QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
(Address of principal executive office) | (Zip Code) |
Title of Each Class | Trading Symbol | Name of Each Exchange on Which Registered | ||||||||||||
Large accelerated filer | o | Accelerated filer | o | |||||||||||
x | x | |||||||||||||
o |
Class | Outstanding November 6, 2023 | |||||||
Common Stock, $0.0005 par value |
PAGE | ||||||||
Notes to Condensed Consolidated Financial Statements | 11 | |||||||
Unregistered Sales of Equity Securities and Use of Proceeds | ||||||||
September 30, 2023 | December 31, 2022 | ||||||||||
ASSETS | |||||||||||
Current assets | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Marketable securities, available for sale | |||||||||||
Accounts receivable, net | |||||||||||
Inventory, net | |||||||||||
Prepaid expenses and other current assets | |||||||||||
Total current assets | |||||||||||
Property, plant and equipment, net | |||||||||||
Prepaid expenses, net of current portion | |||||||||||
Operating lease right-of-use asset, net | |||||||||||
Intangible assets, net | |||||||||||
Goodwill | |||||||||||
Deferred tax asset | |||||||||||
Other assets | |||||||||||
TOTAL ASSETS | $ | $ | |||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
Current liabilities | |||||||||||
Accounts payable | $ | $ | |||||||||
Accrued diagnostic services | |||||||||||
Accrued advertising and other allowances | |||||||||||
Finance lease liabilities | |||||||||||
Operating lease liabilities | |||||||||||
Deferred revenue | |||||||||||
Income tax payable | |||||||||||
Other current liabilities | |||||||||||
Total current liabilities | |||||||||||
Non-current liabilities: | |||||||||||
Deferred revenue, net of current portion | |||||||||||
Deferred tax liability, net | |||||||||||
Unsecured convertible promissory notes, net | |||||||||||
Unsecured convertible promissory notes, net of discount of $ | |||||||||||
Due to sellers (see Note 3) | |||||||||||
Finance lease liabilities, net of current portion | |||||||||||
Operating lease liabilities, net of current portion |
Total non-current liabilities | |||||||||||
Total liabilities | |||||||||||
COMMITMENTS AND CONTINGENCIES | |||||||||||
Stockholders’ equity | |||||||||||
Preferred stock authorized | |||||||||||
Common stock authorized | |||||||||||
Additional paid-in capital | |||||||||||
Retained earnings | |||||||||||
Treasury stock, at cost, | ( | ( | |||||||||
Accumulated other comprehensive income | ( | ||||||||||
Total stockholders’ equity | |||||||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | $ |
For the three months ended | For the nine months ended | ||||||||||||||||||||||
September 30, 2023 | September 30, 2022 | September 30, 2023 | September 30, 2022 | ||||||||||||||||||||
Revenues, net | $ | $ | $ | $ | |||||||||||||||||||
Cost of revenues | |||||||||||||||||||||||
Gross profit | |||||||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||
Diagnostic expenses | |||||||||||||||||||||||
General and administration | |||||||||||||||||||||||
Research and development | |||||||||||||||||||||||
Total operating expenses | |||||||||||||||||||||||
(Loss) income from operations | ( | ( | |||||||||||||||||||||
Interest income, net | |||||||||||||||||||||||
Interest expense | ( | ( | ( | ( | |||||||||||||||||||
Change in fair value of investment securities | ( | ||||||||||||||||||||||
Other income (loss) | ( | ( | |||||||||||||||||||||
(Loss) income from operations before income taxes | ( | ( | |||||||||||||||||||||
Income tax benefit (expense) | ( | ( | |||||||||||||||||||||
(Loss) income from operations after income taxes | ( | ( | |||||||||||||||||||||
Net (loss) income | $ | ( | $ | $ | ( | $ | |||||||||||||||||
Other comprehensive (loss) income: | |||||||||||||||||||||||
Unrealized gain (loss) on marketable debt securities | ( | ( | ( | ( | |||||||||||||||||||
Total comprehensive (loss) income | $ | ( | $ | $ | ( | $ | |||||||||||||||||
Earnings per share: | |||||||||||||||||||||||
Basic | $ | ( | $ | $ | ( | $ | |||||||||||||||||
Diluted | $ | ( | $ | $ | ( | $ | |||||||||||||||||
Weighted average common shares outstanding: | |||||||||||||||||||||||
Basic | |||||||||||||||||||||||
Diluted |
For the Three Months Ended September 30, 2023 | |||||||||||||||||||||||||||||||||||||||||
Common Stock Shares Outstanding | Par Value | Additional Paid in Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Income | Total | |||||||||||||||||||||||||||||||||||
Balance as of July 1, 2023 | $ | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||
Issuance of common stock to convert outstanding convertible notes | — | — | — | ||||||||||||||||||||||||||||||||||||||
Issuance of common stock upon exercise of warrant | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Unrealized gain on marketable debt securities | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||
Stock-based compensation (including $ | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
Balance as of September 30, 2023 | $ | $ | $ | $ | ( | $ | ( | $ |
For the Three Months Ended September 30, 2022 | |||||||||||||||||||||||||||||||||||||||||
Common Stock Shares Outstanding | Par Value | Additional Paid in Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Loss | Total | |||||||||||||||||||||||||||||||||||
Balance as of July 1, 2022 | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||
Repurchase of common shares | ( | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||
Treasury shares repurchased to satisfy tax withholding obligations | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||
Issuance of common shares upon cashless exercise of stock options | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Unrealized loss on marketable debt securities | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Balance as of September 30, 2022 | $ | $ | $ | $ | ( | $ | ( | $ |
For the Nine Months Ended September 30, 2023 | |||||||||||||||||||||||||||||||||||||||||
Common Stock Shares Outstanding | Par Value | Additional Paid in Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Income (Loss) | Total | |||||||||||||||||||||||||||||||||||
Balance as of January 1, 2023 | $ | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||
Issuance of common stock in asset acquisition | — | — | — | ||||||||||||||||||||||||||||||||||||||
Repurchases of common shares | ( | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||
Issuance of common stock to convert outstanding convertible notes | — | — | — | ||||||||||||||||||||||||||||||||||||||
Issuance of common stock upon exercise of warrants | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Issuance of common stock upon stock options cashless exercise | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Issuance of warrants with unsecured promissory note | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Treasury shares repurchased to satisfy tax withholding obligations | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||
Unrealized loss on marketable debt securities | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||
Stock-based compensation (including $ | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
Balance as of September 30, 2023 | $ | $ | $ | $ | ( | $ | ( | $ |
For the Nine Months Ended September 30, 2022 | |||||||||||||||||||||||||||||||||||||||||
Common Stock Shares Outstanding | Par Value | Additional Paid in Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Loss | Total | |||||||||||||||||||||||||||||||||||
Balance as of January 1, 2022 | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||
Issuance of common shares for debt conversion | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Treasury shares repurchased to satisfy tax withholding obligations | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||
Repurchase of common shares | ( | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||
Cash dividends | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
Unrealized loss on marketable debt securities, net of taxes | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||
Issuance of common shares upon cashless exercise of stock options | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Balance as of September 30, 2022 | $ | $ | $ | $ | ( | $ | ( | $ |
For the nine months ended | |||||||||||
September 30, 2023 | September 30, 2022 | ||||||||||
Cash flows from operating activities | |||||||||||
Net (loss) income | $ | ( | $ | ||||||||
Adjustments to reconcile net income to net cash (used in) provided by operating activities: | |||||||||||
Realized (gain) loss on marketable debt securities | ( | ||||||||||
Depreciation and amortization | |||||||||||
Accretion of debt discount | |||||||||||
Amortization on operating lease right-of-use assets | |||||||||||
Loss on sale of assets | |||||||||||
Stock-based compensation expense | |||||||||||
Change in fair value of investment securities | |||||||||||
Accounts receivable allowances | |||||||||||
Inventory valuation reserve | ( | ||||||||||
Bad debt expenses, direct write-off | |||||||||||
Changes in operating assets and liabilities: | |||||||||||
Accounts receivable | ( | ( | |||||||||
Inventory | ( | ( | |||||||||
Prepaid expenses and other current assets | ( | ||||||||||
Deferred tax asset | ( | ( | |||||||||
Other assets | ( | ||||||||||
Accounts payable and accrued expenses | ( | ( | |||||||||
Accrued diagnostic services | ( | ( | |||||||||
Accrued advertising and other allowances | ( | ||||||||||
Deferred revenue | ( | ||||||||||
Deferred tax liability | ( | ||||||||||
Lease liabilities | ( | ( | |||||||||
Income tax payable | ( | ||||||||||
Other current liabilities | ( | ||||||||||
Net cash (used in) provided by operating activities | ( | ||||||||||
Cash flows from investing activities | |||||||||||
Business acquisitions, escrow received | |||||||||||
Business acquisitions, net of cash acquired | ( | ||||||||||
Purchase of marketable securities | ( | ( | |||||||||
Proceeds from maturities of marketable securities | |||||||||||
Proceeds from sales of marketable securities | |||||||||||
Proceeds from dispositions of property and other assets, net | |||||||||||
Capital expenditures | ( | ( | |||||||||
Net cash (used in) provided by investing activities | ( | ||||||||||
Cash flows from financing activities | |||||||||||
Proceeds from issuance of secured note payable | |||||||||||
Proceeds from exercise of warrants | |||||||||||
Repurchase of common stock for payment of statutory taxes due on cashless exercise of stock option | ( | ( | |||||||||
Repurchases of common shares | ( | ( | |||||||||
Repayment of note payable | ( | ||||||||||
Payment of dividends | ( | ||||||||||
Net cash provided by (used in) financing activities | ( | ||||||||||
(Decrease) increase in cash and cash equivalents | ( | ||||||||||
Cash and cash equivalents, at the beginning of the period | |||||||||||
Cash and cash equivalents, at the end of the period | $ | $ | |||||||||
Supplemental disclosures: | |||||||||||
Cash paid for income taxes | $ | $ | |||||||||
Interest payment on the promissory notes | $ | $ | |||||||||
Supplemental disclosure of non-cash investing and financing activities: | |||||||||||
Stock-based compensation included in prepaid expenses | $ | $ | |||||||||
Issuance of common shares for debt conversion | $ | $ | |||||||||
Net unrealized loss (gain), investments in marketable debt securities | $ | $ | ( | ||||||||
Assets obtained in exchange for new finance lease obligations | $ | $ | |||||||||
Issuance of warrants with unsecured promissory note | $ | $ | |||||||||
Common stock issued in asset acquisition | $ | $ |
As of September 30, 2023 | |||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
Corporate obligations | $ | $ | $ | $ | |||||||||||||||||||
$ | $ | $ | $ |
As of December 31, 2022 | |||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
U.S. government obligations | $ | $ | $ | $ | |||||||||||||||||||
Corporate obligations | |||||||||||||||||||||||
$ | $ | $ | $ |
September 30, 2023 | December 31, 2022 | Estimated Useful Life (in years) | |||||||||||||||
Trade names | $ | $ | |||||||||||||||
Proprietary intellectual property | |||||||||||||||||
Customer relationships | |||||||||||||||||
CLIA license | |||||||||||||||||
Less: accumulated amortization | ( | ( | |||||||||||||||
Total intangible assets, net | $ | $ |
Remaining periods in the year ended December 31, 2023 | $ | ||||
Year ended December 31, 2024 | |||||
Year ended December 31, 2025 | |||||
Year ended December 31, 2026 | |||||
Year ended December 31, 2027 | |||||
Thereafter | |||||
$ |
Number of Shares | Weighted Average Exercise Price | Weighted Average Remaining Contractual Life (in years) | Total Intrinsic Value | ||||||||||||||||||||
Outstanding as of January 1, 2023 | $ | $ | |||||||||||||||||||||
Granted | — | ||||||||||||||||||||||
Cashless exercised | ( | — | — | ||||||||||||||||||||
Forfeited | ( | — | — | ||||||||||||||||||||
Outstanding as of September 30, 2023 | $ | $ | |||||||||||||||||||||
Options vested and exercisable | $ | $ |
Number of Shares | Weighted Average Exercise Price | Weighted Average Remaining Contractual Life (in years) | |||||||||||||||
Outstanding as of January 1, 2023 | $ | ||||||||||||||||
Granted | |||||||||||||||||
Exercised | $ | ( | — | ||||||||||||||
Outstanding as of September 30, 2023 | $ | $ | |||||||||||||||
Warrants vested and exercisable | $ | $ |
For the three months ended | For the nine months ended | ||||||||||||||||||||||
September 30, 2023 | September 30, 2022 | September 30, 2023 | September 30, 2022 | ||||||||||||||||||||
Operating leases: | |||||||||||||||||||||||
Operating lease cost | $ | $ | $ | $ | |||||||||||||||||||
Total operating lease expense | $ | $ | $ | $ | |||||||||||||||||||
Finance leases: | |||||||||||||||||||||||
Interest lease cost | $ | $ | $ | $ | |||||||||||||||||||
Depreciation expense | |||||||||||||||||||||||
Total finance lease expense | $ | $ | $ | $ | |||||||||||||||||||
For the nine months ended | |||||||||||
September 30, 2023 | September 30, 2022 | ||||||||||
Operating cash flows used in operating leases | $ | ( | $ | ( | |||||||
September 30, 2023 | December 31, 2022 | ||||||||||
Weighted-average remaining lease term – operating leases (in years) | |||||||||||
Weighted-average remaining lease term – finance leases (in years) | — | ||||||||||
Weighted-average discount rate – operating leases | % | % | |||||||||
Weighted-average discount rate – finance leases | % | — | |||||||||
Finance lease asset (1) | $ | — |
Operating Lease | Finance Lease | Total | |||||||||||||||
Remaining periods in the year ended December 31, 2023 | $ | $ | $ | ||||||||||||||
Year Ended December 31, 2024 | |||||||||||||||||
Year Ended December 31, 2025 | |||||||||||||||||
Year Ended December 31, 2026 | |||||||||||||||||
Year Ended December 31, 2027 | |||||||||||||||||
Thereafter | |||||||||||||||||
Total lease payments | |||||||||||||||||
Less present value discount | ( | ( | ( | ||||||||||||||
Total | $ | $ | $ | ||||||||||||||
For the three months ended | For the nine months ended | ||||||||||||||||||||||
September 30, 2023 | September 30, 2022 | September 30, 2023 | September 30, 2022 | ||||||||||||||||||||
Net revenues | |||||||||||||||||||||||
Diagnostic services | $ | $ | $ | $ | |||||||||||||||||||
Consumer products | |||||||||||||||||||||||
Consolidated net revenue | |||||||||||||||||||||||
Cost of revenue | |||||||||||||||||||||||
Diagnostic services | |||||||||||||||||||||||
Consumer products | |||||||||||||||||||||||
Consolidated cost of revenue | |||||||||||||||||||||||
Depreciation and amortization expense | |||||||||||||||||||||||
Diagnostic services | |||||||||||||||||||||||
Consumer products | |||||||||||||||||||||||
Total Depreciation and amortization expense | |||||||||||||||||||||||
Operating and other expenses | |||||||||||||||||||||||
Income (loss) from operations, before income taxes | |||||||||||||||||||||||
Diagnostic services | ( | ||||||||||||||||||||||
Consumer products | ( | ( | ( | ( | |||||||||||||||||||
Unallocated corporate | ( | ( | ( | ( | |||||||||||||||||||
Total (loss) income from operations, before income taxes | ( | ( | |||||||||||||||||||||
Income tax benefit (expense) | ( | ( | |||||||||||||||||||||
Total (loss) income from operations, after income taxes | ( | ( | |||||||||||||||||||||
Net (loss) income | $ | ( | $ | $ | ( | $ |
September 30, 2023 | December 31, 2022 | ||||||||||
ASSETS | |||||||||||
Diagnostic services | $ | $ | |||||||||
Consumer products | |||||||||||
Unallocated corporate | |||||||||||
Total assets | $ | $ |
For the three months ended | For the nine months ended | ||||||||||||||||||||||
September 30, 2023 | September 30, 2022 | September 30, 2023 | September 30, 2022 | ||||||||||||||||||||
Net (loss) income - basic | $ | ( | $ | $ | ( | $ | |||||||||||||||||
Interest on unsecured convertible promissory note | |||||||||||||||||||||||
Net (loss) income - diluted | $ | ( | $ | $ | ( | $ | |||||||||||||||||
Weighted average shares outstanding - basic | |||||||||||||||||||||||
Diluted shares- Stock Options | |||||||||||||||||||||||
Diluted shares- Stock Warrants | |||||||||||||||||||||||
Unsecured convertible promissory note | |||||||||||||||||||||||
Weighted average shares outstanding - diluted |
For the three months ended | For the nine months ended | |||||||||||||||||||||||||
Anti-dilutive securities | September 30, 2023 | September 30, 2022 | September 30, 2023 | September 30, 2022 | ||||||||||||||||||||||
Common stock purchase warrants | ||||||||||||||||||||||||||
Stock Options | ||||||||||||||||||||||||||
Anti-dilutive securities |
For the three months ended | For the nine months ended | ||||||||||||||||||||||
September 30, 2023 | September 30, 2022 | September 30, 2023 | September 30, 2022 | ||||||||||||||||||||
GAAP net (loss) income (1) | $ | (5,141) | $ | 968 | $ | (8,031) | $ | 20,907 | |||||||||||||||
Interest, net | 274 | 176 | 742 | 512 | |||||||||||||||||||
Income tax (benefit) expense | (1,644) | 809 | (3,104) | 7,190 | |||||||||||||||||||
Depreciation and amortization | 3,143 | 2,352 | 4,435 | 3,601 | |||||||||||||||||||
EBITDA | (3,368) | 4,305 | (5,958) | 32,210 | |||||||||||||||||||
Share-based compensation expense | 744 | 1,969 | 3,998 | 2,979 | |||||||||||||||||||
Non-cash rent expense (2) | 99 | 22 | 111 | 32 | |||||||||||||||||||
Bad debt expense | — | — | 74 | 250 | |||||||||||||||||||
Adjusted EBITDA | $ | (2,525) | $ | 6,296 | $ | (1,775) | $ | 35,471 |
Period | Total Number of Shares Purchased (1) | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (1) | ||||||||||||||||||||||
July 1, 2023 through July 31, 2023 | — | $ | — | — | $ | 5,411,119 | ||||||||||||||||||||
August 1, 2023 through August 31, 2023 | — | — | — | 5,411,119 | ||||||||||||||||||||||
September 1, 2023 through September 30, 2023 | — | — | — | 5,411,119 | ||||||||||||||||||||||
Total | — | $ | — | — | $ | 5,411,119 |
Exhibit No. | Description | |||||||
3.1 | ||||||||
3.2 | ||||||||
31.1 | ||||||||
31.2 | ||||||||
32.1 | ||||||||
32.2 | ||||||||
101. INS# | Inline XBRL Instance Document | |||||||
101.SCH# | Inline XBRL Taxonomy Extension Schema Document | |||||||
101.CAL# | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |||||||
101.DEF# | Inline XBRL Taxonomy Extension Definition Linkbase Document | |||||||
101.LAB# | Inline XBRL Taxonomy Extension Label Linkbase Document | |||||||
101.PRE# | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |||||||
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
ProPhase Labs, Inc. | ||||||||
By: | /s/ Ted Karkus | |||||||
Ted Karkus | ||||||||
Chairman of the Board and Chief Executive Officer (Principal Executive Officer) | ||||||||
Date: November 13, 2023 | ||||||||
By: | /s/ Robert A Morse Jr. | |||||||
Robert A. Morse Jr. | ||||||||
Chief Financial Officer (Principal Accounting and Financial Officer) | ||||||||
Date: November 13, 2023 |
Date: November 13, 2023 | By: | /s/ Ted Karkus | ||||||
Ted Karkus | ||||||||
Chairman of the Board and Chief Executive Officer (Principal Executive Officer) |
Date: November 13, 2023 | By: | /s/ Robert Morse | ||||||
Robert Morse | ||||||||
Chief Accounting Officer (Principal Accounting and Financial Officer) |
/s/ Ted Karkus | |||||
Ted Karkus | |||||
Chairman of the Board and Chief Executive Officer (Principal Executive Officer) | |||||
November 13, 2023 |
/s/ Robert Morse | |||||
Robert Morse | |||||
Chief Accounting Officer (Principal Accounting and Financial Officer) | |||||
November 13, 2023 |
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Preferred stock, authorized (in shares) | 1,000,000 | 1,000,000 |
Preferred stock, par value (in dollars per share) | $ 0.0005 | $ 0.0005 |
Preferred stock, issued (in shares) | 0 | 0 |
Preferred Stock, outstanding (in shares) | 0 | 0 |
Common stock, authorized (in shares) | 50,000,000 | 50,000,000 |
Common stock, par value (in dollars per share) | $ 0.0005 | $ 0.0005 |
Common stock, outstanding (in shares) | 18,045,029 | 16,210,776 |
Treasury stock (in shares) | 18,940,967 | 18,126,970 |
2023 Note | ||
Discount | $ 301 | $ 0 |
Condensed Consolidated Statements of Stockholders' Equity (Parenthetical) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended |
---|---|---|
Sep. 30, 2023 |
Sep. 30, 2023 |
|
Statement of Stockholders' Equity [Abstract] | ||
Prepaid expense | $ 1,138 | $ 1,138 |
Organization and Business |
9 Months Ended |
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Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Business | Organization and Business ProPhase Labs, Inc. (“ProPhase”, “we”, “us”, “our” or the “Company”) is a diversified company that offers a range of services including genomics testing, diagnostic testing and contract manufacturing. We are also focused on licensing, developing and commercializing novel drugs, dietary supplements, compounds and diagnostics. We currently conduct our operations through two operating segments: diagnostic services and consumer products. Until late fiscal year 2020, we were engaged primarily in the research, development, manufacture, distribution, marketing and sale of OTC consumer healthcare products and dietary supplements in the United States. However, commencing in December 2020, we also began offering COVID-19 and prepared to validate other Respiratory Pathogen Panel (“RPP”) molecular tests through our diagnostic services business. In August 2021 we began offering personal genomics products and services and in July 2022 we began focusing on the licensing, development and commercialization of novel drugs, dietary supplements, compounds and diagnostics. Our wholly owned subsidiary, ProPhase Diagnostics, Inc. (“ProPhase Diagnostics”), which was formed on October 9, 2020, offers a broad array of clinical diagnostic and testing services at its Clinical Laboratory Improvement Amendments (“CLIA”) certified laboratories including polymerase chain reaction (“PCR”) testing for COVID-19. Critical to COVID-19 testing, we provide fast turnaround times for results. We also offer rapid antigen testing for COVID-19. On October 23, 2020, we acquired Confucius Plaza Medical Laboratory Corp. (“CPM”), which included a non-operating but certified 4,000 square foot CLIA accredited laboratory located in Old Bridge, New Jersey. In December 2020, we expanded our diagnostic service business with the build-out of a second, larger CLIA accredited laboratory in Garden City, New York. Operations at this second facility commenced in January 2021. On August 10, 2021, we acquired Nebula Genomics, Inc. (“Nebula”), a privately owned personal genomics company, through our new wholly owned subsidiary, ProPhase Precision Medicine, Inc. (“ProPhase Precision”) (see Note 3, Business Acquisitions). ProPhase Precision focuses on genomics sequencing technologies, a comprehensive method for analyzing entire genomes, including the genes and chromosomes in DNA. The data obtained from genomic sequencing can be used to help identify inherited disorders and tendencies, help predict disease risk, help identify expected drug response, and characterize genetic mutations, including those that drive cancer progression. Our wholly owned subsidiary, ProPhase BioPharma, Inc. (“PBIO”) was formed on June 28, 2022, for the licensing, development and commercialization of novel drugs, dietary supplements and compounds beginning with Equivir (dietary supplement) and Equivir G (Rx). In July 2022, PBIO announced a second licensing agreement for two small molecule PIM kinase inhibitors, Linebacker LB-1 and LB-2, with plans to pursue development and commercialization of LB-1 as a cancer co-therapy. In January 2023, the Company acquired exclusive rights to the BE-Smart Esophageal Pre-Cancer Diagnostic Screening Test and related intellectual property assets. Our wholly owned subsidiary, Pharmaloz Manufacturing, Inc. (“PMI”), is a full-service contract manufacturer and private label developer of a broad range of non-GMO, organic and natural-based cough drops and lozenges and OTC drug and dietary supplement products. We also develop and market dietary supplements under the TK Supplements® brand.
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Summary of Significant Accounting Policies |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation The unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial statements and the rules of the Securities and Exchange Commission (“SEC”) applicable to interim financial statements, and therefore do not include all disclosures that might normally be required for financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The accompanying unaudited condensed consolidated financial statements have been prepared by management without audit and should be read in conjunction with our audited consolidated financial statements, including the notes thereto, appearing in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022. In the opinion of management, all adjustments necessary for a fair presentation of the consolidated financial position, consolidated results of operations and other comprehensive loss and consolidated cash flows, for the periods indicated, have been made. The results of operations for the three and nine months ended September 30, 2023 are not necessarily indicative of operating results that may be achieved over the course of the full year. Use of Estimates The preparation of condensed consolidated financial statements and the accompanying notes thereto, in conformity with GAAP, requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and reported amounts of revenues and expenses during the respective reporting periods. Examples include revenue recognition and the impact of the variable consideration of diagnostic test reimbursement rates, the provision for uncollectible receivables and billing errors, allowances, slow moving and/or dated inventory and associated provisions, the potential impairment of long-lived assets, stock based compensation valuations, income tax asset valuations and assumptions related to accrued advertising. Our estimates and assumptions are based on historical experience, current trends and other factors that management believes to be relevant at the time the condensed consolidated financial statements are prepared. Management reviews the accounting policies, assumptions, estimates and judgments on a quarterly basis. Actual results could differ from those estimates. Fair Value of Financial Instruments We measure assets and liabilities at fair value based on expected exit price as defined by the authoritative guidance on fair value measurements, which represents the amount that would be received on the sale date of an asset or paid to transfer a liability, as the case may be, in an orderly transaction between market participants. As such, fair value may be based on assumptions that market participants would use in pricing an asset or liability. The authoritative guidance on fair value measurements establishes a consistent framework for measuring fair value on either a recurring or nonrecurring basis whereby inputs, used in valuation techniques, are assigned a hierarchical level. The following are the hierarchical levels of inputs to measure fair value: •Level 1: Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. •Level 2: Inputs reflect quoted prices for identical assets or liabilities in markets that are not active; quoted prices for similar assets or liabilities in active markets; inputs other than quoted prices that are observable for the assets or liabilities; or inputs that are derived principally from or corroborated by observable market data by correlation or other means. •Level 3: Unobservable inputs reflecting the Company’s assumptions incorporated in valuation techniques used to determine fair value. These assumptions are required to be consistent with market participant assumptions that are reasonably available. The carrying amounts of our financial assets and liabilities, such as cash, accounts receivable, accounts payable, and unsecured note payable, approximate their fair values because of the short-term nature of these instruments. Following is a description of the valuation methodologies used for assets measured at fair value. There have been no changes in the methodologies used at September 30, 2023 and December 31, 2022. Corporate bonds: Valued using pricing model maximizing the use of observable inputs for similar securities. This includes basing value on yields currently available on comparable securities of issuers with similar credit ratings. U.S. government securities: Valued using pricing models maximizing the use of observable inputs for similar securities. We account for our marketable securities at fair value, with the net unrealized gains or losses of marketable debt securities reported as a component of accumulated other comprehensive income or loss and marketable equity securities change in fair value reported on the condensed consolidated statements of operation and comprehensive income (loss). The components of marketable securities are as follows (in thousands):
There were no transfers of marketable debt securities between Levels 1, 2 or 3 for the three and nine months ended September 30, 2023 and 2022. Goodwill Goodwill represents the excess of the fair value of the consideration transferred over the fair value of the underlying identifiable assets and liabilities acquired in a business combination. Goodwill and intangible assets deemed to have an indefinite life are not amortized, but instead are assessed for impairment annually. Additionally, if an event or change in circumstances occurs that would more likely than not reduce the fair value of the reporting unit below its carrying value, we would evaluate goodwill at that time. During the three and nine months ended September 30, 2023, the Company received $0.5 million in connection with terms from an escrow agreement from the purchase of Nebula. The receipt of this escrow payment reduced the excess consideration paid for Nebula and was recorded as a reduction of the Goodwill at the time of receipt. Revenue Recognition The Company recognizes revenues in accordance with FASB Accounting Standards Codification ("ASC") 606, Revenues from Contracts with Customers. The Company recognizes revenue that represents the transfer of promised goods or services to customers at an amount that reflects the consideration that is expected to be received in exchange for those goods or services. The Company recognizes revenue when performance obligations with our customers have been satisfied. At contract inception, we evaluate the contract to determine if revenue should be recognized using the following five steps: (1) identify the contract with the customer; (2) identify the performance obligations; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations; and (5) recognize revenue when (or as) the entity satisfies a performance obligation. Income Taxes The Company recognizes deferred tax liabilities and assets based on the differences between the financial statement carrying amounts and the tax bases of assets and liabilities, using enacted tax rates in effect in the years the differences are expected to reverse. The provision for, or benefit from, income taxes includes deferred taxes resulting from the temporary differences in income for financial and tax purposes using the liability method. Future realization of deferred income tax assets requires sufficient taxable income within the carryback, carryforward period available under tax law. We evaluate, on a quarterly basis whether, based on all available evidence, it is probable that the deferred income tax assets are realizable. Valuation allowances are established when it is more likely than not that the tax benefit of the deferred tax asset will not be realized. The evaluation, as prescribed by ASC 740-10, “Income Taxes,” includes the consideration of all available evidence, both positive and negative, regarding historical operating results including recent years with reported losses, the estimated timing of future reversals of existing taxable temporary differences, estimated future taxable income exclusive of reversing temporary differences and carryforwards, and potential tax planning strategies which may be employed to prevent an operating loss or tax credit carryforward from expiring unused. The Company accounts for uncertainties in income taxes under the provisions of FASB ASC 740-10-05 (the “Subtopic”). The Subtopic clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements. The Subtopic prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The Subtopic provides guidance on the de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. Recently Issued Accounting Standards, Adopted On January 1, 2023, the Company adopted Accounting Standards Update ("ASU") 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”) ASU 2016-13 requires an impairment model (known as the current expected credit loss (“CECL”) model) that is based on expected losses rather than incurred losses. Under the new guidance, each reporting entity should estimate an allowance for expected credit losses, which is intended to result in more timely recognition of losses. This model replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial assets measured at amortized cost, accounts receivable and available for sale debt securities and applies to some off-balance sheet credit exposures. In February 2020, the FASB issued ASU 2020-02, Financial Instruments - Credit Losses (Topic 326), which amends the effective date of the original pronouncement for smaller reporting companies. ASU 2016-13 and its amendments will be effective for the Company for interim and annual periods in fiscal years beginning after December 15, 2022. The adoption of ASU 2016-13 did not have a material impact on the Company's consolidated financial statements. In August 2023, the FASB issued ASU 2023-05, "Business Combinations - Joint Venture Formations (Subtopic 805-60): Recognition and Initial Measurement." The new guidance applies to the formation of a joint venture and requires a joint venture to initially measure all contributions received upon its formation at fair value. The guidance is intended to reduce diversity in practice and is applicable to joint venture entities with a formation date on or after January 1, 2025 on a prospective basis. The Company currently does not have any transactions that fall under the scope of ASU 2023-05; therefore, the adoption of ASU 2023-05 is not expected to have an impact on the Company's consolidated financial statements.
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Asset Acquisition |
9 Months Ended |
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Sep. 30, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Asset Acquisition | Asset Acquisition Stella Diagnostics - Asset Purchase Agreement On December 15, 2022, the Company entered into an Asset Purchase Agreement (the “Stella Purchase Agreement”), with Stella Diagnostics Inc. (“Stella”) and Stella DX, LLC (“Stella DX” and, together with Stella, the “Stella Sellers”), pursuant to which, on January 3, 2023, the Company purchased all of the assets, rights and interests of the Stella Sellers and their affiliates pertaining to the Stella Sellers’ BE-Smart Esophageal Pre-Cancer Diagnostic Screening Test and certain clinical assets, including all intellectual property rights (the “Stella Purchased Assets”). As consideration for the Stella Purchased Assets, at closing, the Company (i) paid to the Stella Sellers $3.5 million in cash, minus (a) the Secured Note Amount of $0.5 million, (b) the Liability Payoff Amount of $1.6 million and (c) the Promissory Note Payoff Amount of $0.4 million, and (ii) issued to Stella DX 100,000 shares of common stock, par value $0.0005 per share, of the Company at a value of $10.00 per share. Total consideration paid was $4.6 million. The Secured Note Amount of $0.5 million and the Promissory Note Payoff of $0.4 million were paid in 2022. The balance of the consideration was paid at closing during the nine months ended September 30, 2023. In addition to the consideration paid at closing, the Company will issue shares of common stock valued at $2.0 million (the “Milestone Stock”) to the Stella Sellers upon a Commercialization Event (as defined in the Stella Purchase Agreement). The Milestone Stock was recorded at closing as a non-current liability at its fair value of $2.0 million and will be marked to market until settlement through other income or expense in the consolidated statements of operations. Also, the Company is required to pay to the Stella Sellers for each of the seven calendar years during the seven year period commencing on the first day of the calendar year following the date of the Commercialization Event, a non-refundable, non-creditable royalty of 5% of the Adjusted Gross Margin (as defined in the Stella Purchase Agreement) for such Annual Period. The asset purchase does not qualify as a business combination under FASB ASC 805, Business Combinations, and has therefore been accounted for as an asset acquisition. In connection with the Stella Purchased Assets, the Company incurred $0.2 million in transaction costs, which were capitalized into the purchase price of the Stella Purchased Assets. The total purchase price for the Stella Purchased Assets was $6.8 million, which was allocated to the proprietary technology intangible asset acquired. The Company is amortizing the acquired intangible asset on a straight-line basis over its estimated useful life of five years.
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Intangible Assets, Net |
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Intangible Assets, Net | Intangible Assets, Net During the nine months ended September 30, 2023, the Company acquired intangible assets of $6.8 million included with proprietary intellectual property, in connection with the acquisition of the Stella Purchased Assets. See Note 3. Intangible assets as of September 30, 2023 and December 31, 2022 consisted of the following (in thousands):
Amortization expense for acquired intangible assets was $0.8 million and $0.5 million during the three months ended September 30, 2023 and 2022, respectively. Amortization expense for acquired intangible assets was $2.3 million and $2.0 million during the nine months ended September 30, 2023 and 2022, respectively. The estimated future amortization expense of acquired intangible assets as of September 30, 2023 is as follows (in thousands):
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Unsecured Promissory Notes Payable |
9 Months Ended |
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Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Unsecured Promissory Notes Payable | Unsecured Promissory Notes Payable 2023 Unsecured Promissory Note Payable On January 26, 2023, the Company issued an unsecured promissory note (the “2023 Note”) and guaranty for an aggregate principal amount of $7.6 million. The 2023 Note is due and payable on January 27, 2026, the third anniversary of the date on which the 2023 Note was funded (the “Closing Date”), and accrues interest at a rate of 10% per year from the Closing Date, payable on a quarterly basis, until the 2023 Note is repaid in full. The Company has the right to prepay the 2023 Note at any time after the Closing Date and prior to the maturity date without premium or penalty upon providing seven days’ written notice to the note holder. Repayment of the 2023 Note has been guaranteed by the Company’s wholly-owned subsidiary, Pharmaloz Manufacturing, Inc. In addition to the 2023 Note, the Company issued warrants to purchase 76,000 shares of the Company's common stock at an exercise price of $9.00 for a term of 5 year, vesting immediately. The warrants were valued at $400,000 fair value,using the Black-Scholes option pricing model to calculate the grant date fair value of the warrants, with the following assumptions: no dividend yield, expected volatility of 81.5%, risk free interest rate of 3.62% and expected warrant life of 5 years. The relative fair value of the warrant was $380,000 and was recorded as a discount to the note payable in accordance with FASB ASC 835-30-25, Recognition, and is being accreted over the term of the note payable for financial statement purposes. As of September 30, 2023, the unpaid principal balance of the 2023 Note was $7.2 million, net of debt discount of $0.3 million. 2020 Unsecured Convertible Notes Payable On September 15, 2020, the Company issued two unsecured, partially convertible, promissory notes (the “September 2020 Notes”) for an aggregate principal amount of $10 million to two investors (collectively, the “Lenders”). On February 28, 2022, the Company entered into a letter agreement (the “Letter Agreement”) with one of the Lenders providing for the payoff of its September 2020 Note in the principal amount of $2,000,000. Pursuant to the terms of the Letter Agreement, (i) the Lender converted $600,000 of the principal amount due to him under his September 2020 Note into 200,000 shares of Company common stock (the “Conversion Shares”) at a price of $3.00 per share as provided for under the terms of the September 2020 Note (the “Conversion”), (ii) the Company paid to the Lender $1,441,000 in cash, representing $1,400,000 of the remaining principal under the September 2020 Note following the Conversion plus $41,000 in accrued and outstanding interest under the September 2020 Note, and (iii) the Company repurchased the Conversion Shares at a price of $5.75 per share for an aggregate amount of $1,150,000 (for a total aggregate payment to the Lender of $2,591,000). On September 10, 2023, the Lender converted the remaining $2.4 million principal into 800,000 shares of the Company's common stock. At September 30, 2023, the September 2020 Note was settled in full. For the three months ended September 30, 2023 and 2022, interest expense, including accretion of debt discount was $0.3 million and $0.2 million, respectively. For the nine months ended September 30, 2023 and 2022, interest expense, including accretion of debt discount was $0.8 million and $0.6 million, respectively.
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Stockholders’ Equity |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders’ Equity | Stockholders’ Equity Our authorized capital stock consists of 50 million shares of common stock, $0.0005 par value, and one million shares of preferred stock, $0.0005 par value. Preferred Stock The preferred stock authorized under our certificate of incorporation may be issued from time to time in one or more series. As of September 30, 2023 and December 31, 2022, no shares of preferred stock have been issued. Common Stock Dividends No dividends have been declared during the nine months ended September 30, 2023. On February 14, 2022, the board of directors of the Company declared a special cash dividend of $0.30 per share on the Company’s common stock, paid on March 10, 2022, in the amount of $4.6 million to holders of record of the Company’s common stock on March 1, 2022. On May 9, 2022, the board of directors of the Company declared a special cash dividend of $0.30 per share on the Company’s common stock, paid on June 4, 2022, in the amount of $4.7 million to holders of record of the Company’s common stock as of May 25, 2022. Common Stock Stock Repurchase Program On March 15, 2023, the Company announced that its board of directors had approved a new stock repurchase program. Under the stock repurchase program, the Company is authorized to repurchase up to $6.0 million of its outstanding shares of common stock from time to time, over a nine-month period. The number of shares to be repurchased and the timing of the repurchases, if any, will depend on a number of factors, including, but not limited to, price, trading volume and general market conditions, along with the Company’s working capital requirements and general business conditions. The board of directors will re-evaluate the program from time to time and may authorize adjustments to its terms. Following the Commencement Date (as defined in the stock repurchase agreement), and for a period of nine months thereafter, repurchases may be made through open market transactions (based on prevailing market prices), privately negotiated transactions, block trades, or any combination thereof, in accordance with applicable federal securities laws, including Rule 10b-18 of the Securities Exchange Act of 1934, as amended. There were 69,628 shares repurchased under this new program during the nine months ended September 30, 2023. On September 8, 2021, the board of directors (the “Board”) approved a stock repurchase program under which the Company was authorized to repurchase up to $6.0 million of its outstanding shares of common stock from time to time, over a nine-month period. This stock repurchase program expired on March 30, 2022. During the nine months ended September 30, 2022, the Company did not make any common shares repurchase under this stock repurchase program. The 2022 Directors’ Equity Compensation Plan On May 19, 2022, the stockholders of the Company approved the 2022 Directors’ Equity Compensation Plan (the “2022 Directors’ Plan”) at the 2022 Annual Meeting of Stockholders of the Company (the “2022 Annual Meeting”). The 2022 Directors’ Plan amended and restated the Company’s Amended and Restated 2010 Directors’ Equity Compensation Plan and provided for an increase in the number of shares reserved for issuance under the plan by 300,000 shares and for the adjustment of the per share exercise price of stock options granted under the 2022 Plan in the event of any change in the outstanding shares of common stock of the Company as a result of, among other things, any distribution or special dividend to stockholders of shares, cash or other property (other than regular cash dividends). On June 16, 2023, the stockholders of the Company approved the Amended and Restated 2022 Directors’ Equity Compensation Plan (the “Amended 2022 Directors’ Plan”) at the 2023 Annual Meeting of Stockholders of the Company. The Amended 2022 Directors’ Plan provides for an increase in the number of shares reserved for issuance under such plan by 150,000 shares. As of September 30, 2023, there were 210,000 shares of common stock available to be issued under the 2022 Directors’ Plan. There were 120,000 options issued under this plan during the nine months ended September 30, 2023. The 2010 Directors’ Equity Compensation Plan On May 20, 2021, the stockholders of the Company approved the Amended and Restated 2010 Directors’ Equity Compensation Plan (the “Amended 2010 Directors’ Plan”) at the 2021 Annual Meeting of Stockholders of the Company (the “2021 Annual Meeting”). The Amended 2010 Directors’ Plan authorized the issuance of up to 775,000 shares of common stock. This plan was amended and restated on April 11, 2022 (to become the 2022 Directors' Plan), subject to stockholder approval, which was obtained at the 2022 Annual Meeting. The 2022 Equity Compensation Plan On May 19, 2022, the stockholders of the Company approved the 2022 Equity Compensation Plan (the “2022 Plan”) at the 2022 Annual Meeting. The 2022 Plan amended and restated the Company’s Amended and Restated 2010 Equity Compensation Plan and provided for an increase in the number of shares reserved for issuance under the plan by 1,000,000 shares and for the adjustment of the per share exercise price of stock options granted under the 2022 Plan in the event of any change in the outstanding shares of common stock of the Company as a result of, among other things, any distribution or special dividend to stockholders of shares, cash or other property (other than regular cash dividends). On June 16, 2023, the stockholders of the Company approved the Amended and Restated 2022 Equity Compensation Plan (the “Amended 2022 Plan”) at the 2023 Annual Meeting of Stockholders of the Company. The Amended 2022 Plan provides for an increase in the number of shares reserved for issuance under such plan by 700,000 shares. As of September 30, 2023, there were 862,035 shares of common stock available to be issued under the 2022 Plan. During the nine months ended September 30, 2023, there were 1,005,000 shares subject to stock options issued under the 2022 Plan. The 2010 Equity Compensation Plan On May 20, 2021, the stockholders of the Company approved the Amended and Restated 2010 Equity Compensation Plan (the “Amended 2010 Plan”) at the 2021 Annual Meeting. The Amended 2010 Plan authorized the issuance of up to 4,900,000 shares of common stock. This plan was amended and restated on April 11, 2022 (to become the 2022 Plan), subject to stockholder approval, which was obtained at the 2022 Annual Meeting. The 2018 Stock Incentive Plan On April 12, 2018, the Company's stockholders approved the 2018 Stock Incentive Plan (the “2018 Stock Plan”). The 2018 Stock Plan provides for the grant of incentive stock options to eligible employees of the Company, and for the grant of non-statutory stock options to eligible employees, directors and consultants. The 2018 Stock Plan provides that the total number of shares that may be issued pursuant to the 2018 Stock Plan is 2,300,000 shares. At April 12, 2018, all 2,300,000 shares had been granted in the form of stock options to Ted Karkus (the “CEO Option”), our Chief Executive Officer. The 2018 Stock Plan required certain proportionate adjustments to be made to the stock options granted under the 2018 Stock Plan upon the occurrence of certain events, including a special distribution (whether in the form of cash, shares, other securities, or other property) in order to maintain parity. Accordingly, the Compensation Committee of the board of directors, as required by the terms of the 2018 Stock Plan, adjusted the exercise price of the CEO Option in connection with each special cash dividend paid by the Company proportionately to the amount of the dividend paid. The final exercise price of the CEO Option was $0.60 per share after the latest special cash dividend paid on June 3, 2022. During the nine months ended September 30, 2023 and 2022, 1,100,000 and 0 stock options were exercised under the 2018 Stock Plan. No share based compensation expense will be recognized in forward periods related to the 2018 Stock Plan. Inducement Option Awards There were no issuances of inducements awards during the nine months ended September 30, 2023. During the nine months ended September 30, 2022, the Company issued an inducement award to a prospective employee to purchase up to 250,000 shares of the Company’s common stock at an exercise price of $13.00, the closing price of the common stock on the date of grant. The award vested 125,000 shares on the date of grant and the remaining portion will vest 25% per year for the next two years. The award expires on the seventh anniversary of the grant date. All inducement awards have been granted outside of the Company’s equity compensation plans. Summary of all option grants During the nine months ended September 30, 2023, the Company granted options to purchase 1,125,000 shares of the Company’s common stock to various employees and consultants. The options grant date fair value was valued at $4.1 million, using the Black-Scholes option pricing model to calculate the grant-date fair value of the options with the following assumptions: no dividend yield, expected volatility of 80.0%, risk free interest rate of 3.7% and expected life of 4.7 years. The fair value of stock options for employees are expensed over the vesting term in accordance with the terms of the related stock option agreements and are expensed over the terms of the consulting agreement for consultants. The following table summarizes stock option activity during the nine months ended September 30, 2023 (in thousands, except per share data).
The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying options and the closing stock price of $4.37 for the Company’s common stock on September 30, 2023. During the nine months ended September 30, 2023 certain holders of stock options elected to exercise their stock options pursuant to a cashless exercise provision resulting in the net issuance of 603,881 shares of common stock and the return of 744,369 shares to the Company. The Company also made a cash payment of approximately $5.4 million to repurchase 603,881 shares of treasury stock to satisfy tax withholding obligations related to the cashless exercise of these stock options. On April 4, 2023, the Company granted, in the aggregate, 550,000 stock options to its CEO and CFO under the 2022 Plan with an exercise price of $9.00. The options vest over a five-year period in equal annual installments. The estimated fair value of these options at the date of grant was $2.7 million, which will be expensed over the vesting term. On April 7, 2023, the Company granted 250,000 stock options to an employee under the 2022 Plan with an exercise price of $10.00. The options vest 25% on the date of grant with the remaining 75% vesting over a 3-year period in equal annual installments. The incremental fair value resulting from this modification was $99,000, which will be expensed over the new vesting term. Stock Warrants On January 12, 2023, the Company issued warrants to an advisory firm to purchase 50,000 shares of the Company's common stock at an exercise price of $10.00 for a term of 5 years, vesting immediately. The warrants were valued at 0.3 million fair value, using the Black-Scholes option pricing model to calculate the grant date fair value of the warrants, with the following assumptions: no dividend yield, expected volatility of 80.9%, risk free interest rate of 3.53% and expected warrant life of 5 years. These warrants will be expensed over the 1 year term of the engagement which ends on December 31, 2023. On January 27, 2023, the Company issued five-year warrants to purchase 76,000 shares of the Company's common stock with the unsecured promissory note (see Note 5). On April 6, 2023, the Company issued 250,000 five year warrants to a consultant that vested at the time of grant and an exercise price of $9.00. The estimated fair value of these options at the date of grant were $1.4 million, using the Black-Scholes option pricing model to calculate the grant date fair value of the warrants, with the following assumptions: no dividend yield, expected volatility of 80.4%, risk free interest rate of 3.59% and expected warrant life of 5 years. which was initially recognized as a prepaid expense and to be expensed over the term of the consulting agreement. As of September 30, 2023, $1.1 million was remained in the prepaid expense and other current assets on the condensed consolidated balance sheet. Between August and September 2023, the Company received $1.2 million from the exercise of outstanding warrants with an exercise price at $3.00 per share. The Company issued approximately 400,000 shares of common stock upon these warrant exercises. The following table summarizes warrant activity during the nine months ended September 30, 2023 (in thousands, except per share data):
The Company recognized $0.7 million and $2.0 million of share-based compensation expense during the three months ended September 30, 2023 and 2022, respectively. The Company recognized $2.9 million and $3.0 million of share-based compensation expense during the nine months ended September 30, 2023 and 2022, respectively. The Company will recognize an aggregate of approximately $6.6 million of remaining share-based compensation expense related to outstanding stock options and warrants over a weighted average period of 4.5 years.
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Income Taxes |
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Sep. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income TaxesWe recognize tax assets and liabilities for future tax consequences related to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and for net operating loss carryforwards. Management evaluated the deferred tax assets for recoverability using a consistent approach that considers the relative impact of negative and positive evidence, including historical profitability and projections of future reversals of temporary differences and future taxable income. We are required to establish a valuation allowance for deferred tax assets if management determines, based on available evidence at the time the determination is made, that it is not more likely than not that some portion or all of the deferred tax assets will be realized. As of September 30, 2023 the Company has net deferred tax liabilities for federal and combined states jurisdictions compared to net deferred tax assets with a full valuation allowance as of December 31, 2022. The decrease in deferred tax assets with a corresponding decrease in valuation allowance against those assets as of September 30, 2023 is primarily due to utilization of net operating losses. The Company has net deferred tax assets in other states jurisdictions where we maintain a full valuation allowance. Judgment is required to estimate forecasted future taxable income, which may be impacted by future business developments, actual results, tax initiatives, legislative, and other economic factors. The Company will continue to monitor income levels and potential changes to its operating and tax model, and other legislative or global developments in its determination.The Company’s effective tax rate for the nine months ended September 30, 2023 is 27.88% and it is primarily driven by federal tax at 21%, state taxes at 2.11%, offset by permanent differences, the R&D credit and state deferred tax benefits. |
Commitments and Contingencies |
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Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Manufacturing Agreement The Company and its wholly owned subsidiary, PMI, entered into a manufacturing agreement (the “Manufacturing Agreement”) with Mylan Consumer Healthcare Inc. (formerly known as Meda Consumer Healthcare Inc.) (“MCH”) and Mylan Inc. (together with MCH, “Mylan” in connection with the asset purchase agreement we entered into with Mylan in 2017. Pursuant to the terms of the Manufacturing Agreement, Mylan (or an affiliate or designee) purchased the inventory of the Company’s Cold-EEZE® brand and product line, and PMI agreed to manufacture certain products for Mylan, as described in the Manufacturing Agreement, at prices that reflect current market conditions for such products and include an agreed upon mark-up on our costs. On May 1, 2021, the Manufacturing Agreement was assigned by Mylan to Nurya Brands, Inc. (“Nurya”) in connection with Nurya’s acquisitions of certain assets from Mylan, including the Cold-EEZE® brand and product line. Unless terminated sooner by the parties, the Manufacturing Agreement was to remain in effect until March 29, 2023. Thereafter, the Manufacturing Agreement could be renewed by Nurya for up to four successive one-year periods by providing notice of its intent to renew not less than 90 days prior to the expiration of the then-current term. On November 15, 2022, the Company was notified by Nurya of its election to renew the Manufacturing agreement for one year. As a result, the Manufacturing Agreement will remain in effect until March 29, 2024. License Agreements Linebacker LB1 and LB2 On July 19, 2022, the Company through its wholly-owned subsidiary ProPhase BioPharma entered into a License Agreement (the “License Agreement”) with Global BioLife, Inc. (the “Licensor”), with an effective date of July 18, 2022 (the “Linebacker Effective Date”), pursuant to which it acquired from Licensor a worldwide exclusive right and license under certain patents identified in the License Agreement (the “Licensed Patents”) and know-how (collectively, the “Licensed IP”) to exploit any compound covered by the Licensed Patents (the “Licensed Compound”), including Linebacker LB1 and LB2, and any product comprising or containing a Licensed Compound (“Licensed Products”) in the treatment of cancer, inflammatory diseases or symptoms, memory-related syndromes, diseases or symptoms including dementia and Alzheimer’s Disease (the “Field”). Under the terms of the License Agreement, the Licensor reserves the right, solely for itself and for GRDG Sciences, LLC (“GRDG”) to use the Licensed Compound and Licensed IP solely for research purposes inside the Field and for any purpose outside the Field. Under the terms of License Agreement, the Company is required to pay to Licensor a one-time upfront license fee of $50,000 within 10 days of the Linebacker Effective Date and must pay an additional $900,000 following the achievement of a first Phase 3 study which may be required by FDA for the first Licensed Product and an additional $1 million upon the receipt of regulatory approval of a New Drug Application (NDA) for the first Licensed Product. During the term of the License Agreement, the Company is also required to pay to Licensor 3% royalties on Net Revenue (as defined in the License Agreement) of each Licensed Product, but no less than the minimum royalty of $250,000 of Net Revenue per year minus any royalty payments for any required third party licenses. Equivir In March 2023, we commenced patient enrollment in a randomized, placebo-controlled clinical trial of Equivir to evaluate its effect on upper respiratory tract infections. Vedic Lifesciences, a leading clinical research organization, is contracted to conduct the combination prophylactic and therapeutic study, which will be conducted at 12 sites. We currently anticipate trial completion in the third quarter of 2023 and anticipate launching Equivir (dietary supplement) in the United States toward the end of 2023. BE-Smart Esophageal Pre-Cancer Diagnostics Screening Test In March 2023, and in connection with the Asset acquisition of Stella,, we announced a collaboration for the continued development of its BE-Smart Esophageal Pre-Cancer diagnostic screening test. We are pursuing initial commercialization of the BE-Smart test as an LDT (Laboratory Developed Test) and RUO (Research Use Only) for the third quarter of 2023 with full commercialization backed by insurance expected by mid-2024. In connection with the License Agreements, for the three and nine months ended September 30, 2023, the Company has incurred approximately $0.4 million and $1.1 million in general and administrative expenses that are included in the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for the three and nine months ended September 30, 2023. No clinical studies have begun under this agreement. Litigation In the normal course of our business, we may be named as a defendant in legal proceedings. It is our policy to vigorously defend litigation or to enter into a reasonable settlement where management deems it appropriate.
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Leases |
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Leases | Leases Operating Leases On October 23, 2020, we completed the acquisition of CPM, which included the acquisition of a 4,000 square foot CLIA accredited laboratory located in Old Bridge, New Jersey, which was owned by CPM (which is now known as ProPhase Diagnostics NJ, Inc.). The lease was renewed in February 2023, for an additional 36 months until February 2026. The monthly base rent remains the same at $5,500 per month. The lease renewal resulted in the recognition of an additional right-of-use asset and operating lease liability of $170,000, respectively during the nine months ended September 30, 2023. New York Second Floor Lease On December 8, 2020, the Company entered into a Lease Agreement (the “NY Second Floor Lease”) with BRG Office L.L.C. and Unit 2 Associates L.L.C. (the “Landlord”), pursuant to which the Company leases certain premises located on the second floor (the “Second Floor Leased Premises”) of 711 Stewart Avenue, Garden City, New York (the “Building”). The Second Floor Leased Premises serve as the Company’s second location and corporate headquarters, offering a wide range of laboratory testing services for diagnosis, screening and evaluation of diseases, including COVID-19 and Respiratory Pathogen Panel Molecular tests. On June 10, 2022, we entered into a First Amendment to the NY Second Floor Lease (the “Second Floor Lease Amendment”). The Second Floor Lease Amendment amends the NY Second Floor Lease to provide that any uncured default by the Company or any of its affiliate under the NY First Floor Lease (defined below) will constitute a default by the Company under the NY Second Floor Lease. New York First Floor Lease On June 10, 2022, the Company entered into a second Lease Agreement (the “NY First Floor Lease”) with Landlord, pursuant to which the Company leases approximately 4,516 sq. feet located on the first floor (the “NY First Floor Leased Premises”) of the Building. As described above, the Company currently leases space on the second floor of the Building. The First Floor Leased Premises will be used to expand the Company’s in-house lab capabilities to include traditional clinical testing across multiple specialty areas and Next Generation Sequencing (NGS) to perform Whole Genome Sequencing (WGS) and an array of genetic diagnostic test offerings for both clinical and research purposes. The NY First Floor Lease became effective as of June 10, 2022 and will commence upon the date of the Landlord’s substantial completion of certain improvements to the NY First Floor Leased Premises (the “First Floor Commencement Date”), as set forth in the NY First Floor Lease, targeted to be approximately five months from the execution of the NY First Floor Lease. The initial term of the NY First Floor Lease will expire on July 15, 2031, unless sooner terminated as provided in the NY First Floor Lease. During the nine months ended September 30, 2023, the Company recognized additional $0.8 million right-of-use asset and operating lease liability for the NY First Floor Lease. At September 30, 2023 and December 31, 2022, the Company had operating lease liabilities for the New York and New Jersey leases of approximately $5.3 million and $4.6 million, respectively, and and right of use assets of approximately $4.7 million and $4.1 million, respectively, which were included in the condensed consolidated balance sheet. Finance Leases On April 19, 2023, the Company entered into a master lease agreement for a laboratory equipment (the "First Equipment Lease") with a vendor. The First Equipment Lease has a 5-year term and is recognized as a finance lease under ASC 842. The present value of the minimum future obligations of $1.5 million was calculated based on an interest rate of 8.0%, which was recognized in finance lease liabilities in the condensed consolidated balance sheet. On July 21, 2023, the Company entered into a master lease agreement for a laboratory equipment (the "Second Equipment Lease") with a vendor. The Second Equipment Lease has a 4-year term and is recognized as a finance lease under ASC 842. The present value of the minimum future obligations of $5.1 million was calculated based on an interest rate of 7.4%, which was recognized in finance lease liabilities in the condensed consolidated balance sheet. On September 26, 2023, the Company entered into a master lease agreement for a laboratory equipment (the "Third Equipment Lease") with a vendor. The Third Equipment Lease has a 3-year term starting on the commencement date. The commencement date is when the equipment is shipped and installed, then the Company will provide Final Acceptance Certificate to the vendor. As of September 30, 2023, the commencement date was not established, therefore, there was no fixed assets or finance lease liability recognized in the condensed consolidated balance sheet. Depreciation and interest expense related to the Equipment Lease was $440,000 and $510,000 for the three and nine months ended September 30, 2023, respectively. The following summarizes quantitative information about our operating and finance leases (amounts in thousands):
Other information related to the Company’s leases is shown below (dollar amounts in thousands):
(1) As of September 30, 2023, the Company had recorded accumulated depreciation of approximately $368,000 for the finance lease asset. Finance lease assets are recorded within property and equipment, net on the Company’s condensed consolidated balance sheets. Minimum lease payments over the remaining lease periods as of September 30, 2023 are as follows (amounts in thousands):
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Leases | Leases Operating Leases On October 23, 2020, we completed the acquisition of CPM, which included the acquisition of a 4,000 square foot CLIA accredited laboratory located in Old Bridge, New Jersey, which was owned by CPM (which is now known as ProPhase Diagnostics NJ, Inc.). The lease was renewed in February 2023, for an additional 36 months until February 2026. The monthly base rent remains the same at $5,500 per month. The lease renewal resulted in the recognition of an additional right-of-use asset and operating lease liability of $170,000, respectively during the nine months ended September 30, 2023. New York Second Floor Lease On December 8, 2020, the Company entered into a Lease Agreement (the “NY Second Floor Lease”) with BRG Office L.L.C. and Unit 2 Associates L.L.C. (the “Landlord”), pursuant to which the Company leases certain premises located on the second floor (the “Second Floor Leased Premises”) of 711 Stewart Avenue, Garden City, New York (the “Building”). The Second Floor Leased Premises serve as the Company’s second location and corporate headquarters, offering a wide range of laboratory testing services for diagnosis, screening and evaluation of diseases, including COVID-19 and Respiratory Pathogen Panel Molecular tests. On June 10, 2022, we entered into a First Amendment to the NY Second Floor Lease (the “Second Floor Lease Amendment”). The Second Floor Lease Amendment amends the NY Second Floor Lease to provide that any uncured default by the Company or any of its affiliate under the NY First Floor Lease (defined below) will constitute a default by the Company under the NY Second Floor Lease. New York First Floor Lease On June 10, 2022, the Company entered into a second Lease Agreement (the “NY First Floor Lease”) with Landlord, pursuant to which the Company leases approximately 4,516 sq. feet located on the first floor (the “NY First Floor Leased Premises”) of the Building. As described above, the Company currently leases space on the second floor of the Building. The First Floor Leased Premises will be used to expand the Company’s in-house lab capabilities to include traditional clinical testing across multiple specialty areas and Next Generation Sequencing (NGS) to perform Whole Genome Sequencing (WGS) and an array of genetic diagnostic test offerings for both clinical and research purposes. The NY First Floor Lease became effective as of June 10, 2022 and will commence upon the date of the Landlord’s substantial completion of certain improvements to the NY First Floor Leased Premises (the “First Floor Commencement Date”), as set forth in the NY First Floor Lease, targeted to be approximately five months from the execution of the NY First Floor Lease. The initial term of the NY First Floor Lease will expire on July 15, 2031, unless sooner terminated as provided in the NY First Floor Lease. During the nine months ended September 30, 2023, the Company recognized additional $0.8 million right-of-use asset and operating lease liability for the NY First Floor Lease. At September 30, 2023 and December 31, 2022, the Company had operating lease liabilities for the New York and New Jersey leases of approximately $5.3 million and $4.6 million, respectively, and and right of use assets of approximately $4.7 million and $4.1 million, respectively, which were included in the condensed consolidated balance sheet. Finance Leases On April 19, 2023, the Company entered into a master lease agreement for a laboratory equipment (the "First Equipment Lease") with a vendor. The First Equipment Lease has a 5-year term and is recognized as a finance lease under ASC 842. The present value of the minimum future obligations of $1.5 million was calculated based on an interest rate of 8.0%, which was recognized in finance lease liabilities in the condensed consolidated balance sheet. On July 21, 2023, the Company entered into a master lease agreement for a laboratory equipment (the "Second Equipment Lease") with a vendor. The Second Equipment Lease has a 4-year term and is recognized as a finance lease under ASC 842. The present value of the minimum future obligations of $5.1 million was calculated based on an interest rate of 7.4%, which was recognized in finance lease liabilities in the condensed consolidated balance sheet. On September 26, 2023, the Company entered into a master lease agreement for a laboratory equipment (the "Third Equipment Lease") with a vendor. The Third Equipment Lease has a 3-year term starting on the commencement date. The commencement date is when the equipment is shipped and installed, then the Company will provide Final Acceptance Certificate to the vendor. As of September 30, 2023, the commencement date was not established, therefore, there was no fixed assets or finance lease liability recognized in the condensed consolidated balance sheet. Depreciation and interest expense related to the Equipment Lease was $440,000 and $510,000 for the three and nine months ended September 30, 2023, respectively. The following summarizes quantitative information about our operating and finance leases (amounts in thousands):
Other information related to the Company’s leases is shown below (dollar amounts in thousands):
(1) As of September 30, 2023, the Company had recorded accumulated depreciation of approximately $368,000 for the finance lease asset. Finance lease assets are recorded within property and equipment, net on the Company’s condensed consolidated balance sheets. Minimum lease payments over the remaining lease periods as of September 30, 2023 are as follows (amounts in thousands):
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Segment Information |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information | Segment InformationThe Company has identified two operating segments, diagnostic services and consumer products, based on the manner in which the Company’s CEO as CODM assesses performance and allocates resources across the organization. The operating segments are organized in a manner that depicts the difference in revenue generating synergies that include the separate processes, profit generation and growth of each segment. The diagnostic services segment provides COVID-19 diagnostic information services to a broad range of customers in the United States, including health plans, third party payers and government organizations. The consumer products segment is engaged in the research, development, manufacture, distribution, marketing and sale of OTC consumer healthcare products and dietary supplements in the United States and also provides personal genomics products and services. The unallocated corporate expenses mainly included professional fees associated with the public company. The following table is a summary of segment information for three and nine months ended September 30, 2023 and 2022 (amounts in thousands):
The following table is a summary of segment information as of September 30, 2023 and December 31, 2022 (amounts in thousands):
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Earnings Per Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share | Earnings Per ShareBasic earnings per share (“EPS”) excludes dilution and is computed by dividing income available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or otherwise result in the issuance of common stock that shared in the earnings of the entity. Diluted EPS also utilizes the treasury stock method which prescribes a theoretical buy back of shares from the theoretical proceeds of all options outstanding during the period, and the if-converted method for convertible debt. The following is a reconciliation of the weighted average number of common shares outstanding used in calculating basic and diluted net loss per share (in thousands):
The following table represents the number of securities excluded from the income per share computation as a result of their anti-dilutive effect (in thousands):
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Subsequent Events |
9 Months Ended |
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Sep. 30, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent EventsThe Company has evaluated subsequent events through November 13, 2023, which is the date the consolidated financial statements were available to be issued. There were no subsequent events that required adjustment to or disclosure in the condensed consolidated financial statements. |
Summary of Significant Accounting Policies (Policies) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of Presentation | Basis of Presentation The unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial statements and the rules of the Securities and Exchange Commission (“SEC”) applicable to interim financial statements, and therefore do not include all disclosures that might normally be required for financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The accompanying unaudited condensed consolidated financial statements have been prepared by management without audit and should be read in conjunction with our audited consolidated financial statements, including the notes thereto, appearing in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022. In the opinion of management, all adjustments necessary for a fair presentation of the consolidated financial position, consolidated results of operations and other comprehensive loss and consolidated cash flows, for the periods indicated, have been made. The results of operations for the three and nine months ended September 30, 2023 are not necessarily indicative of operating results that may be achieved over the course of the full year.
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Use of Estimates | Use of Estimates The preparation of condensed consolidated financial statements and the accompanying notes thereto, in conformity with GAAP, requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and reported amounts of revenues and expenses during the respective reporting periods. Examples include revenue recognition and the impact of the variable consideration of diagnostic test reimbursement rates, the provision for uncollectible receivables and billing errors, allowances, slow moving and/or dated inventory and associated provisions, the potential impairment of long-lived assets, stock based compensation valuations, income tax asset valuations and assumptions related to accrued advertising. Our estimates and assumptions are based on historical experience, current trends and other factors that management believes to be relevant at the time the condensed consolidated financial statements are prepared. Management reviews the accounting policies, assumptions, estimates and judgments on a quarterly basis. Actual results could differ from those estimates.
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Fair Value of Financial Instruments | Fair Value of Financial Instruments We measure assets and liabilities at fair value based on expected exit price as defined by the authoritative guidance on fair value measurements, which represents the amount that would be received on the sale date of an asset or paid to transfer a liability, as the case may be, in an orderly transaction between market participants. As such, fair value may be based on assumptions that market participants would use in pricing an asset or liability. The authoritative guidance on fair value measurements establishes a consistent framework for measuring fair value on either a recurring or nonrecurring basis whereby inputs, used in valuation techniques, are assigned a hierarchical level. The following are the hierarchical levels of inputs to measure fair value: •Level 1: Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. •Level 2: Inputs reflect quoted prices for identical assets or liabilities in markets that are not active; quoted prices for similar assets or liabilities in active markets; inputs other than quoted prices that are observable for the assets or liabilities; or inputs that are derived principally from or corroborated by observable market data by correlation or other means. •Level 3: Unobservable inputs reflecting the Company’s assumptions incorporated in valuation techniques used to determine fair value. These assumptions are required to be consistent with market participant assumptions that are reasonably available. The carrying amounts of our financial assets and liabilities, such as cash, accounts receivable, accounts payable, and unsecured note payable, approximate their fair values because of the short-term nature of these instruments. Following is a description of the valuation methodologies used for assets measured at fair value. There have been no changes in the methodologies used at September 30, 2023 and December 31, 2022. Corporate bonds: Valued using pricing model maximizing the use of observable inputs for similar securities. This includes basing value on yields currently available on comparable securities of issuers with similar credit ratings. U.S. government securities: Valued using pricing models maximizing the use of observable inputs for similar securities. We account for our marketable securities at fair value, with the net unrealized gains or losses of marketable debt securities reported as a component of accumulated other comprehensive income or loss and marketable equity securities change in fair value reported on the condensed consolidated statements of operation and comprehensive income (loss). The components of marketable securities are as follows (in thousands):
There were no transfers of marketable debt securities between Levels 1, 2 or 3 for the three and nine months ended September 30, 2023 and 2022.
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Goodwill | Goodwill Goodwill represents the excess of the fair value of the consideration transferred over the fair value of the underlying identifiable assets and liabilities acquired in a business combination. Goodwill and intangible assets deemed to have an indefinite life are not amortized, but instead are assessed for impairment annually. Additionally, if an event or change in circumstances occurs that would more likely than not reduce the fair value of the reporting unit below its carrying value, we would evaluate goodwill at that time. During the three and nine months ended September 30, 2023, the Company received $0.5 million in connection with terms from an escrow agreement from the purchase of Nebula. The receipt of this escrow payment reduced the excess consideration paid for Nebula and was recorded as a reduction of the Goodwill at the time of receipt.
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Revenue Recognition | Revenue Recognition The Company recognizes revenues in accordance with FASB Accounting Standards Codification ("ASC") 606, Revenues from Contracts with Customers. The Company recognizes revenue that represents the transfer of promised goods or services to customers at an amount that reflects the consideration that is expected to be received in exchange for those goods or services. The Company recognizes revenue when performance obligations with our customers have been satisfied. At contract inception, we evaluate the contract to determine if revenue should be recognized using the following five steps: (1) identify the contract with the customer; (2) identify the performance obligations; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations; and (5) recognize revenue when (or as) the entity satisfies a performance obligation.
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Income Taxes | Income Taxes The Company recognizes deferred tax liabilities and assets based on the differences between the financial statement carrying amounts and the tax bases of assets and liabilities, using enacted tax rates in effect in the years the differences are expected to reverse. The provision for, or benefit from, income taxes includes deferred taxes resulting from the temporary differences in income for financial and tax purposes using the liability method. Future realization of deferred income tax assets requires sufficient taxable income within the carryback, carryforward period available under tax law. We evaluate, on a quarterly basis whether, based on all available evidence, it is probable that the deferred income tax assets are realizable. Valuation allowances are established when it is more likely than not that the tax benefit of the deferred tax asset will not be realized. The evaluation, as prescribed by ASC 740-10, “Income Taxes,” includes the consideration of all available evidence, both positive and negative, regarding historical operating results including recent years with reported losses, the estimated timing of future reversals of existing taxable temporary differences, estimated future taxable income exclusive of reversing temporary differences and carryforwards, and potential tax planning strategies which may be employed to prevent an operating loss or tax credit carryforward from expiring unused. The Company accounts for uncertainties in income taxes under the provisions of FASB ASC 740-10-05 (the “Subtopic”). The Subtopic clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements. The Subtopic prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The Subtopic provides guidance on the de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition.
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Recently Issued Accounting Standards, Adopted | Recently Issued Accounting Standards, Adopted On January 1, 2023, the Company adopted Accounting Standards Update ("ASU") 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”) ASU 2016-13 requires an impairment model (known as the current expected credit loss (“CECL”) model) that is based on expected losses rather than incurred losses. Under the new guidance, each reporting entity should estimate an allowance for expected credit losses, which is intended to result in more timely recognition of losses. This model replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial assets measured at amortized cost, accounts receivable and available for sale debt securities and applies to some off-balance sheet credit exposures. In February 2020, the FASB issued ASU 2020-02, Financial Instruments - Credit Losses (Topic 326), which amends the effective date of the original pronouncement for smaller reporting companies. ASU 2016-13 and its amendments will be effective for the Company for interim and annual periods in fiscal years beginning after December 15, 2022. The adoption of ASU 2016-13 did not have a material impact on the Company's consolidated financial statements. In August 2023, the FASB issued ASU 2023-05, "Business Combinations - Joint Venture Formations (Subtopic 805-60): Recognition and Initial Measurement." The new guidance applies to the formation of a joint venture and requires a joint venture to initially measure all contributions received upon its formation at fair value. The guidance is intended to reduce diversity in practice and is applicable to joint venture entities with a formation date on or after January 1, 2025 on a prospective basis. The Company currently does not have any transactions that fall under the scope of ASU 2023-05; therefore, the adoption of ASU 2023-05 is not expected to have an impact on the Company's consolidated financial statements.
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Summary of Significant Accounting Policies (Tables) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Fair Value of Financial Instruments | The components of marketable securities are as follows (in thousands):
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Intangible Assets, Net (Tables) |
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Intangible Assets, Net | Intangible assets as of September 30, 2023 and December 31, 2022 consisted of the following (in thousands):
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Schedule of Estimated Future Amortization Expense of Acquired Intangible Assets | The estimated future amortization expense of acquired intangible assets as of September 30, 2023 is as follows (in thousands):
|
Stockholders’ Equity (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Stock Options Activity | The following table summarizes stock option activity during the nine months ended September 30, 2023 (in thousands, except per share data).
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Schedule of Warrant Activity | The following table summarizes warrant activity during the nine months ended September 30, 2023 (in thousands, except per share data):
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Leases (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Quantitative Information About Operating Leases | The following summarizes quantitative information about our operating and finance leases (amounts in thousands):
Other information related to the Company’s leases is shown below (dollar amounts in thousands):
(1) As of September 30, 2023, the Company had recorded accumulated depreciation of approximately $368,000 for the finance lease asset. Finance lease assets are recorded within property and equipment, net on the Company’s condensed consolidated balance sheets.
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Schedule of Maturity of Operating Leases | Minimum lease payments over the remaining lease periods as of September 30, 2023 are as follows (amounts in thousands):
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Segment Information (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Segment Information | The following table is a summary of segment information for three and nine months ended September 30, 2023 and 2022 (amounts in thousands):
The following table is a summary of segment information as of September 30, 2023 and December 31, 2022 (amounts in thousands):
|
Earnings Per Share (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Basic and Diluted Net Loss Per Share | The following is a reconciliation of the weighted average number of common shares outstanding used in calculating basic and diluted net loss per share (in thousands):
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Schedule of Anti-dilutive Securities Excluded from the Income Per Share Computation | The following table represents the number of securities excluded from the income per share computation as a result of their anti-dilutive effect (in thousands):
|
Organization and Business - Narrative (Details) |
9 Months Ended | ||
---|---|---|---|
Sep. 30, 2023
Segment
|
Jul. 31, 2022
inhibitor
|
Oct. 23, 2020
ft²
|
|
Real Estate Properties [Line Items] | |||
Number of operating segments | Segment | 2 | ||
Number of inhibitors | inhibitor | 2 | ||
CLIA Accredited Laboratory | |||
Real Estate Properties [Line Items] | |||
Area of CLIA accredited laboratory (sq. ft.) | ft² | 4,000 |
Summary of Significant Accounting Policies - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended |
---|---|---|
Sep. 30, 2023 |
Sep. 30, 2023 |
|
Nebula | ||
Business Acquisition [Line Items] | ||
Business acquisitions, escrow received | $ 0.5 | $ 0.5 |
Asset Acquisition - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands |
9 Months Ended | ||
---|---|---|---|
Dec. 15, 2022 |
Sep. 30, 2023 |
Dec. 31, 2022 |
|
Business Acquisition [Line Items] | |||
Secured note amount | $ 500 | ||
Liability payoff amount | 1,600 | ||
Promissory note payoff amount | $ 400 | ||
Common stock, par value (in dollars per share) | $ 0.0005 | $ 0.0005 | $ 0.0005 |
Shares issued (in value per share) | $ 10.00 | ||
Consideration transferred | $ 4,600 | ||
Due to sellers (see Note 3) | $ 2,000 | $ 2,000 | $ 0 |
Useful life (in years) | 7 years | ||
Transaction costs | $ 200 | ||
Technology-Based Intangible Assets | |||
Business Acquisition [Line Items] | |||
Useful life (in years) | 5 years | ||
Purchase price | $ 6,800 | $ 6,800 | |
Stella Purchase Agreement | |||
Business Acquisition [Line Items] | |||
Payments for asset acquisition | $ 3,500 | ||
Stock issued during period (in shares) | 100,000 | ||
Royalty percent | 5.00% |
Intangible Assets, Net - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Dec. 15, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Finite-Lived Intangible Assets [Line Items] | |||||
Amortization of intangible assets | $ 0.8 | $ 0.5 | $ 2.3 | $ 2.0 | |
Technology-Based Intangible Assets | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Purchase price | $ 6.8 | $ 6.8 |
Intangible Assets, Net - Schedule of Intangible Assets, Net (Details) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
Dec. 15, 2022 |
---|---|---|---|
Finite-Lived Intangible Assets [Line Items] | |||
Finite-lived intangible assets | $ 19,101 | $ 12,297 | |
Estimated Useful Life (in years) | 7 years | ||
Less: accumulated amortization | (6,086) | (3,822) | |
Total intangible assets, net | 13,015 | 8,475 | |
Trade names | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-lived intangible assets | $ 5,550 | 5,550 | |
Estimated Useful Life (in years) | 15 years | ||
Proprietary intellectual property | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-lived intangible assets | $ 11,064 | 4,260 | |
Estimated Useful Life (in years) | 5 years | ||
Customer relationships | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-lived intangible assets | $ 1,180 | 1,180 | |
Estimated Useful Life (in years) | 1 year | ||
CLIA license | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-lived intangible assets | $ 1,307 | $ 1,307 | |
Estimated Useful Life (in years) | 3 years |
Intangible Assets, Net - Schedule of Estimated Future Amortization Expense of Acquired Intangible Assets (Details) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Remaining periods in the year ended December 31, 2023 | $ 682 | |
Year ended December 31, 2024 | 2,583 | |
Year ended December 31, 2025 | 2,583 | |
Year ended December 31, 2026 | 2,251 | |
Year ended December 31, 2027 | 1,731 | |
Thereafter | 3,185 | |
Total intangible assets, net | $ 13,015 | $ 8,475 |
Income Taxes - Narrative (Details) |
9 Months Ended |
---|---|
Sep. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Effective tax rate | 27.88% |
Effective tax rate, federal | 21.00% |
Effective tax rate, state taxes | 2.11% |
Leases - Narrative (Details) |
3 Months Ended | 9 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
Oct. 23, 2020
USD ($)
ft²
|
Sep. 30, 2023
USD ($)
|
Sep. 30, 2022
USD ($)
|
Sep. 30, 2023
USD ($)
|
Sep. 30, 2022
USD ($)
|
Sep. 26, 2023 |
Jul. 21, 2023
USD ($)
|
Apr. 19, 2023
USD ($)
|
Dec. 31, 2022
USD ($)
|
Jun. 10, 2022
ft²
|
|
Restructuring Cost and Reserve [Line Items] | ||||||||||
Operating lease, right-of-use asset | $ 4,680,000 | $ 4,680,000 | $ 4,059,000 | |||||||
Total | 5,292,000 | 5,292,000 | $ 4,600,000 | |||||||
Equipment lease, term (in years) | 3 years | 4 years | 5 years | |||||||
Present value of minimum future obligations | $ 7,290,000 | $ 7,290,000 | $ 5,100,000 | $ 1,500,000 | ||||||
Weighted-average discount rate – finance leases | 8.00% | 8.00% | 7.40% | 8.00% | ||||||
Total finance lease expense | $ 440,000 | $ 0 | $ 510,000 | $ 0 | ||||||
NY Lease | ||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||
Area of real estate property (sq. ft.) | ft² | 4,516 | |||||||||
Operating lease, right-of-use asset | 800,000 | 800,000 | ||||||||
Total | $ 800,000 | $ 800,000 | ||||||||
CPM | Old Bridge New Jersey | ||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||
Area of real estate property (sq. ft.) | ft² | 4,000 | |||||||||
Renewal term (in months) | 36 months | |||||||||
Monthly base rent | $ 5,500 | |||||||||
Operating lease, right-of-use asset | 170,000 | |||||||||
Total | $ 170,000 |
Leases - Schedule of Quantitative Information About Operating Leases (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |||||
---|---|---|---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
Jul. 21, 2023 |
Apr. 19, 2023 |
Dec. 31, 2022 |
|
Operating leases: | |||||||
Operating lease cost | $ 215 | $ 204 | $ 717 | $ 612 | |||
Total operating lease expense | 215 | 204 | 717 | 612 | |||
Finance leases: | |||||||
Interest lease cost | 122 | 0 | 142 | 0 | |||
Depreciation expense | 318 | 0 | 368 | 0 | |||
Total finance lease expense | $ 440 | $ 0 | 510 | 0 | |||
Operating cash flows used in operating leases | $ (606) | $ (580) | |||||
Weighted-average remaining lease term – operating leases (in years) | 7 years 8 months 12 days | 7 years 8 months 12 days | 8 years 6 months | ||||
Weighted-average remaining lease term – finance leases (in years) | 4 years | 4 years | |||||
Weighted-average discount rate – operating leases | 10.00% | 10.00% | 10.00% | ||||
Weighted-average discount rate – finance leases | 8.00% | 8.00% | 7.40% | 8.00% | |||
Finance lease asset | $ 6,201 | $ 6,201 |
Segment Information - Narrative (Details) |
9 Months Ended |
---|---|
Sep. 30, 2023
Segment
| |
Segment Reporting [Abstract] | |
Number of operating segments | 2 |
Earnings Per Share - Schedule of Basic and Diluted Net Loss Per Share (Details) - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Earnings Per Share [Abstract] | ||||
Net (loss) income - basic | $ (5,141) | $ 968 | $ (8,031) | $ 20,907 |
Interest on unsecured convertible promissory note | 0 | 201 | 0 | 635 |
Net (loss) income - diluted | $ (5,141) | $ 1,169 | $ (8,031) | $ 21,542 |
Weighted average shares outstanding - basic (in shares) | 17,175 | 15,898 | 16,924 | 15,712 |
Diluted shares - Stock Options (in shares) | 0 | 2,453 | 0 | 1,925 |
Diluted shares- Stock Warrants (in shares) | 0 | 1,097 | 0 | 1,067 |
Unsecured convertible promissory note (in shares) | 0 | 800 | 0 | 800 |
Weighted average shares outstanding - diluted (in shares) | 17,175 | 20,248 | 16,924 | 19,504 |
Earnings Per Share - Schedule of Anti-dilutive Securities Excluded from the Income Per Share Computation (Details) - shares shares in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities (in shares) | 4,120 | 825 | 4,120 | 1,065 |
Common stock purchase warrants | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities (in shares) | 831 | 455 | 831 | 455 |
Stock Options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities (in shares) | 3,289 | 370 | 3,289 | 610 |
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