per share | |
Trading Symbol | BIOR | |
Security Exchange Name | NASDAQ |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 67,234 | $ 88,397 |
Accounts receivable, net | 0 | 653 |
Prepaid expenses and other current assets | 5,639 | 7,232 |
Current assets of disposal group held for sale | 2,147 | 2,147 |
Total current assets | 75,020 | 98,429 |
Property and equipment, net | 2,742 | 4,012 |
Right-of-use assets | 2,578 | |
Other assets | 326 | 326 |
Goodwill | 6,072 | 6,072 |
Total assets | 86,738 | 108,839 |
Current liabilities: | ||
Accounts payable | 5,380 | 8,709 |
Accrued expenses and other current liabilities | 31,603 | 34,157 |
Warrant liability | 9,742 | 18,731 |
Current portion of capital lease obligations | 0 | 12 |
Total current liabilities | 46,725 | 61,609 |
Convertible notes, net of unamortized discount of $5,989 and $6,333 as of March 31, 2022 and December 31, 2021, respectively | 126,736 | 126,392 |
Other long-term liabilities | 6,462 | 5,814 |
Total liabilities | 179,923 | 193,815 |
Commitments and contingencies | ||
Stockholders' deficit: | ||
Common stock - $0.001 par value. 350,000,000 shares authorized as of March 31, 2022 and December 31, 2021; 188,155,220 and 185,736,890 shares issued as of March 31, 2022 and December 31, 2021, respectively; 184,197,930 and 181,872,676 shares outstanding as of March 31, 2022 and December 31, 2021, respectively | 148 | 146 |
Additional paid-in capital | 728,243 | 722,646 |
Accumulated deficit | (802,494) | (788,686) |
Treasury stock - at cost; 3,957,290 and 3,864,214 shares of common stock as of March 31, 2022 and December 31, 2021, respectively | (19,082) | (19,082) |
Total stockholders' deficit | (93,185) | (84,976) |
Total liabilities and stockholders' deficit | $ 86,738 | $ 108,839 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Unamortized discount | $ 6,000 | $ 6,300 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 350,000,000 | 350,000,000 |
Common stock, shares issued | 188,155,220 | 185,736,890 |
Common stock, shares outstanding | 184,197,930 | 181,872,676 |
Treasury stock, at cost shares | 3,957,290 | 3,864,214 |
Convertible Notes | ||
Unamortized discount | $ 5,989 | $ 6,333 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Income Statement [Abstract] | ||
Revenues | $ 107 | $ 167 |
Operating expenses: | ||
Research and development | 6,558 | 11,673 |
Selling, general and administrative | 13,457 | 19,958 |
Total operating expenses | 20,015 | 31,631 |
Loss from operations | (19,908) | (31,464) |
Interest (expense) income, net | (2,760) | (3,520) |
Loss on warrant liability | 8,989 | 2,650 |
Other income (expense), net | (811) | 14,873 |
Loss from continuing operations | (14,490) | (17,461) |
Loss from discontinued operations | 682 | (14,803) |
Net loss | $ (13,808) | $ (32,264) |
Net loss per share from continuing operations, basic and diluted | $ (0.08) | $ (0.30) |
Net loss per share from discontinued operations, basic and diluted | (0.26) | |
Net loss per share, basic and diluted | $ (0.08) | $ (0.56) |
Weighted average shares outstanding, basic and diluted | 183,201,663 | 57,493,800 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders' Deficit (Unaudited) - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Treasury Stock |
Beginning Balance at Dec. 31, 2020 | $ (106,994) | $ 59 | $ 452,992 | $ (541,274) | $ (18,771) |
Beginning Balance, shares at Dec. 31, 2020 | 59,287,331 | (3,515,028) | |||
Issuance of stock, net | 11,262 | $ 4 | 11,258 | ||
Issuance of stock, net, shares | 4,370,629 | ||||
Exercise of common stock options | 88 | 88 | |||
Exercise of common stock options, shares | 71,284 | ||||
Issuance of common stock upon vesting of restricted stock units | (229) | (228) | $ (1) | ||
Issuance of common stock upon vesting of restricted stock units, shares | 174,730 | (48,581) | |||
Stock-based compensation expense | 2,630 | 2,630 | |||
Net loss | (32,264) | (32,264) | |||
Ending Balance at Mar. 31, 2021 | (125,507) | $ 63 | 466,740 | (573,538) | $ (18,772) |
Ending Balance, shares at Mar. 31, 2021 | 63,903,974 | (3,563,609) | |||
Beginning Balance at Dec. 31, 2021 | (84,976) | $ 146 | 722,646 | (788,686) | $ (19,082) |
Beginning Balance, shares at Dec. 31, 2021 | 185,736,890 | (3,864,214) | |||
Issuance of stock, net | $ 3,626 | $ 2 | 3,624 | ||
Issuance of stock, net, shares | 2,130,327 | ||||
Exercise of common stock options, shares | 0 | ||||
Issuance of common stock upon vesting of restricted stock units | $ (80) | (80) | |||
Issuance of common stock upon vesting of restricted stock units, shares | 288,003 | (93,076) | |||
Stock-based compensation expense | 2,053 | 2,053 | |||
Net loss | (13,808) | (13,808) | |||
Ending Balance at Mar. 31, 2022 | $ (93,185) | $ 148 | $ 728,243 | $ (802,494) | $ (19,082) |
Ending Balance, shares at Mar. 31, 2022 | 188,155,220 | (3,957,290) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Operating Activities: | ||
Net loss | $ (13,808) | $ (32,264) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
(Gain) loss from discontinued operations | (682) | 14,803 |
Non-cash revenue reserve | 96 | 187 |
Depreciation and amortization | 322 | 445 |
Stock-based compensation expense | 2,053 | 2,166 |
Amortization of debt discount and non-cash interest | 343 | 386 |
Loss on disposal of property and equipment | 254 | 0 |
Impairment of property and equipment | 545 | 0 |
Change in fair value of derivative liability | 0 | (14,828) |
Change in fair value of warrant liability | (8,989) | (2,650) |
Changes in operating assets and liabilities: | ||
Prepaid expenses and other current assets | 2,060 | (365) |
Accounts payable | (3,377) | (2,183) |
Accrued expenses and other liabilities | (3,656) | 577 |
Other long-term liabilities | (451) | (62) |
Net cash used in operating activities - continuing operations | (25,290) | (33,788) |
Net cash provided by (used in) operating activities - discontinued operations | 1,335 | (14,776) |
Net cash used in operating activities | (23,955) | (48,564) |
Investing Activities: | ||
Purchases of property and equipment | (342) | (425) |
Net cash used in investing activities - continuing operations | (342) | (425) |
Net cash used in investing activities - discontinued operations | 0 | (38) |
Net cash used in investing activities | (342) | (463) |
Financing Activities: | ||
Proceeds from issuance of common stock, net | 3,626 | 11,631 |
Proceeds from issuance of common stock warrants | 0 | 12,804 |
Payment of deferred offering costs | 0 | (75) |
Payments for financing of insurance premiums | (480) | (1,950) |
Principal payments on mortgages payable | 0 | (17) |
Principal payments on capital lease obligations | (12) | (106) |
Net cash provided by financing activities - continuing operations | 3,134 | 22,287 |
Net cash used in financing activities - discontinued operations | 0 | (60) |
Net cash provided by financing activities | 3,134 | 22,227 |
Net decrease in cash and cash equivalents | (21,163) | (26,800) |
Cash and cash equivalents at beginning of period | 88,397 | 92,076 |
Cash and cash equivalents at end of period | 67,234 | 65,276 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 0 | 41 |
Cash paid for income taxes | 1 | 7 |
Supplemental schedule of non-cash investing and financing activities: | ||
Lease assets obtained in exchange for operating lease liabilities | 2,962 | 0 |
Equity offering costs incurred but not paid | 0 | 281 |
Purchases of property and equipment in accounts payable | 47 | 89 |
Warrant issuance costs incurred but not paid | $ 0 | $ 148 |
Organization and Description of
Organization and Description of Business | 3 Months Ended |
Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Description of Business | 1 . Organization and Description of Business Biora Therapeutics, Inc. (the “Company” or “Biora” or "Biora Therapeutics"), formerly known as Progenity, Inc. (“Progenity”), a Delaware corporation, commenced operations in 2010 with its corporate office located in San Diego, California. Progenity’s historical operations included a licensed Clinical License Improvement Amendment and College of American Pathologists certified laboratory located in Michigan specializing in the molecular testing markets serving women’s health providers in the obstetric, gynecological, fertility, and maternal fetal medicine specialty areas in the United States. Previously, Progenity's core business was focused on the prenatal carrier screening and noninvasive prenatal test market, targeting preconception planning, and routine pregnancy management for genetic disease risk assessment. Through its former affiliation with Mattison Pathology, LLP (“Mattison”), a Texas limited liability partnership doing business as Avero Diagnostics (“Avero”), located in Lubbock and Dallas, Texas, the Company’s operations also included anatomic and molecular pathology testing products in the United States. In order to refocus efforts and resources on it's research and development pipeline, in June 2021, Progenity announced a strategic transformation ("Strategic Transformation") that included the closure of the Progenity genetics laboratory in Ann Arbor, Michigan, and indicated that Progenity was seeking strategic alternatives for Avero, together referred to as the Laboratory Operations. In December 2021, Progenity entered into an asset purchase agreement with Northwest Pathology to sell Avero. The Company has excluded from continuing operations for all periods presented in this report revenues and expenses associated with its Laboratory Operations, which are reported as discontinued operations. See Note 4 for additional information on the Laboratory Operations. On April 12, 2022, Progenity announced that it would rebrand the Company to better reflect the current focus on its therapeutics pipeline, and would begin to operate as Biora Therapeutics, Inc., a Delaware corporation. The Company subsequently changed its name to Biora Therapeutics, Inc. on April 26, 2022. Biora Therapeutics is a biotechnology company developing oral biotherapeutics. The Company's drug-device combinations could enable new treatment approaches in the delivery of therapeutics in two main areas: • Targeted delivery of therapeutics ("Targeted Therapeutics") to the site of disease in the gastrointestinal ("GI") tract, which are designed to improve outcomes for patients with Inflammatory Bowel Disease; and • Systemic delivery of biotherapeutics ("Oral Biotherapeutics"), which are designed to replace injections with needle-free, oral delivery technology. The Company is also developing diagnostics devices to help characterize the GI tract and diagnose GI diseases, such as Small Intestine Bacterial Overgrowth, through the development of innovative technologies that are designed to diagnose at the site of the disease. Using these platforms, the Company intends to develop therapeutics and diagnostic solutions for a broad range of disorders. Liquidity As of March 31, 2022, the Company had cash and cash equivalents of $ 67.2 million and an accumulated deficit of $ 802.5 million. For the three months ended March 31, 2022, the Company reported a net loss of $ 13.8 million and cash used in operating activities of $ 24.0 million. The Company’s primary sources of capital have historically been the sale of common stock and warrants, private placements of preferred stock and incurrence of debt. As of March 31, 2022, the Company had $ 126.7 million of convertible senior notes ("Convertible Notes") outstanding (see Note 8). As a result of the Strategic Transformation, management believes that future operating expenses have been reduced. However, as the Strategic Transformation was announced in June of 2021 and the Company completed the sale of Avero in December of 2021, the Company has not eliminated the risks surrounding its ability to fund operations for at least 12 months from the issuance date of the condensed consolidated financial statements for the three months ended March 31, 2022, without relying on additional funding. As a result, there is substantial doubt about the Company’s ability to continue as a going concern for 12 months following the issuance date of the condensed consolidated financial statements for the three months ended March 31, 2022. The Company’s ability to continue as a going concern is dependent upon its ability to raise additional funding. Management believes that the Company’s liquidity position as of the date of this filing provides sufficient runway to achieve critical research and development pipeline milestones. Management intends to raise additional capital through equity offerings and/or debt financings, or from other potential sources of liquidity, which may include new collaborations, licensing or other commercial agreements for one or more of the Company’s research programs or patent portfolios, or divestitures of the Company's assets. Adequate funding, if needed, may not be available to the Company on acceptable terms, or at all. The Company’s ability to raise additional funds may be adversely impacted by potential worsening global economic conditions and the disruptions to, and volatility in, the credit and financial markets in the United States and worldwide resulting from the ongoing COVID-19 pandemic. If the Company is unable to raise capital when needed or on attractive terms, it would be forced to delay, reduce, or eliminate its research and development programs or other operations. If any of these events occur, the Company’s ability to achieve its operational goals would be adversely affected. Uncertainties Related to the COVID-19 Pandemic The ongoing COVID‑19 pandemic has negatively impacted the global economy, disrupted global supply chains and created significant volatility and disruption of financial markets. The Company has been materially and negatively affected by the COVID-19 pandemic; however, the extent of the continued impact of the COVID-19 pandemic on the Company’s operational and financial performance, including its ability to execute its business strategies and initiatives in the expected time frame, will depend on future developments, including the duration and continued spread of the pandemic, which is uncertain and cannot be predicted. The Company could be further negatively affected by the widespread outbreak of an illness or any other communicable disease, or any other public health crisis that results in economic and trade disruptions, including the disruption of global supply chains. An extended period of global supply chain and economic disruption could materially affect the Company’s business, results of operations, access to sources of liquidity and financial condition. The estimates used for, but not limited to, determining the fair value of goodwill could be impacted by the pandemic. While the full impact of the COVID-19 pandemic is unknown at this time, the Company has made appropriate estimates based on the facts and circumstances available as of the reporting date. These estimates may change as new events occur and additional information is obtained. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2 . Summary of Significant Accounting Policies Basis of Presentation The Company’s condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. These financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, as filed with the Securities and Exchange Commission, (“SEC”), from which management derived the Company’s condensed consolidated balance sheet as of December 31, 2021. Certain amounts in prior periods have been reclassified to reflect the impact of the discontinued operations treatment of the Company's Laboratory Operations in order to conform to the current period presentation. The condensed consolidated financial statements include the accounts of Biora Therapeutics, Inc., its wholly-owned subsidiaries, and, as of March 31, 2021, an affiliated professional partnership with Avero with respect to which the Company had a specific management arrangement (see Note 3). All significant intercompany balances and transactions have been eliminated in consolidation. As a result of the divestiture of the Laboratory Operations, the Company has retrospectively revised the condensed consolidated statements of operations for the three months ended March 31, 2021 and the condensed consolidated statement of cash flows for the three months ended March 31, 2021 to reflect the operations and cash flows of the Laboratory Operations as discontinued operations. Financial Statement Presentation Change In order to more closely align with the Company’s business, and to better serve financial statement users, the Company has combined selling and marketing expenses with general and administrative expenses into a single selling, general and administrative expense line item. Prior period amounts have been reclassified to conform to the current presentation. Unaudited Interim Financial Information The accompanying condensed consolidated financial statements are unaudited, have been prepared on the same basis as the audited annual financial statements and, in the opinion of management, reflect all adjustments, consisting of normal recurring adjustments, that are necessary to present fairly the results for the interim periods presented. Results are not necessarily indicative of results to be expected for the year ending December 31, 2022, any other interim periods, or any future year or period, particularly in light of the COVID-19 pandemic and its impact on domestic and global economies. The balance sheet as of December 31, 2021 included herein was derived from the audited financial statements as of that date. Certain disclosures have been condensed or omitted from the interim financial statements. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant items subject to such estimates include the estimate of variable consideration in connection with the recognition of revenue, the valuation of stock options, the valuation of goodwill, the valuation of the derivative liability associated with the Convertible Notes, accrual for reimbursement claims and settlements, the valuation of warrant liabilities, the valuation of assets held for sale, assessing future tax exposure and the realization of deferred tax assets, and the useful lives and the recoverability of property and equipment. The Company bases these estimates on historical and anticipated results, trends, and various other assumptions that the Company believes are reasonable under the circumstances, including assumptions as to future events. These estimates form the basis for making judgments about the carrying values of assets and liabilities and recorded revenues and expenses that are not readily apparent from other sources. Actual results could differ from those estimates and assumptions. Assets Held for Sale and Discontinued Operations Assets and liabilities are classified as held for sale when all of the following criteria for a plan of sale have been met: (1) management, having the authority to approve the action, commits to a plan to sell the assets; (2) the assets are available for immediate sale, in their present condition, subject only to terms that are usual and customary for sales of such assets; (3) an active program to locate a buyer and other actions required to complete the plan to sell the assets have been initiated; (4) the sale of the assets is probable and is expected to be completed within one year; (5) the assets are being actively marketed for a price that is reasonable in relation to their current fair value; and (6) actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or the plan will be withdrawn. When all of these criteria have been met, the assets and liabilities are classified as held for sale in the condensed consolidated balance sheet. Assets classified as held for sale are reported at the lower of their carrying value or fair value less costs to sell. Depreciation and amortization of assets ceases upon designation as held for sale. Discontinued operations comprise activities that were disposed of, discontinued or held for sale at the end of the period, represent a separate major line of business that can be clearly distinguished for operational and financial reporting purposes and represent a strategic business shift having a major effect on the Company’s operations and financial results according to Accounting Standard Codification (“ASC”) Topic 205, Presentation of Financial Statements . Additional details surrounding the Company's assets and liabilities held for sale and discontinued operations are included in Note 4 . Revenue Recognition Revenue is recognized in accordance with the Financial Accounting Standards Board (“FASB”) ASC Topic 606 , Revenue from Contracts with Customers (“ASC 606”). In accordance with ASC 606, the Company follows a five-step process to recognize revenues: 1) identify the contract with the customer, 2) identify the performance obligations, 3) determine the transaction price, 4) allocate the transaction price to the performance obligations and 5) recognize revenues when the performance obligations are satisfied. Revenue was primarily derived from providing molecular testing products, which were reimbursed through arrangements with third-party payors, laboratory distribution partners, and amounts from individual patients. Third-party payors include commercial payors, such as health insurance companies, health maintenance organizations and government health benefit programs, such as Medicare and Medicaid. The Company’s contracts generally contained a single performance obligation, which was the delivery of the test results, and the Company satisfied its performance obligation at a point in time upon the delivery of the results, which then triggered the billing for the product. The amount of revenue recognized reflects the amount of consideration the Company expected to be entitled to (“transaction price”) and considered the effects of variable consideration. Revenue was recognized when control of the promised product was transferred to customers, in an amount that reflected the consideration the Company expected to be entitled to in exchange for those products. The Company applies the following practical expedients and exemptions: • Incremental costs incurred to obtain a contract are expensed as incurred because the related amortization period would be one year or less. The costs are included in selling and marketing expenses. • No adjustments to amounts of promised consideration are made for the effects of a significant financing component because the Company expects, at contract inception, that the period between the transfer of a promised good or service and customer payment for that good or service will be one year or less. Payor Concentration The Company historically relied upon reimbursements from third-party government payors and private-payor insurance companies to collect accounts receivable. As a result of the Strategic Transformation, all revenue from Laboratory Operations has been classified as discontinued operations and there were no significant concentrations as of March 31, 2022. The Company’s significant third-party payors and their related accounts receivable balances and revenues as a percentage of total accounts receivable balances and revenues as of December 31, 2021 and for the three months ended March 31, 2021 are as follows: Percentage of Accounts Receivable December 31, Blue Shield of Texas 4.0 % Government Health Benefits Programs 55.8 % United Healthcare 7.2 % Percentage of Revenue (1) Three Months Ended March 31, 2021 Blue Shield of Texas 22.7 % Government Health Benefits Programs 23.4 % Aetna 7.7 % United Healthcare 6.8 % (1) Percentage of revenue table shows amounts as a percentage of total revenue, including revenue classified as discontinued operations. Refer to Note 5 for details of the breakdown of revenue. Leases The Company determines if an arrangement is or contains a lease at inception. For leases with a term greater than one year, lease right-of-use assets and lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. In determining the net present value of lease payments, the Company uses its incremental borrowing rate which represents an estimated rate of interest that the Company would have to pay to borrow equivalent funds on a collateralized basis at the lease commencement date. Leases are classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the statement of operations. Net Loss Per Share Basic net loss per share is computed by dividing the net loss by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per share is computed by dividing the net loss by the weighted average number of shares of common stock and potentially dilutive securities outstanding for the period. As the Company has reported net losses for all periods presented, all potentially dilutive securities are antidilutive and, accordingly, basic net loss per share equals diluted net loss per share. Recent Accounting Pronouncements Adopted In December 2019, FASB issued Accounting Standards Update (“ASU”) No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes , which simplified income tax accounting in various areas. The Company adopted this standard on January 1, 2021 , which did not have a material impact on the condensed consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) , which supersedes FASB ASC Topic 840, Leases (Topic 840) , and provides principles for the recognition, measurement, presentation and disclosure of leases for both lessees and lessors. The Company adopted the provisions of this guidance on January 1, 2022, using the effective date method. As a result of adopting ASC 842, the Company recognized right-of-use assets and lease liabilities of $ 2.2 million and $ 2.2 million, respectively, on January 1, 2022. The difference between the right-of-use assets and lease liabilities is attribut ed to the elimination of deferred rent and prepaid rent. There was no adjustment to the opening balance of accumulated deficit as a result of the adoption. The Company elected to use the package of practical expedients available in the new lease standard, allowing it not to reassess: (a) whether expired or existing contracts contain leases under the new definition of a lease; (b) lease classification for expired or existing leases; and (c) whether previously capitalized initial direct costs would qualify for capitalization under the new lease standard. In May 2021, the FASB issued ASU No. 2021-04 , Issuer's Accounting for Certain Modification or Exchanges of Freestanding Equity-Classified Written Call Options , which provides a principles-based framework to determine whether an issuer should recognize the modification or exchange as an adjustment to equity or an expense. The Company adopted this standard on January 1, 2022 , which did not have a material impact on the condensed consolidated financial statements. Recent Accounting Pronouncements Not Yet Adopted In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses , which requires the measurement of expected credit losses for financial instruments carried at amortized cost, such as accounts receivable, held at the reporting date based on historical experience, current conditions and reasonable forecasts. The main objective of this standard is to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. In November 2018, the FASB issued ASU No. 2018-19, Codification Improvements to Topic 326, Financing Instruments–Credit Losses , which included an amendment of the effective date. The standard is effective for the Company for annual reporting periods beginning after December 15, 2022. The Company does not expect the adoption of this standard to have a significant impact on its consolidated financial statements. In August 2020, the FASB issued ASU No. 2020-06 , Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity's Own Equity (Subtopic 815-40)-Accounting for Convertible Instruments and Contracts in an Entity's Own Equity , which simplifies the accounting for convertible instruments, amends the guidance on derivative scope exceptions for contracts in an entity's own equity, and modifies the guidance on diluted earnings per share calculations as a result of these changes. The standard is effective for the Company for annual reporting periods beginning after December 15, 2023. The Company is currently evaluating the impact the adoption of this standard may have on its consolidated financial statements. |
Variable Interest Entities
Variable Interest Entities | 3 Months Ended |
Mar. 31, 2022 | |
Text Block [Abstract] | |
Variable Interest Entity | 3 . Variable Interest Entity In June 2015, the Company, through a wholly-owned subsidiary, entered into a series of agreements with Avero. The subsidiary entity entered into a purchase agreement to acquire certain assets from Mattison used in the operations of Avero. The purchase agreement was accounted for under the acquisition method in accordance with the provisions of ASC Topic 805, Business Combinations. The subsidiary entity also entered into a nominee agreement which provided it with the right, but not the obligation, to purchase, or to designate a person(s) to purchase, the stock of Avero at any time for a nominal amount. In December 2021, the Company entered into an asset purchase agreement with Northwest Pathology to sell certain assets and liabilities of Avero for $ 10.9 million. The Company no longer has a controlling interest in Avero and therefore does not consolidate Avero beginning at December 31, 2021. Prior to the date of sale, Avero income statement activity is included in discontinued operations in the condensed consolidated statements of operations. In June 2015, the Company's subsidiary entity entered into a management services arrangement that authorized the Company to perform the management services in the manner that it deemed reasonably appropriate to meet the day-to-day business needs of Avero. The management services included funding ongoing operational needs, directing activities related to contract negotiation, billing, human resources, and legal and administrative matters and processes, among others. In exchange for the management services provided, the Company's subsidiary entity was entitled to receive an annual management fee equal to the amount of the net operating income of Avero. The agreement had a 10 year term, but was terminated at the time of the sale of Avero. Through the management services arrangement with Avero, the Company had (1) the power to direct the activities of Avero that most significantly impact its economic performance, and (2) the obligation to absorb losses of Avero or the right to receive benefits from Avero that could potentially be significant to Avero. Based on these determinations, the Company determined that Avero was a variable interest entity and that the Company was the primary beneficiary. The Company did not own any equity interest in Avero; however, as these agreements provide the Company the controlling financial interest in Avero, the Company consolidated Avero’s balances and activities within its consolidated financial statements. |
Assets Held for Sale and Discon
Assets Held for Sale and Discontinued Operations | 3 Months Ended |
Mar. 31, 2022 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Assets Held for Sale and Discontinued Operations | 4 . Assets Held for Sale and Discontinued Operations In June 2021, the Company announced its Strategic Transformation to reallocate resources to research and development to better position the business for future growth. The plan included the closure of the Progenity genetics laboratory in Ann Arbor, Michigan and the divestiture of Avero. This plan represents a strategic business shift having a major effect on the Company's operations and financial results. The Company classified the results of its Laboratory Operations as discontinued operations in its condensed consolidated statements of operations and consolidated statements of cash flows for the three months ended March 31, 2022 and 2021. Additionally, the remaining assets have been reported as assets held for sale in the Company’s condensed consolidated balance sheets as of March 31, 2022 and December 31, 2021. The following table presents the combined results of discontinued operations of the Laboratory Operations (in thousands): Three Months Ended 2022 2021 Revenues $ 1,268 $ 24,359 Cost of sales — 22,233 Gross profit 1,268 2,126 Operating expenses: Selling and marketing — 12,790 General and administrative 586 4,120 Total operating expenses 586 16,910 Other income (expense), net — ( 19 ) Net gain (loss) from discontinued operations $ 682 $ ( 14,803 ) The following table presents the carrying amounts of the remaining assets held for sale related to the Laboratory Operations as of March 31, 2022 and December 31, 2021 (in thousands): March 31, December 31, Current assets of disposal group held for sale Property and equipment, net 2,147 2,147 Total current assets of disposal group held for sale (1) $ 2,147 $ 2,147 (1) The remaining assets of the Laboratory Operations are classified as held for sale and are classified as current in the unaudited condensed consolidated balance sheet at March 31, 2022 and December 31, 2021 , because they are expected to be sold within one year. |
Revenues
Revenues | 3 Months Ended |
Mar. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenues | 5 . Revenues The Company’s revenues are generated primarily through collaboration agreements. Under ASC 606, revenue is recognized when a customer obtains control of promised goods or services. The amount of revenue recognized reflects the consideration that the Company expects to be entitled to receive in exchange for these services. The Company analyzes the nature of these performance obligations in the context of individual agreements in order to assess the distinct performance obligations. The Company applies the following five steps to recognize revenue: (1) identify the contract with the customer, (2) identify the performance obligations, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations and (5) recognize revenues when the performance obligations are satisfied. The Company evaluates all promised goods and services within a customer contract and determines which of such goods and services are separate performance obligations. This evaluation includes an assessment of whether the good or service is capable of being distinct and whether the good or service is separable from other promises in the contract. The transaction price is determined based on the consideration to which the Company will be entitled in exchange for transferring goods and services to the customer. A contract may contain variable consideration, including potential payments for both milestone and research and development services. For certain potential milestone payments, the Company estimates the amount of variable consideration by using the most likely amount method. Each reporting period the Company re-evaluates the probability of achievement of such variable consideration and any related constraints. The Company will include variable consideration, without constraint, in the transaction price to the extent it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price among the performance obligations on a relative standalone selling price basis unless the transaction price is variable and meets the criteria to be allocated entirely to a performance obligation or to a distinct good or service that forms part of a single performance obligation. Revenues historically were derived from contracts with healthcare insurers, government payors, laboratory partners and patients in connection with sales of prenatal genetic, anatomic or molecular pathology tests. The Company entered into contracts with healthcare insurers related to tests provided to patients who had health insurance coverage. Insurance carriers are considered third-party payors on behalf of the patients, and the patients who receive genetic, anatomic or molecular pathology test products are considered the customers. Tests were billed to insurance carriers, patients, or a combination of insurance carriers and patients. The Company also sold tests to laboratory partners, which are considered customers. The Company evaluated its contracts with healthcare insurers, government payors, laboratory partners and patients and identified a single performance obligation, the delivery of a test result. The Company satisfied its performance obligation at a point in time upon the delivery of the test result, at which point the Company can bill for its products. The amount of revenue recognized reflects the transaction price and considers the effects of variable consideration, which is discussed below. Once the Company satisfied its performance obligations upon delivery of a test result and billed for the product, the timing of the collection of payments may vary based on the payment practices of the third-party payor. The Company billed patients directly for co-pays and deductibles that they are responsible for and also billed patients directly in cases where the customer did not have insurance. All of the historical test revenue is part of the Company's Laboratory Operations and has been included in discontinued operations in the condensed consolidated statements of operations. The Company had established an accrual for refunds of payments previously made by healthcare insurers based on historical experience and executed settlement agreements with healthcare insurers. Any refunds are accounted for as reductions in revenues in the statement of operations as an element of variable consideration. The transaction price was an estimate and could be fixed or variable. Variable consideration includes reimbursement from healthcare insurers, government payors, and patients and is adjusted for estimates of disallowed cases, discounts, and refunds using the expected value approach. Tests billed to healthcare insurers and directly to patients can take up to nine months to collect and the Company may be paid less than the full amount billed or not paid at all. For insurance carriers and government payors, management utilizes the expected value method using a portfolio of relevant historical data for payors with similar reimbursement characteristics. The portfolio estimate is developed using historical reimbursement data from payors and patients, as well as known current reimbursement trends not reflected in the historical data. Such variable consideration is included in the transaction price only to the extent it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainties with respect to the amount are resolved. The Company monitors these estimates at each reporting period based on actual cash collections and the status of settlement agreements with third-party payors, in order to assess whether a revision to the estimate is required. Both the initial estimate and any subsequent revision to the estimate contain uncertainty and require the use of judgment in the estimation of the transaction price and application of the constraint for variable consideration. If actual results in the future vary from the Company’s estimates, the Company will adjust these estimates, which would affect revenue and earnings in the period such variances become known. The consideration expected from laboratory partners is generally a fixed amount. The Company periodically updated its estimate of the variable consideration recognized for previously delivered performance obligations. These updates resulted in an additional $ 1.4 million and $ 2.4 million of revenue reported for the three months ended March 31, 2022 and 2021, respectively. These amounts included (i) adjustments for actual collections versus estimated variable consideration as of the beginning of the reporting period and (ii) cash collections and the related recognition of revenue in the current period for tests delivered in prior periods due to the release of the constraint on variable consideration, offset by (iii) reductions in revenue for the accrual for reimbursement claims and settlements described in Note 10. Disaggregation of Revenues The following tables show revenues disaggregated by payor type and revenue classification (in thousands): Three months ended Payor 2021 Commercial third-party payors $ 16,453 Government health benefit programs (1) 5,726 Patient/laboratory distribution partners 2,347 Total revenues $ 24,526 (1) The revenue amounts include accruals for reimbursement claims and settlements included in the estimates of variable consideration recorded during the three months ended March 31, 2021 . Revenues recognized reflect the effects of variable consideration, and include adjustments for estimates of disallowed cases, discounts, and refunds. The variable consideration includes reductions in revenues for the accrual for reimbursement claims and settlements. Three Months Ended Classification 2022 2021 Revenue from continuing operations $ 107 $ 167 Revenue from discontinued operations 1,268 24,359 Total revenues $ 1,375 $ 24,526 |
Balance Sheet Components
Balance Sheet Components | 3 Months Ended |
Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Balance Sheet Components | 6 . Balance Sheet Components Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consisted of the following (in thousands): March 31, December 31, Prepaid expenses $ 4,492 $ 6,123 Other current assets 1,147 1,109 Total $ 5,639 $ 7,232 Property and Equipment, Net Property and equipment, net consisted of the following (in thousands): March 31, December 31, Computers and software $ 3,716 $ 5,004 Building and leasehold improvements 755 437 Laboratory equipment 2,182 2,688 Furniture, fixtures, and office equipment 1,132 1,142 Construction in progress 47 16 Land 346 346 Total property and equipment 8,178 9,633 Less accumulated depreciation and amortization ( 5,436 ) ( 5,621 ) Property and equipment, net $ 2,742 $ 4,012 Depreciation expense included in continuing operations was $ 0.3 million and $ 0.4 million for the three months ended March 31, 2022 and 2021, respectively. Intangible Assets, Net All intangible assets were included as part of the sale of Avero in December 2021 (see Note 4 ) and there was no amortization expense for the three months ended March 31, 2022 . Amortization expense was $ 0.2 million for the three months ended March 31, 2021 and is included in discontinued operations. Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consisted of the following (in thousands): March 31, December 31, Accrual for reimbursement claims and settlements, current (1) $ 18,094 $ 18,127 Commissions and bonuses 1,582 3,883 Vacation and payroll benefits 4,491 6,894 Accrued professional services 167 652 Accrued interest 3,229 802 Lease liabilities, current 1,430 — Insurance financing — 489 Contract liabilities 194 301 Other (2) 2,416 3,009 Total $ 31,603 $ 34,157 (1) All of the Company's revenues related to Laboratory Operations have been discontinued; amounts related to the revenue reserve generated from the Progenity Laboratory Operations remain on the balance sheet. (2) Included in this amount are contracts that the Company will be responsible for that cannot be terminated; as there is no future benefit to the Company, they were expensed in discontinued operations in 2021. Other Long-term Liabilities Other long-term liabilities consisted of the following (in thousands): March 31, December 31, Accrual for reimbursement claims and settlements, net of current portion (1) $ 192 $ 192 Lease liabilities, net of current portion 1,099 — Other (2) 5,171 5,622 Total $ 6,462 $ 5,814 (1) All of the Company's revenues related to Laboratory Operations have been discontinued; amounts related to the revenue reserve generated from the Progenity Laboratory Operations remain on the balance sheet. (2) Included in this amount are contracts that the Company will be responsible for that cannot be terminated; as there is no future benefit to the Company, they were expensed in discontinued operations in 2021. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 7 . Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date. The authoritative guidance establishes a three-level valuation hierarchy that prioritizes the inputs to valuation techniques used to measure fair value based upon whether such inputs are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect market assumptions made by the reporting entity. This hierarchy requires the Company to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value. The three-level hierarchy for the inputs to valuation techniques is summarized as follows: Level 1 - Quoted prices in active markets for identical assets and liabilities that the Company has the ability to access. Level 2 - Observable market-based inputs or unobservable inputs that are corroborated by market data, such as quoted prices, interest rates, and yield curves. Level 3 - Inputs that are unobservable data points that are no t corroborated by market data. There were no significant transfers between these fair value measurement classifications during the three months ended March 31, 2022 and 2021. Fair Value of Financial Instruments The Company’s Level 3 liabilities consist of the embedded derivative liability associated with the Company’s Convertible Notes (see Note 8) and the warrant liability resulting from the August 2021 issuance of warrants (see Note 11). The Convertible Notes conversion feature was bifurcated and recorded as an embedded derivative liability with a corresponding discount at the date of issuance that is netted against the principal amount of the Convertible Notes. The Company utilizes a Monte Carlo simulation method to determine the fair value of the conversion feature, which utilizes inputs including the common stock price, volatility of common stock, the risk-free interest rate and the probability of conversion to common shares at the conversion rate in the event of a major transaction (e.g. a change in control). Due to the use of significant unobservable inputs, the overall fair value measurement of the conversion feature is classified as Level 3. As of both March 31, 2022 and December 31, 2021 , the fair value of the embedded derivative liability was zero . The Company uses the Black-Scholes Model to value the Level 3 warrant liability at inception and on subsequent valuation dates. This model incorporates transaction details such as the Company’s stock price, contractual terms, maturity, risk free rates, and volatility. The significant unobservable input for the Level 3 warrant liability includes volatility. Given the limited period of time the Company’s stock has been traded in an active market, the expected volatility is estimated by taking the average historical price volatility for industry peers, consisting of several public companies in the Company’s industry that are similar in size, stage, or financial leverage, over a period of time comme nsurate to the expected term of the warrants. At March 31, 2022, the fair value of warrant liability was estimated using the Black-Scholes Model with the following inputs and assumptions: March 31, Risk-free interest rate 2.42 % Expected volatility 100.2 % Stock price $ 1.16 Expected life (years) 4.4 The following table presents information about the Company’s assets and liabilities that are measured at fair value on a recurring basis and indicates the fair value hierarchy of the valuation techniques utilized to determine such fair value (in thousands): Level 1 Level 2 Level 3 March 31, 2022 Money market funds (1) $ 66,157 $ — $ — Warrant liability $ — $ — $ 9,742 December 31, 2021 Money market funds (1) $ 85,866 $ — $ — Warrant liability $ — $ — $ 18,731 (1) Included in cash and cash equivalents in the accompanying condensed consolidated balance sheets. The carrying value of the Company’s Convertible Notes does not approximate its fair value because the carrying value of the Convertible Notes reflects the balance of unamortized discount related to the derivative liability associated with the value of the conversion feature assessed at inception. The carrying value of the Company’s Convertible Notes, net of discount, was $ 126.7 million and $ 126.4 million at March 31, 2022 and December 31, 2021, respectively. Based on unadjusted quoted prices in active market obtained from third-party pricing services, the Company determined the fair value of the Convertible Notes was $ 105.6 million and $ 86.6 million as of March 31, 2022 and December 31, 2021 , respectively. |
Convertible Notes
Convertible Notes | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Convertible Notes | 8 . Convertible Notes In December 2020, the Comp any issued a total of $ 168.5 million principal amount of Convertible Notes in a private offering of the Convertible Notes pursuant to Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"). The Convertible Notes were issued pursuant to, and are governed by, an indenture, dated as of December 7, 2020 , by and between the Company and The Bank of New York Mellon Trust Company, N.A., as trustee (“Indenture”). The Convertible Notes are due on December 1, 2025 , unless earlier repurchased, redeemed or converted, and accrue interest at a rate per annum equal to 7.25 % payable semi-annually in arrears on June 1 and December 1 of each year, with the initial payment on June 1, 2021 . During the three months ended March 31, 2022 and 2021, the Company recognized interest expense on the Convertible Notes of $ 2.4 million and $ 3.5 million, respectively. The Convertible Notes are the Company's senior, unsecured obligations and are (i) equal in right of payment with the Company's existing and future senior, unsecured indebtedness; (ii) senior in right of payment to the Company's existing and future indebtedness that is expressly subordinated to the Convertible Notes; (iii) effectively subordinated to the Company's existing and future secured indebtedness, to the extent of the value of the collateral securing that indebtedness; and (iv) structurally subordinated to all existing and future indebtedness and other liabilities, including trade payables, and (to the extent the Company is not a holder thereof) preferred equity, if any, of the Company's subsidiaries. At any time, noteholders may convert their Convertible Notes at their option into shares of the Company’s common stock, together, if applicable, with cash in lieu of any fractional share, at the then-applicable conversion rate. The initial conversion rate is 278.0094 shares of common stock per $1,000 principal amount of Convertible Notes, which represents an initial conversion price of approximately $ 3.60 per share of common stock. Noteholders that convert their Convertible Notes before December 1, 2022 will, in certain circumstances, be entitled to an additional cash payment representing the present value of any remaining interest payments on the Convertible Notes through December 1, 2022. The conversion rate and conversion price are subject to customary adjustments upon the occurrence of certain dilutive events. In addition, if certain corporate events that constitute a “Make-Whole Fundamental Change” (as defined in the Indenture) occur, then the conversion rate will, in certain circumstances, be increased for a specified period of time. The Convertible Notes are redeemable, in whole and not in part, at the Company’s option at any time on or after December 1, 2023 , at a cash redemption price equal to the principal amount of the Convertible Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date, but only if the last reported sale price per share of the Company’s common stock exceeds 130 % of the conversion price on (i) each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the trading day immediately before the date the Company sends the related redemption notice; and (ii) the trading day immediately before the date the Company sends such notice. In addition, calling the Convertible Notes will constitute a Make-Whole Fundamental Change, which will result in an increase to the conversion rate in certain circumstances for a specified period of time. The Convertible Notes have customary provisions relating to the occurrence of “Events of Default” (as defined in the Indenture), which include the following: (i) certain payment defaults on the Convertible Notes (which, in the case of a default in the payment of interest on the Convertible Notes, will be subject to a 30-day cure period); (ii) the Company’s failure to send certain notices under the Indenture within specified periods of time; (iii) the Company’s failure to comply with certain covenants in the Indenture relating to the Company’s ability to consolidate with or merge with or into, or sell, lease or otherwise transfer, in one transaction or a series of transactions, all or substantially all of the assets of the Company and its subsidiaries, taken as a whole, to another person; (iv) a default by the Company in its other obligations or agreements under the Indenture or the Convertible Notes if such default is not cured or waived within 60 days after notice is given in accordance with the Indenture; (v) certain defaults by the Company or any of its subsidiaries with respect to indebtedness for borrowed money of at least $ 7.5 million; (vi) the rendering of certain judgments against the Company or any of its subsidiaries for the payment of at least $7.5 million, where such judgments are not discharged or stayed within 60 days after the date on which the right to appeal has expired or on which all rights to appeal have been extinguished; and (vii) certain events of bankruptcy, insolvency and reorganization involving the Company or any of the Company’s significant subsidiaries. As of both March 31, 2022 and December 31, 2021, the Company was in compliance with all such covenants. The Convertible Notes have a conversion option which was required to be bifurcated upon issuance and periodically remeasured to fair value separately as an embedded derivative. The conversion option includes additional interest payments payable to the noteholders if converted prior to December 1, 2022. The conversion feature was bifurcated and recorded separately as an embedded derivative as (1) the conversion feature is not clearly and closely related to the debt instrument and is not considered to be indexed to the Company’s equity, (2) the conversion feature standing alone meets the definition of a derivative, and (3) the Convertible Notes are not remeasured at fair value each reporting period with changes in fair value recorded in the consolidated statement of operations. As of both March 31, 2022 and December 31, 2021 , the fair value of the derivative liability was zero . The prior year change in fair value of the derivative liability of $ 14.9 million is included in other income (expense), net in the condensed consolidated statement of operations for the three months ended March 31, 2021. As of March 31, 2022 and December 31, 2021, the unamortized debt discount was $ 6.0 million and $ 6.3 million, respectively. The Company amortizes the debt discount using the effective interest method over the term of the Convertible Notes, resulting in an effective interest rate of approximately 8.7 %. For the three months ended March 31, 2022 and 2021, the amortization of the Convertible Notes debt discount was $ 0.3 million and $ 0.3 million, respectively, and was included in interest income (expense), net in the condensed consolidated statements of operations. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2022 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 9 . Related Party Transactions As of March 31, 2022 and December 31, 2021 , a private equity firm held 2 2,394,074 shares, or 11.9 %, and 28,935,134 shares, or 15.6 %, respectively, of the Company's common stock outstanding and warrants to purchase up to 8,097,166 shares of common stock at an exercise price of $ 2.84 . This private equity firm also holds $ 103.5 million aggregate principal amount of Convertible Notes as of both March 31, 2022 and December 31, 2021 (see Note 8). As of March 31, 2022 and December 31, 2021 , the accrued interest expense related to the Convertible Notes held by this private equity firm was $ 2.5 million and $ 0.6 million, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 10 . Commitments and Contingencies Operating Leases The Company has entered into various noncancelable operating lease agreements, primarily for office space, laboratory space, and equipment. On January 1, 2022, the Company adopted ASC Topic 842, Leases . Results for reporting periods beginning after January 1, 2022 are presented under ASC 842, while prior period amounts are not adjusted and continue to be reported in accordance with historic accounting guidance. The right-of-use assets were $ 2.6 million as of March 31, 2022 and lease liabilities are recorded in accrued expenses and other current liabilities and other long-term liabilities on the condensed consolidated balance sheet and were $ 1.4 million and $ 1.1 million, respectively, as of March 31, 2022. Operating lease costs were $ 0.3 million for the three months ended March 31, 2022 and cash paid for operating leases was $ 0.4 million. The weighted-average discount rate used was 7.8 % and the weighted-average remaining lease term for all operating leases was 2.3 years. Rent expense included in continuing operations for operating leases was $ 0.4 million for the three months ended March 31, 2021. As of March 31, 2022, future lease payments under the non-cancelable operating leases were as follows (in thousands): Year ending December 31, Minimum Remainder of 2022 $ 1,158 2023 965 2024 235 2025 209 2026 and thereafter 233 Total minimum lease payments 2,800 Less: interest ( 271 ) Present value of lease liabilities $ 2,529 As of December 31, 2021, net minimum payments under the non-cancelable operating leases were as follows (in thousands): Year ending December 31, Minimum 2022 $ 2,141 2023 1,086 2024 237 2025 208 2026 and thereafter 251 Total future minimum lease payments $ 3,923 Contingencies The Company, in the ordinary course of its business, can be involved in lawsuits, threats of litigation, and audit and investigative demands from third parties. While management is unable to predict the exact outcome of such matters, it is management’s current belief that any potential liabilities of Avero or Progenity resulting from these contingencies, individually or in the aggregate, could have a material impact on the Company’s financial position and results of operations. The regulations governing government reimbursement programs (e.g., Medicaid, Tricare, and Medicare) and commercial payor reimbursement programs are complex and may be subject to interpretation. As a former provider of services to patients covered under government and commercial payor programs, post payment review audits, and other forms of reviews and investigations are routine. The Company believes it complies in all material respects with the statutes, regulations, and other requirements applicable to its laboratory operations. Federal Investigations In April 2018, the Company received a civil investigative demand from an Assistant U.S. Attorney (“AUSA”) for the Southern District of New York (“SDNY”) and a Health Insurance Portability and Accountability Act subpoena issued by an AUSA for the Southern District of California (“SDCA”) around legacy commercial practices. In May 2018, the Company received a subpoena from the State of New York Medicaid Fraud Control Unit. On July 21, 2020, July 23, 2020 and October 1, 2020, the Company entered into agreements (the "Agreements") with certain governmental agencies and the 45 states participating in the sett lement (“State AGs”) to resolve, with respect to such agencies and State AGs, all of such agencies’ and State AGs’ outstanding civil, and, where applicable, federal criminal investigations described above. The remaining amounts payable to the government will be subject to interest at a rate of 1.25 % per annum, and any or all amounts may be paid earlier at the option of the Company. The Company did not make any payments for the three months ended March 31, 2022 and 2021. As of both March 31, 2022 and December 31, 2021, the Company’s accrual consists of $ 6.9 million in accrued expenses and other current liabilities and $ 0.2 million in other long-term liabilities. Furthermore, the Company has agreed that, if during calendar years 2020 through 2023, and so long as amounts payable to the government remain unpaid, the Company receives any civil settlement, damages awards, or tax refunds, to the extent that the amounts exceed $ 5.0 million in a calendar year, it will pay 26 % of the amount received in such civil settlement, damages award, or tax refunds as an accelerated payment of the scheduled amounts set forth above, up to a maximum total acceleration of $ 4.1 million. The Com pany did no t receive any tax refunds during the three months ended March 31, 2022 and 2021. Non-Prosecution Agreement Effective July 21, 2020, the Company entered into the Non-Prosecution Agreement, pursuant to which the Company agreed with the DOJ to (i) pay the restitution provided for under the SDCA Civil Settlement Agreement, (ii) not commit any felonies, (iii) continue to implement a compliance and ethics program designed to prevent and detect violations of applicable fraud and kickback laws throughout its operations and (iv) fulfill certain other disclosure, reporting and cooperation obligations. The DOJ agreed that it will not prosecute the Company for any conduct described in the Non-Prosecution Agreement provided that the Company performs its obligations under the Non-Prosecution Agreement during the period from July 21, 2020 through July 21, 2021. The Non-Prosecution Agreement expired on July 21, 2021. Corporate Integrity Agreement In connection with the resolution of the investigated matters, and in exchange for the Office of Inspector General of the Department of Health and Human Services ("OIG") agreement not to exercise its authority to permissively exclude the Company from participating in federal healthcare programs, effective July 21, 2020, the Company entered into a five-year Corporate Integrity Agreement with the OIG. The Corporate Integrity Agreement requires, among other matters, that the Company maintain a Compliance Officer, a Compliance Committee, board review and oversight of certain federal healthcare compliance matters, compliance programs, and disclosure programs; provide management certifications and compliance training and education; engage an independent review organization to conduct claims and arrangements reviews; and implement a risk assessment and internal review process. In view of the Company’s Strategic Transformation, including cessation of its Laboratory Operations, effective March 16, 2022 the OIG agreed to suspend the Company’s obligations under the Corporate Integrity Agreement except for the Company’s obligation to continue its engagement of an independent review organization to conduct billing claims reviews and reporting of those reviews to OIG with respect to ongoing reimbursement payments being received from federal healthcare programs for historical laboratory services performed by the Company prior to the Company’s cessation of services in the summer of 2021. The Company’s failure to comply with its remaining obligations under the Corporate Integrity Agreement could result in monetary penalties and/or the Company being excluded from participating in federal healthcare programs. Colorado Recoupment On July 21, 2021, the Company received a letter from the Colorado Department of Health Care Policy and Financing (the "Department"), informing the Company that, as a result of a post-payment review of Medicaid claims from October 2014 to June 2018, the Department is seeking recoupment for historical payments in an aggregate amount of approximately $ 5.7 million. In December 2021, the Company received additional correspondence informing them that the Department is seeking recoupment for an additional $ 3.3 million of historical payments from 2018. The historical payments for which the Department is seeking recoupment primarily relate to the Company's Preparent expanded carrier screening tests primarily on the basis that such tests were not medically necessary. The Company previously entered into settlement agreements with 45 states including the State of Colorado as part of a settlement with respect to certain civil claims related to the Company's discontinued legacy billing practices for its non-invasive prenatal tests ("NIPT") and microdeletion tests and the provision of alleged kickbacks or inducements to physicians and patients. The Company has disputed these claims of recoupment with the Department, filed an administrative complaint with the State of Colorado Office of Administrative Courts, and also seeks to offset such claims by an amount of approximately $ 1.9 million previously paid to the Department in connection with the state settlement agreements referred to above. At this preliminary stage, the Company is unable to predict the ultimate outcome of this action, and therefore cannot estimate the reasonably possible loss or range of loss, if any, that may result from this action. California Subpoena On July 19, 2021, the Company received a subpoena from the California Attorney General’s Office, Division of Public Rights, requesting documents and information related to Progenity’s former genetic testing practices, including NIPT, particularly those with a nexus to California patients. The subpoena is captioned “In the Matter of the Investigation of: Prenatal Genetic Testing Companies.” The Company continues to cooperate and provide information requested by the subpoena. At this preliminary stage, the Company is unable to predict the ultimate outcome of this action, and therefore cannot estimate the reasonably possible loss or range of loss, if any, that may result from any unfavorable outcome related to this action. Payor Settlement Agreements In November 2019 , the Company and Aetna entered into a settlement agreement for $ 15.0 million. The Aetna settlement obligation was fully settled during the three months ended March 31, 2021. On September 30, 2019 , the Company entered into a settlement agreement with United HealthCare Services, Inc. and UnitedHealthcare Insurance Company in which the Company agreed to pay an aggregate amount of $ 30.0 million. As of December 31, 2021 the settlement has been fully paid. Payor Recoveries As noted above, the regulations governing government reimbursement programs (e.g., Medicaid, Tricare, and Medicare) and commercial payor reimbursement programs are complex and may be subject to interpretation. As a former provider of services to patients covered under government reimbursement and commercial payor programs, the Company is routinely subject to post-payment review audits and other forms of reviews and investigations. If a third-party payor successfully challenges that a payment to the Company for prior testing was in breach of contract or otherwise contrary to policy or law, they may recoup such payment. The Company may also decide to negotiate and settle with a third-party payor in order to resolve an allegation of overpayment. In the ordinary course of business, the Company addresses and evaluates a number of such claims from payors. In the past, the Company has negotiated and settled these types of claims with third-party payors. The Company may be required to resolve further disputes in the future. While management is unable to predict the exact outcome of any such claims, it is management’s current belief that any potential liabilities resulting from these contingencies, individually or in the aggregate, could have a material impact on the Company’s financial position and results of operations. Payor Dispute On November 16, 2020, the Company received a letter from Anthem, Inc. (“Anthem”) informing the Company that Anthem is seeking recoupment for historical payments made by Anthem in an aggregate amount of approximately $ 27.4 million. The historical payments for which Anthem is seeking recoupment are claimed to relate primarily to discontinued legacy billing practices for the Company’s former NIPT and microdeletion tests and secondarily to the implementation of the new CPT code for reimbursement for the Company’s former Preparent expanded carrier screening tests. As noted above, the Company has historically negotiated and settled similar claims with third-party payors. Although the Company’s practice in resolving disputes with other similar large commercial payors has generally led to agreed settlement amounts substantially less than the originally claimed amount, there can be no assurance that the Company will be successful in a similar settlement amount in any ongoing or future dispute. Historical settlement amounts and payment time periods may not be indicative of the final settlement terms with Anthem, if any. Management disputes this claim of recoupment with Anthem in substantial part based on expired statutes of limitations and seeks to offset any amounts owed by Anthem to the Company. The Company has an accrual for the estimated probable loss for this matter as of March 31, 2022 and December 31, 2021. OIG Inquiry On October 16, 2019, the Company received an inquiry from the Texas Health & Human Services Commission Office of Inspector General (“TX OIG”) alleging that the Company did not hold the required CLIA Laboratory Certificate of Accreditation to perform, bill for, or be reimbursed by the Texas Medicaid Program for certain tests performed by us from January 1, 2015 through December 31, 2018. The Company submitted a written response to the inquiry on October 23, 2019. In October 2021, the Company received a letter from the TX OIG asking the Company to renew its engagement on the matter. The Company continues to cooperate with TX OIG toward resolution of the matter. Although management believes that the Company holds and have held all required CLIA certificates and/or subcontract with third-party laboratories that hold and have held such certificates to perform all of the tests subject to the TX OIG inquiry, there can be no assurance that the TX OIG will agree with this position. The Company has recorded an accrual of $ 0.4 m illion for the estimated probable loss for this matter as of March 31, 2022 and December 31, 2021. Ravgen Lawsuit On December 22, 2020, Ravgen, Inc. ("Ravgen") filed suit in the District of Delaware (D. Del. Civil Action No. 1:20-cv-1734) two Ravgen patents based on the Company's former NIPT testing business. The complaint seeks monetary damages and injunctive relief. The Company responded to the complaint on March 23, 2021. Management believes the claims in Ravgen’s complaint are without merit, and the Company is vigorously defending against them. On March 1, 2022 the court ordered a stay of the litigation pending resolution of patent validity challenges made against the two patents in inter partes review proceedings currently pending before the Patent Trial and Appeal Board of the United States Patent and Trademark Office. IPO Litigation On June 23, 2020, the Company closed its IPO. Lawsuits were filed on August 28, 2020 and September 11, 2020 against the Company, certain of its executive officers and directors, and the underwriters of the IPO. On December 3, 2020, the U.S. District Court for the Southern District of California consolidated the two actions, appointed Lin Shen, Lingjun Lin and Fusheng Lin to serve as Lead Plaintiffs, and approved Glancy Prongay & Murray LLP to be Lead Plaintiffs’ Counsel. Lead Plaintiffs filed their first amended complaint on February 4, 2021. Together with the underwriters of the IPO, the Company moved to dismiss the first amended complaint. On September 1, 2021, the court granted the Company's motion to dismiss, dismissing Lead Plaintiffs’ claims without prejudice. On September 22, 2021, Lead Plaintiffs filed their second amended complaint. It alleges that the Company’s registration statement and related prospectus for the IPO contained false and misleading statements and omissions in violation of the Securities Act by failing to disclose that (i) the Company had overbilled government payors for Preparent tests beginning in 2019 and ending in or before early 2020; (ii) there was a high probability that the Company had received, and would have to refund, a material amount of overpayments from government payors for Preparent tests; (iii) in February 2020 the Company ended a supposedly improper marketing practice on which the competitiveness of the Company's business depended; and (iv) the Company was suffering from material negative trends with respect to testing volumes, average selling prices for its tests, and revenues. Lead Plaintiffs seek certification as a class, unspecified compensatory damages, interest, costs and expenses including attorneys’ fees, and unspecified extraordinary, equitable, and/or injunctive relief. Together with the underwriters of the IPO, the Company moved to dismiss the second amended complaint on November 15, 2021. Lead Plaintiffs filed an opposition to the motion on January 14, 2022, and the Company filed a reply in support of the motion on February 22, 2022. The Company intends to continue to vigorously defend against these claims. Subject to a reservation of rights, the Company is advancing expenses subject to indemnification to the underwriters of the IPO. On June 4, 2021, a purported shareholder filed a lawsuit in the U.S. District Court for the Southern District of California, claiming to sue derivatively on behalf of the Company. The complaint names certain of the Company’s officers and directors as defendants, and names the Company as a nominal defendant. Premised largely on the same allegations as the above-described securities lawsuit, it alleges that the individual defendants breached their fiduciary duties to the Company, wasted corporate assets, and caused the Company to issue a misleading proxy statement in violation of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). The complaint seeks the award of unspecified damages to the Company, equitable and injunctive remedies, and an order directing the Company to reform and improve its internal controls and board oversight. It also seeks the costs and disbursements associated with bringing suit, including attorneys’, consultants’, and experts’ fees. The case is stayed pending the outcome of the motion to dismiss in the above-described securities lawsuit. The Company intends to vigorously defend against these claims. On August 17, 2021, the Company received a letter purportedly on behalf of a stockholder of the Company demanding that the Company's Board of Directors investigate and take action against certain of the Company’s current and former officers and directors to recover damages for alleged breaches of fiduciary duties and related claims arising out of the IPO litigation discussed above. This matter is pending the outcome of the companion securities litigation. Given the uncertainty of litigation, the preliminary stages of the Ravgen and IPO litigations, and the legal standards that must be met for, among other things, success on the merits, the Company is unable to predict the ultimate outcome of these actions, and therefore cannot estimate the reasonably possible loss or range of loss, if any, that may result from these actions. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2022 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | 11 . Stockholders’ Equity Common Stock Pursuant to the Company’s eighth amended and restated certificate of incorporation, which went into effect immediately prior to the completion of the IPO, the Company is authorized to issue 350,000,000 shares of common stock and 10,000,000 shares of undesignated preferred stock. Each holder of common stock is entitled to one vote per share of common stock held. On June 18, 2020, the Company completed its IPO. In February 2021, the Company entered into a Securities Purchase Agreement for a private placement with certain institutional and accredited investors (“February Purchasers”). Pursuant to the Securities Purchase Agreement, the February Purchasers purchased an aggregate of 4,370,629 units (“February Units”), representing (i) 4,370,629 shares of the Company’s common stock and (ii) warrants to purchase up to 4,370,629 shares of common stock. The purchase price for each February Unit was $ 5.72 , for an aggregate purchase price of approximately $ 25.0 million. The warrants are exercisable for cash at an exercise price of $ 6.86 per share, subject to adjustments as provided under the terms of the warrants. The warrants are exercisable at any time for cash and expire on the fifth anniversary of the date of issuance. Pursuant to ASC 815-40, Derivatives and Hedging – Contracts in Entity’s Own Equity ("ASC 815"), the Company deemed the warrants to be liability classified and allocated the proceeds from issuance between the warrants and common stock using the with-and-without method. $ 12.8 million of the proceeds, equal to the fair value of the warrants determined using the Black-Scholes Model, were allocated to the warrant liability, and the remaining proceeds of $ 12.2 million were allocated to the common stock. The Company incurred a total of $ 1.4 million in issuance costs, which were allocated between the warrants and common stock on a relative fair value basis, $ 0.5 million and $ 0.9 million, respectively. The warrant liability was remeasured at $ 10.2 million as of March 31, 2021 and the Company recognized a gain on warrant liability in the amount of $ 2.6 million associated with this transaction during the three months ended March 31, 2021. On April 1, 2021, the registration statement to register the shares of common stock underlying the warrants was declared effective by the SEC. As a result, the warrants met the conditions to be classified in equity and the related warrant liability was reclassified from liability to equity on April 1, 2021. In June 2021, the Company entered into a Securities Purchase Agreement for a private placement with certain institutional and accredited investors (“June Purchasers”). Pursuant to the Securities Purchase Agreement, the June Purchasers purchased an aggregate of 16,194,332 units (“June Units”), representing (i) 15,694,332 shares of the Company’s common stock (ii) warrants to purchase up to 16,194,332 shares of common stock and (iii) pre-funded warrants to purchase up to 500,000 shares of common stock. The purchase price for each June Unit was $ 2.47 , for an aggregate purchase price of approximately $ 40.0 million. The warrants are exercisable for cash at an exercise price of $ 2.84 per share, subject to adjustments as provided under the terms of the warrants. The warrants are exercisable at any time and expire on the fifth anniversary of the date of issuance. The pre-funded warrants are exercisable at an exercise price of $ 0.001 per share and have no expiration date. In July 2021, the Company issued 500,000 shares of common stock as a result of the exercise of the outstanding pre-funded warrants at an exercise price of $ 0.001 per share. Pursuant to ASC 815, the Company deemed the warrants to be liability classified and allocated the proceeds from issuance between the warrants and common stock using the with-and-without method. $ 26.6 million of the proceeds, equal to the fair value of the warrants determined using the Black-Scholes Model, were allocated to the warrant liability, and the remaining proceeds of $ 13.4 million were allocated to the common stock. The Company incurred a total of $ 2.1 million in issuance costs, which were allocated between the warrants and common stock on a relative fair value basis, $ 0.7 million and $ 1.4 million, respectively. The warrant liability was remeasured at $ 31.8 million as of June 30, 2021 and the Company recognized a loss on warrant liability in the amount of $ 5.1 million in the condensed consolidated statements of operations during the three months ended June 30, 2021. On June 30, 2021, the registration statement to register the shares of common stock underlying the warrants was declared effective by the SEC. As a result, the warrants met the conditions to be classified in equity and the related warrant liability was reclassified from liability to equity on June 30, 2021. In August 2021, the Company issued and sold an aggregate of (i) 40,000,000 shares of common stock and (ii) warrants to purchase 40,000,000 shares of common stock in an underwritten public offering. Each share was sold together with one warrant to purchase one share of common stock at a combined public offering price of $ 1.00 per share of the common stock and the accompanying warrant. The warrants have an exercise price of $ 1.00 per share, are exercisable at any time, and will expire five years following the date of issuance. In addition, the Company granted the underwriter a 30-day option to purchase up to 6,000,000 shares of common stock ("Overallotment Stock Option") and/or warrants to purchase 6,000,000 shares of common stock (“Overallotment Warrant Option”) at a price of $ 0.99 per share of common stock and/or $ 0.01 per warrant. The warrants and Overallotment Warrant Options were issued in the money based on the public offering terms. The Company received approximately $ 37.4 million in net proceeds, after deducting underwriting discounts and commissions and other offering expenses payable by the Company. Pursuant to ASC 815, the Company deemed the Overallotment Stock Option to meet the scope exception for equity classification, and the warrants and Overallotment Warrant Option to be classified as a liability (collectively "the Warrant Liability") at fair value initially with subsequent changes in fair value recorded in earnings. The warrants were recorded at a fair value of $ 41.8 million and the Overallotment Warrant Option at a fair value of $ 6.2 million, both determined using the Black-Scholes Model. As the total fair value of the Warrant Liability exceeds the total proceeds of $ 37.4 million, the Company recorded a loss of the $ 8.1 million excess to loss on warrant liability in the condensed consolidated statements of operations. Accordingly, there were no proceeds allocated to the common stock issued or the Overallotment Stock Option granted as part of this transaction. The Company incurred a total of $ 2.8 million in issuance costs, which were allocated between the warrants, Overallotment Warrant Option, common stock and Overallotment Stock Option on a relative fair value basis and expensed in the condensed consolidated statements of operations. The Overallotment Warrant Option was partially exercised in August for warrants to purchase an aggregate of 1,932,000 shares of common stock and the Company recognized a gain on the warrant liability in the amount of $ 3.4 million in the condensed consolidated statements of operations. The remaining Overallotment Warrant Option expired in September 2021 and the Company recognized a gain of $ 1.9 million in the condensed consolidated statements of operations. The Warrant Liability was remeasured at $ 18.7 million as of December 31, 2021 and the Company recognized a loss on warrant liability in the amount of $ 6.7 million in the condensed consolidated statements of operations. The Warrant Liability was remeasured at $ 9.7 million as of March 31, 2022 and the Company recognized a gain on warrant liability in the amount of $ 9.0 million in the condensed consolidated statements of operations during the three months ended March 31, 2022. In October 2021, the Company entered into a securities purchase agreement with certain institutional and accredited investors for the purchase and sale of 13,333,334 shares of the Company's common stock, at a purchase price of $ 1.50 per share in a registered direct offering. The Company received approximately $ 18.7 million in net proceeds, after deducting placement agent fees and other offering expenses payable by the Company. During the year ended December 31, 2021, the Company issued 28,684,125 shares of common stock as a result of the exercise of outstanding warrants at an exercise price of $ 1.00 per share for proceeds of $ 28.7 million. In November 2021, the Company entered into an At Market Issuance Sales Agreement ("ATM Sale Agreement") with B. Riley Securities, Inc., BTIG, LLC, and H.C. Wainwright & Co. LLC ("Agents"), pursuant to which the Company may offer and sell shares of common stock having an aggregate offering price of up to $ 90,000,000 , from time to time, in “at the market” offerings through the Agents. Sales of the shares of common stock, if any, will be made at prevailing market prices at the time of sale, or as otherwise agreed with the Agents. The Agents will receive a commission from the Company of up to 3.0 % of the gross proceeds of any shares of common stock sold under the ATM Sale Agreement. During the three months ended December 31, 2021, the Company received net proceeds of $ 4.6 million, after deducting commissions and other offering expenses, from the sale of 1,763,754 shares under the ATM Sale Agreement. The Company sold such shares at a weighted average purchase price of $ 2.84 per share. During the three months ended March 31, 2022 the Compan y received net proceeds of $ 3.6 million, after deducting commissions and other offering expenses, from the sale of 2,130,327 shares under the ATM Sale Agreement. The Company sold such shares at a weighted average purchase price of $ 1.76 per share. |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2022 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation | 12 . Stock-Based Compensation On May 5, 2021, holders of a majority of the outstanding common stock executed a written consent approving the Fourth Amended and Restated 2018 Equity Incentive Plan ("2018 Fourth Amended Plan"), which provides for an automatic annual increase in the number of shares of common stock reserved for issuance. As of March 31, 2022 , 22,087,645 shares were available for issuance under the 2018 Fourth Amended Plan. On November 3, 2021, the Board of Directors approved and adopted the Company’s 2021 Inducement Plan ("2021 Inducement Plan") to provide for the reservation of 6,500,000 shares of the Company’s common stock to be used exclusively for the grant of awards to individuals not previously an employee or non-employee director of the Company. As of March 31, 2022, 3,000,673 shares were available for grant under the 2021 Inducement Plan. Stock Options The following table summarizes stock option activity, which includes Performance Awards, under the 2012 Plan, the 2015 Plan, the 2018 Fourth Amended Plan and the 2021 Inducement Plan during the three months ended March 31, 2022: Stock Options Weighted- Weighted- Aggregate Balance at December 31, 2021 8,640,951 $ 4.74 Options granted 263,298 $ 1.31 Options exercised — — Options forfeited/cancelled ( 684,403 ) $ 3.68 Options expired ( 343,009 ) $ 7.46 Balance at March 31, 2022 7,876,837 $ 4.60 6.91 $ 4 Vested and expected to vest at March 31, 2022 7,876,837 $ 4.60 6.91 $ 4 Vested and exercisable at March 31, 2022 2,738,642 $ 6.47 3.82 $ 4 The aggregate intrinsic value in the above table is calculated as the difference between the closing price of the Company's common stock at March 31, 2022 of $ 1.16 per s hare and the exercise price of stock options that had strike prices below the closing price. There were no stock options exercised during the three months ended March 31, 2022. The Company uses the Black-Scholes option pricing model to estimate the fair value of each option grant on the date of grant or any other measurement date. The following table sets forth the assumptions used to determine the fair value of stock options granted during the three months ended March 31, 2022: Risk-free interest rate 2.0 % - 2.1 % Expected volatility 90.7 % - 97.3 % Expected dividend yield — % Expected life (years) 6.0 - 6.3 years The weighted-average grant date fair value of options granted during the three months ended March 31, 2022 and 2021 was $ 1.24 per option and $ 2.95 per option, respectively. Restricted Stock Units The following table summarizes RSU activity for the three months ended March 31, 2022: Number of Shares Weighted- Balance at December 31, 2021 3,879,110 $ 3.80 Granted 179,915 $ 1.34 Vested ( 288,003 ) $ 4.88 Forfeited/cancelled ( 401,560 ) $ 3.63 Balance at March 31, 2022 3,369,462 $ 3.60 2020 Employee Stock Purchase Plan In June 2020, the Company’s board of directors adopted the ESPP with 510,000 shares of common stock reserved for future issuance under the ESPP. The ESPP also provides for automatic annual increases in the number of shares of common stock reserved for issuance. As of March 31, 2022 there were 1,350,977 total sha res of common stock reserved for future issuance. Stock-Based Compensation Expense The following table presents total stock-based compensation expense included in each functional line item in the accompanying condensed consolidated statements of operations (in thousands): Three Months Ended 2022 2021 Research and development 337 624 Selling, general and administrative 1,716 1,542 Discontinued operations — 464 Total stock-based compensation expense $ 2,053 $ 2,630 At March 31, 2022 there was $ 10.5 million of compensation cost related to unvested stock options expected to be recognized over a remaining weighted average vesting period of 3.07 and $ 10.1 million of compensation cost related to unvested RSUs expected to be recognized over a remaining weighted average vesting period of 3.27 years. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 13 . Income Taxes The Company calculates its interim income tax provision in accordance with ASC Topic 270, Interim Reporting , and Topic 740, Accounting for Income Taxes . At the end of each interim period, management estimates the annual effective tax rate and applies such rate to the Company’s ordinary quarterly earnings to calculate income tax expense related to ordinary income. Due to maintenance of a full valuation allowance, the Company had a zero effective tax rate for the three months ended March 31, 2022. The tax effects of items significant, unusual and infrequent in nature are discretely calculated and recognized in the period during which they occur. The Company’s NOL carryforwards and research and development expenditure credit carryforwards may be subject to an annual limitation under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended (the “Code”), and similar state provisions if the Company experiences an ownership change within the meaning of such Code sections. In general, an ownership change, as defined by Sections 382 and 383 of the Code, occurs when there is a 50 percentage points or more shift in ownership, consisting of shareholders owning more than 5 % in the Company, occurring within a three-year testing period. The Company performed a formal study through the date of the IPO and determined future utilization of tax attribute carryforwards are not limited per Section 382 of the Internal Revenue Code. The Company has not updated its 382 study since the IPO offering in 2020. Any future changes may limit future utilization of tax attribute carryforwards. Due to the existence of the valuation allowance, limitations created by future ownership changes, if any, will not impact the Company's effective tax rate. |
Net Loss Per Share
Net Loss Per Share | 3 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | 14 . Net Loss Per Share The table below provides potentially dilutive securities in equivalent common shares not included in the Company’s calculation of diluted loss per share because to do so would be antidilutive: March 31, March 31, Options to purchase common stock 7,876,837 5,572,641 Restricted stock units 3,369,462 1,374,479 Common stock warrant 26,183,830 4,770,789 Common stock issuable upon conversion of Convertible Notes 40,588,672 51,529,036 Total 78,018,801 63,246,945 |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | 15 . Subsequent Events On May 4, 2022 , Biora completed the divesture of its single-molecule detection platform. Under the terms of the agreement, Biora contributed all assets related to the single-molecule detection platform to newly-formed Enumera Molecular, Inc., which intends to develop and commercialize the platform. Biora received a minority ownership stake in the company in exchange for the assets. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The Company’s condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. These financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, as filed with the Securities and Exchange Commission, (“SEC”), from which management derived the Company’s condensed consolidated balance sheet as of December 31, 2021. Certain amounts in prior periods have been reclassified to reflect the impact of the discontinued operations treatment of the Company's Laboratory Operations in order to conform to the current period presentation. The condensed consolidated financial statements include the accounts of Biora Therapeutics, Inc., its wholly-owned subsidiaries, and, as of March 31, 2021, an affiliated professional partnership with Avero with respect to which the Company had a specific management arrangement (see Note 3). All significant intercompany balances and transactions have been eliminated in consolidation. As a result of the divestiture of the Laboratory Operations, the Company has retrospectively revised the condensed consolidated statements of operations for the three months ended March 31, 2021 and the condensed consolidated statement of cash flows for the three months ended March 31, 2021 to reflect the operations and cash flows of the Laboratory Operations as discontinued operations. Financial Statement Presentation Change In order to more closely align with the Company’s business, and to better serve financial statement users, the Company has combined selling and marketing expenses with general and administrative expenses into a single selling, general and administrative expense line item. Prior period amounts have been reclassified to conform to the current presentation. |
Unaudited Interim Financial Information | Unaudited Interim Financial Information The accompanying condensed consolidated financial statements are unaudited, have been prepared on the same basis as the audited annual financial statements and, in the opinion of management, reflect all adjustments, consisting of normal recurring adjustments, that are necessary to present fairly the results for the interim periods presented. Results are not necessarily indicative of results to be expected for the year ending December 31, 2022, any other interim periods, or any future year or period, particularly in light of the COVID-19 pandemic and its impact on domestic and global economies. The balance sheet as of December 31, 2021 included herein was derived from the audited financial statements as of that date. Certain disclosures have been condensed or omitted from the interim financial statements. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant items subject to such estimates include the estimate of variable consideration in connection with the recognition of revenue, the valuation of stock options, the valuation of goodwill, the valuation of the derivative liability associated with the Convertible Notes, accrual for reimbursement claims and settlements, the valuation of warrant liabilities, the valuation of assets held for sale, assessing future tax exposure and the realization of deferred tax assets, and the useful lives and the recoverability of property and equipment. The Company bases these estimates on historical and anticipated results, trends, and various other assumptions that the Company believes are reasonable under the circumstances, including assumptions as to future events. These estimates form the basis for making judgments about the carrying values of assets and liabilities and recorded revenues and expenses that are not readily apparent from other sources. Actual results could differ from those estimates and assumptions. |
Assets Held for Sale and Discontinued Operations | Assets Held for Sale and Discontinued Operations Assets and liabilities are classified as held for sale when all of the following criteria for a plan of sale have been met: (1) management, having the authority to approve the action, commits to a plan to sell the assets; (2) the assets are available for immediate sale, in their present condition, subject only to terms that are usual and customary for sales of such assets; (3) an active program to locate a buyer and other actions required to complete the plan to sell the assets have been initiated; (4) the sale of the assets is probable and is expected to be completed within one year; (5) the assets are being actively marketed for a price that is reasonable in relation to their current fair value; and (6) actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or the plan will be withdrawn. When all of these criteria have been met, the assets and liabilities are classified as held for sale in the condensed consolidated balance sheet. Assets classified as held for sale are reported at the lower of their carrying value or fair value less costs to sell. Depreciation and amortization of assets ceases upon designation as held for sale. Discontinued operations comprise activities that were disposed of, discontinued or held for sale at the end of the period, represent a separate major line of business that can be clearly distinguished for operational and financial reporting purposes and represent a strategic business shift having a major effect on the Company’s operations and financial results according to Accounting Standard Codification (“ASC”) Topic 205, Presentation of Financial Statements . Additional details surrounding the Company's assets and liabilities held for sale and discontinued operations are included in Note 4 . |
Revenue Recognition | Revenue Recognition Revenue is recognized in accordance with the Financial Accounting Standards Board (“FASB”) ASC Topic 606 , Revenue from Contracts with Customers (“ASC 606”). In accordance with ASC 606, the Company follows a five-step process to recognize revenues: 1) identify the contract with the customer, 2) identify the performance obligations, 3) determine the transaction price, 4) allocate the transaction price to the performance obligations and 5) recognize revenues when the performance obligations are satisfied. Revenue was primarily derived from providing molecular testing products, which were reimbursed through arrangements with third-party payors, laboratory distribution partners, and amounts from individual patients. Third-party payors include commercial payors, such as health insurance companies, health maintenance organizations and government health benefit programs, such as Medicare and Medicaid. The Company’s contracts generally contained a single performance obligation, which was the delivery of the test results, and the Company satisfied its performance obligation at a point in time upon the delivery of the results, which then triggered the billing for the product. The amount of revenue recognized reflects the amount of consideration the Company expected to be entitled to (“transaction price”) and considered the effects of variable consideration. Revenue was recognized when control of the promised product was transferred to customers, in an amount that reflected the consideration the Company expected to be entitled to in exchange for those products. The Company applies the following practical expedients and exemptions: • Incremental costs incurred to obtain a contract are expensed as incurred because the related amortization period would be one year or less. The costs are included in selling and marketing expenses. • No adjustments to amounts of promised consideration are made for the effects of a significant financing component because the Company expects, at contract inception, that the period between the transfer of a promised good or service and customer payment for that good or service will be one year or less. |
Payor Concentration | Payor Concentration The Company historically relied upon reimbursements from third-party government payors and private-payor insurance companies to collect accounts receivable. As a result of the Strategic Transformation, all revenue from Laboratory Operations has been classified as discontinued operations and there were no significant concentrations as of March 31, 2022. The Company’s significant third-party payors and their related accounts receivable balances and revenues as a percentage of total accounts receivable balances and revenues as of December 31, 2021 and for the three months ended March 31, 2021 are as follows: Percentage of Accounts Receivable December 31, Blue Shield of Texas 4.0 % Government Health Benefits Programs 55.8 % United Healthcare 7.2 % Percentage of Revenue (1) Three Months Ended March 31, 2021 Blue Shield of Texas 22.7 % Government Health Benefits Programs 23.4 % Aetna 7.7 % United Healthcare 6.8 % (1) Percentage of revenue table shows amounts as a percentage of total revenue, including revenue classified as discontinued operations. Refer to Note 5 for details of the breakdown of revenue. |
Leases | Leases The Company determines if an arrangement is or contains a lease at inception. For leases with a term greater than one year, lease right-of-use assets and lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. In determining the net present value of lease payments, the Company uses its incremental borrowing rate which represents an estimated rate of interest that the Company would have to pay to borrow equivalent funds on a collateralized basis at the lease commencement date. Leases are classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the statement of operations. |
Net Loss Per Share | Net Loss Per Share Basic net loss per share is computed by dividing the net loss by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per share is computed by dividing the net loss by the weighted average number of shares of common stock and potentially dilutive securities outstanding for the period. As the Company has reported net losses for all periods presented, all potentially dilutive securities are antidilutive and, accordingly, basic net loss per share equals diluted net loss per share. |
Recent Accounting Pronouncements Adopted | Recent Accounting Pronouncements Adopted In December 2019, FASB issued Accounting Standards Update (“ASU”) No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes , which simplified income tax accounting in various areas. The Company adopted this standard on January 1, 2021 , which did not have a material impact on the condensed consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) , which supersedes FASB ASC Topic 840, Leases (Topic 840) , and provides principles for the recognition, measurement, presentation and disclosure of leases for both lessees and lessors. The Company adopted the provisions of this guidance on January 1, 2022, using the effective date method. As a result of adopting ASC 842, the Company recognized right-of-use assets and lease liabilities of $ 2.2 million and $ 2.2 million, respectively, on January 1, 2022. The difference between the right-of-use assets and lease liabilities is attribut ed to the elimination of deferred rent and prepaid rent. There was no adjustment to the opening balance of accumulated deficit as a result of the adoption. The Company elected to use the package of practical expedients available in the new lease standard, allowing it not to reassess: (a) whether expired or existing contracts contain leases under the new definition of a lease; (b) lease classification for expired or existing leases; and (c) whether previously capitalized initial direct costs would qualify for capitalization under the new lease standard. In May 2021, the FASB issued ASU No. 2021-04 , Issuer's Accounting for Certain Modification or Exchanges of Freestanding Equity-Classified Written Call Options , which provides a principles-based framework to determine whether an issuer should recognize the modification or exchange as an adjustment to equity or an expense. The Company adopted this standard on January 1, 2022 , which did not have a material impact on the condensed consolidated financial statements. |
Recent Accounting Pronouncements Not Yet Adopted | Recent Accounting Pronouncements Not Yet Adopted In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses , which requires the measurement of expected credit losses for financial instruments carried at amortized cost, such as accounts receivable, held at the reporting date based on historical experience, current conditions and reasonable forecasts. The main objective of this standard is to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. In November 2018, the FASB issued ASU No. 2018-19, Codification Improvements to Topic 326, Financing Instruments–Credit Losses , which included an amendment of the effective date. The standard is effective for the Company for annual reporting periods beginning after December 15, 2022. The Company does not expect the adoption of this standard to have a significant impact on its consolidated financial statements. In August 2020, the FASB issued ASU No. 2020-06 , Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity's Own Equity (Subtopic 815-40)-Accounting for Convertible Instruments and Contracts in an Entity's Own Equity , which simplifies the accounting for convertible instruments, amends the guidance on derivative scope exceptions for contracts in an entity's own equity, and modifies the guidance on diluted earnings per share calculations as a result of these changes. The standard is effective for the Company for annual reporting periods beginning after December 15, 2023. The Company is currently evaluating the impact the adoption of this standard may have on its consolidated financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Schedule of Accounts Receivable Balances and Revenues as Percentage of Total Accounts Receivable Balances and Revenues | The Company historically relied upon reimbursements from third-party government payors and private-payor insurance companies to collect accounts receivable. As a result of the Strategic Transformation, all revenue from Laboratory Operations has been classified as discontinued operations and there were no significant concentrations as of March 31, 2022. The Company’s significant third-party payors and their related accounts receivable balances and revenues as a percentage of total accounts receivable balances and revenues as of December 31, 2021 and for the three months ended March 31, 2021 are as follows: Percentage of Accounts Receivable December 31, Blue Shield of Texas 4.0 % Government Health Benefits Programs 55.8 % United Healthcare 7.2 % Percentage of Revenue (1) Three Months Ended March 31, 2021 Blue Shield of Texas 22.7 % Government Health Benefits Programs 23.4 % Aetna 7.7 % United Healthcare 6.8 % (1) Percentage of revenue table shows amounts as a percentage of total revenue, including revenue classified as discontinued operations. Refer to Note 5 for details of the breakdown of revenue. |
Assets Held for Sale and Disc_2
Assets Held for Sale and Discontinued Operations (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Summary of Results of Discontinued Operations and Class of Assets and Liabilities | The following table presents the combined results of discontinued operations of the Laboratory Operations (in thousands): Three Months Ended 2022 2021 Revenues $ 1,268 $ 24,359 Cost of sales — 22,233 Gross profit 1,268 2,126 Operating expenses: Selling and marketing — 12,790 General and administrative 586 4,120 Total operating expenses 586 16,910 Other income (expense), net — ( 19 ) Net gain (loss) from discontinued operations $ 682 $ ( 14,803 ) The following table presents the carrying amounts of the remaining assets held for sale related to the Laboratory Operations as of March 31, 2022 and December 31, 2021 (in thousands): March 31, December 31, Current assets of disposal group held for sale Property and equipment, net 2,147 2,147 Total current assets of disposal group held for sale (1) $ 2,147 $ 2,147 (1) The remaining assets of the Laboratory Operations are classified as held for sale and are classified as current in the unaudited condensed consolidated balance sheet at March 31, 2022 and December 31, 2021 , because they are expected to be sold within one year. |
Revenues (Tables)
Revenues (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Summary of Disaggregation of Revenues by Payor | The following tables show revenues disaggregated by payor type and revenue classification (in thousands): Three months ended Payor 2021 Commercial third-party payors $ 16,453 Government health benefit programs (1) 5,726 Patient/laboratory distribution partners 2,347 Total revenues $ 24,526 (1) The revenue amounts include accruals for reimbursement claims and settlements included in the estimates of variable consideration recorded during the three months ended March 31, 2021 . Revenues recognized reflect the effects of variable consideration, and include adjustments for estimates of disallowed cases, discounts, and refunds. The variable consideration includes reductions in revenues for the accrual for reimbursement claims and settlements. Three Months Ended Classification 2022 2021 Revenue from continuing operations $ 107 $ 167 Revenue from discontinued operations 1,268 24,359 Total revenues $ 1,375 $ 24,526 |
Balance Sheet Components (Table
Balance Sheet Components (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Summary of Prepaid Expenses and Other Current Assets | Prepaid expenses and other current assets consisted of the following (in thousands): March 31, December 31, Prepaid expenses $ 4,492 $ 6,123 Other current assets 1,147 1,109 Total $ 5,639 $ 7,232 |
Summary of Property and Equipment, Net | Property and equipment, net consisted of the following (in thousands): March 31, December 31, Computers and software $ 3,716 $ 5,004 Building and leasehold improvements 755 437 Laboratory equipment 2,182 2,688 Furniture, fixtures, and office equipment 1,132 1,142 Construction in progress 47 16 Land 346 346 Total property and equipment 8,178 9,633 Less accumulated depreciation and amortization ( 5,436 ) ( 5,621 ) Property and equipment, net $ 2,742 $ 4,012 |
Summary of Accrued Expenses and Other Current Liabilities | Accrued expenses and other current liabilities consisted of the following (in thousands): March 31, December 31, Accrual for reimbursement claims and settlements, current (1) $ 18,094 $ 18,127 Commissions and bonuses 1,582 3,883 Vacation and payroll benefits 4,491 6,894 Accrued professional services 167 652 Accrued interest 3,229 802 Lease liabilities, current 1,430 — Insurance financing — 489 Contract liabilities 194 301 Other (2) 2,416 3,009 Total $ 31,603 $ 34,157 (1) All of the Company's revenues related to Laboratory Operations have been discontinued; amounts related to the revenue reserve generated from the Progenity Laboratory Operations remain on the balance sheet. (2) Included in this amount are contracts that the Company will be responsible for that cannot be terminated; as there is no future benefit to the Company, they were expensed in discontinued operations in 2021. |
Summary of Other Long-term Liabilities | Other long-term liabilities consisted of the following (in thousands): March 31, December 31, Accrual for reimbursement claims and settlements, net of current portion (1) $ 192 $ 192 Lease liabilities, net of current portion 1,099 — Other (2) 5,171 5,622 Total $ 6,462 $ 5,814 (1) All of the Company's revenues related to Laboratory Operations have been discontinued; amounts related to the revenue reserve generated from the Progenity Laboratory Operations remain on the balance sheet. (2) Included in this amount are contracts that the Company will be responsible for that cannot be terminated; as there is no future benefit to the Company, they were expensed in discontinued operations in 2021. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Summary of Inputs and Assumptions used to Determine Fair Value of Warrant Liability | At March 31, 2022, the fair value of warrant liability was estimated using the Black-Scholes Model with the following inputs and assumptions: March 31, Risk-free interest rate 2.42 % Expected volatility 100.2 % Stock price $ 1.16 Expected life (years) 4.4 |
Summary of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis | The following table presents information about the Company’s assets and liabilities that are measured at fair value on a recurring basis and indicates the fair value hierarchy of the valuation techniques utilized to determine such fair value (in thousands): Level 1 Level 2 Level 3 March 31, 2022 Money market funds (1) $ 66,157 $ — $ — Warrant liability $ — $ — $ 9,742 December 31, 2021 Money market funds (1) $ 85,866 $ — $ — Warrant liability $ — $ — $ 18,731 (1) Included in cash and cash equivalents in the accompanying condensed consolidated balance sheets. |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Net Minimum Payments Under Non-Cancelable Operating Leases | As of March 31, 2022, future lease payments under the non-cancelable operating leases were as follows (in thousands): Year ending December 31, Minimum Remainder of 2022 $ 1,158 2023 965 2024 235 2025 209 2026 and thereafter 233 Total minimum lease payments 2,800 Less: interest ( 271 ) Present value of lease liabilities $ 2,529 As of December 31, 2021, net minimum payments under the non-cancelable operating leases were as follows (in thousands): Year ending December 31, Minimum 2022 $ 2,141 2023 1,086 2024 237 2025 208 2026 and thereafter 251 Total future minimum lease payments $ 3,923 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Share-based Payment Arrangement [Abstract] | |
Summary of Stock Options Activity under Plans | The following table summarizes stock option activity, which includes Performance Awards, under the 2012 Plan, the 2015 Plan, the 2018 Fourth Amended Plan and the 2021 Inducement Plan during the three months ended March 31, 2022: Stock Options Weighted- Weighted- Aggregate Balance at December 31, 2021 8,640,951 $ 4.74 Options granted 263,298 $ 1.31 Options exercised — — Options forfeited/cancelled ( 684,403 ) $ 3.68 Options expired ( 343,009 ) $ 7.46 Balance at March 31, 2022 7,876,837 $ 4.60 6.91 $ 4 Vested and expected to vest at March 31, 2022 7,876,837 $ 4.60 6.91 $ 4 Vested and exercisable at March 31, 2022 2,738,642 $ 6.47 3.82 $ 4 |
Summary of Assumptions used to Determine Fair Value of Stock Options Granted | The following table sets forth the assumptions used to determine the fair value of stock options granted during the three months ended March 31, 2022: Risk-free interest rate 2.0 % - 2.1 % Expected volatility 90.7 % - 97.3 % Expected dividend yield — % Expected life (years) 6.0 - 6.3 years The weighted-average grant date fair value of options granted during the three months ended March 31, 2022 and 2021 was $ 1.24 per option and $ 2.95 per option, respectively. |
Summary of Restricted Stock Units Activity | The following table summarizes RSU activity for the three months ended March 31, 2022: Number of Shares Weighted- Balance at December 31, 2021 3,879,110 $ 3.80 Granted 179,915 $ 1.34 Vested ( 288,003 ) $ 4.88 Forfeited/cancelled ( 401,560 ) $ 3.63 Balance at March 31, 2022 3,369,462 $ 3.60 |
Schedule of Stock-based Compensation Expense | The following table presents total stock-based compensation expense included in each functional line item in the accompanying condensed consolidated statements of operations (in thousands): Three Months Ended 2022 2021 Research and development 337 624 Selling, general and administrative 1,716 1,542 Discontinued operations — 464 Total stock-based compensation expense $ 2,053 $ 2,630 |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share [Abstract] | |
Summary of Potentially Dilutive Securities Not Included in Calculation of Diluted Loss Per Share | The table below provides potentially dilutive securities in equivalent common shares not included in the Company’s calculation of diluted loss per share because to do so would be antidilutive: March 31, March 31, Options to purchase common stock 7,876,837 5,572,641 Restricted stock units 3,369,462 1,374,479 Common stock warrant 26,183,830 4,770,789 Common stock issuable upon conversion of Convertible Notes 40,588,672 51,529,036 Total 78,018,801 63,246,945 |
Organization and Description _2
Organization and Description of Business - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | ||||
Cash and cash equivalents | $ 67,234 | $ 88,397 | ||
Accumulated deficit | 802,494 | $ 788,686 | ||
Net loss | 13,808 | $ 32,264 | ||
Cash used in operating activities | 23,955 | $ 48,564 | ||
7.25% Convertible Senior Notes due 2025 | ||||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | ||||
Principal amount | $ 126,700 | $ 168,500 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2022 | Jan. 01, 2022 | Dec. 31, 2021 | |
Summary Of Significant Accounting Policies [Line Items] | |||
Expected dividend yield | 0.00% | ||
Operating Lease, Right-of-Use Asset | $ 2,578 | ||
Operating Lease, Liability | $ 2,529 | ||
Accounting Standards Update 2014-09 [Member] | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Change in accounting principle, accounting standards update, adopted [true false] | true | ||
Accounting Standards Update 2019-12 [Member] | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Change in accounting principle, accounting standards update, adopted [true false] | true | ||
Change in accounting principle, accounting standards update, adoption date | Jan. 1, 2021 | ||
Change in accounting principle, accounting standards update, immaterial effect [true false] | true | ||
Accounting Standards Update 2016-02 [Member] | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Operating Lease, Right-of-Use Asset | $ 2,200 | ||
Operating Lease, Liability | $ 2,200 | ||
Accounting Standards Update 2016-13 [Member] | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Change in accounting principle, accounting standards update, adopted [true false] | false | ||
AccountingStandardsUpdate202104 [Member] | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Change in accounting principle, accounting standards update, adopted [true false] | true | ||
Change in accounting principle, accounting standards update, adoption date | Jan. 1, 2022 | ||
Change in accounting principle, accounting standards update, immaterial effect [true false] | true | ||
Maximum | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Amortization period | 1 year |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Schedule of Accounts Receivable Balances and Revenues as Percentage of Total Accounts Receivable Balances and Revenues (Details) - Customer Concentration Risk | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2021 | Dec. 31, 2021 | ||
Blue Shield of Texas | Accounts Receivable | |||
Concentration Risk [Line Items] | |||
Percentage of accounts receivable | 22.70% | 4.00% | |
Blue Shield of Texas | Revenue | |||
Concentration Risk [Line Items] | |||
Percentage of revenues | [1] | 23.40% | |
Government Health Benefits Programs | Accounts Receivable | |||
Concentration Risk [Line Items] | |||
Percentage of accounts receivable | 55.80% | ||
Government Health Benefits Programs | Revenue | |||
Concentration Risk [Line Items] | |||
Percentage of revenues | [1] | 7.70% | |
Aetna | Revenue | |||
Concentration Risk [Line Items] | |||
Percentage of revenues | [1] | 6.80% | |
United Healthcare | Accounts Receivable | |||
Concentration Risk [Line Items] | |||
Percentage of accounts receivable | 7.20% | ||
[1] | Percentage of revenue table shows amounts as a percentage of total revenue, including revenue classified as discontinued operations. Refer to Note 5 for details of the breakdown of revenue. |
Variable Interest Entities - Ad
Variable Interest Entities - Additional Information (Details) - USD ($) $ in Millions | 1 Months Ended | |
Dec. 31, 2021 | Jun. 30, 2015 | |
Asset Purchase Agreement With Northwest Pathology | ||
Variable Interest Entity [Line Items] | ||
Proceeds from sale | $ 10.9 | |
Avero | ||
Variable Interest Entity [Line Items] | ||
Term of agreement | 10 years |
Assets Held for Sale and Disc_3
Assets Held for Sale and Discontinued Operations - Summary of Results of Discontinued Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Revenue | $ 1,268 | $ 24,359 |
Cost of sales | 22,233 | |
Gross profit | 1,268 | 2,126 |
Selling and marketing | 12,790 | |
General and administrative | 586 | 4,120 |
Total operating expenses | 586 | 16,910 |
Other income (expense), net | (19) | |
Net gain (loss) from discontinued operations | $ 682 | $ (14,803) |
Assets Held for Sale and Disc_4
Assets Held for Sale and Discontinued Operations - Summary of Carrying Amounts of the Classes of Assets and Liabilities of Discontinued Operations (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 | |
Current assets: | |||
Total current assets of disposal group held for sale | $ 2,147 | $ 2,147 | |
Discontinued Operations, Held-for-sale [Member] | |||
Current assets: | |||
Total current assets of disposal group held for sale | [1] | 2,147 | 2,147 |
Property and equipment, net | $ 2,147 | $ 2,147 | |
[1] | (1) The remaining assets of the Laboratory Operations are classified as held for sale and are classified as current in the unaudited condensed consolidated balance sheet at March 31, 2022 and December 31, 2021 , because they are expected to be sold within one year. |
Revenues - Additional Informati
Revenues - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | ||
Performance obligations resulted in increase (decrease) of revenue | $ 1.4 | $ 2.4 |
Revenues - Summary of Disaggreg
Revenues - Summary of Disaggregation of Revenues by Payor (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | ||
Disaggregation Of Revenue [Line Items] | |||
Total revenues | $ 1,375 | $ 24,526 | |
Commercial Third-party Payors | |||
Disaggregation Of Revenue [Line Items] | |||
Total revenues | 16,453 | ||
Government Health Benefit Programs | |||
Disaggregation Of Revenue [Line Items] | |||
Total revenues | [1] | 5,726 | |
Patient/Laboratory Distribution Partners | |||
Disaggregation Of Revenue [Line Items] | |||
Total revenues | $ 2,347 | ||
[1] | The revenue amounts include accruals for reimbursement claims and settlements included in the estimates of variable consideration recorded during the three months ended March 31, 2021 . Revenues recognized reflect the effects of variable consideration, and include adjustments for estimates of disallowed cases, discounts, and refunds. The variable consideration includes reductions in revenues for the accrual for reimbursement claims and settlements. |
Revenues - Summary Of Disaggr_2
Revenues - Summary Of Disaggregation Of Revenue classification (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Disaggregation of Revenue [Line Items] | ||
Total revenues | $ 1,375 | $ 24,526 |
Revenue from Continuing Operations | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 107 | 167 |
Revenue from Discontinued Operations | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | $ 1,268 | $ 24,359 |
Balance Sheet Components - Summ
Balance Sheet Components - Summary of Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Prepaid expenses | $ 4,492 | $ 6,123 |
Other current assets | 1,147 | 1,109 |
Total | $ 5,639 | $ 7,232 |
Balance Sheet Components - Su_2
Balance Sheet Components - Summary of Property and Equipment, Net (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 8,178 | $ 9,633 |
Less accumulated depreciation and amortization | (5,436) | (5,621) |
Property and equipment, net | 2,742 | 4,012 |
Computers and Software | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 3,716 | 5,004 |
Building and Leasehold Improvements | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 755 | 437 |
Laboratory Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 2,182 | 2,688 |
Furniture, Fixtures, and Office Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 1,132 | 1,142 |
Construction in Progress | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 47 | 16 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 346 | $ 346 |
Balance Sheet Components - Addi
Balance Sheet Components - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Depreciation expense | $ 0.3 | $ 0.4 |
Amortization expense of intangible assets | $ 0 | $ 0.2 |
Balance Sheet Components - Su_3
Balance Sheet Components - Summary of Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Accrual for reimbursement claims and settlements, current | [1] | $ 18,094 | $ 18,127 |
Commission and bonus | 1,582 | 3,883 | |
Vacation and payroll benefits | 4,491 | 6,894 | |
Accrued professional services | 167 | 652 | |
Accrued interest | 3,229 | 802 | |
Lease liabilities, current | 1,430 | 0 | |
Insurance financing | 0 | 489 | |
Contract liabilities | 194 | 301 | |
Other | [2] | 2,416 | 3,009 |
Total | $ 31,603 | $ 34,157 | |
[1] | All of the Company's revenues related to Laboratory Operations have been discontinued; amounts related to the revenue reserve generated from the Progenity Laboratory Operations remain on the balance sheet. | ||
[2] | Included in this amount are contracts that the Company will be responsible for that cannot be terminated; as there is no future benefit to the Company, they were expensed in discontinued operations in 2021. |
Balance Sheet Components - Su_4
Balance Sheet Components - Summary of Other Long-term Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Accrual for reimbursement claims and settlements, net of current portion | [1] | $ 192 | $ 192 |
Lease liabilities, net of current portion | 1,099 | ||
Other | [2] | 5,171 | 5,622 |
Total | $ 6,462 | $ 5,814 | |
[1] | All of the Company's revenues related to Laboratory Operations have been discontinued; amounts related to the revenue reserve generated from the Progenity Laboratory Operations remain on the balance sheet. | ||
[2] | Included in this amount are contracts that the Company will be responsible for that cannot be terminated; as there is no future benefit to the Company, they were expensed in discontinued operations in 2021. |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2022 | Dec. 31, 2021 | Mar. 31, 2021 | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Transfer of assets from level 2 to level 1 | $ 0 | $ 0 | |
Transfer of liability out of level 3 | 0 | ||
Fair value of the embedded derivative liability | 0 | $ 0 | |
Carrying value of convertible notes, net of discount | 126,736,000 | 126,392,000 | |
Fair value of convertible notes | $ 105,600,000 | $ 86,600,000 |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Inputs and Assumptions used to Determine Fair Value of Warrant Liability (Details) - Level 3 - Warrant Liability | Mar. 31, 2022$ / shares |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Share Price | $ 1.16 |
Expected life (years) | 4 years 4 months 24 days |
Risk-free interest rate | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Measurement inputs | 0.0242 |
Expected volatility | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Measurement inputs | 1.002 |
Fair Value Measurements - Sum_2
Fair Value Measurements - Summary of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - Fair Value on Recurring Basis - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 | |
Level 1 | Warrant Liability | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Total liabilities at fair value | $ 0 | $ 0 | |
Level 1 | Money Market Funds | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Total assets at fair value | [1] | 66,157 | 85,866 |
Level 2 | Warrant Liability | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Total liabilities at fair value | 0 | 0 | |
Level 2 | Money Market Funds | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Total assets at fair value | [1] | 0 | 0 |
Level 3 | Warrant Liability | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Total liabilities at fair value | 9,742 | 18,731 | |
Level 3 | Money Market Funds | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Total assets at fair value | [1] | $ 0 | $ 0 |
[1] | Included in cash and cash equivalents in the accompanying condensed consolidated balance sheets. |
Convertible Notes - Additional
Convertible Notes - Additional Information (Details) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | ||
Dec. 31, 2020USD ($)$ / shares | Mar. 31, 2022USD ($)TradingDays | Mar. 31, 2021USD ($) | Dec. 31, 2021USD ($) | |
Debt Instrument [Line Items] | ||||
Interest expense | $ 2,760 | $ 3,520 | ||
Derivative liabilities fair value | 0 | $ 0 | ||
Debt Instrument, Unamortized Discount | 6,000 | $ 6,300 | ||
Amortization of debt discount | 343 | 386 | ||
Interest and Other Income (Expense), Net | ||||
Debt Instrument [Line Items] | ||||
Change in fair value of derivative liability | 14,900 | |||
Interest Expense | ||||
Debt Instrument [Line Items] | ||||
Amortization of debt discount | 300 | 300 | ||
7.25% Convertible Senior Notes due 2025 | ||||
Debt Instrument [Line Items] | ||||
Principal amount | $ 168,500 | 126,700 | ||
Debt instrument, annual interest rate | 7.25% | |||
Debt instrument, issuance date | Dec. 7, 2020 | |||
Debt instrument, frequency of periodic payment | semi-annually | |||
Debt instrument due date | Dec. 1, 2025 | |||
Debt instrument, initial payment date | Jun. 1, 2021 | |||
Interest expense | $ 2,400 | $ 3,500 | ||
Debt instrument, convertible, initial conversion rate per $1,000 principal amount of convertible notes | 278.0094 | |||
Debt instrument convertible initial conversion price | $ / shares | $ 3.60 | |||
Debt instrument, redemption period, start date | Dec. 1, 2023 | |||
Debt instrument, convertible, threshold percentage of stock price trigger | 130.00% | |||
Debt instrument, convertible, threshold trading days | TradingDays | 20 | |||
Debt instrument, convertible, threshold consecutive trading days | TradingDays | 30 | |||
Events of default, description | The Convertible Notes have customary provisions relating to the occurrence of “Events of Default” (as defined in the Indenture), which include the following: (i) certain payment defaults on the Convertible Notes (which, in the case of a default in the payment of interest on the Convertible Notes, will be subject to a 30-day cure period); (ii) the Company’s failure to send certain notices under the Indenture within specified periods of time; (iii) the Company’s failure to comply with certain covenants in the Indenture relating to the Company’s ability to consolidate with or merge with or into, or sell, lease or otherwise transfer, in one transaction or a series of transactions, all or substantially all of the assets of the Company and its subsidiaries, taken as a whole, to another person; (iv) a default by the Company in its other obligations or agreements under the Indenture or the Convertible Notes if such default is not cured or waived within 60 days after notice is given in accordance with the Indenture; (v) certain defaults by the Company or any of its subsidiaries with respect to indebtedness for borrowed money of at least $7.5 million; (vi) the rendering of certain judgments against the Company or any of its subsidiaries for the payment of at least $7.5 million, where such judgments are not discharged or stayed within 60 days after the date on which the right to appeal has expired or on which all rights to appeal have been extinguished; and (vii) certain events of bankruptcy, insolvency and reorganization involving the Company or any of the Company’s significant subsidiaries. | |||
Debt instrument, effective interest rate | 8.70% | |||
7.25% Convertible Senior Notes due 2025 | Minimum | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, debt default, amount | $ 7,500 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Related Party Transaction [Line Items] | |||
Common stock, shares outstanding | 184,197,930 | 181,872,676 | |
Aggregate principal amount of convertible notes | $ 103.5 | $ 103.5 | |
Accrued interest expense | $ 2.5 | $ 0.6 | |
Common Stock | |||
Related Party Transaction [Line Items] | |||
Stock Issued During Period, Shares, New Issues | 2,130,327 | 4,370,629 | |
Warrants | Private Placement | |||
Related Party Transaction [Line Items] | |||
Shares issued, price per share | $ 2.84 | ||
Private Equity Firm | |||
Related Party Transaction [Line Items] | |||
Common stock, shares outstanding | 2,394,074 | 28,935,134 | |
Common stock outstanding, percentage | 11.90% | 15.60% | |
Private Equity Firm | Warrants | |||
Related Party Transaction [Line Items] | |||
Stock Issued During Period, Shares, New Issues | 8,097,166 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) $ in Thousands | Jul. 21, 2021USD ($) | Dec. 22, 2020Case | Dec. 03, 2020Case | Jul. 23, 2020USD ($) | Nov. 30, 2019USD ($) | Sep. 30, 2019USD ($) | Mar. 31, 2022USD ($) | Mar. 31, 2021USD ($) | Dec. 31, 2021USD ($) | Nov. 16, 2020USD ($) | Jul. 21, 2020State |
Commitment And Contingencies [Line Items] | |||||||||||
Right-of-use assets | $ 2,578 | ||||||||||
Accrued expenses and other current liabilities | 31,603 | 34,157 | |||||||||
Other long-term liabilities | 6,462 | 5,814 | |||||||||
Operating lease costs | 300 | ||||||||||
cash paid for operating leases | $ 400 | ||||||||||
Rent expense for operating leases | $ 400 | ||||||||||
Weighted average imputed interest rate | 7.80% | ||||||||||
weighted-average remaining lease term | 2 years 3 months 18 days | ||||||||||
Number of states participating in settlement | State | 45 | ||||||||||
Aggregate amount of historical payments | $ 5,700 | 3,300 | $ 27,400 | ||||||||
Amount of offsets | $ 1,900 | ||||||||||
Number of actions pending | Case | 2 | 2 | |||||||||
TX OIG member | |||||||||||
Commitment And Contingencies [Line Items] | |||||||||||
Amount accrued for probable loss | $ 400 | $ 400 | |||||||||
Accrued Expenses And Other Current Liabilities | |||||||||||
Commitment And Contingencies [Line Items] | |||||||||||
Accrued expenses and other current liabilities | 1,400 | ||||||||||
Remaining accrual balance | 6,900 | ||||||||||
Other Long Term Liabilities | |||||||||||
Commitment And Contingencies [Line Items] | |||||||||||
Other long-term liabilities | 1,100 | ||||||||||
Remaining accrual balance | 200 | ||||||||||
Aetna Settlement Agreement | |||||||||||
Commitment And Contingencies [Line Items] | |||||||||||
Litigation settlement agreement date | November 2019 | ||||||||||
Litigation settlement amount agreed to pay to other party | $ 15,000 | ||||||||||
United Health Group Settlement Agreement | |||||||||||
Commitment And Contingencies [Line Items] | |||||||||||
Litigation settlement agreement date | September 30, 2019 | ||||||||||
Litigation settlement amount agreed to pay to other party | $ 30,000 | ||||||||||
SDNY Civil Settlement Agreement | |||||||||||
Commitment And Contingencies [Line Items] | |||||||||||
Interest rate | 1.25% | ||||||||||
Income taxes percentage of payments related to civil settlement damages awards and tax refund, CARES Act | 26.00% | ||||||||||
Maximum acceleration amount | 4,100 | ||||||||||
Income tax discrete benefit related to net operating loss, CARES Act | $ 0 | $ 0 | |||||||||
SDNY Civil Settlement Agreement | Minimum | |||||||||||
Commitment And Contingencies [Line Items] | |||||||||||
Income taxes civil settlement damages awards and tax refund amount in single year, CARES Act | $ 5,000 |
Commitments and Contingencies_2
Commitments and Contingencies - Schedule of Net Minimum Payments Under Non-Cancelable Operating Leases (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Commitments and Contingencies Disclosure [Abstract] | ||
Remainder of 2022 | $ 1,158 | $ 2,141 |
2023 | 965 | 1,086 |
2024 | 235 | 237 |
2025 | 209 | 208 |
2026 and thereafter | 233 | 251 |
Total minimum lease payments | 2,800 | $ 3,923 |
Less: interest | (271) | |
Present value of lease liabilities | $ 2,529 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Details) | Aug. 31, 2021USD ($)$ / sharesshares | Nov. 30, 2021USD ($) | Oct. 31, 2021USD ($)$ / sharesshares | Sep. 30, 2021USD ($) | Jun. 30, 2021USD ($)$ / sharesshares | Feb. 28, 2021USD ($)$ / sharesshares | Mar. 31, 2022USD ($)Vote$ / sharesshares | Dec. 31, 2021USD ($)$ / sharesshares | Jun. 30, 2021USD ($)$ / sharesshares | Mar. 31, 2021USD ($)shares | Jun. 30, 2021USD ($)$ / sharesshares | Dec. 31, 2021USD ($)$ / sharesshares | Jul. 31, 2021$ / sharesshares | Dec. 31, 2020shares |
Class Of Stock [Line Items] | ||||||||||||||
Common stock authorized to issue | shares | 350,000,000 | 350,000,000 | 350,000,000 | |||||||||||
Undesignated preferred stock | shares | 10,000,000 | |||||||||||||
Number of vote per share of common stock held | Vote | 1 | |||||||||||||
Proceeds from issuance of common stock, net | $ 18,700,000 | $ 3,626,000 | $ 11,631,000 | |||||||||||
Adjusted common stock purchase warrant to purchase shares of common stock | shares | 1,932,000 | 28,684,125 | 28,684,125 | 500,000 | ||||||||||
Issuance of stock, net | 3,626,000 | 11,262,000 | ||||||||||||
Warrants exercise price per share | $ / shares | $ 1 | $ 1 | $ 0.001 | |||||||||||
Proceeds from issuance of common stock warrants | 0 | 12,804,000 | ||||||||||||
Proceeds from warrant exercises | $ 28,700,000 | |||||||||||||
Total issuance cost | $ 2,800,000 | $ 1,400,000 | $ 2,100,000 | |||||||||||
Warrant issuance cost | $ 700,000 | 500,000 | ||||||||||||
Common stock issuance cost | 1,400,000 | 900,000 | ||||||||||||
Remeasurement of warrant liability | $ 31,800,000 | 9,700,000 | $ 18,700,000 | $ 31,800,000 | 10,200,000 | 31,800,000 | 18,700,000 | |||||||
Gain loss on warrant liability | 3,400,000 | $ 1,900,000 | 9,000 | $ (5,100,000) | 2,600,000 | 6,700,000 | ||||||||
Change in fair value of warrant liability | 41,800,000 | (8,989,000) | $ (2,650,000) | |||||||||||
Accumulated deficit | $ 802,494,000 | $ 788,686,000 | $ 788,686,000 | |||||||||||
Sale Agreement | ||||||||||||||
Class Of Stock [Line Items] | ||||||||||||||
Common stock issued and sold | shares | 2,130,327 | 1,763,754 | ||||||||||||
Shares issued, price per share | $ / shares | $ 1.76 | $ 2.84 | $ 2.84 | |||||||||||
Proceeds from Sale of Equity | $ 3,600,000 | $ 4,600,000 | ||||||||||||
Shares issued, price per share | $ / shares | $ 1.76 | $ 2.84 | $ 2.84 | |||||||||||
Sale Agreement | B Riley Securities, Inc [Member] | ||||||||||||||
Class Of Stock [Line Items] | ||||||||||||||
Rate of commission proposed for agents | 3.00% | |||||||||||||
Issuance of stock, net | $ 90,000,000,000 | |||||||||||||
Derivatives and Hedging (ASC 815) | ||||||||||||||
Class Of Stock [Line Items] | ||||||||||||||
Proceeds from issuance of common stock, net | $ 12,200,000 | |||||||||||||
Proceeds from issuance of common stock warrants | $ 12,800,000 | |||||||||||||
Common Stock | ||||||||||||||
Class Of Stock [Line Items] | ||||||||||||||
Issuance of stock, net, shares | shares | 2,130,327 | 4,370,629 | ||||||||||||
Issuance of stock, net | $ 2,000 | $ 4,000 | ||||||||||||
Proceeds from issuance of common stock warrants | 13,400,000 | |||||||||||||
Shares outstanding | shares | 188,155,220 | 185,736,890 | 63,903,974 | 185,736,890 | 59,287,331 | |||||||||
Common Stock | Securities Purchase Agreement | ||||||||||||||
Class Of Stock [Line Items] | ||||||||||||||
Shares issued, price per share | $ / shares | $ 1.50 | |||||||||||||
Shares issued, price per share | $ / shares | $ 1.50 | |||||||||||||
Issuance of stock, net, shares | shares | 13,333,334 | |||||||||||||
Common Stock | Derivatives and Hedging (ASC 815) | ||||||||||||||
Class Of Stock [Line Items] | ||||||||||||||
Proceeds from issuance of common stock warrants | $ 26,600,000 | |||||||||||||
Overallotment Warrant Option [Member] | ||||||||||||||
Class Of Stock [Line Items] | ||||||||||||||
Proceeds from issuance of common stock warrants | 37,400,000 | |||||||||||||
Gain loss on warrant liability | 8,100,000 | |||||||||||||
Change in fair value of warrant liability | $ 6,200,000 | |||||||||||||
Underwritten Public Offering | ||||||||||||||
Class Of Stock [Line Items] | ||||||||||||||
Shares issued, price per share | $ / shares | $ 1 | |||||||||||||
Shares issued, price per share | $ / shares | $ 1 | |||||||||||||
Adjusted common stock purchase warrant to purchase shares of common stock | shares | 40,000,000 | |||||||||||||
Share issued, price per share | $ / shares | $ 0.01 | |||||||||||||
Warrants exercise price per share | $ / shares | $ 1 | |||||||||||||
Class of Warrant or Right, Number of Securities Called by Each Warrant or Right | shares | 1 | |||||||||||||
Option Warrants Available To Purchase For Underwriters | shares | 6,000,000 | |||||||||||||
Proceeds from Issuance Initial Public Offering | $ 37,400,000 | |||||||||||||
Shares issued, price per share | $ / shares | $ 0.99 | |||||||||||||
Underwritten Public Offering | Maximum | ||||||||||||||
Class Of Stock [Line Items] | ||||||||||||||
Option Shares Available To Purchase For Underwriter | shares | 6,000,000 | |||||||||||||
Underwritten Public Offering | Common Stock | ||||||||||||||
Class Of Stock [Line Items] | ||||||||||||||
Common stock issued and sold | shares | 40,000,000 | |||||||||||||
Private Placement | Securities Purchase Agreement | ||||||||||||||
Class Of Stock [Line Items] | ||||||||||||||
Issuance of stock, net, shares | shares | 16,194,332 | 4,370,629 | ||||||||||||
Adjusted common stock purchase warrant to purchase shares of common stock | shares | 16,194,332 | 4,370,629 | 16,194,332 | 16,194,332 | ||||||||||
Share issued, price per share | $ / shares | $ 2.47 | $ 5.72 | $ 2.47 | $ 2.47 | ||||||||||
Issuance of stock, net | $ 40,000,000 | $ 25,000,000 | ||||||||||||
Warrants exercise price per share | $ / shares | $ 2.84 | $ 6.86 | $ 2.84 | $ 2.84 | ||||||||||
Private Placement | Common Stock | Securities Purchase Agreement | ||||||||||||||
Class Of Stock [Line Items] | ||||||||||||||
Issuance of stock, net, shares | shares | 15,694,332 | 4,370,629 | ||||||||||||
Private Placement | Pre- funded warrant | Securities Purchase Agreement | ||||||||||||||
Class Of Stock [Line Items] | ||||||||||||||
Adjusted common stock purchase warrant to purchase shares of common stock | shares | 500,000 | 500,000 | 500,000 | |||||||||||
Warrants exercise price per share | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Details) - USD ($) | 3 Months Ended | ||||
Mar. 31, 2022 | Mar. 31, 2021 | Nov. 03, 2021 | May 05, 2021 | Jun. 30, 2020 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Closing market price of common tock | $ 1.16 | ||||
Intrinsic value of all stock options exercised | $ 0 | ||||
Weighted-average grant date fair value of options granted | $ 1.24 | $ 2.95 | |||
Unrecognized compensation cost related to unvested stock options expected to be recognized amount | $ 10,500,000 | ||||
Unrecognized compensation cost related to unvested stock options expected to be recognized over remaining weighted average vesting period | 3 years 25 days | ||||
Restricted Stock Units (RSUs) | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Unrecognized compensation cost related to unvested stock options expected to be recognized over remaining weighted average vesting period | 3 years 3 months 7 days | ||||
Unrecognized compensation cost related to restricted stock options expected to be recognized amount | $ 10,100,000 | ||||
2018 Equity Incentive Plan | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Shares available for future grant | 22,087,645 | ||||
2020 Employee Stock Purchase Plan | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Common stock shares reserved for future issuance | 1,350,977 | 510,000 | |||
Inducement Plan Member | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Shares available for future grant | 6,500,000 | ||||
2021 Inducement Plan | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Shares available for future grant | 3,000,673 |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Stock Options Activity under Plans (Details) $ / shares in Units, $ in Thousands | 3 Months Ended |
Mar. 31, 2022USD ($)$ / sharesshares | |
Share-based Payment Arrangement [Abstract] | |
Stock Options Outstanding Balance at December 31, 2021 | shares | 8,640,951 |
Stock Options Outstanding Options granted | shares | 263,298 |
Stock Options Outstanding Options exercised | shares | 0 |
Stock Options Outstanding Options forfeited/cancelled | shares | (684,403) |
Stock Options Outstanding Options expired | shares | (343,009) |
Stock Options Outstanding Balance at March 31, 2022 | shares | 7,876,837 |
Stock Options Outstanding Vested and expected to vest at March 31, 2022 | shares | 7,876,837 |
Stock Options Outstanding Vested and exercisable at March 31, 2022 | shares | 2,738,642 |
Weighted-Average Exercise Price Balance at December 31, 2021 | $ / shares | $ 4.74 |
Weighted-Average Exercise Price Options granted | $ / shares | 1.31 |
Weighted-Average Exercise Price Options exercised | $ / shares | 0 |
Weighted-Average Exercise Price Options forfeited/cancelled | $ / shares | 3.68 |
Weighted-Average Exercise Price Options expired | $ / shares | 7.46 |
Weighted-Average Exercise Price Balance at March 31, 2022 | $ / shares | 4.60 |
Weighted-Average Exercise Price Vested and expected to vest at March 31, 2022 | $ / shares | 4.60 |
Weighted-Average Exercise Price Vested and exercisable at March 31, 2022 | $ / shares | $ 6.47 |
Weighted-Average Remaining Contractual Term (in years) Balance at March 31, 2022 | 6 years 10 months 28 days |
Weighted-Average Remaining Contractual Term (in years) Vested and expected to vest at March 31, 2022 | 6 years 10 months 28 days |
Weighted-Average Remaining Contractual Term (in years) Vested and exercisable at March 31, 2022 | 3 years 9 months 25 days |
Aggregate Intrinsic Value Balance at March 31, 2022 | $ | $ 4 |
Aggregate Intrinsic Value Vested and expected to vest at March 31, 2022 | $ | 4 |
Aggregate Intrinsic Value Vested and exercisable at March 31, 2022 | $ | $ 4 |
Stock-Based Compensation - Su_2
Stock-Based Compensation - Summary of Assumptions used to Determine Fair Value of Stock Options Granted (Details) | 3 Months Ended |
Mar. 31, 2022 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Risk-free interest rate, minimum | 2.00% |
Risk-free interest rate, maximum | 2.10% |
Expected volatility, minimum | 90.70% |
Expected volatility, maximum | 97.30% |
Expected dividend yield | 0.00% |
Minimum | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Expected life (years) | 6 years |
Maximum | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Expected life (years) | 6 years 3 months 18 days |
Stock-Based Compensation - Su_3
Stock-Based Compensation - Summary of Restricted Stock Units Activity (Details) - Restricted Stock Units (RSUs) | 3 Months Ended |
Mar. 31, 2022$ / sharesshares | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Number of Shares, Beginning Balance | shares | 3,879,110 |
Number of Shares, Granted | shares | 179,915 |
Number of Shares, Vested | shares | (288,003) |
Number of Shares, Forfeited/cancelled | shares | (401,560) |
Number of Shares, Ending Balance | shares | 3,369,462 |
Weighted Average Grant Date Fair Value beginning of period | $ / shares | $ 3.80 |
Weighted Average Grant Date Fair Value, Granted | $ / shares | 1.34 |
Weighted Average Grant Date Fair Value, Vested | $ / shares | 4.88 |
Weighted Average Grant Date Fair Value, Forfeited/cancelled | $ / shares | 3.63 |
Weighted Average Grant Date Fair Value end of period | $ / shares | $ 3.60 |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Stock-based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Stock-based compensation expense | $ 2,053 | $ 2,630 |
Research and Development | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Stock-based compensation expense | 337 | 624 |
Selling, general and administrative | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Stock-based compensation expense | 1,716 | 1,542 |
Discontinued Operations [Member] | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Stock-based compensation expense | $ 0 | $ 464 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) | 3 Months Ended |
Mar. 31, 2022 | |
Income Tax [Line Items] | |
Effective tax rate | 0.00% |
Maximum | |
Income Tax [Line Items] | |
Testing period for ownership change | 3 years |
Minimum | |
Income Tax [Line Items] | |
Percentage of shift in stock ownership to determine whether ownership change occurred | 50.00% |
Percentage of shareholders ownership | 5.00% |
Net Loss Per Share - Summary of
Net Loss Per Share - Summary of Potentially Dilutive Securities Not Included in Calculation of Diluted Loss Per Share (Details) - shares | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Antidilutive securities not included in calculation of diluted loss per share | 78,018,801 | 63,246,945 |
Options to Purchase Common Stock | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Antidilutive securities not included in calculation of diluted loss per share | 7,876,837 | 5,572,641 |
Restricted Stock Units (RSUs) | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Antidilutive securities not included in calculation of diluted loss per share | 3,369,462 | 1,374,479 |
Common Stock Warrants | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Antidilutive securities not included in calculation of diluted loss per share | 26,183,830 | 4,770,789 |
Common Stock Issuable Upon Conversion of Convertible Notes | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Antidilutive securities not included in calculation of diluted loss per share | 40,588,672 | 51,529,036 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) | May 04, 2022 |
Subsequent Event [Member] | |
Subsequent Event [Line Items] | |
Date of subsequent event | May 4, 2022 |