IDXG 10-Q
Interpace Biosciences, Inc. (IDXG)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For
the quarterly period ended
OR
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from _______________ to _______________
Commission
File Number:
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
(Address of principal executive offices and zip code)
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| None | N/A | N/A |
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer ☐ | Accelerated filer ☐ | |
| Smaller
reporting company | ||
| Emerging
Growth Company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:
| Class | Shares Outstanding May 1, 2026 | |
| Common Stock, par value $ per share |
INTERPACE BIOSCIENCES, INC.
FORM 10-Q FOR PERIOD ENDED MARCH 31, 2026
TABLE OF CONTENTS
| 2 |
PART I. FINANCIAL INFORMATION
INTERPACE BIOSCIENCES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)
| March 31, | December 31, | |||||||
| 2026 | 2025 | |||||||
| (unaudited) | ||||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Accounts receivable | ||||||||
| Other current assets | ||||||||
| Total current assets | ||||||||
| Property and equipment, net | ||||||||
| Operating lease right of use assets | ||||||||
| Deferred tax asset | ||||||||
| Other long-term assets | ||||||||
| Total assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued salary and bonus | ||||||||
| Other accrued expenses | ||||||||
| Current liabilities of discontinued operations | ||||||||
| Total current liabilities | ||||||||
| Operating lease liabilities, net of current portion | ||||||||
| Other long-term liabilities | ||||||||
| Total liabilities | ||||||||
| Commitments and contingencies (Note 7) | ||||||||
| Stockholders’ equity: | ||||||||
| Redeemable preferred stock, $ par value; shares authorized, and shares Series C issued and outstanding, respectively | ||||||||
| Common stock, $ par value; shares authorized; and shares issued, respectively; and shares outstanding, respectively | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Treasury stock, at cost ( and shares, respectively) | ( | ) | ( | ) | ||||
| Total stockholders’ equity | ||||||||
| Total liabilities and stockholders’ equity | $ | $ | ||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
| 3 |
INTERPACE BIOSCIENCES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in thousands, except for per share data)
| For The Three Months Ended | ||||||||
| March 31, | ||||||||
| 2026 | 2025 | |||||||
| Revenue, net | $ | $ | ||||||
| Cost of revenue | ||||||||
| Gross profit | ||||||||
| Operating expenses: | ||||||||
| Sales and marketing | ||||||||
| Research and development | ||||||||
| General and administrative | ||||||||
| Total operating expenses | ||||||||
| Operating income from continuing operations | ||||||||
| Note payable interest | ( | ) | ||||||
| Other income, net | ||||||||
| Income from continuing operations before tax | ||||||||
| Provision for income taxes | ||||||||
| Income from continuing operations | ||||||||
| Loss from discontinued operations, net of tax | ( | ) | ( | ) | ||||
| Net income | $ | $ | ||||||
| Basic income (loss) per share of common stock: | ||||||||
| From continuing operations | $ | $ | ||||||
| From discontinued operations | ( | ) | ( | ) | ||||
| Net income (loss) per basic share of common stock | $ | $ | ||||||
| Diluted income (loss) per share of common stock: | ||||||||
| From continuing operations | $ | $ | ||||||
| From discontinued operations | ( | ) | ( | ) | ||||
| Net income (loss) per diluted share of common stock | $ | $ | ||||||
| Weighted average number of common shares and common share equivalents outstanding: | ||||||||
| Basic | ||||||||
| Diluted | ||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
| 4 |
INTERPACE BIOSCIENCES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(unaudited, in thousands)
| Additional | ||||||||||||||||||||||||||||||||||||
| Preferred Stock | Common Stock | Treasury Stock | Paid in | Accumulated | ||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Capital | Deficit | Total | ||||||||||||||||||||||||||||
| Balance -December 31, 2024 | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||
| Issuance of common stock | - | - | ||||||||||||||||||||||||||||||||||
| Treasury stock purchased | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
| Series C issuance costs | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||
| Stock-based compensation expense | - | - | - | |||||||||||||||||||||||||||||||||
| Net income | - | - | - | |||||||||||||||||||||||||||||||||
| Balance -March 31, 2025 | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||
| Balance -December 31, 2025 | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||||||||||||||||||||
| Issuance of common stock | - | - | ||||||||||||||||||||||||||||||||||
| Treasury stock purchased | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
| Series C conversion into common stock | ( | ) | - | ( | ) | |||||||||||||||||||||||||||||||
| Stock-based compensation expense | - | - | - | |||||||||||||||||||||||||||||||||
| Net income | - | - | - | |||||||||||||||||||||||||||||||||
| Balance -March 31, 2026 | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||||||||||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
| 5 |
INTERPACE BIOSCIENCES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in thousands)
| ` | For The Three Months Ended March 31, | |||||||
| 2026 | 2025 | |||||||
| Cash Flows From Operating Activities | ||||||||
| Net income | $ | $ | ||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | ||||||||
| Amortization of deferred financing fees | ||||||||
| Stock-based compensation | ||||||||
| Deferred taxes | ||||||||
| Change in fair value of note payable | ( | ) | ||||||
| Amortization on operating lease right of use asset | ||||||||
| Other changes in operating assets and liabilities: | ||||||||
| Accounts receivable | ( | ) | ( | ) | ||||
| Other current assets | ||||||||
| Accounts payable | ( | ) | ||||||
| Accrued salaries and bonus | ( | ) | ( | ) | ||||
| Other accrued expenses | ( | ) | ||||||
| Operating lease liabilities | ( | ) | ( | ) | ||||
| Long-term liabilities | ||||||||
| Net cash provided by operating activities | ||||||||
| Cash Flows From Investing Activity | ||||||||
| Purchase of property and equipment | ( | ) | ||||||
| Net cash used in investing activities | ( | ) | ||||||
| Cash Flows From Financing Activities | ||||||||
| Payments made on note payable | ( | ) | ||||||
| Net cash used in financing activities | ( | ) | ||||||
| Net increase (decrease) in cash and cash equivalents | ( | ) | ||||||
| Cash and cash equivalents – beginning | $ | $ | ||||||
| Cash and cash equivalents – ending | $ | $ | ||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
| 6 |
INTERPACE BIOSCIENCES, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(Tabular information in thousands, except per share amounts)
1. OVERVIEW
Nature of Business
Interpace Biosciences, Inc. (“Interpace” or the “Company”) is a company that provides esoteric molecular diagnostic testing and pathology services to aid physicians in their evaluation of cancer risk in patients with indeterminate biopsies and a perceived high risk of cancer from clinical features. The Company develops and commercializes genomic tests and related first-line assays that can personalize medicine to help improve patient diagnosis and management.
2. BASIS OF PRESENTATION
The accompanying unaudited interim condensed consolidated financial statements and related notes (the “Interim Financial Statements”) should be read in conjunction with the consolidated financial statements of the Company and its wholly-owned subsidiaries (Interpace Diagnostics Lab Inc., Interpace Diagnostics Corporation, and Interpace Diagnostics, LLC), and related notes as included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, as filed with the Securities & Exchange Commission (“SEC”) on March 30, 2026 and as amended on April 30, 2026.
The Interim Financial Statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) for interim financial reporting and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. The Interim Financial Statements include all normal recurring adjustments that, in the judgment of management, are necessary for a fair presentation of such interim financial statements. Discontinued operations include the Company’s wholly owned subsidiaries: Group DCA, LLC, InServe Support Solutions, TVG, Inc., its Commercial Services business unit, which was sold on December 22, 2015 and its Interpace Pharma Solutions business which was sold on August 31, 2022. All significant intercompany balances and transactions have been eliminated in consolidation. Operating results for the three-month period ended March 31, 2026 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2026.
3. LIQUIDITY
For
the three months ended March 31, 2026, the Company had operating income from continuing operations of $
The Company intends to meet its ongoing capital needs by using its available cash, as well as through targeted margin improvement; collection of accounts receivable; containment of costs; and the potential use of other financing options and other strategic alternatives.
The Company continues to explore various strategic alternatives, dilutive and non-dilutive sources of funding, including equity and debt financings, strategic alliances, business development and other sources in order to provide additional liquidity. With the delisting of its common stock, par value $ per share (“Common Stock”), from Nasdaq in February 2021, the Company’s ability to raise additional capital on terms acceptable to it has been adversely impacted. There can be no assurance that the Company will be successful in obtaining such funding on terms acceptable to it. The Company intends to seek an uplisting of its Common Stock to Nasdaq, but no assurances can be given that a Nasdaq listing will be achieved.
The Company anticipates that current cash and cash equivalents and forecasted cash receipts will be sufficient to meet its anticipated cash requirements through the next twelve months from the date of the filing of this report.
| 7 |
4. DISCONTINUED OPERATIONS
Liabilities classified as discontinued operations as of both March 31, 2026 and December 31, 2025 consist of accrued expenses which are liabilities related to the former Commercial Services business unit.
The table below presents the significant components of its former discontinued operations results included within loss from discontinued operations, net of tax in the condensed consolidated statements of operations for the three months ended March 31, 2026 and 2025.
| For The Three Months Ended | ||||||||
| March 31, | ||||||||
| 2026 | 2025 | |||||||
| Income tax expense | $ | $ | ||||||
| Loss from discontinued operations, net of tax | $ | ( | ) | $ | ( | ) | ||
There
was
5. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounting Estimates
The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts of assets and liabilities reported and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management’s estimates are based on historical experience, facts and circumstances available at the time, and various other assumptions that are believed to be reasonable under the circumstances. Significant estimates include accounting for valuation allowances related to deferred income taxes, contingent consideration, allowances for credit losses, revenue recognition, unrecognized tax benefits, and asset impairments involving intangible assets. The Company periodically reviews these matters and reflects changes in estimates in earnings as appropriate. Actual results could materially differ from those estimates.
Revenue Recognition
We derive our revenues from the performance of proprietary assays or tests. The Company’s performance obligation is fulfilled upon the completion, review and release of test results to the customer. We subsequently bill third-party payers or direct-bill payers for the tests performed. Under Accounting Standards Codification 606, revenue is recognized based on the estimated transaction price or net realizable value, which is determined based on historical collection rates by each payer category for each proprietary test offered by the Company. To the extent the transaction price includes variable consideration, for all third party and direct-bill payers and proprietary tests, we estimate the amount of variable consideration that should be included in the transaction price using the expected value method based on historical experience.
| 8 |
We regularly review the ultimate amounts received from the third-party and direct-bill payers and related estimated reimbursement rates and adjust the net realizable values (“NRVs”) and related contractual allowances accordingly. If actual collections and related NRVs vary significantly from our estimates, we will adjust the estimates of contractual allowances, which affects net revenue in the period such variances become known.
Financing and Payment
For non-Medicare claims, our payment terms vary by payer category. Payment terms for direct-payers in our clinical services are typically thirty days. Commercial third-party-payers are required to respond to a claim within a time period established by their respective state regulations, generally between thirty to sixty days. However, payment for commercial third-party claims may be subject to a denial and appeal process, which could take up to two years in some instances where multiple appeals are submitted. The Company generally appeals all denials from commercial third-party payers. We bill Medicare directly for tests performed for Medicare patients and must accept Medicare’s fee schedule for the covered tests as payment in full.
Costs to Obtain or Fulfill a Customer Contract
Sales commissions are expensed in the period in which they have been earned. These costs are recorded in sales and marketing expense in the condensed consolidated statements of operations.
Accounts Receivable
The Company’s accounts receivable represent unconditional rights to consideration and are generated using its clinical services. The Company’s clinical services are fulfilled upon completion of the test, review and release of the test results. In conjunction with fulfilling these services, the Company bills the third-party payer or direct-bill payer. Contractual adjustments represent the difference between the list prices and the reimbursement rates set by third-party payers, including Medicare, commercial payers, and amounts billed to direct-bill payers. Specific accounts may be written off after several appeals, which in some cases may take longer than twelve months.
Leases
The Company determines if an arrangement contains a lease in whole or in part at the inception of the contract. Right-of-use (“ROU”) assets represent the Company’s right to use an underlying asset for the lease term while lease liabilities represent our obligation to make lease payments arising from the lease. All leases with terms greater than twelve months result in the recognition of a ROU asset and a liability at the lease commencement date based on the present value of the lease payments over the lease term. Unless a lease provides all of the information required to determine the implicit interest rate, we use our incremental borrowing rate based on the information available at the commencement date in determining the present value of the lease payments. We use the implicit interest rate in the lease when readily determinable.
Our lease terms include all non-cancelable periods and may include options to extend (or to not terminate) the lease when it is reasonably certain that we will exercise that option. Leases with terms of twelve months or less at the commencement date are expensed on a straight-line basis over the lease term and do not result in the recognition of an asset or liability. See Note 6, Leases.
| 9 |
Other Current Assets
Other current assets consisted of the following as of March 31, 2026 and December 31, 2025:
| March 31, 2026 | December 31, 2025 | |||||||
| Lab supplies | $ | $ | ||||||
| Prepaid expenses | ||||||||
| Total other current assets | $ | $ | ||||||
A reconciliation of the number of shares of Common Stock, used in the calculation of basic and diluted income (loss) per share for the three-month periods ended March 31, 2026 and 2025 is as follows:
| Three Months Ended | ||||||||
| March 31, | ||||||||
| 2026 | 2025 | |||||||
| Basic weighted average number of common shares | ||||||||
| Potential dilutive effect of stock-based awards | ||||||||
| Dilutive effect of preferred stock | ||||||||
| Diluted weighted average number of common shares | ||||||||
In January 2026, the Company’s preferred stock was converted into Common Stock thereby increasing the number of basic shares outstanding in 2026.
For the three-month periods ended March 31, 2026 and 2025, the following outstanding stock-based awards were excluded from the computation of the effect of dilutive securities on income (loss) per share for the following periods as they would have been anti-dilutive (rounded to thousands):
| Three Months Ended | ||||||||
| March 31, | ||||||||
| 2026 | 2025 | |||||||
| Options | ||||||||
| Restricted stock units (RSUs) | ||||||||
| 10 |
6. LEASES
The table below presents the lease-related assets and liabilities recorded in the Condensed Consolidated Balance Sheet:
| Classification on the Balance Sheet | March 31, 2026 | December 31, 2025 | ||||||||
| Assets | ||||||||||
| Operating lease assets | Operating lease right of use assets | |||||||||
| Total lease assets | $ | $ | ||||||||
| Liabilities | ||||||||||
| Current | ||||||||||
| Operating lease liabilities | Other accrued expenses | |||||||||
| Total current lease liabilities | $ | $ | ||||||||
| Noncurrent | ||||||||||
| Operating lease liabilities | Operating lease liabilities, net of current portion | |||||||||
| Total long-term lease liabilities | ||||||||||
| Total lease liabilities | $ | $ | ||||||||
The
weighted average remaining lease term for the Company’s operating leases was
The table below reconciles the cash flows to the lease liabilities recorded on the Company’s Condensed Consolidated Balance Sheet as of March 31, 2026:
| Operating Leases | ||||
| 2026 | ||||
| 2027 | ||||
| 2028 | ||||
| Total minimum lease payments | ||||
| Less: amount of lease payments representing effects of discounting | ||||
| Present value of future minimum lease payments | ||||
| Less: current obligations under leases | ||||
| Long-term lease obligations | $ | |||
7. COMMITMENTS AND CONTINGENCIES
Litigation
From time to time, the Company may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. When the Company is aware of a claim or potential claim, it assesses the likelihood of any loss or exposure. If it is probable that a loss will result and the amount of the loss can be reasonably estimated, the Company will record a liability for the loss. In addition to the estimated loss, the recorded liability includes probable and estimable legal costs associated with the claim or potential claim. Litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm the Company’s business. There is no pending litigation involving the Company at this time.
Due to the nature of the businesses in which the Company is engaged, it is subject to certain risks. Such risks include, among others, risk of liability for personal injury or death to persons using products or services that the Company promotes or commercializes. There can be no assurance that substantial claims or liabilities will not arise in the future due to the nature of the Company’s business activities. There is also the risk of employment-related litigation and other litigation in the ordinary course of business.
| 11 |
The Company could also be held liable for errors and omissions of its employees in connection with the services it performs that are outside the scope of any indemnity or insurance policy. The Company could be materially adversely affected if it were required to pay damages or incur defense costs in connection with a claim that is outside the scope of an indemnification agreement; if the indemnity, although applicable, is not performed in accordance with its terms; or if the Company’s liability exceeds the amount of applicable insurance or indemnity.
8. OTHER ACCRUED EXPENSES
Other accrued expenses consisted of the following as of March 31, 2026 and December 31, 2025:
| March 31, 2026 | December 31, 2025 | |||||||
| Operating lease liability | $ | $ | ||||||
| Accrued sales and marketing | ||||||||
| Accrued lab costs | ||||||||
| Accrued professional fees | ||||||||
| Taxes payable | ||||||||
| All others | ||||||||
| Total other accrued expenses | $ | $ | ||||||
Historically,
There were stock option awards issued in the three months ended March 31, 2026 and March 31, 2025.
The Company recognized approximately $ and $ of stock-based compensation expense within continuing operations during the three-month periods ended March 31, 2026 and 2025, respectively. The following table has a breakout of stock-based compensation expense from continuing operations by line item.
| Three Months Ended | ||||||||
| March 31, | ||||||||
| 2026 | 2025 | |||||||
| Sales and marketing | $ | $ | ||||||
| General and administrative | ||||||||
| Total stock compensation expense | $ | $ | ||||||
| 12 |
10. INCOME TAXES
The following table summarizes income tax expense on income from continuing operations and the effective tax rate for the three-month periods ended March 31, 2026 and 2025:
| Three Months Ended | ||||||||
| March 31, | ||||||||
| 2026 | 2025 | |||||||
| Provision for income tax | $ | $ | ||||||
| Effective income tax rate | % | % | ||||||
Income tax expense for the three months ended March 31, 2026 was primarily due to the Company’s net income for the three months ended March 31, 2026 and its deferred tax expense. Income tax expense for the three months ended March 31, 2025 was primarily due to state and federal income taxes.
Other long-term liabilities consisted of uncertain tax positions as of March 31, 2026 and December 31, 2025.
11. SEGMENTS
The Company operates and manages its business as a single reporting segment. The business provides esoteric molecular diagnostic testing, and pathology services to aid physicians in their evaluation of cancer risk in patients with indeterminate biopsies and a perceived high risk of cancer from clinical features. We develop and commercialize genomic tests and related first-line assays that can personalize medicine to help improve patient diagnosis and management. The Company’s chief operating decision maker (“CODM”) is the chief executive officer.
The CODM assesses performance for the segment and decides how to allocate resources based on consolidated net income that is also reported on the consolidated statements of operations. The monitoring of budgeted versus actual results is used in assessing performance of the segment and in establishing resource allocation across the organization.
The measure of segment assets is reported on the consolidated balance sheet as total consolidated assets. All the Company’s long-lived assets are located in the United States. The accounting policies of the segment are the same as those described in Note 1, Nature of Business and Significant Accounting Policies included in our Annual Report on Form 10-K.
| 13 |
The following table presents reportable segment profit and loss, including significant expense categories, attributable to the Company’s reportable segment for the periods presented:
| For The Three Months Ended | ||||||||
| March 31, | ||||||||
| 2026 | 2025 | |||||||
| Revenue, net: | $ | $ | ||||||
| Less: | ||||||||
| Cost of revenue: | ||||||||
| Fixed | ||||||||
| Variable | ||||||||
| Operating and other expenses: | ||||||||
| Sales and marketing | ||||||||
| Research and development | ||||||||
| General and administrative | ||||||||
| Other (income) expense, net | ( | ) | ||||||
| Provision for income taxes | ||||||||
| Segment net income | ||||||||
| Reconciliation of profit or loss: | ||||||||
| Loss on discontinued operations | ( | ) | ( | ) | ||||
| Consolidated net income | $ | $ | ||||||
Adjusted EBITDA, a non-GAAP financial measure, is a metric used by the CODM to measure cash flow of the ongoing business. Adjusted EBITDA is defined as income or loss from continuing operations, plus depreciation and amortization, non-cash stock-based compensation, non-recurring legal expenses, severance expense, interest and taxes, and other non-cash expenses including change in fair value of notes payable. The legal expenses included are related to NASDAQ uplist costs, special proxy and charter work, and an employment dispute. The table below includes a reconciliation of this non-GAAP financial measure to the most directly comparable GAAP financial measure.
Reconciliation of Adjusted EBITDA (Unaudited)
($ in thousands)
| Three Months Ended | ||||||||
| March 31, | ||||||||
| 2026 | 2025 | |||||||
| Income from continuing operations (GAAP Basis) | $ | $ | ||||||
| Depreciation and amortization | ||||||||
| Stock-based compensation | ||||||||
| Severance expense | ||||||||
| Taxes expense | ||||||||
| Non-recurring legal expenses | ||||||||
| Note payable interest | ||||||||
| Interest income | ( | ) | ( | ) | ||||
| Change in fair value of note payable | ( | ) | ||||||
| Adjusted EBITDA | $ | $ | ||||||
| 14 |
12. SUPPLEMENTAL CASH FLOW INFORMATION
Supplemental Disclosures of Non-Cash Activities
(in thousands)
| Three Months Ended | ||||||||
| March 31, | ||||||||
| 2026 | 2025 | |||||||
| Taxes accrued for repurchase of restricted shares | $ | $ | ||||||
| Accrued capital expenditures | ||||||||
| Accrued Series C issuance costs | ||||||||
13. EQUITY
On
October 10, 2024, the Company, Ampersand 2018 Limited Partnership (“Ampersand”) and 1315 Capital II, L.P. (“1315 Capital”,
and together with Ampersand, the “Investors”) entered into an Exchange Agreement (the “Exchange Agreement”) pursuant
to which the Investors exchanged (the “Exchange”) an aggregate of shares of the Company’s Series B Preferred
Stock, comprised of shares of Series B Preferred Stock held by Ampersand and shares of Series B Preferred Stock held by
1315 Capital, which represented all of the Company’s issued and outstanding Series B Preferred Stock, for newly created
shares of Series C Preferred Stock, at an issuance price per share of $. In the Exchange, Ampersand received shares of Series
C Preferred Stock and 1315 Capital received shares of Series C Preferred Stock. The Company recorded approximately $
On
January 20, 2026, the Company announced that all shares of Series C Preferred Stock were converted into Common Stock, resulting in the
issuance of approximately shares of Common Stock (calculated as $
Of
this amount, 1315 Capital owns approximately shares of Common Stock, or approximately
14. RECENT ACCOUNTING STANDARDS
Accounting Pronouncements Pending
In November 2024, the FASB issued ASU 2024-03, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures”. ASU 2024-03 will require disclosure of specific cost and expense information in the notes to the financial statements. Disclosure shall include inventory purchases, employee compensation, depreciation and intangible asset amortization presented in the face of the income statement for continuing operations. It shall also include certain amounts already disclosed under GAAP in the same disclosure as other disaggregation requirements as well as disclose a qualitative description and the amount of selling expenses. ASU 2024-03 will be effective for the Company in annual periods beginning after December 15, 2026. The amendment contemplates changes in disclosures only and the Company continues to assess the impact of the amendment.
| 15 |
INTERPACE BIOSCIENCES, INC
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
FORWARD-LOOKING STATEMENTS
This quarterly report on Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Statements that are not historical facts, including statements about our plans, objectives, beliefs and expectations, are forward-looking statements. Forward-looking statements include statements preceded by, followed by or that include the words “believes,” “expects,” “anticipates,” “plans,” “estimates,” “intends,” “projects,” “should,” “could,” “may,” “will” or similar words and expressions. These forward-looking statements are contained throughout this Form 10-Q.
Forward-looking statements are only predictions and are not guarantees of future performance. These statements are based on current expectations and assumptions involving judgments about, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond our control. These predictions are also affected by known and unknown risks, uncertainties and other factors that may cause our actual results to be materially different from those expressed or implied by any forward-looking statement. Many of these factors are beyond our ability to control or predict. Our actual results could differ materially from the results contemplated by these forward-looking statements due to a number of factors. Such factors include, but are not limited to, the following:
| ● | our expectations of future revenues, expenditures, capital or other funding requirements; | |
| ● | our reliance on Medicare reimbursement for our clinical services and our being able to successfully restructure ourselves and maintain profitability as a result of the decision of the Center for Medicare and Medicaid Services (“CMS) to cease reimbursement coverage of our PancraGEN® test on April 24, 2025 which resulted in specimens for first-line fluid chemistry and PancraGEN® testing not being accepted by the Company after May 2, 2025; | |
| ● | our dependence on sales and reimbursements from our clinical services for all of our revenue; | |
| ● | our reliance on sales of our molecular diagnostic tests for thyroid cancer, ThyGeNEXT® and ThyraMIR®v2, following the loss of reimbursement for and resulting discontinuance of PancraGEN®, our pancreatic cancer test; | |
| ● | our ability to continue to generate sufficient revenue from our clinical service products and other products and/or solutions that we develop in the future is important for our ability to meet our financial and other targets; | |
| ● | our ability to finance our business on acceptable terms in the future, which may limit the ability to grow our business, develop and commercialize products and services, and develop and commercialize new molecular clinical service solutions and technologies; | |
| ● | our dependence on third parties for the supply of some of the materials used in our clinical services tests; | |
| ● | the potential adverse impact of current and future laws, licensing requirements and governmental regulations upon our business operations, including but not limited to the evolving U.S. regulatory environment related to laboratory developed tests (“LDTs”), pricing of our tests and services and patient access limitations; | |
| ● | our reliance on our sales and marketing activities for future business growth and our ability to continue to expand our sales and marketing activities; | |
| ● | our being subject to the controlling interests of our two private equity investors who control an aggregate of 84% of our outstanding shares of Common Stock and this concentration of ownership may have a substantial influence on our decisions; |
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| ● | the delisting of our Common Stock from Nasdaq, the removal of our Common Stock from trading on the OTCQX on August 18, 2025 and the subsequent trading of our Common Stock on the OTCID have adversely affected and may continue to adversely affect our Common Stock and business and financial condition; | |
| ● | our determination to restate prior period consolidated financial statements and its impact on investor confidence and reputational issues; | |
| ● | our ability to implement our business strategy; and | |
| ● | the potential impact of future contingent liabilities on our financial condition. |
Please see Part I – Item 1A – “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 filed with the SEC on March 30, 2026, and as amended on April 30, 2026, as well as other documents we file with the SEC from time-to-time, for other important factors that could cause our actual results to differ materially from our current expectations as expressed in the forward-looking statements discussed in this Form 10-Q. Because of these and other risks, uncertainties and assumptions, you should not place undue reliance on these forward-looking statements. In addition, these statements speak only as of the date of the report in which they are set forth and, except as may be required by law, we undertake no obligation to revise or update publicly any forward-looking statements for any reason.
OVERVIEW
We are a company that provides esoteric molecular diagnostic testing and pathology services to aid physicians in their evaluation of cancer risk in patients with indeterminate biopsies and a perceived risk of cancer from clinical features. We develop and commercialize genomic tests that can personalize medicine to help improve patient diagnosis and management. Due to the decision of CMS to cease reimbursement coverage of our PancraGEN® test for assessing the risk of pancreatic cyst progression to cancer on April 24, 2025 which resulted in specimens for first-line fluid chemistry and PancraGEN® testing not being accepted by the Company after May 2, 2025, we are currently concentrating our efforts on our molecular diagnostic tests for thyroid cancer, ThyGeNEXT® and ThyraMIR®v2.
Equity
On January 20, 2026, we announced that all shares of Series C Preferred Stock were converted into shares of Common Stock, resulting in the issuance of approximately 23,267,327 shares of Common Stock (calculated as $1,000 stated value per preferred share divided by the $2.02 conversion price). As a result of these conversions and the subsequent issuances, there were 27,700,904 shares of Common Stock outstanding as of March 31, 2026.
Clinical Services
Our clinical services business commercializes clinically useful molecular diagnostic tests and molecular pathology services. We commercialize genomic tests and related first-line assays principally focused on risk-stratification of cancer using the latest technology to help personalize medicine and improve patient diagnosis and management. Our tests and services provide mutational analysis of genomic material contained in suspicious cysts, nodules, and lesions with the goal of better informing surgery or surveillance treatment decisions in patients suspected of thyroid, pancreatic, and other cancers. The molecular diagnostic tests we offer enable healthcare providers to stratify cancer risk, helping to avoid unnecessary surgical treatment in patients at low risk, while also helping to identify patients that would benefit from increased surveillance or surgical intervention.
We currently have two commercialized molecular diagnostic tests in the marketplace: ThyGeNEXT®, an expanded oncogenic mutation panel that helps “rule-in” and “rule-out” malignancy in thyroid nodules and ThyraMIR®v2, used in combination with ThyGeNEXT®, which further stratifies thyroid nodules for malignancy risk utilizing a proprietary microRNA gene expression classifier.
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Revenue Recognition
Clinical services derive revenues from the performance of proprietary assays or tests. Our performance obligation is fulfilled upon completion, review and release of test results to the customer, at which time we bill third-party payers or direct-bill payers for the tests performed. Under Accounting Standards Codification 606, revenue is recognized based upon the estimated transaction price or NRV, which is determined based on historical collection rates by each payer category for each proprietary test offered. To the extent that the transaction price includes variable consideration, for all third party and direct-bill payers and proprietary tests, we estimate the amount of variable consideration that should be included in the transaction price using the expected value method based on historical experience.
The ultimate amounts received from the third-party and direct-bill payers and related estimated reimbursement rates are regularly reviewed and we adjust the NRVs and related contractual allowances accordingly. If actual collections and related NRVs vary significantly from our estimates, we adjust the estimates of contractual allowances, which affects net revenue in the period such variances become known.
Cost of Revenue
Cost of revenue consists primarily of the costs associated with operating our laboratory and other costs directly related to our tests. Personnel costs, which constitute the largest portion of cost of services, include all labor-related costs, such as salaries, bonuses, fringe benefits and payroll taxes for laboratory personnel. Other direct costs include, but are not limited to, laboratory supplies, certain consulting expenses, royalty expenses, and facility expenses.
CONDENSED CONSOLIDATED RESULTS OF OPERATIONS
The following table sets forth, for the periods indicated, certain statements of operations data. The trends illustrated in this table may not be indicative of future results.
Consolidated Results of Continuing Operations for the Quarter Ended March 31, 2026 Compared to the Quarter Ended March 31, 2025 (in thousands)
| Three Months Ended March 31, | ||||||||||||||||
| 2026 | 2026 | 2025 | 2025 | |||||||||||||
| % to | % to | |||||||||||||||
| revenue | revenue | |||||||||||||||
| Revenue, net | $ | 9,032 | 100.0 | % | $ | 11,515 | 100.0 | % | ||||||||
| Cost of revenue | 3,128 | 34.6 | % | 4,145 | 36.0 | % | ||||||||||
| Gross profit | 5,904 | 65.4 | % | 7,370 | 64.0 | % | ||||||||||
| Operating expenses: | ||||||||||||||||
| Sales and marketing | 2,177 | 24.1 | % | 2,814 | 24.4 | % | ||||||||||
| Research and development | 153 | 1.7 | % | 177 | 1.5 | % | ||||||||||
| General and administrative | 2,451 | 27.1 | % | 2,550 | 22.1 | % | ||||||||||
| Total operating expenses | 4,781 | 52.9 | % | 5,541 | 48.1 | % | ||||||||||
| Operating income | 1,123 | 12.4 | % | 1,829 | 15.9 | % | ||||||||||
| Note payable interest | - | 0.0 | % | (78 | ) | -0.7 | % | |||||||||
| Other income, net | 10 | 0.1 | % | 21 | 0.2 | % | ||||||||||
| Income from continuing operations before tax | 1,133 | 12.5 | % | 1,772 | 15.4 | % | ||||||||||
| Provision for income taxes | 302 | 3.3 | % | 18 | 0.2 | % | ||||||||||
| Income from continuing operations | 831 | 9.2 | % | 1,754 | 15.2 | % | ||||||||||
| Loss from discontinued operations, net of tax | (110 | ) | -1.2 | % | (107 | ) | -0.9 | % | ||||||||
| Net income | $ | 721 | 8.0 | % | $ | 1,647 | 14.3 | % | ||||||||
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Revenue, net
Consolidated revenue, net for the three months ended March 31, 2026 decreased by $2.5 million, or 22%, to $9.0 million, compared to $11.5 million for the three months ended March 31, 2025. The decrease in net revenue was primarily driven by the loss of reimbursement for PancraGEN® in April 2025, which resulted in specimens for PancraGEN® testing no longer being accepted by the Company after May 2, 2025.
Cost of revenue
Consolidated cost of revenue for the three months ended March 31, 2026 was $3.1 million, as compared to $4.1 million for the three months ended March 31, 2025. The decrease was primarily driven by the discontinuance of our PancraGEN® test resulting from the loss of reimbursement discussed above. As a percentage of revenue, cost of revenue was approximately 35% for the three months ended March 31, 2026 and 36% for the three months ended March 31, 2025.
Gross profit
Consolidated gross profit was approximately $5.9 million for the three months ended March 31, 2026 and $7.4 million for the three months ended March 31, 2025. The gross profit percentage was approximately 65% for the three months ended March 31, 2026 and 64% for the three months ended March 31, 2025. The decrease in gross profit can be attributed to the decrease in revenue resulting from the discontinuance of our PancraGEN® test as a result of the loss of reimbursement.
Sales and marketing expense
Sales and marketing expense was approximately $2.2 million for the three months ended March 31, 2026 and $2.8 million for the three months ended March 31, 2025. The decrease can be attributed to the reduction in salesforce size as a result of the loss of PancraGEN® reimbursement as discussed previously.
Research and development
Research and development expense was approximately $0.2 million for both the three months ended March 31, 2026 and March 31, 2025, respectively.
General and administrative
General and administrative expense was approximately $2.5 million for the three months ended March 31, 2026 and $2.6 million for the three months ended March 31, 2025. As a percentage of revenue, general and administrative expense was 27% for the three months ended March 31, 2026 as compared to 22% for the three months ended March 31, 2025. This percentage increase can be attributed to the decline in revenue mentioned above.
Operating income
Operating income from continuing operations was $1.1 million for the three months ended March 31, 2026 and $1.8 million for the three months ended March 31, 2025. The decrease in operating income for the three months ended March 31, 2026 can be primarily attributed to the decrease in revenue and gross profit discussed above.
Note payable interest expense
Note payable interest expense was $0.1 million for the three months ended March 31, 2025. The interest expense was from our former Term Loan with BroadOak Fund V, L.P. (“Term Loan”) which has since been repaid.
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Provision for income taxes
Income tax expense was approximately $0.3 million for the three months ended March 31, 2026 and $18,000 for the three months ended March 31, 2025. The income tax expense for the three months ended March 31, 2026 was primarily due to our net income for the three months ended March 31, 2026 and deferred tax expense. The income tax expense for the three months ended March 31, 2025 was primarily related to state and local taxes.
Loss from discontinued operations, net of tax
We had a loss from discontinued operations of approximately $0.1 million for both the three months ended March 31, 2026 and March 31, 2025.
Non-GAAP Financial Measures
In addition to the GAAP results provided throughout this document, we have provided certain non-GAAP financial measures to help evaluate the results of our performance. We believe that these non-GAAP financial measures, when presented in conjunction with comparable GAAP financial measures, are useful to both management and investors in analyzing our ongoing business and operating performance. We believe that providing the non-GAAP information to investors, in addition to the GAAP presentation, allows investors to view our financial results in the way that management views financial results.
In this Quarterly Report on Form 10-Q, we discuss Adjusted EBITDA, a non-GAAP financial measure. Adjusted EBITDA is a metric used by management to measure cash flow of the ongoing business. Adjusted EBITDA is defined as income or loss from continuing operations, plus depreciation and amortization, non-cash stock-based compensation, non-recurring legal expenses, severance expense, interest and taxes, and other non-cash expenses including change in fair value of notes payable. The legal expenses included are related to NASDAQ uplist costs, special proxy and charter work, and an employment dispute. The table below includes a reconciliation of this non-GAAP financial measure to the most directly comparable GAAP financial measure.
Reconciliation of Adjusted EBITDA (Unaudited)
($ in thousands)
| Three Months Ended | ||||||||
| March 31, | ||||||||
| 2026 | 2025 | |||||||
| Income from continuing operations (GAAP Basis) | $ | 831 | $ | 1,754 | ||||
| Depreciation and amortization | 118 | 95 | ||||||
| Stock-based compensation | 4 | 15 | ||||||
| Severance expense | - | 168 | ||||||
| Taxes expense | 302 | 18 | ||||||
| Non-recurring legal expenses | 315 | - | ||||||
| Note payable interest | - | 78 | ||||||
| Interest income | (10 | ) | (7 | ) | ||||
| Change in fair value of note payable | - | (25 | ) | |||||
| Adjusted EBITDA | $ | 1,560 | $ | 2,096 | ||||
LIQUIDITY AND CAPITAL RESOURCES
For the three months ended March 31, 2026, we had operating income from continuing operations of $1.1 million. As of March 31, 2026, we had cash and cash equivalents of $2.6 million, total current assets of $10.0 million and current liabilities of $4.0 million. As of May 1, 2026, we had approximately $2.9 million of cash and cash equivalents.
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During the three months ended March 31, 2026, net cash provided by operating activities was $0.3 million. The main component of cash provided by operating activities was our net income of $0.7 million and non-cash adjustments of $0.5 million, which were partially offset by a decrease in accrued salaries and bonus of $1.2 million. During the three months ended March 31, 2025, net cash provided by operating activities was $1.2 million. The main component of cash provided by operating activities was our net income of $1.6 million.
For the three months ended March 31, 2026, cash used in investing activities was $0.1 million which pertained to the purchase of lab equipment. For the three months ended March 31, 2025, cash used in investing activities was zero.
For the three months ended March 31, 2026, there was no cash used in financing activities. For the three months ended March 31, 2025, cash used in financing activities was $1.5 million, which were payments made on our former Term Loan.
We generated positive cash flows from operations for the three months ending March 31, 2026. We intend to meet our ongoing capital needs by using our available cash as well as through targeted margin improvement, collection of accounts receivable, containment of costs, and the potential use of other financing options and other strategic alternatives.
The Company continues to explore various strategic alternatives, dilutive and non-dilutive sources of funding, including equity and debt financings, strategic alliances, business development and other sources in order to provide additional liquidity. With the delisting of the Common Stock from Nasdaq in February 2021, our ability to raise additional capital on terms acceptable to the Company has been adversely impacted. There can be no assurance that the Company will be successful in obtaining such funding on terms acceptable to the Company. The Company intends to seek an uplisting of its Common Stock to Nasdaq, but no assurances can be given that a Nasdaq listing will be achieved.
Inflation
We do not believe that inflation had a significant impact on our results of operations for the periods presented. However, inflation and supply chain disruptions, whether caused by tariffs, restrictions or slowdowns in shipping or logistics, increases in demand for certain goods used in our operations, or otherwise, could impact our operations in the near term.
Critical Accounting Estimates
See Note 5, Summary of Significant Accounting Policies and Note 14, Recent Accounting Standards to the Interim Financial Statements included elsewhere in this Quarterly Report on Form 10-Q for information regarding newly adopted and recent accounting pronouncements. See also Note 1, Nature of Business and Significant Accounting Policies to our financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2025, as amended, for a discussion of our critical accounting policies. There have been no material changes to such critical accounting policies. We believe our most critical accounting policies include accounting for revenue recognition, leases, and income taxes.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
As a smaller reporting company, we are electing scaled disclosure reporting obligations and therefore are not required to provide the information requested by this Item.
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Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our principal executive officer and principal financial officer evaluated the effectiveness of our disclosure controls and procedures as of March 31, 2026. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate, to allow timely decisions regarding required disclosure.
Based on management’s evaluation of the Company’s disclosure controls and procedures, the principal executive officer and principal financial officer of the Company have concluded that the Company’s disclosure controls and procedures were effective as of March 31, 2026.
Reference should be made to our Annual Report on Form 10-K for the year ended December 31, 2025 filed with the SEC on March 30, 2026, as amended, for additional information regarding discussion of the effectiveness of the Company’s controls and procedures.
Changes in Internal Control over Financial Reporting
There has been no change in our internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the quarter covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 1A. Risk Factors
In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K of the Company filed with the SEC on March 30, 2026, as amended, and as updated and supplemented in subsequent filings. These risk factors could materially harm our business, operating results and financial condition. Additional factors and uncertainties not currently known to us or that we currently consider immaterial also may materially adversely affect our business, financial condition or future results.
Item 2. Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
None.
Item 5. Other Information
None.
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Item 6. Exhibits
| * | Filed Herewith. | |
| + | Exhibits 32.1 and 32.2 are being furnished herewith and shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liability of that section, nor shall such exhibits be deemed to be incorporated by reference to any registration statement or other document filed under the Securities Act or the Exchange Act, except as otherwise stated in any such filing. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Date: May 12, 2026 | Interpace Biosciences, Inc. |
| (Registrant) | |
| /s/ Thomas W. Burnell | |
| Thomas W. Burnell | |
| President and Chief Executive Officer | |
| (Principal Executive Officer) | |
| Date: May 12, 2026 | /s/ Christopher McCarthy |
Christopher McCarthy Chief Financial Officer and Chief Operating Officer | |
| (Principal Financial Officer) |
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