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): January 20, 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:
| [<br> ] | Written<br> communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| [<br> ] | Soliciting<br> material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| [<br> ] | Pre-commencement<br> communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| [<br> ] | Pre-commencement<br> communications 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 |
|---|---|---|
| Common<br> Stock, $0.01 par value per share | IDXG | The<br> Nasdaq Stock Market LLC |
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 January 20, 2021, Interpace Biosciences, Inc. issued a press release announcing its results of operations and financial condition for the quarter ended September 30, 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<br> Release, dated January 20, 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<br> Biosciences, Inc. | |
|---|---|
| By: | /s/ Thomas W. Burnell |
| Name: | Thomas<br> W. Burnell |
| Title: | President<br> and Chief Executive Officer |
Date: January 20, 2021
Exhibit99.1
InterpaceBiosciences Announces Third Quarter 2020 Financial and Business Results and Completion of $5 Million Bridge Loan
| ● | Third Quarter Net Revenue of $8.2 Million Up 7% vs Prior Year; Third Quarter Year to Date Net Revenue of $22.8 Million Up 14% vs Prior Year |
|---|---|
| ● | Estimates Fourth Quarter Net Revenue range of $9.0 million - $10.0 million |
| ● | Realized Reimbursement on Higher ThyGeNEXT Pricing in January |
| ● | Closed $5 Million Bridge Loan Agreement with Existing Private Equity Investors and terminated the SVB credit facility |
| ● | Cash balance as of January 15, 2021 was $6.1 million net of restricted cash |
ConferenceCall and Webcast Thursday January 21, 2021 at 4:30 pm ET
PARSIPPANY, NJ, January 20, 2021 (GLOBE NEWSWIRE) — Interpace Biosciences, Inc. (“Interpace” or the “Company”) (Nasdaq: IDXG) today announced financial results for the fiscal quarter ended September 30, 2020 and provided a business and financial update.
Thomas Burnell, President and CEO of Interpace commented, “We were pleased to see improvement in clinical volumes in Q3 as the Company continued to recover from the effects of the pandemic. We exceeded the net revenue guidance previously provided, driven by higher molecular test volume, higher reimbursement rates and realization of our ThyraMIR^®^price increase in the third quarter. In January, we began to realize reimbursement on the Medicare ThyGeNEXT^®^ price increase. We experienced improved business trends through the third quarter and into the fourth quarter; we currently expect Fourth Quarter Net Revenue to be in the range of $9 million to $10 million, subject to review and audit. However, in December and January we are seeing lower testing volume due to increased COVID cases.”
Mr. Burnell continued, “Additionally, we are pleased to announce that on January 7^th^ we successfully closed on a $5 million secured bridge loan with our existing equity investors, Ampersand Capital Partners and 1315 Capital Partners, which further demonstrates their commitment as a strategic partner to the Company. Concurrently, we terminated our credit facility with Silicon Valley Bank, which had no borrowing availability. As of January 15^th^ we had a cash balance of $6.1 million, net of restricted cash.”
Fred Knechtel, CFO of Interpace added, “It is also important to note that we have successfully transitioned the testing capabilities from our Rutherford, New Jersey facility to our Morrisville, North Carolina facility. The North Carolina facility offers an end to end solution, all under one roof, allowing for optimization and efficiency in supporting our pharma and CRO partners. We will vacate the Rutherford facility by the end of March.”
ThirdQuarter 2020 Financial Performance as Compared to the Third Quarter of 2019
| ● | Net<br> Revenue was $8.2 million, an increase of 7% versus third quarter 2019. |
|---|---|
| ● | Gross<br> Profit was 37% for both the third quarter 2020 and 2019. |
| ● | Loss<br> from Continuing Operations was $(6.2) million vs $(7.4) million in the third quarter 2019. |
| ● | Adjusted<br> EBITDA was $(2.9) million vs $(4.2) million in the third quarter 2019. |
| ● | September<br> 30, 2020 cash balance was $5.3 million. |
Yearto Date Third Quarter 2020 Financial Performance as Compared to Year to Date Third Quarter 2019
| ● | Net<br> Revenue was $22.8 million, an increase of 14% versus prior year and included pharma services revenue starting third quarter<br> 2019. |
|---|---|
| ● | Gross<br> Profit was 33% as compared to 48% for the first nine months of 2019 due principally to lower margins associated with<br> pharma services in 2020. |
| ● | Loss<br> from Continuing Operations was approximately $(18.1) million as compared to $(16.0) million for the prior year to date<br> period. |
| ● | Adjusted<br> EBITDA was $(11.3) million as compared to $(7.4) million for the prior year to date period. |
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 State, Utah, Oregon, and Idaho. |
|---|---|
| ● | In<br> December 2020, we executed an agreement with HealthNow New York, parent company of Blue Cross Blue Shield of Western New York,<br> and Blue Cross Blue Shield of Northeastern New York. |
| ● | In<br> December, 2020, we executed an agreement with Florida Blue/Blue Cross Blue Shield of Florida, which was effective January<br> 1, 2021. |
| ● | In December 2020, Medicare increased pricing<br> for our ThyGeNEXT^®^ test from $600 to $2,900. We began realizing reimbursement at the higher rate starting in<br> January 2021. |
Form10-K/A and Form 10-Q/A Restatements
On January 19^th^, the Company filed an amended Form 10-K for the fiscal year ended December 31, 2019 and two amended Form 10-Q’s for the quarters ended March 31, 2020 and June 30, 2020, which reflected restated financial statements in connection with our previously announced non-cash impairment charge of approximately $11.6 million and amortization expenses of approximately $6 million recorded for an intangible asset which impacted Fiscal Years 2014 through 2019 and the first two quarters of 2020.
NasdaqUpdate
We submitted a remediation plan to Nasdaq in December as a result of our failure to meet the Nasdaq minimum stockholder’s equity requirement of $2.5 million as of June 30, 2020; however, there can be no assurances that our remediation plan will be approved or that we will be successful in remediating the deficiency particularly in light of our increased stockholder’s equity deficit resulting from the impairment charge.
CONFERENCECALL INFORMATION
Interpace will hold a conference call and Webcast on Thursday, January 21, 2021, at 4:30 pm ET. Details are as follow:
Dateand Time: Thursday, January 21, 2021 at 4:30 pm ET
Dial-inNumber (Domestic): +1 (877) 407-9716
Dial-inNumber (International): +1 (201) 493-6779
ConfirmationNumber: 13714992
WebcastAccess: http://public.viavid.com/index.php?id=143006
The webcast replay will be available on the Company’s website approximately two hours following completion of the call and archived on the Company’s website for 90 days.
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 four commercialized molecular tests and one test in a clinical evaluation process (CEP): PancraGEN^®^for the diagnosis and prognosis of pancreatic cancer from pancreatic cysts; 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 ability to maintain its Nasdaq listing in lightof its failure to meet minimum stockholder equity requirements as of June 30, 2020, as well as the increased difficulty in meetingthe minimum stockholders’ equity requirement as a result of the impairment charge, the Company’s dependence on salesand reimbursements from its clinical services, the Company’s ability to retain or secure reimbursement including its relianceon third parties to process and transmit claims to payers and the adverse impact of any delay, data loss, or other disruptionin processing or transmitting such claims, the Company’s revenue recognition being based in part on estimates for futurecollections which estimates may prove to be incorrect, and the Company’s ability to remediate material weaknesses in internalcontrols. Additionally, all forward-looking statements are subject to the “Risk Factors” detailed from time to timein the Company’s most recent Annual Report on Form 10-K filed on April 22, 2020, Current Reports on Form 8-K and QuarterlyReports on Form 10-Q. Because of these and other risks, uncertainties and assumptions, undue reliance should not be placed onthese forward-looking statements. In addition, these statements speak only as of the date of this press release and, except asmay be required by law, the Company undertakes no obligation to revise or update publicly any forward-looking statements for anyreason.
Contacts:
Investor Relations
Edison Group
Joseph Green/ Megan Paul
(646) 653-7030/7034
[email protected]/[email protected]
INTERPACEBIOSCIENCES, INC.
CONDENSEDCONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(inthousands, except per share data)
| Three Months Ended | Nine Months Ended | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| September 30, | September 30, | |||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||
| Revenue, net | $ | 8,248 | $ | 7,725 | $ | 22,752 | $ | 20,005 | ||||
| Cost of revenue | 5,194 | 4,835 | 15,156 | 10,489 | ||||||||
| Gross Profit | 3,054 | 2,890 | 7,596 | 9,516 | ||||||||
| Sales and marketing | 2,699 | 2,757 | 6,776 | 8,127 | ||||||||
| Research and development | 763 | 857 | 2,123 | 2,032 | ||||||||
| General and administrative | 4,482 | 4,492 | 13,481 | 9,613 | ||||||||
| Acquisition related expense | - | 838 | - | 2,534 | ||||||||
| Acquisition amortization expense | 1,115 | 1,079 | 3,346 | 2,874 | ||||||||
| Total operating expenses | 9,059 | 10,023 | 25,726 | 25,180 | ||||||||
| Operating loss | (6,005 | ) | (7,133 | ) | (18,130 | ) | (15,664 | ) | ||||
| Interest accretion | (138 | ) | (111 | ) | (414 | ) | (331 | ) | ||||
| Other income, net | (12 | ) | (135 | ) | 473 | (12 | ) | |||||
| Loss from continuing operations before tax | (6,155 | ) | (7,379 | ) | (18,071 | ) | (16,007 | ) | ||||
| Provision for income taxes | 14 | 9 | 43 | 19 | ||||||||
| Loss from continuing operations | (6,169 | ) | (7,388 | ) | (18,114 | ) | (16,026 | ) | ||||
| Loss from discontinued operations, net of tax | (65 | ) | (58 | ) | (194 | ) | (51 | ) | ||||
| Net loss | (6,234 | ) | (7,446 | ) | (18,308 | ) | (16,077 | ) | ||||
| Less adjustment for preferred stock deemed dividend | - | - | (3,033 | ) | - | |||||||
| Less dividends on preferred stock | - | (75 | ) | - | (75 | ) | ||||||
| Net loss attributable to common stockholders | $ | (6,234 | ) | $ | (7,521 | ) | $ | (21,341 | ) | $ | (16,152 | ) |
| Basic and diluted loss per share of common stock: | ||||||||||||
| From continuing operations | $ | (1.53 | ) | $ | (1.95 | ) | $ | (5.25 | ) | $ | (4.34 | ) |
| From discontinued operations | (0.01 | ) | (0.02 | ) | (0.05 | ) | (0.01 | ) | ||||
| Net loss per basic share of common stock | $ | (1.54 | ) | $ | (1.97 | ) | $ | (5.30 | ) | $ | (4.35 | ) |
| Weighted average number of common shares and common share equivalents outstanding: | ||||||||||||
| Basic | 4,038 | 3,820 | 4,025 | 3,717 | ||||||||
| Diluted | 4,038 | 3,820 | 4,025 | 3,717 |
SelectedBalance Sheet Data (Unaudited)
($in thousands)
| September 30, | December 31, | |||||
|---|---|---|---|---|---|---|
| 2020 | 2019 | |||||
| Cash and cash equivalents | $ | 5,308 | $ | 2,321 | ||
| Total current assets | 17,632 | 16,510 | ||||
| Total current liabilities | 15,601 | 17,292 | ||||
| Total assets | 50,701 | 51,540 | ||||
| Total liabilities | 25,963 | 29,847 | ||||
| Total stockholders’ equity | (21,798 | ) | (4,479 | ) |
SelectedCash Flow Data (Unaudited)
($in thousands)
| For the Nine Months Ended | ||||||
|---|---|---|---|---|---|---|
| September 30, | ||||||
| 2020 | 2019 | |||||
| Net loss | $ | (18,308 | ) | $ | (16,077 | ) |
| Net cash used in operating activities | $ | (12,395 | ) | $ | (12,556 | ) |
| Net cash used in investing activities | (1,275 | ) | (13,921 | ) | ||
| Net cash provided by financing activities | 16,657 | 22,767 | ||||
| Change in cash and cash equivalents | 2,987 | (3,710 | ) | |||
| Cash and equivalents, Beginning | 2,321 | 6,068 | ||||
| Cash and equivalents, Ending | $ | 5,308 | $ | 2,358 |
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)
| Three Months Ended | Nine Months Ended | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| September 30, | September 30, | |||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||
| Loss from continuing operations (GAAP Basis) | $ | (6,169 | ) | $ | (7,388 | ) | $ | (18,114 | ) | $ | (16,026 | ) |
| Bad debt expense | - | - | 250 | 499 | ||||||||
| Acquisition related expense | - | 838 | - | 2,534 | ||||||||
| Receipt of HHS stimulus grant | - | - | (650 | ) | - | |||||||
| Transition expenses | 687 | 836 | 798 | 836 | ||||||||
| Legal and professional services | 495 | - | 495 | - | ||||||||
| Depreciation and amortization | 1,394 | 1,158 | 4,102 | 3,164 | ||||||||
| Stock-based compensation | 563 | 211 | 1,381 | 1,247 | ||||||||
| Taxes | 14 | 9 | 43 | 19 | ||||||||
| Accretion expense | 138 | 111 | 414 | 331 | ||||||||
| Mark to market on warrant liability | (13 | ) | 10 | (62 | ) | (35 | ) | |||||
| Adjusted EBITDA | $ | (2,891 | ) | $ | (4,215 | ) | $ | (11,343 | ) | $ | (7,431 | ) |