Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2023 | May 05, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2023 | |
Document Transition Report | false | |
Entity File Number | 000-21617 | |
Entity Registrant Name | ProPhase Labs, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 23-2577138 | |
Entity Address, Address Line One | 711 Stewart Ave | |
Entity Address, Address Line Two | Suite 200 | |
Entity Address, City or Town | Garden City | |
Entity Address, State or Province | NY | |
Entity Address, Postal Zip Code | 11530 | |
City Area Code | (215) | |
Local Phone Number | 345-0919 | |
Title of 12(b) Security | Common Stock, par value $0.0005 | |
Trading Symbol | PRPH | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 17,182,841 | |
Entity Central Index Key | 0000868278 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Current assets | ||
Cash and cash equivalents | $ 9,613 | $ 9,109 |
Marketable debt securities, available for sale | 5,946 | 8,328 |
Accounts receivable, net | 37,836 | 37,054 |
Inventory, net | 4,311 | 3,976 |
Prepaid expenses and other current assets | 3,573 | 2,366 |
Total current assets | 61,279 | 60,833 |
Property, plant and equipment, net | 8,891 | 7,288 |
Prepaid expenses, net of current portion | 121 | 121 |
Operating lease right-of-use asset, net | 3,974 | 4,059 |
Intangible assets, net | 14,524 | 8,475 |
Goodwill | 5,231 | 5,709 |
Deferred tax asset | 191 | 0 |
Other assets | 1,163 | 1,163 |
TOTAL ASSETS | 95,374 | 87,648 |
Current liabilities | ||
Accounts payable | 4,866 | 5,905 |
Accrued diagnostic services | 353 | 1,009 |
Accrued advertising and other allowances | 151 | 99 |
Operating lease liabilities | 298 | 301 |
Deferred revenue | 2,841 | 2,499 |
Income tax payable | 3,849 | 4,190 |
Other current liabilities | 6,109 | 2,072 |
Total current liabilities | 18,467 | 16,075 |
Non-current liabilities: | ||
Deferred revenue, net of current portion | 1,160 | 1,059 |
Deferred tax liability, net | 0 | 224 |
Unsecured promissory notes, net of discount of $376 and $0 | 7,224 | 0 |
Unsecured convertible promissory notes, net | 2,400 | 2,400 |
Operating lease liabilities, net of current portion | 4,182 | 4,259 |
Due to sellers (see Note 3) | 2,000 | 0 |
Total non-current liabilities | 16,966 | 7,942 |
Total liabilities | 35,433 | 24,017 |
COMMITMENTS AND CONTINGENCIES | ||
Stockholders’ equity | ||
Preferred stock authorized 1,000,000, $0.0005 par value, no shares issued and outstanding | 0 | 0 |
Common stock authorized 50,000,000, $0.0005 par value, 16,851,041 and 16,210,776 shares outstanding, respectively | 17 | 16 |
Additional paid-in capital | 111,482 | 109,138 |
Retained earnings | 12,303 | 11,753 |
Treasury stock, at cost, 18,934,955 and 18,126,970 shares, respectively | (63,953) | (58,033) |
Accumulated other comprehensive loss | 92 | 757 |
Total stockholders’ equity | 59,941 | 63,631 |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ 95,374 | $ 87,648 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Preferred stock, authorized (in shares) | 1,000,000 | 1,000,000 |
Preferred stock, par value (in dollars per share) | $ 0.0005 | $ 0.0005 |
Preferred stock, issued (in shares) | 0 | 0 |
Preferred Stock, outstanding (in shares) | 0 | 0 |
Common stock, authorized (in shares) | 50,000,000 | 50,000,000 |
Common stock, par value (in dollars per share) | $ 0.0005 | $ 0.0005 |
Common stock, outstanding (in shares) | 16,851,041 | 16,210,776 |
Treasury stock (in shares) | 18,934,955 | 18,126,970 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Income Statement [Abstract] | ||
Revenues, net | $ 19,303 | $ 47,531 |
Cost of revenues | 8,783 | 18,854 |
Gross profit | 10,520 | 28,677 |
Operating expenses: | ||
Diagnostic expenses | 1,203 | 4,672 |
General and administration | 8,298 | 7,824 |
Research and development | 144 | 35 |
Total operating expenses | 9,645 | 12,531 |
Income from operations | 875 | 16,146 |
Interest income, net | 11 | 73 |
Interest expense | (215) | (233) |
Other income (loss) | (107) | (76) |
Income from operations before income taxes | 564 | 15,910 |
Income tax expense | 14 | 3,416 |
Income from operations after income taxes | 550 | 12,494 |
Net income | 550 | 12,494 |
Other comprehensive (loss) income: | ||
Unrealized loss on marketable debt securities | (665) | 37 |
Total comprehensive (loss) income | $ (115) | $ 12,531 |
Earnings per share: | ||
Earnings (loss) per share, basic (in dollars per share) | $ 0.03 | $ 0.81 |
Earnings (loss) per share, diluted (in dollars per share) | $ 0.03 | $ 0.68 |
Weighted average common shares outstanding: | ||
Weighted average common shares outstanding, basic (in shares) | 16,748 | 15,486 |
Weighted average common shares outstanding, diluted (in shares) | 18,061 | 18,740 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) $ in Thousands | Total | Common Stock | Additional Paid in Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Loss |
Beginning balance (in shares) at Dec. 31, 2021 | 15,485,000 | |||||
Beginning balance, value at Dec. 31, 2021 | $ 58,628 | $ 16 | $ 104,552 | $ 2,642 | $ (48,407) | $ (175) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common shares for debt conversions (in shares) | 200,000 | |||||
Issuance of common shares for debt conversion | 600 | 600 | ||||
Cash dividends | (4,646) | (4,646) | ||||
Repurchases of common shares (in shares) | (200,000) | |||||
Repurchase of common shares | (1,150) | (1,150) | ||||
Unrealized loss on marketable debt securities | 37 | 37 | ||||
Stock-based compensation | 482 | 482 | ||||
Net income | 12,494 | 12,494 | ||||
Ending balance (in shares) at Mar. 31, 2022 | 15,485,000 | |||||
Ending balance, value at Mar. 31, 2022 | 66,445 | $ 16 | 105,634 | 10,490 | (49,557) | (138) |
Beginning balance (in shares) at Dec. 31, 2022 | 16,210,776 | |||||
Beginning balance, value at Dec. 31, 2022 | 63,631 | $ 16 | 109,138 | 11,753 | (58,033) | 757 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock in asset acquisition (in shares) | 100,000 | |||||
Issuance of common stock in asset acquisition | 1,000 | $ 1 | 999 | |||
Repurchases of common shares (in shares) | (63,616) | |||||
Repurchase of common shares | (541) | (541) | ||||
Unrealized loss on marketable debt securities | (665) | (665) | ||||
Issuance of common stock upon stock options cashless exercise (in shares) | 603,881 | |||||
Issuance of warrants with unsecured promissory note | 398 | 398 | ||||
Treasury shares repurchased to satisfy tax withholding obligations | (5,379) | (5,379) | ||||
Stock-based compensation | 947 | 947 | ||||
Net income | 550 | 550 | ||||
Ending balance (in shares) at Mar. 31, 2023 | 16,851,041 | |||||
Ending balance, value at Mar. 31, 2023 | $ 59,941 | $ 17 | $ 111,482 | $ 12,303 | $ (63,953) | $ 92 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Cash flows from operating activities | ||
Net income | $ 550 | $ 12,494 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Realized loss on marketable debt securities | 107 | 179 |
Depreciation and amortization | 1,292 | 1,249 |
Accretion of debt discount | 20 | 1 |
Amortization on operating lease right-of-use assets | 85 | 83 |
Gain on sale of assets | 0 | (23) |
Stock-based compensation expense | 947 | 482 |
Change in fair value of investment securities | 0 | 76 |
Accounts receivable allowances | (147) | (924) |
Inventory valuation reserve | 0 | 25 |
Bad debt expenses | 230 | 0 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (864) | 1,938 |
Inventory | (335) | (105) |
Prepaid expenses and other current assets | (2,107) | (126) |
Deferred tax asset | (96) | 0 |
Other assets | 0 | 360 |
Accounts payable and accrued expenses | (2,661) | 1,178 |
Accrued diagnostic services | (656) | (878) |
Accrued advertising and other allowances | 52 | 0 |
Deferred revenue | 443 | 165 |
Deferred tax liability | 0 | 443 |
Operating lease liabilities | (80) | (73) |
Income tax payable | (341) | 2,973 |
Other current liabilities | 4,037 | 770 |
Net cash provided by operating activities | 476 | 20,287 |
Cash flows from investing activities | ||
Business acquisitions, escrow received | 478 | 0 |
Asset acquisition, net of cash acquired | (2,904) | 0 |
Purchase of marketable securities | 0 | (206) |
Proceeds from sale of marketable debt securities | 1,291 | 5,300 |
Proceeds from dispositions of property and other assets, net | 0 | 85 |
Capital expenditures | (517) | (1,095) |
Net cash (used in) provided by investing activities | (1,652) | 4,084 |
Cash flows from financing activities | ||
Proceeds from issuance of secured note payable | 7,600 | 0 |
Repurchase of common stock for payment of statutory taxes due on cashless exercise of stock option | 5,379 | 0 |
Repurchases of common shares | (541) | (1,150) |
Repayment of note payable | 0 | (1,426) |
Payment of dividends | 0 | (4,646) |
Net cash provided by (used in) financing activities | 1,680 | (7,222) |
Increase in cash, cash equivalents and restricted cash | 504 | 17,149 |
Cash and cash equivalents, at the beginning of the period | 9,109 | 8,658 |
Cash and cash equivalents, at the end of the period | 9,613 | 25,807 |
Supplemental disclosures: | ||
Cash paid for income taxes | 1,500 | 0 |
Interest payment on the promissory notes | 203 | 241 |
Supplemental disclosure of non-cash investing and financing activities: | ||
Financed capital expenditures | 1,623 | 0 |
Common stock issued in Asset Acquisition | 1,000 | 0 |
Issuance of common shares for debt conversion | 0 | 600 |
Net unrealized loss, investments in marketable debt securities | $ 0 | $ 37 |
Organization and Business
Organization and Business | 3 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Business | Organization and Business ProPhase Labs, Inc. (“ProPhase”, “we”, “us”, “our” or the “Company”) is a diversified company that offers a range of services including genomics testing, diagnostic testing and contract manufacturing. We are also focused on licensing, developing and commercializing novel drugs, dietary supplements, compounds and diagnostics. We currently conduct our operations through two operating segments: diagnostic services and consumer products. Until late fiscal year 2020, we were engaged primarily in the research, development, manufacture, distribution, marketing and sale of OTC consumer healthcare products and dietary supplements in the United States. However, commencing in December 2020, we also began offering COVID-19 and prepared to validate other Respiratory Pathogen Panel (RPP) molecular tests through our diagnostic services business. In August 2021 we began offering personal genomics products and services and in July 2022 we began focusing on the licensing, development and commercialization of novel drugs, dietary supplements, compounds and diagnostics. Our wholly owned subsidiary, ProPhase Diagnostics, Inc. (“ProPhase Diagnostics”), which was formed on October 9, 2020, offers a broad array of clinical diagnostic and testing services at its CLIA certified laboratories including polymerase chain reaction (“PCR”) testing for COVID-19. Critical to COVID-19 testing, we provide fast turnaround times for results. We also offer rapid antigen testing for COVID-19. On October 23, 2020, we acquired Confucius Plaza Medical Laboratory Corp. (“CPM”), which included a non-operating but certified 4,000 square foot CLIA accredited laboratory located in Old Bridge, New Jersey. In December 2020, we expanded our diagnostic service business with the build-out of a second, larger CLIA accredited laboratory in Garden City, New York. Operations at this second facility commenced in January 2021. On August 10, 2021, we acquired Nebula Genomics, Inc. (“Nebula”), a privately owned personal genomics company, through our new wholly owned subsidiary, ProPhase Precision Medicine, Inc. (“ProPhase Precision”) (see Note 3, Business Acquisitions). ProPhase Precision focuses on genomics sequencing technologies, a comprehensive method for analyzing entire genomes, including the genes and chromosomes in DNA. The data obtained from genomic sequencing can be used to help identify inherited disorders and tendencies, help predict disease risk, help identify expected drug response, and characterize genetic mutations, including those that drive cancer progression. Our wholly owned subsidiary, ProPhase BioPharma, Inc. (“PBIO”) was formed on June 28, 2022, for the licensing, development and commercialization of novel drugs, dietary supplements and compounds beginning with Equivir (dietary supplement) and Equivir G (Rx). In July 2022, PBIO announced a second licensing agreement for two small molecule PIM kinase inhibitors, Linebacker LB-1 and LB-2, with plans to pursue development and commercialization of LB-1 as a cancer co-therapy. In January 2023, the Company acquired exclusive rights to the BE-Smart Esophageal Pre-Cancer Diagnostic Screening Test and related intellectual property assets. Our wholly owned subsidiary, Pharmaloz Manufacturing, Inc. (“PMI”), is a full-service contract manufacturer and private label developer of a broad range of non-GMO, organic and natural-based cough drops and lozenges and OTC drug and dietary supplement products. We also develop and market dietary supplements under the TK Supplements® brand. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation The unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial statements and the rules of the Securities and Exchange Commission (“SEC”) applicable to interim financial statements, and therefore do not include all disclosures that might normally be required for financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The accompanying unaudited condensed consolidated financial statements have been prepared by management without audit and should be read in conjunction with our audited consolidated financial statements, including the notes thereto, appearing in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022. In the opinion of management, all adjustments necessary for a fair presentation of the consolidated financial position, consolidated results of operations and other comprehensive loss and consolidated cash flows, for the periods indicated, have been made. The results of operations for the three months ended March 31, 2023 are not necessarily indicative of operating results that may be achieved over the course of the full year. Use of Estimates The preparation of condensed consolidated financial statements and the accompanying notes thereto, in conformity with GAAP, requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and reported amounts of revenues and expenses during the respective reporting periods. Examples include revenue recognition and the impact of the variable consideration of diagnostic test reimbursement rates, the provision for uncollectible receivables and billing errors, allowances, slow moving and/or dated inventory and associated provisions, the potential impairment of long-lived assets, stock based compensation valuations, income tax asset valuations and assumptions related to accrued advertising. Our estimates and assumptions are based on historical experience, current trends and other factors that management believes to be relevant at the time the condensed consolidated financial statements are prepared. Management reviews the accounting policies, assumptions, estimates and judgments on a quarterly basis. Actual results could differ from those estimates. Fair Value of Financial Instruments We measure assets and liabilities at fair value based on expected exit price as defined by the authoritative guidance on fair value measurements, which represents the amount that would be received on the sale date of an asset or paid to transfer a liability, as the case may be, in an orderly transaction between market participants. As such, fair value may be based on assumptions that market participants would use in pricing an asset or liability. The authoritative guidance on fair value measurements establishes a consistent framework for measuring fair value on either a recurring or nonrecurring basis whereby inputs, used in valuation techniques, are assigned a hierarchical level. The following are the hierarchical levels of inputs to measure fair value: • Level 1: Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. • Level 2: Inputs reflect quoted prices for identical assets or liabilities in markets that are not active; quoted prices for similar assets or liabilities in active markets; inputs other than quoted prices that are observable for the assets or liabilities; or inputs that are derived principally from or corroborated by observable market data by correlation or other means. • Level 3: Unobservable inputs reflecting the Company’s assumptions incorporated in valuation techniques used to determine fair value. These assumptions are required to be consistent with market participant assumptions that are reasonably available. The carrying amounts of our financial assets and liabilities, such as cash, accounts receivable, accounts payable, and unsecured note payable, approximate their fair values because of the short-term nature of these instruments. We account for our marketable securities at fair value, with the net unrealized gains or losses of marketable debt securities reported as a component of accumulated other comprehensive income or loss and marketable equity securities change in fair value reported on the condensed consolidated statements of operation and comprehensive income (loss). The components of marketable securities are as follows (in thousands): As of March 31, 2023 Level 1 Level 2 Level 3 Total U.S. government obligations $ — $ 1,451 $ — $ 1,451 Corporate obligations 4,395 100 — 4,495 $ 4,395 $ 1,551 $ — $ 5,946 As of December 31, 2022 Level 1 Level 2 Level 3 Total U.S. government obligations $ — $ 1,478 $ — $ 1,478 Corporate obligations 5,496 1,354 — 6,850 Marketable equity securities — — — — $ 5,496 $ 2,832 $ — $ 8,328 There were no transfers of marketable debt securities between Levels 1, 2 or 3 for the three months ended March 31, 2023 and 2022. Goodwill Goodwill represents the excess of the fair value of the consideration transferred over the fair value of the underlying identifiable assets and liabilities acquired in a business combination. Goodwill and intangible assets deemed to have an indefinite life are not amortized, but instead are assessed for impairment annually. Additionally, if an event or change in circumstances occurs that would more likely than not reduce the fair value of the reporting unit below its carrying value, we would evaluate goodwill at that time. During the three months ended March 31, 2023, the Company received $0.5 million in connection with terms from an escrow agreement from the purchase of Nebula. The receipt of this escrow payment reduced the excess consideration paid for Nebula and was recorded as a reduction of the Goodwill at the time of receipt. Revenue Recognition The Company recognizes revenues in accordance with FASB Accounting Standards Codification ("ASC") 606, Revenues from Contracts with Customers. The Company recognizes revenue that represents the transfer of promised goods or services to customers at an amount that reflects the consideration that is expected to be received in exchange for those goods or services. The Company recognizes revenue when performance obligations with our customers have been satisfied. At contract inception, we evaluate the contract to determine if revenue should be recognized using the following five steps: (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 revenue when (or as) the entity satisfies a performance obligation. Income Taxes The Company recognizes deferred tax liabilities and assets based on the differences between the financial statement carrying amounts and the tax bases of assets and liabilities, using enacted tax rates in effect in the years the differences are expected to reverse. The provision for, or benefit from, income taxes includes deferred taxes resulting from the temporary differences in income for financial and tax purposes using the liability method. Future realization of deferred income tax assets requires sufficient taxable income within the carryback, carryforward period available under tax law. We evaluate, on a quarterly basis whether, based on all available evidence, it is probable that the deferred income tax assets are realizable. Valuation allowances are established when it is more likely than not that the tax benefit of the deferred tax asset will not be realized. The evaluation, as prescribed by ASC 740-10, “Income Taxes,” includes the consideration of all available evidence, both positive and negative, regarding historical operating results including recent years with reported losses, the estimated timing of future reversals of existing taxable temporary differences, estimated future taxable income exclusive of reversing temporary differences and carryforwards, and potential tax planning strategies which may be employed to prevent an operating loss or tax credit carryforward from expiring unused. The Company accounts for uncertainties in income taxes under the provisions of FASB ASC 740-10-05 (the “Subtopic”). The Subtopic clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements. The Subtopic prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The Subtopic provides guidance on the de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. Recently Issued Accounting Standards, Adopted |
Business Acquisition
Business Acquisition | 3 Months Ended |
Mar. 31, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Business Acquisition | Asset Acquisition Stella Diagnostics - Asset Purchase Agreement On December 15, 2022, the Company entered into an Asset Purchase Agreement (the “Stella Purchase Agreement”), with Stella Diagnostics Inc. (“Stella”) and Stella DX, LLC (“Stella DX” and, together with Stella, the “Stella Sellers”), pursuant to which, on January 3, 2023, the Company purchased all of the assets, rights and interests of the Stella Sellers and their affiliates pertaining to the Stella Sellers’ BE-Smart Esophageal Pre-Cancer Diagnostic Screening Test and certain clinical assets, including all intellectual property rights (the “Stella Purchased Assets”). As consideration for the Stella Purchased Assets, at closing, the Company (i) paid to the Stella Sellers $3.5 million in cash, minus (a) the Secured Note Amount of $0.5 million, (b) the Liability Payoff Amount of $1.6 million and (c) the Promissory Note Payoff Amount of $0.4 million, and (ii) issued to Stella DX 100,000 shares of common stock, par value $0.0005 per share, of the Company at a value of $10.00 per share. Total consideration paid was $4.6 million. The Secured Note Amount of $0.5 million and the Promissory Note Payoff of $0.4 million were paid in 2022. The balance of the consideration was paid at closing during the three months ended March 31, 2023. In addition to the consideration paid at closing, the Company will issue shares of common stock valued at $2.0 million (the “Milestone Stock”) to the Stella Sellers upon a Commercialization Event (as defined in the Stella Purchase Agreement). The Milestone Stock was recorded at closing as a non-current liability at its fair value of $2.0 million and will be marked to market until settlement through other income or expense in the consolidated statements of operations. Also, the Company is required to pay to the Stella Sellers for each of the seven calendar years during the seven year period commencing on the first day of the calendar year following the date of the Commercialization Event, a non-refundable, non-creditable royalty of 5% of the Adjusted Gross Margin (as defined in the Stella Purchase Agreement) for such Annual Period. The asset purchase does not qualify as a business combination under FASB ASC 805, Business Combinations , and has therefore been accounted for as an asset acquisition. In connection with the Stella Purchased Assets, the Company incurred $0.2 million in transaction costs, which were capitalized into the purchase price of the Stella Purchased Assets. The total purchase price for the Stella Purchased Assets was $6.8 million, which was allocated to the proprietary technology intangible asset acquired. The Company is amortizing the acquired intangible asset on a straight-line basis over its estimated useful life of five years. |
Intangible Assets, Net
Intangible Assets, Net | 3 Months Ended |
Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets, Net | Intangible Assets, Net During the three months ended March 31, 2023, the Company acquired intangible assets of $6.8 million included with proprietary intellectual property, in connection with the acquisition of the Stella Purchased Assets. See Note 3. Intangible assets as of March 31, 2023 and December 31, 2022 consisted of the following (in thousands): March 31, 2023 December 31, 2022 Estimated Useful Life Trade names $ 5,550 $ 5,550 15 Proprietary intellectual property 11,063 4,260 5 Customer relationships 1,180 1,180 1 CLIA license 1,307 1,307 3 19,100 12,297 Less: accumulated amortization (4,576) (3,822) Total intangible assets, net $ 14,524 $ 8,475 Amortization expense for acquired intangible assets was $754,000 and $709,000 during the three months ended March 31, 2023 and 2022, respectively. The estimated future amortization expense of acquired intangible assets as of March 31, 2023 is as follows (in thousands): Remaining periods in the year ended December 31, 2023 $ 2,191 Year ended December 31, 2024 2,583 Year ended December 31, 2025 2,583 Year ended December 31, 2026 2,251 Year ended December 31, 2027 1,731 Thereafter 3,185 $ 14,524 |
Unsecured Promissory Notes Paya
Unsecured Promissory Notes Payable | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
Unsecured Promissory Notes Payable | Unsecured Promissory Notes Payable 2023 Unsecured Promissory Note Payable On January 26, 2023, the Company issued an unsecured promissory note (the “2023 Note”) and guaranty for an aggregate principal amount of $7.6 million. The 2023 Note is due and payable on January 27, 2026, the third anniversary of the date on which the 2023 Note was funded (the “Closing Date”), and accrues interest at a rate of 10% per year from the Closing Date, payable on a quarterly basis, until the 2023 Note is repaid in full. The Company has the right to prepay the 2023 Note at any time after the Closing Date and prior to the maturity date without premium or penalty upon providing seven days’ written notice to the note holder. Repayment of the 2023 Note has been guaranteed by the Company’s wholly-owned subsidiary, Pharmaloz Manufacturing, Inc. In addition to the 2023 Note, the Company issued warrants to purchase 76,000 shares of the Company's common stock at an exercise price of $9.00 for a term of 5 year, vesting immediately. The warrants were valued at $400,000 fair value,using the Black-Scholes option pricing model to calculate the grant date fair value of the warrants, with the following assumptions: no dividend yield, expected volatility of 81.5%, risk free interest rate of 3.62% and expected warrant life of 5 years. The relative fair value of the warrant was $380,000 and was recorded as a discount to the note payable in accordance with FASB ASC 835-30-25, Recognition , and is being accreted over the term of the note payable for financial statement purposes. As of March 31, 2023, the unpaid principal balance of the 2023 Note was $7.2 million, net of debt discount of $0.4 million. 2020 Unsecured Convertible Notes Payable On September 15, 2020, the Company issued two unsecured, partially convertible, promissory notes (the “September 2020 Notes”) for an aggregate principal amount of $10 million to two investors (collectively, the “Lenders”). On February 28, 2022, the Company entered into a letter agreement (the “Letter Agreement”) with one of the Lenders providing for the payoff of its September 2020 Note in the principal amount of $2,000,000. Pursuant to the terms of the Letter Agreement, (i) the Lender converted $600,000 of the principal amount due to him under his September 2020 Note into 200,000 shares of Company common stock (the “Conversion Shares”) at a price of $3.00 per share as provided for under the terms of the September 2020 Note (the “Conversion”), (ii) the Company paid to the Lender $1,440,548 in cash, representing $1,400,000 of the remaining principal under the September 2020 Note following the Conversion plus $40,548 in accrued and outstanding interest under the September 2020 Note, and (iii) the Company repurchased the Conversion Shares at a price of $5.75 per share for an aggregate amount of $1,150,000 (for a total aggregate payment to the Lender of $2,590,548). The September 2020 Note that remains outstanding as of March 31, 2023 is due and payable on September 15, 2023 and accrues interest at a rate of 10% per year from the closing date, payable on a quarterly basis, until the September 2020 Note is repaid in full. At March 31, 2023 and 2022, the unpaid balance of the September 2020 Notes was $2.4 million and $8.0 million, respectively. |
Stockholders_ Equity
Stockholders’ Equity | 3 Months Ended |
Mar. 31, 2023 | |
Equity [Abstract] | |
Stockholders’ Equity | Stockholders’ Equity Our authorized capital stock consists of 50 million shares of common stock, $0.0005 par value, and one million shares of preferred stock, $0.0005 par value. Preferred Stock The preferred stock authorized under our certificate of incorporation may be issued from time to time in one or more series. As of March 31, 2023 and December 31, 2022, no shares of preferred stock have been issued. Common Stock Dividends No dividends have been declared during the three months ended March 31, 2023. On February 14, 2022, the board of directors of the Company declared a special cash dividend of $0.30 per share on the Company’s common stock, paid on March 10, 2022, in the amount of $4.6 million to holders of record of the Company’s common stock on March 1, 2022. Common Stock Stock Repurchase Program On March 15, 2023, the Company announced that its board of directors had approved a new stock repurchase program. Under the stock repurchase program, the Company is authorized to repurchase up to $6.0 million of its outstanding shares of common stock from time to time, over a six-month period. The number of shares to be repurchased and the timing of the repurchases, if any, will depend on a number of factors, including, but not limited to, price, trading volume and general market conditions, along with the Company’s working capital requirements and general business conditions. The board of directors will re-evaluate the program from time to time and may authorize adjustments to its terms . Following the Commencement Date (as defined in the stock repurchase agreement), and for a period of six months thereafter, repurchases may be made through open market transactions (based on prevailing market prices), privately negotiated transactions, block trades, or any combination thereof, in accordance with applicable federal securities laws, including Rule 10b-18 of the Securities Exchange Act of 1934, as amended. There were 63,616 shares repurchased under this new program during the three months ended March 31, 2023. On September 8, 2021, the board of directors (the “Board”) approved a stock repurchase program under which the Company was authorized to repurchase up to $6.0 million of its outstanding shares of common stock from time to time, over a six-month period. This stock repurchase program expired on March 30, 2022. During the three months ended March 31, 2022, the Company did not make any common shares repurchase under this stock repurchase program. The 2022 Directors’ Equity Compensation Plan On May 19, 2022, the stockholders of the Company approved the 2022 Directors’ Equity Compensation Plan (the “2022 Directors’ Plan”) at the 2022 Annual Meeting of Stockholders of the Company (the “2022 Annual Meeting”). The 2022 Directors’ Plan amended and restated the Company’s Amended and Restated 2010 Directors’ Equity Compensation Plan and provided for an increase in the number of shares reserved for issuance under the plan by 300,000 shares and for the adjustment of the per share exercise price of stock options granted under the 2022 Plan in the event of any change in the outstanding shares of common stock of the Company as a result of, among other things, any distribution or special dividend to stockholders of shares, cash or other property (other than regular cash dividends). As of March 31, 2023, there were 180,000 shares of common stock available to be issued under the 2022 Directors’ Plan. There were no options issued under this plan during the three months ended March 31, 2023. The 2010 Directors’ Equity Compensation Plan On May 20, 2021, the stockholders of the Company approved the Amended and Restated 2010 Directors’ Equity Compensation Plan (the “Amended 2010 Directors’ Plan”) at the 2021 Annual Meeting of Stockholders of the Company (the “2021 Annual Meeting”). The Amended 2010 Directors’ Plan authorized the issuance of up to 775,000 shares of common stock. This plan was amended and restated on April 11, 2022 (to become the 2022 Directors' Plan), subject to stockholder approval, which was obtained at the 2022 Annual Meeting. During the three months ended March 31, 2022, there were no stock options issued under the Amended 2010 Directors’ Plan. The 2022 Equity Compensation Plan On May 19, 2022, the stockholders of the Company approved the 2022 Equity Compensation Plan (the “2022 Plan”) at the 2022 Annual Meeting. The 2022 Plan amended and restated the Company’s Amended and Restated 2010 Equity Compensation Plan and provided for an increase in the number of shares reserved for issuance under the plan by 1,000,000 shares and for the adjustment of the per share exercise price of stock options granted under the 2022 Plan in the event of any change in the outstanding shares of common stock of the Company as a result of, among other things, any distribution or special dividend to stockholders of shares, cash or other property (other than regular cash dividends). As of March 31, 2023, there were 803,285 shares of common stock available to be issued under the 2022 Plan. During the three months ended March 31, 2023, there were 205,000 issued under the 2022 Plan. The 2010 Equity Compensation Plan On May 20, 2021, the stockholders of the Company approved the Amended and Restated 2010 Equity Compensation Plan (the “Amended 2010 Plan”) at the 2021 Annual Meeting. The Amended 2010 Plan authorized the issuance of up to 4,900,000 shares of common stock. This plan was amended and restated on April 11, 2022 (to become the 2022 Plan), subject to stockholder approval, which was obtained at the 2022 Annual Meeting. During the three months ended March 31, 2022, there were no stock options issued under the Amended 2010 Plan. The 2018 Stock Incentive Plan On April 12, 2018, the Company's stockholders approved the 2018 Stock Incentive Plan (the “2018 Stock Plan”). The 2018 Stock Plan provides for the grant of incentive stock options to eligible employees of the Company, and for the grant of non-statutory stock options to eligible employees, directors and consultants. The 2018 Stock Plan provides that the total number of shares that may be issued pursuant to the 2018 Stock Plan is 2,300,000 shares. At April 12, 2018, all 2,300,000 shares had been granted in the form of stock options to Ted Karkus (the “CEO Option”), our Chief Executive Officer. The 2018 Stock Plan required certain proportionate adjustments to be made to the stock options granted under the 2018 Stock Plan upon the occurrence of certain events, including a special distribution (whether in the form of cash, shares, other securities, or other property) in order to maintain parity. Accordingly, the Compensation Committee of the board of directors, as required by the terms of the 2018 Stock Plan, adjusted the exercise price of the CEO Option in connection with each special cash dividend paid by the Company proportionately to the amount of the dividend paid. The final exercise price of the CEO Option was $0.60 per share after the latest special cash dividend paid on June 3, 2022. During the three months ended March 31, 2023 and 2022, 1,100,000 and 0 stock options were exercised under the 2018 Stock Plan. No share based compensation expense will be recognized in forward periods related to the 2018 Stock Plan. Inducement Option Awards There were no issuances of inducements awards during the three months ended March 31, 2023 and 2022. All inducement awards have been granted outside of the Company’s equity compensation plans. Summary of all option grants During the three months ended March 31, 2023, the Company granted options to purchase 205,000 shares of the Company’s common stock to various employees and consultants. The options grant date fair value was valued at $0.9 million, using the Black-Scholes option pricing model to calculate the grant-date fair value of the options with the following assumptions: no dividend yield, expected volatility of 80.9%, risk free interest rate of 3.78% and expected warrant life of 4.25 years. The fair value of stock options for employees are expensed over the vesting term in accordance with the terms of the related stock option agreements and are expensed over the terms of the consulting agreement for consultants. The following table summarizes stock option activity during the three months ended March 31, 2023, (in thousands, except per share data). Number Weighted Weighted Total Outstanding as of January 1, 2023 3,952 $ 5.36 4.0 $ 20,379 Granted 205 6.84 7.0 — Cashless exercised (1,348) 0.99 — — Forfeited (38) 2.64 — — Outstanding as of March 31, 2023 2,771 $ 7.49 5.2 $ 3,939 Options vested and exercisable 1,661 $ 6.84 4.9 $ 3,172 The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying options and the closing stock price of $7.62 for the Company’s common stock on March 31, 2023. During the three months ended March 31, 2023 certain holders of stock options elected to exercise their stock options pursuant to a cashless exercise provision resulting in the net issuance of 603,881 shares of common stock and the return of 744,369 shares to the Company. The Company also made a cash payment of approximately $5.4 million to repurchase 603,881 shares of treasury stock to satisfy tax withholding obligations related to the cashless exercise of these stock options. Stock Warrants On January 12, 2023, the Company issued warrants to an advisory firm to purchase 50,000 shares of the Company's common stock at an exercise price of $10.00 for a term of 5 years, vesting immediately. The warrants were valued at 0.3 million fair value,using the Black-Scholes option pricing model to calculate the grant date fair value of the warrants, with the following assumptions: no dividend yield, expected volatility of 80.9%, risk free interest rate of 3.53% and expected warrant life of 5 years. These warrants will be expensed over the 1 year term of the engagement which ends on December 31, 2023. On January 27, 2023, the Company issued five year warrants to purchase 76,000 shares of the Company's common stock with the unsecured promissory note (see Note 5). The following table summarizes warrant activity during the three months ended March 31, 2023 (in thousands, except per share data): Number of Shares Weighted Average Exercise Weighted Average Outstanding as of January 1, 2023 855 $ 8.23 1.9 Granted 126 9.39 4.8 Outstanding as of March 31, 2023 981 $ 8.38 1.2 Warrants vested and exercisable 981 $ 8.38 1.2 We recognized $0.9 million and $0.5 million of share-based compensation expense during the three months ended March 31, 2023 and 2022, respectively. We will recognize an aggregate of approximately $4.7 million of remaining share-based compensation expense related to outstanding stock options over a weighted average period of 3.9 years. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income TaxesWe recognize tax assets and liabilities for future tax consequences related to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and for net operating loss carryforwards. Management evaluated the deferred tax assets for recoverability using a consistent approach that considers the relative impact of negative and positive evidence, including historical profitability and projections of future reversals of temporary differences and future taxable income. We are required to establish a valuation allowance for deferred tax assets if management determines, based on available evidence at the time the determination is made, that it is not more likely than not that some portion or all of the deferred tax assets will be realized. As of March 31, 2023 the Company has net deferred tax liabilities for federal and combined states jurisdictions compared to net deferred tax assets with a full valuation allowance as of December 31, 2022. The decrease in deferred tax assets with a corresponding decrease in valuation allowance against those assets as of March 31, 2023 is primarily due to utilization of net operating losses. The Company has net deferred tax assets in other states jurisdictions where we maintain a full valuation allowance. Judgment is required to estimate forecasted future taxable income, which may be impacted by future business developments, actual results, tax initiatives, legislative, and other economic factors. The Company will continue to monitor income levels and potential changes to its operating and tax model, and other legislative or global developments in its determination.The Company’s effective tax rate for the three months ended March 31, 2023 is 1.69% and it is primarily driven by federal tax at 21%, state taxes at 10.13%, offset by permanent differences, the R&D credit and state deferred tax benefits. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Manufacturing Agreement The Company and its wholly owned subsidiary, PMI, entered into a manufacturing agreement (the “Manufacturing Agreement”) with Mylan Consumer Healthcare Inc. (formerly known as Meda Consumer Healthcare Inc.) (“MCH”) and Mylan Inc. (together with MCH, “Mylan” in connection with the asset purchase agreement we entered into with Mylan in 2017. Pursuant to the terms of the Manufacturing Agreement, Mylan (or an affiliate or designee) purchased the inventory of the Company’s Cold-EEZE® brand and product line, and PMI agreed to manufacture certain products for Mylan, as described in the Manufacturing Agreement, at prices that reflect current market conditions for such products and include an agreed upon mark-up on our costs. On May 1, 2021, the Manufacturing Agreement was assigned by Mylan to Nurya Brands, Inc. (“Nurya”) in connection with Nurya’s acquisitions of certain assets from Mylan, including the Cold-EEZE® brand and product line. Unless terminated sooner by the parties, the Manufacturing Agreement was to remain in effect until March 29, 2023. Thereafter, the Manufacturing Agreement could be renewed by Nurya for up to four successive one-year periods by providing notice of its intent to renew not less than 90 days prior to the expiration of the then-current term. On November 15, 2022, the Company was notified by Nurya of its election to renew the Manufacturing agreement for one year. As a result, the Manufacturing Agreement will remain in effect until March 29, 2024. License Agreements Linebacker LB1 and LB2 On July 19, 2022, the Company through its wholly-owned subsidiary ProPhase BioPharma entered into a License Agreement (the “License Agreement”) with Global BioLife, Inc. (the “Licensor”), with an effective date of July 18, 2022 (the “Linebacker Effective Date”), pursuant to which it acquired from Licensor a worldwide exclusive right and license under certain patents identified in the License Agreement (the “Licensed Patents”) and know-how (collectively, the “Licensed IP”) to exploit any compound covered by the Licensed Patents (the “Licensed Compound”), including Linebacker LB1 and LB2, and any product comprising or containing a Licensed Compound (“Licensed Products”) in the treatment of cancer, inflammatory diseases or symptoms, memory-related syndromes, diseases or symptoms including dementia and Alzheimer’s Disease (the “Field”). Under the terms of the License Agreement, the Licensor reserves the right, solely for itself and for GRDG Sciences, LLC (“GRDG”) to use the Licensed Compound and Licensed IP solely for research purposes inside the Field and for any purpose outside the Field. Under the terms of License Agreement, the Company is required to pay to Licensor a one-time upfront license fee of $50,000 within 10 days of the Linebacker Effective Date and must pay an additional $900,000 following the achievement of a first Phase 3 study which may be required by FDA for the first Licensed Product and an additional $1 million upon the receipt of regulatory approval of a New Drug Application (NDA) for the first Licensed Product. During the term of the License Agreement, the Company is also required to pay to Licensor 3% royalties on Net Revenue (as defined in the License Agreement) of each Licensed Product, but no less than the minimum royalty of $250,000 of Net Revenue per year minus any royalty payments for any required third party licenses. Equivir In March 2023, we commenced patient enrollment in a randomized, placebo-controlled clinical trial of Equivir to evaluate its effect on upper respiratory tract infections. Vedic Lifesciences, a leading clinical research organization, is contracted to conduct the combination prophylactic and therapeutic study, which will be conducted at 12 sites. We currently anticipate trial completion in the third quarter of 2023 and anticipate launching Equivir (dietary supplement) in the United States toward the end of 2023. BE-Smart Esophageal Pre-Cancer Diagnostics Screening Test In March 2023, and in connection with the Asset acquisition of Stella,, we announced a collaboration for the continued development of its BE-Smart Esophageal Pre-Cancer diagnostic screening test. We are pursuing initial commercialization of the BE-Smart test as an LDT (Laboratory Developed Test) and RUO (Research Use Only) for the third quarter of 2023 with full commercialization backed by insurance expected by mid-2024. In connection with the License Agreement, the Company has incurred approximately $0.2 million in general and administrative expenses that are included in the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for the three months ended March 31, 2023. No clinical studies have begun under this agreement. Litigation In the normal course of our business, we may be named as a defendant in legal proceedings. It is our policy to vigorously defend litigation or to enter into a reasonable settlement where management deems it appropriate. |
Leases
Leases | 3 Months Ended |
Mar. 31, 2023 | |
Leases | |
Leases | Leases On October 23, 2020, we completed the acquisition of CPM, which included the acquisition of a 4,000 square foot CLIA accredited laboratory located in Old Bridge, New Jersey, which was owned by CPM (which is now known as ProPhase Diagnostics NJ, Inc.). The lease is for a term of 24 months with a monthly base lease payment of $5,950. New York Second Floor Lease On December 8, 2020, the Company entered into a Lease Agreement (the “NY Second Floor Lease”) with BRG Office L.L.C. and Unit 2 Associates L.L.C. (the “Landlord”), pursuant to which the Company leases certain premises located on the second floor (the “Second Floor Leased Premises”) of 711 Stewart Avenue, Garden City, New York (the “Building”). The Second Floor Leased Premises serve as the Company’s second location and corporate headquarters, offering a wide range of laboratory testing services for diagnosis, screening and evaluation of diseases, including COVID-19 and Respiratory Pathogen Panel Molecular tests. On June 10, 2022, we entered into a First Amendment to the NY Second Floor Lease (the “Second Floor Lease Amendment”). The Second Floor Lease Amendment amends the NY Second Floor Lease to provide that any uncured default by the Company or any of its affiliate under the NY First Floor Lease (defined below) will constitute a default by the Company under the NY Second Floor Lease. New York First Floor Lease On June 10, 2022, the Company entered into a second Lease Agreement (the “NY First Floor Lease”) with Landlord, pursuant to which the Company leases approximately 4,516 sq. feet located on the first floor (the “NY First Floor Leased Premises”) of the Building. As described above, the Company currently leases space on the second floor of the Building. The First Floor Leased Premises will be used to expand the Company’s in-house lab capabilities to include traditional clinical testing across multiple specialty areas and Next Generation Sequencing (NGS) to perform Whole Genome Sequencing (WGS) and an array of genetic diagnostic test offerings for both clinical and research purposes. The NY First Floor Lease became effective as of June 10, 2022 and will commence upon the date of the Landlord’s substantial completion of certain improvements to the NY First Floor Leased Premises (the “First Floor Commencement Date”), as set forth in the NY First Floor Lease, targeted to be approximately five months from the execution of the NY First Floor Lease. The initial term of the NY First Floor Lease will expire on July 15, 2031, unless sooner terminated as provided in the NY First Floor Lease. As of March 31, 2023, lease commencement has not yet begun. At March 31, 2023 and December 31, 2022, we had operating lease liabilities for the New York and New Jersey leases of approximately $4.5 million and $4.6 million, respectively, and and right of use assets of approximately $4.0 million and $4.1 million, respectively, which were included in the condensed consolidated balance sheet. The following summarizes quantitative information about our operating leases (amounts in thousands): For the three months ended March 31, 2023 March 31, 2022 Operating leases Operating lease cost $ 204 $ 204 Operating lease expense 204 204 Total rent expense $ 204 $ 204 Maturities of the Company’s operating leases, excluding short-term leases, are as follows (in thousands): Remaining periods in the year ended December 31, 2023 $ 659 Year Ended December 31, 2024 747 Year Ended December 31, 2025 768 Year Ended December 31, 2026 783 Year Ended December 31, 2027 804 Thereafter 3,071 Total 6,832 Less present value discount (2,352) Operating lease liabilities $ 4,480 |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2023 | |
Segment Reporting [Abstract] | |
Segment Information | Segment InformationThe Company has identified two operating segments, diagnostic services and consumer products, based on the manner in which the Company’s CEO as CODM assesses performance and allocates resources across the organization. The operating segments are organized in a manner that depicts the difference in revenue generating synergies that include the separate processes, profit generation and growth of each segment. The diagnostic services segment provides COVID-19 diagnostic information services to a broad range of customers in the United States, including health plans, third party payers and government organizations. The consumer products segment is engaged in the research, development, manufacture, distribution, marketing and sale of OTC consumer healthcare products and dietary supplements in the United States and also provides personal genomics products and services. The unallocated corporate expenses mainly included professional fees associated with the public company. The following table is a summary of segment information for three months ended March 31, 2023 and 2022 (amounts in thousands): For the three months ended March 31, 2023 March 31, 2022 Net revenues Diagnostic services $ 14,524 $ 44,913 Consumer products 4,779 2,618 Consolidated net revenue 19,303 47,531 Cost of revenue Diagnostic services 5,222 16,702 Consumer products 3,561 2,152 Consolidated cost of revenue 8,783 18,854 Depreciation and amortization expense Diagnostic services 931 576 Consumer products 306 600 Total Depreciation and amortization expense 1,237 1,176 Operating and other expenses 8,612 11,591 Income (loss) from operations, before income taxes Diagnostic services 4,397 20,026 Consumer products (1,029) (1,863) Unallocated corporate (2,804) (2,253) Total income from operations, before income taxes 564 15,910 Income tax expense 14 3,416 Total income (loss) from operations, after income taxes 550 12,494 Net income (loss) $ 550 $ 12,494 The following table is a summary of segment information as of March 31, 2023 and December 31, 2022 (amounts in thousands): March 31, 2023 December 31, 2022 ASSETS Diagnostic services $ 50,667 $ 50,832 Consumer products 23,507 22,080 Unallocated corporate 21,200 14,736 Total assets $ 95,374 $ 87,648 |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per ShareBasic earnings per share (“EPS”) excludes dilution and is computed by dividing income available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or otherwise result in the issuance of common stock that shared in the earnings of the entity. Diluted EPS also utilizes the treasury stock method which prescribes a theoretical buy back of shares from the theoretical proceeds of all options outstanding during the period, and the if-converted method for convertible debt. The following is a reconciliation of the weighted average number of common shares outstanding used in calculating basic and diluted net loss per share (in thousands): For the three months ended March 31, 2023 March 31, 2022 Net income - basic $ 550 $ 12,494 Interest on unsecured convertible promissory note 60 232 Net income - diluted $ 610 $ 12,726 Weighted average shares outstanding - basic 16,748 15,486 Diluted shares- Stock Options 22 2,232 Diluted shares- Stock Warrants 1,051 222 Unsecured convertible promissory note 240 800 Weighted average shares outstanding - diluted 18,061 18,740 The following table represents the number of securities excluded from the income per share computation as a result of their anti-dilutive effect (in thousands): For the three months ended Anti-dilutive securities March 31, 2023 March 31, 2022 Common stock purchase warrants 581 455 Stock Options 870 810 Anti-dilutive securities 1,451 1,265 |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On January 30, 2023, the Administration announced that effective May 11, 2023, the federal Public Health Emergency (“PHE”) would expire related to the COVID-19 pandemic. This expiration changes regulatory guidelines around COVID-19 testing including billing codes and reimbursement rates of in and out of network laboratories. While the Company is still assessing the impact this may have on our operations and financial performance, it could impact our ability to collect insurance reimbursements and could negatively impact revenues in future periods. On April 4, 2023, the Company granted, in the aggregate, 550,000 stock options to its CEO and CFO under the 2022 Plan with an exercise price of $9.00. The options vest over a 5-year period in equal annual installments. The estimated fair value of these options at the date of grant was $2.7 million, which will be expensed over the vesting term. On April 6, 2023, the Company issued 250,000 five year warrants to a consultant that vested at the time of grant and an exercise price of $9.00. The estimated fair value of these options at the date of grant were $1.4 million, which will be expensed over the term of the consulting agreement. On April 7, 2023, the Company replaced, 250,000 stock options to an employee under the 2022 Plan with an exercise price of $10.00, The options vest 25% on the date of grant with the remaining 75% vesting over a 3-year period in equal annual installments. The estimated fair value of these options at the date of grant was $1.5 million, which will be expensed over the vesting term. The Company will recognize the incremental fair value resulting from the modification of these options. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial statements and the rules of the Securities and Exchange Commission (“SEC”) applicable to interim financial statements, and therefore do not include all disclosures that might normally be required for financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The accompanying unaudited condensed consolidated financial statements have been prepared by management without audit and should be read in conjunction with our audited consolidated financial statements, including |
Use of Estimates | Use of Estimates The preparation of condensed consolidated financial statements and the accompanying notes thereto, in conformity with GAAP, requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and reported amounts of revenues and expenses during the respective reporting periods. Examples include revenue recognition and the impact of the variable consideration of diagnostic test reimbursement rates, the provision for uncollectible receivables and billing errors, allowances, slow moving and/or dated inventory and associated provisions, the potential impairment of long-lived assets, stock based compensation valuations, income tax asset valuations and assumptions related to accrued advertising. Our estimates and assumptions are based on historical experience, current trends and other factors that management believes to be relevant at the time the condensed consolidated financial statements are prepared. Management reviews the accounting policies, assumptions, estimates and judgments on a quarterly basis. Actual results could differ from those estimates. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments We measure assets and liabilities at fair value based on expected exit price as defined by the authoritative guidance on fair value measurements, which represents the amount that would be received on the sale date of an asset or paid to transfer a liability, as the case may be, in an orderly transaction between market participants. As such, fair value may be based on assumptions that market participants would use in pricing an asset or liability. The authoritative guidance on fair value measurements establishes a consistent framework for measuring fair value on either a recurring or nonrecurring basis whereby inputs, used in valuation techniques, are assigned a hierarchical level. The following are the hierarchical levels of inputs to measure fair value: • Level 1: Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. • Level 2: Inputs reflect quoted prices for identical assets or liabilities in markets that are not active; quoted prices for similar assets or liabilities in active markets; inputs other than quoted prices that are observable for the assets or liabilities; or inputs that are derived principally from or corroborated by observable market data by correlation or other means. • Level 3: Unobservable inputs reflecting the Company’s assumptions incorporated in valuation techniques used to determine fair value. These assumptions are required to be consistent with market participant assumptions that are reasonably available. The carrying amounts of our financial assets and liabilities, such as cash, accounts receivable, accounts payable, and unsecured note payable, approximate their fair values because of the short-term nature of these instruments. We account for our marketable securities at fair value, with the net unrealized gains or losses of marketable debt securities reported as a component of accumulated other comprehensive income or loss and marketable equity securities change in fair value reported on the condensed consolidated statements of operation and comprehensive income (loss). The components of marketable securities are as follows (in thousands): As of March 31, 2023 Level 1 Level 2 Level 3 Total U.S. government obligations $ — $ 1,451 $ — $ 1,451 Corporate obligations 4,395 100 — 4,495 $ 4,395 $ 1,551 $ — $ 5,946 As of December 31, 2022 Level 1 Level 2 Level 3 Total U.S. government obligations $ — $ 1,478 $ — $ 1,478 Corporate obligations 5,496 1,354 — 6,850 Marketable equity securities — — — — $ 5,496 $ 2,832 $ — $ 8,328 There were no transfers of marketable debt securities between Levels 1, 2 or 3 for the three months ended March 31, 2023 and 2022. |
Goodwill | Goodwill Goodwill represents the excess of the fair value of the consideration transferred over the fair value of the underlying identifiable assets and liabilities acquired in a business combination. Goodwill and intangible assets deemed to have an indefinite life are not amortized, but instead are assessed for impairment annually. Additionally, if an event or change in circumstances occurs that would more likely than not reduce the fair value of the reporting unit below its carrying value, we would evaluate goodwill at that time. |
Revenue Recognition | Revenue Recognition The Company recognizes revenues in accordance with FASB Accounting Standards Codification ("ASC") 606, Revenues from Contracts with Customers. The Company recognizes revenue that represents the transfer of promised goods or services to customers at an amount that reflects the consideration that is expected to be received in exchange for those goods or services. The Company recognizes revenue when performance obligations with our customers have been satisfied. At contract inception, we evaluate the contract to determine if revenue should be recognized using the following five steps: (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 revenue when (or as) the entity satisfies a performance obligation. |
Income Taxes | Income Taxes The Company recognizes deferred tax liabilities and assets based on the differences between the financial statement carrying amounts and the tax bases of assets and liabilities, using enacted tax rates in effect in the years the differences are expected to reverse. The provision for, or benefit from, income taxes includes deferred taxes resulting from the temporary differences in income for financial and tax purposes using the liability method. Future realization of deferred income tax assets requires sufficient taxable income within the carryback, carryforward period available under tax law. We evaluate, on a quarterly basis whether, based on all available evidence, it is probable that the deferred income tax assets are realizable. Valuation allowances are established when it is more likely than not that the tax benefit of the deferred tax asset will not be realized. The evaluation, as prescribed by ASC 740-10, “Income Taxes,” includes the consideration of all available evidence, both positive and negative, regarding historical operating results including recent years with reported losses, the estimated timing of future reversals of existing taxable temporary differences, estimated future taxable income exclusive of reversing temporary differences and carryforwards, and potential tax planning strategies which may be employed to prevent an operating loss or tax credit carryforward from expiring unused. The Company accounts for uncertainties in income taxes under the provisions of FASB ASC 740-10-05 (the “Subtopic”). The Subtopic clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements. The Subtopic prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The Subtopic provides guidance on the de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. |
Recently Issued Accounting Standards, Adopted | Recently Issued Accounting Standards, AdoptedOn January 1, 2023, the Company adopted ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”) ASU 2016-13 requires an impairment model (known as the current expected credit loss (“CECL”) model) that is based on expected losses rather than incurred losses. Under the new guidance, each reporting entity should estimate an allowance for expected credit losses, which is intended to result in more timely recognition of losses. This model replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial assets measured at amortized cost, accounts receivable and available for sale debt securities and applies to some off-balance sheet credit exposures. In February 2020, the FASB issued ASU 2020-02, Financial Instruments - Credit Losses (Topic 326), which amends the effective date of the original pronouncement for smaller reporting companies. ASU 2016-13 and its amendments will be effective for the Company for interim and annual periods in fiscal years beginning after December 15, 2022. The adoption of ASU 2016-13 did not have a material impact on the Company's consolidated financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Schedule of Fair Value of Financial Instruments | The components of marketable securities are as follows (in thousands): As of March 31, 2023 Level 1 Level 2 Level 3 Total U.S. government obligations $ — $ 1,451 $ — $ 1,451 Corporate obligations 4,395 100 — 4,495 $ 4,395 $ 1,551 $ — $ 5,946 As of December 31, 2022 Level 1 Level 2 Level 3 Total U.S. government obligations $ — $ 1,478 $ — $ 1,478 Corporate obligations 5,496 1,354 — 6,850 Marketable equity securities — — — — $ 5,496 $ 2,832 $ — $ 8,328 |
Intangible Assets, Net (Tables)
Intangible Assets, Net (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets, Net | Intangible assets as of March 31, 2023 and December 31, 2022 consisted of the following (in thousands): March 31, 2023 December 31, 2022 Estimated Useful Life Trade names $ 5,550 $ 5,550 15 Proprietary intellectual property 11,063 4,260 5 Customer relationships 1,180 1,180 1 CLIA license 1,307 1,307 3 19,100 12,297 Less: accumulated amortization (4,576) (3,822) Total intangible assets, net $ 14,524 $ 8,475 |
Schedule of Estimated Future Amortization Expense of Acquired Intangible Assets | The estimated future amortization expense of acquired intangible assets as of March 31, 2023 is as follows (in thousands): Remaining periods in the year ended December 31, 2023 $ 2,191 Year ended December 31, 2024 2,583 Year ended December 31, 2025 2,583 Year ended December 31, 2026 2,251 Year ended December 31, 2027 1,731 Thereafter 3,185 $ 14,524 |
Stockholders_ Equity (Tables)
Stockholders’ Equity (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Equity [Abstract] | |
Schedule of Stock Options Activity | The following table summarizes stock option activity during the three months ended March 31, 2023, (in thousands, except per share data). Number Weighted Weighted Total Outstanding as of January 1, 2023 3,952 $ 5.36 4.0 $ 20,379 Granted 205 6.84 7.0 — Cashless exercised (1,348) 0.99 — — Forfeited (38) 2.64 — — Outstanding as of March 31, 2023 2,771 $ 7.49 5.2 $ 3,939 Options vested and exercisable 1,661 $ 6.84 4.9 $ 3,172 |
Schedule of Warrant Activity | The following table summarizes warrant activity during the three months ended March 31, 2023 (in thousands, except per share data): Number of Shares Weighted Average Exercise Weighted Average Outstanding as of January 1, 2023 855 $ 8.23 1.9 Granted 126 9.39 4.8 Outstanding as of March 31, 2023 981 $ 8.38 1.2 Warrants vested and exercisable 981 $ 8.38 1.2 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Leases | |
Summary of Quantitative Information About Operating Leases | The following summarizes quantitative information about our operating leases (amounts in thousands): For the three months ended March 31, 2023 March 31, 2022 Operating leases Operating lease cost $ 204 $ 204 Operating lease expense 204 204 Total rent expense $ 204 $ 204 |
Schedule of Maturity of Operating Leases | Maturities of the Company’s operating leases, excluding short-term leases, are as follows (in thousands): Remaining periods in the year ended December 31, 2023 $ 659 Year Ended December 31, 2024 747 Year Ended December 31, 2025 768 Year Ended December 31, 2026 783 Year Ended December 31, 2027 804 Thereafter 3,071 Total 6,832 Less present value discount (2,352) Operating lease liabilities $ 4,480 |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Segment Reporting [Abstract] | |
Schedule of Segment Information | The following table is a summary of segment information for three months ended March 31, 2023 and 2022 (amounts in thousands): For the three months ended March 31, 2023 March 31, 2022 Net revenues Diagnostic services $ 14,524 $ 44,913 Consumer products 4,779 2,618 Consolidated net revenue 19,303 47,531 Cost of revenue Diagnostic services 5,222 16,702 Consumer products 3,561 2,152 Consolidated cost of revenue 8,783 18,854 Depreciation and amortization expense Diagnostic services 931 576 Consumer products 306 600 Total Depreciation and amortization expense 1,237 1,176 Operating and other expenses 8,612 11,591 Income (loss) from operations, before income taxes Diagnostic services 4,397 20,026 Consumer products (1,029) (1,863) Unallocated corporate (2,804) (2,253) Total income from operations, before income taxes 564 15,910 Income tax expense 14 3,416 Total income (loss) from operations, after income taxes 550 12,494 Net income (loss) $ 550 $ 12,494 The following table is a summary of segment information as of March 31, 2023 and December 31, 2022 (amounts in thousands): March 31, 2023 December 31, 2022 ASSETS Diagnostic services $ 50,667 $ 50,832 Consumer products 23,507 22,080 Unallocated corporate 21,200 14,736 Total assets $ 95,374 $ 87,648 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Net Loss Per Share | The following is a reconciliation of the weighted average number of common shares outstanding used in calculating basic and diluted net loss per share (in thousands): For the three months ended March 31, 2023 March 31, 2022 Net income - basic $ 550 $ 12,494 Interest on unsecured convertible promissory note 60 232 Net income - diluted $ 610 $ 12,726 Weighted average shares outstanding - basic 16,748 15,486 Diluted shares- Stock Options 22 2,232 Diluted shares- Stock Warrants 1,051 222 Unsecured convertible promissory note 240 800 Weighted average shares outstanding - diluted 18,061 18,740 |
Schedule of Anti-dilutive Securities Excluded from the Income Per Share Computation | The following table represents the number of securities excluded from the income per share computation as a result of their anti-dilutive effect (in thousands): For the three months ended Anti-dilutive securities March 31, 2023 March 31, 2022 Common stock purchase warrants 581 455 Stock Options 870 810 Anti-dilutive securities 1,451 1,265 |
Organization and Business - Nar
Organization and Business - Narrative (Details) | 3 Months Ended | ||
Mar. 31, 2023 Segment | Jul. 31, 2022 inhibitor | Oct. 23, 2020 ft² | |
Real Estate Properties [Line Items] | |||
Number of operating segments | Segment | 2 | ||
Number of inhibitors | inhibitor | 2 | ||
CLIA Accredited Laboratory | |||
Real Estate Properties [Line Items] | |||
Area of CLIA accredited laboratory (sq. ft.) | ft² | 4,000 |
Schedule of Fair Value of Finan
Schedule of Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Defined Benefit Plan Disclosure [Line Items] | ||
Marketable securities | $ 5,946 | $ 8,328 |
U.S. government obligations | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Marketable securities | 1,451 | 1,478 |
Corporate obligations | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Marketable securities | 4,495 | 6,850 |
Marketable equity securities | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Marketable securities | 0 | |
Level 1 | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Marketable securities | 4,395 | 5,496 |
Level 1 | U.S. government obligations | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Marketable securities | 0 | 0 |
Level 1 | Corporate obligations | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Marketable securities | 4,395 | 5,496 |
Level 1 | Marketable equity securities | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Marketable securities | 0 | |
Level 2 | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Marketable securities | 1,551 | 2,832 |
Level 2 | U.S. government obligations | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Marketable securities | 1,451 | 1,478 |
Level 2 | Corporate obligations | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Marketable securities | 100 | 1,354 |
Level 2 | Marketable equity securities | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Marketable securities | 0 | |
Level 3 | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Marketable securities | 0 | 0 |
Level 3 | U.S. government obligations | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Marketable securities | 0 | 0 |
Level 3 | Corporate obligations | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Marketable securities | $ 0 | 0 |
Level 3 | Marketable equity securities | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Marketable securities | $ 0 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Narrative (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
Nebula Acquisition [Member] | |
Business Acquisition [Line Items] | |
Business acquisitions, escrow received | $ 0.5 |
Business Acquisition - Narrativ
Business Acquisition - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | ||
Dec. 15, 2022 | Mar. 31, 2023 | Dec. 31, 2022 | |
Business Acquisition [Line Items] | |||
Secured note amount | $ 500 | ||
Liability payoff amount | $ 1,600 | ||
Promissory note payoff amount | $ 400 | ||
Common stock, par value (in dollars per share) | $ 0.0005 | $ 0.0005 | $ 0.0005 |
Shares issued (in value per share) | $ 10 | ||
Consideration transferred | $ 4,600 | ||
Due to sellers (see Note 3) | $ 2,000 | $ 2,000 | $ 0 |
Useful life (in years) | 7 years | ||
Transaction costs | 200 | ||
Technology-Based Intangible Assets | |||
Business Acquisition [Line Items] | |||
Useful life (in years) | 5 years | ||
Purchase price | $ 6,800 | ||
Stella Purchase Agreement | |||
Business Acquisition [Line Items] | |||
Payments for asset acquisition | $ 3,500 | ||
Stock issued during period (in shares) | 100,000 | ||
Royalty percent | 5% |
Intangible Assets, Net (Details
Intangible Assets, Net (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization of intangible assets | $ 754,000 | $ 709,000 |
Technology-Based Intangible Assets | ||
Finite-Lived Intangible Assets [Line Items] | ||
Purchase price | $ 6,800,000 |
Schedule of Intangible Assets,
Schedule of Intangible Assets, Net (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Dec. 15, 2022 | Mar. 31, 2023 | Dec. 31, 2022 | |
Finite-Lived Intangible Assets [Line Items] | |||
Finite-lived intangible assets | $ 19,100 | $ 12,297 | |
Estimated Useful Life (in years) | 7 years | ||
Less: accumulated amortization | (4,576) | (3,822) | |
Total intangible assets, net | 14,524 | 8,475 | |
Trade names | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-lived intangible assets | $ 5,550 | 5,550 | |
Estimated Useful Life (in years) | 15 years | ||
Proprietary intellectual property | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-lived intangible assets | $ 11,063 | 4,260 | |
Estimated Useful Life (in years) | 5 years | ||
Customer relationships | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-lived intangible assets | $ 1,180 | 1,180 | |
Estimated Useful Life (in years) | 1 year | ||
CLIA license | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-lived intangible assets | $ 1,307 | $ 1,307 | |
Estimated Useful Life (in years) | 3 years |
Schedule of Estimated Future Am
Schedule of Estimated Future Amortization Expense of Acquired Intangible Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Remaining periods in the year ended December 31, 2023 | $ 2,191 | |
Year ended December 31, 2024 | 2,583 | |
Year ended December 31, 2025 | 2,583 | |
Year ended December 31, 2026 | 2,251 | |
Year ended December 31, 2027 | 1,731 | |
Thereafter | 3,185 | |
Total intangible assets, net | $ 14,524 | $ 8,475 |
Unsecured Promissory Notes Pa_2
Unsecured Promissory Notes Payable - Narrative (Details) | 3 Months Ended | |||||||
Jan. 26, 2023 USD ($) $ / shares | Feb. 28, 2022 USD ($) $ / shares shares | Feb. 28, 2022 USD ($) $ / shares | Mar. 31, 2023 USD ($) | Mar. 31, 2022 USD ($) | Jan. 27, 2023 | Jan. 12, 2023 $ / shares shares | Sep. 15, 2020 USD ($) investor | |
Short-Term Debt [Line Items] | ||||||||
Exercise price (in dollars per share) | $ / shares | $ 10 | |||||||
Warrants term (in years) | 5 years | 1 year | ||||||
Conversion price (in dollars per share) | $ / shares | $ 5.75 | $ 5.75 | ||||||
Cash paid | $ 1,440,548 | $ 1,440,548 | ||||||
Principal amount | 1,400,000 | 1,400,000 | ||||||
Interest payable | 40,548 | 40,548 | ||||||
Debt conversion | 1,150,000 | |||||||
Periodic payment | 2,590,548 | |||||||
2023 Notes Warrants | ||||||||
Short-Term Debt [Line Items] | ||||||||
Warrants (in shares) | shares | 76,000 | |||||||
Exercise price (in dollars per share) | $ / shares | $ 9 | |||||||
Weighted average remaining contractual life, options vested and exercisable (in years) | 5 years | |||||||
Expected volatility rate | 81.50% | |||||||
Risk free interest rate | 3.62% | |||||||
Warrants term (in years) | 5 years | |||||||
Warrant, fair value | $ 380,000 | |||||||
Black-Scholes Option Pricing Model | 2023 Notes Warrants | ||||||||
Short-Term Debt [Line Items] | ||||||||
Warrant fair value | 400,000 | |||||||
Unsecured Debt | ||||||||
Short-Term Debt [Line Items] | ||||||||
Debt, face amount | $ 600,000 | $ 600,000 | ||||||
Conversion shares (in shares) | shares | 200,000 | |||||||
Conversion price (in dollars per share) | $ / shares | $ 3 | $ 3 | ||||||
Unsecured Debt | Letter Agreement | ||||||||
Short-Term Debt [Line Items] | ||||||||
Debt, face amount | $ 2,000,000 | $ 2,000,000 | ||||||
September 2020 Notes | ||||||||
Short-Term Debt [Line Items] | ||||||||
Unpaid balance | $ 2,400,000 | $ 8,000,000 | ||||||
September 2020 Notes | Unsecured Debt | ||||||||
Short-Term Debt [Line Items] | ||||||||
Debt, face amount | $ 10,000,000 | |||||||
Interest rate | 10% | |||||||
Number of investors | investor | 2 | |||||||
Interest expense | $ 215,000 | $ 233,000 | ||||||
2023 Note | Unsecured Debt | ||||||||
Short-Term Debt [Line Items] | ||||||||
Debt, face amount | $ 7,600,000 | |||||||
Interest rate | 10% | |||||||
2023 Note | Unsecured Debt | 2023 Notes Warrants | ||||||||
Short-Term Debt [Line Items] | ||||||||
Debt, face amount | 7,200,000 | |||||||
Debt discount | $ 400,000 |
Stockholders_ Equity - Narrativ
Stockholders’ Equity - Narrative (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||||||||||
Mar. 15, 2023 | Jan. 12, 2023 | Jun. 03, 2022 | Feb. 14, 2022 | May 20, 2021 | Apr. 12, 2018 | Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | Jan. 27, 2023 | Dec. 15, 2022 | May 19, 2022 | |
Equity, Class of Treasury Stock [Line Items] | ||||||||||||
Common stock, authorized (in shares) | 50,000,000 | 50,000,000 | ||||||||||
Common stock, par value (in dollars per share) | $ 0.0005 | $ 0.0005 | $ 0.0005 | |||||||||
Preferred stock, authorized (in shares) | 1,000,000 | 1,000,000 | ||||||||||
Preferred stock, par value (in dollars per share) | $ 0.0005 | $ 0.0005 | ||||||||||
Preferred stock, issued (in shares) | 0 | 0 | ||||||||||
Cash dividend declared (in dollars per share) | $ 0.30 | |||||||||||
Payments of ordinary dividends | $ 4,600,000 | |||||||||||
Stock repurchase, authorized | $ 6,000,000 | |||||||||||
Stock repurchase, period (in months) | 6 months | |||||||||||
Stock options granted (in shares) | 205,000 | |||||||||||
Options, value | $ 900,000 | |||||||||||
Return of shares (in shares) | 744,369 | |||||||||||
Cash payment for repurchase | $ 5,400,000 | |||||||||||
Treasury stock repurchased (in shares) | 603,881 | |||||||||||
Exercise price (in price per share) | $ 10 | |||||||||||
Award vesting period (in years) | 5 years | |||||||||||
Estimated fair value of options at date of grant | $ 300,000 | |||||||||||
Warrants term (in years) | 1 year | 5 years | ||||||||||
Share-based compensation expense | $ 900,000 | $ 500,000 | ||||||||||
Share-based compensation expense, remaining | $ 4,700,000 | |||||||||||
Weighted average remaining contractual life, outstanding shares (in years) | 3 years 10 months 24 days | |||||||||||
Stock Options | ||||||||||||
Equity, Class of Treasury Stock [Line Items] | ||||||||||||
Expected volatility rate | 0.809% | |||||||||||
Warrant life (in years) | 4 years 3 months | |||||||||||
Risk free interest rate | 0.0378% | |||||||||||
Common Stock | ||||||||||||
Equity, Class of Treasury Stock [Line Items] | ||||||||||||
Shares repurchased (in shares) | 63,616 | 200,000 | ||||||||||
Stock options exercised (in shares) | 603,881 | |||||||||||
Warrant | ||||||||||||
Equity, Class of Treasury Stock [Line Items] | ||||||||||||
Warrants (in shares) | 50,000 | |||||||||||
Expected volatility rate | 80.90% | |||||||||||
Warrant life (in years) | 5 years | |||||||||||
Risk free interest rate | 3.53% | |||||||||||
Weighted average remaining contractual life, outstanding shares (in years) | 1 year 2 months 12 days | 1 year 10 months 24 days | ||||||||||
2022 Directors Plan | ||||||||||||
Equity, Class of Treasury Stock [Line Items] | ||||||||||||
Shares reserved for future issuance (in shares) | 180,000 | 300,000 | ||||||||||
Amended 2010 Directors' Plan | ||||||||||||
Equity, Class of Treasury Stock [Line Items] | ||||||||||||
Number of shares authorized (in shares) | 775,000 | |||||||||||
Amended 2010 Plan | ||||||||||||
Equity, Class of Treasury Stock [Line Items] | ||||||||||||
Shares issued (in shares) | 4,900,000 | |||||||||||
2018 Stock Incentive Plan | ||||||||||||
Equity, Class of Treasury Stock [Line Items] | ||||||||||||
Stock options exercised (in shares) | 0 | 1,100,000 | ||||||||||
2018 Stock Incentive Plan | CEO Options | ||||||||||||
Equity, Class of Treasury Stock [Line Items] | ||||||||||||
Exercise price (in dollars per share) | $ 0.60 | |||||||||||
2022 Plan | ||||||||||||
Equity, Class of Treasury Stock [Line Items] | ||||||||||||
Shares reserved for future issuance (in shares) | 803,285 | |||||||||||
Increase in shares reserved for future issuance | 1,000,000 | |||||||||||
Common stock issued (in shares) | 205,000 | |||||||||||
Chief Executive Officer | 2018 Stock Incentive Plan | ||||||||||||
Equity, Class of Treasury Stock [Line Items] | ||||||||||||
Stock issued during period (in shares) | 2,300,000 | |||||||||||
Stock options granted (in shares) | 2,300,000 | |||||||||||
Share Repurchase Program | ||||||||||||
Equity, Class of Treasury Stock [Line Items] | ||||||||||||
Shares repurchased (in shares) | 63,616 |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Stock Options Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | |
Number of Shares | ||
Number of shares options granted (in shares) | 205,000 | |
Number of shares options forfeited (in shares) | (744,369) | |
Weighted Average Exercise Price | ||
Weighted average remaining contractual life (in years) | 3 years 10 months 24 days | |
Closing stock price (in dollars per share) | $ 7.62 | |
Equity Option | ||
Number of Shares | ||
Number of shares options outstanding - beginning (in shares) | 3,952,000 | |
Number of shares options granted (in shares) | 205,000 | |
Number of shares options exercised (in shares) | (1,348,000) | |
Number of shares options forfeited (in shares) | (38,000) | |
Number of shares options outstanding - ending (in shares) | 2,771,000 | 3,952,000 |
Number of shares options vested and exercisable (in shares) | 1,661,000 | |
Weighted Average Exercise Price | ||
Weighted average exercise price, beginning (in dollars per share) | $ 5.36 | |
Weighted average exercise price, granted (in dollars per share) | 6.84 | |
Weighted average exercise price, cashless exercised (in dollars per share) | 0.99 | |
Weighted average exercise price, forfeited (in dollars per share) | 2.64 | |
Weighted average exercise price, ending (in dollars per share) | 7.49 | $ 5.36 |
Weighted average exercise price, options vested and exercisable (in dollars per share) | $ 6.84 | |
Weighted average remaining contractual life (in years) | 5 years 2 months 12 days | 4 years |
Weighted average remaining contractual life shares options granted (in years) | 7 years | |
Weighted average remaining contractual life, options vested and exercisable (in years) | 4 years 10 months 24 days | |
Total intrinsic value, outstanding, beginning | $ 20,379 | |
Total intrinsic value, outstanding, ending | 3,939 | $ 20,379 |
Total intrinsic value, options vested and exercisable | $ 3,172 |
Stockholders' Equity - Schedu_2
Stockholders' Equity - Schedule of Warrant Activity (Details) - $ / shares | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | |
Warrants and Rights Note Disclosure [Abstract] | ||
Weighted average remaining contractual life (in years) | 3 years 10 months 24 days | |
Warrant | ||
Number of Shares | ||
Number of shares, warrants outstanding, beginning (in shares) | 855,000 | |
Number of shares, warrants granted (in shares) | 126,000 | |
Number of shares, warrants outstanding, ending (in shares) | 981,000 | 855,000 |
Number of shares, warrant vested and exercisable (in shares) | 981,000 | |
Warrants and Rights Note Disclosure [Abstract] | ||
Weighted average exercise price, warrants outstanding, beginning | $ 8.23 | |
Weighted average exercise price warrants, granted | 9.39 | |
Weighted average exercise price, warrants outstanding, ending | 8.38 | $ 8.23 |
Weighted average exercise price warrants vested and exercisable | $ 8.38 | |
Weighted average remaining contractual life (in years) | 1 year 2 months 12 days | 1 year 10 months 24 days |
Weighted average remaining contractual life warrants granted (in years) | 4 years 9 months 18 days | |
Weighted average remaining contractual life warrants, vested and exercisable | 1 year 2 months 12 days |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
Effective tax rate | 1.69% | |
Effective tax rate, federal | 21% | |
Effective tax rate, state taxes | 10.13% | |
Tax expense | $ 14 | $ 3,416 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) | 3 Months Ended | |||
Jul. 19, 2022 USD ($) | Mar. 31, 2023 USD ($) | Mar. 31, 2022 USD ($) | May 01, 2021 periods | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Renewal options | periods | 4 | |||
Renewal period (in years) | 1 year | |||
Agreement term (in days) | 90 days | |||
License agreement term (in days) | 10 days | |||
General and administrative expense | $ 8,298,000 | $ 7,824,000 | ||
License Agreement | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
General and administrative expense | $ 200,000 | |||
License Agreement | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Upfront license fee | $ 50,000 | |||
License or royalty net revenue percentage | 3% | |||
Royalty expense | $ 250,000 | |||
License Agreement | Phase 3 | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Additional payment of fee | 900,000 | |||
License Agreement | New Drug Application | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Additional payment of fee | $ 1,000,000 |
Leases - Narrative (Details)
Leases - Narrative (Details) | Oct. 23, 2020 USD ($) ft² | Mar. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Jun. 10, 2022 ft² |
Restructuring Cost and Reserve [Line Items] | ||||
Operating lease liability | $ 4,480,000 | $ 4,600,000 | ||
Operating lease, right-of-use asset | $ 3,974,000 | $ 4,059,000 | ||
NY Lease | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Area of real estate property (sq. ft.) | ft² | 4,516 | |||
CPM | Old Bridge New Jersey | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Area of real estate property (sq. ft.) | ft² | 4,000 | |||
Lease term (in months) | 24 months | |||
Lease payment | $ 5,950 |
Leases - Summary of Quantitativ
Leases - Summary of Quantitative Information About Operating Leases (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Leases | ||
Operating lease cost | $ 204 | $ 204 |
Operating lease expense | 204 | 204 |
Total rent expense | $ 204 | $ 204 |
Leases - Schedule of Maturity o
Leases - Schedule of Maturity of Operating Leases (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Leases | ||
Remaining periods in the year ended December 31, 2023 | $ 659 | |
Year Ended December 31, 2024 | 747 | |
Year Ended December 31, 2025 | 768 | |
Year Ended December 31, 2026 | 783 | |
Year Ended December 31, 2027 | 804 | |
Thereafter | 3,071 | |
Total | 6,832 | |
Less present value discount | (2,352) | |
Operating lease liabilities | $ 4,480 | $ 4,600 |
Segment Information - Schedule
Segment Information - Schedule of Segment Information (Details) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 USD ($) Segment | Mar. 31, 2022 USD ($) | Dec. 31, 2022 USD ($) | |
Segment Reporting Information [Line Items] | |||
Number of operating segments | Segment | 2 | ||
Revenues, net | $ 19,303 | $ 47,531 | |
Cost of revenue | 8,783 | 18,854 | |
Depreciation and amortization expense | 1,237 | 1,176 | |
Operating and other expenses | 8,612 | 11,591 | |
Income (loss) from operations, before income taxes | 564 | 15,910 | |
Income tax expense | 14 | 3,416 | |
Total income (loss) from operations, after income taxes | 550 | 12,494 | |
Net income | 550 | 12,494 | |
Total assets | 95,374 | $ 87,648 | |
Diagnostic services | |||
Segment Reporting Information [Line Items] | |||
Revenues, net | 14,524 | 44,913 | |
Cost of revenue | 5,222 | 16,702 | |
Depreciation and amortization expense | 931 | 576 | |
Income (loss) from operations, before income taxes | 4,397 | 20,026 | |
Total assets | 50,667 | 50,832 | |
Consumer products | |||
Segment Reporting Information [Line Items] | |||
Revenues, net | 4,779 | 2,618 | |
Cost of revenue | 3,561 | 2,152 | |
Depreciation and amortization expense | 306 | 600 | |
Income (loss) from operations, before income taxes | (1,029) | (1,863) | |
Total assets | 23,507 | 22,080 | |
Unallocated corporate | |||
Segment Reporting Information [Line Items] | |||
Income (loss) from operations, before income taxes | (2,804) | $ (2,253) | |
Total assets | $ 21,200 | $ 14,736 |
Earnings Per Share - Schedule o
Earnings Per Share - Schedule of Basic and Diluted Net Loss Per Share (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Earnings Per Share [Abstract] | ||
Net income - basic | $ 550 | $ 12,494 |
Interest on unsecured convertible promissory note | 60 | 232 |
Net income - diluted | $ 610 | $ 12,726 |
Weighted average common shares outstanding, basic (in shares) | 16,748 | 15,486 |
Diluted shares - stock options (in shares) | 22 | 2,232 |
Diluted shares- stock warrants (in shares) | 1,051 | 222 |
Unsecured convertible promissory note (in shares) | 240 | 800 |
Weighted average shares outstanding - diluted (in shares) | 18,061 | 18,740 |
Earnings Per Share - Schedule_2
Earnings Per Share - Schedule of Anti-dilutive Securities Excluded from the Income Per Share Computation (Details) - shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive securities (in shares) | 1,451 | 1,265 |
Common stock purchase warrants | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive securities (in shares) | 581 | 455 |
Stock Options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive securities (in shares) | 870 | 810 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |||||
Apr. 07, 2023 | Apr. 04, 2023 | Jan. 12, 2023 | Mar. 31, 2023 | Apr. 06, 2023 | Jan. 27, 2023 | |
Subsequent Event [Line Items] | ||||||
Stock options granted (in shares) | 205,000 | |||||
Option vesting period (in years) | 5 years | |||||
Warrants term (in years) | 1 year | 5 years | ||||
Warrant | ||||||
Subsequent Event [Line Items] | ||||||
Warrants (in shares) | 50,000 | |||||
Subsequent Event | Warrant | ||||||
Subsequent Event [Line Items] | ||||||
Warrants (in shares) | 250,000 | |||||
Warrants term (in years) | 5 years | |||||
Warrants, exercise price (in dollars per share) | $ 9 | |||||
Warrant, fair value | $ 1.4 | |||||
Subsequent Event | 2022 Plan | Stock Options | ||||||
Subsequent Event [Line Items] | ||||||
Exercise price (in dollars per share) | $ 9 | |||||
Option vesting period (in years) | 3 years | 5 years | ||||
Estimated fair value at date of grant | $ 1.5 | $ 2.7 | ||||
Subsequent Event | 2022 Plan | Stock Options | Vesting Period One | ||||||
Subsequent Event [Line Items] | ||||||
Options vesting percentage | 25% | |||||
Subsequent Event | 2022 Plan | Stock Options | Vesting Period Two | ||||||
Subsequent Event [Line Items] | ||||||
Options vesting percentage, remaining | 75% | |||||
Subsequent Event | 2022 Plan | CEO and CFO | Stock Options | ||||||
Subsequent Event [Line Items] | ||||||
Stock options granted (in shares) | 550,000 | |||||
Subsequent Event | 2022 Plan | Employee | Stock Options | ||||||
Subsequent Event [Line Items] | ||||||
Stock options granted (in shares) | 250,000 | |||||
Exercise price (in dollars per share) | $ 10 |