10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2024

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-39334

Biora Therapeutics, Inc.

(Exact name of registrant as specified in its charter)

Delaware	27-3950390
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
4330 La Jolla Village Drive, Suite 300, San Diego, CA	92122
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (833) 727-2841

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.001 per share	BIOR	The Nasdaq Global Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

As of May 8, 2024, the registrant had 35,883,843 shares of common stock, par value $0.001 per share, outstanding.

Table of Contents

		Page
PART 1	FINANCIAL INFORMATION
Item 1.	Financial Statements (unaudited)	1
	Condensed Consolidated Balance Sheets	1
	Condensed Consolidated Statements of Operations	2
	Condensed Consolidated Statements of Stockholders’ Deficit	3
	Condensed Consolidated Statements of Cash Flows	4
	Notes to Condensed Consolidated Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	26
Item 4.	Controls and Procedures	27
PART II	OTHER INFORMATION
Item 1.	Legal Proceedings	28
Item 1A.	Risk Factors	28
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	61
Item 3.	Default Upon Senior Securities	61
Item 4.	Mine Safety Disclosures	61
Item 5.	Other Information	61
Item 6.	Exhibits	63
Signatures		64

EXPLANATORY NOTE

All share and per share information included in this Quarterly Report on Form 10-Q has been retroactively adjusted to reflect a 1-for-25 reverse stock split effected on January 3, 2023.

TRADEMARKS

Biora TherapeuticsTM, BiojetTM, NavicapTM, and GITracTM are trademarks of Biora Therapeutics, Inc. Any other brand names or trademarks appearing in this Quarterly Report on Form 10-Q are the property of their respective holders.

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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

Biora Therapeutics, INC.

CONDENSED Consolidated Balance Sheets

(In thousands, except share and per share data)

(Unaudited)

	March 31, 2024			December 31, 2023
Assets
Current assets:
Cash, cash equivalents and restricted cash	$	10,820		$	15,211
Income tax receivable		822			830
Prepaid expenses and other current assets		2,429			3,030
Total current assets		14,071			19,071
Property and equipment, net		1,136			1,156
Right-of-use assets		1,418			1,614
Other assets		293			3,302
Goodwill		6,072			6,072
Total assets	$	22,990		$	31,215
Liabilities and Stockholders' Deficit
Current liabilities:
Accounts payable	$	4,936		$	2,843
Accrued expenses and other current liabilities		16,984			17,319
Warrant liabilities		27,208			40,834
Related party senior secured convertible notes, current portion		1,976			1,976
Total current liabilities		51,104			62,972
Convertible notes, net of unamortized discount of $103 and $259 as of      March 31, 2024 and December 31, 2023, respectively		4,497			9,966
Senior secured convertible notes, net of unamortized discount of $13,992 and $11,066 as of      March 31, 2024 and December 31, 2023, respectively (Note 6)		18,709			14,591
Related party senior secured convertible notes net of unamortized discount of $7,058      and $7,951 as of March 31, 2024 and December 31, 2023, respectively (including      future interest of $9,747 and $9,747 as of March 31, 2024 and      December 31, 2023, respectively) (Note 6)		20,072			19,179
Derivative liabilities		26,210			22,899
Other long-term liabilities		2,583			3,029
Total liabilities	$	123,175		$	132,636
Commitments and contingencies (Note 8)
Stockholders' deficit:
Common stock – $0.001 par value; 164,000,000 shares authorized; 31,166,719 and    28,574,918 shares issued as of March 31, 2024 and December 31, 2023, respectively;    30,429,295 and 27,837,563 shares outstanding as of March 31, 2024 and    December 31, 2023, respectively		28			25
Additional paid-in capital		874,013			868,591
Accumulated deficit		(955,147	)		(950,958	)
Treasury stock – at cost; 737,424 and 737,355 shares as of March 31, 2024 and    December 31, 2023, respectively		(19,079	)		(19,079	)
Total stockholders' deficit		(100,185	)		(101,421	)
Total liabilities and stockholders' deficit	$	22,990		$	31,215

See accompanying notes to unaudited condensed consolidated financial statements.

1

Biora Therapeutics, INC.

Condensed Consolidated Statements of Operations

(In thousands, except share and per share data)

(Unaudited)

	Three Months Ended March 31,
	2024			2023
Revenues	$	542		$	2
Operating expenses:
Research and development		7,005			7,190
Selling, general and administrative		9,053			8,356
Total operating expenses		16,058			15,546
Loss from operations		(15,516	)		(15,544	)
Interest expense, net		(2,757	)		(2,680	)
Gain on warrant liabilities		13,915			864
Other income (expense), net		217			(81	)
Loss before income taxes		(4,141	)		(17,441	)
Income tax expense		48			—
Net loss		(4,189	)		(17,441	)
Net loss per share, basic and diluted	$	(0.14	)	$	(1.59	)
Weighted average shares outstanding, basic and diluted		29,296,767			10,970,583

See accompanying notes to unaudited condensed consolidated financial statements.

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Biora Therapeutics, INC.

Condensed Consolidated Statements of Stockholders’ Deficit

(In thousands, except share data)

(Unaudited)

	Common Stock				Additional Paid-In		Accumulated			Treasury Stock						Total Stockholders'
	Shares		Amount		Capital		Deficit			Shares			Amount			Deficit
Balance at December 31, 2023		28,574,918	$	25	$	868,591	$	(950,958	)		(737,355	)	$	(19,079	)	$	(101,421	)
Issuance of common stock, net		2,591,662		3		2,821		—			—			—			2,824
Issuance of common stock upon vesting of restricted stock units		139		—		—		—			(69	)		—			—
Issuance of common stock warrants		—		—		1,062		—			—			—			1,062
Stock-based compensation expense		—		—		1,539		—			—			—			1,539
Net loss		—		—		—		(4,189	)		—			—			(4,189	)
Balance at March 31, 2024		31,166,719	$	28	$	874,013	$	(955,147	)		(737,424	)	$	(19,079	)	$	(100,185	)

	Common Stock				Additional Paid-In			Accumulated			Treasury Stock						Total Stockholders'
	Shares		Amount		Capital			Deficit			Shares			Amount			Deficit
Balance at December 31, 2022		9,098,844	$	8	$	743,626		$	(826,843	)		(170,346	)	$	(19,078	)	$	(102,287	)
Issuance of common stock, net		2,853,109		3		12,521			—			—			—			12,524
Issuance of common stock upon vesting of restricted stock units		146,321		—		(178	)		—			(68,938	)		—			(178	)
Stock-based compensation expense		—		—		2,384			—			—			—			2,384
Net loss		—		—		—			(17,441	)		—			—			(17,441	)
Balance at March 31, 2023		12,098,274	$	11	$	758,353		$	(844,284	)		(239,284	)	$	(19,078	)	$	(104,998	)

See accompanying notes to unaudited condensed consolidated financial statements.

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Biora Therapeutics, INC.

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

	Three Months Ended March 31,
	2024			2023
Operating Activities:
Net loss	$	(4,189	)	$	(17,441	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		105			147
Stock-based compensation expense		1,539			2,384
Loss on extinguishment of convertible notes		185			—
Amortization of debt discount		1,939			374
Loss on disposal of property and equipment		10			9
Impairment of property and equipment		—			100
Change in fair value of derivative liabilities		(418	)		—
Change in fair value of warrant liabilities		(13,915	)		(864	)
Changes in operating assets and liabilities:
Income tax receivable		8			—
Prepaid expenses and other current assets		728			772
Accounts payable		1,806			(184	)
Accrued expenses and other current liabilities		(83	)		3,057
Other long-term liabilities		(211	)		(452	)
Net cash used in operating activities		(12,496	)		(12,098	)
Investing Activities:
Purchases of property and equipment		(15	)		(16	)
Proceeds from sale of property and equipment		20			10
Proceeds from sale of investment in Enumera Molecular, Inc.		3,000			—
Net cash provided by (used in) investing activities		3,005			(6	)
Financing Activities:
Proceeds from issuance of common stock		2,800			12,883
Proceeds from issuance of convertible notes, net		2,813			—
Payments of offering costs		(70	)		(359	)
Payments for financing of insurance premiums		(443	)		(443	)
Net cash provided by financing activities		5,100			12,081
Net decrease in cash, cash equivalents and restricted cash		(4,391	)		(23	)
Cash, cash equivalents and restricted cash at beginning of period		15,211			30,486
Cash, cash equivalents and restricted cash at end of period	$	10,820		$	30,463

Supplemental disclosure of cash flow information:
Cash paid for interest	$	78	$	—
Supplemental schedule of non-cash investing and financing activities:
Exchange of convertibles note for senior secured notes and warrants	$	5,625	$	—
Lease assets obtained in exchange for operating lease liabilities	$	—	$	1,133
Debt issuance costs incurred but not paid	$	314	$	—
Purchases of property and equipment in accounts payable	$	107	$	—

See accompanying notes to unaudited condensed consolidated financial statements.

4

Biora Therapeutics, INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

1. Organization and Description of Business

Biora Therapeutics, Inc. (the “Company” or “Biora” or "Biora Therapeutics") is a clinical-stage biotechnology company developing oral biotherapeutics that could enable new treatment approaches in the delivery of therapeutics. The Company's pipeline includes two therapeutic delivery platforms:

•NaviCapTM Targeted Oral Delivery Platform: Delivery of therapeutics to the site of disease in the gastrointestinal tract designed to improve outcomes for patients with Inflammatory Bowel Disease; and

•BioJetTM Systemic Oral Delivery Platform: Designed to replace injections with needle-free, oral delivery of large molecules for better management of chronic diseases.

Biora Therapeutics, a Delaware corporation, was formerly known as Progenity, Inc., and commenced operations in 2010 with its corporate office located in San Diego, California. The Company's historical operations included a licensed Clinical Laboratory Improvement Amendments and College of American Pathologists certified laboratory located in Michigan specializing in molecular testing markets serving women’s health providers in the obstetric, gynecological, fertility, and maternal fetal medicine specialty areas in the United States. Previously, the Company's core business was focused on the carrier screening and noninvasive prenatal test market, targeting preconception planning and routine pregnancy management for genetic disease risk assessment. Through its former affiliation with Mattison Pathology, LLP, a Texas limited liability partnership doing business as Avero Diagnostics (“Avero”), the Company’s operations also included anatomic and molecular pathology testing products.

On December 29, 2022, the Company filed a certificate of amendment (the "Certificate of Amendment") to its eighth amended and restated certificate of incorporation to effect, as of January 3, 2023, a 1-for-25 reverse split of the Company's common stock (the "Reverse Stock Split"). On January 3, 2023, the Company effected the Reverse Stock Split. See Note 2 for additional information.

Liquidity

As of March 31, 2024, the Company had cash and cash equivalents of $10.6 million, restricted cash of $0.2 million and a working capital deficit. The Company had an accumulated deficit of $955.1 million as of March 31, 2024. For the three months ended March 31, 2024, the Company reported a net loss of $4.2 million and cash used in operating activities of $12.5 million. The Company’s primary sources of capital have historically been the sale of common stock and warrants, private placements of preferred stock and the incurrence of debt. As of March 31, 2024, the Company had a face value of $47.5 million of 11.0%/13.0% convertible senior secured notes due 2028 ("2028 Convertible Notes") outstanding and a face value of $4.6 million of 7.25% convertible senior notes due 2025 ("2025 Convertible Notes" and together with the 2028 Convertible Notes, the "Convertible Notes") outstanding (see Note 6). Management does not expect that the Company's current cash and cash equivalents will be sufficient to fund its operations for at least 12 months from the issuance date of the condensed consolidated financial statements for the three months ended March 31, 2024, and will require additional capital to fund the Company's operations. As a result, substantial doubt exists about the Company’s ability to continue as a going concern for 12 months following the issuance date of the condensed consolidated financial statements for the three months ended March 31, 2024.

The Company’s ability to continue as a going concern is dependent upon its ability to raise additional funding. Management believes that the Company’s liquidity position as of the date of this filing provides sufficient runway to achieve important research and development pipeline milestones. Management intends to raise additional capital through equity offerings and/or debt financings, or from other potential sources of liquidity, which may include new collaborations, licensing or other commercial agreements for one or more of the Company’s research programs or patent portfolios or divestitures of the Company's assets. Adequate funding, if needed, may not be available to the Company on acceptable terms, or at all. The Company’s ability to raise additional funds may be adversely impacted by potential worsening global economic conditions and the disruptions to, and volatility in, the credit and financial markets in the United States and worldwide. If the Company is unable to raise capital when needed or on attractive terms, it would be forced to delay, reduce, or eliminate its research and development programs or other operations. If any of these events occur, the Company’s ability to achieve its operational goals would be adversely affected.

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2. Summary of Significant Accounting Policies

Basis of Presentation

The Company’s condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. These financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the Securities and Exchange Commission, from which management derived the Company’s condensed consolidated balance sheet as of December 31, 2023.

The condensed consolidated financial statements and notes thereto give retrospective effect to the Reverse Stock Split for all periods presented. All common stock, options exercisable for common stock, restricted stock units ("RSUs"), warrants and per share amounts contained in the condensed consolidated financial statements have been retrospectively adjusted to reflect the Reverse Stock Split for all periods presented. Concurrent with the Reverse Stock Split, the Company effected a reduction in the number of authorized shares of common stock from 350,000,000 shares to 164,000,000 shares.

Unaudited Interim Financial Information

The accompanying condensed consolidated financial statements are unaudited, have been prepared on the same basis as the audited annual financial statements and, in the opinion of management, reflect all adjustments, consisting of normal recurring adjustments, that are necessary to present fairly the results for the interim periods presented. Results are not necessarily indicative of results to be expected for the year ending December 31, 2024, any other interim periods, or any future year or period. The balance sheet as of December 31, 2023 included herein was derived from the audited financial statements as of that date. Certain disclosures have been condensed or omitted from the interim financial statements.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant items subject to such estimates include the valuation of stock options, the valuation of goodwill, the valuation of the derivative liabilities associated with the 2028 Convertible Notes, accrual for reimbursement claims and settlements, the valuation of warrant liabilities, assessing future tax exposure and the realization of deferred tax assets, and the useful lives and the recoverability of property and equipment. The Company bases these estimates on historical and anticipated results, trends, and various other assumptions that the Company believes are reasonable under the circumstances, including assumptions as to future events. These estimates form the basis for making judgments about the carrying values of assets and liabilities and recorded revenues and expenses that are not readily apparent from other sources. Actual results could differ from those estimates and assumptions.

Restricted Cash

Restricted cash consists of collateral required for the Company's bank-issued credit cards with a balance of $0.2 million as of both March 31, 2024 and December 31, 2023.

Recent Accounting Pronouncements Adopted

In August 2020, the Financial Accounting Standards ("FASB") issued Accounting Standards Update ("ASU") No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity's Own Equity (Subtopic 815-40)-Accounting for Convertible Instruments and Contracts in an Entity's Own Equity, which simplifies the accounting for convertible instruments, amends the guidance on derivative scope exceptions for contracts in an entity's own equity, and modifies the guidance on diluted earnings per share calculations as a result of these changes. The standard is effective for the Company for annual reporting periods beginning after December 15, 2023. The Company adopted this standard on January 1, 2024, and it did not have a material impact on the consolidated financial statements.

Recent Accounting Pronouncements Not Yet Adopted

In December 2023, the FASB issued ASU No. 2023-09, Improvements to Income Tax Disclosures, which introduces new and enhanced income tax disclosure requirements. The standard is effective for the Company for annual reporting periods beginning after December 15, 2025. The Company is currently evaluating the impact the adoption of this standard may have on its consolidated financial statements and related disclosures.

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3. Strategic Transformation

In order to refocus efforts and resources on its research and development pipeline, in June 2021, the Company announced a strategic transformation ("Strategic Transformation") that included the closure of the legacy genetics laboratory and the sale of Avero, together referred to as the "Laboratory Operations".

Assets Held for Sale

In October 2023, the Company entered into a purchase and sale agreement to sell the building located in Ann Arbor, Michigan included in current assets held for sale. The transaction closed in October 2023 and the Company received gross proceeds of $2.8 million and incurred closing expenses of $0.2 million. There are no assets held for sale as of March 31, 2024 or December 31, 2023.

Investment in Enumera Molecular, Inc.

In May 2022, the Company completed the divesture of its single-molecule detection platform. Under the terms of the agreements, the Company contributed intellectual property and fixed assets related to the single-molecule detection platform to a newly-formed entity, Enumera Molecular, Inc. ("Enumera"), which intends to develop and commercialize the platform. On the transaction date, the Company received a 25% minority ownership stake, on a fully-diluted basis, of 6,000,000 Series A-1 preferred shares with an estimated value of $6.0 million in exchange for the assets. The Company concluded, based on a technical evaluation of the facts, that Enumera is not a variable interest entity. The Company also evaluated the characteristics of the investment and determined that the preferred stock is not in-substance common stock that would require equity method accounting. The Company concluded the appropriate accounting treatment for the investment in Enumera to be that of an equity security with no readily determinable fair value and has recorded the investment at cost, less impairment, adjusted for subsequent observable price changes. The Company determined the fair value was less than carrying value as of December 31, 2023 based on negative cash flows from operations and for the year ended December 31, 2023 recorded a $3.0 million impairment loss on its investment. The investment is included in other assets in the Company’s condensed consolidated balance sheets as of December 31, 2023. In March 2024, the Company entered into a stock purchase agreement with Enumera investors, pursuant to which it sold its remaining investment for $3.0 million.

Licensing Agreements

In November 2022, the Company entered into a license agreement with Northwest Pathology, doing business as Avero Diagnostics (“Northwest”), pursuant to which the Company licensed its Preecludia rule-out test for preeclampsia to Northwest for commercial development (the “Northwest License Agreement”). Under the terms of the Northwest License Agreement, Northwest received the rights to assets and intellectual property related to the Preecludia test and the Company will receive commercial milestone payments and royalties on net sales.

4. Balance Sheet Components

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consisted of the following (in thousands):

	March 31, 2024		December 31, 2023
Prepaid expenses	$	2,260	$	2,443
Other current assets		169		587
Total	$	2,429	$	3,030

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Property and Equipment, Net

Property and equipment, net consisted of the following (in thousands):

	March 31, 2024			December 31, 2023
Computers and software	$	1,189		$	1,193
Building and leasehold improvements		852			803
Laboratory equipment		430			423
Furniture, fixtures, and office equipment		799			799
Construction in progress		49			45
Total property and equipment		3,319			3,263
Less accumulated depreciation and amortization		(2,183	)		(2,107	)
Property and equipment, net	$	1,136		$	1,156

Depreciation and amortization expense was $0.1 million for each of the three months ended March 31, 2024 and 2023.

Other Assets

Other assets consisted of the following (in thousands):

	March 31, 2024		December 31, 2023
Investment in Enumera	$	—	$	3,000
Other		293		302
Total	$	293	$	3,302

Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following (in thousands):

	March 31, 2024		December 31, 2023
Accrual for reimbursement claims and legal settlements, current (1)	$	3,572	$	6,337
Commissions and bonuses		3,146		2,469
Vacation and payroll benefits		1,442		1,367
Accrued professional services (2)		4,123		2,914
Accrued interest		1,058		173
Lease liabilities, current		920		896
Insurance financing		606		401
Contract liabilities		—		542
Other (3)		2,117		2,220
Total	$	16,984	$	17,319

(1) Laboratory Operations have been discontinued; amounts related to revenue reserves generated from the Laboratory Operations remain on the balance sheet.

(2) The Company has entered into an alternative fee arrangement with a professional services firm related to certain litigation matters; amounts related to the arrangement are included in accrued professional services. Depending on the ultimate outcome of such litigation, the fees could be materially higher than what has been accrued.

(3) Included in this amount are contracts that the Company is responsible for that were expensed in discontinued operations in 2021.

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Other Long-term Liabilities

Other long-term liabilities consisted of the following (in thousands):

	March 31, 2024		December 31, 2023
Lease liabilities, net of current portion		583		818
Other (1)		2,000		2,211
Total	$	2,583	$	3,029

(1) Included in this amount are contracts that the Company is responsible for that were expensed in discontinued operations in 2021.

5. Fair Value Measurements

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date. The authoritative guidance establishes a three-level valuation hierarchy that prioritizes the inputs to valuation techniques used to measure fair value based upon whether such inputs are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect market assumptions made by the reporting entity. This hierarchy requires the Company to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value. The three-level hierarchy for the inputs to valuation techniques is summarized as follows:

Level 1 - Quoted prices in active markets for identical assets and liabilities that the Company has the ability to access.

Level 2 - Observable market-based inputs or unobservable inputs that are corroborated by market data, such as quoted prices, interest rates, and yield curves.

Level 3 - Inputs that are unobservable data points that are not corroborated by market data.

There were no significant transfers between these fair value measurement classifications during the three months ended March 31, 2024 and 2023.

The following table presents information about the Company’s assets and liabilities that are measured at fair value on a recurring basis and indicates the fair value hierarchy of the valuation techniques utilized to determine such fair value (in thousands):

	Level 1		Level 2		Level 3
March 31, 2024
Derivative liabilities	$	—	$	—	$	26,210
Warrant liabilities	$	—	$	—	$	27,208
December 31, 2023
Derivative liabilities	$	—	$	—	$	22,899
Warrant liabilities	$	—	$	—	$	40,834

The Company issued 2028 Convertible Notes (see Note 6) that contain conversion features that are required to be bifurcated and recorded as embedded derivative liabilities in the consolidated balance sheet. The Company utilized a binomial pricing model to determine the fair value of the conversion features, which utilizes significant unobservable inputs. The fair value of the embedded derivatives as of March 31, 2024 and December 31, 2023 were estimated using a binomial pricing model with the following inputs and assumptions:

	March 31, 2024	December 31, 2023
Risk-free interest rate	4.2%	3.8% - 4.3%
Expected volatility	94.1%	84.3% - 95.7%
Stock price	$1.10	$1.35
Discount Rate	32.1%	28.7% - 28.9%

The Company’s Level 3 liabilities consist of the warrant liabilities resulting from equity financings (see Note 9) and the Convertible Note exchanges (see Note 6). The Company uses the Black-Scholes Model to value the warrant liabilities at inception and on subsequent valuation dates. This model incorporates transaction details such as the Company’s stock price, contractual terms, maturity, risk free rates, and volatility. The significant unobservable input for the Level 3 warrant liabilities includes volatility. Given the limited period of time the Company’s stock has been traded in an active market, the expected volatility is estimated by taking the

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average historical price volatility for industry peers, consisting of several public companies in the Company’s industry that are similar in size, stage, or financial leverage, over a period of time commensurate to the expected term of the warrants. At March 31, 2024 and December 31, 2023, the fair value of the warrant liabilities were estimated using the Black-Scholes Model with the following inputs and assumptions:

	March 31, 2024	December 31, 2023
Risk-free interest rate	4.2% - 4.5%	3.8% - 4.1%
Expected volatility	89.9% - 95.2%	95.6% - 101.8%
Stock price	$1.10	$1.35
Expected life (years)	2.2 - 4.9	2.5 - 5.0

A summary of the changes in the Level 3 classified liabilities is presented below (in thousands):

	Warrant Liabilities			Derivative Liabilities
Balance at December 31, 2023	$	40,834		$	22,899
Recognition of warrant liabilities		1,351			—
Reclassification of warrant liabilities to equity		(1,062	)		—
Expired warrants		(1,460	)		—
Recognition of derivative liabilities		—			3,729
Change in fair value		(12,455	)		(418	)
Balance at March 31, 2024	$	27,208		$	26,210

6. Convertible Notes

The following table summarizes significant terms of the Company's Convertible Notes at March 31, 2024 (in thousands):

	March 31, 2024
	Face Value		Carrying Value		Fair Value (1)		Stated Interest Rate	Effective Interest Rate
2028 Convertible Notes	$	30,138	$	18,709	$	14,933	11-13%	18.4%
Related Party 2028 Convertible Notes	$	17,383	$	22,048	$	8,613	11-13%	3.0%
2025 Convertible Notes	$	4,600	$	4,497	$	2,690	7.25%	8.7%

(1) To estimate the fair value of the 2028 Convertible Notes, the Company used a binomial pricing model. Including the derivative liabilities of $26.2 million, the 2028 Convertible Notes fair value using the with method is $49.8 million. To estimate the fair value of the 2025 Convertible Notes, the Company used unadjusted quoted prices in the active market obtained from third-party pricing services.

The following table summarizes significant terms of the Company’s Convertible Notes at December 31, 2023 (in thousands):

	December 31, 2023
	Face Value		Carrying Value		Fair Value (2)		Stated Interest Rate	Effective Interest Rate
2028 Convertible Notes	$	23,500	$	14,591	$	14,846	11-13%	48.9%
Related Party 2028 Convertible Notes	$	17,383	$	21,155	$	10,982	11-13%	(22.0)%
2025 Convertible Notes	$	10,225	$	9,966	$	5,984	7.25%	8.7%

(2) To estimate the fair value of the 2028 Convertible Notes, the Company used a binomial pricing model. Including the derivative liabilities of $22.9 million, the 2028 Convertible Notes fair value using the with method is $48.7 million. To estimate the fair value of the 2025 Convertible Notes, the Company used unadjusted quoted prices in the active market obtained from third-party pricing services.

The carrying value of the Convertible Notes does not approximate their fair values because the carrying values reflect the balance of unamortized discount related to the derivative liabilities associated with the value of the conversion features assessed at inception. The Company amortizes the debt discount using the effective interest method over the term of the Convertible Notes. As of March 31, 2024 and December 31, 2023, the unamortized debt discount on the 2025 Convertible Notes was $0.1 million and $0.3 million, respectively. The amortization of the debt discount was less than $0.1 million and $0.4 million for the three months ended March 31, 2024 and 2023, respectively, and is included in interest expense, net in the consolidated statements of operations. As of March 31, 2024 and December 31, 2023, the unamortized debt discount on the 2028 Convertible Notes was $21.1 million and $19.0 million, respectively. The amortization of the debt discount was $1.9 million for the three months ended March 31, 2024 and is included in interest expense, net in the consolidated statements of operations.

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2025 Convertible Notes

In December 2020, the Company issued a total of $168.5 million principal amount of 2025 Convertible Notes in a private offering of the Convertible Notes pursuant to Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"). The 2025 Convertible Notes were issued pursuant to, and are governed by, an indenture, dated as of December 7, 2020, by and between the Company and The Bank of New York Mellon Trust Company, N.A., as trustee (the “2025 Convertible Notes Indenture”). The 2025 Convertible Notes are due on December 1, 2025, unless earlier repurchased, redeemed or converted, and accrue interest at a rate per annum equal to 7.25% payable semi-annually in arrears on June 1 and December 1 of each year, with the initial payment on June 1, 2021. The Company recognized interest expense on the 2025 Convertible Notes of $0.2 million and $2.4 million for the three months ended March 31, 2024 and 2023, respectively.

The 2025 Convertible Notes are the Company's senior, unsecured obligations and are (i) equal in right of payment with the Company's existing and future senior, unsecured indebtedness; (ii) senior in right of payment to the Company's existing and future indebtedness that is expressly subordinated to the 2025 Convertible Notes; (iii) effectively subordinated to the Company's existing and future secured indebtedness, to the extent of the value of the collateral securing that indebtedness; and (iv) structurally subordinated to all existing and future indebtedness and other liabilities, including trade payables, and (to the extent the Company is not a holder thereof) preferred equity, if any, of the Company's subsidiaries.

At any time, noteholders may convert their 2025 Convertible Notes at their option into shares of the Company’s common stock, together, if applicable, with cash in lieu of any fractional share, at the then-applicable conversion rate. The initial conversion rate is 11.1204 shares of common stock per $1,000 principal amount of 2025 Convertible Notes, which represents an initial conversion price of approximately $89.92 per share of common stock. Noteholders that converted their 2025 Convertible Notes before December 1, 2022 were, in certain circumstances, entitled to an additional cash payment representing the present value of any remaining interest payments on the 2025 Convertible Notes through December 1, 2022. The conversion rate and conversion price are subject to customary adjustments upon the occurrence of certain dilutive events. In addition, if certain corporate events that constitute a “Make-Whole Fundamental Change” (as defined in the 2025 Convertible Notes Indenture) occur, then the conversion rate will, in certain circumstances, be increased for a specified period of time.

The 2025 Convertible Notes are redeemable, in whole and not in part, at the Company’s option at any time on or after December 1, 2023, at a cash redemption price equal to the principal amount of the 2025 Convertible Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date, but only if the last reported sale price per share of the Company’s common stock exceeds 130% of the conversion price on (i) each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the trading day immediately before the date the Company sends the related redemption notice; and (ii) the trading day immediately before the date the Company sends such notice. In addition, calling the 2025 Convertible Notes will constitute a Make-Whole Fundamental Change, which will result in an increase to the conversion rate in certain circumstances for a specified period of time.

The 2025 Convertible Notes have customary provisions relating to the occurrence of “Events of Default” (as defined in the 2025 Convertible Notes Indenture). As of both March 31, 2024 and December 31, 2023, the Company was in compliance with all such covenants.

The 2025 Convertible Notes had a conversion option which was required to be bifurcated upon issuance and recorded separately as an embedded derivative remeasured at fair value each reporting period with changes in fair value recorded in the consolidated statement of operations. As of December 31, 2022, the conversion option expired and there was no longer a derivative liability.

Note Exchanges

In September 2023, certain related party holders of 2025 Convertible Notes exchanged an aggregate of $50.0 million principal amount for a combination of 9,235,281 shares of the Company's common stock, 7,399,226 pre-funded warrants at an exercise price of $0.001 per share and warrants to purchase up to 16,634,507 shares of common stock at an exercise price of $3.01 per share. The warrants are exercisable on or after September 18, 2023 until September 18, 2026 and the pre-funded warrants have no expiration date. The pre-funded warrants and the warrants (together, the "September 2023 Warrants") are subject to certain exercise limitations, including a limitation on the ability to exercise if the holder’s beneficial ownership would exceed 49.9%. As the 2025 Convertible Notes were exchanged for an amount over the fair value of shares issuable under the original conversion terms, the Company recorded an inducement loss of $53.2 million, included in other income (expense), net in the condensed consolidated statements of operations. Pursuant to Accounting Standards Codification ("ASC") Topic 815, Derivatives and Hedging ("ASC") the Company deemed the September 2023 Warrants to be classified as a liability at fair value initially with subsequent changes in fair value recorded in earnings. The September 2023 Warrants were recorded at a fair value of $35.1 million determined using the Black-Scholes Model.

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In December 2023, the Company entered into exchange agreements with certain holders of 2025 Convertible Notes to exchange an aggregate of $72.5 million principal amount for a combination of (i) $23.9 million in principal amount of 2028 Convertible Notes (ii) 625,000 shares of the Company's common stock, (iii) warrants to purchase 5,039,236 shares of common stock (the “Exchange Warrants”), and (iv) accrued and unpaid interest on the 2025 Convertible Notes. The Company also entered into note purchase agreements with certain investors (the "Purchasers") to purchase $17.0 million in principal amount of additional 2028 Convertible Notes from the Company for cash at par value. The Purchasers were granted warrants to purchase 5,084,613 shares of common stock (the “Additional Warrants”) and certain Purchasers were also granted warrants to purchase 7,352,941 shares of common stock (the “Commitment Warrants”). In connection with these agreements, the Company has agreed to allow certain of the parties to designate one observer to the Company's Board of Directors (the "Board").

The Exchange Warrants have an exercise price of $5.50 per share, the Commitment Warrants have an exercise price of $1.36 per share and the Additional Warrants have an exercise price of $5.00 per share. Each of the Exchange Warrants, the Commitment Warrants and the Additional Warrants (together the "December 2023 Warrants") are subject to certain exercise limitations, including a limitation on the ability to exercise if the holder’s beneficial ownership of common stock would exceed specified levels and are exercisable at any time on or after June 19, 2024. Pursuant to ASC 815, the December 2023 Warrants are classified as a liability at fair value initially with subsequent changes in fair value recorded in earnings. In connection with the March 2024 Offering (as defined below), 2,322,059 of the December 2023 Warrants were amended to (i) lower the exercise price to $1.10 per share, (ii) provide that the warrants will not be exercisable until the Stockholder Approval Date (as defined below) and (iii) extend the original expiration date to be five years from the Stockholder Approval Date.

The December note exchange with one holder of 2025 Convertible Notes constitutes a troubled debt restructuring ("TDR") under ASC Topic 470, Debt ("ACS 470") because the Company is experiencing financial difficulty and a concession has been granted by the holder. As the holder is a related party, the Company recorded the restructuring gain as a capital contribution resulting in $25.5 million of restructuring gain recorded within additional paid-in-capital as of December 31, 2023. Following the TDR guidance under ASC 470, future interest payments of approximately $11.7 million were also included in the carrying value of the 2028 Convertible Notes. The December note exchange with the other holders of 2025 Convertible Notes is considered a debt extinguishment under ASC 470. As a result, the Company recorded a loss on debt extinguishment of $6.4 million, which is the difference between the fair value of the 2028 Convertible Notes combined with the fair value of the warrants, derivative liabilities and common stock and the net carrying value of the 2025 Convertible Notes during the fourth quarter of 2023.

On March 8, 2024 the Company entered into an exchange agreement with a holder of the Company’s 2025 Convertible Notes, pursuant to which the Company agreed to acquire an aggregate of $5.6 million of 2025 Convertible Notes from the holder in exchange for (i) $3.8 million in aggregate principal amount of 2028 Convertible Notes, and (ii) accrued and unpaid interest on the 2025 Convertible Notes exchanged. The Company also entered into a note purchase agreement with the investor pursuant to which the investor agreed to purchase $2.8 million in aggregate principal amount of 2028 Convertible Notes from the Company for cash at par value. Additionally, as part of the agreements, the investor was granted warrants to purchase 2,000,000 shares of common stock. The warrants have an exercise price of $2.75 per share, are exercisable at any time on or after September 12, 2024 and expire on March 12, 2029. The warrants are subject to certain exercise limitations, including a limitation on the ability to exercise if the holder’s beneficial ownership of common stock would exceed specified levels. Pursuant to ASC 815, the warrants are classified as a liability at fair value initially with subsequent changes in fair value recorded in earnings. The exchange is considered a debt extinguishment under ASC 470. As a result, the Company recorded a loss on debt extinguishment of $0.2 million, which is the difference between the fair value of the 2028 Convertible Notes combined with the fair value of the warrants, derivative liabilities and the net carrying value of the 2025 Convertible Notes.

2028 Convertible Notes

The 2028 Convertible Notes were issued pursuant to, and are governed by, an indenture (the “2028 Convertible Notes Indenture”), dated December 19, 2023, by and between the Company and GLAS Trust Company LLC, as trustee. The 2028 Convertible Notes will mature on the earlier of December 19, 2028 and the date that is 90 days prior to the maturity of the Convertible Notes solely to the extent there are Convertible Notes outstanding in a principal amount equal to or greater than $5.0 million as of such date, unless earlier repurchased, redeemed or converted. In March 2024 the maturity date of the Convertible Notes was extended to December 19, 2028. The Notes will accrue interest at a rate of 11.0% per annum in the case of cash payment and 13.0% in the case of blended payments or payments-in-kind, payable semi-annually in arrears on June 1 and December 1 of each year, with the initial payment on June 1, 2024. The Company recognized interest expense on the 2028 Convertible Notes of $0.7 million for the three months ended March 31, 2024.

The 2028 Convertible Notes are the Company’s senior secured obligations, and are secured by substantially all of the Company’s and its subsidiaries’ assets. The 2028 Convertible Notes are (i) senior in right of payment to the Company’s existing and

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future senior, unsecured indebtedness to the extent of the value of the collateral; and (ii) senior in right of payment to the Company’s existing and future indebtedness that is expressly subordinated to the 2028 Convertible Notes.

At any time, noteholders may convert their 2028 Convertible Notes at their option into shares of the Company’s common stock, together, if applicable, with cash in lieu of any fractional share, at the then-applicable conversion rate. The initial conversion rate is 641.02564 shares of common stock per $1,000 principal amount of 2028 Convertible Notes, which represents an initial conversion price of approximately $1.56 per share of common stock. Noteholders that convert their 2028 Convertible Notes will be entitled to an additional premium payment representing the amount of certain of the remaining interest payments on the 2028 Convertible Notes as specified in the 2028 Convertible Notes Indenture. The conversion rate and conversion price will be subject to customary adjustments upon the occurrence of certain events.

The 2028 Convertible Notes are redeemable, in whole and not in part, at the Company’s option at any time on or after December 19, 2024, and in some circumstances prior to that date, at a cash redemption price equal to the principal amount of the 2028 Convertible Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date, but only if the last reported sale price per share of the Company’s common stock exceeds 150% of the conversion price on (i) each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the trading day immediately before the date the Company sends the related redemption notice; and (ii) the trading day immediately before the date the Company sends such notice.

If certain corporate events that constitute a “Fundamental Change” (as defined in the 2028 Convertible Notes Indenture) occur, then noteholders may require the Company to repurchase their Notes at a cash repurchase price equal to the principal amount of the 2028 Convertible Notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the fundamental change repurchase date. The definition of Fundamental Change includes certain business combination transactions involving the Company and certain de-listing events with respect to the Company’s common stock.

The 2028 Convertible Notes Indenture contains covenants restricting the Company’s ability to incur indebtedness, incur liens, make restricted payments, make asset sales and engage in transactions with affiliates, subject to certain baskets. The 2028 Convertible Notes Indenture requires the Company to maintain minimum liquidity of $4.0 million and to add future assets to the collateral under the Security Agreement, dated as of December 19, 2023, among the Company, the Guarantors party thereto and GLAS Trust Company LLC, as collateral agent (the "Security Agreement") and to add future subsidiaries as guarantors under the Security Agreement. The 2028 Convertible Notes have customary provision relating to the occurrence of “Events of Default” (as defined in the 2028 Convertible Notes Indenture). As of both March 31, 2024 and December 31, 2023, the Company was in compliance with all such covenants.

The 2028 Convertible Notes have several conversion features which are required to be bifurcated upon issuance and periodically remeasured to fair value separately as an embedded derivative. The conversion features were bifurcated and recorded separately as an embedded derivative remeasured at fair value each reporting period with changes in fair value recorded in other income (expense), net in the consolidated statement of operations.

7. Related Party Transactions

As of March 31, 2024 and December 31, 2023, Athyrium Capital Management, LP (“Athyrium”) held $17.4 million aggregate principal amount of 2028 Convertible Notes (see Note 6). Athyrium also held 10,929,763 shares, or 35.9%, of the Company's common stock outstanding, 7,399,226 pre-funded warrants and warrants to purchase up to 24,583,231 shares of common stock at exercise prices ranging from of $3.01 to $8.22 as of March 31, 2024.

In November 2022, the Company entered into a securities purchase agreement with an institutional investor. Following this transaction, the institutional investor became a related party due to greater than 5% ownership. On January 12, 2023, the Company issued warrants to purchase 90,000 shares of common stock to the institutional investor in exchange for the investor’s agreement to waive the lockup provisions contained in the November 2022 securities purchase agreement. As of March 31, 2023 this institutional investor held less than 5% of the Company's outstanding common stock and is no longer considered a related party.

8. Commitments and Contingencies

Operating Leases

The Company has entered into various noncancelable operating lease agreements, primarily for office space, laboratory space, and equipment. In March 2023, the Company signed an amended lease agreement for certain office space in San Diego, California to decrease the office space and extend the term to June 2025. Cash paid for operating leases was $0.3 million and $0.4 million for the

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three months ended March 31, 2024 and 2023, respectively.

The components of lease expense were as follows (in thousands):

	Three Months Ended March 31,
	2024		2023
Operating lease costs	$	235	$	384

Supplemental weighted-average information related to operating leases is as follows:

	March 31,
	2024			2023
Weighted-average remaining lease term (years)		2.0			2.5
Weighted-average discount rate		9.6	%		9.4	%

As of March 31, 2024, future lease payments under the non-cancelable operating leases were as follows (in thousands):

Year ending December 31,	Minimum Operating Lease Payments
2024 (remaining)	$	771
2025		590
2026		264
2027		18
2028 and thereafter		—
Total minimum lease payments		1,643
Less: interest		(140	)
Present value of lease liabilities	$	1,503

Contingencies

The Company, in the ordinary course of its business, can be involved in lawsuits, threats of litigation, and audit and investigative demands from third parties. While management is unable to predict the exact outcome of such matters, it is management’s current belief that any potential liabilities of Biora resulting from these contingencies, individually or in the aggregate, could have a material impact on the Company’s financial position and results of operations.

The regulations governing government reimbursement programs (e.g., Medicaid, Tricare, and Medicare) and commercial payor reimbursement programs are complex and may be subject to interpretation. As a former provider of services to patients covered under government and commercial payor programs, post payment review audits, and other forms of reviews and investigations are routine. The Company believes it complied in all material respects with the statutes, regulations, and other requirements applicable to its former Laboratory Operations.

Government Investigations Settlements

In April 2018, the Company received a civil investigative demand from an Assistant U.S. Attorney (“AUSA”) for the Southern District of New York and a Health Insurance Portability and Accountability Act subpoena issued by an AUSA for the Southern District of California (“SDCA”) around legacy commercial practices. In May 2018, the Company received a subpoena from the State of New York Medicaid Fraud Control Unit.

On July 21, 2020, July 23, 2020 and October 1, 2020, the Company entered into agreements (the "Agreements") with certain governmental agencies and the 45 states participating in the settlement (“State AGs”) to resolve, with respect to such agencies and State AGs, all of such agencies’ and State AGs’ outstanding civil, and, where applicable, federal criminal investigations described above. The Company did not make any payments during the three months ended March 31, 2023. The Company paid $2.8 million during the three months ended March 31, 2024. The remaining amount payable of $2.6 million is due on or before July 1, 2024, and is subject to interest at a rate of 1.25% per annum. Any or all amounts may be paid earlier at the option of the Company. As of March 31, 2024, the Company’s accrual consisted of $2.6 million in accrued expenses and other current liabilities.

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In connection with the resolution of the investigated matters, and in exchange for the Office of Inspector General of the Department of Health and Human Services ("OIG") agreement not to exercise its authority to permissively exclude the Company from participating in federal healthcare programs, effective July 21, 2020, the Company entered into a five-year Corporate Integrity Agreement with the OIG. The Corporate Integrity Agreement requires, among other matters, that the Company maintain a Compliance Officer, a Compliance Committee, board review and oversight of certain federal healthcare compliance matters, compliance programs, and disclosure programs; provide management certifications and compliance training and education; engage an independent review organization to conduct claims and arrangements reviews; and implement a risk assessment and internal review process. In view of the Company's cessation of its Laboratory Operations and related billing for services, effective March 7, 2023 the OIG agreed to suspend the Company’s obligations under the Corporate Integrity Agreement.

Payor Recoveries

As noted above, the regulations governing government reimbursement programs (e.g., Medicaid, Tricare, and Medicare) and commercial payor reimbursement programs are complex and may be subject to interpretation. As a former provider of services to patients covered under government reimbursement and commercial payor programs, the Company is routinely subject to post-payment review audits and other forms of reviews and investigations. For example, the Company rejected several managed Medicaid payor recoupment requests that it received in 2022 aggregating to $1.1 million. If a third-party payor successfully challenges that a payment to the Company for prior testing was in breach of contract or otherwise contrary to policy or law, they may recoup such payment. The Company may also decide to negotiate and settle with a third-party payor in order to resolve an allegation of overpayment. In the past, the Company has negotiated and settled these types of claims with third-party payors. The Company may be required to resolve further disputes in the future. While management is unable to predict the exact outcome of any such claims, it is management’s current belief that any potential liabilities resulting from these contingencies related to payors and the Company's ceased Laboratory Operations, individually or in the aggregate, should not have a material impact on the Company’s financial position and results of operations.

Ravgen Litigation

On December 22, 2020, Ravgen, Inc. ("Ravgen") filed suit in the District of Delaware (D. Del. Civil Action No. 1:20-cv-1734)
asserting the Company’s infringement of two Ravgen patents based on the Company's former NIPT testing business. The complaint seeks monetary damages and injunctive relief. The Company responded to the complaint on March 23, 2021. Ravgen has since narrowed its claim of infringement to a single patent claim of one patent. Management believes the claims in Ravgen’s complaint are without merit, and the Company is vigorously defending against them. A trial date is expected to be scheduled for the end of the fourth quarter 2024 or 2025. Given the uncertainty of litigation and the legal standards that must be met for, among other things, success on the merits, the Company is unable to predict the ultimate outcome of this matter, and therefore cannot estimate the reasonably possible loss or range of loss, if any, that may result from this action.

IPO Litigation

On June 23, 2020, the Company closed its IPO. Lawsuits were filed on August 28, 2020 and September 11, 2020 against the Company, certain of its executive officers and directors, and the underwriters of the IPO. On December 3, 2020, the U.S. District Court for the Southern District of California consolidated the two actions, appointed Lin Shen, Lingjun Lin and Fusheng Lin to serve as Lead Plaintiffs, and approved Glancy Prongay & Murray LLP to be Lead Plaintiffs’ Counsel. Lead Plaintiffs filed their first amended complaint on February 4, 2021. Together with the underwriters of the IPO, the Company moved to dismiss the first amended complaint. On September 1, 2021, the court granted the Company's motion to dismiss, dismissing Lead Plaintiffs’ claims without prejudice. On September 22, 2021, Lead Plaintiffs filed their second amended complaint. Together with the underwriters of the IPO, the Company moved to dismiss the second amended complaint on November 15, 2021. On January 13, 2023, the court again granted our motion to dismiss, dismissing Lead Plaintiffs’ claims for failure to state a claim without prejudice. On February 3, 2023, Lead Plaintiffs filed their third amended complaint, adding information allegedly produced to Plaintiffs in response to freedom of information requests. The third amended complaint alleges that the Company’s registration statement and related prospectus for the IPO contained false and misleading statements and omissions in violation of the Securities Act by failing to disclose that (i) the Company had overbilled government payors for Preparent tests beginning in 2019 and ending in or before early 2020; (ii) there was a high probability that the Company had received, and would have to refund, a material amount of overpayments from government payors for Preparent tests; (iii) in February 2020 the Company ended a supposedly improper marketing practice on which the competitiveness of the Company's business depended; and (iv) the Company was suffering from material negative trends with respect to testing volumes, average selling prices for its tests, and revenues. Lead Plaintiffs seek certification as a class, unspecified compensatory damages, interest, costs and expenses including attorneys’ fees, and unspecified extraordinary, equitable, and/or injunctive relief. The Company filed a motion to dismiss the third amended complaint with prejudice on March 20, 2023, which the court granted on July 12, 2023. Lead Plaintiffs filed a notice of appeal on August 11, 2023 and the appeal is currently before the United States Court of Appeals for the Ninth Circuit (Case No: 23-55716) with appellate briefing concluded and submitted by the parties in March 2024. Subject to a reservation of rights, the Company is advancing expenses subject to indemnification to the

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underwriters of the IPO. In March 2024, the Company and plaintiffs agreed to settle the litigation, subject to negotiation and entry into definitive and binding agreements and court approval, for an amount of $1.0 million. This amount is included in accrued expenses and other current liabilities as of March 31, 2024.

On June 4, 2021, a purported shareholder filed a lawsuit in the U.S. District Court for the SDCA, claiming to sue derivatively on behalf of the Company. The complaint names certain of the Company’s officers and directors as defendants, and names the Company as a nominal defendant. Premised largely on the same allegations as the above-described securities lawsuit, it alleges that the individual defendants breached their fiduciary duties to the Company, wasted corporate assets, and caused the Company to issue a misleading proxy statement in violation of the Securities Exchange Act of 1934, as amended. The complaint seeks the award of unspecified damages to the Company, equitable and injunctive remedies, and an order directing the Company to reform and improve its internal controls and board oversight. It also seeks the costs and disbursements associated with bringing suit, including attorneys’, consultants’, and experts’ fees. The case is stayed pending the resolution of the appeal in the above-described securities lawsuit. The Company intends to vigorously defend against these claims.

On August 17, 2021, the Company received a letter purportedly on behalf of a stockholder of the Company demanding that the Company's board of directors investigate and take action against certain of the Company’s current and former officers and directors to recover damages for alleged breaches of fiduciary duties and related claims arising out of the IPO litigation discussed above. This matter is pending the outcome of the companion securities litigation.

Given the uncertainty of litigation and other matters described above, and the legal standards that must be met for, among other things, success on the merits, the Company is unable to predict the ultimate outcome of these actions, and therefore cannot estimate the reasonably possible loss or range of loss, if any, that may result from these actions.

9. Stockholders’ Equity

Common Stock

On January 3, 2023, the Company effected the Reverse Stock Split of the Company's common stock. The Reverse Stock Split, which has been retroactively reflected throughout the condensed consolidated financial statements, reduced the authorized shares of the Company to 164,000,000 and did not change the par value of the Company's common stock.

Registered Offerings

In January 2023, the Company issued warrants to purchase 90,000 shares of common stock to an institutional investor in exchange for the investor’s agreement to waive the lockup provisions contained in the securities purchase agreement related to the registered direct offering completed in November 2022. The warrants have an exercise price of $8.22 and were exercisable beginning on May 9, 2023. In connection with the March 2024 Offering (as defined below), the warrants were amended to (i) lower the exercise price to $1.10 per share, (ii) provide that the warrants will not be exercisable until the Stockholder Approval Date (as defined below) and (iii) extend the original expiration date to be five years from the Stockholder Approval Date. Pursuant to ASC 815, the Company deemed the warrants to be classified as a liability at fair value initially with subsequent changes in fair value recorded in earnings.

In June 2023, the Company entered into a securities purchase agreement with certain institutional and accredited investors relating to the offering and sale of 1,509,434 shares of common stock in a registered direct offering at an offering price of $5.30 per share (the "June 2023 Offering"). In addition, in a concurrent private placement with the same investors, the Company issued unregistered warrants to purchase 3,018,868 shares of common stock. At issuance, the warrants had an exercise price of $5.05 per share and were exercisable at any time. The Company received approximately $7.3 million in net proceeds, after deducting placement agent fees and offering expenses. In connection with the March 2024 Offering (as defined below), the warrants were amended to (i) lower the exercise price to $1.10 per share, (ii) provide that the warrants will not be exercisable until the Stockholder Approval Date (as defined below) and (iii) extend the original expiration date to be five years from the Stockholder Approval Date.

Pursuant to ASC 815, the Company deemed the warrants to be classified as a liability at fair value initially with subsequent changes in fair value recorded in earnings. The warrants were recorded at a fair value of $9.0 million, as the total fair value of the warrant liability exceeds the gross proceeds of $8.0 million, the Company recorded a loss of the $1.0 million excess to gain (loss) on warrant liabilities in the consolidated statements of operations. Accordingly, there were no proceeds allocated to the common stock issued as part of this transaction. The Company incurred a total of $0.7 million in issuance costs, which were allocated between the warrants and common stock on a relative fair value basis.

In October 2023, the Company issued warrants to purchase up to 1,000,000 shares and 4,278,074 shares of the Company's common stock, with exercise prices of $1.93 per share and $1.87 per share, respectively, to accredited investors in private placement transactions. The warrants are exercisable in April 2024, six months following the dates of issuance. The investors may from time to

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time agree to acquire, and the Company may agree to sell, up to an aggregate of $9.9 million of common stock at any time prior to January 31, 2024. The warrants will vest in proportion to issuances described in the preceding sentence. Pursuant to ASC 815, the Company deemed the warrants to be classified as a liability at fair value initially with subsequent changes in fair value recorded in earnings. The warrants were recorded at a fair value of $6.7 million and the Company recorded a loss of the $6.7 million excess to gain (loss) on warrant liabilities in the consolidated statements of operations. On January 31, 2024, warrants to purchase 848,366 shares and 1,378,687 shares, respectively, of the Company's common stock vested and were reclassified to equity on the vesting termination date, the remaining warrants expired and the Company recognized a gain of $1.5 million included in gain on warrant liabilities on the consolidated statements of operations.

On March 31, 2024, the Company entered into a securities purchase agreement with certain institutional and accredited investors relating to (1) the offering and sale of an aggregate of 5,454,548 shares of the Company’s common stock at an offering price of $1.10 per share in a registered direct offering and (2) the issuance of unregistered warrants to purchase up to 5,454,548 shares of the Company's common stock with an exercise price of $1.10 to certain accredited investors in a concurrent private placement (collectively, the "March 2024 Offering"). The March 2024 Offering closed and was recorded on April 3, 2024, subsequent to the end of the quarter. The Company received net proceeds of $5.5 million after deducting placement agent fees and offering expenses. In connection with the March 2024 Offering, the Company also agreed to amend an aggregate of 6,415,822 outstanding warrants held by purchasers in the offering to (i) lower the exercise price to $1.10 per share, (ii) provide that the warrants will not be exercisable until the Company receives approval from its stockholders with respect to the issuance of shares of common stock issuable upon exercise of the amended warrants (the “Stockholder Approval Date”) and (iii) extend the original expiration date to be five years from the Stockholder Approval Date.

Common Stock Warrants

As of March 31, 2024, the Company had the following warrants outstanding to acquire shares of its common stock:

Expiration Date	Shares of common stock issuable upon exercise of warrants		Exercise Price per share
Held by Related Parties
N/A		7,399,226	$	0.001
September 2026		16,634,507	$	3.01
May 2028		824,116	$	8.22
December 2028		2,085,372	$	5.00
December 2028		5,039,236	$	5.50
Related Parties Total		31,982,457
Held by non-affiliates
February 2026		69,930	$	171.50
June 2026		3,018,868	$	5.05
August 2026		452,635	$	25.00
April 2027		1,378,687	$	1.87
April 2027		848,366	$	1.93
May 2028		1,074,916	$	8.22
December 2028		7,352,941	$	1.36
December 2028		2,999,241	$	5.00
March 2029		2,000,000	$	2.75
Non-affiliate Total		19,195,584
Total		51,178,041

At-The-Market Sales Agreement and Offering

In November 2021, the Company entered into an At Market Issuance Sales Agreement with B. Riley Securities, Inc., BTIG, LLC, and H.C. Wainwright & Co. LLC ("Agents"), pursuant to which the Company may offer and sell shares of common stock having an aggregate offering price of up to $90.0 million from time to time, in “at the market” offerings through the Agents (the "ATM Facility"). In connection with the registered direct offering in November 2022, the aggregate offering price was reduced to $70.0 million. The Company further reduced the aggregate offering price to $12.0 million in connection with the June 2023 Offering. As of October 9, 2023, the aggregate offering price was increased to $37.6 million. Sales of the shares of common stock, if any, will be made at prevailing market prices at the time of sale, or as otherwise agreed with the Agents. The Agents will receive a commission

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from the Company of up to 3.0% of the gross proceeds of any shares of common stock sold under the ATM Facility. The following table provides information on the shares sold under the ATM Facility for the three months ended March 31, 2024 and 2023.

	Three Months Ended March 31,
	2024		2023
Net proceeds (in millions)	$	2.8	$	12.6
Number of shares		2,591,662		2,853,109
Weighted average purchase price	$	1.13	$	4.69

Preferred Stock

Pursuant to the Company’s eighth amended and restated certificate of incorporation, which went into effect immediately prior to the completion of the IPO, the Company was authorized to issue 10,000,000 shares of undesignated preferred stock. This amount and the par value of preferred stock remained unchanged after the Reverse Stock Split.

On November 10, 2022, the Board declared a dividend of one one-thousandth of a share of Series X Preferred Stock, par value $0.001 per share (“Series X Preferred Stock”), for each outstanding share of common stock to stockholders of record as of November 21, 2022. This Series X Preferred Stock entitled its holders to 3,000 votes per share exclusively on the vote for the proposal to approve the Reverse Stock Split. All shares of Series X Preferred Stock that were not present to vote on the Reverse Stock Split were redeemed by the Company (the “Initial Redemption”). Any outstanding shares of Series X Preferred Stock that were not redeemed pursuant to an Initial Redemption would be redeemed in whole, but not in part, (i) if such redemption is ordered by the Board in its sole discretion, automatically and effective on such time and date specified by the Board in its sole discretion or (ii) automatically upon the effectiveness of the Certificate of Amendment implementing the Reverse Stock Split. At the December 19, 2022 special meeting of the Company's stockholders, the holders of 136,961 shares of Series X Preferred Stock were represented in person or by proxy. Immediately prior to the special meeting, all 86,210 shares of Series X Preferred Stock that were not voted were redeemed. The remaining 136,961 outstanding shares of Series X Preferred Stock were redeemed automatically upon the effectiveness of the Certificate of Amendment on January 3, 2023.

On January 9, 2023, the Company filed a Certificate of Elimination of Series X Preferred Stock with the Delaware Secretary of State, which, effective immediately upon filing, eliminated all matters set forth in the Certificate of Designation of Series X Preferred Stock filed with the Delaware Secretary of State on November 21, 2022.

10. Stock-Based Compensation

In February 2018, the Company adopted the 2018 Equity Incentive Plan (“2018 Plan”). The 2018 Plan is the successor to and continuation of the Second Amended and Restated 2012 Stock Plan (“2012 Plan”) and is administered with either stock options or RSUs. The Board administers the plans. Upon adoption of the 2018 Plan, no new stock options or awards are issuable under the 2012 Plan, as amended. The 2018 Plan also provides for other types of equity to issue awards, which at this time the Company does not plan to utilize.

On June 14, 2023, the Company’s stockholders approved the Fifth Amended and Restated 2018 Equity Incentive Plan ("2018 Fifth Amended Plan"), which included an increase of 5,500,000 shares of common stock reserved for issuance. As of March 31, 2024 there were 4,834,832 shares available for issuance under the 2018 Fifth Amended Plan.

On November 3, 2021, the Board approved and adopted the Company’s 2021 Inducement Plan ("2021 Inducement Plan") to provide for the reservation of 260,000 shares of the Company’s common stock to be used exclusively for the grant of awards to individuals not previously an employee or non-employee director of the Company. As of March 31, 2024, 63,964 shares were available for grant under the 2021 Inducement Plan.

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Stock Options

The following table summarizes stock option activity, which includes performance awards, under the 2012 Plan, the 2018 Fifth Amended Plan and the 2021 Inducement Plan during the three months ended March 31, 2024:

	Stock Options Outstanding			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value (in thousands)
Balance at December 31, 2023		763,012		$	36.23
Options granted		3,200		$	1.12
Options exercised		—		$	—
Options forfeited/cancelled		(1,689	)	$	36.79
Balance at March 31, 2024		764,523		$	36.09		7.7	$	—
Vested and expected to vest at March 31, 2024		764,523		$	36.09		7.7	$	—
Vested and exercisable at March 31, 2024		299,736		$	64.14		7.1	$	—

The Company uses the Black-Scholes option pricing model to estimate the fair value of each option grant on the date of grant or any other measurement date. The following table sets forth the assumptions used to determine the fair value of stock options granted during the three months ended March 31, 2024 and 2023:

	Three Months Ended March 31,
	2024	2023
Risk-free interest rate	4.3%	3.6%
Expected volatility	95.4%	101.3% - 102.3%
Expected dividend yield	―	―
Expected life (years)	6.3 years	6.3 years

The weighted-average grant date fair value of options granted during the three months ended March 31, 2024 and 2023 was $0.89 per option and $2.80 per option, respectively.

Restricted Stock Units

The following table summarizes RSU activity for the three months ended March 31, 2024:

	Number of Shares			Weighted- Average Grant Date Fair Value
Balance at December 31, 2023		2,537,357		$	3.31
Granted		2,733,000		$	0.81
Vested		(139	)	$	78.56
Forfeited/cancelled		(29,300	)	$	3.14
Balance at March 31, 2024		5,240,918		$	2.00

Stock-Based Compensation Expense

The following table presents total stock-based compensation expense included in each functional line item in the accompanying condensed consolidated statements of operations (in thousands):

	Three Months Ended March 31,
	2024		2023
Research and development		575		855
Selling, general and administrative		964		1,529
Total stock-based compensation expense	$	1,539	$	2,384

At March 31, 2024 there was $5.7 million of compensation cost related to unvested stock options expected to be recognized over a remaining weighted average vesting period of 2.3 years and $9.0 million of compensation cost related to unvested RSUs expected to be recognized over a remaining weighted average vesting period of 3.6 years.

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11. Income Taxes

The Company calculates its interim income tax provision in accordance with ASC Topic 270, Interim Reporting, and ASC Topic 740, Accounting for Income Taxes. At the end of each interim period, management estimates the annual effective tax rate and applies such rate to the Company’s ordinary quarterly earnings to calculate income tax expense related to ordinary income. The Company's effective tax rate was zero for both the three months ended March 31, 2024 and 2023. The tax effects of items significant, unusual and infrequent in nature are discretely calculated and recognized in the period during which they occur.

The Company’s net operating loss carryforwards and research and development expenditure credit carryforwards may be subject to an annual limitation under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended (the “Code”), and similar state provisions if the Company experiences an ownership change within the meaning of such Code sections. In general, an ownership change, as defined by Sections 382 and 383 of the Code, occurs when there is a 50 percentage points or more shift in ownership, consisting of shareholders owning more than 5% in the Company, occurring within a three-year testing period. The Company performed a formal study through the date of the IPO and determined future utilization of tax attribute carryforwards were not limited per Section 382 of the Internal Revenue Code. The Company has not updated its Section 382 study since the IPO offering in 2020. However, because the Company has raised and expects to continue to raise significant amounts of equity, the Company expects that Section 382 will limit future utilization of tax attribute carryforwards. Due to the existence of the valuation allowance, limitations created by future ownership changes, if any, will not impact the Company's effective tax rate.

12. Net Loss Per Share

The table below provides potentially dilutive securities in equivalent shares of common stock not included in the Company’s calculation of diluted loss per share because to do so would be antidilutive:

	March 31, 2024		March 31, 2023
Stock options to purchase common stock		764,523		578,699
Restricted stock units		5,240,918		1,048,914
Common stock warrants and pre-funded warrants		51,178,041		2,421,597
Common stock issuable upon conversion of Convertible Notes		30,518,126		1,623,547
Total		87,701,608		5,672,757

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

General

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our financial statements and notes thereto and other financial information included elsewhere in this Quarterly Report on Form 10-Q ("Quarterly Report") and the audited consolidated financial statements and notes thereto as of and for the year ended December 31, 2023 included in our Annual Report on Form 10-K ("Annual Report"). Unless the context requires otherwise, references in this Quarterly Report to “we,” “us,” and “our” refer to Biora Therapeutics, Inc.

This Quarterly Report includes forward-looking statements that involve a number of risks, uncertainties and assumptions. These forward-looking statements can generally be identified as such because the context of the statement will include words such as “may,” “will,” “intend,” “plan,” “believe,” “anticipate,” “expect,” “estimate,” “predict,” “potential,” “continue,” “likely,” "target," "forecast," or “opportunity,” the negative of these words or other similar words. Similarly, statements that describe our plans, strategies, intentions, expectations, objectives, goals or prospects and other statements that are not historical facts are also forward-looking statements. For such statements, we claim the protection of the Private Securities Litigation Reform Act of 1995. Readers of this Quarterly Report are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the time this Quarterly Report was filed with the Securities and Exchange Commission (the "SEC"). These forward-looking statements are based largely on our expectations and projections about future events and future trends affecting our business, and are subject to risks and uncertainties that could cause actual results to differ materially from those anticipated in the forward-looking statements. These risks and uncertainties include, without limitation, the risk factors identified below and those discussed in the section titled “Risk Factors” included under Part II, Item 1A below. In addition, past financial or operating performance is not necessarily a reliable indicator of future performance, and you should not use our historical performance to anticipate results or future period trends. We can give no assurances that any of the events anticipated by the forward-looking statements will occur or, if any of them do, what impact they will have on our results of operations and financial condition. Except as required by law, we undertake no obligation to update publicly or revise our forward-looking statements.

Overview

We are a clinical-stage biotechnology company developing oral biotherapeutics that could enable new treatment approaches in the delivery of therapeutics. Our pipeline includes two therapeutic delivery platforms:

•NaviCapTM Targeted Oral Delivery Platform: Delivery of therapeutics to the site of disease in the gastrointestinal tract designed to improve outcomes for patients with Inflammatory Bowel Disease; and

•BioJetTM Systemic Oral Delivery Platform: Designed to replace injection with needle-free, oral delivery of large molecules for better management of chronic diseases.

Our mission is to reimagine therapeutics and their delivery. By creating innovative smart pills designed for targeted drug delivery to the GI tract and systemic, needle-free delivery of biotherapeutics, we are developing therapies intended to improve patients’ lives.

Common Stock Reverse Split

On December 29, 2022, we filed a certificate of amendment to our eighth amended and restated certificate of incorporation to effect, as of January 3, 2023, a 1-for-25 reverse split of our common stock and decrease the number of authorized shares of our common stock from 350,000,000 to 164,000,000. All shares, options, restricted stock units ("RSUs"), warrants and per share amounts included in this Quarterly Report have been retroactively adjusted to reflect the stock split.

Factors Affecting Our Performance

Our business involves significant investment in research and development ("R&D") activities for the development of new products. We intend to continue investing in our pipeline of new products and technologies. We expect our investment in R&D to increase as we pursue regulatory approval of our targeted therapeutics and systemic therapeutics product candidates. The achievement of key development milestones is a key factor in evaluating our performance.

We expect to continue to incur significant expenses and increasing operating losses in the near term. We expect our expenses may increase in connection with our ongoing activities as we:

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•continue to advance the preclinical and clinical development of our lead targeted therapeutics and systemic therapeutics product candidates;

•initiate preclinical studies and clinical trials for additional targeted therapeutics and systemic therapeutics product candidates that we may identify in the future;

•increase personnel and infrastructure to support our clinical development, research and manufacturing efforts;

•build out and expand our in-house process development and engineering and manufacturing capabilities for R&D and clinical purposes;

•continue to develop, perfect and defend our intellectual property portfolio; and

•incur additional legal, accounting or other expenses in operating our business, including the additional costs associated with operating as a public company.

We do not expect to generate significant product revenue unless and until we successfully complete development and obtain regulatory and marketing approval of, and begin to sell, one or more of our targeted therapeutics and systemic therapeutics product candidates, which we expect will take several years. We expect to spend a significant amount in development costs prior to such time. We may never succeed in achieving regulatory and marketing approval for our therapeutics product candidates. We may obtain unexpected results from our preclinical and clinical trials. We may elect to discontinue, delay or modify preclinical and clinical trials of our therapeutics product candidates. A change in the outcome of any of these variables with respect to the development of a product candidate could mean a significant change in the costs and timing associated with the development of that product candidate. Accordingly, until such time as we can generate significant product revenue, if ever, we expect to continue to seek private or public equity and debt financing to meet our capital requirements. There can be no assurance that such funding may be available to us on acceptable terms, or at all, or that we will be able to commercialize our therapeutics product candidates. In addition, we may not be profitable even if we commercialize any of our therapeutics product candidates.

Key Components of Our Results of Operations

We are providing the following summary of our revenues, research and development expenses and selling, general and administrative expenses to supplement the more detailed discussion below. This summary excludes our revenues, research and development expenses, selling and marketing, general and administrative and other expenses associated with our legacy genetics laboratory and the sale of Avero Diagnostics ("Avero"), together, referred to as the "Laboratory Operations", which are reported within loss from discontinued operations.

Revenue

Historically, all of our revenue has been derived from molecular laboratory tests, principally from the sale of non-invasive prenatal tests, genetic carrier screening, and pathology molecular testing. If our development efforts for our targeted therapeutics and systemic therapeutics product candidates are successful and result in regulatory approval, we may generate revenue from future product sales. If we enter into license or collaboration agreements for any of our therapeutics product candidates, other pipeline products or intellectual property, we may generate revenue in the future from payments as a result of such license or collaboration agreements. We cannot predict if, when, or to what extent we will generate revenue from the commercialization and sale of our therapeutics product candidates or from license or collaboration agreements. We may never succeed in obtaining regulatory approval for any of our therapeutics product candidates.

Research and Development

Research and development expenses consist primarily of costs associated with developing our therapeutics product candidates. Research and development expenses also consist of personnel expenses, including salaries, bonuses, stock-based compensation expense, benefits, consulting costs, and allocated overhead costs. Research and development costs are expensed as incurred.

We plan to continue investing in research and development activities for the foreseeable future as we focus on our targeted therapeutics and systemic therapeutics programs through preclinical studies and clinical trials. We expect our investment in research and development to remain flat in 2024 as we continue clinical trials for our product candidates.

Product candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials. While we plan to partner with large pharmaceutical companies, especially for the later stage clinical work, we still expect our research and development expenses to increase over the next several years as we conduct additional preclinical studies and clinical trials, including later-stage clinical trials, for our current and future product candidates and pursue regulatory approval of our product candidates. The process of conducting the

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necessary preclinical and clinical research to obtain regulatory approval is costly and time consuming. The actual probability of success for our product candidates may be affected by a variety of factors including:

•the safety and efficacy of our product candidates;

•early clinical data for our product candidates;

•investment in our clinical programs;

•the ability of collaborators to successfully develop our licensed product candidates;

•competition;

•manufacturing capability; and

•commercial viability.

We may never succeed in achieving regulatory approval for any of our product candidates due to the uncertainties discussed above. We are unable to determine the duration and completion costs of our research and development projects or when and to what extent we will generate revenue from the commercialization and sale of our product candidates, if ever.

Selling, General and Administrative

Selling, general and administrative expenses consist primarily of personnel costs, including salaries, bonuses, stock-based compensation expense, and benefits, for our finance and accounting, legal, human resources, and other administrative teams. Additionally, these expenses include costs for communications, conferences, and professional fees of audit, legal, and recruiting services. Additionally, expenses related to maintaining compliance with the stipulations of the government settlement and the legal costs associated with the legal matters described in Note 8, "Commitments and Contingencies."

Interest Expense, Net

Interest expense, net is primarily attributable to borrowings under our credit and security agreements, lease agreements and interest income earned from our cash and cash equivalents.

Gain on Warrant Liabilities

Gain on warrant liabilities consists of losses on warrant issuances and changes in the fair value of our liability-classified warrants to purchase common stock.

Other Income (Expense), Net

Other income (expense), net primarily consists of changes in the fair value of our derivative liabilities related to the 11.0%/13.0% convertible senior secured notes due 2028 (the "2028 Convertible Notes" and, together with the 2025 Convertible Notes (defined below), the "Convertible Notes"), inducement loss and extinguishment loss on the Convertible Notes, gains and losses on investments, impairment of property and equipment, and loss on disposals of property and equipment.

Income Tax Provision

We account for income taxes under the asset-and-liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis, and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

We recognize the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is more than 50% likely of being realized. Changes in recognition or measurement are recognized in the period in which the change in judgment occurs. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. Due to losses generated in the past and projected future taxable losses anticipated in the future, we established a 100% valuation allowance on net deferred tax assets.

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Results of Operations.

Comparison of the Three Months Ended March 31, 2024 and 2023

	Three Months Ended March 31,
	2024			2023			Change
	(in thousands)
Statement of Operations Data:	(unaudited)
Revenues	$	542		$	2		$	540
Operating expenses:
Research and development		7,005			7,190			(185	)
Selling, general and administrative		9,053			8,356			697
Total operating expenses		16,058			15,546			512
Loss from operations		(15,516	)		(15,544	)		28
Interest expense, net		(2,757	)		(2,680	)		(77	)
Gain on warrant liabilities		13,915			864			13,051
Other income (expense), net		217			(81	)		298
Loss before income taxes		(4,141	)		(17,441	)		13,300
Income tax expense		48			—			48
Net loss	$	(4,189	)	$	(17,441	)	$	13,252

Revenues

Revenues increased by $0.5 million for the three months ended March 31, 2024 compared to the three months ended March 31, 2023, due to an increase in collaboration revenue.

Research and Development Expenses

Research and development expenses decreased by $0.2 million for the three months ended March 31, 2024 compared to the three months ended March 31, 2023, primarily due to a decrease in consulting and professional fees and supplies costs, offset by an increase in clinical trial expenses and salaries and benefits.

Selling, General and Administrative Expenses

Selling, general and administrative expenses increased by $0.7 million for the three months ended March 31, 2024 compared to the three months ended March 31, 2023, primarily due to an increase in consulting and professional fees, offset by a decrease in business insurance, salaries and benefits, and facilities costs.

Interest expense, net

Interest expense, net decreased by $0.1 million for the three months ended March 31, 2024 compared to the three months ended March 31, 2023, primarily due to a decrease in the balance of the 7.25% convertible senior notes due 2025 (the "2025 Convertible Notes") from note exchanges, offset by issuance of 2028 Convertible Notes.

Gain on Warrant Liabilities

Gain on warrant liabilities increased by $13.1 million for the three months ended March 31, 2024 compared to the three months ended March 31, 2023 primarily due to the change in fair value of warrant liabilities.

Other Income (Expense), Net

The change in other income (expense), net of $0.3 million for the three months ended March 31, 2024 compared to the three months ended March 31, 2023 is primarily due to a gain on the change in fair value of the derivative liabilities for the 2028 Convertible Notes, offset by an extinguishment loss on our 2025 Convertible Notes.

Liquidity and Capital Resources.

Since our inception, our primary sources of liquidity have been generated by our operations, sales of common stock, preferred stock, warrants to purchase common stock and preferred stock, and cash from debt financings, including our convertible notes.

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As of March 31, 2024, we had $10.6 million of cash and cash equivalents, restricted cash of $0.2 million and a working capital deficit. The face value of convertible notes outstanding was $52.1 million and our accumulated deficit as of March 31, 2024 was $955.1 million. For the three months ended March 31, 2024, we had a net loss of $4.2 million and cash used in operations of $12.5 million. Our primary requirements for liquidity have been to fund our working capital needs, capital expenditures, research and development, and general corporate needs.

Based on our planned operations, we do not expect that our current cash and cash equivalents will be sufficient to fund our operations for at least 12 months from the issuance date of the condensed consolidated financial statements for the three months ended March 31, 2024, and we will require additional capital to fund our operations. As a result, substantial doubt exists about our ability to continue as a going concern for 12 months following the issuance date of the condensed consolidated financial statements for the three months ended March 31, 2024. We therefore intend to raise additional capital through equity offerings, including our At Market Issuance Sales Agreement with B. Riley Securities, Inc., BTIG, LLC, and H.C. Wainwright & Co. LLC (“Agents”), pursuant to which we may offer and sell shares of common stock having an aggregate offering price of up to $90.0 million from time to time, in “at the market” offerings through the Agents (the "ATM Facility"), and/or debt financings or from other potential sources of liquidity, which may include new collaborations, licensing or other commercial agreements for one or more of our research programs or patent portfolios. Adequate funding, if needed, may not be available to us on acceptable terms, or at all. If we are unable to raise capital when needed or on attractive terms, we would be forced to delay, reduce or eliminate our research and development programs or other operations. If any of these events occur, our ability to achieve our operational goals would be adversely affected. Our future capital requirements and the adequacy of available funds will depend on many factors, including those described in “Risk Factors.” Depending on the severity and direct impact of these factors on us, we may be unable to secure additional financing to meet our operating requirements on terms favorable to us, or at all. Our ability to raise additional funds may be adversely impacted by potential worsening global economic conditions and the recent disruptions to, and volatility in, the credit and financial markets in the United States and worldwide resulting from global political tensions and economic uncertainty.

Convertible Notes

See Note 6 "Convertible Notes" to our condensed consolidated financial statements included in this Quarterly Report for information on our Convertible Notes.

Equity Financings

See Note 9 "Stockholders' Equity to our condensed consolidated financial statements included in this Quarterly Report for information on our equity financings.

Cash Flows

Our primary uses of cash are to fund our operations and research and development as we continue to grow our business. We expect to continue to incur operating losses in future periods as our operating expenses increase to support the growth of our business. We expect our research and development expenses to remain flat as we continue to focus on developing our therapeutics product candidates, through preclinical studies and clinical trials. Cash used to fund operating expenses is impacted by the timing of when we pay expenses, as reflected in the change in our outstanding accounts payable and accrued expenses.

The following table summarizes our cash flows for the periods indicated (in thousands):

	Three Months Ended March 31,
	2024			2023
Cash used in operating activities	$	(12,496	)	$	(12,098	)
Cash provided by (used in) investing activities		3,005			(6	)
Cash provided by financing activities		5,100			12,081

Operating Activities

Net cash used in operating activities in the three months ended March 31, 2024 was primarily attributable to a $4.2 million net loss and non-cash charges of $10.6 million, primarily driven by a $13.9 million change in fair value of the warrant liabilities and a $1.4 million change in fair value of the derivative liabilities, partially offset by $1.9 million of debt discount amortization, $1.5 million of stock-based compensation expense, $0.2 extinguishment loss on convertible notes and $0.1 million of depreciation and amortization. The net cash inflow from changes in operating assets and liabilities was attributable to a $1.8 million increase in accounts payable, a $0.7 million decrease in prepaid and other current assets, offset by a $0.2 million decrease in other long-term liabilities.

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Net cash used in operating activities in the three months ended March 31, 2023 was primarily attributable to a $17.4 million net loss, adjusted for non-cash charges of $2.1 million, primarily driven by $2.4 million of stock-based compensation expense, $0.4 million of debt discount amortization and non-cash interest, $0.1 million of depreciation and amortization, $0.1 million of property and equipment impairment and $0.1 million of loss on disposal of property and equipment, partially offset by a $0.9 million change in fair value related to the warrant liability. The net cash inflow from changes in operating assets and liabilities was attributable to a $3.0 million increase in accrued expenses and other current liabilities and a $0.8 million decrease in prepaid expenses and other current assets, offset by a $0.2 million decrease in accounts payable and a $0.5 million decrease in other long-term liabilities.

Investing Activities

Net cash provided by investing activities during the three months ended March 31, 2024 was primarily attributable to proceeds of $3.0 million from the sale of the investment in Enumera Molecular, Inc. Net cash used in investing activities for the three months ended March 31, 2023 was less than $0.1 million.

Financing Activities

Net cash provided by financing activities during the three months ended March 31, 2024 was primarily attributable to $2.8 million in proceeds from the issuance of common stock and $2.8 million in proceeds from the issuance of senior secured convertible notes, partially offset by $0.4 million in payments for insurance financing and $0.1 million in payments of offering costs. Net cash provided by financing activities during the three months ended March 31, 2023 was primarily attributable to $12.5 million in net proceeds from the issuance of common stock, partially offset by $0.4 million in payments for insurance financing.

Other Contractual Obligations and Commitments

See Note 8 to our condensed consolidated financial statements included elsewhere in this Quarterly Report for additional information. There have been no other material changes from the contractual obligations and commitments disclosed in our Annual Report.

Critical Accounting Policies and Significant Judgments and Estimates.

Our management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in conformity with GAAP. The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions about future events that affect the amounts of assets and liabilities reported, disclosures about contingent assets and liabilities, and reported amounts of revenue and expenses. These estimates and assumptions are based on management’s best estimates and judgment. Management regularly evaluates its estimates and assumptions using historical experience and other factors; however, actual results could differ materially from these estimates and could have an adverse effect on our financial statements.

During the three months ended March 31, 2024, there were no significant changes to the information discussed under “Critical Accounting Policies and Significant Judgments and Estimates” included in the Management’s Discussion and Analysis of Financial Condition and Results of Operations section of our Annual Report.

Recent Accounting Pronouncements.

Refer to Note 2, “Summary of Significant Accounting Policies” to the condensed consolidated financial statements included in this Quarterly Report for information on recently issued accounting pronouncements.

JOBS Act Accounting Election.

We are an emerging growth company, as defined in the Jumpstart Our Business Startups Act (the "JOBS Act"). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. We have elected to use this extended transition period and, as a result, our financial statements may not be comparable to companies that comply with public company effective dates. We also intend to rely on other exemptions provided by the JOBS Act, including without limitation, not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act of 2002, as amended.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

We are a smaller reporting company, as defined by Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the "Exhcnage Act"), and in Item 10(f)(1) of Regulation S-K, and are not required to provide the information under this item.

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Item 4. Controls and Procedures.

Our management, with the participation and supervision of our Chief Executive Officer and our Chief Financial Officer, have evaluated our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this Quarterly Report. Based on that evaluation, our Chief Executive Officer and our Chief Financial Officer have concluded that, as of the end of the period covered by this Quarterly Report, our disclosure controls and procedures are effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and our Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) or 15d-15(f) of the Exchange Act) that occurred during the quarter ended March 31, 2024 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings.

The information in Note 8, "Commitments and Contingencies" to the condensed consolidated financial statements included in this Quarterly Report on Form 10-Q is incorporated herein by reference. There are no matters which constitute material pending legal proceedings to which we are a party other than those incorporated into this item by reference to Note 8 to the condensed consolidated financial statements for the quarter ended March 31, 2024 contained in this Quarterly Report on Form 10-Q.

Item 1A. Risk Factors.

Investing in our common stock involves a high degree of risk. You should carefully consider the risks and uncertainties described below, together with all of the other information in this Quarterly Report on Form 10-Q, including “Management’s Discussion & Analysis” and the financial statements and related notes, before deciding to make an investment decision with respect to shares of our common stock. If any of the following risks actually occurs, our business, financial condition, operating results, reputation, and prospects could be materially and adversely affected. In that event, the price of our common stock could decline and you could lose part or all of your investment. We caution you that the risks, uncertainties and other factors referred to below and elsewhere in this Quarterly Report on Form 10-Q may not contain all of the risks, uncertainties and other factors that may affect our future results and operations. Moreover, new risks will emerge from time to time. It is not possible for our management to predict all risks. In this “Risk Factors” section, unless the context requires otherwise, references to “we,” “us,” “our,” “Biora,” “Biora Therapeutics” or the “company” refer to Biora Therapeutics, Inc. and its subsidiaries.

Risk Factor Summary

•We have incurred losses in the past, expect to incur losses in the future, have limited capital resources as disclosed in this Quarterly Report, and may not be able to continue operations or achieve or sustain profitability in the future.

•Operating our business will require a significant amount of cash, and our ability to generate sufficient cash depends on many factors, some of which are beyond our control. An adverse judgment and/or significant damage award against us resulting from our pending litigation matters that we are currently defending would negatively impact our financial position and our ability to raise additional capital. We expect to need to raise additional capital, and if we cannot raise additional capital when needed, we may have to curtail or cease operations.

•We rely on a limited number of suppliers or, in some cases, single suppliers, and may not be able to find replacements or immediately transition to alternative suppliers on a cost-effective basis, or at all.

•The manufacturing of our therapeutics product candidates, and other products under development, is highly exacting and complex, and we depend on third parties to supply materials and manufacture certain products and components.

•We operate in a highly competitive business environment.

•Our success depends on our ability to develop new product candidates, which is complex and costly and the results are uncertain.

•We are still developing our therapeutics pipeline and are in the early stages of its development, have conducted some early preclinical studies, and limited early clinical studies, and to date have generated no therapeutics products or product revenue. There can be no assurance that we will develop any therapeutics products that deliver therapeutic solutions, or, if developed, that such product candidates will be authorized for marketing by regulatory authorities, or will be commercially successful. This uncertainty makes it difficult to assess our future prospects and financial results.

•Our outstanding debt, and any new debt, may impair our financial and operating flexibility.

•We may not be able to obtain and maintain the third-party relationships that are necessary to develop, fund, commercialize, and manufacture some or all of our product candidates.

•If third-party payors do not adequately reimburse for our products under development, they might not be purchased or used, which may adversely affect our revenue and profitability.

•If we or our commercial partners act in a manner that violates healthcare laws or otherwise engage in misconduct, we could face substantial penalties and damage to our reputation, and our business operations and financial condition could be adversely affected.

•New third-party claims of intellectual property infringement could result in litigation or other proceedings, which would be costly and time-consuming, and could limit our ability to commercialize our products.

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•We may fail to qualify for continued listing on The Nasdaq Global Market ("Nasdaq"), which could make it more difficult for our stockholders to sell their shares.

Risks Related to Our Business and Industry

We have incurred losses in the past, expect to incur losses in the future, have limited capital resources as disclosed in this Quarterly Report, and may not be able to continue operations or achieve or sustain profitability in the future.

We expect to incur significant costs in connection with the development, approval, and commercialization of our products under development. Even if we succeed in creating such product candidates from these investments, those innovations still may fail to result in commercially successful products.

Other than potential revenues from partnerships similar to those we have entered into in the past, we do not expect to generate significant revenues in the immediate future. We do not expect to generate sufficient revenue to cover our costs for the foreseeable future, including research and development and clinical study expenses related to furthering our product pipeline, and expect to incur losses in the future. We may not generate significant revenue in the future until we are able to achieve commercialization of our product candidates or enter into licensing or collaboration agreements with respect to such product candidates.

Since we or any collaborators or licensees may not successfully develop product candidates, obtain required regulatory authorizations, manufacture products at an acceptable cost or with appropriate quality, or successfully market and sell such product candidates with desired margins, our expenses may continue to exceed any revenues we may receive. Our operating expenses also will increase as and if, among other things:

•our earlier-stage product candidates move into later-stage clinical development, which is generally more expensive than early-stage development;

•additional technologies or products are selected for development;

•we pursue development of our product candidates for new uses;

•we increase the number of patents we are prosecuting or otherwise expend additional resources on patent prosecution or defense; or

•we acquire or in-license additional technologies, product candidates, products, or businesses.

Given our limited capital resources as disclosed elsewhere in the Quarterly Report, if we are not able to raise additional capital or generate revenue to fund our operations, we may not be able to continue operations or achieve or sustain profitability in the future.

Operating our business will require a significant amount of cash, and our ability to generate sufficient cash depends on many factors, some of which are beyond our control. An adverse judgment and/or significant damage award against us resulting from our pending litigation matters that are currently defending would negatively impact our financial position and our ability to raise additional capital. We expect to need to raise additional capital, and if we cannot raise additional capital when needed, we may have to curtail or cease operations.

We expect to incur significant costs in connection with our operations, including, but not limited to, the research and development, marketing authorization, and/or commercialization of new medical devices, therapeutics, and other products. These development activities generally require a substantial investment before we can determine commercial viability, and the proceeds from our offerings to date will not be sufficient to fully fund these activities. In addition, as a result of our strategic transformation in June 2021 (the "Strategic Transformation"), our revenue has been substantially eliminated. We will need to raise additional funds through public or private equity or debt financings, collaborations, licensing arrangements or sales of assets to continue to fund or expand our operations. Following the Strategic Transformation, we no longer generate revenue from our historical testing business, and we would be dependent on such additional sources of capital, including public or private equity or debt financings, collaborations, licensing arrangements or sales of assets for all of our future capital requirements if we do not achieve commercialization of our product candidates.

Our actual liquidity and capital funding requirements will depend on numerous factors, including:

•the scope and duration of and expenditures associated with our discovery efforts and research and development programs for our therapeutics pipeline;

•the costs to fund our commercialization strategies for any product candidates for which we receive marketing authorization or otherwise launch and to prepare for potential product marketing authorizations, as required;

•the costs of any acquisitions of complementary businesses or technologies that we may pursue;

•potential licensing or partnering transactions, if any;

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•our facilities expenses, which will vary depending on the time and terms of any facility lease or sublease we may enter into, and other operating expenses;

•the scope and extent of any future sales and marketing efforts;

•pending and potential litigation and any resulting adverse judgments, damages awards or liabilities, potential payor recoupments of reimbursement amounts as related to our historical testing business, and other contingencies;

•the commercial success of our future products;

•the termination costs associated with our Strategic Transformation; and

•any proceeds from strategic transactions.

The availability of additional capital, whether from private capital sources (including banks) or the public capital markets, fluctuates as our financial condition and market conditions in general change. There may be times when the private capital sources and the public capital markets lack sufficient liquidity or when our securities cannot be sold at attractive prices, or at all, in which case we would not be able to access capital from these sources. In addition, a weakening of our financial condition, a further decline in our share price or a deterioration in our credit ratings could adversely affect our ability to obtain necessary funds. Even if available, additional financing could be costly or have adverse consequences.

Additional capital, if needed, may not be available on satisfactory terms or at all. Our ability to raise capital in the public capital markets, including through our ATM Facility, may be limited by, among other things, SEC rules and regulations impacting the eligibility of smaller companies to use Form S-3 for primary offerings of securities. Although alternative public and private transaction structures may be available, these may require additional time and cost, may impose operational restrictions on us, and may not be available on attractive terms.

Furthermore, any additional capital raised through the sale of equity or equity-linked securities, including through our ATM Facility will dilute our stockholders’ ownership interests and may have an adverse effect on the price of our common stock. In addition, the terms of any financing may adversely affect stockholders’ holdings or rights. Debt financing, if available, may include restrictive covenants. To the extent that we raise additional funds through collaborations and licensing arrangements, it may be necessary to relinquish some rights to our technologies or grant licenses on terms that may not be favorable to us.

To minimize dilution to our equity holders, we are also exploring non-dilutive financing options, which could include licenses or collaborations and/or sales of certain assets or business lines. To the extent that we raise additional funds through collaborations and licensing arrangements, it may be necessary to relinquish some rights to our technologies or grant licenses on terms that may not be favorable to us. To the extent that we raise additional funds through strategic transactions, including a sale of one of our lines of business, we may not ultimately realize the value of or synergies from such transactions and our long-term prospects could be diminished as a result of the divestiture of these assets. We may also be required to use some or all of these sale proceeds to pay down indebtedness, which would then not serve to increase our working capital.

If we are not able to obtain adequate funding when needed, we may be required to delay development programs or other initiatives. If we are unable to raise additional capital in sufficient amounts or on satisfactory terms, we may have to make reductions in our workforce and may be prevented from continuing our discovery, development, and commercialization efforts and exploiting other corporate opportunities. In addition, it may be necessary to work with a partner on one or more of our product candidates, which could reduce the economic value of those products to us. If we engage in strategic transactions with respect to revenue-producing assets or business lines, our revenue may be adversely affected and such transactions could negatively affect the viability of our business. Each of the foregoing may harm our business, operating results, and financial condition, and may impact our ability to continue as a going concern.

We maintain our cash at financial institutions, often in balances that exceed federally-insured limits. The failure of financial institutions could adversely affect our ability to pay our operational expenses or make other payments.

Our cash held in non-interest-bearing and interest-bearing accounts exceeds the Federal Deposit Insurance Corporation (“FDIC”) insurance limits. If such banking institutions were to fail, we could lose all or a portion of those amounts held in excess of such insurance limitations. For example, the FDIC took control of Silicon Valley Bank on March 10, 2023. The Federal Reserve subsequently announced that account holders would be made whole. However, the FDIC may not make all account holders whole in the event of future bank failures. In addition, even if account holders are ultimately made whole with respect to a future bank failure, account holders’ access to their accounts and assets held in their accounts may be substantially delayed. Any material loss that we may experience in the future or inability for a material time period to access our cash and cash equivalents could have an adverse effect on our ability to pay our operational expenses or make other payments, which could adversely affect our business.

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We rely on a limited number of suppliers or, in some cases, single suppliers, and may not be able to find replacements or immediately transition to alternative suppliers on a cost-effective basis, or at all.

We source components of our technology from third parties and certain components are sole sourced. Obtaining substitute components may be difficult or require us to re-design our products under development, including those for which we are required to obtain marketing authorization from the U.S. Federal Drug Administration ("FDA") and would need to obtain a new marketing authorization from the FDA to use a new supplier. Any natural or other disasters, acts of war or terrorism, shipping embargoes, labor unrest or political instability or similar events at our third-party manufacturers’ facilities that cause a loss of manufacturing capacity or a reduction in the quality or yield of the items manufactured would heighten the risks that we face. For example, our targeted therapeutics device under development includes complex components including circuit boards that have to be built to exacting standards, and the failure of a manufacturer to meet our requirements on time, as we have experienced in the past and continue to experience, could lead to delays in our plans for testing, pre-clinical and clinical studies and other development activities. Changes to, failure to renew or termination of our existing agreements or our inability to enter into new agreements with other suppliers could result in the loss of access to important components of our products under development and could impair, delay or suspend our commercialization efforts. Our failure to maintain a continued and cost-effective supply of high-quality components could materially and adversely harm our business, operating results, and financial condition.

The manufacturing of our therapeutics product candidates, and other products under development, is highly exacting and complex, and we depend on third parties to supply materials and manufacture certain products and components.

Manufacturing is highly exacting and complex due, in part, to strict regulatory requirements governing the manufacture of our future products and product candidates, including medical devices with complex components including, but not limited to, circuit boards and pharmaceutical products. We have limited personnel with experience in, and we do not own facilities for, manufacturing any products. We depend upon our collaborators and other third parties, including sole source suppliers, to provide raw materials meeting FDA quality standards and related regulatory requirements, manufacture devices, and drug substances, produce drug products and provide certain analytical services with respect to our products and product candidates. The FDA and other regulatory authorities require that many of our products be manufactured according to current good manufacturing practice ("cGMP") regulations and that proper procedures be implemented to assure the quality of our sourcing of raw materials and the manufacture of our products. Any failure by us, our collaborators, or our third-party manufacturers to comply with cGMP and/or scale-up manufacturing processes could lead to a delay in, or failure to obtain, marketing authorizations. In addition, such failure could be the basis for action by the FDA, including issuing a warning letter, initiating a product recall or seizure, fines, imposing operating restrictions, total or partial suspension of production or injunctions and/or withdrawing marketing authorizations for products previously granted to us. To the extent we rely on a third-party manufacturer, the risk of noncompliance with cGMP regulations may be greater and the ability to effect corrective actions for any such noncompliance may be compromised or delayed.

Moreover, we expect that certain of our therapeutics product candidates, including BT-600, BT-001, BT-200, and BT-002, are drug-device combination products that will be regulated under the drug and biological product regulations of the Federal Food, Drug, and Cosmetic Act (the "FD&C Act") and Public Health Service Act (the "PHSA") based on their primary modes of action as drugs and biologics. Third-party manufacturers may not be able to comply with cGMP regulations, applicable to drug/device combination products, including applicable provisions of the FDA’s drug and biologics cGMP regulations, device cGMP requirements embodied in the Quality System Regulation ("QSR"), or similar regulatory requirements outside the United States.

In addition, we or third parties may experience other problems with the manufacturing, quality control, yields, storage or distribution of our products, including equipment breakdown or malfunction, failure to follow specific protocols and procedures, problems with suppliers and the sourcing or delivery of raw materials and other necessary components, problems with software, labor difficulties, and natural disaster-related events or other environmental factors. These problems can lead to increased costs, delays to development and preclinical study timelines, lost collaboration opportunities, damage to collaborator relations, time and expense spent investigating the cause and, depending on the cause, similar losses with respect to other batches of products. For example, our therapeutics devices under development includes complex components including circuit boards that have to be built to exacting standards, and the failure of a manufacturer to meet our requirements on time, as we have experienced in the past and continue to experience, could lead to delays in our plans for testing, pre-clinical and clinical studies and other development activities. If problems are not discovered before the product is released to the market, recalls, corrective actions, or product liability-related costs also may be incurred. Problems with respect to the manufacture, storage, or distribution of products could materially disrupt our business and have a material and adverse effect on our operating results and financial condition.

We may be unable to successfully divest certain assets or recover any of the costs of our investment in certain R&D programs.

In connection with our Strategic Transformation, we have divested certain assets that do not align with our current operational plans and strategies, including the sale of certain laboratory assets and the divesture of Avero. We have explored the potential divestiture and/or out-license of other assets and intellectual property as well. It is possible that we will be unable to successfully divest and/or license these assets, and we may never recover any of the costs of our historical R&D investments.

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For example, in November 2022, we announced that we had signed an agreement to license our Preecludia™ rule-out test for preeclampsia to Northwest Pathology, doing business as Avero Diagnostics ("Northwest") for commercial development in exchange for commercial milestone payments and royalties on net sales. There is no assurance that Northwest will be able to successfully commercialize the test. As a result, there is no assurance that we will receive any payments from the transaction and we may never recover any of the costs of the historical R&D investments related to this program.

We operate in a highly competitive business environment.

The industries in which we operate are highly competitive and require an ongoing, extensive search for technological innovation. They also require, among other things, the ability to effectively develop, test, commercialize, market, and promote products, including communicating the effectiveness, safety, and value of products to actual and prospective healthcare providers. Other competitive factors in our industries include quality and price, product technology, reputation, customer service, and access to technical information.

We expect our future products, if approved, to face substantial competition from major pharmaceutical companies, biotechnology companies, academic institutions, government agencies, and public and private research institutions. The larger competitors have substantially greater financial and human resources, as well as a much larger infrastructure than we do. For more information on our therapeutics competitors, see Part I, Item 1. “Business—Competition” in our Annual Report.

Additionally, we compete to acquire the intellectual property assets that we require to continue to develop and broaden our product pipeline. In addition to our in-house R&D efforts, we may seek to acquire rights to new intellectual property through corporate acquisitions, asset acquisitions, licensing, and joint venture arrangements. Competitors with greater resources may acquire intellectual property that we seek, and even where we are successful, competition may increase the acquisition price of such intellectual property or prevent us from capitalizing on such acquisitions, licensing opportunities, or joint venture arrangements. If we fail to compete successfully, our growth may be limited.

It is possible that developments by our competitors could make our products or technologies under development less competitive or obsolete. Our future growth depends, in part, on our ability to provide products that are more effective than those of our competitors and to keep pace with rapid medical and scientific change. Sales of any future products may decline rapidly if a new product is introduced by a competitor, particularly if a new product represents a substantial improvement over our products. In addition, the high level of competition in our industry could force us to reduce the price at which we sell our products or require us to spend more to market our products.

Many of our competitors have greater resources than we have. This enables them, among other things, to spread their marketing and promotion costs over a broader revenue base. In addition, we may not be able to compete effectively against our competitors because their products and services are superior. Our current and future competitors could have greater experience, technological and financial resources, stronger business relationships, broader product lines and greater name recognition than us, and we may not be able to compete effectively against them. Increased competition is likely to result in pricing pressures, which could harm our revenues, operating income, or market share. If we are unable to compete successfully, we may be unable to increase or sustain our revenues or achieve or sustain profitability.

Our success depends on our ability to develop new product candidates, which is complex and costly and the results are uncertain.

Effective execution of R&D activities and the timely introduction of new products and product candidates to the market are important elements of our business strategy. However, the development of new products and product candidates is complex, costly, and uncertain and requires us to, among other factors, accurately anticipate patients’, clinicians’, and payors’ needs, and emerging technology trends. For more information on our current R&D efforts, see Part I, Item 1. “Business” in our Annual Report.

In the development of new products and product candidates, we can provide no assurance that:

•we will develop any products that meet our desired target product profile and address the relevant clinical need or commercial opportunity;

•any products that we develop will prove to be effective in clinical trials, platform validations, or otherwise;

•we will obtain necessary regulatory authorizations, in a timely manner or at all;

•any products that we develop will be successfully marketed to and ordered by healthcare providers;

•any products that we develop will be produced at an acceptable cost and with appropriate quality;

•our current or future competitors will not introduce products similar to ours that have superior performance, lower prices, or other characteristics that cause healthcare providers to recommend, and consumers to choose, such competitive products over ours; or

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•third parties do not or will not hold patents in any key jurisdictions that would be infringed by our products.

These and other factors beyond our control could delay our launch of new products and product candidates.

The R&D process in our industries generally requires a significant amount of time from the research and design stage through commercialization. The launch of such new products requires the completion of certain clinical development and/or assay validations in a commercial laboratory. This process is conducted in various stages, and each stage presents the risk that we will not achieve our goals and will not be able to complete clinical development for any planned product in a timely manner. Such development and/or validation failures could prevent or significantly delay our ability to obtain FDA clearance or approval as may be necessary or desired or launch any of our planned products and product candidates. At times, it may be necessary for us to abandon a product in which we have invested substantial resources. Without the timely introduction of new product candidates, our future products may become obsolete over time and our competitors may develop products that are more competitive, in which case our business, operating results, and financial condition will be harmed.

We are still developing our therapeutics pipeline and are in the early stages of its development, have conducted some early preclinical studies, and limited early clinical studies, and to date have generated no therapeutics products or product revenue. There can be no assurance that we will develop any therapeutics products that deliver therapeutic solutions, or, if developed, that such product candidates will be authorized for marketing by regulatory authorities, or will be commercially successful. This uncertainty makes it difficult to assess our future prospects and financial results.

Our operations with respect to our therapeutics pipeline to date have been limited to developing our platform technology, undertaking preclinical studies and feasibility studies with human subjects, and conducting research to identify potential product candidates. To date, we have only conducted limited feasibility studies in humans to evaluate whether our platform localization technology enables identification of the location of our ingestible medical devices within the gastrointestinal tract as well as the function of our devices.

We seek to develop two therapeutic platforms that use ingestible drug-device combination products. However, medical device and related therapeutic product development is a highly speculative undertaking and involves a substantial degree of uncertainty and we are in the early stages of our development programs. Our therapeutics pipeline has not yet demonstrated an ability to generate revenue or successfully overcome many of the risks and uncertainties frequently encountered by companies in new and rapidly evolving fields such as ours. Consequently, the ability to accurately assess the future operating results or business prospects of our therapeutics pipeline is significantly more limited than if we had an operating history or approved commercial therapeutics products. Our success in developing commercial products that are based on our therapeutics pipeline will depend on a variety of factors, many of which are beyond our control, including, but not limited to:

•the outcomes from our product development efforts;

•competition from existing products or new products;

•the timing of regulatory review and our ability to obtain regulatory marketing authorizations of our product candidates;

•potential side effects of our product candidates that could delay or prevent receipt of marketing authorizations or cause an approved or cleared product to be taken off the market;

•our ability to attract and retain key personnel with the appropriate expertise and experience to potentially develop our product candidates; and

•the ability of third-party manufacturers to manufacture our product candidates in accordance with cGMP, for the conduct of clinical trials and, if approved or cleared, for successful commercialization.

Even if we are able to develop one or more commercial therapeutics products, we expect that the operating results of these products will fluctuate significantly from period to period due to the factors above and a variety of other factors, many of which are beyond our control, including, but not limited to:

•market acceptance of our product candidates, if approved or cleared;

•our ability to establish and maintain an effective sales and marketing infrastructure for our products;

•the ability of patients or healthcare providers to obtain coverage or sufficient reimbursement for our products;

•our ability, as well as the ability of any third-party collaborators, to obtain, maintain and enforce intellectual property rights covering our products, product candidates and technologies, and our ability to develop, manufacture and commercialize our products, product candidates, and technologies without infringing on the intellectual property rights of others; and

•our ability to attract and retain key personnel with the appropriate expertise and experience to manage our business effectively.

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Accordingly, the likelihood of the success of our therapeutics pipeline must be evaluated in light of these many potential challenges and variables.

The development of new product candidates will require us to undertake clinical trials, which are costly, time-consuming, and subject to a number of risks.

The development of new product candidates, including development of the data necessary for IND submissions and to obtain clearance or approval for such product candidates, is costly, time-consuming, and carries with it the risk of not yielding the desired results. Once filed, our IND submissions may not become effective if the FDA raises concerns with respect to those submissions. Further, the outcome of preclinical studies and early clinical trials may not be predictive of the success of later clinical trials, and interim results of clinical trials do not necessarily predict success in future clinical trials. Many companies in the pharmaceutical and biotechnology industries have suffered significant setbacks in late-stage clinical trials after achieving positive results in earlier development, and even if we achieve positive results in earlier trials, we could face similar setbacks. The design of a clinical trial can determine whether its results will support a product candidate’s marketing authorization, to the extent required, and flaws in the design of a clinical trial may not become apparent until the clinical trial is well advanced. In addition, preclinical and clinical data are often susceptible to varying interpretations and analyses. Many companies that believed their product candidates performed satisfactorily in preclinical studies and clinical trials have nonetheless failed to obtain marketing authorization for the product candidates. Furthermore, limited results from earlier-stage studies may not predict results from studies in larger numbers of subjects drawn from more diverse populations over a longer period of time.

Unfavorable results from ongoing preclinical studies and clinical trials could result in delays, modifications, or abandonment of ongoing or future analytical or clinical trials, or abandonment of a product development program, or may delay, limit, or prevent marketing authorizations, where required, or commercialization of our product candidates. Even if we, or our collaborators, believe that the results of clinical trials for our product candidates warrant marketing authorization, the FDA and other regulatory authorities may disagree and may not grant marketing authorizations for our product candidates.

Moreover, the FDA requires us to comply with regulatory standards, commonly referred to as the Good Clinical Practice ("GCP"), requirements, for conducting, recording, and reporting the results of clinical trials to assure that data and reported results are credible and accurate and that the rights, safety, and welfare of trial participants are protected. Other countries’ regulatory agencies also have requirements for clinical trials with which we must comply. We also are required to register certain ongoing clinical trials and post the results of certain completed clinical trials on a government-sponsored database, ClinicalTrials.gov, within specified timeframes. Failure to do so can result in fines, enforcement action, adverse publicity, and civil and criminal sanctions.

The initiation and completion of any clinical studies may be prevented, delayed, or halted for numerous reasons. We may experience delays in initiation or completion of our clinical trials for a number of reasons, which could adversely affect the costs, timing, or success of our clinical trials, including related to the following:

•we may be required to submit an investigational device exemption ("IDE"), application to the FDA with respect to our medical device product candidates, which must become effective prior to commencing certain human clinical trials of medical devices, and the FDA may reject our IDE application and notify us that we may not begin clinical trials;

•regulators and other comparable foreign regulatory authorities may disagree as to the design or implementation of our clinical trials;

•regulators and/or institutional review boards ("IRBs"), or other reviewing bodies may not authorize us or our investigators to commence a clinical trial, or to conduct or continue a clinical trial at a prospective or specific trial site;

•we may not reach agreement on acceptable terms with prospective contract research organizations ("CROs"), and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites;

•clinical trials may produce negative or inconclusive results, and we may decide, or regulators may require us, to conduct additional clinical trials or abandon product development programs;

•the number of subjects or patients required for clinical trials may be larger than we anticipate, enrollment in these clinical trials may be insufficient or slower than we anticipate, and the number of clinical trials being conducted at any given time may be high and result in fewer available patients for any given clinical trial, or patients may drop out of these clinical trials at a higher rate than we anticipate;

•our third-party contractors, including those manufacturing products or conducting clinical trials on our behalf, may fail to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, or at all;

•we or our investigators may have to suspend or terminate clinical trials for various reasons, including a finding that the subjects are being exposed to unacceptable health risks or based on a requirement or recommendation from regulators, IRBs or other parties due to safety signals or noncompliance with regulatory requirements;

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•we may have to amend clinical trial protocols or conduct additional studies to reflect changes in regulatory requirements or guidance, which we may be required to submit to an IRB and/or regulatory authorities for re-examination;

•the cost of clinical trials may be greater than we anticipate;

•clinical sites may not adhere to the clinical protocol or may drop out of a clinical trial;

•we may be unable to recruit a sufficient number of clinical trial sites;

•regulators, IRBs, or other reviewing bodies may fail to approve or subsequently find fault with our manufacturing processes or facilities of third-party manufacturers with which we enter into agreement for clinical and commercial supplies, the supply of devices or other materials necessary to conduct clinical trials may be insufficient, inadequate or not available at an acceptable cost, or we may experience interruptions in supply;

•marketing authorization policies or regulations of the FDA or applicable foreign regulatory agencies may change in a manner rendering our clinical data insufficient for authorization; and

•our product candidates may have undesirable side effects or other unexpected characteristics.

Any of these occurrences may significantly harm our business, financial condition, and prospects. In addition, many of the factors that cause, or lead to, a delay in the commencement or completion of clinical trials may also ultimately lead to the denial of regulatory approval of our product candidates.

Patient enrollment in clinical trials and completion of patient follow-up depend on many factors, including the size of the patient population, the nature of the trial protocol, the proximity of patients to clinical sites, the eligibility criteria for the clinical trial, patient compliance, competing clinical trials and clinicians’ and patients’ perceptions as to the potential advantages of the product being studied in relation to other available therapies, including any new treatments that may be approved for the indications we are investigating. For example, patients may be discouraged from enrolling in our clinical trials if the trial protocol requires them to undergo extensive post-treatment procedures or follow-up to assess the safety and efficacy of a product candidate, or they may be persuaded to participate in contemporaneous clinical trials of a competitor’s product candidate. In addition, patients participating in our clinical trials may drop out before completion of the trial or experience adverse medical events unrelated to our product candidates. Delays in patient enrollment or failure of patients to continue to participate in a clinical trial may delay commencement or completion of the clinical trial, cause an increase in the costs of the clinical trial and delays, or result in the failure of the clinical trial.

Clinical trials must be also conducted in accordance with the laws and regulations of the FDA and other applicable regulatory authorities’ legal requirements, regulations or guidelines, and are subject to oversight by these governmental agencies and IRBs at the medical institutions where the clinical trials are conducted. We rely on CROs and clinical trial sites to ensure the proper and timely conduct of our clinical trials and while we have agreements governing their committed activities, we have limited influence over their actual performance. We depend on our collaborators and on medical institutions and CROs to conduct our clinical trials in compliance with the FDA’s GCP requirements. To the extent our collaborators or the CROs fail to enroll participants for our clinical trials, fail to conduct the study to GCP requirements, or are delayed for a significant time in the execution of trials, including achieving full enrollment, we may be affected by increased costs, program delays, or both. In addition, clinical trials that are conducted in countries outside the United States may subject us to further delays and expenses as a result of increased shipment costs, additional regulatory requirements and the engagement of non-U.S. CROs, as well as expose us to risks associated with clinical investigators who are unknown to the FDA, and different standards of diagnosis, screening and medical care.

The clinical trial process is lengthy and expensive with uncertain outcomes. We have limited data and experience regarding the safety and efficacy of our product candidates. Results of earlier studies may not be predictive of future clinical trial results, or the safety or efficacy profile for such products or product candidates.

Clinical testing is difficult to design and implement, can take many years, can be expensive, and carries uncertain outcomes. The results of preclinical studies and clinical trials of our products conducted to date and ongoing or future studies and trials of our current, planned, or future products and product candidates may not be predictive of the results of later clinical trials, and interim results of a clinical trial do not necessarily predict final results. Our interpretation of data and results from our clinical trials do not ensure that we will achieve similar results in future clinical trials. In addition, preclinical and clinical data are often susceptible to various interpretations and analyses, and many companies that have believed their products performed satisfactorily in preclinical studies and earlier clinical trials have nonetheless failed to replicate results in later clinical trials. Products in later stages of clinical trials may fail to show the desired safety and efficacy despite having progressed through nonclinical studies and earlier clinical trials. Failure can occur at any stage of clinical testing. Our clinical studies may produce negative or inconclusive results, and we may decide, or regulators may require us, to conduct additional clinical and non-clinical testing in addition to those we have planned.

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Interim “top-line” and preliminary data from studies or trials that we announce or publish from time to time may change as more data become available and are subject to audit and verification procedures that could result in material changes in the final data.

From time to time, we may publish interim “top-line” or preliminary data from preclinical studies or clinical trials. Interim data are subject to the risk that one or more of the outcomes may materially change as more data become available. We also make assumptions, estimations, calculations, and conclusions as part of our analyses of data, and we may not have received or had the opportunity to fully and carefully evaluate all data. As a result, the top-line results that we report may differ from future results of the same studies, or different conclusions or considerations may qualify such results, once additional data have been received and fully evaluated. Preliminary or “top-line” data also remain subject to audit and verification procedures that may result in the final data being materially different from the preliminary data we previously published. As a result, interim and preliminary data should be viewed with caution until the final data are available. Additionally, interim data from clinical trials that we may complete are subject to the risk that one or more of the clinical outcomes may materially change as patient enrollment continues and more patient data become available. Adverse differences between preliminary or interim data and final data could seriously harm our business.

Further, others, including regulatory agencies, may not accept or agree with our assumptions, estimates, calculations, conclusions or analyses or may interpret or weigh the importance of data differently, which could impact the value of the particular program, the approvability or commercialization of the particular product candidate or product, and our results of operations, liquidity and financial condition. In addition, the information we choose to publicly disclose regarding a particular study or clinical trial is based on what is typically extensive information, and others may not agree with what we determine is the material or otherwise appropriate information to include in our disclosure. Any information we determine not to disclose may ultimately be deemed significant by others with respect to future decisions, conclusions, views, activities or otherwise regarding a particular product candidate or our business. If the top-line data that we report differ from final results, or if others, including regulatory authorities, disagree with the conclusions reached, our ability to obtain marketing authorization for, and commercialize, product candidates may be harmed, which could seriously harm our business.

The results of our clinical trials may not support the use of our product candidates, or may not be replicated in later studies required for marketing authorizations.

As the healthcare reimbursement system in the United States evolves to place greater emphasis on comparative effectiveness and outcomes data, we cannot predict whether we will have sufficient data, or whether the data we have will be presented to the satisfaction of any payors seeking such data for determining coverage for our products under development, particularly in new areas such as in drug-device combination or therapeutic applications.

The administration of clinical and economic utility studies is expensive and demands significant attention from certain members of our management team. Data collected from these studies may not be positive or consistent with our existing data, or may not be statistically significant or compelling to the medical community or payors. If the results obtained from our ongoing or future studies are inconsistent with certain results obtained from our previous studies, adoption of our products would suffer and our business would be harmed.

Peer-reviewed publications regarding our product candidates may be limited by many factors, including delays in the completion of, poor design of, or lack of compelling data from clinical studies, as well as delays in the review, acceptance, and publication process. If our products under development or the underlying technology do not receive sufficient favorable exposure in peer-reviewed publications, or are not published, the rate of healthcare provider adoption of our products under development and positive reimbursement coverage decisions for our products under development could be negatively affected. The publication of clinical data in peer-reviewed journals can be a crucial step in commercializing and obtaining reimbursement for products under development, and our inability to control when, if ever, results are published may delay or limit our ability to derive sufficient revenues from any test or other product that is the subject of a study. The performance achieved in published studies might not be repeated in later studies that may be required to obtain FDA clearance or marketing authorizations should we decide for business reasons, or be required to submit applications to the FDA or other health authorities seeking such authorizations.

Our outstanding debt, and any new debt, may impair our financial and operating flexibility.

As of March 31, 2024, we had a face value of approximately $52.1 million of convertible notes outstanding. Certain of our debt agreements contain various restrictive covenants.

The indentures for our Convertible Notes prohibit us and our subsidiaries from incurring additional indebtedness in the future, with certain exceptions. Under the Convertible Notes, we will not, and we will not permit any subsidiary of ours to, create, incur, assume or permit to exist any lien on any property or asset now owned or later acquired by us or any subsidiary that secures any indebtedness for borrowed money, other than (i) secured indebtedness for borrowed money in existence on the date of the indentures; (ii) permitted refinancing indebtedness incurred in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any secured indebtedness for borrowed money permitted by clause (i) of this sentence; and (iii)

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additional subordinated indebtedness for borrowed money that, in an aggregate principal amount (or accredited value, as applicable), does not exceed $10.0 million at any time outstanding.

Accordingly, we may incur additional indebtedness in the future. Our current indebtedness and the incurrence of additional indebtedness could have significant negative consequences for our stockholders and our business, results of operations and financial condition by, among other things:

•making it more difficult for us to satisfy our obligations under our existing debt instruments;

•increasing our vulnerability to general adverse economic and industry conditions;

•limiting our ability to obtain additional financing to fund our research, development, and commercialization activities, particularly when the availability of financing in the capital markets is limited;

•requiring a substantial portion of our cash flows from operations for the payment of principal and interest on our debt, reducing our ability to use our cash flows to fund working capital, research and development, and other general corporate requirements;

•limiting our flexibility to plan for, or react to, changes in our business and the industries in which we operate;

•further diluting our current stockholders as a result of issuing shares of our common stock upon conversion of our Convertible Notes; and

•placing us at a competitive disadvantage with competitors that are less leveraged than us or have better access to capital.

Our ability to make principal and interest payments will depend on our ability to generate cash in the future. Our business may not generate sufficient funds, and we may otherwise be unable to maintain sufficient cash reserves, to pay amounts due under our indebtedness, and our cash needs may increase in the future. If we do not generate sufficient cash to meet our debt service requirements and other operating requirements, we may need to seek additional financing. In that case, it may be more difficult, or we may be unable, to obtain financing on terms that are acceptable to us or at all.

In addition, any future indebtedness that we may incur may contain financial and other restrictive covenants that limit our ability to operate our business, raise capital or make payments under our other indebtedness. If we fail to comply with these covenants or to make payments under our indebtedness when due, then we would be in default under that indebtedness, which could, in turn, result in that and our other indebtedness becoming immediately payable in full.

Actual or perceived failures to comply with applicable data protection, privacy, consumer protection and security laws, regulations, standards and other requirements could adversely affect our business, results of operations, and financial condition.

The global data protection landscape is rapidly evolving, and we are or may become subject to numerous state, federal, and foreign laws, requirements, and regulations governing the collection, use, disclosure, retention, and security of personal information. Implementation standards and enforcement practices are likely to remain uncertain for the foreseeable future, and we cannot yet determine the impact future laws, regulations, standards, or perception of their requirements may have on our business. This evolution may create uncertainty in our business, affect our ability to operate in certain jurisdictions or to collect, store, transfer, use and share personal information, necessitate the acceptance of more onerous obligations in our contracts, result in liability or impose additional costs on us. The cost of compliance with these laws, regulations, and standards is high and is likely to increase in the future. Any failure or perceived failure by us to comply with federal, state or foreign laws or regulations, our internal policies and procedures or our contracts governing our processing of personal information could result in negative publicity, government investigations and enforcement actions, claims by third parties and damage to our reputation, any of which could have a material adverse effect on our operations, financial performance and business.

As our operations and business grow, we may become subject to or affected by new or additional data protection laws and regulations and face increased scrutiny or attention from regulatory authorities. In the United States, the manner in which we collect, use, access, disclose, transmit and store protected health information ("PHI"), is subject to the Health Insurance Portability and Accountability Act of 1996 ("HIPAA"), as amended by the Health Information Technology for Economic and Clinical Health Act of 2009 ("HITECH"), and the health data privacy, security and breach notification regulations issued pursuant to these statutes.

HIPAA establishes a set of national privacy and security standards for the protection of PHI, by health plans, healthcare clearinghouses, and certain healthcare providers, referred to as covered entities, and the business associates with whom such covered entities contract for services that involve the use or disclosure of PHI. HIPAA requires healthcare providers like us to develop and maintain policies and procedures with respect to PHI that is used or disclosed, including the adoption of administrative, physical, and technical safeguards to protect such information.

HIPAA further requires covered entities to notify affected individuals “without unreasonable delay and in no case later than 60 calendar days after discovery of the breach” if their unsecured PHI is subject to unauthorized access, use or disclosure. If a breach

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affects 500 patients or more, covered entities must report it to the U.S. Department of Health and Human Services ("HHS"), and local media without unreasonable delay (and in no case later than 60 days after discovery of the breach), and HHS will post the name of the entity on its public website. If a breach affects fewer than 500 individuals, the covered entity must log it and notify HHS at least annually. HIPAA also implemented the use of standard transaction code sets and standard identifiers that covered entities must use when submitting or receiving certain electronic healthcare transactions, including activities associated with the billing and collection of healthcare claims.

Penalties for failure to comply with a requirement of HIPAA and HITECH vary significantly depending on the failure and could include requiring corrective actions, and/or imposing civil monetary or criminal penalties. HIPAA also authorizes state attorneys general to file suit under HIPAA on behalf of state residents. Courts can award damages, costs and attorneys’ fees related to violations of HIPAA in such cases. While HIPAA does not create a private right of action allowing individuals to sue us in civil court for HIPAA violations, its standards have been used as the basis for a duty of care claim in state civil suits such as those for negligence or recklessness in the misuse or breach of PHI.

Certain states have also adopted comparable privacy and security laws and regulations, some of which, such as California's Confidentiality of Medical Information Act, may be more stringent than HIPAA. Such laws and regulations will be subject to interpretation by various courts and other governmental authorities, thus creating potentially complex compliance issues for us and our future customers and strategic partners.

In addition, depending on the information at issue, comprehensive state privacy laws may apply as well, such as the California Consumer Privacy Act of 2018, which went into effect on January 1, 2020 and was amended by the California Privacy Rights Act of 2020 ("CPRA"), which went into effect on January 1, 2023. The CPRA creates individual privacy rights for California consumers and increases the privacy and security obligations of entities handling certain personal data. The CPRA provides for civil penalties for violations, as well as a private right of action for data breaches that could increase data breach litigation. The CPRA may increase our compliance costs and potential liability, and many similar laws have been proposed at the federal level and proposed or enacted in other states. Any liability from failure to comply with the requirements of these laws could adversely affect our financial condition. Various state data breach laws may require additional notification requirements in the event of a breach, as well, depending on the types of information accessed without authorization.

Although we work to comply with applicable laws, regulations and standards, our contractual obligations and other legal obligations, these requirements are evolving and may be modified, interpreted and applied in an inconsistent manner from one jurisdiction to another, and may conflict with one another or other legal obligations with which we must comply. Any failure or perceived failure by us or our employees, representatives, contractors, consultants, CROs, collaborators, or other third parties to comply with such requirements or adequately address privacy and security concerns, even if unfounded, could result in additional cost and liability to us, damage our reputation, and adversely affect our business and results of operations.

Security breaches, loss of data, and other disruptions could compromise sensitive information related to our business or prevent us from accessing critical information and expose us to liability, which could adversely affect our business and reputation.

In the ordinary course of our business, including our now discontinued historical testing business, we collect and store sensitive data, including PHI (such as patient medical records, including test results), and personally identifiable information. We also store business and financial information, intellectual property, R&D information, trade secrets and other proprietary and business critical information, including that of our customers, payors, and collaboration partners. We manage and maintain our data utilizing a combination of on-site systems, managed data center systems and cloud-based data center systems. We are highly dependent on information technology networks and systems, including the internet, to securely process, transmit, and store critical information. Although we take measures to protect sensitive information from unauthorized access or disclosure, our information technology and infrastructure, and that of our third-party billing and collections provider and other service providers, may be vulnerable to attacks by hackers, viruses, disruptions and breaches due to employee error or malfeasance.

A security breach or privacy violation that leads to unauthorized access, disclosure or modification of, or prevents access to, personal information, including PHI, could compel us to comply with state and federal breach notification laws, subject us to mandatory corrective action and require us to verify the correctness of database contents. Such a breach or violation also could result in legal claims or proceedings brought by a private party or a governmental authority, liability under laws and regulations that protect the privacy of personal information, such as HIPAA, HITECH, and laws and regulations of various U.S. states and foreign countries, as well as penalties imposed by the Payment Card Industry Security Standards Council for violations of the Payment Card Industry Data Security Standard. If we are unable to prevent such security breaches or privacy violations or implement satisfactory remedial measures, we may suffer loss of reputation, financial loss and civil or criminal fines or other penalties because of lost or misappropriated information. In addition, these breaches and other forms of inappropriate access can be difficult to detect, and any delay in identifying them may lead to increased harm of the type described above.

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Unauthorized access, loss or dissemination of information could disrupt our operations, including our ability to process claims and appeals, provide customer assistance services, conduct R&D activities, develop and commercialize products, collect, process and prepare company financial information, provide information about products, and manage the administrative aspects of our business, any of which could damage our reputation and adversely affect our business. Any breach could also result in the compromise of our trade secrets and other proprietary information, which could adversely affect our competitive position.

In addition, health-related, privacy, and data protection laws and regulations in the United States and elsewhere are subject to interpretation and enforcement by various governmental authorities and courts, resulting in complex compliance issues and the potential for varying or even conflicting interpretations, particularly as laws and regulations in this area are in flux. It is possible that these laws may be interpreted and applied in a manner that is inconsistent with our practices. If so, this could result in government-imposed fines or orders requiring that we change our practices, which could adversely affect our business and our reputation. Complying with these laws could cause us to incur substantial costs or require us to change our business practices and compliance procedures in a manner adverse to our business, operating results, and financial condition.

Any failure or perceived failure by us or any third-party collaborators, service providers, contractors or consultants to comply with our privacy, confidentiality, data security or similar obligations, or any data security incidents or other security breaches that result in the accidental, unlawful or unauthorized access to, use of, release of, processing of, or transfer of sensitive information, including personal information, may result in negative publicity, harm to our reputation, governmental investigations, enforcement actions, regulatory fines, litigation or public statements against us, could cause third parties to lose trust in us or could result in claims by third parties, including those that assert that we have breached our privacy, confidentiality, data security or similar obligations, any of which could have a material adverse effect on our reputation, business, financial condition or results of operations. We could be subject to fines and penalties (including civil and criminal) under HIPAA for any failure by us or our business associates to comply with HIPAA’s requirements. Moreover, data security incidents and other security breaches can be difficult to detect, and any delay in identifying them may lead to increased harm. While we have implemented data security measures intended to protect our information, data, information technology systems, applications and infrastructure, there can be no assurance that such measures will successfully prevent service interruptions or data security incidents.

If we lose the services of members of our senior management team or other key employees, we may not be able to execute our business strategy.

Our success depends in large part upon the continued service of our senior management team and certain other key employees who are important to our vision, strategic direction, and culture. Our current long-term business strategy was developed in large part by our senior management team and depends in part on their skills and knowledge to implement. We may not be able to offset the impact on our business of the loss of the services of any member of our senior management or other key officers or employees or attract additional talent. The loss of any members of our senior management team or other key employees could have a material and adverse effect on our business, operating results, and financial condition.

An inability to attract and retain highly skilled employees could adversely affect our business.

To execute our business plan, we must attract and retain highly qualified personnel. Competition for qualified personnel is intense, especially for personnel in our industry and especially in the areas where our facilities are located. We have from time to time experienced, and we expect to continue to experience, difficulty in hiring and retaining employees with appropriate qualifications. Many of the companies with which we compete for experienced personnel have greater resources than we have. If we hire employees from competitors or other companies, their former employers may attempt to assert that these employees have breached their legal obligations to their former employees, resulting in a diversion of our time and resources. In addition, job candidates and existing employees often consider the value of the stock awards they receive in connection with their employment. If the perceived value of our stock awards declines, it may adversely affect our ability to attract and retain highly skilled employees. If we fail to attract new personnel or fail to retain and motivate our current personnel, our business, operating results, and financial condition could be adversely affected.

We may not be able to obtain and maintain the third-party relationships that are necessary to develop, fund, commercialize, and manufacture some or all of our product candidates.

We expect to depend on collaborators, partners, licensees, manufacturers, and other third parties to support our product candidate development efforts, including, to manufacture our product candidates and to market, sell, and distribute any products we successfully develop. Any problems we experience with any of these third parties could delay the development, commercialization, and manufacturing of our product candidates, which could harm our results of operations.

We cannot guarantee that we will be able to successfully negotiate agreements for, or maintain relationships with, collaborators, partners, licensees, manufacturers, and other third parties on favorable terms, if at all. If we are unable to obtain or maintain these agreements, we may not be able to clinically develop, manufacture, obtain regulatory authorizations for, or commercialize any future product candidates, which will in turn adversely affect our business.

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We expect to expend substantial management time and effort to enter into relationships with third parties and, if we successfully enter into such relationships, to manage these relationships. In addition, substantial amounts will be paid to third parties in these relationships. However, we cannot control the amount or timing of resources our future contract partners will devote to our R&D programs and products under development, and we cannot guarantee that these parties will fulfill their obligations to us under these arrangements in a timely fashion, if at all. In addition, while we manage the relationships with third parties, we cannot control all of the operations of and protection of intellectual property with respect to such third parties.

We rely on third parties for matters related to the design of our product candidates and for our preclinical research and clinical trials, and those third parties may not perform satisfactorily, including failing to meet deadlines for the completion of such preclinical research and trials.

We rely and expect to continue to rely on third parties, such as engineering firms, CROs, clinical data management organizations, medical institutions, and clinical investigators, to conduct and manage certain aspects of the design, preclinical testing, and clinical trials for our products under development. Our reliance on these third parties for R&D activities reduces our control over these activities but does not relieve us of our responsibilities. For example, we remain responsible for ensuring that each of our clinical trials is conducted in accordance with GCP requirements, the general investigational plan, and the protocols established for such trials.

These third parties may be slow to recruit patients and complete the studies. Furthermore, these third parties may also have relationships with other entities, some of which may be our competitors. If these third parties do not successfully carry out their contractual duties, do not meet expected deadlines, experience work stoppages, terminate their agreements with us or need to be replaced, or do not conduct our clinical trials in accordance with regulatory requirements or our stated protocols, we may need to enter into new arrangements with alternative third parties, which could be difficult, costly or impossible, and our clinical trials may be extended, delayed, or terminated or may need to be repeated. If any of the foregoing occur, we may not be able to obtain, or may be delayed in obtaining, marketing authorizations for our product candidates and may not be able to, or may be delayed in our efforts to, successfully commercialize our product candidates.

Even if our newly developed product candidates receive marketing authorizations, to the extent required, they may fail to achieve market acceptance.

If we can develop enhanced, improved, or new product candidates that receive marketing authorizations, they may nonetheless fail to gain sufficient market acceptance by healthcare providers, patients, third-party payors, and others in the medical community to be commercially successful. The degree of market acceptance of any of our new product candidates following receipt of marketing authorizations, if any, will depend on a number of factors, including:

•our ability to anticipate and meet customer and patient needs;

•the timing of regulatory approvals or clearances, to the extent such are required for marketing;

•the efficacy, safety and other potential advantages, such as convenience and ease of administration, of our product candidates as compared to alternative tests or treatments;

•the clinical indications for which our product candidates are approved or cleared;

•concordance with clinical guidelines established by relevant professional colleges;

•compliance with state guidelines and licensure, if applicable;

•our ability to offer our product candidates for sale at competitive prices;

•the willingness of the target patient population to try our new products, and of physicians to prescribe these products;

•the strength of our marketing and distribution support;

•the availability and requirements of third-party payor insurance coverage and adequate reimbursement for our product candidates;

•the prevalence and severity of side effects and the overall safety profiles of our product candidates;

•any restrictions on the use of our product candidates together with other products and medications;

•our ability to manufacture quality products in an economic and timely manner;

•interactions of our product candidates with other medications patients are taking; and

•the ability of patients to take and tolerate our product candidates.

If our newly developed product candidates are unable to achieve market acceptance, our business, operating results, and financial condition will be harmed.

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Additional time may be required to obtain marketing authorizations for certain of our therapeutics product candidates because they are combination products.

Some of our therapeutics product candidates are drug-device combination products that require coordination within the FDA and similar foreign regulatory agencies for review of their device and drug components. Although the FDA and similar foreign regulatory agencies have systems in place for the review and approval of combination products such as ours, we may experience delays in the development and commercialization of our product candidates due to regulatory timing constraints and uncertainties in the product development and approval process.

Our therapeutics product candidates under development include complex medical devices that, if authorized for marketing, will require training for qualified personnel and care for data analysis.

Our therapeutics product candidates under the early stages of development include complex medical devices that, if authorized for marketing, will require training for qualified personnel, including physicians, and care for data analysis. Although we will be required to ensure that our therapeutics product candidates are prescribed only by trained professionals, the potential for misuse of our therapeutics product candidates, if authorized for marketing, still exists due to their complexity. Such misuse could result in adverse medical consequences for patients that could damage our reputation, subject us to costly product liability litigation, and otherwise have a material and adverse effect on our business, operating results, and financial condition.

The successful discovery, development, manufacturing, and sale of biologics is a long, expensive, and uncertain process and carries unique risks and uncertainties. Moreover, even if successful, our biologic products may be subject to competition from biosimilars.

We may develop product candidates regulated as biologics in the future in connection with our therapeutics pipeline. The successful development, manufacturing, and sale of biologics is a long, expensive, and uncertain process. There are unique risks and uncertainties with biologics. For example, access to and supply of necessary biological materials, such as cell lines, may be limited and governmental regulations restrict access to and regulate the transport and use of such materials. In addition, the testing, development, approval, manufacturing, distribution, and sale of biologics is subject to applicable provisions of the FD&C Act, PHSA, and regulations issued thereunder that are often more complex and extensive than the regulations applicable to other pharmaceutical products or to medical devices. Manufacturing biologics, especially in large quantities, is often complicated and may require the use of innovative technologies. Such manufacturing also requires facilities specifically designed and validated for this purpose and sophisticated quality assurance and quality control procedures. Biologics are also frequently costly to manufacture because production inputs are derived from living animal or plant material, and some biologics cannot be made synthetically.

Failure to successfully discover, develop, manufacture, and sell biologics could adversely impact our business, operating results, and financial condition.

Even if we are able to successfully develop biologics in the future, the Biologics Price Competition and Innovation Act ("BPCIA"), created a framework for the approval of biosimilars in the United States that could allow competitors to reference data from any future biologic products for which we receive marketing approvals and otherwise increase the risk that any product candidates for which we intend to seek approval as biologic products may face competition sooner than anticipated. Under the BPCIA, an application for a biosimilar product may not be submitted to the FDA until four years following the date that the original biologic was first licensed by the FDA. In addition, the approval of a biosimilar product may not be made effective by the FDA until 12 years from the date on which the reference product was first licensed. During this 12-year period of exclusivity, another company may still market a competing version of the reference product if the FDA approves a full Biologics License Application ("BLA"), for the competing product containing the sponsor’s own preclinical data and data from adequate and well-controlled clinical trials to demonstrate the safety, purity, and potency of their product. The BPCIA is complex and is still being interpreted and implemented by the FDA. As a result, the law’s ultimate impact, implementation, and meaning are subject to uncertainty. While it is uncertain when such processes intended to implement the BPCIA may be fully adopted by the FDA, any such processes could have a material adverse effect on the future commercial prospects for our biological product candidates.

In addition, there is a risk that any of our product candidates regulated as a biologic and licensed under a BLA would not qualify for the 12-year period of exclusivity or that this exclusivity could be shortened due to congressional action or otherwise, potentially creating the opportunity for generic competition sooner than anticipated. Other aspects of the BPCIA, some of which may impact the BPCIA exclusivity provisions, have been the subject of litigation. Moreover, the extent to which a biosimilar, once approved, will be substituted for any one of our reference products in a way that is similar to traditional generic substitution for non-biological products is not yet clear, and will depend on a number of marketplace and regulatory factors that are still developing.

In Europe, the European Commission has granted marketing authorizations for several biosimilars pursuant to a set of general and product class-specific guidelines for biosimilar approvals issued over the past few years. In addition, companies are developing biosimilars in other countries that could compete with any biologic products that we develop. If competitors are able to obtain marketing approval for biosimilars referencing any biologic products that we develop, our product candidates may become subject to competition from such biosimilars, with the attendant competitive pressure and consequences. Expiration or successful challenge of

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our applicable patent rights could also trigger competition from other products, assuming any relevant exclusivity period has expired. As a result, we could face more litigation and administrative proceedings with respect to the validity and/or scope of patents relating to our biologic products.

If our future pharmaceutical product candidates are not approved by regulatory authorities, including the FDA, we will be unable to commercialize them.

In the future, we may develop pharmaceutical product candidates using our therapeutics pipeline that require FDA approval of a New Drug Application ("NDA"), or a BLA before marketing or sale in the United States. In the NDA or BLA process, we, or our collaborative partners, must provide the FDA and similar foreign regulatory authorities with data from preclinical and clinical studies that demonstrate that our product candidates are safe and effective, or in the case of biologics, safe, pure, and potent, for a defined indication before they can be approved for commercial distribution. The FDA or foreign regulatory authorities may disagree with our clinical trial designs and our interpretation of data from preclinical studies and clinical trials. The processes by which regulatory approvals are obtained from the FDA and foreign regulatory authorities to market and sell a new product are complex, require a number of years, depend upon the type, complexity, and novelty of the product candidate, and involve the expenditure of substantial resources for research, development, and testing. The FDA and foreign regulatory authorities have substantial discretion in the drug approval process and may require us to conduct additional nonclinical and clinical testing or to perform post-marketing studies. Further, the implementation of new laws and regulations, and revisions to FDA clinical trial design guidance, may lead to increased uncertainty regarding the approvability of new drugs.

Applications for our drug or biologic product candidates could fail to receive regulatory approval for many reasons, including, but not limited to, the following:

•the FDA or comparable foreign regulatory authorities may disagree with the design, implementation or results of our or our collaborators’ clinical trials;

•the FDA or comparable foreign regulatory authorities may determine that our product candidates are not safe and effective, only moderately effective or have undesirable or unintended side effects, toxicities or other characteristics;

•the population studied in the clinical program may not be sufficiently broad or representative to assure efficacy and safety in the full population for which we seek approval;

•we or our collaborators may be unable to demonstrate to the FDA, or comparable foreign regulatory authorities that a product candidate’s clinical and other benefits outweigh its safety risks;

•the FDA or comparable foreign regulatory authorities may disagree with our or our collaborators’ interpretation of data from preclinical studies or clinical trials;

•the data collected from clinical trials of our product candidates may not be sufficient to support the submission of a BLA, NDA, or other submission or to obtain regulatory approval in the United States or elsewhere;

•the FDA or comparable foreign regulatory authorities may fail to approve the manufacturing processes, test procedures and specifications, or facilities of third-party manufacturers with which we contract for clinical and commercial supplies; and

•the approval policies or regulations of the FDA or comparable foreign regulatory authorities may significantly change in a manner rendering our or our collaborators’ clinical data insufficient for approval.

This lengthy approval process, as well as the unpredictability of the results of clinical trials, may result in our failing to obtain regulatory approval to market any of our product candidates, which would seriously harm our business. In addition, the FDA may recommend advisory committee meetings for certain new molecular entities, and if warranted, require a Risk Evaluation and Mitigation Strategy ("REMS"), to assure that a drug’s benefits outweigh its risks. Even if we receive regulatory approval of a product, the approval may limit the indicated uses for which the drug may be marketed or impose significant restrictions or limitations on the use and/or distribution of such product.

In addition, in order to market any pharmaceutical or biological product candidates that we develop in foreign jurisdictions, we, or our collaborative partners, must obtain separate regulatory approvals in each country. The approval procedure varies among countries and can involve additional testing, and the time required to obtain approval may differ from that required to obtain FDA approval. Approval by the FDA does not ensure approval by regulatory authorities in other countries, and approval by one foreign regulatory authority does not ensure approval by regulatory authorities in other foreign countries or by the FDA. Conversely, failure to obtain approval in one or more jurisdictions may make approval in other jurisdictions more difficult. These laws, regulations, additional requirements and changes in interpretation could cause non-approval or further delays in the FDA’s or other regulatory authorities’ review and approval of our and our collaborative partner’s product candidates, which would materially harm our business and financial condition and could cause the price of our securities to fall.

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The marketing authorization process is expensive, time-consuming, and uncertain, and we may not be able to obtain or maintain authorizations for the commercialization of some or all of our product candidates.

The product candidates associated with our therapeutics pipeline and the activities associated with their development and commercialization, including their design, testing, manufacture, safety, efficacy, recordkeeping, labeling, storage, approval, advertising, promotion, sale, and distribution, export, and import, are subject to comprehensive regulation by the FDA and other regulatory agencies in the United States and by the European Medicines Agency and comparable regulatory authorities in other countries. We have not received authorization to market any of our product candidates from regulatory authorities in any jurisdiction. Failure to obtain marketing authorization for a product candidate will prevent us from commercializing the product candidate.

Securing marketing authorizations may require the submission of extensive preclinical and clinical data and other supporting information to the various regulatory authorities for each therapeutic indication to establish the product candidate’s safety and efficacy, or in the case of product candidates regulated as biologics, such product candidate’s safety, purity, and potency. Securing regulatory authorization generally requires the submission of information about the product manufacturing process to, and inspection of manufacturing facilities by, the relevant regulatory authority. Our product candidates may not be effective, may be only moderately effective, or may prove to have undesirable or unintended side effects, toxicities or other characteristics that may preclude our obtaining marketing authorization or prevent or limit commercial use.

The process of obtaining marketing authorizations, both in the United States and abroad, is expensive, may take many years if additional clinical trials are required, if authorization is obtained at all, and can vary substantially based upon a variety of factors, including the type, complexity, and novelty of the product candidates involved. Changes in marketing authorization policies during the development period, changes in or the enactment of additional statutes or regulations, or changes in regulatory review for each submitted product application, may cause delays in the approval or rejection of an application. The FDA and comparable authorities in other countries have substantial discretion in the approval process and may refuse to accept any application we submit, or may decide that our data is insufficient for approval and require additional preclinical, clinical, or other studies. In addition, varying interpretations of the data obtained from preclinical and clinical testing could delay, limit, or prevent marketing authorization of a product candidate. Any marketing authorization we or our collaborators ultimately obtain may be limited or subject to restrictions or post-approval commitments that render the approved product not commercially viable.

Accordingly, if we or our collaborators experience delays in obtaining authorization or if we or they fail to obtain authorization of our product candidates, the commercial prospects for our product candidates may be harmed and our ability to generate revenue will be materially impaired.

Disruptions at the FDA, the SEC and other government agencies caused by funding shortages or global health concerns could hinder their ability to hire and retain key leadership and other personnel, prevent new products and services from being developed or commercialized in a timely manner or otherwise prevent those agencies from performing normal business functions on which the operation of our business may rely, which could negatively impact our business.

The ability of the FDA to review regulatory filings and our ability to commence human clinical trials can be affected by a variety of factors, including government budget and funding levels, ability to hire and retain key personnel and accept the payment of user fees, and statutory, regulatory and policy changes. Average review times at the agency have fluctuated in recent years as a result. In addition, government funding of the SEC, and other government agencies on which our operations may rely, including those that fund research and development activities is subject to the political process, which is inherently fluid and unpredictable.

Disruptions at the FDA and other agencies may also slow the time necessary for the review and approval of INDs, which would adversely affect our business. For example, in recent years, the U.S. government shut down several times and certain regulatory agencies, such as the FDA and the SEC, had to furlough critical employees and stop critical activities. If a prolonged government shutdown occurs, it could significantly impact the ability of the FDA to timely review and process our regulatory submissions, which could have a material adverse effect on our business. Further, future government shutdowns could impact our ability to access the public markets and obtain necessary capital in order to properly capitalize and continue our operations.

If a prolonged government shutdown occurs, or if global health concerns prevent the FDA or other regulatory authorities from conducting their regular inspections, reviews, or other regulatory activities, it could significantly impact the ability of the FDA or other regulatory authorities to timely review and process our regulatory submissions, which could have a material adverse effect on our business.

Our product candidates may cause undesirable side effects or have other properties that could delay or prevent their regulatory authorization, limit the commercial profile of an approved label or result in significant negative consequences following marketing approval, if granted.

The use of our product candidates could be associated with side effects or adverse events, which can vary in severity (from minor reactions to death) and frequency (infrequent or prevalent). Side effects or adverse events associated with the use of our product

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candidates may be observed at any time, including in clinical trials or when a product is commercialized. Undesirable side effects caused by our product candidates could cause us or regulatory authorities to interrupt, delay or halt clinical trials and could result in a more restrictive label or the delay or denial of regulatory authorization by the FDA or other comparable foreign authorities. Results of our trials could reveal a high and unacceptable severity and prevalence of side effects such as toxicity or other safety issues and could require us or our collaboration partners to perform additional studies or halt development or sale of these product candidates or expose us to product liability lawsuits, which would harm our business and financial results. In such an event, we may be required by regulatory agencies to conduct additional animal or human studies regarding the safety and efficacy of our product candidates, which we have not planned or anticipated or our studies could be suspended or terminated, and the FDA or comparable foreign regulatory authorities could order us to cease further development of or deny or withdraw approval of our product candidates for any or all targeted indications. There can be no assurance that we will resolve any issues related to any product-related adverse events to the satisfaction of the FDA or any other regulatory agency in a timely manner, if ever, which could harm our business, operating results, financial condition and prospects.

Additionally, product quality characteristics have been shown to be sensitive to changes in process conditions, manufacturing techniques, equipment or sites and other such related considerations, hence any manufacturing process changes we implement prior to or after regulatory authorization could impact product safety and efficacy.

Product-related side effects could affect patient recruitment for clinical trials, the ability of enrolled patients to complete our studies or result in potential product liability claims. We currently carry product liability insurance and we are required to maintain product liability insurance pursuant to certain of our agreements. We believe our product liability insurance coverage is sufficient in light of our current clinical programs; however, we may not be able to maintain insurance coverage at a reasonable cost or in sufficient amounts to protect us against losses due to liability, or such insurance coverage may not be sufficient to cover all losses. A successful product liability claim or series of claims brought against us could adversely affect our business, operating results, and financial condition. In addition, regardless of merit or eventual outcome, product liability claims may result in impairment of our business reputation, withdrawal of clinical study participants, costs due to related litigation, distraction of management’s attention from our primary business, initiation of investigations by regulators, substantial monetary awards to patients or other claimants, the inability to commercialize our product candidates and decreased demand for our product candidates, if authorized for commercial sale. Additionally, if one or more of our product candidates receives marketing authorization, and we or others later identify undesirable side effects caused by such products, a number of potentially significant negative consequences could result, including, but not limited to:

•regulatory authorities may suspend, limit or withdraw marketing authorizations for such products, or seek an injunction against their manufacture or distribution;

•regulatory authorities may require additional warnings on the label including “boxed” warnings, or issue safety alerts, Dear Healthcare Provider letters, press releases or other communications containing warnings or other safety information about the product;

•we may be required to change the way the product is administered or conduct additional clinical trials or post-approval studies;

•we may be required to create a REMS plan, which could include a medication guide outlining the risks of such side effects for distribution to patients, a communication plan for healthcare providers and/or other elements to assure safe use;

•the product may become less competitive;

•we may be subject to fines, injunctions or the imposition of criminal penalties;

•we could be sued and held liable for harm caused to patients; and

•our reputation may suffer.

Any of these events could prevent us from achieving or maintaining market acceptance of a particular product candidate, if approved, and could significantly harm our business, operating results, financial condition, and prospects.

If we receive marketing authorization, regulatory agencies including the FDA and foreign authorities enforce requirements that we report certain information about adverse medical events. For example, under FDA medical device reporting regulations, medical device manufacturers are required to report to the FDA information that a device has or may have caused or contributed to a death or serious injury or has malfunctioned in a way that would likely cause or contribute to a death or serious injury if the malfunction of our device (or any similar future product) were to recur. We may fail to appreciate that we have become aware of a reportable adverse event, especially if it is not reported to us as an adverse event or if it is an adverse event that is unexpected or removed in time from the use of our products. If we fail to investigate and report these events to the FDA within the required timeframes, or at all, the FDA could take enforcement action against us. Any such adverse event involving our products also could result in future corrective actions, such as recalls or customer notifications, or agency action, such as inspection or enforcement action. Any corrective action, whether voluntary or involuntary, including any legal action taken against us, will require us to devote significant time and capital to the matter, distract management from operating our business, and may harm our reputation and financial results.

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We may not comply with laws regulating the protection of the environment and health and human safety.

Our research and development involves, or may in the future involve, the use of hazardous materials and chemicals and certain radioactive materials and related equipment. If an accident occurs, we could be held liable for resulting damages, which could be substantial. We are also subject to numerous environmental, health and workplace safety laws and regulations, including those governing laboratory procedures, exposure to blood-borne pathogens and the handling of biohazardous materials. Insurance may not provide adequate coverage against potential liabilities, and we do not maintain insurance for environmental liability or toxic tort claims that may be asserted against us. Additional federal, state, and local laws and regulations affecting our operations may be adopted in the future. We may incur substantial costs to comply with, and substantial fines or penalties if we violate, any of these laws or regulations.

Unfavorable global economic conditions, whether brought about by global crises, health epidemics, military conflicts and war, geopolitical and trade disputes or other factors, may have a material adverse effect on our business and financial results.

Our business is sensitive to global economic conditions, which can be adversely affected by public health crises (including the COVID-19 pandemic) and epidemics, political and military conflicts, trade and other international disputes, significant natural disasters (including as a result of climate change) or other events that disrupt macroeconomic conditions. Adverse macroeconomic conditions, including inflation, slower growth or recession, new or increased tariffs and other barriers to trade, changes to fiscal and monetary policy or government budget dynamics (particularly in the pharmaceutical and biotech areas), tighter credit, higher interest rates, volatility in financial markets, high unemployment, labor availability constraints, currency fluctuations and other challenges in the global economy have in the past adversely affected, and may in the future adversely affect, us and our business partners and suppliers.

For example, military conflicts or wars (such as the ongoing conflicts between Russia and Ukraine and among Israel and surrounding areas) can cause exacerbated volatility and disruptions to various aspects of the global economy. The uncertain nature, magnitude, and duration of hostilities stemming from such conflicts, including the potential effects of sanctions and counter-sanctions, or retaliatory cyber-attacks on the world economy and markets, have contributed to increased market volatility and uncertainty, which could have an adverse impact on macroeconomic factors that affect our business and operations, such as worldwide supply chain issues. It is not possible to predict the short and long-term implications of military conflicts or wars or geopolitical tensions which could include further sanctions, uncertainty about economic and political stability, increases in inflation rate and energy prices, cyber-attacks, supply chain challenges and adverse effects on currency exchange rates and financial markets.

Additionally, our operations and facilities, as well as operations of our service providers and manufacturers, may be located in areas that are prone to earthquakes and other natural disasters. Such operations and facilities are also subject to the risk of interruption by fire, drought, power shortages, nuclear power plant accidents and other industrial accidents, terrorist attacks and other hostile acts, ransomware and other cybersecurity attacks, telecommunication failure, labor disputes, public health crises (including the COVID-19 pandemic) and other events beyond our control. Global climate change is resulting in certain types of natural disasters occurring more frequently or with more intense effects. If a natural disaster or other event occurred that prevented us from using all or a significant portion of our headquarters, that damaged critical infrastructure, such as the manufacturing facilities of our third-party contract manufacturers, or that otherwise disrupted operations, it may be difficult or, in certain cases, impossible for us to continue our business for a substantial period of time. Because we rely on a single or limited sources for the supply and manufacture of many critical components, a business interruption affecting such sources would exacerbate any negative consequences on our business. We may not carry sufficient business interruption insurance to compensate us for all losses that may occur.

Any public health crises, including the COVID-19 pandemic, may affect our operations and those of third parties on which we rely, including our business partners and suppliers. To date, we are aware of certain suppliers for our R&D activities who have experienced operational delays directly related to the COVID-19 pandemic. In the past three years, the COVID-19 pandemic has caused, and likely will continue to cause, significant volatility and uncertainty in U.S. and international markets, disruptions to our business and delays in our preclinical studies, clinical trials and timelines, including as a result of impacts associated with protective health measures that we, other businesses and governments are taking or might have to take again in the future to manage the pandemic. The extent to which the COVID-19 pandemic and measures taken in response thereto impact our business, results of operations and financial condition will depend on future developments which are highly uncertain and difficult to predict.

Our operating results may fluctuate significantly, which could adversely impact the value of our common stock.

Our operating results, including our revenues, gross margin, profitability, and cash flows, have varied in the past and may vary significantly in the future, and period-to-period comparisons of our operating results may not be meaningful. Accordingly, our results should not be relied upon as an indication of future performance. Our operating results, including quarterly financial results, may fluctuate as a result of a variety of factors, many of which are outside of our control. Fluctuations in our results may adversely impact the value of our common stock. Factors that may cause fluctuations in our financial results include, without limitation, those listed elsewhere in this “Risk Factors” section. In addition, as we increase our research and development efforts, we expect to incur costs in advance of achieving the anticipated benefits of such efforts.

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We may engage in acquisitions that could disrupt our business, cause dilution to our stockholders, or reduce our financial resources.

We have in the past entered into, and may in the future enter into, transactions to acquire other businesses, products, or technologies. Successful acquisitions require us to correctly identify appropriate acquisition candidates and to integrate acquired products or operations and personnel with our own.

Should we make an error in judgment when identifying an acquisition candidate, should the acquired operations not perform as anticipated, or should we fail to successfully integrate acquired technologies, operations, or personnel, we will likely fail to realize the benefits we intended to derive from the acquisition and may suffer other adverse consequences. Acquisitions involve a number of other risks, including:

•we may not be able to make such acquisitions on favorable terms or at all;

•the acquisitions may not strengthen our competitive position, and these transactions may be viewed negatively by customers or investors;

•we may decide to incur debt with debt repayment obligations that we are unable to satisfy or that could otherwise require the use of a significant portion of our cash flow;

•we may decide to issue our common stock or other equity securities to the stockholders of the acquired company, which would reduce the percentage ownership of our existing stockholders;

•we may incur losses resulting from undiscovered liabilities of the acquired business that are not covered by any indemnification we may obtain from the seller;

•the acquisitions may reduce our cash available for operations and other uses;

•the acquisitions may divert of the attention of our management from operating our existing business; and

•the acquisitions may result in charges to earnings in the event of any write-down or write-off of goodwill and other assets recorded in connection with acquisitions.

We cannot predict the number, timing or size of future acquisitions or the effect that any such transactions might have on our business, operating results, and financial condition.

The development and expansion of our business through joint ventures, licensing and other strategic transactions may result in similar risks that reduce the benefits we anticipate from these strategic alliances and cause us to suffer other adverse consequences.

We may be significantly impacted by changes in tax laws and regulations or their interpretation.

U.S. and foreign governments continue to review, reform and modify tax laws. Changes in tax laws and regulations could result in material changes to the domestic and foreign taxes that we are required to provide for and pay. In addition, we are subject to regular audits with respect to our various tax returns and processes in the jurisdictions in which we operate. Errors or omissions in tax returns, process failures, or differences in interpretation of tax laws by tax authorities and us may lead to litigation, payments of additional taxes, penalties, and interest. On December 22, 2017, the Tax Cuts and Jobs Act of 2017 ("TCJA"), was passed into law. The TCJA has given rise to significant one-time and ongoing changes, including, but not limited to, a federal corporate tax rate decrease to 21% for tax years beginning after December 31, 2017, limitations on interest expense deductions, the immediate expensing of certain capital expenditures, the adoption of elements of a partially territorial tax system, new anti-base erosion provisions, a reduction to the maximum deduction allowed for net operating losses generated in tax years after December 31, 2017 and providing for indefinite carryforwards for losses generated in tax years after December 31, 2017. The legislation is unclear in many respects and could be subject to potential amendments and technical corrections, and will be subject to interpretations and implementing regulations by the Treasury and Internal Revenue Service, any of which could mitigate or increase certain adverse effects of the legislation. In addition, it is unclear how these U.S. federal income tax changes will affect state and local taxation. Generally, future changes in applicable tax laws and regulations, or their interpretation and application, could have a material and adverse effect on our business, operating results, and financial condition.

Our ability to utilize our net operating loss carryforwards and certain other tax attributes may be limited.

As of December 31, 2023, we had net operating loss ("NOL") carryforwards of approximately $500.3 million for federal income tax purposes, and $218.6 million for state income tax purposes. The federal NOLs will be carried forward indefinitely and the state NOLs begin expiring in 2028. Utilization of these NOLs depends on many factors, including our future income, which cannot be assured. Some of these NOLs could expire unused and be unavailable to offset our future income tax liabilities. In addition, under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, and corresponding provisions of state law, if a corporation undergoes an “ownership change,” which is generally defined as a greater than 50 percentage point change, by value, in its equity ownership by 5% stockholders over a rolling three-year period, the corporation’s ability to use its pre-change NOLs and other pre-change tax attributes to offset its post-change income may be limited. If we determine that an ownership change has occurred and our

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ability to use our historical NOLs is materially limited, it could harm our future operating results by effectively increasing our future tax obligations. In addition, under the TCJA, federal NOLs incurred in 2018 and in future years may be carried forward indefinitely but generally may not be carried back and the deductibility of such NOLs is limited to 80% of taxable income.

Reimbursement Risks Related to Our Historical Testing Business

Billing disputes with third-party payors may decrease realized revenue and may lead to requests for recoupment of past amounts paid.

Prior to the shutdown of our Laboratory Operations, which occurred in 2021, we operated clinical laboratories and billed for tests. Payors dispute our billing or coding from time to time and we deal with requests for recoupment from third-party payors from time to time in the ordinary course of our business (see Note 8 to our condensed consolidated financial statements included elsewhere in this Quarterly Report for additional information regarding current recoupment requests). We continue to receive recoupment requests and we expect these disputes and requests for recoupment may continue for a period of time in the future. Third-party payors may decide to deny payment or recoup payment for testing that they contend to have been not medically necessary, against their coverage determinations, or for which they have otherwise overpaid, and we may be required to refund reimbursements already received. We have entered into settlement agreements with government and commercial payors in order to settle claims related to past billing practices that have since been discontinued. For more information on these disputes, see Part I, Item 1. “Business—Commercial Third-Party Payors” in our Annual Report. Additionally, the Patient Protection and Affordable Care Act, as amended by the Healthcare and Education Reconciliation Act of 2010 (collectively, the "ACA"), enacted in March 2010, requires providers and suppliers to report and return any overpayments received from government payors under the Medicare and Medicaid programs within 60 days of identification. Failure to identify and return such overpayments exposes the provider or supplier to liability under federal false claims laws and the healthcare enforcement authorities, of Office of Inspector General of the Department of Health and Human Services ("OIG"). Claims for recoupment also require the time and attention of our management and other key personnel, which can be a distraction from operating our business.

If a third-party payor successfully challenges that payment to us for prior testing was in breach of contract or otherwise contrary to policy or law, they may recoup payment, which amounts could be significant and would impact our operating results and financial condition. We may also decide to negotiate and settle with a third-party payor in order to resolve an allegation of overpayment. In the past, we have negotiated and settled these types of claims with third-party payors. We may be required to resolve further disputes in the future. For example, after the closure of our Laboratory Operations, we received several managed Medicaid payor recoupment requests aggregating to $1.1 million, which we dispute. We can provide no assurance that we will not receive similar claims for recoupment from other third-party payors in the future. For more information on this claim, see Part I, Item 1. “Business—Reimbursement—Payor Dispute” in our Annual Report. Any of these outcomes, including recoupment or reimbursements, might also require us to restate our financials from a prior period, any of which could have a material and adverse effect on our business, operating results, and financial condition.

If the validity of an informed consent from a patient is challenged, we could be forced to refund amounts previously paid by third-party payors, or to exclude a patient’s data from clinical trial results.

We are required to ensure that all clinical data and/or patient specimens that we receive have been collected from subjects who have provided appropriate informed consent for us to perform testing in clinical trials. We seek to ensure that the subjects from whom the data and samples are collected do not retain or have conferred on them any proprietary or commercial rights to the data or any discoveries derived from them. A subject’s informed consent could be challenged in the future, and the informed consent could prove invalid, unlawful, or otherwise inadequate for our purposes. Any such findings against us, or our partners, could deny us access to, or force us to stop, testing samples in a particular area or could call into question the results of our clinical trials. In addition, we could be requested to refund amounts previously paid by third-party payors for tests where an informed consent is challenged. We could become involved in legal challenges, which could require significant management and financial resources and adversely affect our operating results.

We may be unable to obtain or maintain third-party payor coverage and reimbursement for our future products.

Our future success will depend on our or our potential partners' ability to obtain or maintain adequate reimbursement coverage from third-party payors. Third-party reimbursement for our testing historically represented a significant portion of our revenues, and we expect third-party payors such as third-party commercial payors and government healthcare programs to be a source of revenue in the future. It is to be determined whether and to what extent certain of our products under development will be covered or reimbursed. If we or our potential partners are unable to obtain or maintain coverage or adequate reimbursement from, or achieve in-network status with, third-party payors for our future products, our ability to generate revenues will be limited. For example, healthcare providers may be reluctant to prescribe our products due to the potential of a substantial cost to the patient if coverage or reimbursement is unavailable or insufficient.

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Regulatory and Legal Risks Related to Our Business

If we or our commercial partners act in a manner that violates healthcare laws or otherwise engage in misconduct, we could face substantial penalties and damage to our reputation, and our business operations and financial condition could be adversely affected.

We are subject to healthcare fraud and abuse regulation and enforcement by both the U.S. federal government and the states in which we conduct our business, including:

•federal and state laws and regulations governing the submission of claims, as well as billing and collection practices, for healthcare services;

•the federal Anti-Kickback Statute, which prohibits, among other things, the knowing and willful solicitation, receipt, offer or payment of remuneration, directly or indirectly, in exchange for or to induce either the referral of an individual for, or the purchase, order or recommendation of, any good or service for which payment may be made under federal healthcare programs such as Medicare and Medicaid; a person does not need to have knowledge of the statute or specific intent to violate it to have committed a violation; a violation of the Anti-Kickback Statute may result in imprisonment for up to ten years and significant fines for each violation and administrative civil money penalties, plus up to three times the amount of the remuneration paid; in addition, the government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the civil False Claims Act;

•the Eliminating Kickbacks in Recovery Act of 2018 ("EKRA"), which, among other things, prohibits knowingly or willfully paying, offering to pay, soliciting or receiving any remuneration (including any kickback, bribe, or rebate), whether directly or indirectly, overtly or covertly, in cash or in kind, to induce a referral of an individual to a recovery home, clinical treatment facility, or laboratory, or in exchange for an individual using the services of that recovery home, clinical treatment facility, or laboratory; violation of EKRA may result in significant fines and imprisonment of up to 10 years for each occurrence;

•the federal False Claims Act which prohibits, among other things, the presentation of false or fraudulent claims for payment from Medicare, Medicaid, or other government-funded third-party payors discussed in more detail below;

•federal laws and regulations governing the Medicare program, providers of services covered by the Medicare program, and the submission of claims to the Medicare program, as well as the Medicare Manuals issued by Centers for Medicare and Medicaid Services ("CMS") and the local medical policies promulgated by the Medicare Administrative Contractors with respect to the implementation and interpretation of such laws and regulations;

•the federal Stark Law, also known as the physician self-referral law, which, subject to certain exceptions, prohibits a physician from making a referral for certain designated health services covered by the Medicare program (and according to case law in some jurisdictions, the Medicaid program as well), including laboratory and pathology services, if the physician or an immediate family member has a financial relationship with the entity providing the designated health services; a person who attempts to circumvent the Stark Law may be fined up to approximately $165,000 for each arrangement or scheme that violates the statute; in addition, any person who presents or causes to be presented a claim to the Medicare or Medicaid programs in violation of the Stark Law is subject to significant civil monetary penalties, plus up to three times the amount of reimbursement claimed;

•the federal Civil Monetary Penalties Law, which, subject to certain exceptions, prohibits, among other things, the offer or transfer of remuneration, including waivers of copayments and deductible amounts (or any part thereof), to a Medicare or state healthcare program beneficiary if the person knows or should know it is likely to influence the beneficiary’s selection of a particular provider, practitioner or supplier of services reimbursable by Medicare or a state healthcare program; any violation of these prohibitions may result in significant civil monetary penalties for each wrongful act;

•the prohibition on reassignment by the program beneficiary of Medicare claims to any party;

•The federal Healthcare Fraud Statute, which, among other things, imposes criminal liability for executing or attempting to execute a scheme to defraud any healthcare benefit program, willfully embezzling or stealing from a healthcare benefit program, willfully obstructing a criminal investigation of a healthcare offense, and knowingly and willfully falsifying, concealing or covering up a material fact or making false, fictitious or fraudulent statements relating to healthcare matters; similar to the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation;

•HIPAA, as amended by HITECH, and their implementing regulations, which imposes privacy, security and breach reporting obligations with respect to PHI upon entities subject to the law, such as health plans, healthcare clearinghouses and certain healthcare providers, known as covered entities, and their respective business associates, individuals or entities

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that perform services for them that involve PHI; HITECH also created new tiers of civil monetary penalties, amended HIPAA to make civil and criminal penalties directly applicable to business associates, and gave state attorneys general new authority to file civil actions for damages or injunctions in U.S. federal courts to enforce HIPAA and seek attorneys’ fees and costs associated with pursuing federal civil actions;

•the federal transparency requirements under the Physician Payments Sunshine Act, created under the ACA, which requires, among other things, certain manufacturers of drugs, devices, biologics and medical supplies reimbursed under Medicare, Medicaid, or the Children’s Health Insurance Program to annually report to CMS information related to payments and other transfers of value provided to physicians, various other healthcare professionals, including physician assistants, nurse practitioners, clinical nurse specialists, certified nurse anesthetists, and certified nurse midwives, and teaching hospitals and physician ownership and investment interests, including such ownership and investment interests held by a physician’s immediate family members; we believe that we are currently exempt from these reporting requirements; we cannot assure you, however, that regulators, principally the federal government, will agree with our determination, and a determination that we have violated these laws and regulations, or a public announcement that we are being investigated for possible violations, could adversely affect our business;

•federal and state laws and regulations governing informed consent for genetic testing and the use of genetic material;

•state law equivalents of the above U.S. federal laws, such as the Stark Law, Anti-Kickback Statute and false claims laws, which may apply to items or services reimbursed by any third-party payor, including commercial insurers; and

•similar healthcare laws in the European Union and other jurisdictions, including reporting requirements detailing interactions with and payments to healthcare providers.

Furthermore, a development affecting our industry is the increased enforcement of the federal False Claims Act and, in particular, actions brought pursuant to the False Claims Act’s “whistleblower” or “qui tam” provisions. The False Claims Act imposes liability for, among other things, knowingly presenting, or causing to be presented, a false or fraudulent claim for payment by a federal governmental payor program. The qui tam provisions of the False Claims Act allow a private individual to bring civil actions on behalf of the federal government for violations of the False Claims Act and permit such individuals to share in any amounts paid by the defendant to the government in fines or settlement.

When an entity is determined to have violated the False Claims Act, it is subject to mandatory damages of three times the actual damages sustained by the government, plus significant mandatory civil penalties for each false claim. In addition, various states have enacted false claim laws analogous to the federal False Claims Act, and in some cases apply more broadly because many of these state laws apply to claims made to private payors and not merely governmental payors.

The evolving interpretations of these laws and regulations by courts and regulators increase the risk that we may be alleged to be, or in fact found to be, in violation of these or other laws and regulations, including pursuant to private qui tam actions brought by individual whistleblowers in the name of the government as described above.

Our inability to obtain, on a timely basis or at all, any necessary marketing authorizations for new device products or improvements could adversely affect our future product commercialization and operating results.

Our product candidates are expected to be subject to regulation by the FDA, and numerous other federal and state governmental authorities. The process of obtaining regulatory approvals or clearances to market a medical device, particularly from the FDA and regulatory authorities outside the United States, can be costly and time-consuming, and approvals or clearances might not be granted for future products on a timely basis, if at all. To ensure ongoing customer safety, regulatory agencies such as the FDA may re-evaluate their current approval or clearance processes and may impose additional requirements. In addition, the FDA and other regulatory authorities may impose increased or enhanced regulatory inspections for domestic or foreign facilities involved in the manufacture of medical devices.

We may develop new medical devices in connection with our therapeutics pipeline that are regulated by the FDA as medical devices. Unless otherwise exempted, medical devices must receive one of the following marketing authorizations from the FDA before being marketed in the United States: “510(k) clearance,” de novo classification, or PMA. The FDA determines whether a medical device will require 510(k) clearance, de novo classification, or the PMA process based on statutory criteria that include the risk associated with the device and whether the device is similar to an existing, legally marketed product. In the 510(k) clearance process, before a device may be marketed, the FDA must determine that a proposed device is “substantially equivalent” to a legally-marketed “predicate” device, which includes a device that has been previously cleared through the 510(k) process, a device that was legally marketed prior to May 28, 1976 (pre-amendments device), a device that was originally on the U.S. market pursuant to an approved PMA and later down-classified, or a 510(k)-exempt device. To be “substantially equivalent,” the proposed device must have the same intended use as the predicate device, and either have the same technological characteristics as the predicate device or have different technological characteristics and not raise different questions of safety or effectiveness than the predicate device. Clinical data are sometimes required to support substantial equivalence. In the process of obtaining PMA approval, the FDA must determine

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that a proposed device is safe and effective for its intended use based, in part, on extensive data, including, but not limited to, technical, preclinical, clinical trial, manufacturing, and labeling data. The PMA process is typically required for devices that are deemed to pose the greatest risk, such as life-sustaining, life-supporting or implantable devices. The process to obtain either 510(k) clearance or PMA will likely be costly, time-consuming, and uncertain. However, we believe the PMA process is generally more challenging. Even if we design a product that we expect to be eligible for the 510(k) clearance process, the FDA may require that the product undergo the PMA process. There can be no assurance that the FDA will approve or clear the marketing of any new medical device product that we develop. Even if regulatory approval or clearance is granted, such approval may include significant limitations on indicated uses, which could materially and adversely affect the prospects of the new medical device product.

If a medical device is novel and has not been previously classified by the FDA as Class I, II, or III, it is automatically classified into Class III regardless of the level of risk it poses. The Food and Drug Administration Modernization Act of 1997 established a route to market for low to moderate risk medical devices that are automatically placed into Class III due to the absence of a predicate device, called the “Request for Evaluation of Automatic Class III Designation,” or the de novo classification procedure. This procedure allows a manufacturer whose novel device would automatically be classified into Class III to request down-classification of its medical device into Class I or Class II on the basis that the device presents low or moderate risk, rather than requiring the submission and approval of a PMA application.

FDA marketing authorization could not only be required for new products we develop, but also could be required for certain enhancements we may seek to make to our future products. Delays in receipt of, or failure to obtain, marketing authorizations could materially delay or prevent us from commercializing our products or result in substantial additional costs that could decrease our profitability. In addition, even if we receive FDA or other regulatory marketing authorizations for a new or enhanced product, the FDA or such other regulator may condition, withdraw, or materially modify its marketing authorization.

We are subject to costly and complex laws and governmental regulations.

Our therapeutics product candidates are subject to a complex set of regulations and rigorous enforcement, including by the FDA, United States Department of Justice ("DOJ"), HHS, and numerous other federal, state, and non-U.S. governmental authorities. To varying degrees, each of these agencies requires us to comply with laws and regulations governing the development, testing, manufacturing, labeling, marketing, and distribution of our product candidates, if approved. As a part of the regulatory process of obtaining marketing authorization for new products and modifications to products, we may conduct and participate in numerous clinical trials with a variety of study designs, patient populations, and trial endpoints. Unfavorable or inconsistent clinical data from existing or future clinical trials or the market’s or FDA’s perception of this clinical data, may adversely impact our ability to obtain product approvals, our position in, and share of, the markets in which we participate, and our business, operating results, and financial condition. We cannot guarantee that we will be able to obtain or maintain marketing authorization for our product candidates and/or enhancements or modifications to products, and the failure to maintain or obtain marketing authorization in the future could have a material and adverse effect on our business, operating results, financial condition.

Both before and after a product is commercially released, we and our products are subject to ongoing and pervasive oversight of government regulators. For instance, in the case of any product candidates subject to regulation by the FDA, including those products candidates in connection with our therapeutics pipeline, our facilities and procedures and those of our suppliers will be subject to periodic inspections by the FDA to determine compliance with applicable regulations. The results of these inspections can include inspectional observations on FDA’s Form-483, warning letters, or other forms of enforcement. If the FDA or a non-U.S. regulatory agency were to conclude that we are not in compliance with applicable laws or regulations, or that any of our product candidates, if authorized for marketing, are ineffective or pose an unreasonable health risk, the FDA or such other non-U.S. regulatory agency could ban products, withdraw marketing authorizations for such products, detain or seize adulterated or misbranded products, order a recall, repair, replacement, or refund of such products, refuse to grant pending marketing applications, require certificates of non-U.S. governments for exports, and/or require us to notify health professionals and others that the products present unreasonable risks of substantial harm to the public health. The FDA and other non-U.S. regulatory agencies may also assess civil or criminal penalties against us, our officers, or employees and impose operating restrictions on a company-wide basis. The FDA may also recommend prosecution to the DOJ. Any adverse regulatory action, depending on its magnitude, may restrict us from effectively marketing and selling our products and limit our ability to obtain future marketing authorizations, and could result in a substantial modification to our business practices and operations. Furthermore, we occasionally receive investigative demands, subpoenas, or other requests for information from state and federal governmental agencies, and we cannot predict the timing, outcome, or impact of any such investigations. See Note 8 to our condensed consolidated financial statements included elsewhere in this Quarterly Report. Any adverse outcome in one or more of these investigations could include the commencement of civil and/or criminal proceedings, substantial fines, penalties, and/or administrative remedies, including exclusion from government reimbursement programs and/or amendments to our corporate integrity agreement with the OIG. In addition, resolution of any of these matters could involve the imposition of additional, costly compliance obligations. These potential consequences, as well as any adverse outcome from government investigations, could have a material and adverse effect on our business, operating results, and financial condition.

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Current and future legislation may increase the difficulty and cost for us, and any collaborators, to obtain marketing approval of and commercialize our drug candidates and affect the prices we, or they, may obtain.

To date, there have been several recent U.S. congressional inquiries and proposed and enacted state and federal legislation and regulation designed to, among other things, bring more transparency to drug pricing, review the relationship between pricing and manufacturer patient support programs, reduce the costs of drugs under Medicare and reform government program reimbursement methodologies for drug products. Heightened governmental scrutiny over the manner in which manufacturers set prices for their marketed products has resulted in several recent Congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for products. We expect that additional state and federal healthcare reform measures will be adopted in the future, particularly in light of the new presidential administration, any of which could limit the amounts that federal and state governments will pay for healthcare therapies, which could result in reduced demand for our product candidates or additional pricing pressures. For example, on August 16, 2022, President Biden signed into law the Inflation Reduction Act of 2022 (“IRA”), which, contains provisions intended to lower beneficiary drug spending. Beginning in 2023, the IRA authorizes the CMS to negotiate Medicare reimbursement rates for certain prescription drug products, which may put limits on prices paid for drugs by government health programs. We cannot be sure whether additional legislation or rulemaking related to the IRA will be issued or enacted, or what impact, if any, such changes will have on the profitability of any of our drug candidates, if approved for commercial use, in the future.

We and our commercial partners and contract manufacturers are subject to significant regulation with respect to manufacturing medical devices and therapeutic products. The manufacturing facilities on which we rely may not continue to meet regulatory requirements or may not be able to meet supply demands.

Entities involved in the preparation of medical devices and/or therapeutic products for clinical studies or commercial sale, including our manufacturers for the therapeutic products that we may develop, are subject to extensive regulation. Components of a finished medical device or therapeutic product approved for commercial sale or used in late-stage clinical studies must be manufactured in accordance with cGMP and/or QSR requirements. These regulations govern manufacturing processes and procedures (including record keeping) and the implementation and operation of quality systems to control and assure the quality of investigational products and products approved for sale. Poor control of production processes can lead to the introduction of contaminants or to inadvertent changes in the properties or stability of our product candidates that may not be detectable in final product testing. We, our collaboration partners or our contract manufacturers must supply all necessary documentation in support of an NDA, a BLA, a PMA, a 510(k) application, a request for de novo classification, or a Marketing Authorization Application ("MAA"), on a timely basis and must adhere to cGMP regulations enforced by the FDA and other regulatory agencies through their facilities inspection program. Some of our contract manufacturers may have never produced a commercially approved pharmaceutical product and therefore have not been subject to the review of the FDA and other regulators. The facilities and quality systems of some or all of our collaboration partners and third-party contractors must pass a pre-approval inspection for compliance with the applicable regulations as a condition of regulatory approval of our drug and biologic product candidates and may be subject to inspection in connection with a MAA for any of our other potential product candidates. In addition, the regulatory authorities may, at any time, audit or inspect a manufacturing facility involved with the preparation of our product candidates or our other potential products or the associated quality systems for compliance with the regulations applicable to the activities being conducted. Although we oversee our contract manufacturers, we cannot control the manufacturing process of, and are completely dependent on, such contract manufacturing partners for compliance with these regulatory requirements. If these facilities do not pass a pre-approval plant inspection, marketing authorizations for the products may not be granted or may be substantially delayed until any violations are corrected to the satisfaction of the regulatory authority, if ever.

The regulatory authorities also may, at any time following approval or clearance of a product for sale, audit the manufacturing facilities of our collaboration partners and third-party contractors. If any such inspection or audit identifies a failure to comply with applicable regulations or if a violation of our product specifications or applicable regulations occurs independent of such an inspection or audit, we or the relevant regulatory authority may require remedial measures that may be costly and/or time-consuming for us or a third party to implement and that may include the temporary or permanent suspension of a clinical study or commercial sales or the temporary or permanent closure of a facility.

Any such remedial measures imposed upon us or third parties with whom we contract could materially harm our business.

If we, our collaboration partners or any of our third-party manufacturers fail to maintain regulatory compliance, the FDA or other applicable regulatory authority can impose regulatory sanctions including, among other things, refusal to approve a pending application for a new product candidate, withdrawal of a marketing authorization or suspension of production. As a result, our business, operating results, and financial condition may be materially harmed.

Additionally, if supply from one approved manufacturer is interrupted, an alternative manufacturer will need to be qualified and we may need to obtain marketing authorization for a change in the manufacturer through submission of a PMA supplement, 510(k)

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pre-market notification, NDA or BLA supplement, MAA variation or other regulatory filing to the FDA or other foreign regulatory agencies, which could result in further delay.

These factors could cause us to incur additional costs and could cause the delay or termination of clinical studies, regulatory submissions, required marketing authorizations or commercialization of our products under development. Furthermore, if our suppliers fail to meet contractual requirements and we are unable to secure one or more replacement suppliers capable of production at a substantially equivalent cost, our clinical studies may be delayed or we could lose potential revenue.

If the FDA does not conclude that certain of our product candidates satisfy the requirements for the Section 505(b)(2) regulatory approval pathway, or if the requirements for such product candidates under Section 505(b)(2) are not as we expect, the approval pathway for those product candidates will likely take significantly longer, cost significantly more and entail significantly greater complications and risks than anticipated, and in either case may not be successful.

We are developing proprietary product candidates, such as BT-600, a GI-targeted tofacitinib, for which we may seek FDA approval through the Section 505(b)(2) regulatory pathway. We expect that BT-600 will be regulated as a drug-device combination product under the drug provisions of the FD&C Act, enabling us to submit NDAs for approval of this product candidate. The Hatch-Waxman Act added Section 505(b)(2) to the FD&C Act. Section 505(b)(2) permits the filing of an NDA where at least some of the information required for approval comes from studies that were not conducted by or for the applicant and for which the applicant has not obtained a right of reference. Section 505(b)(2), if applicable to us under the FD&C Act, would allow an NDA we submit to the FDA to rely in part on data in the public domain or the FDA’s prior conclusions regarding the safety and effectiveness of approved compounds, which could expedite the development program for our product candidate by potentially decreasing the amount of nonclinical and/or clinical data that we would need to generate in order to obtain FDA approval. If the FDA does not allow us to pursue the Section 505(b)(2) regulatory pathway as anticipated, we may need to conduct additional nonclinical studies and/or clinical trials, provide additional data and information, and meet additional standards for regulatory approval. If this were to occur, the time and financial resources required to obtain FDA approval for this product candidate, and complications and risks associated with this product candidate, would likely substantially increase. Moreover, inability to pursue the Section 505(b)(2) regulatory pathway could result in new competitive products reaching the market more quickly than our product candidate, which would likely materially adversely impact our competitive position and prospects. Even if we are allowed to pursue the Section 505(b)(2) regulatory pathway, we cannot assure you that our product candidate will receive the requisite approval for commercialization.

In addition, notwithstanding the approval of a number of products by the FDA under Section 505(b)(2) over the last few years, certain pharmaceutical companies and others have objected to the FDA’s interpretation of Section 505(b)(2). If the FDA’s interpretation of Section 505(b)(2) is successfully challenged, the FDA may change its 505(b)(2) policies and practices, which could delay or even prevent the FDA from approving any NDA that we submit under Section 505(b)(2). In addition, the pharmaceutical industry is highly competitive, and Section 505(b)(2) NDAs are subject to certain requirements designed to protect the patent rights of sponsors of previously approved drugs that are referenced in a Section 505(b)(2) NDA. These requirements may give rise to patent litigation and mandatory delays in approval of our NDAs for up to 30 months or longer depending on the outcome of any litigation. It is not uncommon for a manufacturer of an approved product to file a citizen petition with the FDA seeking to delay approval of, or impose additional approval requirements for, pending competing products. If successful, such petitions can significantly delay, or even prevent, the approval of the new product. Even if the FDA ultimately denies such a petition, the FDA may substantially delay approval while it considers and responds to the petition. In addition, even if we are able to utilize the Section 505(b)(2) regulatory pathway, there is no guarantee this would ultimately lead to streamlined product development or earlier approval.

Moreover, even if our product candidate is approved under Section 505(b)(2), the approval may be subject to limitations on the indicated uses for which the product may be marketed or to other conditions of approval, or may contain requirements for costly post-marketing testing and surveillance to monitor the safety or efficacy of the product.

The misuse or off-label use of our product candidates may harm our reputation in the marketplace, result in injuries that lead to product liability suits or result in costly investigations, fines or sanctions by regulatory bodies if we are deemed to have engaged in the promotion of these uses, and any of these consequences could be costly to our business.

We are developing certain therapeutics product candidates, including pharmaceutical products and medical devices, which if authorized for marketing by the FDA or other regulatory authorities, will be authorized for use in specific indications and patient populations. We expect to train our marketing personnel and direct sales force not to promote our product candidates for uses outside of the FDA-approved or -cleared indications for use, which are sometimes referred to as “off-label uses.” We cannot, however, prevent a physician from using our products off-label, when in the physician’s independent professional medical judgment he or she deems it appropriate. There may be increased risk of injury to patients if physicians attempt to use our products off-label. Furthermore, the use of our products for indications other than those authorized for marketing by the FDA or any foreign regulatory body may not effectively treat such conditions, which could harm our reputation in the marketplace among physicians and patients.

If the FDA or any foreign regulatory body determines that our promotional materials or training constitute promotion of an off-label use, it could request that we modify our training or promotional materials or subject us to regulatory or enforcement actions,

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including the issuance or imposition of an untitled letter, a warning letter, injunction, seizure, civil fine, or criminal penalties. It is also possible that other federal, state or foreign enforcement authorities might take action under other regulatory authority, such as false claims laws, if they consider our business activities to constitute promotion of an off-label use, which could result in significant penalties, including, but not limited to, criminal, civil, and administrative penalties, damages, fines, disgorgement, exclusion from participation in government healthcare programs and the curtailment of our operations.

In addition, physicians may misuse our products or use improper techniques if they are not adequately trained, potentially leading to injury and an increased risk of product liability. If our products are misused or used with improper technique, we may become subject to costly litigation by our customers or their patients. As described above, product liability claims could divert management’s attention from our core business, be expensive to defend and result in sizeable damage awards against us that may not be covered by insurance.

Our internal information technology systems, or those of any of our third party service providers, or potential future collaborators, may fail or suffer security or data privacy breaches or other unauthorized or improper access to, use of, or destruction of our proprietary or confidential data, employee data or personal data, which could result in additional costs, loss of revenue, significant liabilities, harm to our brand and material disruption of our operations.

In the ordinary course of our business, we and the third parties upon which we rely collect, receive, store, process, generate, use, transfer, disclose, make accessible, protect, secure, dispose of, transmit, and share (collectively, process) proprietary, confidential, and sensitive data, including personal data, intellectual property, trade secrets, and other sensitive data (collectively, sensitive information). We may implement a variety of security measures designed to protect systems that store our information, given their size and complexity and the increasing amounts of information maintained on our internal information technology systems and those of our third-party service providers and supply chain companies, and consultants, these systems are potentially vulnerable to breakdown or other damage or interruption from service interruptions, system malfunction, natural disasters, terrorism, war and telecommunication and electrical failures, as well as security breaches from inadvertent or intentional actions by our employees, contractors, consultants, business partners and/or other third parties, or from cyber-attacks by malicious third parties, which may compromise our system infrastructure or lead to the loss, destruction, alteration or dissemination of, or damage to, our data.

Some actors now engage and are expected to continue to engage in cyber-attacks, including without limitation nation-state actors for geopolitical reasons and in conjunction with military conflicts and defense activities. During times of war and other major conflicts, we, and the third parties upon which we rely, may be vulnerable to a heightened risk of these attacks, including retaliatory cyber-attacks, that could materially disrupt our systems and operations, supply chain, and ability to produce, sell and distribute our goods and services. In particular, severe ransomware attacks are becoming increasingly prevalent and can lead to significant interruptions in our operations, ability to provide our products or services, loss of sensitive data and income, reputational harm, and diversion of funds. Extortion payments may alleviate the negative impact of a ransomware attack, but we may be unwilling or unable to make such payments due to, for example, applicable laws or regulations prohibiting such payments.

To the extent that any disruption or security breach were to result in loss, destruction, unavailability, alteration or dissemination of, or damage to, our data or applications, or for it to be believed or reported that any of these occurred, we could incur liability and reputational damage and the development and commercialization of our programs could be delayed. Further, our insurance policies may not be adequate to compensate us for the potential losses arising from any such disruption in, or failure or security breach of, our systems or third-party systems where information important to our business operations or commercial development is stored.

While we have implemented security measures designed to protect against security incidents, there can be no assurance that these measures will be effective. We may be unable in the future to detect vulnerabilities in our information technology systems because such threats and techniques change frequently, are often sophisticated in nature, and may not be detected until after a security incident has occurred. Further, we may experience delays in developing and deploying remedial measures designed to address any such identified vulnerabilities. Applicable data privacy and security obligations may require us to notify relevant stakeholders of security incidents. Such disclosures are costly, and the disclosure or the failure to comply with such requirements could lead to adverse consequences.

We rely on third-party service providers and technologies to operate critical business systems to process sensitive information in a variety of contexts. Our ability to monitor these third parties’ information security practices is limited, and these third parties may not have adequate information security measures in place. If our third-party service providers experience a security incident or other interruption, we could experience adverse consequences. While we may be entitled to damages if our third-party service providers fail to satisfy their privacy or security-related obligations to us, any award may be insufficient to cover our damages, or we may be unable to recover such award. In addition, supply-chain attacks have increased in frequency and severity, and we cannot guarantee that third parties’ infrastructure in our supply chain or our third-party partners’ supply chains have not been compromised.

If we (or a third party upon whom we rely) experience a security incident or are perceived to have experienced a security incident, we may experience adverse consequences, such as government enforcement actions (for example, investigations, fines, penalties, audits, and inspections); additional reporting requirements and/or oversight; restrictions on processing sensitive information

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(including personal data); litigation (including class claims); indemnification obligations; negative publicity; reputational harm; monetary fund diversions; interruptions in our operations (including availability of data); financial loss; and other similar harms. Security incidents and attendant consequences may cause stakeholders (including investors and potential customers) to stop supporting our platform, deter new customers from products, and negatively impact our ability to grow and operate our business.

Our contracts may not contain limitations of liability, and even where they do, there can be no assurance that limitations of liability in our contracts are sufficient to protect us from liabilities, damages, or claims related to our data privacy and security obligations. We cannot be sure that our insurance coverage will be adequate or sufficient to protect us from or to mitigate liabilities arising out of our privacy and security practices, that such coverage will continue to be available on commercially reasonable terms or at all, or that such coverage will pay future claims.

Risks Related to Our Intellectual Property

New third-party claims of intellectual property infringement could result in litigation or other proceedings, which would be costly and time-consuming, and could limit our ability to commercialize our products under development.

Our success depends in part on our freedom-to-operate with respect to the patents or intellectual property rights of third parties. We operate in industries in which there have been substantial litigation and other proceedings regarding patents and other intellectual property rights. For example, we have identified a number of third-party patents that may be asserted against us with respect to certain of our future products, and have identified pending patent applications for which the ultimate claim scope and validity are uncertain. We believe that we do not infringe the relevant claims of these third-party patents and/or that the relevant claims of these patents are likely invalid or unenforceable. We may choose to challenge the validity of these patents, though the outcome of any challenge that we may initiate in the future is uncertain. We may also decide in the future to seek a license to those third-party patents, but we might not be able to do so on reasonable terms. Certain third parties, including our competitors or collaborators, may in the future assert that we are employing their proprietary technology without authorization or that we are otherwise infringing their intellectual property rights. The risk of intellectual property proceedings may increase as the number of products and the level of competition in our industry segments grows. Defending against infringement claims is costly and may divert the attention of our management and technical personnel. If we are unsuccessful in defending against patent infringement claims, we could be required to stop developing or commercializing products, pay potentially substantial monetary damages, and/or obtain licenses from third parties, which we may be unable to do on acceptable terms, if at all, and which may require us to make substantial royalty payments. In addition, we could encounter delays in product introductions while we attempt to develop alternative non-infringing products. Any of these or other adverse outcomes could have a material and adverse effect on our business, operating results, and financial condition. See Note 8 to our condensed consolidated financial statements included elsewhere in this Quarterly Report for more information regarding a patent infringement suit filed by Ravgen, Inc. related to our discontinued historical laboratory developed test business, which is no longer in operation. There can be no assurance that we will prevail in the Ravgen matter. For example, in a patent infringement suit filed by Ravgen against another laboratory asserting the same patents, a Texas jury found the laboratory liable for infringement and awarded significant damages.

As we move into new markets and develop enhancements to and new applications for our product candidates, competitors have asserted and may in the future assert their patents and other proprietary rights against us as a means of blocking or slowing our entry into such markets or our sales of such new or enhanced products or as a means to extract substantial license and royalty payments from us. Our competitors and others may have significantly stronger, larger, and/or more mature patent portfolios than we have, and additionally, our competitors may be better resourced and highly motivated to protect large, well-established markets that could be disrupted by our product candidates. In addition, future litigation may involve patent holding companies or other patent owners or licensees who have no relevant product revenues and against whom our own patents may provide little or no deterrence or protection.

In addition, our agreements with some of our collaborators, suppliers, and other entities with whom we do business require us to defend or indemnify these parties to the extent they become involved in infringement claims, including the types of claims described above. We could also voluntarily agree to defend or indemnify third parties if we determine it to be in the best interests of our business relationships. If we are required or agree to defend or indemnify third parties in connection with any infringement claims, we could incur significant costs and expenses that could adversely affect our business, operating results, and financial condition.

Because the industries in which we operate are particularly litigious, we are susceptible to intellectual property suits that could cause us to incur substantial costs or pay substantial damages or prohibit us from selling our products under development or conducting our business.

There is a substantial amount of litigation over patent and other intellectual property rights in the industries in which we operate, including, but not limited to, the biotechnology, life sciences, pharmaceuticals, and medical device industries. Whether a product infringes a patent involves complex legal and factual issues that may be open to different interpretations. Searches typically performed to identify potentially infringed patents of third parties are often not conclusive and because patent applications can take many years to issue, there may be applications now pending, which may later result in issued patents which our future products may infringe. In addition, our competitors or other parties may assert that our product candidates and the methods they employ may be covered by

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patents held by them. If any of our products infringes a valid patent, we could be prevented from manufacturing or selling it unless we can obtain a license or redesign the product to avoid infringement. A license may not always be available or may require us to pay substantial royalties. Infringement and other intellectual property claims, with or without merit, can be expensive and time-consuming to litigate and could divert our management’s attention from operating our business.

Any inability to effectively protect our proprietary technologies could harm our competitive position.

Our success and ability to compete depend to a large extent on our ability to develop proprietary products and technologies and to maintain adequate protection of our intellectual property in the United States and elsewhere. The laws of some foreign countries do not protect proprietary rights to the same extent as the laws of the United States, and many companies have encountered significant challenges in establishing and enforcing their proprietary rights outside of the United States. These challenges can be caused by the absence of rules and methods for the establishment and enforcement of intellectual property rights in certain jurisdictions outside of the United States. In addition, the proprietary positions of companies in the industries in which we operate generally are uncertain and involve complex legal and factual questions. This is particularly true in the life sciences area where the U.S. Supreme Court has issued a series of decisions setting forth limits on the patentability of natural phenomena, natural laws, abstract ideas and their applications (see, Mayo Collaborative v. Prometheus Laboratories (2012), Association for Molecular Pathology v. Myriad Genetics (2013), and Alice Corporation v. CLS Bank (2014), which has made it difficult to obtain certain patents and to assess the validity of previously issued patents). This uncertainty may materially affect our ability to defend or obtain patents or to address the patents and patent applications owned or controlled by our collaborators and licensors.

We will be able to protect our proprietary rights from unauthorized use by third parties only to the extent that our proprietary technologies are covered by valid and enforceable patents or are effectively maintained as trade secrets. Any finding that our patents or patent applications are invalid or unenforceable could harm our ability to prevent others from practicing the related technology. We cannot be certain that we were the first to invent the inventions covered by pending patent applications or that we were the first to file such applications, and a finding that others have claims of inventorship or ownership rights to our patents and applications could require us to obtain certain rights to practice related technologies, which may not be available on favorable terms, if at all. There may be times when we choose to retain advisors with academic employers who limit their employees’ rights to enter into agreements which provide the kind of confidentiality and assignment provisions congruent with our consulting agreements. We may decide that obtaining the services of these advisors is worth any potential risk, and this may harm our ability to obtain and enforce our intellectual property rights. In addition, our existing patents and any future patents we obtain may not be sufficiently broad to prevent others from practicing our technologies or from developing similar or alternative competing products, or design around our patented technologies, and may therefore fail to provide us with any competitive advantage. Furthermore, as our issued patents expire, we may lose some competitive advantage as others develop competing products that would have been covered by the expired patents, and, as a result, may adversely affect our business, operating results, and financial condition.

We may be required to file or defend infringement lawsuits and other contentious proceedings, such as inter partes reviews, reexaminations, oppositions, and declaratory judgment actions, to protect our interests, which can be expensive and time-consuming. We cannot assure you that we would prevail over an infringing third party, and we may become subject to counterclaims by such third parties. Our patents may be declared invalid or unenforceable, or narrowed in scope, as a result of such litigation or other proceedings. Some third-party infringers may have substantially greater resources than us and may be able to sustain the costs of complex infringement litigation more effectively than we can. Even if we have valid and enforceable patents, competitors may still choose to offer products that infringe our patents.

Further, preliminary injunctions that bar future infringement by the competitor are not often granted; therefore, remedies for infringement are not often immediately available. Even if we prevail in an infringement action, we cannot assure you that we would be fully or partially financially compensated for any harm to our business. We may be forced to enter into a license or other agreement with the third parties on terms less profitable or otherwise less commercially acceptable to us than those negotiated between a willing licensee and a willing licensor. Any inability to stop third-party infringement could result in the future in a loss in market share of our products under development, or lead to a delay, reduction, and/or inhibition of our development, manufacture, or sale of some of our products. A product produced and sold by a third-party infringer may not meet our or other regulatory standards or may not be safe for use, which could cause irreparable harm to the reputation of our products, which in turn could result in substantial loss in our market share and profits.

There is also the risk that others, including our competitors in the targeted and systemic therapeutics fields, may independently develop similar or alternative technologies, ingestible devices, or design around our patented or patent pending technologies, and our competitors or others may have filed, and may in the future file, conflicting patent claims covering technology similar or identical to ours. The costs associated with challenging conflicting patent claims could be substantial, and it is possible that our efforts would be unsuccessful and may result in a loss of our patent position and the issuance or validation of the competing claims. Should such competing claims cover our technology, we could be required to obtain rights to those claims at substantial cost.

Any of these factors could adversely affect our ability to obtain commercially relevant or competitively advantageous patent protection for our products under development.

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“Submarine” patents may be granted to our competitors, which may significantly alter our launch timing expectations, reduce our projected market size, cause us to modify our product or process or block us from the market altogether.

The term “submarine” patent is used to denote a patent issuing from an application that was not published, publicly known or available prior to its grant. Submarine patents add substantial risk and uncertainty to our business. Submarine patents may issue to our competitors covering our product candidates and thereby cause significant market entry delay, defeat our ability to market our product candidates or cause us to abandon development and/or commercialization of a product candidate.

The issuance of one or more submarine patents may harm our business by causing substantial delays in our ability to introduce a product candidate or other product into the U.S. market.

If we are not able to adequately protect our trade secrets, know-how, and other proprietary information, the value of our technology and products under development could be significantly diminished.

We rely on trade secret protection and proprietary know-how protection for our confidential and proprietary information, and we have taken security measures to protect this information. These measures, however, may not provide adequate protection for our trade secrets, know-how, or other proprietary information. For example, although we have a policy of requiring our consultants, advisors and collaborators to enter into confidentiality agreements and our employees to enter into invention, non-disclosure and, where lawful, noncompete agreements, we cannot assure you that such agreements will provide for a meaningful protection of our trade secrets, know-how or other proprietary information in the event of any unauthorized use or disclosure of information, including as a result of breaches of our physical or electronic security systems, or as a result of our employees failing to abide by their confidentiality obligations during or upon termination of their employment with us. Any action to enforce our rights is likely to be time-consuming and expensive, and may ultimately be unsuccessful, or may result in a remedy that is not commercially valuable. These risks are heightened in countries where laws or law enforcement practices may not protect proprietary rights as fully as in the United States. Any unauthorized use or disclosure of, or access to, our trade secrets, know-how or other proprietary information, whether accidentally or through willful misconduct, could have a material and adverse effect on our programs, our business strategy, and on our ability to compete effectively.

If our trademarks and trade names are not adequately protected, we may not be able to build name recognition in our markets of interest, and our business may be adversely affected.

Failure to maintain our trademark registrations, or to obtain new trademark registrations in the future, could limit our ability to protect our trademarks and impede our marketing efforts in the countries in which we operate. We may not be able to protect our rights to trademarks and trade names which we may need to build name recognition with potential partners or customers in our markets of interest. As a means to enforce our trademark rights and prevent infringement, we may be required to file trademark claims against third parties or initiate trademark opposition proceedings. This can be expensive, particularly for a company of our size, and time-consuming, and we may not be successful. Our registered or unregistered trademarks or trade names may be challenged, infringed, circumvented, declared generic or determined to be infringing on other marks.

Our pending trademark applications in the United States and in other foreign jurisdictions where we may file may not be allowed or may subsequently be opposed. Even if these applications result in registration of trademarks, third parties may challenge our use or registration of these trademarks in the future. Over the long term, if we are unable to establish name recognition based on our trademarks and trade names, then we may not be able to compete effectively and our business may be adversely affected.

We may be subject to claims that our employees, consultants, or independent contractors have wrongfully used or disclosed confidential information of third parties.

We employ individuals who were previously employed at other companies in the industries in which we operate, including biotechnology, pharmaceutical or medical device companies. We may be subject to claims that we or our employees, consultants or independent contractors have inadvertently or willfully used or disclosed confidential information of our employees’ former employers or other third parties. We may also be subject to claims that our employees’ former employers or other third parties have an ownership interest in our patents. Litigation may be necessary to defend against these claims, and if we are unsuccessful, we could be required to pay substantial damages and could lose rights to important intellectual property.

Even if we are successful, litigation could result in substantial costs to us and could divert the time and attention of our management and other employees.

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Risks Related to Ownership of Our Common Stock

The market price of our common stock has fluctuated in the past, and is likely to continue to be volatile, which could subject us to litigation.

The market price of our common stock has fluctuated and is likely to be subject to further wide fluctuations in response to numerous factors, many of which are beyond our control, such as those in this “Risk Factors” section and others including:

•actual or anticipated variations in our and our competitors’ operating results;

•announcements by us or our competitors of new products, product development results, significant acquisitions or divestitures, strategic and commercial partnerships and relationships, joint ventures, collaborations or capital commitments;

•issuance of new securities analysts’ reports or changed recommendations for our stock;

•periodic fluctuations in our revenue;

•actual or anticipated changes in regulatory oversight of our products under development;

•developments or disputes concerning our intellectual property or other proprietary rights or alleged infringement of third party’s rights by us or our products under development;

•commencement of, or our involvement in, litigation or other proceedings;

•announcement or expectation of additional debt or equity financing efforts;

•sales of our common stock by us, our insiders or our other stockholders;

•any major change in our management; and

•general economic conditions and slow or negative growth of our markets, including slow or negative growth in the biotechnology industry generally.

In addition, if the stock market experiences uneven investor confidence, the market price of our common stock could decline for reasons unrelated to our business, operating results, or financial condition. The market price of our common stock might also decline in reaction to events that affect other companies within, or outside, our industry even if these events do not directly affect us. Some companies that have experienced volatility in the trading price of their stock have been the subject of securities class action litigation. If we are the subject of such litigation, it could result in substantial costs and a diversion of our management’s attention and resources.

We may fail to qualify for continued listing on Nasdaq, which could make it more difficult for our stockholders to sell their shares.

We are required to satisfy the continued listing requirements of Nasdaq to maintain such listing, including, among other things, the maintenance of a market value of our common stock of at least $50 million and the requirement that the minimum bid price of our stock not fall below $1.00 per share for more than 30 consecutive trading days.

For example, on December 11, 2023, we received formal notice from Nasdaq indicating that we no longer satisfy the $50 million market value of listed securities requirement for continued listing on Nasdaq (the “MVLS Rule”). In accordance with Nasdaq Listing Rule 5810(c)(3)(C), we will have 180 calendar days, or until June 10, 2024 (the “Compliance Date”), to regain compliance with the MVLS Rule. To regain compliance with the MVLS Rule, our MVLS must equal or exceed $50 million for a minimum of ten consecutive business days at any time prior to the Compliance Date. If we regain compliance with the MVLS Rule, Nasdaq will provide us with written confirmation and will close the matter.

In addition, on May 13, 2024, we received written notice (the "Notification Letter") from Nasdaq indicating that we are not in compliance with the minimum bid price requirements set forth in Nasdaq Listing Rule 5450(a)(1) for continued listing on Nasdaq. Nasdaq Listing Rule 5450(a)(1) requires listed securities maintain a minimum closing bid price of $1.00 per share, and Listing Rule 5810(c)(3)(A) provides that a failure to meet the minimum closing bid price requirement exists if the deficiency continues for a period of 30 consecutive business days (the “Bid Price Rule”). In accordance with Nasdaq Listing Rule 5810(c)(3)(A), we have 180 days, or until November 11, 2024, to regain compliance with the Bid Price Rule. To regain compliance with the Bid Price Rule, the closing price of our stock must be at least $1.00 per share for a minimum of 10 consecutive trading days at any time prior to the expiration of the 180-day period. If we regain compliance with the MVLS Rule, Nasdaq will provide us with written confirmation and will close the matter.

If we do not regain compliance with the MVLS Rule by the Compliance Date, we will receive written notification that our securities are subject to delisting. At that time, we may appeal the delisting determination to a Hearings Panel or we may be eligible to transfer the listing of our securities to The Nasdaq Capital Market (provided that we then satisfy the requirements for continued listing on that market).

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There can be no assurance that we will be able to regain compliance with Nasdaq’s continued listing requirements. If our stock price does not increase or if we are unable to raise additional funds, and if our market capitalization does not meet the minimum standards, we may not be able to meet the standards for continued listing on Nasdaq within the compliance period. In the event that we do not regain compliance with the Nasdaq Listing Rules, we expect to receive written notification that our common stock is subject to delisting. If our common stock is delisted by Nasdaq, we could face significant material adverse consequences, including:

•a limited availability of market quotations for our common stock;

•an adverse effect on the market price of our common stock;

•loss of confidence from stakeholders, employees, and potential business partners;

•reduced liquidity with respect to our common stock;

•a determination that our shares are “penny stock,” which will require brokers trading in our shares to adhere to more stringent shares, and which may limit demand for our common stock among certain investors;

•a limited amount of news and analyst coverage for our company; and

•a decreased ability to issue additional securities or obtain additional financing in the future.

Our common stock may become the target of “short squeezes.”

In the recent past, the securities of several companies have increasingly experienced significant and extreme volatility in stock price due to short sellers of shares of their stock and buy-and-hold decisions of other investors, resulting in what is sometimes described as a “short squeeze.” Short squeezes have caused extreme volatility in the stock prices of those companies and in the market and have led to the price per share of some of those companies to trade at a significantly inflated rate that is disconnected from the underlying value of the company. Sharp rises in a company’s stock price may force traders in a short position to buy the stock to avoid even greater losses. Investors who purchase shares in those companies at an inflated rate face the risk of losing a significant portion of their original investment as the price per share has declined steadily as interest in those stocks have abated. Market activity suggests that we have been the target of a short squeeze, and this could occur again at any time, and stockholders may lose a significant portion or all of their investment if they purchase our shares at a rate that is significantly disconnected from our underlying value.

The issuance of shares of our common stock upon conversion of the Convertible Notes and exercise of warrants will dilute the ownership interests of our stockholders and could depress the trading price of our common stock.

We must settle conversions of our outstanding Convertible Notes and exercise of our outstanding warrants in shares of our common stock, together with cash in lieu of issuing any fractional share in the case of the Convertible Notes. The issuance of shares of our common stock upon conversion of the Convertible Notes or exercise of the warrants will dilute the ownership interests of our stockholders, which could depress the trading price of our common stock. In addition, the market’s expectation that conversions or exercises may occur could depress the trading price of our common stock even in the absence of actual conversions or exercises. Moreover, the expectation of conversions or exercises could encourage the short selling of our common stock, which could place further downward pressure on the trading price of our common stock.

Hedging activity by investors in the Convertible Notes and warrants could depress the trading price of our common stock.

We expect that many investors in our outstanding Convertible Notes and warrants will seek to employ an arbitrage strategy. Under this strategy, investors typically short sell a certain number of shares of our common stock and adjust their short position over time while they continue to hold the Convertible Notes or warrants. Investors may also implement this type of strategy by entering into swaps on our common stock in lieu of, or in addition to, short selling shares of our common stock. This market activity, or the market’s perception that it will occur, could depress the trading price of our common stock.

Provisions in the indentures governing our outstanding Convertible Notes could delay or prevent an otherwise beneficial takeover of us.

Certain provisions in our Convertible Notes and the indentures governing the Convertible Notes could make a third-party attempt to acquire us more difficult or expensive. For example, if a takeover constitutes a “fundamental change” (which is defined in the indentures to include certain change-of-control events and the delisting of our common stock), then noteholders will have the right to require us to repurchase their Convertible Notes for cash. In addition, if a takeover constitutes a “make-whole fundamental change” (which is defined in the indentures to include, among other events, fundamental changes and certain additional business combination transactions), then we may be required to temporarily increase the conversion rate for the Convertible Notes. In either case, and in other cases, our obligations under the Convertible Notes and the indentures could increase the cost of acquiring us or otherwise discourage a third party from acquiring us or removing incumbent management, including in a transaction that holders of our common stock may view as favorable.

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We may be unable to raise the funds necessary to repurchase the Convertible Notes for cash following a fundamental change or to pay any cash amounts due upon conversion, and our other indebtedness may limit our ability to repurchase our outstanding Convertible Notes.

Noteholders may require us to repurchase their Convertible Notes following a “fundamental change” (which is defined in the indentures governing the Convertible Notes to include certain change-of-control events and the delisting of our common stock) at a cash repurchase price generally equal to the principal amount of the Convertible Notes to be repurchased, plus accrued and unpaid interest, if any. Furthermore, additional cash amounts may be due upon conversion in certain circumstances if the number of shares that we deliver upon conversion of the Convertible Notes is limited by Nasdaq listing standards. We may not have enough available cash or be able to obtain financing at the time we are required to repurchase the Convertible Notes or pay these cash amounts upon their conversion. In addition, applicable law, regulatory authorities and the agreements governing our other indebtedness may restrict our ability to repurchase the Convertible Notes or pay these cash amounts upon their conversion. Our failure to repurchase Convertible Notes when required or pay these cash amounts upon their conversion will constitute a default under the indentures governing the Convertible Notes. A default under the indentures or the fundamental change itself could also lead to a default under agreements governing our other indebtedness, which may result in that other indebtedness becoming immediately payable in full. We may not have sufficient funds to satisfy all amounts due under the other indebtedness and the Convertible Notes.

The accounting method for the Convertible Notes could adversely affect our reported financial results.

The accounting method for reflecting the underlying shares of our common stock in our reported diluted earnings per share may adversely affect our reported earnings and financial condition. We expect that, under applicable accounting principles, the shares underlying our Convertible Notes will be reflected in our diluted earnings per share using the “if-converted” method. Under that method, diluted earnings per share would generally be calculated assuming that all the Convertible Notes were converted into shares of common stock at the beginning of the reporting period, unless the result would be anti-dilutive. The application of the if-converted method may further increase our reported diluted loss per share.

Furthermore, the conversion features in our Convertible Notes are accounted for as free-standing embedded derivatives bifurcated from the principal balance of the Convertible Notes. The embedded derivative liabilities are remeasured at fair value each reporting period with positive or negative changes in fair value recorded in our consolidated statement of operations, which may adversely affect our reported earnings and financial condition and result in significant fluctuations in our future financial performance.

General Risk Factors

Insiders have substantial control over us and will be able to influence corporate matters.

As of March 31, 2024, our current directors and executive officers, together with their affiliates, have significant ownership of our outstanding common stock. As a result, these stockholders, if they act, will be able to exercise significant influence over all matters requiring stockholder approval, including the election of directors and approval of significant corporate transactions, such as a merger or other sale of our company or its assets. They may have interests that differ from yours and may vote in a way with which you disagree and that may be adverse to your interests. This concentration of ownership could limit stockholders’ ability to influence corporate matters and may have the effect of delaying, deterring or preventing a third party from acquiring control over us, depriving our stockholders of an opportunity to receive a premium for their common stock as part of a sale of our company, and could negatively impact the value and market price of our common stock.

Future sales and issuances of our common stock or rights to purchase common stock, including pursuant to our equity incentive plans, could result in additional dilution of the percentage ownership of our stockholders and could cause the stock price of our common stock to decline.

In the future, we may sell common stock, convertible securities, or other equity securities in one or more transactions at prices and in a manner we determine from time to time. We also expect to issue common stock to employees, directors, and consultants pursuant to our equity incentive plans. If we sell common stock, convertible securities, or other equity securities in subsequent transactions, or common stock is issued pursuant to equity incentive plans, investors may be materially diluted. New investors in such subsequent transactions could gain rights, preferences, and privileges senior to those of holders of our common stock.

Sales of a substantial number of shares of our common stock in the public market, including through our ATM Facility or by our existing stockholders, or the perception that these sales might occur could depress the market price of our common stock and could impair our ability to raise capital through the sale of additional equity securities. We are unable to predict the effect that sales may have on the prevailing market price of our common stock.

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We are an emerging growth company and the reduced disclosure requirements applicable to emerging growth companies may make our common stock less attractive to investors.

We are an emerging growth company. Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards until such time as those standards apply to private companies. We have elected to avail ourselves of this exemption and, as a result, will not be subject to the same implementation timing for new or revised accounting standards as are required of other public companies that are not emerging growth companies, which may make comparison of our consolidated financial information to those of other public companies more difficult.

For as long as we continue to be an emerging growth company, however, we intend to take advantage of certain other exemptions from various reporting requirements that are applicable to other public companies including, but not limited to, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. We cannot predict if investors will find our common stock less attractive because we will rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile and experience decreases.

We will remain an emerging growth company until the earliest of (a) the end of the fiscal year (i) following the fifth anniversary of the closing of our IPO, (ii) in which the market value of our common stock that is held by non-affiliates exceeds $700 million and (iii) in which we have total annual gross revenues of $1.235 billion or more during such fiscal year, and (b) the date on which we issue more than $1 billion in non-convertible debt in a three-year period.

We have previously identified material weaknesses in our internal control over financial reporting. If additional material weaknesses in our internal control over financial reporting are discovered or occur in the future, our consolidated financial statements may contain material misstatements and we could be required to restate our financial results, which could adversely affect our stock price and result in an inability to maintain compliance with applicable stock exchange listing requirements.

We previously concluded that there were matters that constituted material weaknesses in our internal control over financial reporting that have since been remediated. A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected and corrected on a timely basis. The material weaknesses related to a lack of (i) controls, as related to our historical testing business prior to our Strategic Transformation, designed to reconcile tests performed and recognized as revenue to billed tests and (ii) appropriately designed or effectively operating controls over the proper recording of accounts payable and accrued liabilities.

If additional material weaknesses in our internal control over financial reporting are discovered or occur in the future, our consolidated financial statements may contain material misstatements and we could be required to restate our financial results. If we are unable to successfully remediate any material weaknesses in our internal controls or if we are unable to produce accurate and timely financial statements, our stock price may be adversely affected, and we may be unable to maintain compliance with applicable stock exchange listing requirements.

If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our stock price and trading volume could decline.

The trading market for our common stock depends in part on the research and reports that securities or industry analysts publish about us or our business. If few securities analysts provide coverage of us, or if industry analysts cease coverage of us, the trading price and volume for our common stock could be adversely affected. If one or more of the analysts who cover us downgrade our common stock or publish inaccurate or unfavorable research about our business, our common stock price would likely decline. If one or more of these analysts cease coverage of us or fail to publish reports on us regularly, demand for our common stock could decrease, which might cause our common stock price and trading volume to decline.

Provisions in our certificate of incorporation and bylaws and Delaware law might discourage, delay or prevent a change in control of our company or changes in our management and, therefore, depress the market price of our common stock.

Our eighth amended and restated certificate of incorporation, as amended and our second amended and restated bylaws contain provisions that could depress the market price of our common stock by acting to discourage, delay, or prevent a change in control of our company or changes in our management that the stockholders of our company may deem advantageous. These provisions, among other things:

•authorize the issuance of “blank check” preferred stock that our board of directors could use to implement a stockholder rights plan;

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•prohibit stockholder action by written consent, which requires stockholder actions to be taken at a meeting of our stockholders, except for so long as specified stockholders hold in excess of 50% of our outstanding common stock;

•prohibit stockholders from calling special meetings of stockholders;

•establish advance notice requirements for nominations for election to our board of directors or for proposing matters that can be acted upon by stockholders at annual stockholder meetings;

•provide the board of directors with sole authorization to establish the number of directors and fill director vacancies; and

•provide that the board of directors is expressly authorized to make, alter, or repeal our second amended and restated bylaws.

In addition, Section 203 of the Delaware General Corporation Law may discourage, delay, or prevent a change in control of our company. Section 203 imposes certain restrictions on mergers, business combinations and other transactions between us and holders of 15% or more of our common stock.

Our certificate of incorporation provides that the Court of Chancery of the State of Delaware will be the exclusive forum for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.

Our eighth amended and restated certificate of incorporation, as amended to date, provides that, unless we consent in writing to the selection of an alternative forum, the sole and exclusive forum, to the fullest extent permitted by law, for (1) any derivative action or proceeding brought on our behalf, (2) any action asserting a breach of a fiduciary duty owed by any director, officer or other employee to us or our stockholders, (3) any action asserting a claim against us or any director, officer or other employee arising pursuant to the Delaware General Corporation Law, (4) any action to interpret, apply, enforce or determine the validity of our eighth amended and restated certificate of incorporation, as amended to date, and our second amended and restated bylaws, or (5) any other action asserting a claim that is governed by the internal affairs doctrine, shall be the Court of Chancery of the State of Delaware (or another state court or the federal court located within the State of Delaware if the Court of Chancery does not have or declines to accept jurisdiction), in all cases subject to the court’s having jurisdiction over indispensable parties named as defendants. In addition, our eighth amended and restated certificate of incorporation, as amended to date, provides that the federal district courts of the United States will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act but that the forum selection provision will not apply to claims brought to enforce a duty or liability created by the Exchange Act. Although we believe these provisions benefit us by providing increased consistency in the application of Delaware law for the specified types of actions and proceedings, the provisions may have the effect of discouraging lawsuits against us or our directors and officers. Alternatively, if a court were to find the choice of forum provision contained in our eighth amended and restated certificate of incorporation, as amended to date, and our second amended and restated bylaws to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, financial condition, and operating results. For example, under the Securities Act, federal courts have concurrent jurisdiction over all suits brought to enforce any duty or liability created by the Securities Act, and investors cannot waive compliance with the federal securities laws and the rules and regulations thereunder. Any person or entity purchasing or otherwise acquiring any interest in our shares of capital stock shall be deemed to have notice of and consented to this exclusive forum provision, but will not be deemed to have waived our compliance with the federal securities laws and the rules and regulations thereunder.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

None, other than those previously reported on Current Reports on Form 8-K.

Item 3. Default Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

On May 13, 2024, we received the Notification Letter from the Nasdaq Stock Market LLC notifying us that we are not in compliance with the Bid Price Rule based on the closing bid price of our common stock for the 30 consecutive business days prior to the date of the Notification Letter.

The Notification Letter does not impact our listing on Nasdaq at this time. The Notification Letter states that we have 180 calendar days to regain compliance with the Bid Price Rule. To regain compliance, the closing bid price of our common stock must be at least $1.00 per share for a minimum of 10 consecutive business days at any time prior to the expiration of the 180 calendar day period. If we do not achieve compliance with the Bid Price Rule during the initial 180 calendar day period, we should be eligible for

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an additional 180 calendar day compliance period. We intend to actively monitor the closing bid price of our common stock and are committed to regaining compliance with the Bid Price Rule prior to the expiration of all applicable compliance periods.

(c) Trading Plans

During the quarter ended March 31, 2024, no director or Section 16 officer adopted or terminated any Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement.

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Item 6. Exhibits.

EXHIBIT NUMBER	DESCRIPTION	FORM	EXHIBIT	FILING DATE
4.1	Form of March 2024 Private Placement Warrant.	8-K	4.1	April 2, 2024
4.2	Form of Voting Agreement (attached as Exhibit D to the Form of Securities Purchase Agreement).	8-K	4.2	April 2, 2024
4.3	Form of Supplemental Indenture, to be dated as of the Closing Date, between the Company, the guarantors party thereto and GLAS Trust Company LLC.	8-K	4.3	March 11, 2024
10.1	Securities Purchase Agreement, dated March 31, 2024, by and between Biora Therapeutics, Inc. and the Purchasers signatory therein.	8-K	10.1	April 2, 2024
10.2	Form of Note Exchange Agreement, dated March 8, 2024, between the Company and the holder named therein.	8-K	10.1	March 11, 2024
10.3	Form of Note Purchase Agreement, dated March 8, 2024, between the Company and the purchaser named therein.	8-K	10.2	March 11, 2024
10.4	Form of Registration Rights Agreement, to be dated as of the Closing Date, between the Company and the investor named therein.	8-K	10.4	March 11, 2024
31.1*	Certification of principal executive officer pursuant to Rule 13a-14(A) promulgated under the Securities Exchange Act of 1934.			Filed herewith
31.2*	Certification of principal financial officer pursuant to Rule 13a-14(A) promulgated under the Securities Exchange Act of 1934.			Filed herewith
32.1†	Certification of principal executive officer and principal financial officer pursuant to 18 U.S.C. Section 1350 and Rule 13a-14(B) promulgated under the Securities Exchange Act of 1934.			Furnished herewith
101.INS	Inline XBRL Instance Document
101.SCH	Inline XBRL Taxonomy Extension Schema with Embedded Linkbases Document
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)
*	Filed herewith.
†	Furnished herewith and not deemed to be “filed” for purposes of Section 18 of the Exchange Act, and shall not be deemed to be incorporated by reference into any filing under the Securities Act.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date:	May 15, 2024	BIORA THERAPEUTICS, INC.
		By:	/s/ Aditya P. Mohanty
			Aditya P. Mohanty
			Chief Executive Officer
			(principal executive officer)
		By:	/s/ Eric d'Esparbes
			Eric d’Esparbes
			Chief Financial Officer
			(principal financial and accounting officer)

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EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO

RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Aditya P. Mohanty, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Biora Therapeutics, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: May 15, 2024	By:	/s/ Aditya P. Mohanty
		Aditya P. Mohanty, Chief Executive Officer
		(principal executive officer)

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO

RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Eric d’Esparbes, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Biora Therapeutics, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: May 15, 2024	By:	/s/ Eric d’Esparbes
		Eric d’Esparbes, Chief Financial Officer
		(principal financial and accounting officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Biora Therapeutics, Inc. (the “Company”) for the period ended March 31, 2024 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), each of the undersigned officers of the Company hereby certifies, pursuant to 18 U.S.C. § 1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 15, 2024	By:	/s/ Aditya P. Mohanty
		Aditya P. Mohanty, Chief Executive Officer
		(principal executive officer)
	By:	/s/ Eric d’Esparbes
		Eric d’Esparbes, Chief Financial Officer
		(principal financial and accounting officer)

The foregoing certification is being furnished solely to accompany the Report pursuant to 18 U.S.C. §1350, and is not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, and is not to be incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

Note: A signed original of this written statement required by §906 has been provided to Biora Therapeutics, Inc. and will be retained by Biora Therapeutics, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2024	May 08, 2024
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2024
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	Q1
Entity Registrant Name	Biora Therapeutics, Inc.
Entity Central Index Key	0001580063
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		35,883,843
Entity File Number	001-39334
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	27-3950390
Entity Address, Address Line One	4330 La Jolla Village Drive
Entity Address, Address Line Two	Suite 300
Entity Address, City or Town	San Diego
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	92122
City Area Code	833
Local Phone Number	727-2841
Document Quarterly Report	true
Document Transition Report	false
Title of 12(b) Security	Common Stock, par value $0.001 per share
Trading Symbol	BIOR
Security Exchange Name	NASDAQ

XML

Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Current assets:
Cash, cash equivalents and restricted cash	$ 10,820	$ 15,211
Income tax receivable	822	830
Prepaid expenses and other current assets	2,429	3,030
Total current assets	14,071	19,071
Property and equipment, net	1,136	1,156
Right-of-use assets	1,418	1,614
Other assets	293	3,302
Goodwill	6,072	6,072
Total assets	22,990	31,215
Current liabilities:
Accounts payable	4,936	2,843
Accrued expenses and other current liabilities	16,984	17,319
Warrant liabilities	27,208	40,834
Related party senior secured convertible notes, current portion	1,976	1,976
Total current liabilities	51,104	62,972
Convertible notes, net of unamortized discount of $103 and $259 as of March 31,2024 and December 31, 2023, respectively	4,497	9,966
Senior secured convertible notes, net of unamortized discount of $ 13,992 and $11,066 as of March 31, 2024 and December 31, 2023, respectively (Note 6)	18,709	14,591
Related party senior secured convertible notes net of unamortized discount of $7,058 and $7,951 as of March 31, 2024 and December 31, 2023, respectively (including future interest of $9,747 and $9,747 as of March 31, 2024 and December 31, 2023, respectively) (Note 6)	20,072	19,179
Derivative liabilities	26,210	22,899
Other long-term liabilities	2,583	3,029
Total liabilities	123,175	132,636
Commitments and contingencies (Note 8)
Stockholders' deficit:
Common stock - $0.001 par value. 164,000,000 shares authorized;31,166,719 and 28,574,918 shares issued as of March 31, 2024 and December 31, 2023, repectively; 30,429,295 and 27,837,563 shares outstanding as of March 31, 2024 and December 31, 2023, respectively	28	25
Additional paid-in capital	874,013	868,591
Accumulated deficit	(955,147)	(950,958)
Treasury stock - at cost; 737,424 and 737,355 shares as of March 31, 2024 and December 31, 2023, respectively	(19,079)	(19,079)
Total stockholders' deficit	(100,185)	(101,421)
Total liabilities and stockholders' deficit	$ 22,990	$ 31,215

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Condensed Consolidated Balance Sheets (Parenthetical) (Unaudited) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	164,000,000	164,000,000
Common stock, shares issued	31,166,719	28,574,918
Common stock, shares outstanding	30,429,295	27,837,563
Treasury stock, at cost shares	737,424	737,355
Convertible Notes
Unamortized discount	$ 103	$ 259
Senior Secured Convertible Notes
Unamortized discount	13,992	11,066
Related Party Senior Secured Convertible Notes
Unamortized discount	7,058	7,951
Future interest	$ 9,747	$ 9,747

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Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Income Statement [Abstract]
Revenues	$ 542	$ 2
Operating expenses:
Research and development	7,005	7,190
Selling, general and administrative	9,053	8,356
Total operating expenses	16,058	15,546
Loss from operations	(15,516)	(15,544)
Interest expense, net	(2,757)	(2,680)
Gain on warrant liabilities	13,915	864
Other income (expense), net	217	(81)
Loss before income taxes	(4,141)	(17,441)
Income tax expense	48	0
Net loss	$ (4,189)	$ (17,441)
Net loss per share, basic	$ (0.14)	$ (1.59)
Net loss per share, diluted	$ (0.14)	$ (1.59)
Weighted average shares outstanding, basic	29,296,767	10,970,583
Weighted average shares outstanding, diluted	29,296,767	10,970,583

XML

Condensed Consolidated Statements of Stockholders' Deficit (Unaudited) - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-In Capital	Accumulated Deficit	Treasury Stock
Beginning Balance at Dec. 31, 2022	$ (102,287)	$ 8	$ 743,626	$ (826,843)	$ (19,078)
Beginning Balance, shares at Dec. 31, 2022		9,098,844			(170,346)
Issuance of stock, net	12,524	$ 3	12,521
Issuance of stock, net, shares		2,853,109
Issuance of common stock upon vesting of restricted stock units	(178)		(178)
Issuance of common stock upon vesting of restricted stock units, shares		146,321			(68,938)
Stock-based compensation expense	2,384		2,384
Net Income (Loss)	(17,441)			(17,441)
Ending Balance at Mar. 31, 2023	(104,998)	$ 11	758,353	(844,284)	$ (19,078)
Ending Balance, shares at Mar. 31, 2023		12,098,274			(239,284)
Beginning Balance at Dec. 31, 2023	(101,421)	$ 25	868,591	(950,958)	$ (19,079)
Beginning Balance, shares at Dec. 31, 2023		28,574,918			(737,355)
Issuance of stock, net	2,824	$ 3	2,821
Issuance of stock, net, shares		2,591,662
Issuance of common stock upon vesting of restricted stock units, shares		139			(69)
Issuance of common stock warrants	1,062		1,062
Stock-based compensation expense	1,539		1,539
Net Income (Loss)	(4,189)			(4,189)
Ending Balance at Mar. 31, 2024	$ (100,185)	$ 28	$ 874,013	$ (955,147)	$ (19,079)
Ending Balance, shares at Mar. 31, 2024		31,166,719			(737,424)

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Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Operating Activities:
Net Income (Loss)	$ (4,189)	$ (17,441)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	105	147
Stock-based compensation expense	1,539	2,384
Loss on extinguishment of convertible notes	185	0
Amortization of debt discount	1,939	374
Loss on disposal of property and equipment	10	9
Impairment of property and equipment	0	100
Change in fair value of derivative liabilities	(418)	0
Change in fair value of warrant liabilities	(13,915)	(864)
Changes in operating assets and liabilities:
Income tax receivable	8	0
Prepaid expenses and other current assets	728	772
Accounts payable	1,806	(184)
Accrued expenses and other current liabilities	(83)	3,057
Other long-term liabilities	(211)	(452)
Net cash used in operating activities	(12,496)	(12,098)
Investing Activities:
Purchases of property and equipment	(15)	(16)
Proceeds from sale of property and equipment	20	10
Proceeds from sale of investment in Enumera Molecular, Inc.	3,000	0
Net cash provided by (used in) investing activities	3,005	(6)
Financing Activities:
Proceeds from issuance of common stock	2,800	12,883
Proceeds from issuance of convertible notes, net	2,813	0
Payments of offering costs	(70)	(359)
Payments for financing of insurance premiums	(443)	(443)
Net cash provided by financing activities	5,100	12,081
Net decrease in cash, cash equivalents and restricted cash	(4,391)	(23)
Cash, cash equivalents and restricted cash at beginning of period	15,211	30,486
Cash, cash equivalents and restricted cash at end of period	10,820	30,463
Supplemental disclosure of cash flow information:
Cash paid for interest	78	0
Supplemental schedule of non-cash investing and financing activities:
Exchange of convertibles note for senior secured notes and warrants	5,625	0
Lease assets obtained in exchange for operating lease liabilities	0	1,133
Debt issuance costs incurred but not paid	314	0
Purchases of property and equipment in accounts payable	$ 107	$ 0

XML

Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Pay vs Performance Disclosure
Net Income (Loss)	$ (4,189)	$ (17,441)

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Insider Trading Arrangements	3 Months Ended
	Mar. 31, 2024
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

XML

Organization and Description of Business

3 Months Ended

Mar. 31, 2024

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization and Description of Business

1. Organization and Description of Business

Biora Therapeutics, Inc. (the “Company” or “Biora” or "Biora Therapeutics") is a clinical-stage biotechnology company developing oral biotherapeutics that could enable new treatment approaches in the delivery of therapeutics. The Company's pipeline includes two therapeutic delivery platforms:

•NaviCapTM Targeted Oral Delivery Platform: Delivery of therapeutics to the site of disease in the gastrointestinal tract designed to improve outcomes for patients with Inflammatory Bowel Disease; and

•BioJetTM Systemic Oral Delivery Platform: Designed to replace injections with needle-free, oral delivery of large molecules for better management of chronic diseases.

Biora Therapeutics, a Delaware corporation, was formerly known as Progenity, Inc., and commenced operations in 2010 with its corporate office located in San Diego, California. The Company's historical operations included a licensed Clinical Laboratory Improvement Amendments and College of American Pathologists certified laboratory located in Michigan specializing in molecular testing markets serving women’s health providers in the obstetric, gynecological, fertility, and maternal fetal medicine specialty areas in the United States. Previously, the Company's core business was focused on the carrier screening and noninvasive prenatal test market, targeting preconception planning and routine pregnancy management for genetic disease risk assessment. Through its former affiliation with Mattison Pathology, LLP, a Texas limited liability partnership doing business as Avero Diagnostics (“Avero”), the Company’s operations also included anatomic and molecular pathology testing products.

On December 29, 2022, the Company filed a certificate of amendment (the "Certificate of Amendment") to its eighth amended and restated certificate of incorporation to effect, as of January 3, 2023, a 1-for-25 reverse split of the Company's common stock (the "Reverse Stock Split"). On January 3, 2023, the Company effected the Reverse Stock Split. See Note 2 for additional information.

Liquidity

As of March 31, 2024, the Company had cash and cash equivalents of $10.6 million, restricted cash of $0.2 million and a working capital deficit. The Company had an accumulated deficit of $955.1 million as of March 31, 2024. For the three months ended March 31, 2024, the Company reported a net loss of $4.2 million and cash used in operating activities of $12.5 million. The Company’s primary sources of capital have historically been the sale of common stock and warrants, private placements of preferred stock and the incurrence of debt. As of March 31, 2024, the Company had a face value of $47.5 million of 11.0%/13.0% convertible senior secured notes due 2028 ("2028 Convertible Notes") outstanding and a face value of $4.6 million of 7.25% convertible senior notes due 2025 ("2025 Convertible Notes" and together with the 2028 Convertible Notes, the "Convertible Notes") outstanding (see Note 6). Management does not expect that the Company's current cash and cash equivalents will be sufficient to fund its operations for at least 12 months from the issuance date of the condensed consolidated financial statements for the three months ended March 31, 2024, and will require additional capital to fund the Company's operations. As a result, substantial doubt exists about the Company’s ability to continue as a going concern for 12 months following the issuance date of the condensed consolidated financial statements for the three months ended March 31, 2024.

The Company’s ability to continue as a going concern is dependent upon its ability to raise additional funding. Management believes that the Company’s liquidity position as of the date of this filing provides sufficient runway to achieve important research and development pipeline milestones. Management intends to raise additional capital through equity offerings and/or debt financings, or from other potential sources of liquidity, which may include new collaborations, licensing or other commercial agreements for one or more of the Company’s research programs or patent portfolios or divestitures of the Company's assets. Adequate funding, if needed, may not be available to the Company on acceptable terms, or at all. The Company’s ability to raise additional funds may be adversely impacted by potential worsening global economic conditions and the disruptions to, and volatility in, the credit and financial markets in the United States and worldwide. If the Company is unable to raise capital when needed or on attractive terms, it would be forced to delay, reduce, or eliminate its research and development programs or other operations. If any of these events occur, the Company’s ability to achieve its operational goals would be adversely affected.

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Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2024

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

Basis of Presentation

The Company’s condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. These financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the Securities and Exchange Commission, from which management derived the Company’s condensed consolidated balance sheet as of December 31, 2023.

The condensed consolidated financial statements and notes thereto give retrospective effect to the Reverse Stock Split for all periods presented. All common stock, options exercisable for common stock, restricted stock units ("RSUs"), warrants and per share amounts contained in the condensed consolidated financial statements have been retrospectively adjusted to reflect the Reverse Stock Split for all periods presented. Concurrent with the Reverse Stock Split, the Company effected a reduction in the number of authorized shares of common stock from 350,000,000 shares to 164,000,000 shares.

Unaudited Interim Financial Information

The accompanying condensed consolidated financial statements are unaudited, have been prepared on the same basis as the audited annual financial statements and, in the opinion of management, reflect all adjustments, consisting of normal recurring adjustments, that are necessary to present fairly the results for the interim periods presented. Results are not necessarily indicative of results to be expected for the year ending December 31, 2024, any other interim periods, or any future year or period. The balance sheet as of December 31, 2023 included herein was derived from the audited financial statements as of that date. Certain disclosures have been condensed or omitted from the interim financial statements.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant items subject to such estimates include the valuation of stock options, the valuation of goodwill, the valuation of the derivative liabilities associated with the 2028 Convertible Notes, accrual for reimbursement claims and settlements, the valuation of warrant liabilities, assessing future tax exposure and the realization of deferred tax assets, and the useful lives and the recoverability of property and equipment. The Company bases these estimates on historical and anticipated results, trends, and various other assumptions that the Company believes are reasonable under the circumstances, including assumptions as to future events. These estimates form the basis for making judgments about the carrying values of assets and liabilities and recorded revenues and expenses that are not readily apparent from other sources. Actual results could differ from those estimates and assumptions.

Restricted Cash

Restricted cash consists of collateral required for the Company's bank-issued credit cards with a balance of $0.2 million as of both March 31, 2024 and December 31, 2023.

Recent Accounting Pronouncements Adopted

In August 2020, the Financial Accounting Standards ("FASB") issued Accounting Standards Update ("ASU") No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity's Own Equity (Subtopic 815-40)-Accounting for Convertible Instruments and Contracts in an Entity's Own Equity, which simplifies the accounting for convertible instruments, amends the guidance on derivative scope exceptions for contracts in an entity's own equity, and modifies the guidance on diluted earnings per share calculations as a result of these changes. The standard is effective for the Company for annual reporting periods beginning after December 15, 2023. The Company adopted this standard on January 1, 2024, and it did not have a material impact on the consolidated financial statements.

Recent Accounting Pronouncements Not Yet Adopted

In December 2023, the FASB issued ASU No. 2023-09, Improvements to Income Tax Disclosures, which introduces new and enhanced income tax disclosure requirements. The standard is effective for the Company for annual reporting periods beginning after December 15, 2025. The Company is currently evaluating the impact the adoption of this standard may have on its consolidated financial statements and related disclosures.

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Strategic Transformation

3 Months Ended

Mar. 31, 2024

Discontinued Operations and Disposal Groups [Abstract]

Strategic Transformation

3. Strategic Transformation

In order to refocus efforts and resources on its research and development pipeline, in June 2021, the Company announced a strategic transformation ("Strategic Transformation") that included the closure of the legacy genetics laboratory and the sale of Avero, together referred to as the "Laboratory Operations".

Assets Held for Sale

In October 2023, the Company entered into a purchase and sale agreement to sell the building located in Ann Arbor, Michigan included in current assets held for sale. The transaction closed in October 2023 and the Company received gross proceeds of $2.8 million and incurred closing expenses of $0.2 million. There are no assets held for sale as of March 31, 2024 or December 31, 2023.

Investment in Enumera Molecular, Inc.

In May 2022, the Company completed the divesture of its single-molecule detection platform. Under the terms of the agreements, the Company contributed intellectual property and fixed assets related to the single-molecule detection platform to a newly-formed entity, Enumera Molecular, Inc. ("Enumera"), which intends to develop and commercialize the platform. On the transaction date, the Company received a 25% minority ownership stake, on a fully-diluted basis, of 6,000,000 Series A-1 preferred shares with an estimated value of $6.0 million in exchange for the assets. The Company concluded, based on a technical evaluation of the facts, that Enumera is not a variable interest entity. The Company also evaluated the characteristics of the investment and determined that the preferred stock is not in-substance common stock that would require equity method accounting. The Company concluded the appropriate accounting treatment for the investment in Enumera to be that of an equity security with no readily determinable fair value and has recorded the investment at cost, less impairment, adjusted for subsequent observable price changes. The Company determined the fair value was less than carrying value as of December 31, 2023 based on negative cash flows from operations and for the year ended December 31, 2023 recorded a $3.0 million impairment loss on its investment. The investment is included in other assets in the Company’s condensed consolidated balance sheets as of December 31, 2023. In March 2024, the Company entered into a stock purchase agreement with Enumera investors, pursuant to which it sold its remaining investment for $3.0 million.

Licensing Agreements

In November 2022, the Company entered into a license agreement with Northwest Pathology, doing business as Avero Diagnostics (“Northwest”), pursuant to which the Company licensed its Preecludia rule-out test for preeclampsia to Northwest for commercial development (the “Northwest License Agreement”). Under the terms of the Northwest License Agreement, Northwest received the rights to assets and intellectual property related to the Preecludia test and the Company will receive commercial milestone payments and royalties on net sales.

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Balance Sheet Components

3 Months Ended

Mar. 31, 2024

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Balance Sheet Components

4. Balance Sheet Components

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consisted of the following (in thousands):

	March 31, 2024		December 31, 2023
Prepaid expenses	$	2,260	$	2,443
Other current assets		169		587
Total	$	2,429	$	3,030

Property and Equipment, Net

Property and equipment, net consisted of the following (in thousands):

	March 31, 2024			December 31, 2023
Computers and software	$	1,189		$	1,193
Building and leasehold improvements		852			803
Laboratory equipment		430			423
Furniture, fixtures, and office equipment		799			799
Construction in progress		49			45
Total property and equipment		3,319			3,263
Less accumulated depreciation and amortization		(2,183	)		(2,107	)
Property and equipment, net	$	1,136		$	1,156

Depreciation and amortization expense was $0.1 million for each of the three months ended March 31, 2024 and 2023.

Other Assets

Other assets consisted of the following (in thousands):

	March 31, 2024		December 31, 2023
Investment in Enumera	$	—	$	3,000
Other		293		302
Total	$	293	$	3,302

Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following (in thousands):

	March 31, 2024		December 31, 2023
Accrual for reimbursement claims and legal settlements, current (1)	$	3,572	$	6,337
Commissions and bonuses		3,146		2,469
Vacation and payroll benefits		1,442		1,367
Accrued professional services (2)		4,123		2,914
Accrued interest		1,058		173
Lease liabilities, current		920		896
Insurance financing		606		401
Contract liabilities		—		542
Other (3)		2,117		2,220
Total	$	16,984	$	17,319

(1) Laboratory Operations have been discontinued; amounts related to revenue reserves generated from the Laboratory Operations remain on the balance sheet.

(2) The Company has entered into an alternative fee arrangement with a professional services firm related to certain litigation matters; amounts related to the arrangement are included in accrued professional services. Depending on the ultimate outcome of such litigation, the fees could be materially higher than what has been accrued.

(3) Included in this amount are contracts that the Company is responsible for that were expensed in discontinued operations in 2021.

Other Long-term Liabilities

Other long-term liabilities consisted of the following (in thousands):

	March 31, 2024		December 31, 2023
Lease liabilities, net of current portion		583		818
Other (1)		2,000		2,211
Total	$	2,583	$	3,029

(1) Included in this amount are contracts that the Company is responsible for that were expensed in discontinued operations in 2021.

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Fair Value Measurements

3 Months Ended

Mar. 31, 2024

Fair Value Disclosures [Abstract]

Fair Value Measurements

5. Fair Value Measurements

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date. The authoritative guidance establishes a three-level valuation hierarchy that prioritizes the inputs to valuation techniques used to measure fair value based upon whether such inputs are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect market assumptions made by the reporting entity. This hierarchy requires the Company to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value. The three-level hierarchy for the inputs to valuation techniques is summarized as follows:

Level 1 - Quoted prices in active markets for identical assets and liabilities that the Company has the ability to access.

Level 2 - Observable market-based inputs or unobservable inputs that are corroborated by market data, such as quoted prices, interest rates, and yield curves.

Level 3 - Inputs that are unobservable data points that are not corroborated by market data.

There were no significant transfers between these fair value measurement classifications during the three months ended March 31, 2024 and 2023.

The following table presents information about the Company’s assets and liabilities that are measured at fair value on a recurring basis and indicates the fair value hierarchy of the valuation techniques utilized to determine such fair value (in thousands):

	Level 1		Level 2		Level 3
March 31, 2024
Derivative liabilities	$	—	$	—	$	26,210
Warrant liabilities	$	—	$	—	$	27,208
December 31, 2023
Derivative liabilities	$	—	$	—	$	22,899
Warrant liabilities	$	—	$	—	$	40,834

The Company issued 2028 Convertible Notes (see Note 6) that contain conversion features that are required to be bifurcated and recorded as embedded derivative liabilities in the consolidated balance sheet. The Company utilized a binomial pricing model to determine the fair value of the conversion features, which utilizes significant unobservable inputs. The fair value of the embedded derivatives as of March 31, 2024 and December 31, 2023 were estimated using a binomial pricing model with the following inputs and assumptions:

	March 31, 2024	December 31, 2023
Risk-free interest rate	4.2%	3.8% - 4.3%
Expected volatility	94.1%	84.3% - 95.7%
Stock price	$1.10	$1.35
Discount Rate	32.1%	28.7% - 28.9%

The Company’s Level 3 liabilities consist of the warrant liabilities resulting from equity financings (see Note 9) and the Convertible Note exchanges (see Note 6). The Company uses the Black-Scholes Model to value the warrant liabilities at inception and on subsequent valuation dates. This model incorporates transaction details such as the Company’s stock price, contractual terms, maturity, risk free rates, and volatility. The significant unobservable input for the Level 3 warrant liabilities includes volatility. Given the limited period of time the Company’s stock has been traded in an active market, the expected volatility is estimated by taking the

average historical price volatility for industry peers, consisting of several public companies in the Company’s industry that are similar in size, stage, or financial leverage, over a period of time commensurate to the expected term of the warrants. At March 31, 2024 and December 31, 2023, the fair value of the warrant liabilities were estimated using the Black-Scholes Model with the following inputs and assumptions:

	March 31, 2024	December 31, 2023
Risk-free interest rate	4.2% - 4.5%	3.8% - 4.1%
Expected volatility	89.9% - 95.2%	95.6% - 101.8%
Stock price	$1.10	$1.35
Expected life (years)	2.2 - 4.9	2.5 - 5.0

A summary of the changes in the Level 3 classified liabilities is presented below (in thousands):

	Warrant Liabilities			Derivative Liabilities
Balance at December 31, 2023	$	40,834		$	22,899
Recognition of warrant liabilities		1,351			—
Reclassification of warrant liabilities to equity		(1,062	)		—
Expired warrants		(1,460	)		—
Recognition of derivative liabilities		—			3,729
Change in fair value		(12,455	)		(418	)
Balance at March 31, 2024	$	27,208		$	26,210

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Convertible Notes

3 Months Ended

Mar. 31, 2024

Debt Disclosure [Abstract]

Convertible Notes

6. Convertible Notes

The following table summarizes significant terms of the Company's Convertible Notes at March 31, 2024 (in thousands):

	March 31, 2024
	Face Value		Carrying Value		Fair Value (1)		Stated Interest Rate	Effective Interest Rate
2028 Convertible Notes	$	30,138	$	18,709	$	14,933	11-13%	18.4%
Related Party 2028 Convertible Notes	$	17,383	$	22,048	$	8,613	11-13%	3.0%
2025 Convertible Notes	$	4,600	$	4,497	$	2,690	7.25%	8.7%

(1) To estimate the fair value of the 2028 Convertible Notes, the Company used a binomial pricing model. Including the derivative liabilities of $26.2 million, the 2028 Convertible Notes fair value using the with method is $49.8 million. To estimate the fair value of the 2025 Convertible Notes, the Company used unadjusted quoted prices in the active market obtained from third-party pricing services.

The following table summarizes significant terms of the Company’s Convertible Notes at December 31, 2023 (in thousands):

	December 31, 2023
	Face Value		Carrying Value		Fair Value (2)		Stated Interest Rate	Effective Interest Rate
2028 Convertible Notes	$	23,500	$	14,591	$	14,846	11-13%	48.9%
Related Party 2028 Convertible Notes	$	17,383	$	21,155	$	10,982	11-13%	(22.0)%
2025 Convertible Notes	$	10,225	$	9,966	$	5,984	7.25%	8.7%

(2) To estimate the fair value of the 2028 Convertible Notes, the Company used a binomial pricing model. Including the derivative liabilities of $22.9 million, the 2028 Convertible Notes fair value using the with method is $48.7 million. To estimate the fair value of the 2025 Convertible Notes, the Company used unadjusted quoted prices in the active market obtained from third-party pricing services.

The carrying value of the Convertible Notes does not approximate their fair values because the carrying values reflect the balance of unamortized discount related to the derivative liabilities associated with the value of the conversion features assessed at inception. The Company amortizes the debt discount using the effective interest method over the term of the Convertible Notes. As of March 31, 2024 and December 31, 2023, the unamortized debt discount on the 2025 Convertible Notes was $0.1 million and $0.3 million, respectively. The amortization of the debt discount was less than $0.1 million and $0.4 million for the three months ended March 31, 2024 and 2023, respectively, and is included in interest expense, net in the consolidated statements of operations. As of March 31, 2024 and December 31, 2023, the unamortized debt discount on the 2028 Convertible Notes was $21.1 million and $19.0 million, respectively. The amortization of the debt discount was $1.9 million for the three months ended March 31, 2024 and is included in interest expense, net in the consolidated statements of operations.

2025 Convertible Notes

In December 2020, the Company issued a total of $168.5 million principal amount of 2025 Convertible Notes in a private offering of the Convertible Notes pursuant to Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"). The 2025 Convertible Notes were issued pursuant to, and are governed by, an indenture, dated as of December 7, 2020, by and between the Company and The Bank of New York Mellon Trust Company, N.A., as trustee (the “2025 Convertible Notes Indenture”). The 2025 Convertible Notes are due on December 1, 2025, unless earlier repurchased, redeemed or converted, and accrue interest at a rate per annum equal to 7.25% payable semi-annually in arrears on June 1 and December 1 of each year, with the initial payment on June 1, 2021. The Company recognized interest expense on the 2025 Convertible Notes of $0.2 million and $2.4 million for the three months ended March 31, 2024 and 2023, respectively.

The 2025 Convertible Notes are the Company's senior, unsecured obligations and are (i) equal in right of payment with the Company's existing and future senior, unsecured indebtedness; (ii) senior in right of payment to the Company's existing and future indebtedness that is expressly subordinated to the 2025 Convertible Notes; (iii) effectively subordinated to the Company's existing and future secured indebtedness, to the extent of the value of the collateral securing that indebtedness; and (iv) structurally subordinated to all existing and future indebtedness and other liabilities, including trade payables, and (to the extent the Company is not a holder thereof) preferred equity, if any, of the Company's subsidiaries.

At any time, noteholders may convert their 2025 Convertible Notes at their option into shares of the Company’s common stock, together, if applicable, with cash in lieu of any fractional share, at the then-applicable conversion rate. The initial conversion rate is 11.1204 shares of common stock per $1,000 principal amount of 2025 Convertible Notes, which represents an initial conversion price of approximately $89.92 per share of common stock. Noteholders that converted their 2025 Convertible Notes before December 1, 2022 were, in certain circumstances, entitled to an additional cash payment representing the present value of any remaining interest payments on the 2025 Convertible Notes through December 1, 2022. The conversion rate and conversion price are subject to customary adjustments upon the occurrence of certain dilutive events. In addition, if certain corporate events that constitute a “Make-Whole Fundamental Change” (as defined in the 2025 Convertible Notes Indenture) occur, then the conversion rate will, in certain circumstances, be increased for a specified period of time.

The 2025 Convertible Notes are redeemable, in whole and not in part, at the Company’s option at any time on or after December 1, 2023, at a cash redemption price equal to the principal amount of the 2025 Convertible Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date, but only if the last reported sale price per share of the Company’s common stock exceeds 130% of the conversion price on (i) each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the trading day immediately before the date the Company sends the related redemption notice; and (ii) the trading day immediately before the date the Company sends such notice. In addition, calling the 2025 Convertible Notes will constitute a Make-Whole Fundamental Change, which will result in an increase to the conversion rate in certain circumstances for a specified period of time.

The 2025 Convertible Notes have customary provisions relating to the occurrence of “Events of Default” (as defined in the 2025 Convertible Notes Indenture). As of both March 31, 2024 and December 31, 2023, the Company was in compliance with all such covenants.

The 2025 Convertible Notes had a conversion option which was required to be bifurcated upon issuance and recorded separately as an embedded derivative remeasured at fair value each reporting period with changes in fair value recorded in the consolidated statement of operations. As of December 31, 2022, the conversion option expired and there was no longer a derivative liability.

Note Exchanges

In September 2023, certain related party holders of 2025 Convertible Notes exchanged an aggregate of $50.0 million principal amount for a combination of 9,235,281 shares of the Company's common stock, 7,399,226 pre-funded warrants at an exercise price of $0.001 per share and warrants to purchase up to 16,634,507 shares of common stock at an exercise price of $3.01 per share. The warrants are exercisable on or after September 18, 2023 until September 18, 2026 and the pre-funded warrants have no expiration date. The pre-funded warrants and the warrants (together, the "September 2023 Warrants") are subject to certain exercise limitations, including a limitation on the ability to exercise if the holder’s beneficial ownership would exceed 49.9%. As the 2025 Convertible Notes were exchanged for an amount over the fair value of shares issuable under the original conversion terms, the Company recorded an inducement loss of $53.2 million, included in other income (expense), net in the condensed consolidated statements of operations. Pursuant to Accounting Standards Codification ("ASC") Topic 815, Derivatives and Hedging ("ASC") the Company deemed the September 2023 Warrants to be classified as a liability at fair value initially with subsequent changes in fair value recorded in earnings. The September 2023 Warrants were recorded at a fair value of $35.1 million determined using the Black-Scholes Model.

In December 2023, the Company entered into exchange agreements with certain holders of 2025 Convertible Notes to exchange an aggregate of $72.5 million principal amount for a combination of (i) $23.9 million in principal amount of 2028 Convertible Notes (ii) 625,000 shares of the Company's common stock, (iii) warrants to purchase 5,039,236 shares of common stock (the “Exchange Warrants”), and (iv) accrued and unpaid interest on the 2025 Convertible Notes. The Company also entered into note purchase agreements with certain investors (the "Purchasers") to purchase $17.0 million in principal amount of additional 2028 Convertible Notes from the Company for cash at par value. The Purchasers were granted warrants to purchase 5,084,613 shares of common stock (the “Additional Warrants”) and certain Purchasers were also granted warrants to purchase 7,352,941 shares of common stock (the “Commitment Warrants”). In connection with these agreements, the Company has agreed to allow certain of the parties to designate one observer to the Company's Board of Directors (the "Board").

The Exchange Warrants have an exercise price of $5.50 per share, the Commitment Warrants have an exercise price of $1.36 per share and the Additional Warrants have an exercise price of $5.00 per share. Each of the Exchange Warrants, the Commitment Warrants and the Additional Warrants (together the "December 2023 Warrants") are subject to certain exercise limitations, including a limitation on the ability to exercise if the holder’s beneficial ownership of common stock would exceed specified levels and are exercisable at any time on or after June 19, 2024. Pursuant to ASC 815, the December 2023 Warrants are classified as a liability at fair value initially with subsequent changes in fair value recorded in earnings. In connection with the March 2024 Offering (as defined below), 2,322,059 of the December 2023 Warrants were amended to (i) lower the exercise price to $1.10 per share, (ii) provide that the warrants will not be exercisable until the Stockholder Approval Date (as defined below) and (iii) extend the original expiration date to be five years from the Stockholder Approval Date.

The December note exchange with one holder of 2025 Convertible Notes constitutes a troubled debt restructuring ("TDR") under ASC Topic 470, Debt ("ACS 470") because the Company is experiencing financial difficulty and a concession has been granted by the holder. As the holder is a related party, the Company recorded the restructuring gain as a capital contribution resulting in $25.5 million of restructuring gain recorded within additional paid-in-capital as of December 31, 2023. Following the TDR guidance under ASC 470, future interest payments of approximately $11.7 million were also included in the carrying value of the 2028 Convertible Notes. The December note exchange with the other holders of 2025 Convertible Notes is considered a debt extinguishment under ASC 470. As a result, the Company recorded a loss on debt extinguishment of $6.4 million, which is the difference between the fair value of the 2028 Convertible Notes combined with the fair value of the warrants, derivative liabilities and common stock and the net carrying value of the 2025 Convertible Notes during the fourth quarter of 2023.

On March 8, 2024 the Company entered into an exchange agreement with a holder of the Company’s 2025 Convertible Notes, pursuant to which the Company agreed to acquire an aggregate of $5.6 million of 2025 Convertible Notes from the holder in exchange for (i) $3.8 million in aggregate principal amount of 2028 Convertible Notes, and (ii) accrued and unpaid interest on the 2025 Convertible Notes exchanged. The Company also entered into a note purchase agreement with the investor pursuant to which the investor agreed to purchase $2.8 million in aggregate principal amount of 2028 Convertible Notes from the Company for cash at par value. Additionally, as part of the agreements, the investor was granted warrants to purchase 2,000,000 shares of common stock. The warrants have an exercise price of $2.75 per share, are exercisable at any time on or after September 12, 2024 and expire on March 12, 2029. The warrants are subject to certain exercise limitations, including a limitation on the ability to exercise if the holder’s beneficial ownership of common stock would exceed specified levels. Pursuant to ASC 815, the warrants are classified as a liability at fair value initially with subsequent changes in fair value recorded in earnings. The exchange is considered a debt extinguishment under ASC 470. As a result, the Company recorded a loss on debt extinguishment of $0.2 million, which is the difference between the fair value of the 2028 Convertible Notes combined with the fair value of the warrants, derivative liabilities and the net carrying value of the 2025 Convertible Notes.

2028 Convertible Notes

The 2028 Convertible Notes were issued pursuant to, and are governed by, an indenture (the “2028 Convertible Notes Indenture”), dated December 19, 2023, by and between the Company and GLAS Trust Company LLC, as trustee. The 2028 Convertible Notes will mature on the earlier of December 19, 2028 and the date that is 90 days prior to the maturity of the Convertible Notes solely to the extent there are Convertible Notes outstanding in a principal amount equal to or greater than $5.0 million as of such date, unless earlier repurchased, redeemed or converted. In March 2024 the maturity date of the Convertible Notes was extended to December 19, 2028. The Notes will accrue interest at a rate of 11.0% per annum in the case of cash payment and 13.0% in the case of blended payments or payments-in-kind, payable semi-annually in arrears on June 1 and December 1 of each year, with the initial payment on June 1, 2024. The Company recognized interest expense on the 2028 Convertible Notes of $0.7 million for the three months ended March 31, 2024.

The 2028 Convertible Notes are the Company’s senior secured obligations, and are secured by substantially all of the Company’s and its subsidiaries’ assets. The 2028 Convertible Notes are (i) senior in right of payment to the Company’s existing and

future senior, unsecured indebtedness to the extent of the value of the collateral; and (ii) senior in right of payment to the Company’s existing and future indebtedness that is expressly subordinated to the 2028 Convertible Notes.

At any time, noteholders may convert their 2028 Convertible Notes at their option into shares of the Company’s common stock, together, if applicable, with cash in lieu of any fractional share, at the then-applicable conversion rate. The initial conversion rate is 641.02564 shares of common stock per $1,000 principal amount of 2028 Convertible Notes, which represents an initial conversion price of approximately $1.56 per share of common stock. Noteholders that convert their 2028 Convertible Notes will be entitled to an additional premium payment representing the amount of certain of the remaining interest payments on the 2028 Convertible Notes as specified in the 2028 Convertible Notes Indenture. The conversion rate and conversion price will be subject to customary adjustments upon the occurrence of certain events.

The 2028 Convertible Notes are redeemable, in whole and not in part, at the Company’s option at any time on or after December 19, 2024, and in some circumstances prior to that date, at a cash redemption price equal to the principal amount of the 2028 Convertible Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date, but only if the last reported sale price per share of the Company’s common stock exceeds 150% of the conversion price on (i) each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the trading day immediately before the date the Company sends the related redemption notice; and (ii) the trading day immediately before the date the Company sends such notice.

If certain corporate events that constitute a “Fundamental Change” (as defined in the 2028 Convertible Notes Indenture) occur, then noteholders may require the Company to repurchase their Notes at a cash repurchase price equal to the principal amount of the 2028 Convertible Notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the fundamental change repurchase date. The definition of Fundamental Change includes certain business combination transactions involving the Company and certain de-listing events with respect to the Company’s common stock.

The 2028 Convertible Notes Indenture contains covenants restricting the Company’s ability to incur indebtedness, incur liens, make restricted payments, make asset sales and engage in transactions with affiliates, subject to certain baskets. The 2028 Convertible Notes Indenture requires the Company to maintain minimum liquidity of $4.0 million and to add future assets to the collateral under the Security Agreement, dated as of December 19, 2023, among the Company, the Guarantors party thereto and GLAS Trust Company LLC, as collateral agent (the "Security Agreement") and to add future subsidiaries as guarantors under the Security Agreement. The 2028 Convertible Notes have customary provision relating to the occurrence of “Events of Default” (as defined in the 2028 Convertible Notes Indenture). As of both March 31, 2024 and December 31, 2023, the Company was in compliance with all such covenants.

The 2028 Convertible Notes have several conversion features which are required to be bifurcated upon issuance and periodically remeasured to fair value separately as an embedded derivative. The conversion features were bifurcated and recorded separately as an embedded derivative remeasured at fair value each reporting period with changes in fair value recorded in other income (expense), net in the consolidated statement of operations.

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Related Party Transactions

3 Months Ended

Mar. 31, 2024

Related Party Transactions [Abstract]

Related Party Transactions

7. Related Party Transactions

As of March 31, 2024 and December 31, 2023, Athyrium Capital Management, LP (“Athyrium”) held $17.4 million aggregate principal amount of 2028 Convertible Notes (see Note 6). Athyrium also held 10,929,763 shares, or 35.9%, of the Company's common stock outstanding, 7,399,226 pre-funded warrants and warrants to purchase up to 24,583,231 shares of common stock at exercise prices ranging from of $3.01 to $8.22 as of March 31, 2024.

In November 2022, the Company entered into a securities purchase agreement with an institutional investor. Following this transaction, the institutional investor became a related party due to greater than 5% ownership. On January 12, 2023, the Company issued warrants to purchase 90,000 shares of common stock to the institutional investor in exchange for the investor’s agreement to waive the lockup provisions contained in the November 2022 securities purchase agreement. As of March 31, 2023 this institutional investor held less than 5% of the Company's outstanding common stock and is no longer considered a related party.

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Commitments and Contingencies

3 Months Ended

Mar. 31, 2024

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

8. Commitments and Contingencies

Operating Leases

The Company has entered into various noncancelable operating lease agreements, primarily for office space, laboratory space, and equipment. In March 2023, the Company signed an amended lease agreement for certain office space in San Diego, California to decrease the office space and extend the term to June 2025. Cash paid for operating leases was $0.3 million and $0.4 million for the

three months ended March 31, 2024 and 2023, respectively.

The components of lease expense were as follows (in thousands):

	Three Months Ended March 31,
	2024		2023
Operating lease costs	$	235	$	384

Supplemental weighted-average information related to operating leases is as follows:

	March 31,
	2024			2023
Weighted-average remaining lease term (years)		2.0			2.5
Weighted-average discount rate		9.6	%		9.4	%

As of March 31, 2024, future lease payments under the non-cancelable operating leases were as follows (in thousands):

Year ending December 31,	Minimum Operating Lease Payments
2024 (remaining)	$	771
2025		590
2026		264
2027		18
2028 and thereafter		—
Total minimum lease payments		1,643
Less: interest		(140	)
Present value of lease liabilities	$	1,503

Contingencies

The Company, in the ordinary course of its business, can be involved in lawsuits, threats of litigation, and audit and investigative demands from third parties. While management is unable to predict the exact outcome of such matters, it is management’s current belief that any potential liabilities of Biora resulting from these contingencies, individually or in the aggregate, could have a material impact on the Company’s financial position and results of operations.

The regulations governing government reimbursement programs (e.g., Medicaid, Tricare, and Medicare) and commercial payor reimbursement programs are complex and may be subject to interpretation. As a former provider of services to patients covered under government and commercial payor programs, post payment review audits, and other forms of reviews and investigations are routine. The Company believes it complied in all material respects with the statutes, regulations, and other requirements applicable to its former Laboratory Operations.

Government Investigations Settlements

In April 2018, the Company received a civil investigative demand from an Assistant U.S. Attorney (“AUSA”) for the Southern District of New York and a Health Insurance Portability and Accountability Act subpoena issued by an AUSA for the Southern District of California (“SDCA”) around legacy commercial practices. In May 2018, the Company received a subpoena from the State of New York Medicaid Fraud Control Unit.

On July 21, 2020, July 23, 2020 and October 1, 2020, the Company entered into agreements (the "Agreements") with certain governmental agencies and the 45 states participating in the settlement (“State AGs”) to resolve, with respect to such agencies and State AGs, all of such agencies’ and State AGs’ outstanding civil, and, where applicable, federal criminal investigations described above. The Company did not make any payments during the three months ended March 31, 2023. The Company paid $2.8 million during the three months ended March 31, 2024. The remaining amount payable of $2.6 million is due on or before July 1, 2024, and is subject to interest at a rate of 1.25% per annum. Any or all amounts may be paid earlier at the option of the Company. As of March 31, 2024, the Company’s accrual consisted of $2.6 million in accrued expenses and other current liabilities.

In connection with the resolution of the investigated matters, and in exchange for the Office of Inspector General of the Department of Health and Human Services ("OIG") agreement not to exercise its authority to permissively exclude the Company from participating in federal healthcare programs, effective July 21, 2020, the Company entered into a five-year Corporate Integrity Agreement with the OIG. The Corporate Integrity Agreement requires, among other matters, that the Company maintain a Compliance Officer, a Compliance Committee, board review and oversight of certain federal healthcare compliance matters, compliance programs, and disclosure programs; provide management certifications and compliance training and education; engage an independent review organization to conduct claims and arrangements reviews; and implement a risk assessment and internal review process. In view of the Company's cessation of its Laboratory Operations and related billing for services, effective March 7, 2023 the OIG agreed to suspend the Company’s obligations under the Corporate Integrity Agreement.

Payor Recoveries

As noted above, the regulations governing government reimbursement programs (e.g., Medicaid, Tricare, and Medicare) and commercial payor reimbursement programs are complex and may be subject to interpretation. As a former provider of services to patients covered under government reimbursement and commercial payor programs, the Company is routinely subject to post-payment review audits and other forms of reviews and investigations. For example, the Company rejected several managed Medicaid payor recoupment requests that it received in 2022 aggregating to $1.1 million. If a third-party payor successfully challenges that a payment to the Company for prior testing was in breach of contract or otherwise contrary to policy or law, they may recoup such payment. The Company may also decide to negotiate and settle with a third-party payor in order to resolve an allegation of overpayment. In the past, the Company has negotiated and settled these types of claims with third-party payors. The Company may be required to resolve further disputes in the future. While management is unable to predict the exact outcome of any such claims, it is management’s current belief that any potential liabilities resulting from these contingencies related to payors and the Company's ceased Laboratory Operations, individually or in the aggregate, should not have a material impact on the Company’s financial position and results of operations.

Ravgen Litigation

On December 22, 2020, Ravgen, Inc. ("Ravgen") filed suit in the District of Delaware (D. Del. Civil Action No. 1:20-cv-1734)
asserting the Company’s infringement of two Ravgen patents based on the Company's former NIPT testing business. The complaint seeks monetary damages and injunctive relief. The Company responded to the complaint on March 23, 2021. Ravgen has since narrowed its claim of infringement to a single patent claim of one patent. Management believes the claims in Ravgen’s complaint are without merit, and the Company is vigorously defending against them. A trial date is expected to be scheduled for the end of the fourth quarter 2024 or 2025. Given the uncertainty of litigation and the legal standards that must be met for, among other things, success on the merits, the Company is unable to predict the ultimate outcome of this matter, and therefore cannot estimate the reasonably possible loss or range of loss, if any, that may result from this action.

IPO Litigation

On June 23, 2020, the Company closed its IPO. Lawsuits were filed on August 28, 2020 and September 11, 2020 against the Company, certain of its executive officers and directors, and the underwriters of the IPO. On December 3, 2020, the U.S. District Court for the Southern District of California consolidated the two actions, appointed Lin Shen, Lingjun Lin and Fusheng Lin to serve as Lead Plaintiffs, and approved Glancy Prongay & Murray LLP to be Lead Plaintiffs’ Counsel. Lead Plaintiffs filed their first amended complaint on February 4, 2021. Together with the underwriters of the IPO, the Company moved to dismiss the first amended complaint. On September 1, 2021, the court granted the Company's motion to dismiss, dismissing Lead Plaintiffs’ claims without prejudice. On September 22, 2021, Lead Plaintiffs filed their second amended complaint. Together with the underwriters of the IPO, the Company moved to dismiss the second amended complaint on November 15, 2021. On January 13, 2023, the court again granted our motion to dismiss, dismissing Lead Plaintiffs’ claims for failure to state a claim without prejudice. On February 3, 2023, Lead Plaintiffs filed their third amended complaint, adding information allegedly produced to Plaintiffs in response to freedom of information requests. The third amended complaint alleges that the Company’s registration statement and related prospectus for the IPO contained false and misleading statements and omissions in violation of the Securities Act by failing to disclose that (i) the Company had overbilled government payors for Preparent tests beginning in 2019 and ending in or before early 2020; (ii) there was a high probability that the Company had received, and would have to refund, a material amount of overpayments from government payors for Preparent tests; (iii) in February 2020 the Company ended a supposedly improper marketing practice on which the competitiveness of the Company's business depended; and (iv) the Company was suffering from material negative trends with respect to testing volumes, average selling prices for its tests, and revenues. Lead Plaintiffs seek certification as a class, unspecified compensatory damages, interest, costs and expenses including attorneys’ fees, and unspecified extraordinary, equitable, and/or injunctive relief. The Company filed a motion to dismiss the third amended complaint with prejudice on March 20, 2023, which the court granted on July 12, 2023. Lead Plaintiffs filed a notice of appeal on August 11, 2023 and the appeal is currently before the United States Court of Appeals for the Ninth Circuit (Case No: 23-55716) with appellate briefing concluded and submitted by the parties in March 2024. Subject to a reservation of rights, the Company is advancing expenses subject to indemnification to the

underwriters of the IPO. In March 2024, the Company and plaintiffs agreed to settle the litigation, subject to negotiation and entry into definitive and binding agreements and court approval, for an amount of $1.0 million. This amount is included in accrued expenses and other current liabilities as of March 31, 2024.

On June 4, 2021, a purported shareholder filed a lawsuit in the U.S. District Court for the SDCA, claiming to sue derivatively on behalf of the Company. The complaint names certain of the Company’s officers and directors as defendants, and names the Company as a nominal defendant. Premised largely on the same allegations as the above-described securities lawsuit, it alleges that the individual defendants breached their fiduciary duties to the Company, wasted corporate assets, and caused the Company to issue a misleading proxy statement in violation of the Securities Exchange Act of 1934, as amended. The complaint seeks the award of unspecified damages to the Company, equitable and injunctive remedies, and an order directing the Company to reform and improve its internal controls and board oversight. It also seeks the costs and disbursements associated with bringing suit, including attorneys’, consultants’, and experts’ fees. The case is stayed pending the resolution of the appeal in the above-described securities lawsuit. The Company intends to vigorously defend against these claims.

On August 17, 2021, the Company received a letter purportedly on behalf of a stockholder of the Company demanding that the Company's board of directors investigate and take action against certain of the Company’s current and former officers and directors to recover damages for alleged breaches of fiduciary duties and related claims arising out of the IPO litigation discussed above. This matter is pending the outcome of the companion securities litigation.

Given the uncertainty of litigation and other matters described above, and the legal standards that must be met for, among other things, success on the merits, the Company is unable to predict the ultimate outcome of these actions, and therefore cannot estimate the reasonably possible loss or range of loss, if any, that may result from these actions.

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Stockholders' Equity

3 Months Ended

Mar. 31, 2024

Stockholders' Equity Note [Abstract]

Stockholders' Equity

9. Stockholders’ Equity

Common Stock

On January 3, 2023, the Company effected the Reverse Stock Split of the Company's common stock. The Reverse Stock Split, which has been retroactively reflected throughout the condensed consolidated financial statements, reduced the authorized shares of the Company to 164,000,000 and did not change the par value of the Company's common stock.

Registered Offerings

In January 2023, the Company issued warrants to purchase 90,000 shares of common stock to an institutional investor in exchange for the investor’s agreement to waive the lockup provisions contained in the securities purchase agreement related to the registered direct offering completed in November 2022. The warrants have an exercise price of $8.22 and were exercisable beginning on May 9, 2023. In connection with the March 2024 Offering (as defined below), the warrants were amended to (i) lower the exercise price to $1.10 per share, (ii) provide that the warrants will not be exercisable until the Stockholder Approval Date (as defined below) and (iii) extend the original expiration date to be five years from the Stockholder Approval Date. Pursuant to ASC 815, the Company deemed the warrants to be classified as a liability at fair value initially with subsequent changes in fair value recorded in earnings.

In June 2023, the Company entered into a securities purchase agreement with certain institutional and accredited investors relating to the offering and sale of 1,509,434 shares of common stock in a registered direct offering at an offering price of $5.30 per share (the "June 2023 Offering"). In addition, in a concurrent private placement with the same investors, the Company issued unregistered warrants to purchase 3,018,868 shares of common stock. At issuance, the warrants had an exercise price of $5.05 per share and were exercisable at any time. The Company received approximately $7.3 million in net proceeds, after deducting placement agent fees and offering expenses. In connection with the March 2024 Offering (as defined below), the warrants were amended to (i) lower the exercise price to $1.10 per share, (ii) provide that the warrants will not be exercisable until the Stockholder Approval Date (as defined below) and (iii) extend the original expiration date to be five years from the Stockholder Approval Date.

Pursuant to ASC 815, the Company deemed the warrants to be classified as a liability at fair value initially with subsequent changes in fair value recorded in earnings. The warrants were recorded at a fair value of $9.0 million, as the total fair value of the warrant liability exceeds the gross proceeds of $8.0 million, the Company recorded a loss of the $1.0 million excess to gain (loss) on warrant liabilities in the consolidated statements of operations. Accordingly, there were no proceeds allocated to the common stock issued as part of this transaction. The Company incurred a total of $0.7 million in issuance costs, which were allocated between the warrants and common stock on a relative fair value basis.

In October 2023, the Company issued warrants to purchase up to 1,000,000 shares and 4,278,074 shares of the Company's common stock, with exercise prices of $1.93 per share and $1.87 per share, respectively, to accredited investors in private placement transactions. The warrants are exercisable in April 2024, six months following the dates of issuance. The investors may from time to

time agree to acquire, and the Company may agree to sell, up to an aggregate of $9.9 million of common stock at any time prior to January 31, 2024. The warrants will vest in proportion to issuances described in the preceding sentence. Pursuant to ASC 815, the Company deemed the warrants to be classified as a liability at fair value initially with subsequent changes in fair value recorded in earnings. The warrants were recorded at a fair value of $6.7 million and the Company recorded a loss of the $6.7 million excess to gain (loss) on warrant liabilities in the consolidated statements of operations. On January 31, 2024, warrants to purchase 848,366 shares and 1,378,687 shares, respectively, of the Company's common stock vested and were reclassified to equity on the vesting termination date, the remaining warrants expired and the Company recognized a gain of $1.5 million included in gain on warrant liabilities on the consolidated statements of operations.

On March 31, 2024, the Company entered into a securities purchase agreement with certain institutional and accredited investors relating to (1) the offering and sale of an aggregate of 5,454,548 shares of the Company’s common stock at an offering price of $1.10 per share in a registered direct offering and (2) the issuance of unregistered warrants to purchase up to 5,454,548 shares of the Company's common stock with an exercise price of $1.10 to certain accredited investors in a concurrent private placement (collectively, the "March 2024 Offering"). The March 2024 Offering closed and was recorded on April 3, 2024, subsequent to the end of the quarter. The Company received net proceeds of $5.5 million after deducting placement agent fees and offering expenses. In connection with the March 2024 Offering, the Company also agreed to amend an aggregate of 6,415,822 outstanding warrants held by purchasers in the offering to (i) lower the exercise price to $1.10 per share, (ii) provide that the warrants will not be exercisable until the Company receives approval from its stockholders with respect to the issuance of shares of common stock issuable upon exercise of the amended warrants (the “Stockholder Approval Date”) and (iii) extend the original expiration date to be five years from the Stockholder Approval Date.

Common Stock Warrants

As of March 31, 2024, the Company had the following warrants outstanding to acquire shares of its common stock:

Expiration Date	Shares of common stock issuable upon exercise of warrants		Exercise Price per share
Held by Related Parties
N/A		7,399,226	$	0.001
September 2026		16,634,507	$	3.01
May 2028		824,116	$	8.22
December 2028		2,085,372	$	5.00
December 2028		5,039,236	$	5.50
Related Parties Total		31,982,457
Held by non-affiliates
February 2026		69,930	$	171.50
June 2026		3,018,868	$	5.05
August 2026		452,635	$	25.00
April 2027		1,378,687	$	1.87
April 2027		848,366	$	1.93
May 2028		1,074,916	$	8.22
December 2028		7,352,941	$	1.36
December 2028		2,999,241	$	5.00
March 2029		2,000,000	$	2.75
Non-affiliate Total		19,195,584
Total		51,178,041

At-The-Market Sales Agreement and Offering

In November 2021, the Company entered into an At Market Issuance Sales Agreement with B. Riley Securities, Inc., BTIG, LLC, and H.C. Wainwright & Co. LLC ("Agents"), pursuant to which the Company may offer and sell shares of common stock having an aggregate offering price of up to $90.0 million from time to time, in “at the market” offerings through the Agents (the "ATM Facility"). In connection with the registered direct offering in November 2022, the aggregate offering price was reduced to $70.0 million. The Company further reduced the aggregate offering price to $12.0 million in connection with the June 2023 Offering. As of October 9, 2023, the aggregate offering price was increased to $37.6 million. Sales of the shares of common stock, if any, will be made at prevailing market prices at the time of sale, or as otherwise agreed with the Agents. The Agents will receive a commission

from the Company of up to 3.0% of the gross proceeds of any shares of common stock sold under the ATM Facility. The following table provides information on the shares sold under the ATM Facility for the three months ended March 31, 2024 and 2023.

	Three Months Ended March 31,
	2024		2023
Net proceeds (in millions)	$	2.8	$	12.6
Number of shares		2,591,662		2,853,109
Weighted average purchase price	$	1.13	$	4.69

Preferred Stock

Pursuant to the Company’s eighth amended and restated certificate of incorporation, which went into effect immediately prior to the completion of the IPO, the Company was authorized to issue 10,000,000 shares of undesignated preferred stock. This amount and the par value of preferred stock remained unchanged after the Reverse Stock Split.

On November 10, 2022, the Board declared a dividend of one one-thousandth of a share of Series X Preferred Stock, par value $0.001 per share (“Series X Preferred Stock”), for each outstanding share of common stock to stockholders of record as of November 21, 2022. This Series X Preferred Stock entitled its holders to 3,000 votes per share exclusively on the vote for the proposal to approve the Reverse Stock Split. All shares of Series X Preferred Stock that were not present to vote on the Reverse Stock Split were redeemed by the Company (the “Initial Redemption”). Any outstanding shares of Series X Preferred Stock that were not redeemed pursuant to an Initial Redemption would be redeemed in whole, but not in part, (i) if such redemption is ordered by the Board in its sole discretion, automatically and effective on such time and date specified by the Board in its sole discretion or (ii) automatically upon the effectiveness of the Certificate of Amendment implementing the Reverse Stock Split. At the December 19, 2022 special meeting of the Company's stockholders, the holders of 136,961 shares of Series X Preferred Stock were represented in person or by proxy. Immediately prior to the special meeting, all 86,210 shares of Series X Preferred Stock that were not voted were redeemed. The remaining 136,961 outstanding shares of Series X Preferred Stock were redeemed automatically upon the effectiveness of the Certificate of Amendment on January 3, 2023.

On January 9, 2023, the Company filed a Certificate of Elimination of Series X Preferred Stock with the Delaware Secretary of State, which, effective immediately upon filing, eliminated all matters set forth in the Certificate of Designation of Series X Preferred Stock filed with the Delaware Secretary of State on November 21, 2022.

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Stock-Based Compensation

3 Months Ended

Mar. 31, 2024

Share-Based Payment Arrangement [Abstract]

Stock-Based Compensation

10. Stock-Based Compensation

In February 2018, the Company adopted the 2018 Equity Incentive Plan (“2018 Plan”). The 2018 Plan is the successor to and continuation of the Second Amended and Restated 2012 Stock Plan (“2012 Plan”) and is administered with either stock options or RSUs. The Board administers the plans. Upon adoption of the 2018 Plan, no new stock options or awards are issuable under the 2012 Plan, as amended. The 2018 Plan also provides for other types of equity to issue awards, which at this time the Company does not plan to utilize.

On June 14, 2023, the Company’s stockholders approved the Fifth Amended and Restated 2018 Equity Incentive Plan ("2018 Fifth Amended Plan"), which included an increase of 5,500,000 shares of common stock reserved for issuance. As of March 31, 2024 there were 4,834,832 shares available for issuance under the 2018 Fifth Amended Plan.

On November 3, 2021, the Board approved and adopted the Company’s 2021 Inducement Plan ("2021 Inducement Plan") to provide for the reservation of 260,000 shares of the Company’s common stock to be used exclusively for the grant of awards to individuals not previously an employee or non-employee director of the Company. As of March 31, 2024, 63,964 shares were available for grant under the 2021 Inducement Plan.

Stock Options

The following table summarizes stock option activity, which includes performance awards, under the 2012 Plan, the 2018 Fifth Amended Plan and the 2021 Inducement Plan during the three months ended March 31, 2024:

	Stock Options Outstanding			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value (in thousands)
Balance at December 31, 2023		763,012		$	36.23
Options granted		3,200		$	1.12
Options exercised		—		$	—
Options forfeited/cancelled		(1,689	)	$	36.79
Balance at March 31, 2024		764,523		$	36.09		7.7	$	—
Vested and expected to vest at March 31, 2024		764,523		$	36.09		7.7	$	—
Vested and exercisable at March 31, 2024		299,736		$	64.14		7.1	$	—

The Company uses the Black-Scholes option pricing model to estimate the fair value of each option grant on the date of grant or any other measurement date. The following table sets forth the assumptions used to determine the fair value of stock options granted during the three months ended March 31, 2024 and 2023:

	Three Months Ended March 31,
	2024	2023
Risk-free interest rate	4.3%	3.6%
Expected volatility	95.4%	101.3% - 102.3%
Expected dividend yield	―	―
Expected life (years)	6.3 years	6.3 years

The weighted-average grant date fair value of options granted during the three months ended March 31, 2024 and 2023 was $0.89 per option and $2.80 per option, respectively.

Restricted Stock Units

The following table summarizes RSU activity for the three months ended March 31, 2024:

	Number of Shares			Weighted- Average Grant Date Fair Value
Balance at December 31, 2023		2,537,357		$	3.31
Granted		2,733,000		$	0.81
Vested		(139	)	$	78.56
Forfeited/cancelled		(29,300	)	$	3.14
Balance at March 31, 2024		5,240,918		$	2.00

Stock-Based Compensation Expense

The following table presents total stock-based compensation expense included in each functional line item in the accompanying condensed consolidated statements of operations (in thousands):

	Three Months Ended March 31,
	2024		2023
Research and development		575		855
Selling, general and administrative		964		1,529
Total stock-based compensation expense	$	1,539	$	2,384

At March 31, 2024 there was $5.7 million of compensation cost related to unvested stock options expected to be recognized over a remaining weighted average vesting period of 2.3 years and $9.0 million of compensation cost related to unvested RSUs expected to be recognized over a remaining weighted average vesting period of 3.6 years.

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Income Taxes

3 Months Ended

Mar. 31, 2024

Income Tax Disclosure [Abstract]

Income Taxes

11. Income Taxes

The Company calculates its interim income tax provision in accordance with ASC Topic 270, Interim Reporting, and ASC Topic 740, Accounting for Income Taxes. At the end of each interim period, management estimates the annual effective tax rate and applies such rate to the Company’s ordinary quarterly earnings to calculate income tax expense related to ordinary income. The Company's effective tax rate was zero for both the three months ended March 31, 2024 and 2023. The tax effects of items significant, unusual and infrequent in nature are discretely calculated and recognized in the period during which they occur.

The Company’s net operating loss carryforwards and research and development expenditure credit carryforwards may be subject to an annual limitation under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended (the “Code”), and similar state provisions if the Company experiences an ownership change within the meaning of such Code sections. In general, an ownership change, as defined by Sections 382 and 383 of the Code, occurs when there is a 50 percentage points or more shift in ownership, consisting of shareholders owning more than 5% in the Company, occurring within a three-year testing period. The Company performed a formal study through the date of the IPO and determined future utilization of tax attribute carryforwards were not limited per Section 382 of the Internal Revenue Code. The Company has not updated its Section 382 study since the IPO offering in 2020. However, because the Company has raised and expects to continue to raise significant amounts of equity, the Company expects that Section 382 will limit future utilization of tax attribute carryforwards. Due to the existence of the valuation allowance, limitations created by future ownership changes, if any, will not impact the Company's effective tax rate.

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Net Loss Per Share

3 Months Ended

Mar. 31, 2024

Earnings Per Share [Abstract]

Net Loss Per Share

12. Net Loss Per Share

The table below provides potentially dilutive securities in equivalent shares of common stock not included in the Company’s calculation of diluted loss per share because to do so would be antidilutive:

	March 31, 2024		March 31, 2023
Stock options to purchase common stock		764,523		578,699
Restricted stock units		5,240,918		1,048,914
Common stock warrants and pre-funded warrants		51,178,041		2,421,597
Common stock issuable upon conversion of Convertible Notes		30,518,126		1,623,547
Total		87,701,608		5,672,757

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Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2024

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

The Company’s condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. These financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the Securities and Exchange Commission, from which management derived the Company’s condensed consolidated balance sheet as of December 31, 2023.

The condensed consolidated financial statements and notes thereto give retrospective effect to the Reverse Stock Split for all periods presented. All common stock, options exercisable for common stock, restricted stock units ("RSUs"), warrants and per share amounts contained in the condensed consolidated financial statements have been retrospectively adjusted to reflect the Reverse Stock Split for all periods presented. Concurrent with the Reverse Stock Split, the Company effected a reduction in the number of authorized shares of common stock from 350,000,000 shares to 164,000,000 shares.

Unaudited Interim Financial Information

Unaudited Interim Financial Information

The accompanying condensed consolidated financial statements are unaudited, have been prepared on the same basis as the audited annual financial statements and, in the opinion of management, reflect all adjustments, consisting of normal recurring adjustments, that are necessary to present fairly the results for the interim periods presented. Results are not necessarily indicative of results to be expected for the year ending December 31, 2024, any other interim periods, or any future year or period. The balance sheet as of December 31, 2023 included herein was derived from the audited financial statements as of that date. Certain disclosures have been condensed or omitted from the interim financial statements.

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant items subject to such estimates include the valuation of stock options, the valuation of goodwill, the valuation of the derivative liabilities associated with the 2028 Convertible Notes, accrual for reimbursement claims and settlements, the valuation of warrant liabilities, assessing future tax exposure and the realization of deferred tax assets, and the useful lives and the recoverability of property and equipment. The Company bases these estimates on historical and anticipated results, trends, and various other assumptions that the Company believes are reasonable under the circumstances, including assumptions as to future events. These estimates form the basis for making judgments about the carrying values of assets and liabilities and recorded revenues and expenses that are not readily apparent from other sources. Actual results could differ from those estimates and assumptions.

Restricted Cash

Restricted Cash

Restricted cash consists of collateral required for the Company's bank-issued credit cards with a balance of $0.2 million as of both March 31, 2024 and December 31, 2023.

Recent Accounting Pronouncements Adopted

Recent Accounting Pronouncements Adopted

In August 2020, the Financial Accounting Standards ("FASB") issued Accounting Standards Update ("ASU") No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity's Own Equity (Subtopic 815-40)-Accounting for Convertible Instruments and Contracts in an Entity's Own Equity, which simplifies the accounting for convertible instruments, amends the guidance on derivative scope exceptions for contracts in an entity's own equity, and modifies the guidance on diluted earnings per share calculations as a result of these changes. The standard is effective for the Company for annual reporting periods beginning after December 15, 2023. The Company adopted this standard on January 1, 2024, and it did not have a material impact on the consolidated financial statements.

Recent Accounting Pronouncements Not Yet Adopted

Recent Accounting Pronouncements Not Yet Adopted

In December 2023, the FASB issued ASU No. 2023-09, Improvements to Income Tax Disclosures, which introduces new and enhanced income tax disclosure requirements. The standard is effective for the Company for annual reporting periods beginning after December 15, 2025. The Company is currently evaluating the impact the adoption of this standard may have on its consolidated financial statements and related disclosures.

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Balance Sheet Components (Tables)

3 Months Ended

Mar. 31, 2024

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Summary of Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consisted of the following (in thousands):

	March 31, 2024		December 31, 2023
Prepaid expenses	$	2,260	$	2,443
Other current assets		169		587
Total	$	2,429	$	3,030

Summary of Property and Equipment, Net

Property and equipment, net consisted of the following (in thousands):

	March 31, 2024			December 31, 2023
Computers and software	$	1,189		$	1,193
Building and leasehold improvements		852			803
Laboratory equipment		430			423
Furniture, fixtures, and office equipment		799			799
Construction in progress		49			45
Total property and equipment		3,319			3,263
Less accumulated depreciation and amortization		(2,183	)		(2,107	)
Property and equipment, net	$	1,136		$	1,156

Schedule of Other Assets

Other assets consisted of the following (in thousands):

	March 31, 2024		December 31, 2023
Investment in Enumera	$	—	$	3,000
Other		293		302
Total	$	293	$	3,302

Summary of Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following (in thousands):

	March 31, 2024		December 31, 2023
Accrual for reimbursement claims and legal settlements, current (1)	$	3,572	$	6,337
Commissions and bonuses		3,146		2,469
Vacation and payroll benefits		1,442		1,367
Accrued professional services (2)		4,123		2,914
Accrued interest		1,058		173
Lease liabilities, current		920		896
Insurance financing		606		401
Contract liabilities		—		542
Other (3)		2,117		2,220
Total	$	16,984	$	17,319

(1) Laboratory Operations have been discontinued; amounts related to revenue reserves generated from the Laboratory Operations remain on the balance sheet.

(2) The Company has entered into an alternative fee arrangement with a professional services firm related to certain litigation matters; amounts related to the arrangement are included in accrued professional services. Depending on the ultimate outcome of such litigation, the fees could be materially higher than what has been accrued.

(3) Included in this amount are contracts that the Company is responsible for that were expensed in discontinued operations in 2021.

Summary of Other Long-term Liabilities

Other long-term liabilities consisted of the following (in thousands):

	March 31, 2024		December 31, 2023
Lease liabilities, net of current portion		583		818
Other (1)		2,000		2,211
Total	$	2,583	$	3,029

(1) Included in this amount are contracts that the Company is responsible for that were expensed in discontinued operations in 2021.

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Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2024

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]

Summary of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis

The following table presents information about the Company’s assets and liabilities that are measured at fair value on a recurring basis and indicates the fair value hierarchy of the valuation techniques utilized to determine such fair value (in thousands):

	Level 1		Level 2		Level 3
March 31, 2024
Derivative liabilities	$	—	$	—	$	26,210
Warrant liabilities	$	—	$	—	$	27,208
December 31, 2023
Derivative liabilities	$	—	$	—	$	22,899
Warrant liabilities	$	—	$	—	$	40,834

Summary of Inputs and Assumptions used to Determine Fair Value of Warrant Liability

At March 31, 2024 and December 31, 2023, the fair value of the warrant liabilities were estimated using the Black-Scholes Model with the following inputs and assumptions:

	March 31, 2024	December 31, 2023
Risk-free interest rate	4.2% - 4.5%	3.8% - 4.1%
Expected volatility	89.9% - 95.2%	95.6% - 101.8%
Stock price	$1.10	$1.35
Expected life (years)	2.2 - 4.9	2.5 - 5.0

Summary of Changes in Warrant Liabilities

A summary of the changes in the Level 3 classified liabilities is presented below (in thousands):

	Warrant Liabilities			Derivative Liabilities
Balance at December 31, 2023	$	40,834		$	22,899
Recognition of warrant liabilities		1,351			—
Reclassification of warrant liabilities to equity		(1,062	)		—
Expired warrants		(1,460	)		—
Recognition of derivative liabilities		—			3,729
Change in fair value		(12,455	)		(418	)
Balance at March 31, 2024	$	27,208		$	26,210

Derivative Financial Instruments Liabilities [Member]

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]

Summary of Inputs and Assumptions used to Determine Fair Value of Warrant Liability

The fair value of the embedded derivatives as of March 31, 2024 and December 31, 2023 were estimated using a binomial pricing model with the following inputs and assumptions:

	March 31, 2024	December 31, 2023
Risk-free interest rate	4.2%	3.8% - 4.3%
Expected volatility	94.1%	84.3% - 95.7%
Stock price	$1.10	$1.35
Discount Rate	32.1%	28.7% - 28.9%

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Convertible Notes (Tables)

3 Months Ended

Mar. 31, 2024

Debt Disclosure [Abstract]

Summary of Significant Terms of Company's Convertible Notes

The following table summarizes significant terms of the Company's Convertible Notes at March 31, 2024 (in thousands):

	March 31, 2024
	Face Value		Carrying Value		Fair Value (1)		Stated Interest Rate	Effective Interest Rate
2028 Convertible Notes	$	30,138	$	18,709	$	14,933	11-13%	18.4%
Related Party 2028 Convertible Notes	$	17,383	$	22,048	$	8,613	11-13%	3.0%
2025 Convertible Notes	$	4,600	$	4,497	$	2,690	7.25%	8.7%

(1) To estimate the fair value of the 2028 Convertible Notes, the Company used a binomial pricing model. Including the derivative liabilities of $26.2 million, the 2028 Convertible Notes fair value using the with method is $49.8 million. To estimate the fair value of the 2025 Convertible Notes, the Company used unadjusted quoted prices in the active market obtained from third-party pricing services.

The following table summarizes significant terms of the Company’s Convertible Notes at December 31, 2023 (in thousands):

	December 31, 2023
	Face Value		Carrying Value		Fair Value (2)		Stated Interest Rate	Effective Interest Rate
2028 Convertible Notes	$	23,500	$	14,591	$	14,846	11-13%	48.9%
Related Party 2028 Convertible Notes	$	17,383	$	21,155	$	10,982	11-13%	(22.0)%
2025 Convertible Notes	$	10,225	$	9,966	$	5,984	7.25%	8.7%

(2) To estimate the fair value of the 2028 Convertible Notes, the Company used a binomial pricing model. Including the derivative liabilities of $22.9 million, the 2028 Convertible Notes fair value using the with method is $48.7 million. To estimate the fair value of the 2025 Convertible Notes, the Company used unadjusted quoted prices in the active market obtained from third-party pricing services.

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Commitments and Contingencies (Tables)

3 Months Ended

Mar. 31, 2024

Commitments and Contingencies Disclosure [Abstract]

Components of Lease Expense

The components of lease expense were as follows (in thousands):

	Three Months Ended March 31,
	2024		2023
Operating lease costs	$	235	$	384

Supplemental Weighted-Average Information Related to Operating Leases

Supplemental weighted-average information related to operating leases is as follows:

	March 31,
	2024			2023
Weighted-average remaining lease term (years)		2.0			2.5
Weighted-average discount rate		9.6	%		9.4	%

Schedule of Net Minimum Payments Under Non-Cancelable Operating Leases

As of March 31, 2024, future lease payments under the non-cancelable operating leases were as follows (in thousands):

Year ending December 31,	Minimum Operating Lease Payments
2024 (remaining)	$	771
2025		590
2026		264
2027		18
2028 and thereafter		—
Total minimum lease payments		1,643
Less: interest		(140	)
Present value of lease liabilities	$	1,503

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Stockholders' Equity (Tables)

3 Months Ended

Mar. 31, 2024

Stockholders' Equity Note [Abstract]

Schedule of Warrants Outstanding to Acquire Shares of its Common Stock

As of March 31, 2024, the Company had the following warrants outstanding to acquire shares of its common stock:

Expiration Date	Shares of common stock issuable upon exercise of warrants		Exercise Price per share
Held by Related Parties
N/A		7,399,226	$	0.001
September 2026		16,634,507	$	3.01
May 2028		824,116	$	8.22
December 2028		2,085,372	$	5.00
December 2028		5,039,236	$	5.50
Related Parties Total		31,982,457
Held by non-affiliates
February 2026		69,930	$	171.50
June 2026		3,018,868	$	5.05
August 2026		452,635	$	25.00
April 2027		1,378,687	$	1.87
April 2027		848,366	$	1.93
May 2028		1,074,916	$	8.22
December 2028		7,352,941	$	1.36
December 2028		2,999,241	$	5.00
March 2029		2,000,000	$	2.75
Non-affiliate Total		19,195,584
Total		51,178,041

Schedule of Shares Sold Under the ATM Sale Agreement

The following table provides information on the shares sold under the ATM Facility for the three months ended March 31, 2024 and 2023.

	Three Months Ended March 31,
	2024		2023
Net proceeds (in millions)	$	2.8	$	12.6
Number of shares		2,591,662		2,853,109
Weighted average purchase price	$	1.13	$	4.69

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Stock-Based Compensation (Tables)

3 Months Ended

Mar. 31, 2024

Share-Based Payment Arrangement [Abstract]

Summary of Stock Options Activity under Plans

The following table summarizes stock option activity, which includes performance awards, under the 2012 Plan, the 2018 Fifth Amended Plan and the 2021 Inducement Plan during the three months ended March 31, 2024:

	Stock Options Outstanding			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value (in thousands)
Balance at December 31, 2023		763,012		$	36.23
Options granted		3,200		$	1.12
Options exercised		—		$	—
Options forfeited/cancelled		(1,689	)	$	36.79
Balance at March 31, 2024		764,523		$	36.09		7.7	$	—
Vested and expected to vest at March 31, 2024		764,523		$	36.09		7.7	$	—
Vested and exercisable at March 31, 2024		299,736		$	64.14		7.1	$	—

Summary of Assumptions used to Determine Fair Value of Stock Options Granted

The following table sets forth the assumptions used to determine the fair value of stock options granted during the three months ended March 31, 2024 and 2023:

	Three Months Ended March 31,
	2024	2023
Risk-free interest rate	4.3%	3.6%
Expected volatility	95.4%	101.3% - 102.3%
Expected dividend yield	―	―
Expected life (years)	6.3 years	6.3 years

Summary of Restricted Stock Units Activity

The following table summarizes RSU activity for the three months ended March 31, 2024:

	Number of Shares			Weighted- Average Grant Date Fair Value
Balance at December 31, 2023		2,537,357		$	3.31
Granted		2,733,000		$	0.81
Vested		(139	)	$	78.56
Forfeited/cancelled		(29,300	)	$	3.14
Balance at March 31, 2024		5,240,918		$	2.00

Schedule of Stock-based Compensation Expense

The following table presents total stock-based compensation expense included in each functional line item in the accompanying condensed consolidated statements of operations (in thousands):

	Three Months Ended March 31,
	2024		2023
Research and development		575		855
Selling, general and administrative		964		1,529
Total stock-based compensation expense	$	1,539	$	2,384

XML

Net Loss Per Share (Tables)

3 Months Ended

Mar. 31, 2024

Earnings Per Share [Abstract]

Summary of Potentially Dilutive Securities Not Included in Calculation of Diluted Loss Per Share

The table below provides potentially dilutive securities in equivalent shares of common stock not included in the Company’s calculation of diluted loss per share because to do so would be antidilutive:

	March 31, 2024		March 31, 2023
Stock options to purchase common stock		764,523		578,699
Restricted stock units		5,240,918		1,048,914
Common stock warrants and pre-funded warrants		51,178,041		2,421,597
Common stock issuable upon conversion of Convertible Notes		30,518,126		1,623,547
Total		87,701,608		5,672,757

XML

Organization and Description of Business - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Mar. 08, 2024	Dec. 31, 2023	Dec. 31, 2020
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]
Cash and cash equivalents	$ 10,600
Restricted cash	200
Accumulated deficit	955,147			$ 950,958
Net loss	4,189	$ 17,441
Cash used in operating activities	12,496	$ 12,098
2028 Convertible Notes and Related Party 2028 Convertible Notes
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]
Face Value	$ 47,500
2028 Convertible Notes and Related Party 2028 Convertible Notes | Minimum
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]
Interest rate	11.00%
2028 Convertible Notes and Related Party 2028 Convertible Notes | Maximum
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]
Interest rate	13.00%
7.25% Convertible Senior Notes due 2025
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]
Face Value	$ 4,600		$ 5,600	$ 10,225	$ 168,500
Interest rate	7.25%			7.25%	7.25%

XML

Summary of Significant Accounting Policies - Additional Information (Details) - USD ($) $ in Millions	Mar. 31, 2024	Dec. 31, 2023	Jan. 03, 2023	Dec. 31, 2022
Summary Of Significant Accounting Policies [Line Items]
Common Stock, Shares Authorized	164,000,000	164,000,000
Restricted cash collateral for credit cards	$ 0.2	$ 0.2
Accounting Standards Update 2023-09
Summary Of Significant Accounting Policies [Line Items]
Change in accounting principle, accounting standards update, adopted [true false]		false
Maximum
Summary Of Significant Accounting Policies [Line Items]
Common Stock, Shares Authorized				350,000,000
Minimum
Summary Of Significant Accounting Policies [Line Items]
Common Stock, Shares Authorized			164,000,000

XML

Strategic Transformation - Additional Information (Details) - USD ($)		3 Months Ended		12 Months Ended
	Oct. 06, 2023	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023	May 31, 2022
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Proceeds from sale of building held for sale	$ 2,800,000
Expense incurred in sale of building	$ 200,000
Proceeds from sale of equity securities		$ 3,000,000	$ 0
Building
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Remaining assets of disposal group held for sale		0		$ 0
Enumera Molecular Inc
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Impairment loss on investment				$ 3,000,000
Proceeds from sale of equity securities		$ 3,000,000
Enumera Molecular Inc | Series A-1 Preferred Stock
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Minority ownership shares, issued					6,000,000
Minority ownership received in preferred stock					$ 6,000,000
Enumera Molecular, Inc | Series A-1 Preferred Stock
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Minority ownership stake, percentage					25.00%

XML

Balance Sheet Components - Summary of Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Prepaid expenses	$ 2,260	$ 2,443
Other current assets	169	587
Total	$ 2,429	$ 3,030

XML

Balance Sheet Components - Summary of Property and Equipment, Net (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Property, Plant and Equipment [Line Items]
Total property and equipment	$ 3,319	$ 3,263
Less accumulated depreciation and amortization	(2,183)	(2,107)
Property and equipment, net	1,136	1,156
Computers and Software
Property, Plant and Equipment [Line Items]
Total property and equipment	1,189	1,193
Building and Leasehold Improvements
Property, Plant and Equipment [Line Items]
Total property and equipment	852	803
Laboratory Equipment
Property, Plant and Equipment [Line Items]
Total property and equipment	430	423
Furniture, Fixtures, and Office Equipment
Property, Plant and Equipment [Line Items]
Total property and equipment	799	799
Construction in Progress
Property, Plant and Equipment [Line Items]
Total property and equipment	$ 49	$ 45

XML

Balance Sheet Components - Schedule of Other Assets (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Other	$ 293	$ 302
Total	293	3,302
Enumera Molecular Inc
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Investment in Enumera	$ 0	$ 3,000

XML

Balance Sheet Components - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Depreciation and amortization expense	$ 105	$ 147

XML

Balance Sheet Components - Summary of Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands		Mar. 31, 2024	Dec. 31, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Accrual for reimbursement claims and legal settlements, current	[1]	$ 3,572	$ 6,337
Commissions and bonuses		3,146	2,469
Vacation and payroll benefits		1,442	1,367
Accrued professional services	[2]	4,123	2,914
Accrued interest		1,058	173
Lease liabilities, current		920	896
Insurance financing		606	401
Contract liabilities		0	542
Other	[3]	2,117	2,220
Total		$ 16,984	$ 17,319

[1] Laboratory Operations have been discontinued; amounts related to revenue reserves generated from the Laboratory Operations

[2] The Company has entered into an alternative fee arrangement with a professional services firm related to certain litigation matters; amounts related to the arrangement are included in accrued professional services. Depending on the ultimate outcome of such litigation, the fees could be materially higher than what has been accrued.

[3] Included in this amount are contracts that the Company is responsible for that were expensed in discontinued operations in 2021.

XML

Balance Sheet Components - Summary of Other Long-term Liabilities (Details) - USD ($) $ in Thousands		Mar. 31, 2024	Dec. 31, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Lease liabilities, net of current portion		$ 583	$ 818
Other	[1]	2,000	2,211
Total		$ 2,583	$ 3,029

[1] Included in this amount are contracts that the Company is responsible for that were expensed in discontinued operations in 2021.

XML

Fair Value Measurements - Additional Information (Details) - USD ($)	Mar. 31, 2024	Mar. 31, 2023
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fair Value Assets Level 2 To Level 1Transfers Amount 1	$ 0	$ 0

XML

Fair Value Measurements - Summary of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - Fair Value on Recurring Basis - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Level 1 | Warrant Liability
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Total liabilities at fair value	$ 0	$ 0
Level 1 | Embedded Derivative
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Total liabilities at fair value	0	0
Level 2 | Warrant Liability
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Total liabilities at fair value	0	0
Level 2 | Embedded Derivative
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Total liabilities at fair value	0	0
Level 3 | Warrant Liability
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Total liabilities at fair value	27,208	40,834
Level 3 | Embedded Derivative
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Total liabilities at fair value	$ 26,210	$ 22,899

XML

Fair Value Measurements - Summary of Inputs and Assumptions used to Determine Fair Value of Warrant Liability (Details)	Mar. 31, 2024 $ / shares	Dec. 31, 2023 $ / shares
Derivative Financial Instruments Liabilities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Share Price	$ 1.1	$ 1.35
Level 3 | Warrant Liability
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Share Price	$ 1.1	$ 1.35
Level 3 | Warrant Liability | Minimum
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Expected life (years)	2 years 2 months 12 days	2 years 6 months
Level 3 | Warrant Liability | Maximum
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Expected life (years)	4 years 10 months 24 days	5 years
Risk-free interest rate | Derivative Financial Instruments Liabilities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value of embedded derivative liability range	0.42
Risk-free interest rate | Minimum | Derivative Financial Instruments Liabilities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value of embedded derivative liability range		0.38
Risk-free interest rate | Maximum | Derivative Financial Instruments Liabilities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value of embedded derivative liability range		0.43
Risk-free interest rate | Level 3 | Warrant Liability | Minimum
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Measurement inputs	0.42	0.38
Risk-free interest rate | Level 3 | Warrant Liability | Maximum
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Measurement inputs	0.45	0.41
Expected volatility | Derivative Financial Instruments Liabilities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value of embedded derivative liability range	9.41
Expected volatility | Minimum | Derivative Financial Instruments Liabilities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value of embedded derivative liability range		8.43
Expected volatility | Maximum | Derivative Financial Instruments Liabilities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value of embedded derivative liability range		9.57
Expected volatility | Level 3 | Warrant Liability | Minimum
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Measurement inputs	8.99	9.56
Expected volatility | Level 3 | Warrant Liability | Maximum
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Measurement inputs	9.52	10.18
Measurement Input Discount Rate | Derivative Financial Instruments Liabilities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value of embedded derivative liability range	3.21
Measurement Input Discount Rate | Minimum | Derivative Financial Instruments Liabilities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value of embedded derivative liability range		2.87
Measurement Input Discount Rate | Maximum | Derivative Financial Instruments Liabilities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value of embedded derivative liability range		2.89

XML

Fair Value Measurements - Summary of Changes in Warrant Liabilities (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2024 USD ($)
Derivative Liabilities [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Balance at December 31, 2023	$ 22,899
Recognition of derivative liabilities	3,729
Change in fair value	(418)
Balance at March 31, 2024	26,210
Warrant [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Balance at December 31, 2023	40,834
Recognition of warrant liabilities	1,351
Reclassification of warrant liabilities to equity	(1,062)
Expired warrants	(1,460)
Change in fair value	$ (12,455)
Fair Value, Liability, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration]	Fair Value Adjustment of Warrants
Balance at March 31, 2024	$ 27,208

XML

Convertible Notes - Summary of Significant Terms of Company's Convertible Notes (Details) - USD ($) $ in Thousands	Mar. 31, 2024		Mar. 08, 2024	Dec. 31, 2023		Dec. 31, 2020
Debt Instrument [Line Items]
2028 Convertible Notes	$ 18,709			$ 14,591
Related Party 2028 Convertible Notes	22,048			21,155
2025 Convertible Notes	4,497			9,966
2028 Convertible Notes
Debt Instrument [Line Items]
Face Value	30,138		$ 3,800	23,500
Fair Value	$ 14,933	[1]		$ 14,846	[2]
Interest rate	11.00%
Effective Interest Rate	18.40%			48.90%
2028 Convertible Notes | Minimum
Debt Instrument [Line Items]
Face Value	$ 5,000
Interest rate	11.00%			11.00%
2028 Convertible Notes | Maximum
Debt Instrument [Line Items]
Interest rate	13.00%			13.00%
Related Party 2028 Convertible Notes
Debt Instrument [Line Items]
Face Value	$ 17,383			$ 17,383
Fair Value	$ 8,613	[1]		$ 10,982	[2]
Effective Interest Rate	3.00%			22.00%
Related Party 2028 Convertible Notes | Minimum
Debt Instrument [Line Items]
Interest rate	11.00%			11.00%
Related Party 2028 Convertible Notes | Maximum
Debt Instrument [Line Items]
Interest rate	13.00%			13.00%
2025 Convertible Notes
Debt Instrument [Line Items]
Face Value	$ 4,600		$ 5,600	$ 10,225		$ 168,500
Fair Value	$ 2,690	[1]		$ 5,984	[2]
Interest rate	7.25%			7.25%		7.25%
Effective Interest Rate	8.70%			8.70%

[1] (1) To estimate the fair value of the 2028 Convertible Notes, the Company used a binomial pricing model. Including the derivative liabilities of $26.2 million, the 2028 Convertible Notes fair value using the with method is $49.8 million. To estimate the fair value of the 2025 Convertible Notes, the Company used unadjusted quoted prices in the active market obtained from third-party pricing services.

[2] (2) To estimate the fair value of the 2028 Convertible Notes, the Company used a binomial pricing model. Including the derivative liabilities of $22.9 million, the 2028 Convertible Notes fair value using the with method is $48.7 million. To estimate the fair value of the 2025 Convertible Notes, the Company used unadjusted quoted prices in the active market obtained from third-party pricing services.

XML

Convertible Notes - Summary of Significant Terms of Company's Convertible Notes (Parenthetical) (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Debt Instrument [Line Items]
Derivative liabilities	$ 26,210	$ 22,899
2028 Convertible Notes
Debt Instrument [Line Items]
Derivative liabilities	26,200	22,900
Fair value	$ 49,800	$ 48,700

XML

Convertible Notes - Additional Information (Details) $ / shares in Units, $ in Thousands		1 Months Ended			3 Months Ended		9 Months Ended	12 Months Ended
	Mar. 08, 2024 USD ($) $ / shares shares	Dec. 31, 2023 USD ($) $ / shares shares	Sep. 30, 2023 USD ($) $ / shares shares	Dec. 31, 2020 USD ($) $ / shares	Mar. 31, 2024 USD ($) TradingDays Warrants $ / shares shares	Mar. 31, 2023 USD ($) shares	Sep. 30, 2023 $ / shares shares	Dec. 31, 2023 USD ($) $ / shares shares	Oct. 31, 2023 USD ($)	Oct. 12, 2023 $ / shares shares	Oct. 10, 2023 $ / shares shares	Sep. 18, 2023 USD ($)	Jun. 30, 2023 $ / shares shares
Debt Instrument [Line Items]
Interest expense					$ 2,757	$ 2,680
Issuance of common stock upon conversion of debt			$ 50,000
Warrants issued | shares					51,178,041					4,278,074	1,000,000		3,018,868
Class Of warrant or right, period for warrants or rights exercisable							after September 18, 2023 until September 18, 2026
Warrants exercise price per share | $ / shares										$ 1.87	$ 1.93		$ 5.05
Date from which warrants are exercisable					Apr. 01, 2024
Restructuring gain								$ 25,500
Future interest payments included in restructured senior secured convertible notes								11,700
Loss on extinguishment					$ (185)	0
Inducement loss on convertible notes			$ 53,200
Warrant liabilities		$ 40,834			27,208			40,834	$ 6,700			$ 35,100
Amortization of debt discount					$ 1,939	$ 374
Note Purchase Agreements
Debt Instrument [Line Items]
Warrants issued | shares	2,000,000
Warrants exercise price per share | $ / shares	$ 2.75
Date from which warrants are exercisable	Sep. 12, 2024
Warrants maturity date	Mar. 12, 2029
Convertible Notes
Debt Instrument [Line Items]
Loss on extinguishment	$ 200							$ 6,400
Maximum
Debt Instrument [Line Items]
Beneficial ownership, Limitation to exercise warrants percentage							49.90%
Common Stock
Debt Instrument [Line Items]
Issuance of stock, net, shares | shares			9,235,281		2,591,662	2,853,109
Warrants exercise price per share | $ / shares			$ 3.01				$ 3.01
Common Stock | Maximum
Debt Instrument [Line Items]
Class of Warrant or Right, Outstanding | shares			16,634,507				16,634,507
Common Stock | Note Exchange Agreements
Debt Instrument [Line Items]
Issuance of stock, net, shares | shares		625,000
Pre Funded Warrants
Debt Instrument [Line Items]
Warrants issued | shares			7,399,226				7,399,226
Warrants exercise price per share | $ / shares			$ 0.001				$ 0.001
Exchange Warrant
Debt Instrument [Line Items]
Warrants exercise price per share | $ / shares		$ 5.5						$ 5.5
Exchange Warrant | Note Exchange Agreements | Maximum
Debt Instrument [Line Items]
Class of Warrant or Right, Outstanding | shares		5,039,236						5,039,236
Additional Warrants
Debt Instrument [Line Items]
Warrants issued | shares		5,084,613						5,084,613
Warrants exercise price per share | $ / shares		$ 5						$ 5
Commitment Warrants
Debt Instrument [Line Items]
Warrants issued | shares		7,352,941						7,352,941
Warrants exercise price per share | $ / shares		$ 1.36						$ 1.36
Date from which warrants are exercisable								Jun. 19, 2024
December 2023 Warrants
Debt Instrument [Line Items]
Warrants exercise price per share | $ / shares					$ 1.1
Amendment of warrants description					In connection with the March 2024 Offering (as defined below), 2,322,059 of the December 2023 Warrants were amended to (i) lower the exercise price to $1.10 per share, (ii) provide that the warrants will not be exercisable until the Stockholder Approval Date (as defined below) and (iii) extend the original expiration date to be five years from the Stockholder Approval Date.
Number of warrants amended | Warrants					2,322,059
Warrants expire term					5 years
7.25% Convertible Senior Notes due 2025
Debt Instrument [Line Items]
Principal amount	5,600	$ 10,225		$ 168,500	$ 4,600			$ 10,225
Debt instrument, annual interest rate		7.25%		7.25%	7.25%			7.25%
Debt instrument, issuance date				Dec. 07, 2020
Debt instrument, frequency of periodic payment				semi-annually
Debt instrument due date				Dec. 01, 2025
Debt instrument, initial payment date				Jun. 01, 2021
Interest expense					$ 200	$ 2,400
Debt instrument, convertible, initial conversion rate per $1,000 principal amount of convertible notes				11.1204
Debt instrument convertible initial conversion price | $ / shares				$ 89.92
Debt instrument, redemption period, start date					Dec. 01, 2023
Debt instrument, convertible, threshold percentage of stock price trigger					130.00%
Debt instrument, convertible, threshold trading days | TradingDays					20
Debt instrument, convertible, threshold consecutive trading days | TradingDays					30
Events of default, description					The 2025 Convertible Notes have customary provisions relating to the occurrence of “Events of Default” (as defined in the 2025 Convertible Notes Indenture).
Unamortized discount		$ 300			$ 100			$ 300
7.25% Convertible Senior Notes due 2025 | Interest Expense
Debt Instrument [Line Items]
Amortization of debt discount					100	$ 400
7.25% Convertible Senior Notes due 2025 | Note Exchange Agreements
Debt Instrument [Line Items]
Principal amount		72,500						72,500
2028 Convertible Notes
Debt Instrument [Line Items]
Principal amount	3,800	23,500			$ 30,138			23,500
Debt instrument, annual interest rate					11.00%
Paid in kind interest rate					13.00%
Debt instrument, issuance date					Dec. 19, 2023
Debt instrument due date					Dec. 19, 2028
Debt instrument, initial payment date					Jun. 01, 2024
Interest expense					$ 700
Debt instrument, convertible, initial conversion rate per $1,000 principal amount of convertible notes					641.02564
Debt instrument convertible initial conversion price | $ / shares					$ 1.56
Debt instrument, redemption period, start date					Dec. 19, 2024
Debt instrument, convertible, threshold percentage of stock price trigger					150.00%
Debt instrument, convertible, threshold trading days | TradingDays					20
Debt instrument, convertible, threshold consecutive trading days | TradingDays					30
Minimum liquidity requirement/Covenant					$ 4,000
Events of default, description					The 2028 Convertible Notes have customary provision relating to the occurrence of “Events of Default” (as defined in the 2028 Convertible Notes Indenture).
Unamortized discount		19,000			$ 21,100			19,000
2028 Convertible Notes | Interest Expense
Debt Instrument [Line Items]
Amortization of debt discount					1,900
2028 Convertible Notes | Note Purchase Agreements
Debt Instrument [Line Items]
Principal amount	$ 2,800	$ 17,000						$ 17,000
2028 Convertible Notes | Minimum
Debt Instrument [Line Items]
Principal amount					$ 5,000
Debt instrument, annual interest rate		11.00%			11.00%			11.00%
2028 Convertible Notes | Maximum
Debt Instrument [Line Items]
Debt instrument, annual interest rate		13.00%			13.00%			13.00%
2028 Convertible Notes | Note Exchange Agreements
Debt Instrument [Line Items]
Principal amount		$ 23,900						$ 23,900

XML

Related Party Transactions - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions	Mar. 31, 2024	Dec. 31, 2023	Oct. 12, 2023	Oct. 10, 2023	Sep. 30, 2023	Jun. 30, 2023	Mar. 31, 2023	Jan. 31, 2023	Jan. 12, 2023	Nov. 30, 2022
Related Party Transaction [Line Items]
Common stock, shares outstanding	30,429,295	27,837,563
Warrants issued	51,178,041		4,278,074	1,000,000		3,018,868
Warrants exercise price per share			$ 1.87	$ 1.93		$ 5.05
Securities Purchase Agreement | Maximum
Related Party Transaction [Line Items]
Common stock outstanding, percentage							5.00%
Securities Purchase Agreement
Related Party Transaction [Line Items]
Common stock outstanding, percentage										5.00%
Warrants issued								90,000	90,000
Warrants exercise price per share								$ 8.22
Exchange Warrant
Related Party Transaction [Line Items]
Warrants exercise price per share		$ 5.5
Common Stock
Related Party Transaction [Line Items]
Warrants exercise price per share					$ 3.01
Common Stock | Maximum
Related Party Transaction [Line Items]
Class of Warrant or Right, Outstanding					16,634,507
Additional Warrants
Related Party Transaction [Line Items]
Warrants issued		5,084,613
Warrants exercise price per share		$ 5
Pre- funded Warrants
Related Party Transaction [Line Items]
Warrants issued					7,399,226
Warrants exercise price per share					$ 0.001
Athyrium
Related Party Transaction [Line Items]
Common stock, shares outstanding	10,929,763
Common stock outstanding, percentage	35.90%
Athyrium | Convertible Notes
Related Party Transaction [Line Items]
Aggregate principal amount of convertible notes	$ 17.4	$ 17.4
Athyrium | Warrants | Maximum
Related Party Transaction [Line Items]
Class of Warrant or Right, Outstanding	24,583,231
Warrants exercise price per share	$ 8.22
Athyrium | Warrants | Minimum
Related Party Transaction [Line Items]
Warrants exercise price per share	$ 3.01
Athyrium | Pre- funded Warrants
Related Party Transaction [Line Items]
Class of Warrant or Right, Outstanding	7,399,226

XML

Commitments and Contingencies - Additional Information (Details)			3 Months Ended		24 Months Ended
	Dec. 22, 2020 Case	Dec. 03, 2020 Case	Mar. 31, 2024 USD ($)	Mar. 31, 2023 USD ($)	Jul. 23, 2022	Jul. 01, 2024 USD ($)	Jul. 21, 2020 State
Commitment And Contingencies [Line Items]
cash paid for operating leases			$ 300,000	$ 400,000
Number of states participating in settlement | State							45
Payments for settlements related to agreement			2,800,000	$ 0
Payor Recoupment			1,100,000
Number of actions pending | Case	2	2
Litigation expense			1,000,000
Forecast
Commitment And Contingencies [Line Items]
Contractual obligation remaining payment						$ 2,600,000
Accrued Expenses And Other Current Liabilities
Commitment And Contingencies [Line Items]
Remaining accrual balance			$ 2,600,000
SDNY Civil Settlement Agreement
Commitment And Contingencies [Line Items]
Interest rate					1.25%

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Commitments and Contingencies - components of lease expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Commitments and Contingencies Disclosure [Abstract]
Operating lease costs	$ 235	$ 384

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Commitments and Contingencies - Supplemental weighted-average information related to operating leases (Details)	Mar. 31, 2024	Mar. 31, 2023
Commitments and Contingencies Disclosure [Abstract]
Weighted-average remaining lease term (years)	2 years	2 years 6 months
Weighted-average discount rate	9.60%	9.40%

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Commitments and Contingencies - Schedule of Net Minimum Payments Under Non-Cancelable Operating Leases (Details) $ in Thousands	Mar. 31, 2024 USD ($)
Commitments and Contingencies Disclosure [Abstract]
2024 (remaining)	$ 771
2025	590
2026	264
2027	18
2028 and thereafter	0
Total minimum lease payments	1,643
Less: interest	$ (140)
Operating Lease, Liability, Statement of Financial Position [Extensible Enumeration]	Accrued Expenses And Other Liabilities Current
Present value of lease liabilities	$ 1,503

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Stockholders' Equity - Additional Information (Details) $ / shares in Units, $ in Thousands						1 Months Ended						3 Months Ended
	Jan. 31, 2024 USD ($) shares	Oct. 09, 2023 USD ($)	Jan. 03, 2023 shares	Dec. 19, 2022 shares	Nov. 10, 2022 Vote $ / shares	Oct. 31, 2023 USD ($)	Sep. 30, 2023 $ / shares shares	Jun. 30, 2023 USD ($) $ / shares shares	Jan. 31, 2023 $ / shares shares	Nov. 30, 2022 USD ($)	Nov. 30, 2021 USD ($)	Jun. 30, 2024 USD ($) $ / shares shares	Mar. 31, 2024 USD ($) $ / shares shares	Mar. 31, 2023 USD ($) $ / shares shares	Apr. 03, 2024 $ / shares shares	Dec. 31, 2023 USD ($) shares	Oct. 12, 2023 $ / shares shares	Oct. 10, 2023 $ / shares shares	Sep. 18, 2023 USD ($)	Jan. 12, 2023 shares	Dec. 31, 2022 shares
Class Of Stock [Line Items]
Common stock authorized to issue													164,000,000			164,000,000
Shares issued, price per share | $ / shares								$ 5.3
Proceeds from issuance of common stock, net | $								$ 7,300					$ 2,800	$ 12,883
Adjusted common stock purchase warrant to purchase shares of common stock								3,018,868					51,178,041				4,278,074	1,000,000
Warrants exercise price per share | $ / shares								$ 5.05									$ 1.87	$ 1.93
Date from which warrants are exercisable													Apr. 01, 2024
Common stock value subscriptions | $						$ 9,900
Proceeds from issuance of common stock warrants | $								$ 8,000				$ 5,500
Total issuance cost | $								700
Gain loss on warrant liability | $	$ 1,500					6,700		1,000
Reverse stock split description			On January 3, 2023, the Company effected the Reverse Stock Split of the Company's common stock.
Warrant liabilities | $						$ 6,700							$ 27,208			$ 40,834			$ 35,100
Loss on extinguishment | $													(185)	0
Number of vote per preferred stock held | Vote					3,000
Loss on and change in fair value of warrant liabilities | $													$ (13,915)	$ (864)
Minimum
Class Of Stock [Line Items]
Common stock authorized to issue			164,000,000
Maximum
Class Of Stock [Line Items]
Common stock authorized to issue																					350,000,000
One Point Nine Three Per Share [Member]
Class Of Stock [Line Items]
Adjusted common stock purchase warrant to purchase shares of common stock	848,366
One Point Eight Seven Per Share [Member]
Class Of Stock [Line Items]
Adjusted common stock purchase warrant to purchase shares of common stock	1,378,687
Amended Warrants [Member]
Class Of Stock [Line Items]
Warrants exercise price per share | $ / shares															$ 1.1
Class of Warrant or Right, Outstanding															6,415,822
Series X Preferred Stock
Class Of Stock [Line Items]
Preferred stock, par value | $ / shares					$ 0.001
Preferred stock, shares outstanding				136,961									136,961
Redeemable Preferred Stock
Class Of Stock [Line Items]
Stock redeemed or called during period, shares				86,210
Undesignated Preferred Stock
Class Of Stock [Line Items]
Preferred stock, shares authorized													10,000,000
Amended March 2024 Offering
Class Of Stock [Line Items]
Warrants exercise price per share | $ / shares													$ 1.1
March 2024 Offering
Class Of Stock [Line Items]
Sale of stock closing date													Apr. 03, 2024
Securities Purchase Agreement
Class Of Stock [Line Items]
Shares issued, price per share | $ / shares												$ 1.1
Adjusted common stock purchase warrant to purchase shares of common stock									90,000											90,000
Warrants exercise price per share | $ / shares									$ 8.22
Date from which warrants are exercisable									May 09, 2023
Warrant liabilities | $								$ 9,000
Sale Agreement
Class Of Stock [Line Items]
Common stock issued and sold													2,591,662	2,853,109
Proceeds from Sale of Equity | $													$ 2,800	$ 12,600
Sale of stock weighted average purchase price | $ / shares													$ 1.13	$ 4.69
Sale Agreement | B Riley Securities, Inc [Member]
Class Of Stock [Line Items]
Rate of commission proposed for agents											3.00%
Aggregate offering price | $		$ 37,600								$ 70,000	$ 90,000		$ 12,000
Common Stock
Class Of Stock [Line Items]
Common stock authorized to issue			164,000,000
Common stock issued and sold								1,509,434
Issuance of stock, net, shares							9,235,281						2,591,662	2,853,109
Warrants exercise price per share | $ / shares							$ 3.01
Common Stock | Maximum
Class Of Stock [Line Items]
Class of Warrant or Right, Outstanding							16,634,507
Common Stock | Securities Purchase Agreement
Class Of Stock [Line Items]
Common stock issued and sold												5,454,548
Pre- funded Warrants
Class Of Stock [Line Items]
Adjusted common stock purchase warrant to purchase shares of common stock							7,399,226
Warrants exercise price per share | $ / shares							$ 0.001
Private Placement | Securities Purchase Agreement
Class Of Stock [Line Items]
Warrants exercise price per share | $ / shares												$ 1.1
Private Placement | Common Stock
Class Of Stock [Line Items]
Adjusted common stock purchase warrant to purchase shares of common stock												5,454,548

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Stockholders' Equity - Schedule of Warrants Outstanding to Acquire Shares of its Common Stock (Details) - $ / shares	Mar. 31, 2024	Oct. 12, 2023	Oct. 10, 2023	Jun. 30, 2023
Class of Stock [Line Items]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights	51,178,041	4,278,074	1,000,000	3,018,868
Warrants exercise price per share		$ 1.87	$ 1.93	$ 5.05
Related Party [Member]
Class of Stock [Line Items]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights	31,982,457
Nonrelated Party [Member]
Class of Stock [Line Items]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights	19,195,584
Expiration Date Not Applicable [Member] | Related Party [Member]
Class of Stock [Line Items]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights	7,399,226
Warrants exercise price per share	$ 0.001
September 2026 | Related Party [Member]
Class of Stock [Line Items]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights	16,634,507
Warrants exercise price per share	$ 3.01
May 2028 | Related Party [Member]
Class of Stock [Line Items]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights	824,116
Warrants exercise price per share	$ 8.22
December 2028 | Related Party [Member]
Class of Stock [Line Items]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights	2,085,372
Warrants exercise price per share	$ 5
December 2028 One | Related Party [Member]
Class of Stock [Line Items]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights	5,039,236
Warrants exercise price per share	$ 5.5
February 2026 | Nonrelated Party [Member]
Class of Stock [Line Items]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights	69,930
Warrants exercise price per share	$ 171.5
June 2026 | Nonrelated Party [Member]
Class of Stock [Line Items]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights	3,018,868
Warrants exercise price per share	$ 5.05
August 2026 | Nonrelated Party [Member]
Class of Stock [Line Items]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights	452,635
Warrants exercise price per share	$ 25
April 2027 | Nonrelated Party [Member]
Class of Stock [Line Items]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights	1,378,687
Warrants exercise price per share	$ 1.87
April 2027 One | Nonrelated Party [Member]
Class of Stock [Line Items]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights	848,366
Warrants exercise price per share	$ 1.93
May 2028 One | Nonrelated Party [Member]
Class of Stock [Line Items]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights	1,074,916
Warrants exercise price per share	$ 8.22
December 2028 Two | Nonrelated Party [Member]
Class of Stock [Line Items]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights	7,352,941
Warrants exercise price per share	$ 1.36
December 2028 Three | Nonrelated Party [Member]
Class of Stock [Line Items]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights	2,999,241
Warrants exercise price per share	$ 5
March 2029 | Nonrelated Party [Member]
Class of Stock [Line Items]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights	2,000,000
Warrants exercise price per share	$ 2.75

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Stockholders' Equity - Schedule of Shares Sold Under the ATM Sale Agreement (Details) - Sale Agreement - USD ($) $ / shares in Units, $ in Millions	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Class of Stock [Line Items]
Net proceeds (in millions)	$ 2.8	$ 12.6
Number of shares	2,591,662	2,853,109
Weighted average purchase price	$ 1.13	$ 4.69

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Stock-Based Compensation - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Sep. 30, 2022	Jun. 14, 2023	Nov. 03, 2021	Feb. 28, 2018
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation expense	$ 1,539		$ 2,384
Weighted-average grant date fair value of options granted	$ 0.89	$ 2.8
Unrecognized compensation cost related to unvested stock options expected to be recognized amount	$ 5,700
Unrecognized compensation cost related to unvested stock options expected to be recognized over remaining weighted average vesting period	2 years 3 months 18 days
Restricted Stock Units (RSUs)
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Unrecognized compensation cost related to unvested stock options expected to be recognized over remaining weighted average vesting period	3 years 7 months 6 days
Unrecognized compensation cost related to restricted stock options expected to be recognized amount	$ 9,000
2012 Stock Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock options issuable under the plan						0
2018 Equity Incentive Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Shares available for future grant	4,834,832
Common stock shares reserved for future issuance				5,500,000
Inducement Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Shares available for future grant					260,000
2021 Inducement Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Shares available for future grant	63,964

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Stock-Based Compensation - Summary of Stock Options Activity under Plans (Details) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2024 USD ($) $ / shares shares
Share-Based Payment Arrangement [Abstract]
Stock Options Outstanding Balance at December 31, 2023 | shares	763,012
Stock Options Outstanding Options granted | shares	3,200
Stock Options Outstanding Options exercised | shares	0
Stock Options Outstanding Options forfeited/cancelled | shares	(1,689)
Stock Options Outstanding Balance at March 31, 2024 | shares	764,523
Stock Options Outstanding Vested and expected to vest at March 31, 2024 | shares	764,523
Stock Options Outstanding Vested and exercisable at March 31, 2024 | shares	299,736
Weighted-Average Exercise Price Balance at December 31, 2023 | $ / shares	$ 36.23
Weighted-Average Exercise Price Options granted | $ / shares	1.12
Weighted-Average Exercise Price Options exercised | $ / shares	0
Weighted-Average Exercise Price Options forfeited/cancelled | $ / shares	36.79
Weighted-Average Exercise Price Balance at March 31, 2024 | $ / shares	36.09
Weighted-Average Exercise Price Vested and expected to vest at March 31, 2024 | $ / shares	36.09
Weighted-Average Exercise Price Vested and exercisable at March 31, 2024 | $ / shares	$ 64.14
Weighted-Average Remaining Contractual Term (in years) Balance at March 31, 2024	7 years 8 months 12 days
Weighted-Average Remaining Contractual Term (in years) Vested and expected to vest at March 31, 2024	7 years 8 months 12 days
Weighted-Average Remaining Contractual Term (in years) Vested and exercisable at March 31, 2024	7 years 1 month 6 days
Aggregate Intrinsic Value Balance at March 31, 2024 | $	$ 0
Aggregate Intrinsic Value Vested and expected to vest at March 31, 2024 | $	0
Aggregate Intrinsic Value Vested and exercisable at March 31, 2024 | $	$ 0

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Stock-Based Compensation - Summary of Assumptions used to Determine Fair Value of Stock Options Granted (Details)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Share-Based Payment Arrangement [Abstract]
Risk-free interest rate	4.30%	3.60%
Expected volatility	95.40%
Expected volatility, minimum		101.30%
Expected volatility, maximum		102.30%
Expected dividend yield	0.00%	0.00%
Expected life (years)	6 years 3 months 18 days	6 years 3 months 18 days

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Stock-Based Compensation - Summary of Restricted Stock Units Activity (Details) - Restricted Stock Units (RSUs)	3 Months Ended
	Mar. 31, 2024 $ / shares shares
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of Shares, Beginning Balance | shares	2,537,357
Number of Shares, Granted | shares	2,733,000
Number of Shares, Vested | shares	(139)
Number of Shares, Forfeited/cancelled | shares	(29,300)
Number of Shares, Ending Balance | shares	5,240,918
Weighted Average Grant Date Fair Value beginning of period | $ / shares	$ 3.31
Weighted Average Grant Date Fair Value, Granted | $ / shares	0.81
Weighted Average Grant Date Fair Value, Vested | $ / shares	78.56
Weighted Average Grant Date Fair Value, Forfeited/cancelled | $ / shares	3.14
Weighted Average Grant Date Fair Value end of period | $ / shares	$ 2

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Stock-Based Compensation - Schedule of Stock-based Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Sep. 30, 2022
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Total Stock-based compensation expense	$ 1,539	$ 2,384
Research and Development
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Total Stock-based compensation expense	575	855
Selling, General and Administrative
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Total Stock-based compensation expense	$ 964	$ 1,529

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Income Taxes - Additional Information (Details)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Income Tax [Line Items]
Effective tax rate	0.00%	0.00%
Maximum
Income Tax [Line Items]
Testing period for ownership change	3 years
Minimum
Income Tax [Line Items]
Percentage of shift in stock ownership to determine whether ownership change occurred	50.00%
Percentage of shareholders ownership	5.00%

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Net Loss Per Share - Summary of Potentially Dilutive Securities Not Included in Calculation of Diluted Loss Per Share (Details) - shares	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Antidilutive securities not included in calculation of diluted loss per share	87,701,608	5,672,757
Stock Options To Purchase Common Stock
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Antidilutive securities not included in calculation of diluted loss per share	764,523	578,699
Restricted Stock Units (RSUs)
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Antidilutive securities not included in calculation of diluted loss per share	5,240,918	1,048,914
Common Stock Warrants and Pre-funded Warrants
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Antidilutive securities not included in calculation of diluted loss per share	51,178,041	2,421,597
Common Stock Issuable Upon Conversion of Convertible Notes
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Antidilutive securities not included in calculation of diluted loss per share	30,518,126	1,623,547