8-K
Interpace Biosciences, Inc. (IDXG)
UNITEDSTATES
SECURITIESAND EXCHANGE COMMISSION
Washington,D.C. 20549
FORM8-K
CURRENTREPORT
PURSUANTTO SECTION 13 OR 15(D) OF THE
SECURITIESEXCHANGE ACT OF 1934
Dateof Report (Date of earliest event reported): March 31, 2021
INTERPACEBiosciences, INC.
(Exactname of Registrant as specified in its charter)
| DELAWARE | 0-24249 | 22-2919486 |
|---|---|---|
| (State or other jurisdiction<br><br> <br>of incorporation) | (Commission<br><br> <br>File Number) | (IRS Employer<br><br> <br>Identification No.) |
MorrisCorporate Center 1, Building C
300Interpace Parkway,
Parsippany,NJ 07054
(Address, including zip code, of Principal Executive Offices)
(855)776-6419
Registrant’s telephone number, including area code
NotApplicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| [ ] | Written communications<br> pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| [ ] | Soliciting material pursuant<br> to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| [ ] | Pre-commencement communications<br> pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| [ ] | Pre-commencement communications<br> pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securitiesregistered pursuant to Section 12(b) of the Act:
| Title<br> of each class | Trading<br> Symbol(s) | Name<br> of each exchange on which registered |
|---|---|---|
| None | N/A | N/A |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
[ ] 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. [ ]
Item2.02 Results of Operations and Financial Condition.
On March 31, 2021, Interpace Biosciences, Inc. issued a press release announcing its results of operations and financial condition for the fiscal year ended December 31, 2020. The full text of the press release is set forth as Exhibit 99.1 attached hereto and is incorporated herein by reference.
The information in Item 2.02 of this Current Report on Form 8-K, including Exhibit 99.1, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed to be incorporated by reference in any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as otherwise stated in such filing.
Item9.01. Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit<br><br> Number | Description |
|---|---|
| 99.1 | Press Release, dated March 31, 2021 |
SIGNATURE
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 hereunto duly authorized.
| Interpace Biosciences, Inc. | |
|---|---|
| By: | /s/ Thomas W. Burnell |
| Name: | Thomas W. Burnell |
| Title: | President and Chief Executive Officer |
Date: April 5, 2021
Exhibit99.1
InterpaceBiosciences Announces Full Year and Fourth Quarter 2020
Financialand Business Results
| ● | 2020 Full Year Net Revenue of $32.4 Million Up 34% vs Prior Year; Fourth Quarter Net Revenue of $9.6M Million Up 129% vs Prior Year; |
|---|---|
| ● | Provides Full Year 2021 Range of Revenues |
| --- | --- |
| ● | On Target to Achieve EBITDA Breakeven by 2021 Year End |
| --- | --- |
PARSIPPANY, NJ, March 31, 2021 (GLOBE NEWSWIRE) — Interpace Biosciences, Inc. (“Interpace” or the “Company”) (OTCQX: IDXG) today announced financial results for the fiscal quarter ended December 31, 2020 and provided a business and financial update.
“Fiscal 2020 was a challenging and transformational year for Interpace Biosciences. Since joining the company as President and CEO in December, we’ve made significant progress in our restructuring and reprioritization plan and are on target to realize our goal of achieving annualized savings of approximately $7.2 million from changes to our cost structure,” said CEO Thomas Burnell. “We are now operating the clinical services business solely out of the Pittsburgh location and the pharma services business solely out of our new state-of-the-art lab in Morrisville, NC. As we move further into 2021 with the renewed focus on our core capabilities, we expect to see significant improvements through the use of automation technology and to achieve further improvements in overall efficiency with the renovation of the clinical lab in Pittsburgh,” added Mr. Burnell.
“As we progress forward in Fiscal 2021, we are realizing the positive impact of our recently improved reimbursement rates and seeing significant growth in our clinical services testing volume,” stated Tom Freeburg, CFO of Interpace. “We are providing full year revenue guidance in the range of $38 million to $40 million and with a goal of achieving EBITDA breakeven before 2021 year-end,” added Mr. Freeburg.
Full-Year2020 Financial Performance as Compared to Full-Year 2019
| ● | Net<br> Revenue was $32.4 million, an increase of 34% versus the prior year which included pharma<br> services net revenue starting in the third quarter of 2019. |
|---|---|
| ● | Gross<br> Profit was 33% and 34% for full years 2020 and 2019, respectively. |
| --- | --- |
| ● | Loss<br> from Continuing Operations was approximately $(26.2) million as compared to $(26.7) million<br> for the prior year. |
| --- | --- |
| ● | Adjusted<br> EBITDA was $(15.4) million as compared to $(16.6) million for the prior year. |
| --- | --- |
FourthQuarter 2020 Financial Performance as Compared to the Fourth Quarter of 2019
| ● | Net<br> Revenue was $9.6 million, an increase of 129% vs fourth quarter 2019. |
|---|---|
| ● | Gross<br> Profit was 32% for the fourth quarter 2020, vs -28% for the fourth quarter 2019. |
| --- | --- |
| ● | Loss<br> from Continuing Operations was $(8.1) million vs $(10.6) million in the fourth quarter<br> 2019. |
| --- | --- |
| ● | Adjusted<br> EBITDA was $(4.1) million vs $(9.2) million in the fourth quarter 2019. |
| --- | --- |
| ● | December<br> 31, 2020 cash balance was $2.8 million, net of restricted cash. March 15, 2021 cash balance<br> was $3.4 million, net of restricted cash. |
| --- | --- |
RecentClinical and Reimbursement Highlights
We continue to generate and publish clinical evidence related to our key products, including ThyGeNEXT^®^ and ThyraMIR^®^and PancraGEN^®^ as well as our pipeline product, BarreGEN^®^.
Reimbursement expansion for our clinical services through 2020 is as follows:
| ● | In<br> December 2020, we executed an agreement with Regence Blue Cross Blue Shield of Washington<br> State, Utah, Oregon, and Idaho. |
|---|---|
| ● | In<br> December 2020, we executed an agreement with HealthNow New York, parent company of Blue<br> Cross Blue Shield of Western New York, and Blue Cross Blue Shield of Northeastern New<br> York. |
| --- | --- |
| ● | In<br> December, 2020, we executed an agreement with Florida Blue/Blue Cross Blue Shield of<br> Florida, which was effective January 1, 2021. |
| --- | --- |
| ● | In<br> December 2020, Medicare increased reimbursement for our ThyGeNEXT^®^ test<br> from $600 to $2,900. We began realizing reimbursement at this higher rate starting in<br> January 2021. |
| --- | --- |
AboutInterpace Biosciences
Interpace Biosciences is an emerging leader in enabling personalized medicine, offering specialized services along the therapeutic value chain from early diagnosis and prognostic planning to targeted therapeutic applications.
Clinical services, through Interpace Diagnostics, provides clinically useful molecular diagnostic tests, bioinformatics and pathology services for evaluating risk of cancer by leveraging the latest technology in personalized medicine for improved patient diagnosis and management. Interpace has five commercialized molecular tests and one test in a clinical evaluation process (CEP): PancraGEN^®^for the diagnosis and prognosis of pancreatic cancer from pancreatic cysts; PanDNA, a “molecular only” version of PancraGEN^®^ that provides physicians a snapshot of a limited number of factors; ThyGeNEXT^®^ for the diagnosis of thyroid cancer from thyroid nodules utilizing a next generation sequencing assay; ThyraMIR^®^ for the diagnosis of thyroid cancer from thyroid nodules utilizing a proprietary gene expression assay; and RespriDX^®^ that differentiates lung cancer of primary versus metastatic origin. In addition, BarreGEN^®^, a molecular based assay that helps resolve the risk of progression of Barrett’s Esophagus to esophageal cancer, is currently in a clinical evaluation program (CEP) whereby we gather information from physicians using BarreGEN^®^ to assist us in gathering clinical evidence relative to the safety and performance of the test and also providing data that will potentially support payer reimbursement.
Pharma services, through Interpace Pharma Solutions, provides pharmacogenomics testing, genotyping, biorepository and other customized services to the pharmaceutical and biotech industries. Pharma services also advances personalized medicine by partnering with pharmaceutical, academic, and technology leaders to effectively integrate pharmacogenomics into their drug development and clinical trial programs with the goals of delivering safer, more effective drugs to market more quickly, while also improving patient care.
For more information, please visit Interpace Biosciences’ website at www.interpace.com.
Forward-lookingStatements
Thispress release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, Section 21Eof the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995, relating to the Company’sfuture financial and operating performance. The Company has attempted to identify forward looking statements by terminology including“believes,” “estimates,” “anticipates,” “expects,” “plans,” “projects,”“intends,” “potential,” “may,” “could,” “might,” “will,”“should,” “approximately” or other words that convey uncertainty of future events or outcomes to identifythese forward-looking statements. These statements are based on current expectations, assumptions and uncertainties involvingjudgments about, among other things, future economic, competitive and market conditions and future business decisions, all ofwhich are difficult or impossible to predict accurately and many of which are beyond the Company’s control. These statementsalso involve known and unknown risks, uncertainties and other factors that may cause the Company’s actual results to bematerially different from those expressed or implied by any forward-looking statements including, but not limited to, the adverseimpact of the COVID-19 pandemic on the Company’s operations and revenues, the substantial doubt about the Company’sability to continue as a going concern, the possibility that the Company’s estimates of future revenue may prove to be materiallyinaccurate, the Company’s history of operating losses, the Company’s ability to adequately finance its business, theCompany’s ability to repay its $5M secured bridge loan, the Company’s dependence on sales and reimbursements fromits clinical services, the Company’s ability to retain or secure reimbursement including its reliance on third parties toprocess and transmit claims to payers and the adverse impact of any delay, data loss, or other disruption in processing or transmittingsuch claims, the Company’s revenue recognition being based in part on estimates for future collections which estimates mayprove to be incorrect, and the Company’s ability to remediate material weaknesses in internal controls. Additionally, allforward-looking statements are subject to the “Risk Factors” detailed from time to time in the Company’s AnnualReport on Form 10-K for the fiscal year ended December 31, 2020 to be filed with the Securities and Exchange Commission , CurrentReports on Form 8-K and Quarterly Reports on Form 10-Q. Because of these and other risks, uncertainties and assumptions, unduereliance should not be placed on these forward-looking statements. In addition, these statements speak only as of the date ofthis press release and, except as may be required by law, the Company undertakes no obligation to revise or update publicly anyforward-looking statements for any reason.
Contacts:
Investor Relations
Edison Group
Joseph Green/ Megan Paul
(646) 653-7030/7034
[email protected]/[email protected]
INTERPACEBIOSCIENCES, INC.
CONDENSEDCONSOLIDATED STATEMENTS OF OPERATIONS
(inthousands, except per share data)
(Unaudited)
| Three Months Ended | Years Ended | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| December 31, | December 31, | |||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||
| Revenue, net | $ | 9,646 | $ | 4,214 | $ | 32,398 | $ | 24,220 | ||||
| Cost of revenue | 6,517 | 5,399 | 21,673 | 15,888 | ||||||||
| Gross Profit | 3,129 | (1,185 | ) | 10,725 | 8,332 | |||||||
| Sales and marketing | 2,478 | 2,990 | 9,254 | 11,116 | ||||||||
| Research and development | 673 | 778 | 2,795 | 2,810 | ||||||||
| General and administrative | 7,288 | 4,748 | 20,770 | 14,363 | ||||||||
| Acquisition related expense | - | - | - | 2,534 | ||||||||
| Acquisition amortization expense | 1,115 | 1,115 | 4,461 | 3,989 | ||||||||
| Change in fair value of contingent consideration | (489 | ) | (44 | ) | (489 | ) | (44 | ) | ||||
| Total operating expenses | 11,065 | 9,587 | 36,791 | 34,768 | ||||||||
| Operating loss | (7,936 | ) | (10,772 | ) | (26,066 | ) | (26,436 | ) | ||||
| Interest accretion expense | (135 | ) | (109 | ) | (549 | ) | (440 | ) | ||||
| Other (expense) income, net | (6 | ) | 209 | 467 | 196 | |||||||
| Loss from continuing operations before tax | (8,077 | ) | (10,672 | ) | (26,148 | ) | (26,680 | ) | ||||
| Provision for income taxes | 10 | (47 | ) | 53 | (28 | ) | ||||||
| Loss from continuing operations | (8,087 | ) | (10,625 | ) | (26,201 | ) | (26,652 | ) | ||||
| Loss from discontinued operations, net of tax | (56 | ) | (38 | ) | (250 | ) | (88 | ) | ||||
| Net loss | (8,143 | ) | (10,663 | ) | (26,451 | ) | (26,740 | ) | ||||
| Less adjustment for preferred stock deemed dividend | - | - | (3,033 | ) | - | |||||||
| Less dividends on preferred stock | - | (354 | ) | - | (429 | ) | ||||||
| Net loss attributable to common stockholders | $ | (8,143 | ) | $ | (11,017 | ) | $ | (29,484 | ) | $ | (27,169 | ) |
| Basic and diluted loss per share of common stock: | ||||||||||||
| From continuing operations | $ | (2.00 | ) | $ | (2.86 | ) | $ | (7.26 | ) | $ | (7.23 | ) |
| From discontinued operations | (0.01 | ) | (0.01 | ) | (0.06 | ) | (0.02 | ) | ||||
| Net loss per basic share of common stock | $ | (2.01 | ) | $ | (2.87 | ) | $ | (7.32 | ) | $ | (7.25 | ) |
| Weighted average number of common shares and | ||||||||||||
| common share equivalents outstanding: | ||||||||||||
| Basic | 4,043 | 3,834 | 4,029 | 3,746 | ||||||||
| Diluted | 4,043 | 3,834 | 4,029 | 3,746 |
SelectedBalance Sheet Data
($in thousands)
| December 31, | December 31, | |||||
|---|---|---|---|---|---|---|
| 2020 | 2019 | |||||
| Cash and cash equivalents | $ | 2,772 | $ | 2,321 | ||
| Total current assets | 14,122 | 16,510 | ||||
| Total current liabilities | 18,233 | 17,292 | ||||
| Total assets | 45,681 | 51,540 | ||||
| Total liabilities | 28,228 | 29,847 | ||||
| Total stockholders’ deficit | (29,083 | ) | (4,479 | ) |
SelectedCash Flow Data
($in thousands)
| For the Years Ended | ||||||
|---|---|---|---|---|---|---|
| December 31, | ||||||
| 2020 | 2019 | |||||
| Net loss | $ | (26,451 | ) | $ | (26,740 | ) |
| Net cash used in operating activities | $ | (14,579 | ) | $ | (18,957 | ) |
| Net cash used in investing activities | (1,575 | ) | (13,947 | ) | ||
| Net cash provided by financing activities | 16,605 | 29,157 | ||||
| Change in cash and cash equivalents | 451 | (3,747 | ) | |||
| Cash and equivalents, Beginning | 2,321 | 6,068 | ||||
| Cash and equivalents, Ending | $ | 2,772 | $ | 2,321 |
Non-GAAPFinancial Measures
In addition to the United States generally accepted accounting principles, or 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 document, 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, acquisition related expenses, transition expenses, non-cash stock based compensation and ESPP plans, interest and taxes, and other non-cash expenses including asset impairment costs, bad debt expense, receipt of stimulus grants, loss on extinguishment of debt, goodwill impairment and change in fair value of contingent consideration, and warrant liability. The table below includes a reconciliation of this non-GAAP financial measure to the most directly comparable GAAP financial measure.
Reconciliationof Adjusted EBITDA (Unaudited)
($in thousands)
| Quarters Ended | Years Ended | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| December 31, | December 31, | |||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||
| Loss from continuing operations (GAAP Basis) | $ | (8,087 | ) | $ | (10,625 | ) | $ | (26,201 | ) | $ | (26,652 | ) |
| Bad debt expense | 335 | - | 585 | 499 | ||||||||
| Acquisition related expense | - | - | - | 2,534 | ||||||||
| Receipt of HHS stimulus grant | - | - | (650 | ) | - | |||||||
| Transition expenses | 1,780 | - | 2,578 | 836 | ||||||||
| Legal and professional services | - | - | 495 | - | ||||||||
| Depreciation and amortization | 1,399 | 1,360 | 5,501 | 4,524 | ||||||||
| Stock-based compensation | 861 | 289 | 2,242 | 1,535 | ||||||||
| Taxes | 10 | (47 | ) | 53 | (28 | ) | ||||||
| Interest accretion expense | 135 | 109 | 549 | 440 | ||||||||
| Mark to market on warrant liability | 1 | (244 | ) | (61 | ) | (279 | ) | |||||
| Change in fair value of contingent consideration | (489 | ) | (44 | ) | (489 | ) | (44 | ) | ||||
| Adjusted EBITDA | $ | (4,055 | ) | $ | (9,202 | ) | $ | (15,398 | ) | $ | (16,635 | ) |