IDXGD 10-K

Interpace Biosciences, Inc. (IDXGD)

10-K 2024-04-01 For: 2023-12-31

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Added on April 06, 2026

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Title of each class		Trading Symbol(s)		Name of each exchange on which registered
None		N/A		N/A

Large accelerated filer ☐	Accelerated filer ☐	Non-accelerated filer ☒	Smaller reporting company ☒
Emerging growth company ☐

			Page
PART I
	Item 1.	Business	4
	Item 1A.	Risk Factors	26
	Item 1B.	Unresolved Staff Comments	59
	Item 1C.	Cybersecurity	59
	Item 2.	Properties	59
	Item 3.	Legal Proceedings	60
	Item 4.	Mine Safety Disclosures	60

PART II
	Item 5.	Market for our Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	60
	Item 6.	Reserved	60
	Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	61
	Item 7A.	Quantitative and Qualitative Disclosures about Market Risk	72
	Item 8.	Financial Statements and Supplementary Data	72
	Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	72
	Item 9A.	Controls and Procedures	72
	Item 9B.	Other Information	73
	Item 9C.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	73

PART III
	Item 10.	Directors, Executive Officers and Corporate Governance	73
	Item 11.	Executive Compensation	73
	Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	73
	Item 13.	Certain Relationships and Related Transactions, and Director Independence	73
	Item 14.	Principal Accountant Fees and Services	74

PART IV
	Item 15.	Exhibits, Financial Statement Schedules	74
	Item 16.	Form 10-K Summary	77

Signatures			78

	●	we have a history of operating losses prior to fiscal 2023 and our clinical services have generated limited revenue;

	●	our expectations of future revenues, expenditures, capital or other funding requirements;

	●	our reliance on Medicare reimbursement for our clinical services and our being subject to decisions of the Center for Medicare and Medicaid Services (“CMS”) regarding reimbursement and pricing of our clinical services which could have a material adverse effect on our business and financial results;

	●	our ability to continue to perform, bill and receive reimbursement for our PancraGEN^® molecular test long-term under the existing local coverage determination (“LCD”), given that such LCD is currently under review by Novitas, the Company’s Medicare administrative contractor;

	●	our secured lenders have the right to foreclose on substantially all of our assets if we are unable to timely repay our outstanding obligations;

	●	our dependence on sales and reimbursements from our clinical services for all of our revenue;

	●	the 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, develop and commercialize new molecular clinical service solutions and technologies;

	●	our obligations to make royalty and milestone payments to our licensors;

	●	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, on an as-converted basis, an aggregate of 64.2% of our outstanding shares of common stock through their holdings of our Series B Preferred Stock, and this concentration of ownership along with their authority for designation rights for a majority of our directors and their right to approve certain of our actions has a substantial influence on our decisions;

	●	the delisting of our common stock from Nasdaq has adversely affected and may continue to adversely affect our common stock and business and financial condition;

	●	geopolitical and other economic and political conditions or events (such as the wars in Ukraine and Israel/Gaza);

	●	our ability to implement our business strategy; and

	●	the potential impact of existing and future contingent liabilities on our financial condition.

Customer Category	Types of Customers	Nature of Services
Clinical services	● Hospitals ● Physicians ● Cancer Centers ● Clinics	Clinical services that help guide patient management decisions by providing information on the diagnosis and prognosis of indeterminate specimens. Guidance on genetic marker-related pharmaceutical treatment options, when available, is also provided.
	● Commercial laboratories
	● Pathology groups

Cancer Type	Estimated New Cases	Estimated Deaths
Bladder	82,290	16,710
Breast (Female – Male)	297,790-2,800	43,170-530
Colon and Rectal (Combined)	153,020	52,550
Kidney (Renal Cell and Renal Pelvis)	81,800	14,890
Leukemia (All Type)	59,610	23,380
Liver and Intrahepatic Bile Duct	41,210	29,380
Lung (Including Bronchus)	238,340	127,070
Melanoma	97,610	7,990
Non-Hodgkin’s Lymphoma	80,550	20,180
Pancreatic	64,050	50,550
Prostate	288,300	34,700
Thyroid	43,720	2,120

	●	Expanding awareness and use of our existing commercial products, especially PancraGEN^®, ThyGeNEXT^® and ThyraMIR^®v2 through omnichannel marketing programs;

	●	Continuing the clinical development and commercialization of BarreGEN^®, our esophageal cancer risk classifier for Barrett’s Esophagus, and accelerating and further expanding clinical studies for our inline assays;

	●	Implementation of automation and focus on improved operating efficiencies in the clinical laboratories to provide consistent superior quality testing and reporting at reduced costs;

	○	Continuing support of an internal managed care team;

	○	Utilizing Key Opinion Leaders to educate on the validity and utility of our testing services; and

	○	Establishing payer relationship and in-network contracts serving our diagnostic customers.

	●	Expanding our commercial sales staff rationally, while supporting our products with high quality data and studies;

	●	Exploring partnering opportunities to acquire new technologies; and

	●	Expanding understanding and utilization of our bioinformatics data to improve our assays and elevate scientific understanding of the genetic drivers of cancer progression and aggressiveness.

	●	denial of payment for the services provided in violation of the prohibition;

	●	refunds of amounts collected by an entity in violation of the Stark Law;

	●	a civil penalty of up to $29,899 for each service arising out of the prohibited referral;

	●	possible exclusion from federal healthcare programs, including Medicare and Medicaid; and

	●	a civil penalty of up to $199,338 against parties that enter into a scheme to circumvent the Stark Law’s prohibition.

	●	we have a history of operating losses;

	●	our expectations of future revenues, expenditures, capital or other funding requirements;

	●	our reliance on Medicare reimbursement for our clinical services and our being subject to decisions of the Center for Medicare and Medicaid Services (“CMS”) regarding reimbursement and pricing of our clinical services which could have a material adverse effect on our business and financial results;

	●	our ability to continue to perform, bill and receive reimbursement for our PancraGEN^® molecular test long-term under the existing local coverage determination (“LCD”), given that such LCD is currently under review by Novitas, the Company’s Medicare administrative contractor (“Novitas”);

	●	our secured lenders have the right to foreclose on substantially all of our assets if we are unable to timely repay our outstanding obligations;

	●	our dependence on sales and reimbursements from our clinical services for all of our revenue;

	●	the 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, develop and commercialize new molecular clinical service solutions and technologies;

	●	our obligations to make royalty and milestone payments to our licensors;

	●	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;

	●	uncertainty of cash collections which could impact or affect net realizable values of sales of our tests and services;

	●	inability of our laboratory to perform tests;

	●	progress or lack of progress in developing and commercializing tests and services;

	●	favorable or unfavorable decisions about our tests or services or reimbursement rates from government regulators, insurances companies, customers, or other third party payers;

	●	the commencement, delay, cancellation or completion of sales and marketing programs;

	●	timing and amount of expenses for implementing new programs and accuracy of estimates of resources required for ongoing programs;

	●	adoption of and coverage and reimbursement for our tests;

	●	changes in our relationships with key collaborators, suppliers, customers and third parties;

	●	fluctuations in net revenue due to changes in the valuation of our patient accounts;

	●	periodic stock-based compensation and awards;

	●	fluctuations in R&D, business development and spending for clinical trials;

	●	timing and integration of any acquisitions; and

	●	changes in regulations related to diagnostics, pharmaceutical, biotechnology and healthcare companies.

	●	differences between the list price for our molecular diagnostic tests and the reimbursement rates of payers;

	●	compliance with complex federal and state regulations related to billing Medicare;

	●	changes in billing policy reimbursement by CMS;

	●	disputes among payers as to which party is responsible for payment;

	●	differences in coverage among payers and the effect of patient co-payments or co-insurance;

	●	differences in information and billing requirements among payers;

	●	incorrect or missing billing information;

	●	the resources required to manage the billing and claims appeals process including those of our billing service providers;

	●	our inability to bill timely and accurate requisitions and process denials efficiently may result in delayed collections and reduced reimbursement rates; and

	●	the overall performance and effectiveness of our billing service providers.

	●	expend significant funds to conduct substantial research and development;

	●	conduct successful analytical and clinical studies;

	●	scale our laboratory processes to accommodate new tests and services; and

	●	build and maintain the commercial infrastructure to market and sell new tests and services.

	●	manage our clinical studies effectively;

	●	integrate additional management, administrative, manufacturing and regulatory personnel;

	●	maintain sufficient administrative, accounting and management information systems and controls; and

	●	hire and train additional qualified personnel.

	●	The Food, Drug and Cosmetic Act, as supplemented by various other statutes;

	●	CLIA and state licensing requirements;

	●	Manufacturing and promotion laws;

	●	Medicare and Medicaid billing and payment regulations applicable to clinical laboratories;

	●	The Eliminating Kickbacks in Recovery Act of 2018 (EKRA), which, among other things, prohibits the solicitation, receipt, payment or offer of any remuneration (including any kickback, bribe, or rebate) directly or indirectly, overtly or covertly, in cash or in kind, in return for referring a patient or patronage to a recovery home, clinical treatment facility, or laboratory for services covered by both government and private payers;

	●	The Federal Anti-Kickback Statute (and state equivalents), which, among other things, prohibits knowingly and willfully offering, paying, soliciting, or receiving remuneration, directly or indirectly, in exchange for or to induce either the referral of an individual, or the furnishing, arranging for, or recommending of an item or service that is reimbursable, in whole or in part, by a federal health care program;

	●	The Federal physician self-referral law, commonly referred to as the “Stark Law,” (and state equivalents), which prohibits a physician from making a referral for, and an entity receiving the referral from billing for, certain designated health services covered by the Medicare program, including clinical laboratory services, if the physician or an immediate family member has a financial relationship with the entity providing the designated health services, unless the financial relationship falls within an applicable exception to the prohibition;

	●	HIPAA, which establishes comprehensive federal standards with respect to the privacy and security of PHI and requirements for the use of certain standardized electronic transactions, and amendments made in 2013 to HIPAA under the Health Information Technology for Economic and Clinical Health Act, which strengthen and expand HIPAA privacy and security compliance requirements, increase penalties for violators, extend enforcement authority to state attorneys general, and impose requirements for breach notification;

	●	The FTC Act and various state consumer privacy laws, which require regulated entities to take reasonable steps to safeguard the personal information of consumers, make certain disclosures about our data privacy and security practices to the public and certain state or federal regulators, minimize our use of personal information of consumers, and provide consumers with certain rights as to their personal data such as the right to correct or delete their personal information;

	●	The Federal Civil Monetary Penalties Law, which prohibits, among other things, the offering or transfer of remuneration to a Medicare or state healthcare program beneficiary if the person knows or should know it is likely to influence the beneficiary’s selection of a particular provider, practitioner, or supplier of services reimbursable by Medicare or a state healthcare program, unless an exception applies;

	●	The Federal False Claims Act (and state equivalents), which imposes liability on any person or entity that, among other things, knowingly presents, or causes to be presented, a false or fraudulent claim for payment to the federal government;

	●	The federal transparency requirements under the PPACA, including the provisions commonly referred to as the Physician Payments Sunshine Act, and similar state laws that require certain manufacturers of drugs, devices, biologics and medical supplies that are reimbursable under Medicare, Medicaid or Children’s Health Insurance Program to report annually to CMS information related to certain payments and other transfers of value, directly or indirectly, to physicians (defined to include doctors of medicine, osteopathy, dentists, optometrists, podiatrists and chiropractors), physician assistants, nurse practitioners, clinical nurse specialists, certified registered nurse anesthetists, anesthesiologist assistants, and certified nurse midwives, and teaching hospitals, and ownership and investment interests held by physicians and their immediate family members;

	●	The 21st Century Cures Act information blocking provision prohibiting certain covered actors (including laboratories) from engaging in certain practices that are likely to interfere with the access, exchange, or use of electronic health information;

	●	The prohibition on reassignment of Medicare claims, which, subject to certain exceptions, precludes the reassignment of Medicare claims to any other party;

	●	The Protecting Access to Medicare Act of 2014, as amended, which requires us to report private payer rates and test volumes for specific CPT codes on a triennial basis and imposes penalties for failures to report, omissions, or misrepresentations;

	●	The rules regarding billing for diagnostic tests reimbursable by the Medicare program, which among other requirements, prohibit a physician or other supplier from marking up the price of the technical component or professional component of a diagnostic test ordered by the physician or other supplier if the test is performed by a physician who does not “share a practice” with the billing physician or other supplier; and

	●	State laws that prohibit other specified practices related to billing such as billing physicians for testing that they order, waiving coinsurance, co-payments, deductibles, and other amounts owed by patients, and billing a State Medicaid program at a price that is higher than what is charged to other payers.

	●	an acquisition may require us to incur debt or other obligations, incur large and immediate write-offs, issue capital stock potentially dilutive to our stockholders or spend significant cash, or may negatively affect our operating results and financial condition;

	●	if we spend significant funds or incur additional debt or other obligations, our ability to obtain financing for working capital or other purposes could decline;

	●	worse than expected performance of an acquired business may result in the impairment of intangible assets;

	●	we may be unable to realize the anticipated benefits and synergies from acquisitions as a result of inherent risks and uncertainties, including difficulties integrating acquired businesses or retaining key personnel, partners, customers or other key relationships, and risks that acquired entities may not operate profitably or that acquisitions may not result in improved operating performance;

	●	we may fail to successfully manage relationships with customers, distributors and suppliers;

	●	our customers may not accept new molecular diagnostic tests;

	●	we may fail to effectively coordinate sales and marketing efforts of our acquired businesses;

	●	we may fail to combine product offerings and product lines of our acquired businesses timely and efficiently;

	●	an acquisition may involve unexpected costs or liabilities, including as a result of pending and future shareholder lawsuits relating to acquisitions or exercise by stockholders of their statutory appraisal rights, or the effects of purchase accounting may be different from our expectations;

	●	an acquisition may involve significant contingent payments that may adversely affect our future liquidity or capital resources;

	●	accounting for contingent payments requires significant judgment and changes to the assumptions used in determining the fair value of our contingent payments could lead to significant volatility in earnings;

	●	acquisitions and subsequent integration of these companies may disrupt our business and distract our management from other responsibilities; and

	●	the costs of an unsuccessful acquisition may adversely affect our financial performance.

	●	differing information technology, internal control, financial reporting and record-keeping systems;

	●	differences in accounting policies and procedures;

	●	unanticipated additional transaction and integration-related costs;

	●	facilities or operations of acquired businesses in remote locations and the inherent risks of operating in unfamiliar legal and regulatory environments; and

	●	new products, including the risk that any underlying intellectual property associated with such products may not have been adequately protected or that such products may infringe on the proprietary rights of others.

	●	general volatility in the trading markets;

	●	the impact of the delisting of our common stock from Nasdaq;

	●	adverse research and development results;

	●	significant fluctuations in our quarterly operating results;

	●	significant changes in our cash and cash equivalent reserves;

	●	our liquidity and ability to obtain additional capital, including the market’s reaction to any announced capital-raising transactions;

	●	market assessments of any announced strategic transaction, including the likelihood that it would be completed and the timing for completion;

	●	potential negative market reaction to the terms or volume of any issuance of shares of our common stock, preferred stock or other securities to new investors, pursuant to strategic or capital-raising transactions or to employees, directors or other service providers;

	●	sales of substantial amounts of our common stock, or the perception that substantial amounts of our common stock may be sold, by stockholders in the public market;

	●	announcements regarding our business or the business of our competitors;

	●	announcements regarding our equity offerings;

	●	strategic actions by us or our competitors, such as acquisitions or restructurings;

	●	industry and/or regulatory developments;

	●	changes in revenue mix;

	●	changes in revenue and revenue growth rates for us and for the industries in which we operate;

	●	changes in accounting standards, policies, guidance, interpretations or principles;

	●	statements or changes in opinions, ratings or earnings estimates made, or the failure to make, by brokerage firms or industry analysts relating to the markets in which we operate or expect to operate; and

	●	general market and economic conditions.

	Years Ended December 31,
	2023			2023			2022			2022
				% to						% to
				revenue						revenue

Revenue, net	$	40,214			100.0	%	$	31,838			100.0	%
Cost of revenue		16,310			40.6	%		13,607			42.7	%
Gross profit		23,904			59.4	%		18,231			57.3	%
Operating expenses:
Sales and marketing		10,233			25.4	%		9,125			28.7	%
Research and development		636			1.6	%		703			2.2	%
General and administrative		9,363			23.3	%		10,973			34.5	%
Acquisition related amortization expense		861			2.1	%		1,270			4.0	%
Change in fair value of contingent consideration		7			0.0	%		(223	)		-0.7	%
Total operating expenses		21,100			52.5	%		21,848			68.6	%

Operating income (loss)		2,804			7.0	%		(3,617	)		-11.4	%
Interest accretion expense		(112	)		-0.3	%		(158	)		-0.5	%
Note payable interest expense		(896	)		-2.2	%		(850	)		-2.7	%
Other expense, net		(667	)		-1.7	%		(1,211	)		-3.8	%
Income (loss) from continuing operations before tax		1,129			2.8	%		(5,836	)		-18.3	%
Provision for income taxes		17			0.0	%		29			0.1	%
Income (loss) from continuing operations		1,112			2.8	%		(5,865	)		-18.4	%

Loss from discontinued operations, net of tax		(310	)		-0.8	%		(16,093	)		-50.5	%

Net income (loss)	$	802			2.0	%	$	(21,958	)		-69.0	%

	Years Ended
	December 31,
	2023			2022
Income (loss) from continuing operations (GAAP Basis)	$	1,112		$	(5,865	)
Depreciation and amortization		1,026			1,429
Stock-based compensation		630			1,237
Tax expense		17			29
Interest accretion expense		112			158
Financing interest and related costs		938			850
Interest income		(53	)		-
Mark to market on warrant liability		-			(71	)
Change in fair value of note payable		678			1,224
Change in fair value of contingent consideration		7			(223	)
Adjusted EBITDA	$	4,467		$	(1,232	)

	●	Effective November 1, 2023, the interest rate under the BroadOak Loan Agreement is to be reduced from 9% to 8% through the maturity date of October 31, 2024 or earlier, upon the occurrence of a change in control (“Loan Maturity Date”).
	●	The Company has the option to request an extension of the Loan Maturity Date in writing no less than sixty days prior to the Loan Maturity Date. If BroadOak agrees to the extension, the Loan Maturity Date would automatically be extended.

			Less than		1 to 3		3 to 5		After
	Total		1 Year		Years		Years		5 Years
Operating lease obligations	$	2,400	$	575	$	1,000	$	825	$	-
Total	$	2,400	$	575	$	1,000	$	825	$	-

	●	The maturity date was extended to June 30, 2025.
	●	Beginning April 1, 2024, the Company will make $500,000 monthly payments with the remaining loan balance due on the new maturity date.

ITEM 10.	DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

	Information relating to directors and executive officers of the registrant that is responsive to Item 10 of this Annual Report on Form 10-K will be included in an amendment hereto or will be included in our Proxy Statement for our 2024 annual meeting of stockholders and such information is incorporated by reference herein.

ITEM 11.	EXECUTIVE COMPENSATION

	Information relating to executive compensation of the registrant that is responsive to Item 11 of this Annual Report on Form 10-K will be included in an amendment hereto or will be included in our Proxy Statement for our 2024 annual meeting of stockholders and such information is incorporated by reference herein.

ITEM 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

	Information relating to security ownership of certain beneficial owners and management of the registrant that is responsive to Item 12 of this Annual Report on Form 10-K will be included in an amendment hereto or will be included in our Proxy Statement for our 2024 annual meeting of stockholders and such information is incorporated by reference herein.