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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Cancer Genetics Inc | NASDAQ:CGIX | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 4.61 | 4.56 | 4.63 | 0 | 01:00:00 |
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ý
|
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
|
|
|
Delaware
|
|
04-3462475
|
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
|
|
|
|
||
|
|
|
Item 1.
|
|
|
|
||
|
Consolidated Statements of Operations
and Other Comprehensive Loss
|
|
|
||
|
||
|
|
|
Item 2.
|
||
|
|
|
Item 3.
|
||
|
|
|
Item 4.
|
||
|
|
|
|
||
|
|
|
Item 1.
|
||
|
|
|
Item 1A.
|
||
|
|
|
Item 2.
|
||
|
|
|
Item 3.
|
||
|
|
|
Item 4.
|
||
|
|
|
Item 5.
|
||
|
|
|
Item 6.
|
||
|
|
|
|
|
|
|
March 31,
2018 |
|
December 31,
2017 |
||||
ASSETS
|
|
|
|
||||
CURRENT ASSETS
|
|
|
|
||||
Cash and cash equivalents
|
$
|
4,022
|
|
|
$
|
9,541
|
|
Accounts receivable, net of allowance for doubtful accounts of 2018 $7,003; 2017 $6,539
|
10,335
|
|
|
10,958
|
|
||
Assets held for sale
|
2,058
|
|
|
—
|
|
||
Other current assets
|
2,622
|
|
|
2,707
|
|
||
Total current assets
|
19,037
|
|
|
23,206
|
|
||
FIXED ASSETS, net of accumulated depreciation
|
4,876
|
|
|
5,550
|
|
||
OTHER ASSETS
|
|
|
|
||||
Restricted cash
|
350
|
|
|
350
|
|
||
Patents and other intangible assets, net of accumulated amortization
|
4,375
|
|
|
4,478
|
|
||
Investment in joint venture
|
244
|
|
|
246
|
|
||
Goodwill
|
17,257
|
|
|
17,992
|
|
||
Other
|
305
|
|
|
399
|
|
||
Total other assets
|
22,531
|
|
|
23,465
|
|
||
Total Assets
|
$
|
46,444
|
|
|
$
|
52,221
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
CURRENT LIABILITIES
|
|
|
|
||||
Accounts payable and accrued expenses
|
$
|
8,921
|
|
|
$
|
8,715
|
|
Obligations under capital leases, current portion
|
319
|
|
|
272
|
|
||
Liabilities held for sale
|
221
|
|
|
—
|
|
||
Deferred revenue
|
1,751
|
|
|
516
|
|
||
Line of credit
|
3,510
|
|
|
4,137
|
|
||
Term note, current portion
|
6,000
|
|
|
6,000
|
|
||
Total current liabilities
|
20,722
|
|
|
19,640
|
|
||
Obligations under capital leases
|
641
|
|
|
624
|
|
||
Deferred rent payable and other
|
324
|
|
|
360
|
|
||
Warrant liability
|
3,711
|
|
|
4,403
|
|
||
Deferred revenue, long-term
|
992
|
|
|
429
|
|
||
Total Liabilities
|
26,390
|
|
|
25,456
|
|
||
STOCKHOLDERS’ EQUITY
|
|
|
|
||||
Preferred stock, authorized 9,764 shares, $0.0001 par value, none issued
|
—
|
|
|
—
|
|
||
Common stock, authorized 100,000 shares, $0.0001 par value, 27,730 and 27,754 shares issued and outstanding at March 31, 2018 and December 31, 2017, respectively
|
3
|
|
|
3
|
|
||
Additional paid-in capital
|
161,801
|
|
|
161,527
|
|
||
Accumulated other comprehensive income
|
49
|
|
|
69
|
|
||
Accumulated (deficit)
|
(141,799
|
)
|
|
(134,834
|
)
|
||
Total Stockholders’ Equity
|
20,054
|
|
|
26,765
|
|
||
Total Liabilities and Stockholders’ Equity
|
$
|
46,444
|
|
|
$
|
52,221
|
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
Revenue
|
$
|
7,667
|
|
|
$
|
6,966
|
|
Cost of revenues
|
5,082
|
|
|
4,209
|
|
||
Gross profit
|
2,585
|
|
|
2,757
|
|
||
Operating expenses:
|
|
|
|
||||
Research and development
|
681
|
|
|
1,110
|
|
||
General and administrative
|
5,260
|
|
|
3,477
|
|
||
Sales and marketing
|
1,591
|
|
|
971
|
|
||
Total operating expenses
|
7,532
|
|
|
5,558
|
|
||
Loss from operations
|
(4,947
|
)
|
|
(2,801
|
)
|
||
Other income (expense):
|
|
|
|
||||
Interest expense
|
(239
|
)
|
|
(194
|
)
|
||
Interest income
|
21
|
|
|
17
|
|
||
Change in fair value of acquisition note payable
|
17
|
|
|
(232
|
)
|
||
Change in fair value of warrant liability
|
692
|
|
|
(7,294
|
)
|
||
Other expense
|
—
|
|
|
(46
|
)
|
||
Total other income (expense)
|
491
|
|
|
(7,749
|
)
|
||
Loss before income taxes
|
(4,456
|
)
|
|
(10,550
|
)
|
||
Income tax (benefit)
|
—
|
|
|
(970
|
)
|
||
Net (loss)
|
$
|
(4,456
|
)
|
|
$
|
(9,580
|
)
|
Basic and diluted net (loss) per share
|
$
|
(0.16
|
)
|
|
$
|
(0.51
|
)
|
Basic and diluted weighted-average shares outstanding
|
27,049
|
|
|
18,904
|
|
||
|
|
|
|
||||
Net (loss)
|
(4,456
|
)
|
|
(9,580
|
)
|
||
Foreign currency translation (loss)
|
(20
|
)
|
|
—
|
|
||
Comprehensive (loss)
|
(4,476
|
)
|
|
(9,580
|
)
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
||||
Net (loss)
|
$
|
(4,456
|
)
|
|
$
|
(9,580
|
)
|
Adjustments to reconcile net (loss) to net cash (used in) operating activities:
|
|
|
|
||||
Depreciation
|
429
|
|
|
534
|
|
||
Amortization
|
135
|
|
|
83
|
|
||
Provision for bad debts
|
464
|
|
|
(21
|
)
|
||
Stock-based compensation
|
274
|
|
|
435
|
|
||
Change in fair value of acquisition note payable
|
(17
|
)
|
|
232
|
|
||
Change in fair value of warrant liability
|
(692
|
)
|
|
7,294
|
|
||
Amortization of debt issuance costs
|
—
|
|
|
7
|
|
||
Amortization of discount on debt
|
—
|
|
|
7
|
|
||
Loss in equity method investment
|
2
|
|
|
12
|
|
||
Loss on extinguishment of debt
|
—
|
|
|
78
|
|
||
Changes in:
|
|
|
|
||||
Accounts receivable
|
(160
|
)
|
|
(901
|
)
|
||
Other current assets
|
(143
|
)
|
|
156
|
|
||
Other non-current assets
|
(5
|
)
|
|
28
|
|
||
Accounts payable, accrued expenses and deferred revenue
|
(279
|
)
|
|
(694
|
)
|
||
Deferred rent payable and other
|
(24
|
)
|
|
(61
|
)
|
||
Net cash (used in) operating activities
|
(4,472
|
)
|
|
(2,391
|
)
|
||
CASH FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
||||
Purchase of fixed assets
|
(221
|
)
|
|
(178
|
)
|
||
Patent costs
|
(32
|
)
|
|
(31
|
)
|
||
Net cash (used in) investing activities
|
(253
|
)
|
|
(209
|
)
|
||
CASH FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
||||
Principal payments on capital lease obligations
|
(86
|
)
|
|
(34
|
)
|
||
Proceeds from warrant exercises
|
—
|
|
|
1,750
|
|
||
Repayment of borrowings on Silicon Valley Bank line of credit
|
(627
|
)
|
|
—
|
|
||
Proceeds from Partners for Growth IV, L.P. term note
|
—
|
|
|
6,000
|
|
||
Principal payments on Silicon Valley Bank term note
|
—
|
|
|
(4,667
|
)
|
||
Payment of debt issuance costs and loan fees
|
—
|
|
|
(287
|
)
|
||
Net cash provided by (used in) financing activities
|
(713
|
)
|
|
2,762
|
|
||
Effect of foreign exchange rates on cash and cash equivalents and restricted cash
|
(32
|
)
|
|
—
|
|
||
Net increase (decrease) in cash and cash equivalents and restricted cash
|
(5,470
|
)
|
|
162
|
|
||
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH
|
|
|
|
||||
Beginning
|
9,891
|
|
|
9,802
|
|
||
Ending
|
$
|
4,421
|
|
|
$
|
9,964
|
|
SUPPLEMENTAL CASH FLOW DISCLOSURE
|
|
|
|
||||
Cash paid for interest
|
$
|
245
|
|
|
$
|
269
|
|
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING ACTIVITIES
|
|
|
|
||||
Fixed assets acquired through capital lease arrangements
|
$
|
150
|
|
|
$
|
396
|
|
Derivative warrants issued with debt
|
—
|
|
|
1,004
|
|
|
|
Three Months Ended March 31, 2018
|
||||||||||
|
|
As Reported
|
|
ASC 606 Adjustments
|
|
Balances Without Adoption
|
||||||
Consolidated Statements of Operations and Other Comprehensive Loss
|
|
|
|
|
|
|
||||||
Revenue:
|
|
|
|
|
|
|
||||||
Biopharma Services
|
|
$
|
3,658
|
|
|
$
|
(307
|
)
|
|
3,351
|
|
|
Clinical Services
|
|
2,342
|
|
|
—
|
|
|
2,342
|
|
|||
Discovery Services
|
|
1,667
|
|
|
(529
|
)
|
|
1,138
|
|
|||
|
|
$
|
7,667
|
|
|
$
|
(836
|
)
|
|
$
|
6,831
|
|
Consolidated Balance Sheets
|
|
|
|
|
|
|
||||||
CURRENT LIABILITIES
|
|
|
|
|
|
|
||||||
Deferred revenue
|
|
|
|
|
|
|
||||||
Biopharma Services
|
|
$
|
1,625
|
|
|
$
|
(1,547
|
)
|
|
$
|
78
|
|
Clinical Services
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Discovery Services
|
|
126
|
|
|
(126
|
)
|
|
—
|
|
|||
|
|
$
|
1,751
|
|
|
$
|
(1,673
|
)
|
|
$
|
78
|
|
|
|
|
|
|
|
|
||||||
NON-CURRENT LIABILITIES
|
|
|
|
|
|
|
||||||
Deferred revenue
|
|
|
|
|
|
|
||||||
Biopharma Services
|
|
$
|
516
|
|
|
$
|
—
|
|
|
$
|
516
|
|
Clinical Services
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Discovery Services
|
|
476
|
|
|
—
|
|
|
476
|
|
|||
|
|
$
|
992
|
|
|
$
|
—
|
|
|
$
|
992
|
|
|
|
|
|
|
|
|
||||||
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
||||||
Accumulated (deficit)
|
|
$
|
(141,799
|
)
|
|
$
|
1,673
|
|
|
$
|
(140,126
|
)
|
Cash
|
|
$
|
544
|
|
Accounts receivable
|
|
905
|
|
|
Lab supplies
|
|
350
|
|
|
Prepaid expenses and other current assets
|
|
60
|
|
|
Fixed assets
|
|
765
|
|
|
Intangible assets
|
|
3,160
|
|
|
Goodwill
|
|
5,960
|
|
|
Accounts payable and accrued expenses
|
|
(913
|
)
|
|
Deferred revenue
|
|
(814
|
)
|
|
Deferred rent and other
|
|
(222
|
)
|
|
Obligations under capital leases
|
|
(76
|
)
|
|
Total purchase price
|
|
$
|
9,719
|
|
|
Three Months Ended March 31,
|
||
|
2017
|
||
Revenue
|
$
|
8,134
|
|
Net loss
|
(9,795
|
)
|
|
|
|
||
Basic and dilutive net loss per share
|
$
|
(0.45
|
)
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
Biopharma Services
|
3,658
|
|
|
$
|
3,719
|
|
|
Clinical Services
|
2,342
|
|
|
2,954
|
|
||
Discovery Services
|
1,667
|
|
|
293
|
|
||
|
$
|
7,667
|
|
|
$
|
6,966
|
|
|
March 31,
2018 |
|
December 31,
2017 |
||||
Biopharma Services
|
$
|
3,847
|
|
|
$
|
3,746
|
|
Clinical Services
|
12,572
|
|
|
12,205
|
|
||
Discovery Services
|
1,238
|
|
|
1,546
|
|
||
Allowance for doubtful accounts
|
(7,003
|
)
|
|
(6,539
|
)
|
||
|
$
|
10,654
|
|
|
$
|
10,958
|
|
|
Three Months Ended March 31,
|
||
|
2018
|
|
2017
|
Medicare
|
9%
|
|
14%
|
Other insurers
|
16%
|
|
23%
|
Other healthcare facilities
|
5%
|
|
6%
|
|
30%
|
|
43%
|
|
Biopharma Services
|
|
Clinical Services
|
|
Discovery Services
|
Performance Obligation Satisfaction and Revenue Recognition:
|
Performance obligations are satisfied at a point in time as the Company processes samples delivered by the customer. Project level activities, including study setup and project management, are satisfied over the life of the contract. Revenues are recognized at a point in time when the test results or other deliverables are reported to the customer. Project level fee revenue is recognized ratably over the life of the contract.
|
|
Performance obligations are satisfied at a point in time when the tests are reported to the customer. Revenues are recognized at a point in time when the test results are reported to the ordering site.
|
|
Performance obligations are satisfied over time and revenue is recognized using the time elapsed method as the Company delivers study results to the customers.
|
|
|
|
|
|
|
Significant Payment Terms:
|
Monthly invoices at a contractual rate are generated as services are delivered for work completed during the prior month. Some contracts have prepayments prior to services being rendered that are recorded as deferred revenue.
|
|
The Company invoices at its list price or contractually negotiated price. Payments realized vary from amounts invoiced. Accordingly, the Company estimates the variable consideration it expects to collect.
|
|
As results are delivered, the invoices are generated based on contractual rates. Some contracts have prepayments prior to services being rendered that are recorded as deferred revenue.
|
|
|
|
|
|
|
Nature of Services:
|
Biopharma testing services, study setup and study management
|
|
Clinical testing services
|
|
Discovery services
|
Current assets held for sale:
|
|
|
||
Cash and cash equivalents
|
|
$
|
49
|
|
Accounts receivable, net
|
|
319
|
|
|
Other current assets
|
|
228
|
|
|
Fixed assets, net
|
|
628
|
|
|
Goodwill
|
|
735
|
|
|
Other
|
|
99
|
|
|
Total current assets held for sale
|
|
$
|
2,058
|
|
|
|
|
||
Current liabilities held for sale:
|
|
|
||
Accounts payable and accrued expenses
|
|
$
|
209
|
|
Deferred rent and other
|
|
12
|
|
|
Total current liabilities held for sale
|
|
$
|
221
|
|
|
Three Months Ended March 31,
|
||||
|
2018
|
|
2017
|
||
Common stock purchase warrants
|
10,055
|
|
|
6,608
|
|
Stock options
|
2,534
|
|
|
2,520
|
|
Restricted shares of common stock
|
683
|
|
|
68
|
|
|
13,272
|
|
|
9,196
|
|
|
Options Outstanding
|
|
Weighted-
Average
Remaining
Contractual
Term (in years)
|
|
Aggregate
Intrinsic
Value
(in thousands)
|
|||||||
|
Number of
Shares
(in thousands)
|
|
Weighted-
Average
Exercise
Price
|
|
||||||||
Outstanding January 1, 2018
|
2,844
|
|
|
$
|
7.00
|
|
|
6.96
|
|
$
|
4
|
|
Cancelled or expired
|
(310
|
)
|
|
5.13
|
|
|
|
|
|
|||
Outstanding March 31, 2018
|
2,534
|
|
|
$
|
7.23
|
|
|
5.70
|
|
$
|
—
|
|
Exercisable March 31, 2018
|
1,749
|
|
|
$
|
9.02
|
|
|
4.30
|
|
$
|
—
|
|
|
Three Months Ended March 31,
|
|
|
2017
|
|
Volatility
|
73.57
|
%
|
Risk free interest rate
|
2.03
|
%
|
Dividend yield
|
0.00
|
%
|
Term (years)
|
6.00
|
|
Weighted-average fair value of options granted during the period
|
1.63
|
|
|
Three Months Ended March 31,
|
|
|
2017
|
|
Volatility
|
77.41
|
%
|
Risk free interest rate
|
2.22
|
%
|
Dividend yield
|
0.00
|
%
|
Term (years)
|
7.14
|
|
|
Non-vested Restricted Stock Awards
|
|||||
|
Number of
Shares (in thousands) |
|
Weighted-Average Grant Date Fair Value
|
|||
Non-vested at January 1, 2018
|
91
|
|
|
$
|
4.21
|
|
Vested
|
(2
|
)
|
|
6.30
|
|
|
Cancelled
|
(20
|
)
|
|
$
|
6.50
|
|
Non-vested at March 31, 2018
|
69
|
|
|
$
|
3.48
|
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
Cost of revenues
|
$
|
91
|
|
|
$
|
59
|
|
Research and development
|
15
|
|
|
50
|
|
||
General and administrative
|
158
|
|
|
300
|
|
||
Sales and marketing
|
10
|
|
|
26
|
|
||
Total stock-based compensation
|
$
|
274
|
|
|
$
|
435
|
|
Issued With / For
|
Exercise
Price |
|
|
Warrants Outstanding March 31, 2018
|
|||
Non-Derivative Warrants:
|
|
|
|
|
|||
Financing
|
$
|
10.00
|
|
|
|
243
|
|
Financing
|
15.00
|
|
|
|
276
|
|
|
2015 Offering
|
5.00
|
|
|
|
3,450
|
|
|
Total non-derivative warrants
|
$
|
6.00
|
|
C
|
|
3,969
|
|
Derivative Warrants:
|
|
|
|
|
|||
2016 Offerings
|
2.25
|
|
A
|
|
1,968
|
|
|
2017 Debt
|
2.82
|
|
B
|
|
443
|
|
|
2017 Offering
|
2.35
|
|
A
|
|
3,500
|
|
|
2017 Offering
|
2.50
|
|
A
|
|
175
|
|
|
Total derivative warrants
|
2.36
|
|
C
|
|
6,086
|
|
|
Total
|
$
|
3.80
|
|
C
|
|
10,055
|
|
A
|
These warrants are subject to fair value accounting and contain a contingent net cash settlement feature. See Note 9.
|
B
|
These warrants are subject to fair value accounting until the number of shares issuable upon the exercise of the warrants becomes fixed. See Note 9.
|
C
|
Weighted-average exercise prices are as of
March 31, 2018
.
|
Issued with/for
|
Fair value of warrants
outstanding as of December 31, 2017 |
|
Change in fair
value of warrants |
|
Fair value of warrants
outstanding as of March 31, 2018 |
||||||
2016 Offerings
|
$
|
1,929
|
|
|
$
|
27
|
|
|
$
|
1,956
|
|
2017 Debt
|
501
|
|
|
(78
|
)
|
|
423
|
|
|||
2017 Offering
|
1,973
|
|
|
(641
|
)
|
|
1,332
|
|
|||
|
$
|
4,403
|
|
|
$
|
(692
|
)
|
|
$
|
3,711
|
|
2016 Offerings
|
As of March 31, 2018
|
|
As of December 31, 2017
|
|
Exercised During the Three Months Ended March 31, 2017
|
||||||
Exercise price
|
$
|
2.25
|
|
|
$
|
2.25
|
|
|
$
|
2.25
|
|
Expected life (years)
|
3.83
|
|
|
4.08
|
|
|
4.79
|
|
|||
Expected volatility
|
100.00
|
%
|
|
73.44
|
%
|
|
76.29
|
%
|
|||
Risk-free interest rate
|
2.39
|
%
|
|
2.11
|
%
|
|
1.94
|
%
|
|||
Expected dividend yield
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
2017 Debt
|
As of March 31, 2018
|
|
As of December 31, 2017
|
|
Issued During the Three Months Ended March 31, 2017
|
||||||
Exercise price
|
$
|
2.82
|
|
|
$
|
2.82
|
|
|
$
|
2.82
|
|
Expected life (years)
|
5.98
|
|
|
6.22
|
|
|
7.00
|
|
|||
Expected volatility
|
73.43
|
%
|
|
74.18
|
%
|
|
74.61
|
%
|
|||
Risk-free interest rate
|
2.56
|
%
|
|
2.33
|
%
|
|
2.22
|
%
|
|||
Expected dividend yield
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
2017 Offering
|
As of March 31, 2018
|
|
As of December 31, 2017
|
|||
Exercise price
|
$
|
2.36
|
|
|
2.36
|
|
Expected life (years)
|
1.19
|
|
|
1.43
|
|
|
Expected volatility
|
76.78
|
%
|
|
77.55
|
%
|
|
Risk-free interest rate
|
2.09
|
%
|
|
1.83
|
%
|
|
Expected dividend yield
|
—
|
%
|
|
—
|
%
|
|
March 31, 2018
|
||||||||||||||
|
Total
|
|
Quoted Prices in
Active Markets for Identical Assets (Level 1) |
|
Significant Other
Observable Inputs (Level 2) |
|
Significant
Unobservable Inputs (Level 3) |
||||||||
Warrant liability
|
$
|
3,711
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,711
|
|
Note payable
|
139
|
|
|
—
|
|
|
—
|
|
|
139
|
|
||||
|
$
|
3,850
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,850
|
|
|
|
|
|
|
|
|
|
|
December 31, 2017
|
||||||||||||||
|
Total
|
|
Quoted Prices in
Active Markets for Identical Assets (Level 1) |
|
Significant Other
Observable Inputs (Level 2) |
|
Significant
Unobservable Inputs (Level 3) |
||||||||
Warrant liability
|
$
|
4,403
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,403
|
|
Note payable
|
156
|
|
|
—
|
|
|
—
|
|
|
156
|
|
||||
|
$
|
4,559
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,559
|
|
|
|
|
|
|
|
|
|
|
Note Payable
|
|
Warrant
|
||||
|
to VenturEast
|
|
Liability
|
||||
Fair value at December 31, 2017
|
$
|
156
|
|
|
$
|
4,403
|
|
Change in fair value
|
(17
|
)
|
|
(692
|
)
|
||
Fair value at March 31, 2018
|
$
|
139
|
|
|
$
|
3,711
|
|
|
Three Months Ended March 31,
|
|
Change
|
|||||||||||
(dollars in thousands)
|
2018
|
|
2017
|
|
$
|
|
%
|
|||||||
Revenue
|
$
|
7,667
|
|
|
$
|
6,966
|
|
|
$
|
701
|
|
|
10
|
%
|
Cost of revenues
|
5,082
|
|
|
4,209
|
|
|
873
|
|
|
21
|
%
|
|||
Research and development expenses
|
681
|
|
|
1,110
|
|
|
(429
|
)
|
|
(39
|
)%
|
|||
General and administrative expenses
|
5,260
|
|
|
3,477
|
|
|
1,783
|
|
|
51
|
%
|
|||
Sales and marketing expenses
|
1,591
|
|
|
971
|
|
|
620
|
|
|
64
|
%
|
|||
Loss from operations
|
(4,947
|
)
|
|
(2,801
|
)
|
|
(2,146
|
)
|
|
77
|
%
|
|||
Interest income (expense)
|
(218
|
)
|
|
(177
|
)
|
|
(41
|
)
|
|
23
|
%
|
|||
Change in fair value of acquisition note payable
|
17
|
|
|
(232
|
)
|
|
249
|
|
|
(107
|
)%
|
|||
Change in fair value of warrant liability
|
692
|
|
|
(7,294
|
)
|
|
7,986
|
|
|
(109
|
)%
|
|||
Other income
|
—
|
|
|
(46
|
)
|
|
46
|
|
|
(100
|
)%
|
|||
Loss before income taxes
|
(4,456
|
)
|
|
(10,550
|
)
|
|
6,094
|
|
|
(58
|
)%
|
|||
Income tax provision (benefit)
|
—
|
|
|
(970
|
)
|
|
970
|
|
|
n/a
|
|
|||
Net (loss)
|
$
|
(4,456
|
)
|
|
$
|
(9,580
|
)
|
|
$
|
5,124
|
|
|
(53
|
)%
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2018
|
|
2017
|
||||
Reconciliation of net (loss):
|
|
|
|
|
||||
Net (loss)
|
|
$
|
(4,456
|
)
|
|
$
|
(9,580
|
)
|
Adjustments:
|
|
|
|
|
||||
Change in fair value of acquisition note payable
|
|
(17
|
)
|
|
232
|
|
||
Change in fair value of warrant liability
|
|
(692
|
)
|
|
7,294
|
|
||
Adjusted net (loss)
|
|
$
|
(5,165
|
)
|
|
$
|
(2,054
|
)
|
Reconciliation of basic and diluted net (loss) per share:
|
|
|
|
|
||||
Basic and diluted net (loss) per share
|
|
$
|
(0.16
|
)
|
|
$
|
(0.51
|
)
|
Adjustments to net (loss)
|
|
(0.03
|
)
|
|
0.40
|
|
||
Adjusted basic and diluted net (loss) per share
|
|
$
|
(0.19
|
)
|
|
$
|
(0.11
|
)
|
Basic and diluted weighted-average shares outstanding
|
|
27,049
|
|
|
18,904
|
|
|
Three Months Ended March 31,
|
|
Change
|
|||||||||||||||||
|
2018
|
|
2017
|
|
|
|
|
|||||||||||||
(dollars in thousands)
|
$
|
|
%
|
|
$
|
|
%
|
|
$
|
|
%
|
|||||||||
Biopharma Services
|
3,658
|
|
|
48
|
%
|
|
$
|
3,719
|
|
|
53
|
%
|
|
$
|
(61
|
)
|
|
(2
|
)%
|
|
Clinical Services
|
2,342
|
|
|
30
|
%
|
|
2,954
|
|
|
43
|
%
|
|
(612
|
)
|
|
(21
|
)%
|
|||
Discovery Services
|
1,667
|
|
|
22
|
%
|
|
293
|
|
|
4
|
%
|
|
1,374
|
|
|
469
|
%
|
|||
Total Revenue
|
$
|
7,667
|
|
|
100
|
%
|
|
$
|
6,966
|
|
|
100
|
%
|
|
$
|
701
|
|
|
10
|
%
|
|
Three Months Ended
March 31, |
||||||
(in thousands)
|
2018
|
|
2017
|
||||
Cash provided by (used in):
|
|
|
|
||||
Operating activities
|
$
|
(4,472
|
)
|
|
$
|
(2,391
|
)
|
Investing activities
|
(253
|
)
|
|
(209
|
)
|
||
Financing activities
|
(713
|
)
|
|
2,762
|
|
||
Effect of foreign currency exchange rates on cash and cash equivalents
|
(32
|
)
|
|
—
|
|
||
Net increase (decrease) in cash and cash equivalents
|
$
|
(5,470
|
)
|
|
$
|
162
|
|
•
|
our ability to negotiate an amendment of the financial covenants in our credit agreements with our senior lenders for periods subsequent to April 30, 2018;
|
•
|
our ability to achieve revenue growth and profitability;
|
•
|
our ability to secure financing and the amount thereof;
|
•
|
the costs for funding the operations we recently acquired and our ability to realize anticipated benefits from the vivoPharm acquisition;
|
•
|
our ability to improve efficiency of billing and collection processes;
|
•
|
our ability to obtain approvals for our new diagnostic tests;
|
•
|
our ability to execute on our marketing and sales strategy for our tests and services and gain acceptance of our tests and services in the market;
|
•
|
our ability to obtain adequate reimbursement from governmental and other third-party payors for our tests and services;
|
•
|
our ability to maintain our present customer base and obtain new customers;
|
•
|
our ability to clinically validate our pipeline of tests currently in development;
|
•
|
the costs of operating and enhancing our laboratory facilities;
|
•
|
our ability to succeed with our cost control initiative;
|
•
|
our ability to satisfy US (FDA) and international regulatory regiments with respect to our tests and services, many of which are new and still evolving;
|
•
|
the costs of maintaining, expanding and protecting our intellectual property portfolio, including potential litigation costs and liabilities;
|
•
|
our ability to manage the costs of manufacturing our tests;
|
•
|
our rate of progress in, and cost of research and development activities associated with, products in research and early development;
|
•
|
the effect of competing technological and market developments;
|
•
|
costs related to expansion; and
|
•
|
other risks and uncertainties discussed in our annual report on Form 10-K for the year ended December 31, 2017, as updated in other reports, as applicable, we file with the Securities and Exchange Commission.
|
•
|
Revenue recognition;
|
•
|
Accounts receivable and bad debts;
|
•
|
Stock-based compensation; and
|
•
|
Warrant liability.
|
•
|
our ability to negotiate an amendment of the financial covenants in our credit agreements with our senior lenders for periods subsequent to April 30, 2018;
|
•
|
our ability to achieve revenue growth and profitability;
|
•
|
our ability to secure financing and the amount thereof;
|
•
|
our ability to achieve profitability by increasing sales of our laboratory tests and services and to continually develop and commercialize novel and innovative laboratory tests and services focused on oncology and immuno-oncology;
|
•
|
our ability to improve efficiency of billing and collection processes;
|
•
|
with respect to our Clinical Services, our ability to obtain reimbursement from governmental and other third-party payors for our tests and services;
|
•
|
our ability clinically validate our pipeline of tests currently in development;
|
•
|
our ability to execute on our marketing and sales strategy for our tests and services and gain acceptance of our tests and services in the market;
|
•
|
our ability to keep pace with rapidly advancing market and scientific developments;
|
•
|
our ability to satisfy U.S. (including FDA) and international regulatory requirements with respect to our tests and services, many of which are new and still evolving;
|
•
|
our ability to raise additional capital to meet our liquidity needs;
|
•
|
competition from clinical laboratory services companies, tests currently available or new tests that may emerge;
|
•
|
our ability to maintain our clinical collaborations and enter into new collaboration agreements with highly regarded organizations in the cancer field so that, among other things, we have access to thought leaders in the field and to a robust number of samples to validate our tests;
|
•
|
our ability to maintain our present customer base and obtain new customers;
|
•
|
potential product liability or intellectual property infringement claims;
|
•
|
our dependency on third-party manufacturers to supply or manufacture our products;
|
•
|
our ability to attract and retain a sufficient number of scientists, clinicians, sales personnel and other key personnel with extensive experience in oncology and immuno-oncology, who are in short supply;
|
•
|
our ability to obtain or maintain patents or other appropriate protection for the intellectual property in our proprietary tests and services;
|
•
|
our dependency on the intellectual property licensed to us or possessed by third parties;
|
•
|
our ability to expand internationally and launch our tests and services in emerging markets, such as China and Japan;
|
•
|
our ability to adequately support future growth; and
|
•
|
the risk factors discussed in our annual report on Form 10-K for the year ended December 31, 2017, as updated in other reports, as applicable, that we file with the Securities and Exchange Commission.
|
|
|
|
|
|
|
Cancer Genetics, Inc.
|
|
|
|
|
|
|
(Registrant)
|
|
|
|
|
|||
Date: May 15, 2018
|
|
|
|
|
|
/s/ John A. Roberts
|
|
|
|
|
|
|
John A. Roberts
|
|
|
|
|
|
|
President and Chief Executive Officer
(Principal Executive and Financial Officer)
|
|
|
|
|
|
|
|
Date: May 15, 2018
|
|
|
|
|
|
/s/ Igor Gitelman
|
|
|
|
|
|
|
Igor Gitelman
|
|
|
|
|
|
|
Chief Accounting Officer
(Principal Accounting Officer)
|
1 Year Cancer Genetics Chart |
1 Month Cancer Genetics Chart |
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