SEC Filing | Biora Therapeutics, Inc.

View:

Download DOC

Download PDF

Download XLS

Download XBRL

10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2021


☐	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: 001-39334

Progenity, Inc.

(Exact name of registrant as specified in its charter)


Delaware		27-3950390
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

4330 La Jolla Village Drive, Suite 200, San Diego, CA		92122
(Address of principal executive offices)		(Zip Code)

(855) 293-2639

(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
Common Stock, par value $0.001 per share	PROG	The Nasdaq Global Market

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. ☒ Yes ☐ No

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). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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	☐
Non-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

As of November 4, 2021, the registrant had 163,749,556 shares of common stock, par value $0.001 per share, outstanding.

Progenity, Inc.

INDEX


PART I—FINANCIAL INFORMATION

Item 1.	Financial Statements (unaudited)	1

	Condensed Consolidated Balance Sheets	1

	Condensed Consolidated Statements of Operations	2

	Condensed Consolidated Statements of Stockholders’ Deficit	3

	Condensed Consolidated Statements of Cash Flows	5

	Notes to Condensed Consolidated Financial Statements	7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	33

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	45

Item 4.	Controls and Procedures	45

PART II—OTHER INFORMATION

Item 1.	Legal Proceedings	46

Item 1A.	Risk Factors	47

Item 6.	Exhibits	94

Signatures		95

TRADEMARKS AND CERTAIN TERMS

In this Quarterly Report on Form 10-Q, “Progenity,” “we,” “us” and “our” refer to Progenity, Inc., and our wholly-owned subsidiaries on a consolidated basis, unless the context otherwise provides.

Progenity® is a registered service mark of Progenity. Any other brand names or trademarks appearing in this Quarterly Report on Form 10-Q are the property of their respective holders.

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

PROGENITY, INC.

Condensed Consolidated Balance Sheets

(In thousands, except share and per share data)

(Unaudited)


	September 30, 2021			December 31, 2020
Assets
Current assets:
Cash and cash equivalents	$	54,136		$	91,520
Accounts receivable, net		1,917			6,634
Prepaid expenses and other current assets		10,372			8,107
Current assets of disposal group held for sale		26,545			20,077
Total current assets		92,970			126,338
Property and equipment, net		4,564			8,106
Other assets		147			169
Long-term assets of disposal group held for sale		—			19,827
Total assets	$	97,681		$	154,440
Liabilities and Stockholders' Deficit
Current liabilities:
Accounts payable	$	7,989		$	12,657
Accrued expenses and other current liabilities		40,850			51,206
Warrant liability		42,402			—
Current portion of mortgages payable		75			72
Current portion of capital lease obligations		35			266
Current liabilities of disposal group held for sale		11,922			8,469
Total current liabilities		103,273			72,670
Capital lease obligations, net of current portion		—			42
Mortgages payable, net of current portion		1,219			1,275
Convertible notes, net of unamortized discount of $8,255 and $9,614 as of September 30, 2021 and December 31, 2020, respectively		156,045			158,886
Embedded derivative liability		—			18,370
Other long-term liabilities		14,110			8,239
Long-term liabilities of disposal group held for sale		—			1,952
Total liabilities	$	274,647		$	261,434
Commitments and contingencies
Stockholders' deficit:
Common stock – $0.001 par value. 350,000,000 shares authorized as of September 30, 2021 and December 31, 2020; 123,279,683 and 59,287,331 shares issued as of September 30, 2021 and December 31, 2020, respectively; 119,567,684 and 55,772,303 shares outstanding as of September 30, 2021 and December 31, 2020, respectively		83			59
Additional paid-in capital		537,548			452,992
Accumulated deficit		(695,813	)		(541,274	)
Treasury stock – at cost; 3,711,999 and 3,515,028 shares of common stock as of September 30, 2021 and December 31, 2020, respectively		(18,784	)		(18,771	)
Total stockholders' deficit		(176,966	)		(106,994	)
Total liabilities and stockholders' deficit	$	97,681		$	154,440

See accompanying notes to unaudited condensed consolidated financial statements.

PROGENITY, INC.

Condensed Consolidated Statements of Operations

(In thousands, except share and per share data)

(Unaudited)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2021			2020			2021			2020
Revenues	$	182		$	56		$	812		$	56
Cost of sales		—			—			—			—
Gross profit		182			56			812			56
Operating expenses:
Research and development		12,226			13,043			37,300			36,519
Selling and marketing		573			1,563			4,437			4,798
General and administrative		17,944			16,116			56,753			40,537
Total operating expenses		30,743			30,722			98,490			81,854
Loss from operations		(30,561	)		(30,666	)		(97,678	)		(81,798	)
Interest expense		(3,458	)		(2,457	)		(10,450	)		(7,228	)
Loss on warrant liability		(3,322	)		—			(5,818	)		—
Interest and other income (expense), net		467			(19	)		18,211			(3,790	)
Loss before income taxes		(36,874	)		(33,142	)		(95,735	)		(92,816	)
Income tax benefit		—			—			—			(37,697	)
Loss from continuing operations		(36,874	)		(33,142	)		(95,735	)		(55,119	)
Loss from discontinued operations		(6,870	)		(13,923	)		(58,804	)		(61,881	)
Net loss		(43,744	)		(47,065	)		(154,539	)		(117,000	)
Dividend paid to preferred stockholders		—			—			—			(268	)
Net loss attributable to common stockholders	$	(43,744	)	$	(47,065	)	$	(154,539	)	$	(117,268	)


Net loss per share from continuing operations, basic and diluted	$	(0.38	)	$	(0.71	)	$	(1.32	)	$	(2.73	)
Net loss per share from discontinued operations, basic and diluted	$	(0.07	)	$	(0.30	)	$	(0.81	)	$	(3.06	)
Net loss per share, basic and diluted	$	(0.46	)	$	(1.01	)	$	(2.13	)	$	(5.79	)
Net loss per share attributable to common stockholders, basic and diluted	$	(0.46	)	$	(1.01	)	$	(2.13	)	$	(5.80	)
Weighted average shares outstanding, basic and diluted		95,846,672			46,632,043			72,590,873			20,201,325

See accompanying notes to unaudited condensed consolidated financial statements.

PROGENITY, INC.

Condensed Consolidated Statements of Stockholders’ Deficit

(In thousands, except share data)

(Unaudited)


	Common Stock				Additional Paid-In			Accumulated			Treasury Stock						Total Stockholders'
	Shares		Amount		Capital			Deficit			Shares			Amount			Deficit
Balance at December 31, 2020		59,287,331	$	59	$	452,992		$	(541,274	)		(3,515,028	)	$	(18,771	)	$	(106,994	)
Issuance of common stock, net		4,370,629		4		11,258			—			—			—			11,262
Issuance of common stock upon exercise of options		71,284		—		88			—			—			—			88
Issuance of common stock upon vesting of restricted stock unit awards		174,730		—		(228	)		—			(48,581	)		(1	)		(229	)
Stock-based compensation expense		—		—		2,630			—			—			—			2,630
Net loss		—		—		—			(32,264	)		—			—			(32,264	)
Balance at March 31, 2021		63,903,974	$	63	$	466,740		$	(573,538	)		(3,563,609	)	$	(18,772	)	$	(125,507	)
Issuance of common stock, net		15,694,332		16		11,991			—			—			—			12,007
Issuance of common stock upon exercise of options		25,498		—		26			—			(5,050	)		(6	)		20
Issuance of common stock under employee stock purchase plan		254,832		1		560			—			—			—			561
Issuance of common stock upon vesting of restricted stock unit awards		237,388		—		(251	)		—			(79,442	)		—			(251	)
Issuance of stock purchase warrant		—		—		41,926			—			—			—			41,926
Issuance of common stock upon conversion of debt, net		611,616		1		2,068			—			—			—			2,069
Issuance of common stock upon conversion of interest, net		1,268,116		1		3,626			—			—			—			3,627
Stock-based compensation expense		—		—		4,470			—			—			—			4,470
Net loss		—		—		—			(78,531	)		—			—			(78,531	)
Balance at June 30, 2021		81,995,756	$	82	$	531,156		$	(652,069	)		(3,648,101	)	$	(18,778	)	$	(139,609	)
Issuance of common stock, net		40,000,000		—		—			—			—			—			—
Issuance of common stock upon exercise of options		7,087		—		6			—			(4,442	)		(6	)		—
Issuance of common stock upon vesting of restricted stock unit awards		190,822		—		(99	)		—			(59,456	)		—			(99	)
Issuance of common stock upon exercise of warrants		530,000		—		30			—			—			—			30
Issuance of stock purchase warrant		—		—		938			—			—			—			938
Issuance of common stock upon conversion of debt, net		556,018		1		1,645			—			—			—			1,646
Stock-based compensation expense		—		—		3,872			—			—			—			3,872
Net loss		—		—		—			(43,744	)		—			—			(43,744	)
Balance at September 30, 2021		123,279,683	$	83	$	537,548		$	(695,813	)		(3,711,999	)	$	(18,784	)	$	(176,966	)