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What changed in Insight Molecular Diagnostics Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Insight Molecular Diagnostics Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+444 added−706 removedSource: 10-K (2026-03-26) vs 10-K (2025-03-24)

Top changes in Insight Molecular Diagnostics Inc.'s 2025 10-K

444 paragraphs added · 706 removed · 286 edited across 4 sections

Item 1. Business

Business — how the company describes what it does

95 edited+40 added−75 removed66 unchanged
Biggest changeIn May 2020, the Office of the National Coordinator for Health Information Technology promulgated final regulations under the authority of the 21st Century Cures Act that impose new conditions to obtain and maintain certification of certified health information technology and prohibit certain covered actors, including operators of laboratories which are considered “health care providers” under the final regulation, from engaging in activities that are likely to interfere with the access, exchange, or use of electronic health information (information blocking).
Biggest changeIn addition, under the 21st Century Cures Act, the Office of the National Coordinator for Health Information Technology prohibits “information blocking,” defined as practices likely to interfere with the access, exchange, or use of electronic health information (“EHI”).
Private payers generally will determine whether to approve a diagnostic test for reimbursement based on the published results of clinical validity and clinical utility studies, and may base their decision on whether to cover a test, and at what level to reimburse, on the MAC’s LCD.
Private payers generally will determine whether to approve a diagnostic test for reimbursement based on the published results of clinical validity and utility studies and may base their decision on whether to cover a test, and at what level to reimburse, on the MAC’s LCD.
If our laboratory is out of compliance with state laws or regulations governing licensed laboratories, a state may impose penalties, which penalties vary from state to state but may include suspension, limitation, revocation or annulment of the license, assessment of financial penalties or fines, or imprisonment.
If our laboratory is out of compliance with state laws or regulations governing licensed laboratories, a state may impose penalties, which vary from state to state but may include suspension, limitation, revocation or annulment of the license, assessment of financial penalties or fines, or imprisonment.
Covered entities and business associates must also comply with HIPAA’s security regulations, which establish minimum requirements for safeguarding the confidentiality, integrity, and availability of PHI that is electronically transmitted or electronically stored. In addition, HITECH established, among other things, certain breach notification requirements with which covered entities and business associates must comply.
Covered entities and business associates must also comply with the HIPAA’s security regulations, which establish minimum requirements for safeguarding the confidentiality, integrity, and availability of PHI that is electronically transmitted or electronically stored. In addition, HITECH established, among other things, certain breach notification requirements with which covered entities and business associates must comply.
In addition, violation of these laws may result in sanctions imposed against us and/or the professional through licensure proceedings, and we could be subject to civil and criminal penalties that could result in exclusion from state and federal health care programs. 16 Federal and State Fraud and Abuse Laws A variety of federal and state laws prohibit fraud and abuse.
In addition, violation of these laws may result in sanctions imposed against us and/or the professional through licensure proceedings, and we could be subject to civil and criminal penalties that could result in exclusion from state and federal health care programs. Federal and State Fraud and Abuse Laws A variety of federal and state laws prohibit fraud and abuse.
Other countries have enacted similar anti-corruption laws and/or regulations. 17 Other Regulatory Requirements Our laboratory is subject to federal, state and local regulations relating to the handling and disposal of regulated medical waste, hazardous waste and biohazardous waste, including chemical, biological agents and compounds, blood samples and other human tissue.
Other countries have enacted similar anti-corruption laws and/or regulations. Other Regulatory Requirements Our laboratory is subject to federal, state and local regulations relating to the handling and disposal of regulated medical waste, hazardous waste and biohazardous waste, including chemical, biological agents and compounds, blood samples and other human tissue.
Risk Factors – Risks Related to Intellectual Property.” The United States Supreme Court’s decisions in Mayo Collaborative Services v. Prometheus Laboratories, Inc. and Association for Molecular Pathology v. Myriad Genetics may limit our ability to obtain patent protection on diagnostic methods that merely recite a correlation between a naturally occurring event and a diagnostic outcome associated with that event.
“Risk Factors – Risks Related to Intellectual Property.” The United States Supreme Court’s decisions in Mayo Collaborative Services v. Prometheus Laboratories, Inc. and Association for Molecular Pathology v. Myriad Genetics may limit our ability to obtain patent protection on diagnostic methods that merely recite a correlation between a naturally occurring event and a diagnostic outcome associated with that event.
Due to these evolving and diverse requirements, we face uncertain product approval timelines, additional time and effort to comply, as well as the potential for reduced sales and/or fines for noncompliance. State Laboratory Licensing In addition to federal certification requirements of laboratories under CLIA, we are required to maintain licensure under Tennessee law for our laboratory in Nashville, Tennessee.
Due to these evolving and diverse requirements, we face uncertain product approval timelines, additional time and effort to comply, as well as the potential for reduced sales and/or fines for noncompliance. State Laboratory Licensing In addition to federal certification requirements of laboratories under CLIA, we are required to maintain licensure under Tennessee law for our laboratory in Franklin, Tennessee.
This update from the USPTO does not change our opinion on our ability to obtain meaningful patent protection. 10 There is a risk that any patent applications that we file and any patents that we hold or later obtain could be challenged by third parties and declared invalid or infringing of third-party claims.
This update from the USPTO does not change our opinion on our ability to obtain meaningful patent protection. 10 Table of Contents There is a risk that any patent applications that we file and any patents that we hold or later obtain could be challenged by third parties and declared invalid or infringing of third-party claims.
Risk Factors – Risks Related to Our Business Operations – There is a limited number of manufacturers of molecular diagnostic testing equipment and related chemical reagents necessary for the provision of our diagnostic tests .” Patents and Trade Secrets We rely primarily on patents and contractual obligations with employees and third parties to protect our proprietary rights.
“Risk Factors – Risks Related to Our Business Operations – There is a limited number of manufacturers of molecular diagnostic testing equipment and related chemical reagents necessary for the provision of our diagnostic tests .” Patents and Trade Secrets We rely primarily on patents and contractual obligations with employees and third parties to protect our proprietary rights.
These types of devices are exempt from most regulatory controls pursuant to long-standing FDA guidance on RUO/IUO products. These products are exempt from FDA’s premarket review and other requirements as long as they are not promoted for clinical diagnostic use, and Oncocyte does not provide technical assistance to clinical laboratories with respect to these tests.
These types of devices are exempt from most regulatory controls pursuant to long-standing FDA guidance on RUO/IUO products. These products are exempt from FDA’s premarket review and other requirements as long as they are not promoted for clinical diagnostic use, and iMDx does not provide technical assistance to clinical laboratories with respect to these tests.
Since our laboratory in Nashville, Tennessee meets this definition, CLIA requires that we hold a certificate applicable to the complexity of the categories of testing we perform and that we comply with certain standards. Laboratories performing high complexity testing are required to meet more stringent requirements than laboratories performing less complex tests.
Since our laboratory in Franklin, Tennessee meets this definition, CLIA requires that we hold a certificate applicable to the complexity of the categories of testing we perform and that we comply with certain standards. Laboratories performing high complexity testing are required to meet more stringent requirements than laboratories performing less complex tests.
Therefore, all costs of administering the program must be covered by the regulated facilities, including certification and survey costs. CMS enforces CLIA compliance. CMS granted the CAP Laboratory Accreditation Program deeming authority, which allows CAP inspection in lieu of a CMS inspection. Our laboratory in Nashville, Tennessee is CLIA-certified and CAP-accredited.
Therefore, all costs of administering the program must be covered by the regulated facilities, including certification and survey costs. CMS enforces CLIA compliance. CMS granted the CAP Laboratory Accreditation Program deeming authority, which allows CAP inspection in lieu of a CMS inspection. Our laboratory in Franklin, Tennessee is CLIA-certified and CAP-accredited.
Moreover, we could incur substantial costs in litigation if we have to defend ourselves in patent lawsuits brought by third parties or if we initiate such lawsuits. For additional information regarding the risks related to obtaining and enforcing patent protection, see “Part I, Item 1A.
Moreover, we could incur substantial costs in litigation if we have to defend ourselves in patent lawsuits brought by third parties or if we initiate such lawsuits. For additional information regarding the risks related to obtaining and enforcing patent protection, see Part I, Item 1A.
If similar issues were to arise after commercialization of a test, we could experience a disruption in providing the tests to patients and we would lose revenue and potentially market share as a result. See “Part I, Item 1A.
If similar issues were to arise after commercialization of a test, we could experience a disruption in providing the tests to patients and we would lose revenue and potentially market share as a result. See Part I, Item 1A.
In December 2020, aiming to remove regulations that impede communication and data exchange between providers and health plans and expand individuals’ rights to access their own digital health information, HHS proposed further changes to the HIPAA privacy rule.
For example, in December 2020, HHS proposed further changes to the HIPAA Privacy Rule aiming to remove regulations that impede communication and data exchange between providers and health plans and expand individuals’ rights to access their own digital health information.
Most states also have statutes or regulations similar to the federal anti-kickback law and false claims laws, which apply to items and services reimbursed under Medicaid and other state programs, or, in several states, apply regardless of the payor.
Most states also have statutes or regulations similar to the federal anti-kickback law and false claims laws, which apply to items and services reimbursed under Medicaid and other state programs, or, in several states, apply regardless of the payer.
While we have a rigorous process for prior authorization and appeals to overturn denials and to get contracted with commercial payers, full or partial denial of coverage by payers, or reimbursement at inadequate levels, would have a material adverse impact on our business and on market acceptance of our tests.
While we have a rigorous process for prior authorization, appeals to overturn denials, and contract negotiation with commercial payers, full or partial denial of coverage by payers, or reimbursement at inadequate levels, would have a material adverse impact on our business and on market acceptance of our tests.
MACs also serve as the primary operational contact between the Medicare Fee-For-Service program, for paying Medicare claims, and approximately 1.5 million health care providers enrolled in the program. Delays in obtaining MAC approval, or any changes made related to any favorable LCDs, could have a material adverse impact on our business.
MACs also serve as the primary operational contacts between the Medicare Fee-For-Service program, for paying Medicare claims, and the approximately 1.5 million healthcare providers enrolled in the program. Delays in obtaining MAC approval, or any changes made related to any favorable LCDs, could have a material adverse impact on our business.
A device may not be marketed in the United States until the submitter receives a letter declaring the device substantially equivalent.
A device may not be marketed in the United States until the submitter receives a letter from the FDA declaring the device substantially equivalent.
It also establishes a new exception for certain arrangements under which a physician receives limited remuneration for items or services actually provided by the physician; establishes a new exception for donations of cybersecurity technology and related services; and amends the existing exception for electronic health records items and services.
It also established a new exception for certain arrangements under which a physician receives limited remuneration for items or services actually provided by the physician; established a new exception for donations of cybersecurity technology and related services; and amended the existing exception for electronic health records items and services.
Our business could be negatively impacted by any of the following: • The claims of any patents that are issued may not provide meaningful protection, may not provide a basis for commercially viable diagnostic tests or may not provide us with any competitive advantages; • Our patents may be challenged by competitors or other third parties and, if the third parties are successful in their challenge, the patents could be invalidated, permitting third parties to use the patented inventions to compete with us; • Others may have patents that relate to our technology or business that may prevent us from marketing our diagnostic test candidates unless we are able to obtain a license to those patents; • Patent applications to which we have rights may not result in issued patents and the information disclosed in those applications could be used by our competitors; • Changes in government regulations or patent laws; and • We may not be successful in developing additional proprietary technologies that are patentable. 9 In addition, others may independently develop similar or alternative technologies, duplicate any of our technologies and, if patents are licensed or issued to us, design around the patented technologies licensed to or developed by us.
Our business could be negatively impacted by any of the following: • The claims of any patents that are issued may not provide meaningful protection, may not provide a basis for commercially viable diagnostic tests or may not provide us with any competitive advantages; • Our patents may be challenged by competitors or other third parties and, if the third parties are successful in their challenge, the patents could be invalidated, permitting third parties to use the patented inventions to compete with us; • Others may have patents that relate to our technology or business that may prevent us from marketing our diagnostic test candidates unless we are able to obtain a license to those patents; • Patent applications to which we have rights may not result in issued patents and the information disclosed in those applications could be used by our competitors; • Changes in government regulations or patent laws; and • We may not be successful in developing additional proprietary technologies that are patentable.
Penalties for violations of HIPAA regulations include civil and criminal penalties. The HIPAA privacy regulations cover the use and disclosure of PHI by covered entities as well as business associates, which are persons or entities that perform certain functions for or on behalf of a covered entity that involve the creation, receipt, maintenance, or transmittal of PHI.
The HIPAA privacy regulations cover the use and disclosure of PHI by covered entities as well as business associates, which are persons or entities that perform certain functions for or on behalf of a covered entity that involve the creation, receipt, maintenance, or transmittal of PHI.
Within these categories, we have developed or are in the process of developing laboratory developed tests (“LDTs”) that can be run at our Nashville, Tennessee lab, kitted research use only (“RUO”) tests, and kitted clinical tests that can be run by local labs. Our primary near-term strategic market is organ transplant.
Within these categories, we have developed or are in the process of developing laboratory developed tests (“LDTs”) that can be run at our Franklin, Tennessee laboratory, kitted research use only (“RUO”) tests, and in vitro diagnostic (“IVD”) kitted clinical tests that can be run by local labs. Our primary near-term strategic market is organ transplant.
We are an early-stage company with limited resources and operating history and many of our competitors have substantially more resources than we do, including financial, technical and sales resources. In addition, many of our competitors have more experience than we have in the development and commercialization of diagnostics.
We are an early-stage company with limited resources and many of our competitors have substantially more resources than we do, including financial, technical and sales resources. In addition, many of our competitors have more experience than we have in the development and commercialization of diagnostic tests.
Competition Our industry is highly competitive and characterized by rapid technological change. Key competitive factors in our industry include, among others, the ability to successfully complete clinical studies, the ability to obtain any required regulatory approval, average selling prices of competing tests, CLIA laboratory capacity and costs, intellectual property and patent rights, and sales and marketing capabilities.
Key competitive factors in our industry include, among others, the ability to successfully complete clinical studies, the ability to obtain any required regulatory approval, average selling prices of competing tests, CLIA laboratory capacity and costs, intellectual property and patent rights, and sales and marketing capabilities.
We are focusing on executing the technology priorities discussed herein, which have evolved to reflect our operations and strategic vision. Billing, Coverage, and Reimbursement for our Laboratory Tests We are currently in the process of developing and commercializing GraftAssureCore, GraftAssureIQ, GraftAssureDx, DetermaIO and DetermaCNI.
We are focusing on executing the technology priorities discussed herein, which have evolved to reflect our operations and strategic vision. Billing, Coverage, and Reimbursement for our Laboratory Tests We are currently in the process of developing and commercializing GraftAssureCore, GraftAssureIQ and GraftAssureDx. Medicare For diagnostic tests, CMS reimbursement is critically important.
State laws generally include standards for the day-to-day operation of a clinical reference laboratory, including the training and skills required of personnel and quality control. In addition, those laws often mandate proficiency testing, which involves testing of specimens that have been specifically prepared for the laboratory. Some states require licensure of out-of-state laboratories that accept specimens from those states (i.e.
State laws generally include standards for the day-to-day operation of a clinical reference laboratory, including the training and skills required of personnel and quality control. In addition, those laws often mandate proficiency testing, which involves testing of specimens that have been specifically prepared for the laboratory.
We also have a laboratory and pharma services lab, certified under the CLIA and accredited by the Collage of American Pathologists (“CAP”), in Nashville, Tennessee, and a research and development lab in Göttingen, Germany. Our innovation centers in Nashville and Germany employ world-renowned research scientists who, we believe, are leaders in their fields.
We also have a services lab, certified under the CLIA and accredited by the College of American Pathologists (“CAP”), in Franklin, Tennessee, and research and development labs in Nashville, Tennessee and Göttingen, Germany. Our innovation centers in Nashville and Germany employ research scientists whom we believe are leaders in their fields.
The inherent uncertainties of developing and commercializing new diagnostic tests for medical use make it impossible to predict the amount of time and expense that will be required to complete the development and commercialization of those tests.
Our secondary strategic market is in the field of oncology. The inherent uncertainties of developing and commercializing new diagnostic tests for medical use make it impossible to predict the amount of time and expense that will be required to complete the development and commercialization of our oncology tests.
Our efforts in obtaining reimbursement based on individual claims, including pursuing appeals or reconsideration of claims denials, could take a substantial amount of time, and bills may not be paid for many months, if at all.
Our efforts in obtaining reimbursement based on individual claims, including pursuing appeals or reconsideration of claims denials, could take a substantial amount of time, and bills may not be paid for many months, if at all. Furthermore, if a third-party payer denies coverage after final appeal, payment may not be received at all.
Billing and Collection Where there is a private or governmental third-party payer coverage policy in place, we will bill the payer and the patient in accordance with the established policy.
Billing and Collection Where there is a private or governmental third-party payer coverage policy in place, we will bill in accordance with the established policy. Where there is no coverage policy in place, we will pursue reimbursement on a case-by-case basis.
Regulation of Research Use Only Products Some of our product development projects are intended to be sold for research purposes in the U.S., and labeled “For Research Use Only” or “for molecular biology applications.” RUO refers to devices that are in the laboratory phase of development, while investigational use only, or IUO, refers to devices that are in the product testing phase of development.
We believe that we are in material compliance with all applicable licensing laws and regulations applicable to us. 12 Table of Contents Regulation of Research Use Only Products Some of our product development projects are intended to be sold for research purposes in the U.S., and labeled “For Research Use Only” or “for molecular biology applications.” RUO refers to devices that are in the laboratory phase of development, while investigational use only, or IUO, refers to devices that are in the product testing phase of development.
As such, we are working with these regulatory bodies to attain such clearance and approval, as applicable, supporting future distribution and higher sales of our products for clinical use.
As such, we are working with these regulatory bodies to attain such clearance and approval, as applicable, supporting future distribution and higher sales of our products for clinical use. In 2025, we started a clinical trial in conjunction with our IVD submission for GraftAssureDx.
A device is substantially equivalent if, in comparison to a predicate it (a) has the same intended use as the predicate and has the same technological characteristics as the predicate; or (b) has the same intended use as the predicate, has different technological characteristics, and the information submitted to the FDA does not raise new questions of safety and effectiveness, and is demonstrated to be at least as safe and effective as the legally marketed predicate device.
A device may be established as substantially equivalent if, in comparison to a predicate it (a) has the same intended use as the predicate and has the same technological characteristics, and safety and efficacy testing; or (b) has the same intended use as the predicate, has different technological characteristics, and the information submitted to the FDA does not raise new questions of safety and effectiveness.
Our organ transplant rejection monitoring tests compete with other methods of assessing graft organ health, such as performing a manual biopsy, as well as liquid biopsy tests from competitors that measure donor-derived cell-free DNA, including CareDx, Inc., Natera, Inc., Transplant Genomics, Omixon Inc. and Devyser.
Our organ transplant rejection monitoring tests compete with other methods of assessing graft organ health, such as performing a manual biopsy, as well as liquid biopsy tests from competitors that measure dd-cfDNA, including CareDx, Inc., Natera, Inc., Transplant Genomics, Omixon Inc. and Devyser. Three of our competitors (CareDx, Inc., Natera, Inc. and Transplant Genomics) have an established customer base.
Pennsylvania, Rhode Island, Maryland and California). Our laboratories will need to pass various state inspections in order to get licensed to provide LDTs in each of state that requires licensure.
Some states require licensure of out-of-state laboratories that accept specimens from those states (e.g., Pennsylvania, Rhode Island, Maryland and California). Our laboratories will need to pass various state inspections in order to get licensed to provide LDTs in each of state that requires licensure.
In particular, a covered entity must notify any individual whose unsecured PHI is breached according to the specifications set forth in the breach notification rule.
In particular, a covered entity must notify any individual whose unsecured PHI is breached according to the specifications set forth in the breach notification rule. A covered entity must also notify the Secretary of the HHS and, under certain circumstances, the media of a breach of unsecured PHI.
We also perform other assay development and clinical testing services for pharmaceutical and biotechnology companies through our pharma services operations (“Pharma Services”). 6 We believe that the experience of our team with diverse technologies through our Pharma Services activities, strong scientific integrity regarding evidence generation and innovation mentality, alongside our flexibility in operations and regulatory strategy, will drive our success, differentiate us from our competition, and are foundational to our future.
We believe that the experience of our team with diverse technologies through our Laboratory Services activities, strong scientific integrity regarding evidence generation and innovation mentality, alongside our flexibility in operations and regulatory strategy, will drive our success, differentiate us from our competition, and are foundational to our future.
The final rule amended the HIPAA privacy rule to remove the CLIA laboratory exceptions, and as a result, HIPAA-covered laboratories are now required to provide individuals, upon request, with access to their completed test reports.
CMS and the Office of Civil Rights issued a final rule in February 2014 to amend both the HIPAA and CLIA regulations. The final rule amended the HIPAA Privacy Rule to remove the CLIA laboratory exceptions, and as a result, HIPAA-covered laboratories are now required to provide individuals, upon request, with access to their completed test reports.
We are also competing with academic institutions, governmental agencies and private organizations that are conducting research in the field of diagnostics. Our competition will be determined in part by the potential indications for which our lead test candidates are developed and ultimately marketed.
We are also competing with academic institutions, governmental agencies and private organizations that conduct research in our field. Our competition will be determined in part by the potential indications for which our lead test candidates are developed and ultimately marketed. Additionally, the timing of market introduction of our diagnostic tests or of competitors’ tests may be an important competitive factor.
The HIPAA privacy, security, and breach notification regulations establish a uniform federal “floor” and do not supersede state laws that are more stringent or provide individuals with greater rights with respect to the privacy or security of, and access to, their records containing PHI or insofar as such state laws apply to personal information that is broader in scope than PHI as defined under HIPAA.
We continue to monitor our compliance with the evolving EHI exceptions and enforcement frameworks to mitigate potential regulatory and financial exposure. 14 Table of Contents State Privacy and Security Laws The HIPAA privacy, security, and breach notification regulations establish a uniform federal “floor” for healthcare privacy and security and do not supersede state laws that are more stringent or provide individuals with greater rights with respect to the privacy or security of, and access to, their records containing PHI or, insofar as such state laws apply, categories of personal information that are broader in scope than PHI as defined under HIPAA.
The California Confidentiality of Medical Information Act imposes restrictive requirements regulating the use and disclosure of health information and other personally identifiable information. In addition to fines and penalties imposed upon violators, some of these state laws also afford private rights of action to individuals who believe their personal information has been misused.
For example, California has implemented comprehensive privacy laws and regulations, including the California Confidentiality of Medical Information Act (“CMIA”), which imposes restrictive requirements regulating the use and disclosure of health. In addition to fines and penalties imposed upon violators, some state laws, including the CMIA, provide private rights of action to individuals who believe their personal information has been misused.
The enforcement of patent rights often requires litigation against third party infringers, and such litigation can be costly to pursue. Even if we succeed in having new patents issued or in defending any challenge to issued patents, there is no assurance that our patents will be comprehensive enough to provide us with meaningful patent protection against our competitors.
Even if we succeed in having new patents issued or in defending any challenge to issued patents, there is no assurance that our patents will be comprehensive enough to provide us with meaningful patent protection against our competitors.
In addition, Congress has previously considered, and may consider in the future, legislative proposals that would amend the regulatory framework for LDTs, including, among other requirements, FDA premarket review of certain LDTs.
Before the rule took effect, a federal district court vacated the rule, reinstating the FDA’s policy of enforcement discretion. In addition, Congress has previously considered, and may consider in the future, legislative proposals that would amend the regulatory framework for LDTs, including, among other requirements, FDA premarket review of certain LDTs.
Through our acquisition of Insight Genetics, Inc. (“Insight”) in January 2020 and Chronix in April 2021, we obtained exclusive rights to additional intellectual property, including trade secrets, registered trademarks, domain names, copyrights, issued and reissued patents and pending applications, and software material, and have, since our acquisition of Insight, filed our own patents to protect DetermaIO.
(“Chronix”) in April 2021, we obtained exclusive rights to additional intellectual property, including trade secrets, registered trademarks, domain names, copyrights, issued and reissued patents and pending applications, and software material, and have, since our acquisition of IGI, filed our own patents applications to protect DetermaIO in Australia, Canada, China, Europe, Japan, Korea, and the U.S.
Manufacturers of currently marketed in vitro diagnostics products had until May 2022 to meet the requirements of the EU IVDR, though the EU Council and Parliament signed an amendment that delays certain previously mandated deadlines to allow more time for Notified Body of EU countries to manage the entire portfolio of IVD products on the European market. 12 In addition, Russia has enacted more stringent medical product registration and labeling regulations, China has enacted stricter labeling requirements, and we expect other countries, such as Brazil and India, to impose more regulations that impact our product registrations.
Manufacturers of currently marketed in vitro diagnostics products had until May 2022 to meet the requirements of the EU IVDR, though the EU Council and Parliament signed an amendment that delays certain previously mandated deadlines to allow more time for Notified Body of EU countries to manage the entire portfolio of IVD products on the European market.
If we identify any other state with such requirements, or if we are contacted by any other state advising us of such requirements, we intend to follow all instructions from the state regulators regarding compliance with such requirements. International Laboratory Licensing We also maintain laboratory operations in Germany and could expand our laboratory operations to other foreign jurisdictions.
If we identify any other state with such requirements, or if we are contacted by any other state advising us of such requirements, we intend to follow all instructions from the state regulators regarding compliance with such requirements.
The federal Anti-Kickback Statute prohibits, among other things, knowingly and willfully offering, paying, soliciting, receiving, or providing remuneration, directly or indirectly, to induce or in return for either the referral of an individual, or the furnishing, recommending, or arranging for the purchase, lease or order of any health care item or service reimbursable, in whole or in part, under a federal health care program.
In some cases, these overpayments can be used as the basis for an extrapolation, by which the error rate is applied to a larger universe of claims, and which can result in even higher repayments. 16 Table of Contents The federal Anti-Kickback Statute prohibits, among other things, knowingly and willfully offering, paying, soliciting, receiving, or providing remuneration, directly or indirectly, to induce or in return for either the referral of an individual, or the furnishing, recommending, or arranging for the purchase, lease or order of any health care item or service reimbursable, in whole or in part, under a federal health care program.
There can be no assurance, however, that these measures will prevent the unauthorized disclosure or use of our trade secrets and know-how, or that others may not independently develop similar trade secrets and know-how or obtain access to our trade secrets, know-how, or proprietary technology.
There can be no assurance, however, that these measures will prevent the unauthorized disclosure or use of our trade secrets and know-how, or that others may not independently develop similar trade secrets and know-how or obtain access to our trade secrets, know-how, or proprietary technology. 9 Table of Contents General Risks Related to Obtaining and Enforcing Patent Protection Our patents and patent applications are directed to compositions of matter, formulations, methods of use and/or methods of manufacturing.
Prometheus Laboratories, Inc. , the Supreme Court ruled that patent protection is not available for the simple use of a mathematical correlation of the presence of a well-known naturally occurring metabolite as a means of determining proper drug dosage.
For example, in Mayo Collaborative Services v. Prometheus Laboratories, Inc. , the Supreme Court ruled that patent protection is not available for the simple use of a mathematical correlation of the presence of a well-known naturally occurring metabolite (a body chemical) as a means of determining proper drug dosage, which may be relevant to our oncology assays under development.
Reimbursement rates paid by private third-party payers can vary based on whether the provider is considered to be an “in-network” provider, a participating provider, a covered provider, an “out-of-network” provider or a non-participating provider. Currently, we are out-of-network with all commercial payers.
Reimbursement rates paid by private third-party payers can vary based on whether the laboratory is considered “in-network,” “participating,” “covered,” “out-of-network” or “non-participating.” Currently, we are out-of-network with all commercial payers. While these definitions can vary among payers, an in-network laboratory usually has a contract with the payer or benefits provider.
Through our acquisition of Chronix in April 2021, we obtained intellectual property rights to 10 patent families in the field of detection of cell-free tumor DNA and quantification of donor derived cell-fee DNA, with numerous already issued patents in the United States and European Union (“EU”), expiring between April 2031 and October 2034.
Through our acquisition of Chronix in April 2021, we obtained intellectual property rights to nine patent families in the field of detection of cell-free tumor DNA and quantification of dd-cfDNA, with numerous already issued patents in the U.S. and EU, expiring between April 2031 and September 2035.
The Occupational Safety and Health Administration has established extensive requirements relating to workplace safety for health care employers, including requirements to develop and implement programs to protect workers from exposure to blood-borne pathogens by preventing or minimizing any exposure through needle stick or similar penetrating injuries.
The Occupational Safety and Health Administration has established extensive requirements relating to workplace safety for health care employers, including requirements to develop and implement programs to protect workers from exposure to blood-borne pathogens by preventing or minimizing any exposure through needle stick or similar penetrating injuries. 17 Table of Contents Human Capital As of December 31, 2025, we employed 58 persons, of which 55 were on a full-time basis and 3 were on a part-time basis.
(“Bio-Rad”) to collaborate in the development and the commercialization of RUO and in vitro diagnostic (“IVD”) kitted transplant products for clinical use (see Note 10, “Collaborative Arrangements,” to our consolidated financial statements included elsewhere in this Report for additional information).
Consequently, we have entered into a global strategic partnership agreement with Bio-Rad to collaborate in the development and the commercialization of kitted transplant products for clinical use (see Note 10, “Collaborative Arrangements,” to our consolidated financial statements included elsewhere in this Report for additional information).
This prohibition against the “corporate practice of medicine” is aimed at preventing corporations such as us from exercising control over the medical judgments or decisions of physicians.
Corporate Practice of Medicine A number of states, including California, do not allow business corporations to employ physicians to provide professional services. This prohibition against the “corporate practice of medicine” is aimed at preventing corporations such as us from exercising control over the medical judgments or decisions of physicians.
Failure to comply with applicable state laws that impose privacy, security, or breach notification requirements could result in significant civil or criminal penalties, administrative actions, or private causes of action by individuals, and adversely affect our business, results of operations and reputation. 15 Similar health care and data privacy laws and regulations exist in Europe and other jurisdictions, including reporting requirements detailing interactions with and payments to healthcare providers and requirements regarding the collection, distribution, use, security, and storage of personally identifiable information and other data relating to individuals, including the General Data Protection Regulation (“GDPR”), which went into effect in May 2018.
Foreign Privacy and Security Laws Similar health care and data privacy laws and regulations exist in Europe and other jurisdictions, including reporting requirements detailing interactions with and payments to healthcare providers and requirements regarding the collection, distribution, use, security, and storage of personally identifiable information and other data relating to individuals, including the General Data Protection Regulation (“GDPR”), which went into effect in May 2018.
Post-grant review can be sought based on any grounds that can be used to challenge the validity of a patent claim, with the exception of failure to disclose the best mode. Also, a derivation proceeding may be instituted by the USPTO or an inventor alleging that a patent or application was derived from the work of another inventor.
Post-grant review can be sought based on any grounds that can be used to challenge the validity of a patent claim, with the exception of failure to disclose the best mode.
In a 510(k) submission, the device sponsor must demonstrate that the new device is “substantially equivalent” to a predicate device in terms of intended use, technological characteristics, and performance testing. A 510(k) requires demonstration of substantial equivalence to another device that is legally marketed in the United States.
In a 510(k) submission, the device sponsor must demonstrate that the new device is “substantially equivalent” to another device that is legally marketed in the United States, known as a predicate device.
Additionally, the chemical reagents used with the testing equipment we choose are available only from the equipment manufacturer. This situation poses a risk to us. If we were to encounter inconsistent results using testing equipment and reagents from one manufacturer, we would need to switch to testing equipment from a different manufacturer.
If we were to encounter inconsistent results using testing equipment and reagents from one manufacturer, we would need to switch to testing equipment from a different manufacturer.
In January 2025, HHS proposed to modify the HIPAA Security Rule to address prescriptive requirements for administrative, physical, and technical safeguards in response to increased cybersecurity incidents in the health care industry. While a final rule has not yet been issued, if adopted, these proposed changes would potentially require significant operational adjustments and costs to comply.
In January 2025, HHS proposed to modify the HIPAA Security Rule to address prescriptive requirements for administrative, physical, and technical safeguards in response to increased cybersecurity incidents in the health care industry.
We believe that we are in material compliance with all applicable licensing laws and regulations applicable to us.
We believe that we are in material compliance with all applicable licensing laws and regulations applicable to us. International Laboratory Licensing We also maintain laboratory operations in Germany and could expand our laboratory operations to other foreign jurisdictions.
For example, in 2016, the EU and United States agreed to a transfer framework for data transferred from the EU to the United States, called the Privacy Shield, but the Privacy Shield was invalidated in July 2020 by the Court of Justice of the EU.
For example, in 2016, the EU and United States agreed to a transfer framework for data transferred from the EU to the United States, called the Privacy Shield, but the Privacy Shield was invalidated in July 2020 by the Court of Justice of the EU. 15 Table of Contents Further, from January 2021, companies have to comply with the GDPR and also the UK GDPR, which, together with the amended UK Data Protection Act 2018, retains the GDPR in UK national law.
Private Third-Party Payers In addition to seeking Medicare reimbursement approval, we will seek reimbursement approval from private payers such as health insurance companies and HMOs.
In May 2025, CMS increased its reimbursement price for the assay to $2,753 per result. 7 Table of Contents Private Third-Party Payers In addition to seeking Medicare reimbursement approval, we will seek reimbursement approval from private payers such as health insurance companies and HMOs.
Item 1. Business. Overview We are a pioneering diagnostics technology company. Our mission is to democratize access to novel molecular diagnostic testing to improve patient outcomes. We do this primarily by developing molecular diagnostic test kits that empower our customers to run their own tests to participate in the patient-care value chain, which is counter-positioned with the central laboratory model.
We are developing molecular diagnostic test kits designed to empower our customers to run their own tests in-house to participate in the patient-care value chain, which is counter-positioned with the send-out-testing central laboratory model.
In June 2021, the European Commission implemented an adequacy decision enabling data transfers from EU member states to the UK without additional security measures.
The UK GDPR mirrors the fines under the GDPR, e.g. fines up to the greater of €20.0 million (£17.5 million) or 4% of global turnover. In June 2021, the European Commission implemented an adequacy decision enabling data transfers from EU member states to the UK without additional security measures.
Some requirements, known as premarket requirements, apply to medical devices before they are marketed, and other requirements, known as post-market requirements, apply to medical devices after they are marketed. 13 The particular premarket requirements that must be met to market a medical device in the United States will depend on the classification of the device under FDA regulations.
The particular premarket requirements that must be met to market a medical device in the United States will depend on the classification of the device under FDA regulations based on the degree of risk it presents.
CLIA laboratories must create and maintain policies, procedures, and other documentation necessary to inform patients of the right to access laboratory test reports and how to exercise that right.
CLIA laboratories must create and maintain policies, procedures, and other documentation necessary to inform patients of the right to access laboratory test reports and how to exercise that right. HHS has pursued initiatives to update the HIPAA Privacy and Security Rules, resulting in a series of proposed and finalized changes over recent years.
If FDA were to disagree with our designation of any of these products, we could be forced to obtain the appropriate regulatory clearances or approval prior to commercialization. Regulation of In Vitro Diagnostics In the future, we may elect to develop IVDs, which are regulated by the FDA as medical devices.
If FDA were to disagree with our designation of any of these products, we could be forced to obtain the appropriate regulatory clearances or approval prior to commercialization and could face enforcement action.
Thus, in addition to the federal privacy regulations, there are a number of state laws regarding the privacy and security of health information and personal data that are applicable to clinical laboratories, and more states are considering these laws.
Thus, there are a number of state laws regarding the privacy and security of health information and personal data that are applicable to clinical laboratories, and, the compliance requirements and associated penalties for violating such requirements under these state laws vary widely, with more states continuing to consider similar legislation.
Under strict regulatory rules, our kitted tests may not be used in a clinical treatment setting until they have attained IVD clearance from the Food and Drug Administration (“FDA”) in the U.S. and In Vitro Diagnostic Medical Devices Regulation approval in the European Union.
See Note 13, “Subsequent Events – Specimen Collection Agreement,” to our consolidated financial statements included elsewhere in this Report for additional information. 6 Table of Contents Under strict regulatory rules, our kitted tests may not be used in a clinical treatment setting until they have attained marketing authorization from the Food and Drug Administration (“FDA”) for U.S. sales, and In Vitro Diagnostic Medical Devices Regulation approval, for European Union (“EU”) sales.
Additionally, on April 22, 2024, HHS issued a final rulemaking containing modifications to the HIPAA Privacy Rule to address the use or disclosure of PHI in relation to the provision of reproductive health care to update the conditions under which PHI relating to reproductive healthcare can be used or disclosed.
On April 22, 2024, HHS issued a final rulemaking containing modifications to the HIPAA Privacy Rule to address the use or disclosure of PHI in relation to the provision of reproductive health care, which were later vacated in June 2025, and certain changes to Notices of Privacy Practices related to Substance Use Disorder patient records.
Devices that pose the lowest risk are designated as Class I devices; devices that pose moderate risk are designated as Class II devices and are subject to general controls and special controls; and the devices that pose the highest risk are designated as Class III devices and are subject to general controls and premarket approval.
Class I devices (lowest risk) are generally subject to “general controls”; Class II devices (moderate risk) are subject to general and “special controls”; and Class III devices (highest risk) typically require Premarket Approval (“PMA”).
Oppositions to the issuance of patents may be filed under European patent law and the patent laws of certain other countries. As with the USPTO interference proceedings, these foreign proceedings can be very expensive to contest and can result in significant delays in obtaining a patent or can result in a denial of a patent application.
As with the USPTO interference proceedings, these foreign proceedings can be very expensive to contest and can result in significant delays in obtaining a patent or can result in a denial of a patent application. The enforcement of patent rights often requires litigation against third party infringers, and such litigation can be costly to pursue.
The new rule amends the definition of “in vitro diagnostic products” in FDA regulations to state that IVDs are devices under the FD&C Act “including when the manufacturer of these products is a laboratory.” The FDA determined that the general enforcement discretion approach should be phased out in a manner that accounts for the level of public health concern and the importance of avoiding undue disruption to the testing market, including undue disruption to the provision of care.
For example, in May 2024, the FDA finalized a rule, amending its definition of “in vitro diagnostic products” in FDA regulations to state that IVDs are devices under the Federal Food, Drug, and Cosmetic Act “including when the manufacturer of these products is a laboratory” and announced that the general enforcement discretion approach should be phased out.
Our laboratory in Nashville, Tennessee is licensed by the appropriate state agencies in the states in which we do business, if such licensure is required.
Our laboratory in Franklin, Tennessee is licensed by the appropriate state agencies in the states in which we do business, if such licensure is required. We may become aware from time to time of certain states that require out-of-state laboratories to obtain licensure to accept specimens from patients within the state.
We believe that through the use of digital PCR, our tests have attractive sample economics even at low volumes, offer fast turnaround times and offer native absolute quantification, which are expected to be differentiators in the marketplace. Based on our research of customer needs, we believe that turnaround time matters to practitioners while sample economics are important to local labs.
We aim to compete by selling test kits that enable labs to run patient samples locally. We believe that by leveraging digital PCR technology, our tests have attractive sample economics even at low volumes, offer fast turnaround times and offer native absolute quantification, which we expect may be differentiators in the marketplace.
General Risks Related to Obtaining and Enforcing Patent Protection Our patents and patent applications are directed to compositions of matter, formulations, methods of use and/or methods of manufacturing. The patent positions of pharmaceutical and biotechnology companies, including ours, are generally uncertain and involve complex legal and factual questions.
The patent positions of pharmaceutical and biotechnology companies, including ours, are generally uncertain and involve complex legal and factual questions.
CMS relies on a network of Medicare Administrative Contractors (“MACs”) to make a local coverage determination (“LCD”) approving a test for reimbursement. The MolDx Program was developed by Palmetto GBA (the previous MAC for California) to identify and establish coverage and reimbursement for molecular diagnostics tests.
CMS relies on a network of Medicare Administrative Contractors (“MACs”) to develop and implement local coverage determinations (“LCDs”), which are jurisdiction-specific coverage policies that define the clinical and technical criteria under which Medicare will reimburse for particular tests or services. The MolDX Program was developed by the Palmetto GBA MAC to establish coverage and reimbursement for molecular diagnostic tests.
We cannot predict whether, or under what circumstances, payers will reimburse for patients for our tests or whether our efforts to appeal denied claims will be successful.
However, until we are able to negotiate contracts with commercial payers, we expect to be considered “out-of-network” or “non-participating” by payers who cover the vast majority of commercially insured patients. We cannot predict whether, or under what circumstances, payers will reimburse for our tests or if our efforts to appeal denied claims will be successful.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeOther indications include a manufacturer's provision of technical support for clinical validation or clinical applications or solicitation of business from clinical laboratories that do not conduct research activities, all of which could be considered evidence of intended uses that conflict with RUO labeling. 27 In general, if (i) evidence shows that one or more of our IVDs are inappropriately labeled RUO (but marketed for clinical diagnostic use), such test(s) will not qualify for an IDE exemption and will be deemed misbranded under the FDCA.
Biggest changeIn general, if (i) evidence shows that one or more of our IVDs are inappropriately labeled RUO (but marketed for clinical diagnostic use), such test(s) will not qualify for an IDE exemption and will be deemed misbranded under the Federal Food, Drug, and Cosmetic Act ("FDCA") .
Certain commercial bribery rules also prohibit offering or providing any personal benefit to employees and representatives of commercial companies to influence their performance of their duties or induce them to serve interests other than their employers.
Certain commercial bribery rules also prohibit offering or providing any personal benefit to employees and representatives of commercial companies to influence performance of their duties or induce them to serve interests other than their employers.
We currently market certain IVDs that have not been cleared by the FDA in reliance on the regulatory exemption for IVDs intended for RUO, but if the FDA determines that our RUO tests do not meet the applicable requirements for exemption or have intended uses that are inconsistent with RUO tests, we may be required to suspend commercialization of such products until we can obtain the requisite FDA clearance and/or subject to FDA warning or untitled letters, seizure, injunction, fines, or other enforcement action.
We currently market certain IVDs for RUO that have not been cleared by the FDA in reliance on the regulatory exemption for IVDs intended for RUO, but if the FDA determines that our RUO tests do not meet the applicable requirements for exemption or have intended uses that are inconsistent with RUO tests, we may be required to suspend commercialization of such products until we can obtain the requisite FDA clearance and/or subject to FDA warning or untitled letters, seizure, injunction, fines, or other enforcement action.
Given the complexity of HIPAA and HITECH and their overlap with state privacy and security laws, and the fact that these laws are rapidly evolving and are subject to changing and potentially conflicting interpretation, our ability to comply with the HIPAA, HITECH and state privacy requirements is uncertain and the costs of compliance are significant.
Given the complexity of HIPAA and HITECH and their overlap with state privacy and security laws, and the fact that these laws are rapidly evolving and are subject to changing and potentially conflicting interpretation, our ability to comply with HIPAA, HITECH and state privacy requirements is uncertain and the costs of compliance are significant.
However, there are situations in which the failure to comply with the relevant requirements can result in the abandonment or lapse of the patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction.
However, there are situations in which failure to comply with the relevant requirements can result in the abandonment or lapse of the patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction.
As additional consideration for the acquisition of Chronix, we have agreed to pay to holders of other classes and series of Chronix’s stock earnout consideration of (i) 10% of net collections for sales of specified tests and products, until the expiration of intellectual property related to such tests and products, and (ii) 5% of the gross proceeds received from any sale of all or substantially all of the rights, titles, and interests in and to Chronix’s patents for use in transplantation medicine to such third party.
As additional consideration for the acquisition of Chronix, we agreed to pay to holders of other classes and series of Chronix’s stock earnout consideration of (i) 10% of net collections for sales of specified tests and products, until the expiration of intellectual property related to such tests and products, and (ii) 5% of the gross proceeds received from any sale of all or substantially all of the rights, titles, and interests in and to Chronix’s patents for use in transplantation medicine to such third party.
Reimbursement for our diagnostic testing may be negatively impacted by California MAC policies and we may not receive complete reimbursement for tests provided to Medicare patients due to such policies. Long payment cycles of Medicare, Medicaid and other third-party payers, or other payment delays, could hurt our cash flows and increase our need for working capital.
Reimbursement for our diagnostic testing may be negatively impacted by MAC policies and we may not receive complete reimbursement for tests provided to Medicare patients due to such policies. Long payment cycles of Medicare, Medicaid and other third-party payers, or other payment delays, could hurt our cash flows and increase our need for working capital.
An adverse outcome in a litigation or proceeding involving our patents could limit our ability to assert our patents against those parties or other competitors, and may curtail or preclude our ability to exclude third parties from making and selling similar or competitive products. Any of these occurrences could adversely affect our competitive business position, business prospects and financial condition.
An adverse outcome in litigation or proceeding involving our patents could limit our ability to assert our patents against those parties or other competitors, and may curtail or preclude our ability to exclude third parties from making and selling similar or competitive products. Any of these occurrences could adversely affect our competitive business position, business prospects and financial condition.
Clinical trial failures or delays can occur at any stage of the trials, and may be directly or indirectly caused by a variety of factors, including but not limited to: • Delays in securing clinical investigators or trial sites for our clinical trials; • Delays in obtaining Institutional Review Board and other regulatory approvals to commence a clinical trial; • Slower than anticipated rates of patient recruitment and enrollment, or failing to reach the targeted number of patients due to competition for patients from other trials; • Limited or no availability of coverage, reimbursement and adequate payment from health maintenance organizations and other third-party payers for the use of our diagnostic test candidates in our clinical trials; • Negative or inconclusive results from clinical trials; • Approval and introduction of new diagnostic tests or changes in standards of practice or regulatory guidance that render our clinical trial endpoints or the targeting of our proposed indications obsolete; • Inability to monitor patients adequately during or after treatment or problems with investigator or patient compliance with the trial protocols; • Inability to replicate in large controlled studies safety and efficacy data obtained from a limited number of patients in uncontrolled trials; and • Inability or unwillingness of medical investigators to follow our clinical protocols.
Clinical trial failures or delays can occur at any stage of the trials, and may be directly or indirectly caused by a variety of factors, including but not limited to: • Delays in securing clinical investigators or trial sites for our clinical trials; • Delays in obtaining Institutional Review Board and other regulatory approvals to commence a clinical trial; • Slower than anticipated rates of patient recruitment and enrollment, or failing to reach the targeted number of patients due to competition for patients from other trials; 29 Table of Contents • Limited or no availability of coverage, reimbursement and adequate payment from health maintenance organizations and other third-party payers for the use of our diagnostic test candidates in our clinical trials; • Negative or inconclusive results from clinical trials; • Approval and introduction of new diagnostic tests or changes in standards of practice or regulatory guidance that render our clinical trial endpoints or the targeting of our proposed indications obsolete; • Inability to monitor patients adequately during or after treatment or problems with investigator or patient compliance with the trial protocols; • Inability to replicate in large controlled studies safety and efficacy data obtained from a limited number of patients in uncontrolled trials; and • Inability or unwillingness of medical investigators to follow our clinical protocols.
The secure processing, maintenance, and transmission of this information is critical to our operations and business strategy. 22 We face a number of risks relative to protecting our information, including loss of access, inappropriate disclosure, inappropriate modification, and the risk of our being unable to adequately monitor and modify our controls over our critical information.
The secure processing, maintenance, and transmission of this information is critical to our operations and business strategy. We face a number of risks relative to protecting our information, including loss of access, inappropriate disclosure, inappropriate modification, and the risk of our being unable to adequately monitor and modify our controls over our critical information.
A finding of infringement could prevent us from commercializing our diagnostic tests or force us to cease some of our business operations, which could materially harm our business. Claims that we have misappropriated the confidential information or trade secrets of third parties could have a similar negative impact on our business.
A finding of infringement could prevent us from commercializing our diagnostic tests or force us to cease some of our business operations, which could materially harm our business. Claims that we have misappropriated confidential information or trade secrets of third parties could have a similar negative impact on our business.
Under the merger agreement pursuant to which we acquired Insight, as described in Note 3 to the consolidated financial statements included elsewhere in this Report, based on current estimates, we have agreed to pay contingent consideration of up to $4.5 million in any combination of cash or shares of our common stock if certain milestones related to DetermaIO are achieved, which consist of (i) $3.0 million for an affirmative final LCD from CMS for a specified lung cancer test, and (ii) up to $1.5 million for achieving certain CMS reimbursement milestones.
Under the merger agreement pursuant to which we acquired IGI, as described in Note 3 to the consolidated financial statements included elsewhere in this Report, based on current estimates, we agreed to pay contingent consideration of up to $4.5 million in any combination of cash or shares of our common stock if certain milestones related to DetermaIO are achieved, which consist of (i) $3.0 million for an affirmative final LCD from CMS for a specified lung cancer test, and (ii) up to $1.5 million for achieving certain CMS reimbursement milestones.
To meet these various cash payment obligations, we may need to sell additional shares of our common stock or other securities to raise the cash needed, or we may have to divert cash on hand that we would otherwise use for other business and operational purposes which could cause us to delay or reduce activities in the development and commercialization of our cancer tests.
To meet these various cash payment obligations, we may need to sell additional shares of our common stock or other securities, or we may have to divert cash on hand that we would otherwise use for other business and operational purposes which could cause us to delay or reduce activities in the development and commercialization of our cancer tests.
There is a limited number of manufacturers of molecular diagnostic testing equipment and related chemical reagents necessary for the provision of our diagnostic tests. There is a limited number of manufacturers of molecular testing equipment and related chemical reagents necessary for the provision of our tests.
There is a limited number of manufacturers of molecular testing equipment and related chemical reagents necessary for the provision of our tests.
Similarly, if we assert trademark infringement claims, a court may determine that the marks we have asserted are invalid or unenforceable, or that the party against whom we have asserted trademark infringement has superior rights to the marks in question, in which case, we could ultimately be forced to cease use of such trademarks. 33 Even if we establish infringement, the court may decide not to grant an injunction against further infringing activity and instead award only monetary damages, which may or may not be an adequate remedy.
Similarly, if we assert trademark infringement claims, a court may determine that the marks we have asserted are invalid or unenforceable, or that the party against whom we have asserted trademark infringement has superior rights to the marks in question, in which case, we could ultimately be forced to cease use of such trademarks. 34 Table of Contents Even if we establish infringement, the court may decide not to grant an injunction against further infringing activity and instead award only monetary damages, which may or may not be an adequate remedy.
The Leahy-Smith Act and its implementation may make it more difficult to obtain patent protection for our inventions and increase the uncertainties and costs surrounding the prosecution of our or our collaboration partners’ patent applications and the enforcement or defense of our or our collaboration partners’ issued patents, all of which could harm our business, results of operations and financial condition. 32 Other companies or organizations may challenge our patent rights or may assert patent rights that prevent us from developing and commercializing our diagnostic tests.
The Leahy-Smith Act and its implementation may make it more difficult to obtain patent protection for our inventions and increase the uncertainties and costs surrounding the prosecution of our or our collaboration partners’ patent applications and the enforcement or defense of our or our collaboration partners’ issued patents, all of which could harm our business, results of operations and financial condition. 33 Table of Contents Other companies or organizations may challenge our patent rights or may assert patent rights that prevent us from developing and commercializing our diagnostic tests.
For example, in the United States, proving invalidity requires a showing of clear and convincing evidence to overcome the presumption of validity enjoyed by issued patents. 34 We may not have identified all patents, published applications or published literature that affect our business either by blocking our ability to commercialize our products or potential products, by preventing the patentability of one or more aspects of our products or potential products to us or our licensors, or by covering the same or similar technologies that may affect our ability to market our products and potential products.
For example, in the United States, proving invalidity requires a showing of clear and convincing evidence to overcome the presumption of validity enjoyed by issued patents. 35 Table of Contents We may not have identified all patents, published applications or published literature that affect our business either by blocking our ability to commercialize our products or potential products, by preventing the patentability of one or more aspects of our products or potential products to us or our licensors, or by covering the same or similar technologies that may affect our ability to market our products and potential products.
Our financial success will depend, in part, on our ability to obtain commercially valuable patent claims, protect our intellectual property rights and operate without infringing upon the proprietary rights of others. 31 The patent positions of biotechnology companies, including our patent position, involve complex legal and factual questions, and, therefore, the issuance, scope, validity and enforceability of any patent claims that we may obtain cannot be predicted with certainty.
Our financial success will depend, in part, on our ability to obtain commercially valuable patent claims, protect our intellectual property rights and operate without infringing upon the proprietary rights of others. 32 Table of Contents The patent positions of biotechnology companies, including our patent position, involve complex legal and factual questions, and, therefore, the issuance, scope, validity and enforceability of any patent claims that we may obtain cannot be predicted with certainty.
The extent of any future impacts from inflation on our business and our results of operations will be dependent upon how long the elevated inflation levels persist and the extent to which the rate of inflation were to further increase, if at all, neither of which we are able to predict.
The extent of any future impacts from inflation on our business and our results of operations will depend upon how long the elevated inflation levels persist and the extent to which the rate of inflation were to further increase, if at all, neither of which we are able to predict.
We will be subject to ongoing compliance with laws addressing our laboratory licensure and certification at the federal and state level; advertising and promotion (including laws enforced by the Federal Trade Commission); and laws intended to prevent fraud, waste, and abuse in healthcare programs (including, among others, the Anti-Kickback Statute, False Claims Act, EKRA, the Stark Law, and applicable state law equivalents).
We are subject to ongoing compliance with laws addressing our laboratory licensure and certification at the federal and state level; advertising and promotion (including laws enforced by the FDA and Federal Trade Commission); and laws intended to prevent fraud, waste, and abuse in healthcare programs (including, among others, the Anti-Kickback Statute, False Claims Act, EKRA, the Stark Law, and applicable state law equivalents).
Not for use in diagnostic procedures.” Products that are intended for research use only and are properly labeled as RUO are exempt from compliance with the FDA’s pre- and post-market requirements to which traditional devices are subject, including the requirement that the product be cleared or approved before commercialization and QSR requirements.
Not for use in diagnostic procedures.” Products that are intended for research use only and are properly labeled as RUO are exempt from compliance with the FDA’s pre- and post-market requirements to which traditional devices are subject, including the requirement that the product be cleared or approved before commercialization and Quality System Regulation requirements.
The new presidential administration may also significantly alter the current regulatory framework and the healthcare industry, including any further challenges of certain ACA provisions. These changes could have an adverse and material impact on our operations.
The Trump administration may also significantly alter the current regulatory framework and the healthcare industry, including any further challenges of certain ACA provisions. These changes could have an adverse and material impact on our operations.
For instance, the payment reductions imposed by healthcare reform legislation known as the “Patient Protection and Affordable Care Act,” also known as the ACA, the expansion of the federal and state governments’ role in the U.S. healthcare industry, and the changes to the reimbursement amounts paid by payers for our tests and future tests and products may reduce our profits and have a material adverse effect on our business, financial condition, results of operations and cash flows.
For instance, the payment reductions imposed by healthcare reform legislation known as the Patient Protection and Affordable Care Act (“ACA”), the expansion of the federal and state governments’ role in the U.S. healthcare industry, and the changes to the reimbursement amounts paid by payers for our tests and future tests and products may reduce our profits and have a material adverse effect on our business, financial condition, results of operations and cash flows.
Physicians and hospitals may be reluctant to try a new diagnostic test due to the high degree of risk associated with the application of new technologies and diagnostic tests in the field of human medicine, especially if the new tests differ from the current standard of care for detecting cancer in patients.
Physicians and hospitals may be reluctant to try a new diagnostic test due to the high degree of risk associated with the application of new technologies and diagnostic tests in the field of human medicine, especially if the new tests differ from the current standard of care.
If this occurs, our competitors may be able to take advantage of our investment in development and clinical trials by referencing our clinical and preclinical data and launch their product earlier than might otherwise be the case. 35 Obtaining and maintaining patent protection depends on compliance with various procedures and other requirements, and our patent protection could be reduced or eliminated in case of non-compliance with these requirements.
If this occurs, our competitors may be able to take advantage of our investment in development and clinical trials by referencing our clinical and pre-clinical data and launch their product earlier than might otherwise be the case. 36 Table of Contents Obtaining and maintaining patent protection depends on compliance with various procedures and other requirements, and our patent protection could be reduced or eliminated in case of non-compliance with these requirements.
While we cannot predict other actions of the DOGE, there is a possibility that additional changes will be made to CMS spending, which could ultimately affect our financial condition and results of operations. In addition, the new administration recently issued a memorandum instructing U.S. executive agencies to prepare for reductions in workforce at governmental agencies, which likely includes the FDA.
While we cannot predict other actions of the DOGE, there is a possibility that additional changes will be made to CMS spending, which could ultimately affect our financial condition and results of operations. In addition, the Trump administration previously issued a memorandum instructing U.S. executive agencies to prepare for reductions in workforce at governmental agencies, which included the FDA.
HITECH established certain health information security breach notification obligations that require covered entities to notify each individual whose PHI is breached. 30 We may incur significant compliance costs related to HIPAA and HITECH privacy regulations and varying state privacy regulations and varying state privacy and security laws.
HITECH established certain health information security breach notification obligations that require covered entities to notify each individual whose PHI is breached. 31 Table of Contents We may incur significant compliance costs related to HIPAA and HITECH privacy regulations and varying state privacy regulations and varying state privacy and security laws.
In May 2024, the FDA published a final rule that phases out its enforcement discretion for LDTs, unless exempt, and amends the FDA’s regulations to make explicit that IVDs are medical devices under the Federal Food, Drug, and Cosmetic Act ("FDCA"), including when the manufacturer of the diagnostic product is a laboratory.
In May 2024, the FDA published a final rule that proposed to phase out its enforcement discretion policy for LDTs, unless exempt, and proposed to amend the FDA’s regulations to make explicit that IVDs are medical devices under the Federal Food, Drug, and Cosmetic Act, including when the manufacturer of the diagnostic product is a laboratory.
A person who knowingly obtains or discloses individually identifiable health information in violation of HIPAA may face a criminal penalty of up to $50,000 and up to one-year imprisonment. The criminal penalties increase if the wrongful conduct involves false pretenses or the intent to sell, transfer or use identifiable health information for commercial advantage, personal gain or malicious harm.
A person who knowingly obtains or discloses individually identifiable health information in violation of HIPAA may face a criminal penalty including fines and potential imprisonment. The criminal penalties increase if the wrongful conduct involves false pretenses or the intent to sell, transfer or use identifiable health information for commercial advantage, personal gain or malicious harm.
We have limited capital, marketing, sales, and regulatory compliance resources for the commercialization of our diagnostic tests. We are building our own marketing and sales capability for our diagnostic tests, and are devoting significant financial and management resources to recruiting, training, and managing our sales force and building a health care regulatory compliance program.
We are building our own marketing and sales capability for our diagnostic tests and are devoting significant financial and management resources to recruiting, training, and managing our sales force and building a health care regulatory compliance program.
Penalties for failure to comply with a requirement of HIPAA or HITECH vary significantly, and, depending on the knowledge and culpability of the HIPAA-regulated entity, may include civil monetary penalties of up to $1.5 million per calendar year for each provision of HIPAA that is violated.
Penalties for failure to comply with a requirement of HIPAA or HITECH vary significantly, and, depending on the knowledge and culpability of the HIPAA-regulated entity, may include civil monetary penalties for each provision of HIPAA that is violated.
If a collaboration partner fails to conduct its diagnostic test or instrument-related development, manufacturing, commercialization, regulatory compliance, sales and marketing or distribution activities successfully and in a timely manner, or if it terminates or materially modifies its agreements with us, the development and commercialization of one or more diagnostic test candidates could be delayed, curtailed or terminated because we may not have sufficient financial resources or capabilities to continue diagnostic test development, manufacturing, and commercialization on our own.
If a collaboration partner fails to conduct its diagnostic test or instrument-related development, manufacturing, commercialization, regulatory compliance, sales and marketing or distribution activities successfully and in a timely manner, or if it terminates or materially modifies its agreements with us, the development and commercialization of one or more diagnostic test candidates could be delayed, curtailed or terminated because we may not have sufficient financial resources or capabilities to continue diagnostic test development, manufacturing, and commercialization on our own. 22 Table of Contents Our business could be adversely affected if we lose the services of the key personnel upon whom we depend.
The anti-bribery provisions of the FCPA are enforced primarily by the United States Department of Justice. The Securities and Exchange Commission (“SEC”) is involved with enforcement of the books and records provisions of the FCPA. Compliance with these anti-bribery laws is expensive and difficult, particularly in countries in which corruption is a recognized problem.
The anti-bribery provisions of the FCPA are enforced primarily by the United States Department of Justice. The SEC is involved with enforcement of the books and records provisions of the FCPA. 24 Table of Contents Compliance with these anti-bribery laws is expensive and difficult, particularly in countries in which corruption is a recognized problem.
Even if we are able to overcome physician reluctance and compete with products that are currently on the market, our competitors may succeed in developing new safer, more accurate or more cost-effective diagnostic tests that could render our diagnostic tests and technologies obsolete or noncompetitive. There is a risk of product liability claims in our business.
Even if we are able to overcome physician reluctance and compete with products that are currently on the market, our competitors may succeed in developing new safer, more accurate or more cost-effective diagnostic tests that could render our diagnostic tests and technologies obsolete or noncompetitive.
We do not have any control over these analysts. Certain securities analysts cover our shares and they could issue reports or recommendations that are unfavorable to the price of our shares, and they could downgrade a previously favorable report or recommendation, and in either case our share price could decline as a result of the report.
Certain securities analysts cover our shares and they could issue reports or recommendations that are unfavorable to the price of our shares, and they could downgrade a previously favorable report or recommendation, and in either case our share price could decline as a result of the report.
Our net losses for the years ended December 31, 2024 and 2023 were $60.7 million and $27.8 million, respectively, and we had an accumulated deficit of $350.5 million as of December 31, 2024. We finance our operations primarily through sales of our common stock.
Our net losses for the years ended December 31, 2025 and 2024 were $50.2 million and $60.7 million, respectively, and we had an accumulated deficit of $400.8 million as of December 31, 2025. We finance our operations primarily through sales of our common stock.
In some cases, however, patent applications remain confidential in the U.S. Patent and Trademark Office, or the USPTO, for the entire time prior to issuance as a U.S. patent. Patent applications filed in countries outside of the United States are not typically published until at least 18 months from their first filing date.
In some cases, however, patent applications remain confidential in the USPTO, for the entire time prior to issuance as a U.S. patent. Patent applications filed in countries outside of the United States are not typically published until at least 18 months from their first filing date. Similarly, publication of discoveries in scientific or patent literature often lags behind actual discoveries.
Integrating any newly acquired businesses or technologies could be expensive and time-consuming, resulting in the diversion of resources from our current business. We may not be able to integrate any acquired business successfully.
Integrating any newly acquired businesses or technologies could be expensive and time-consuming, resulting in the diversion of resources from our current business.
Should we actually violate, or be perceived to have violated, any privacy promises we make to patients or consumers, we could be subject to a complaint from an affected individual or interested privacy regulator, such as the FTC or a state Attorney General. This risk is heightened given the sensitivity of the data we collect.
Should we violate, or be perceived to have violated, any privacy promises we make to patients or consumers, we could be subject to a complaint from an affected individual or interested privacy regulator, such as the FTC or a state Attorney General.
As such, the effects of inflation may adversely impact our results of operations, financial condition and cash flows. 25 Risks Related to Our Industry Our operations as a clinical laboratory in the United States are subject to oversight by CMS under CLIA, as well as certain state agencies, and our operation of clinical laboratories in any foreign jurisdictions are subject to similar regulatory oversight.
Risks Related to Our Industry Our operations as a clinical laboratory in the United States are subject to oversight by CMS under CLIA, as well as certain state agencies, and our operation of clinical laboratories in any foreign jurisdictions are subject to similar regulatory oversight.
In addition to storing and transmitting sensitive data that is subject to legal protections, these applications and data encompass a wide variety of business-critical information, including research and development information, commercial information, and business and financial information.
We also communicate PHI and other sensitive data through our various tools and platforms. In addition to storing and transmitting sensitive data that is subject to legal protections, these applications and data encompass a wide variety of business-critical information, including research and development information, commercial information, and business and financial information.
Since we are a smaller reporting company, we are exempt from the requirement of having our internal controls over financial reporting audited by our independent registered public accountants, which means that material weaknesses or significant deficiencies in our internal controls that might be detected by an audit may not be detected and remedied. 23 We are subject to laws and regulations governing corruption, which may require us to develop, maintain, and implement costly compliance programs.
Since we are a smaller reporting company, we are exempt from the requirement of having our internal controls over financial reporting audited by our independent registered public accountants, which means that material weaknesses or significant deficiencies in our internal controls that might be detected by an audit may not be detected and remedied.
If we are unable to obtain or maintain sufficient insurance, a product liability claim against us could adversely affect our business. Our business exposes us to potential product liability risks that are inherent in the development, testing, manufacturing and marketing of diagnostic test kits and assays. Product liability claims could delay or prevent completion of our clinical development programs.
Our business exposes us to potential product liability risks that are inherent in the development, testing, manufacturing and marketing of diagnostic test kits and assays. Product liability claims could delay or prevent completion of our clinical development programs.
Item 1A. R isk Factors. Our business is subject to various risks, including those described below. You should consider the following risk factors, together with all of the other information included in this Report, which could materially adversely affect our proposed operations, our business prospects, our financial condition, and the value of an investment in our business.
You should consider the following risk factors, together with all of the other information included in this Report, which could materially adversely affect our proposed operations, our business prospects, our financial condition, and the value of an investment in our business.
In addition, if any of our competitors are not subject to the FCPA, they may engage in practices that will lead to their receipt of preferential treatment from foreign hospitals and enable them to secure business from foreign hospitals in ways that are unavailable to us. 24 We may in the future be subject to litigation, which could harm our stock price, business, results of operations and financial condition.
In addition, if any of our competitors are not subject to the FCPA, they may engage in practices that will lead to their receipt of preferential treatment from foreign hospitals and enable them to secure business from foreign hospitals in ways that are unavailable to us.
We may not be able to obtain patent protection for our diagnostic tests if our pending U.S. patent applications are found to be directed to unpatentable subject matter. The U.S.
Other parties may develop and obtain patent protection for more effective technologies, designs or methods. We may not be able to obtain patent protection for our diagnostic tests if our pending U.S. patent applications are found to be directed to unpatentable subject matter. The U.S.
Accordingly, the loss of the services of one or more of the members of that management team could have a material adverse effect on our business. Our business and operations could suffer in the event of system failures.
We presently rely on a small senior management team to direct our diagnostics program and our initial commercial activities. Accordingly, the loss of the services of one or more of the members of that management team could have a material adverse effect on our business. Our business and operations could suffer in the event of system failures.
Any problems that may arise in connection with our data and systems, including those that are hosted by third-party providers, could result in interruptions to our business and operations or exposure to security vulnerabilities.
This risk is heightened given the sensitivity of the data we collect. 23 Table of Contents Any problems that may arise in connection with our data and systems, including those that are hosted by third-party providers, could result in interruptions to our business and operations or exposure to security vulnerabilities.
Furthermore, even if reimbursement is available, it may not be available at price levels sufficient for us to realize a positive return on our investment.
Furthermore, even if reimbursement is available, it may not be available at price levels sufficient for us to realize a positive return on our investment. 28 Table of Contents Our primary near-term strategic market is organ transplant.
We will need to raise additional capital to pay operating expenses unless we are able to generate sufficient revenues from diagnostic test sales, royalties, and license fees to meet our operating expenses. 18 • Our ability to raise additional equity or debt capital will depend not only on the successful completion of development of our diagnostic tests and receiving reimbursement approval from Medicare and other third-party payers for those tests, but also will depend on access to capital and conditions in the capital markets.
Our ability to raise additional equity or debt capital will depend not only on the successful completion of development of our diagnostic tests and receiving reimbursement approval from Medicare and other third-party payers for those tests, but also will depend on access to capital and conditions in the capital markets.
There is no assurance that we will be able to raise capital at times and in amounts needed to finance the development and commercialization of our diagnostic tests and general operations.
There is no assurance that we will be able to raise capital at times and in amounts needed to finance the development and commercialization of our diagnostic tests and general operations. Even if capital is available, it may not be available on terms that we or our shareholders would consider favorable.
For the foreseeable future we anticipate that any earnings generated in our business will be used to finance the growth of our business and will not be paid out as dividends to our shareholders. Consequently, shareholders’ ability to achieve a return on their investment will depend on appreciation in the price of our common stock.
We do not pay cash dividends on our common stock. For the foreseeable future we anticipate that any earnings generated in our business will be used to finance the growth of our business and will not be paid out as dividends to our shareholders.
Laboratory and health care regulatory compliance efforts are expensive and time-consuming, and failure to maintain compliance with applicable laws could result in enforcement action which could be detrimental to our business.
We are subject to numerous federal and state statutes and regulations pertaining to our business and are subject to government oversight and scrutiny for our compliance with such laws. Laboratory and health care regulatory compliance efforts are expensive and time-consuming, and failure to maintain compliance with applicable laws could result in enforcement action which could be detrimental to our business.
Further, given the complexities of the reimbursement landscape in which we operate, our payers may be unwilling or unable to increase reimbursement rates to compensate for inflationary impacts.
Further, given the complexities of the reimbursement landscape in which we operate, our payers may be unwilling or unable to increase reimbursement rates to compensate for inflationary impacts. As such, the effects of inflation may adversely impact our results of operations, financial condition and cash flows.
We have historically been dependent upon outside financing capital to fund our operations and until such time as our revenues are sufficient to finance our operating expenses, we may need to issue additional equity or debt securities to raise the capital needed to pay our operating expenses. • We plan to continue to incur substantial research and development expenses and we anticipate that we will be incurring significant sales and marketing costs as we develop and commercialize our diagnostic tests.
We have historically been dependent upon outside financing capital to fund our operations and until such time as our revenues are sufficient to finance our operating expenses, we may need to issue additional equity or debt securities to raise the capital needed to pay our operating expenses.
We cannot assure that, following an acquisition, we will achieve revenues, specific net income or loss levels that justify the acquisition or that the acquisition will result in increased earnings, or reduced losses, for the combined company in any future period.
We may not be able to integrate any acquired business successfully, and we may not achieve revenues, specific net income or loss levels that justify the acquisition or that the acquisition will result in increased earnings, or reduced losses, for the combined company in any future period.
In addition to acquisition costs, operationally we will have to build out infrastructure for installing a new testing platform across multiple laboratory locations as well as support functions to help maintain these instrument systems in new customer labs, and we may also encounter unexpected technology issues in the process. 20 If our laboratory facilities become damaged or inoperable, or we are required to vacate any facility, our ability to provide services and pursue our research and development and commercialization efforts may be jeopardized.
In addition to acquisition costs, operationally we will have to build out infrastructure for installing a new testing platform across multiple laboratory locations as well as support functions to help maintain these instrument systems in new customer labs, and we may also encounter unexpected technology issues in the process.
We incurred research and development expenses amounting to approximately $9.8 million and $9.3 million during the years ended December 31, 2024 and 2023, respectively. The current focus of our research and development efforts is the development of GraftAssureCore, GraftAssureIQ, GraftAssureDx, DetermaIO and DetermaCNI.
We incurred research and development expenses amounting to approximately $15.9 million and $9.8 million during the years ended December 31, 2025 and 2024, respectively. The current focus of our research and development efforts is the development of GraftAssureCore, GraftAssureIQ and GraftAssureDx, and in 2025, we started a clinical trial in conjunction with our IVD submission for GraftAssureDx .
In such an event, our competitors might be able to use our technologies and know-how which could have a material adverse effect on our business, prospects, financial condition and results of operation. Risks Related to Our Common Stock We previously identified and remediated a material weakness in our internal control over financial reporting.
In such an event, our competitors might be able to use our technologies and know-how which could have a material adverse effect on our business, prospects, financial condition and results of operation. Risks Related to Our Common Stock The trading price of our common stock is highly volatile, and purchasers of our common stock could incur substantial losses.
As of December 31, 2024, there were 17,452,824 shares of common stock outstanding, 760,866 shares of common stock reserved for issuance upon the exercise of warrants, 342,888 shares of common stock reserved for issuance upon the exercise of pre-funded warrants, 1,091,000 shares of common stock reserved for issuance upon the exercise of options under our e quity incentive plan, and 100,000 shares of common stock reserved for issuance upon the vesting of restricted stock units under our e quity incentive plan.
As of December 31, 2025, there were 28,682,844 shares of common stock outstanding, 760,866 shares of common stock reserved for issuance upon the exercise of warrants, 3,412,814 shares of common stock reserved for issuance upon the exercise of pre-funded warrants, 2,251,000 shares of common stock reserved for issuance upon the exercise of options under our e quity incentive plan, and 852,000 shares of common stock reserved for issuance upon the vesting of restricted stock units under our e quity incentive plan.
Our research and development expenses may also increase if we work to develop tests for additional types of cancer or for other cancer-related diagnostic purposes.
We plan to continue to incur substantial research and development expenses, and we anticipate that we will be incurring significant sales and marketing costs as we develop and commercialize our diagnostic tests. Our research and development expenses may also increase if we work to develop tests for additional types of cancer or for other cancer-related diagnostic purposes.
We may be subject to litigation in the future. In the past, following periods of volatility in the market price of their stock, many companies, including us, have been the subjects of securities class action litigation.
We may become subject to litigation, which could harm our stock price, business, results of operations and financial condition. We may be subject to litigation from time to time. In the past, following periods of volatility in the market price of their stock, many companies have been the subjects of securities class action litigation.
The future issuance of any such additional common stock or other securities may create downward pressure on the trading price of our common stock. 36 We may also issue preferred stock having rights, preferences, and privileges senior to the rights of our common stock with respect to dividends, rights to share in distributions of our assets if we liquidate our company, or voting rights.
We may also issue preferred stock having rights, preferences, and privileges senior to the rights of our common stock with respect to dividends, rights to share in distributions of our assets if we liquidate our company, or voting rights. Any preferred stock may also be convertible into common stock on terms that would be dilutive to holders of common stock.
Third-party payers, including Medicare, Medicaid and private insurers, are increasingly challenging the prices charged for healthcare products and services. In addition, legislative proposals to reform health care or reduce government insurance programs may result in lower prices or the actual inability of prospective customers to purchase our tests.
In addition, legislative proposals to reform health care or reduce government insurance programs may result in lower prices or the actual inability of prospective customers to purchase our tests.
The United States government and state legislatures have shown significant interest in implementing cost containment programs to limit the growth of government-paid healthcare costs, including price controls, restrictions on reimbursement and coverage.
We cannot predict whether future healthcare initiatives will be implemented at the federal or state level, or how any future legislation or regulation may affect us. The United States government and state legislatures have shown significant interest in implementing cost containment programs to limit the growth of government-paid healthcare costs, including price controls, restrictions on reimbursement and coverage.
Private health insurance company policies may deny coverage or limit the amount they will reimburse us for the performance of our diagnostic tests. Patients who are not covered by Medicare will generally rely on health insurance provided by private health insurance companies.
Private health insurance company policies may deny coverage or limit reimbursement for the performance of our diagnostic tests. Patients who are not covered by Medicare will generally rely on health insurance provided by private health insurance companies. However, private third-party payers often follow Medicare coverage policy and payment limitations in setting their own coverage and payment rates.
Securities analysts may not initiate coverage or continue to cover our common stock, and this may have a negative impact on the market price of our shares. The market for our common stock will depend, in part, on the research and reports that securities analysts publish about our business and our common stock.
Consequently, shareholders’ ability to achieve a return on their investment will depend on appreciation in the price of our common stock. 37 Table of Contents Securities analysts may not initiate coverage or continue to cover our common stock, and this may have a negative impact on the market price of our shares.
We also may not know if our competitors filed patent applications for technology covered by our pending applications or if we were the first to invent the technology that is the subject of our patent applications. Competitors may have filed patent applications or received patents and may obtain additional patents and proprietary rights that block or compete with our patents.
We cannot be certain that we or our licensors were the first to invent, or the first to file, patent applications covering our products. We also may not know if our competitors filed patent applications for technology covered by our pending applications or if we were the first to invent the technology that is the subject of our patent applications.
The molecular diagnostics that we are developing use gene expression classifiers or algorithms, which are mathematical models that weight the biomarkers to produce a score. We will treat the mathematical models as trade secrets. We have entered into intellectual property, invention, and non-disclosure agreements with our employees, and it is our practice to enter into confidentiality agreements with our consultants.
The molecular diagnostics that we are developing use gene expression classifiers or algorithms, which are mathematical models that weight the biomarkers to produce a score. We will treat the mathematical models as trade secrets.
In that case, we may be required to obtain premarket clearance or approval prior to offering our tests, which would be time-consuming and costly and could result in interruptions and delays in our ability to sell or offer our tests.
In that case, we may be required to obtain premarket clearance or approval prior to offering, or continuing to offer, our tests, which would be time-consuming and costly and could result in interruptions and delays in our ability to sell or offer our tests. 21 Table of Contents There is a limited number of manufacturers of molecular diagnostic testing equipment and related chemical reagents necessary for the provision of our diagnostic tests.
Competing tests for the initial diagnosis, reoccurrence diagnosis and optimal treatment of cancer are being manufactured and marketed by established companies and by other smaller biotechnology companies. In order to compete with other diagnostic tests, particularly any that sell at lower prices, our tests will have to provide medically significant advantages or be more cost effective.
In order to compete with other diagnostic tests, particularly any that sell at lower prices, our tests will have to provide medically significant advantages or be more cost effective.
As a result, our revenues from the sale of those diagnostic tests may be substantially less than the amount of revenues and gross profits that we might receive if we were to develop, manufacture, and market the diagnostic tests ourselves. 21 We are, and in the future, may become, dependent on collaborations to develop and commercialize many of our diagnostic test candidates and to provide the manufacturing, regulatory compliance, sales, marketing and distribution capabilities required for the success of our business.
As a result, our revenues from the sale of those diagnostic tests may be substantially less than the amount of revenues and gross profits that we might receive if we were to develop, manufacture, and market the diagnostic tests ourselves.
There is no assurance that we will be successful in completing the development of our current diagnostic tests or in developing additional diagnostic tests regardless of the amount of our expenditures. 19 Sales of our diagnostic tests could be adversely impacted by the reluctance of physicians to adopt the use of our tests and by the availability of competing diagnostic tests.
There is no assurance that we will be successful in completing the development of our current diagnostic tests or in developing additional diagnostic tests regardless of the amount of our expenditures. Increased competition from, and technological advances by, our competitors could negatively affect our operating results.
We must comply with a wide range of laws and regulations to prevent corruption, bribery, and other unethical business practices, including the FCPA, anti-bribery and anti-corruption laws in other countries. The creation and implementation of international business practices compliance programs is costly and such programs are difficult to enforce, particularly where reliance on third parties is required.
The creation and implementation of international business practices compliance programs is costly and such programs are difficult to enforce, particularly where reliance on third parties is required.
If the new administration takes action that substantially reduces FDA’s workforce, in particular, at the Center for Devices and Radiological Health, we may face significant delay in obtaining approval, if required, and subsequently marketing future product candidates. 29 Additionally, the Protecting Access to Medicare Act (“PAMA”) significantly altered the payment methodology under the Clinical Laboratory Fee Schedule that determines Medicare coverage for laboratory tests.
If the current administration takes further actions that substantially reduces FDA’s workforce, in particular, at the Center for Devices and Radiological Health, we may face significant delay in obtaining approval, if required, and subsequently marketing future product candidates.
However, private third-party payers often follow Medicare coverage policy and payment limitations in setting their own coverage and payment rates.
Further, third‑party payers often follow Medicare coverage policy and payment limitations in setting their own coverage and payment rates and therefore their coverage and payment determinations may likewise be affected by any such decisions.
Any of the foregoing factors as well as other unforeseen events could delay or prevent commercialization of our current or future diagnostic tests and adversely affect our business, financial condition and results of operations. 28 The commercial success of our diagnostic tests depends on the availability and sufficiency of third-party payer coverage and reimbursement, which may be limited or unavailable.
Any of the foregoing factors as well as other unforeseen events could delay or prevent commercialization of our current or future diagnostic tests and adversely affect our business, financial condition and results of operations. Changes in healthcare laws and policies may have a material adverse effect on our financial condition, results of operations and cash flows.
We may experience inflationary pressures, primarily in personnel costs, with certain laboratory supplies and from inventory costs related to certain raw materials . We anticipate inflationary impacts on other cost areas in the future.
We may experience inflationary pressures, primarily in personnel costs, with certain laboratory supplies, from inventory costs related to certain raw materials, with essential vendors including audit fees and regulatory consultants, and from tariff policies and potential countermeasures.
Any insurance we obtain may not provide sufficient coverage against potential liabilities. Furthermore, clinical trial and product liability insurance is becoming increasingly expensive. As a result, we may be unable to obtain or maintain sufficient insurance at a reasonable cost to protect us against losses caused by product liability claims that could adversely affect our business.
As a result, we may be unable to obtain or maintain sufficient insurance at a reasonable cost or contractual indemnifications to protect us against losses caused by product liability claims that could adversely affect our business. 20 Table of Contents We have limited capital, marketing, sales, and regulatory compliance resources for the commercialization of our diagnostic tests.
Security breaches and other disruptions could compromise our information and expose us to liability, and could cause our business and reputation to suffer. In the ordinary course of business, we collect and store sensitive data, including intellectual property, our proprietary business information and that of our business partners, PHI, and personally identifiable information of patients and employees.
In the ordinary course of business, we collect and store sensitive data, including intellectual property, our proprietary business information and that of our business partners, PHI, and personally identifiable information of patients and employees. We manage and maintain our applications and data utilizing a combination of on-site systems, managed data center systems and cloud-based systems.

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Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Leg al Proceedings. From time to time, we may be involved in routine litigation incidental to the conduct of our business. We are not presently involved in any material pending litigation or proceedings. See Note 6 to our consolidated financial statements included elsewhere in this Report for additional information regarding commitments and contingencies. Item 4. Mine Safety Disclosures.
Biggest changeItem 3. Legal Proceedings. From time to time, we may be involved in routine litigation incidental to the conduct of our business. We are not presently involved in any material pending litigation or proceedings. See Note 6, “Commitments and Contingencies – Litigation – General,” to our consolidated financial statements included elsewhere in this Report for additional information. Item 4.
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Not applicable. 38 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
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Mine Safety Disclosures. Not applicable. 40 Table of Contents PART II
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Market Information On February 7, 2023, our common stock began trading on The Nasdaq Capital Market under the symbol “OCX.” Previously, as of March 8, 2021, our common stock was trading on The Nasdaq Global Market, and prior to that date, our common stock was traded on The New York Stock Exchange (“NYSE”) American, both previously under the same symbol.
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Dividends We have not declared or paid any cash dividends on our common stock. Any future decision to declare or pay dividends will be at the sole discretion of our Board of Directors. Holders As of March 17, 2025, we had approximately 182 holders of record of our common stock.
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This number does not include shareholders whose shares of our common stock are held in “street name” in accounts with securities broker-dealers or other financial institutions or fiduciaries. Recent Sales of Unregistered Securities None. Repurchases None. Ite m 6. [RESERVED] Not applicable. 39

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeSee Note 14, “Subsequent Events – Private Placement Transaction” and “Subsequent Events – Registered Direct Offering,” to our consolidated financial statements included elsewhere in this Report for additional information. 41 Results of Operations Summary Results of Operations Years Ended December 31, 2024 2023 $ Change % Change (In thousands, except percentage change values) Net revenue $ 1,881 $ 1,503 $ 378 25 % Cost of revenues 1,053 1,002 51 5 % Cost of revenues – amortization of acquired intangibles 88 88 — — Research and development 9,839 9,294 545 6 % Sales and marketing 3,944 2,795 1,149 41 % General and administrative 10,204 11,182 (978 ) (9 )% Change in fair value of contingent consideration (4,275 ) (5,762 ) 1,487 (26 )% Impairment losses 41,900 6,757 35,143 520 % Impairment loss on held for sale assets 169 1,283 (1,114 ) (87 )% Loss from operations (61,041 ) (25,136 ) (35,905 ) 143 % Total other income, net 378 281 97 35 % Loss from continuing operations (60,663 ) (24,855 ) (35,808 ) 144 % Loss from discontinued operations (Note 13) — (2,926 ) 2,926 (100 )% Net loss $ (60,663 ) $ (27,781 ) $ (32,882 ) 118 % Results of Operations – Year Ended December 31, 2024 Compared with the Year Ended December 31, 2023 Total net revenue increased to $1.9 million for the year ended December 31, 2024, as compared to $1.5 million in the comparable prior period from Pharma Services as further discussed below.
Biggest changeResults of Operations Summary Results of Operations Years Ended December 31, 2025 2024 $ Change % Change (In thousands, except percentage change values) Net revenue $ 4,055 $ 1,881 $ 2,174 116 % Cost of revenues 1,750 1,053 697 66 % Cost of revenues – amortization of acquired intangibles 7 88 (81 ) (92 )% Research and development 15,900 9,839 6,061 62 % Sales and marketing 6,343 3,944 2,399 61 % General and administrative 10,633 10,204 429 4 % Change in fair value of contingent consideration 5,946 (4,275 ) 10,221 (239 )% Impairment losses 14,600 41,900 (27,300 ) (65 )% Impairment loss on held for sale assets — 169 (169 ) (100 )% Loss from operations (51,124 ) (61,041 ) 9,917 (16 )% Total other income, net 902 378 524 139 % Loss before income taxes (50,222 ) (60,663 ) 10,441 (17 )% Income taxes — — — — Net loss $ (50,222 ) $ (60,663 ) $ 10,441 (17 )% Results of Operations – Year Ended December 31, 2025 Compared with the Year Ended December 31, 2024 Total net revenue increased to $4.1 million for the year ended December 31, 2025, compared to $1.9 million in the comparable prior period primarily from Laboratory Services as further discussed below.
We have built and acquired an intellectual property portfolio that we believe will enable us to gain share in well-established clinical and research markets. Our current intellectual property comprises three general areas: 1) organ transplant, 2) oncology therapy selection and 3) oncology therapy monitoring.
We have built and acquired an intellectual property portfolio that we believe will enable us to gain share in well-established clinical and research markets. Our current intellectual property portfolio comprises three general areas: 1) organ transplant, 2) oncology therapy selection, and 3) oncology therapy monitoring.
We utilize the Black-Scholes option pricing model for determining the fair value of standard time-based stock options. Our determination of fair value of share-based payment awards on the date of grant using an option pricing model is affected by our stock price as well as assumptions regarding a number of complex and subjective variables.
We utilize the Black-Scholes option pricing model for determining the fair value of standard time-based stock options. Our determination of fair value of stock-based payment awards on the date of grant using an option pricing model is affected by our stock price as well as assumptions regarding a number of complex and subjective variables.
Impairment of Long-Lived Assets We assess the impairment of long-lived assets, which consists primarily of long-lived intangible assets, right-of-use assets, and machinery and equipment, whenever events or changes in circumstances indicate that such assets might be impaired and the carrying value may not be recoverable.
Impairment of Long-Lived Assets We assess the impairment of long-lived assets, which consists primarily of right-of-use assets, machinery and equipment, and finite-lived intangible assets, whenever events or changes in circumstances indicate that such assets might be impaired and the carrying value may not be recoverable.
Delays in our collaborative arrangement for the development and the commercialization of RUO and IVD kitted transplant products, or delays in obtaining regulatory approval to distribute our products for clinical use, or delays in the development of, or in obtaining reimbursement coverage from Medicare for DetermaIO and other future laboratory tests that we may develop or acquire, could prevent us from raising sufficient additional capital to finance the completion of development and commercial launch of those tests.
Delays in our collaborative arrangement for the development and the commercialization of RUO and IVD kitted transplant products, or delays in obtaining regulatory approval to distribute our products for clinical use, or delays in the development of, or in obtaining reimbursement coverage from Medicare for future laboratory tests that we may develop or acquire, could prevent us from raising sufficient additional capital to finance the completion of development and commercial launch of those tests.
Although it is difficult to predict our liquidity requirements, based on the going concern evaluation discussed in Note 1 to our consolidated financial statements included elsewhere in this Report, management believes that it will have sufficient cash to meet its projected operating requirements for at least the next twelve months following the issuance of these consolidated financial statements.
Although it is difficult to predict our liquidity requirements, based on the going concern evaluation discussed in Note 1, “Liquidity,” to our consolidated financial statements included elsewhere in this Report, management believes that it will have sufficient cash to meet its projected operating requirements for at least the next twelve months following the issuance of these consolidated financial statements.
The following Management’s Discussion and Analysis of Financial Condition and Results of Operations is intended to provide information necessary to understand our consolidated financial statements for the years ended December 31, 2024 and 2023 included elsewhere in this Report, and highlight certain other information which, in the opinion of management, will enhance a reader’s understanding of our financial condition, changes in financial condition and results of operations.
The following Management’s Discussion and Analysis of Financial Condition and Results of Operations is intended to provide information necessary to understand our consolidated financial statements for the years ended December 31, 2025 and 2024 included elsewhere in this Report, and highlight certain other information which, in the opinion of management, will enhance a reader’s understanding of our financial condition, changes in financial condition and results of operations.
Changes in the fair value of the contingent consideration will be based on our reassessment of the key assumptions underlying the determination of this liability as changes in circumstances and conditions occur from the Insight and Chronix acquisition dates to the reporting periods being presented, with the subsequent changes in fair value recorded as part of our consolidated results from operations for such periods.
Changes in the fair value of the contingent consideration will be based on our reassessment of the key assumptions underlying the determination of this liability as changes in circumstances and conditions occur from the IGI and Chronix acquisition dates to the reporting periods being presented, with the subsequent changes in fair value recorded as part of our consolidated results from operations for such periods.
We continuously monitor collections and payments from customers and maintains a provision for estimated credit losses and uncollectible accounts, if any, based upon its historical experience and any specific customer collection issues that have been identified. Amounts determined to be uncollectible are written off against the credit loss reserve accounts.
We continuously monitor collections and payments from customers and maintain a provision for estimated credit losses and uncollectible accounts, if any, based upon its historical experience and any specific customer collection issues that have been identified. Amounts determined to be uncollectible are written off against the credit loss reserve accounts.
We believe that the experience of our team with diverse technologies through our Pharma Services activities, strong scientific integrity regarding evidence generation and innovation mentality, alongside our flexibility in operations and regulatory strategy, will drive our success, differentiate us from our competition, and are foundational to our future.
We believe that the experience of our team with diverse technologies through our Laboratory Services activities, strong scientific integrity regarding evidence generation and innovation mentality, alongside our flexibility in operations and regulatory strategy, will drive our success, differentiate us from our competition, and are foundational to our future.
Changes in these subjective assumptions can materially affect the estimated value of equity grants and the stock-based compensation that we record in our consolidated financial statements. During the years ended December 31, 2024 and 2023, we recognized total stock-based compensation of $1.8 million and $2.8 million, respectively.
Changes in these subjective assumptions can materially affect the estimated value of equity grants and the stock-based compensation that we record in our consolidated financial statements. During the years ended December 31, 2025 and 2024, we recognized total stock-based compensation of $2.2 million and $1.8 million, respectively.
Upon our completion of the service to the customer in accordance with the contract, we have the right to bill the customer for the agreed upon price (either on a per test or per deliverable basis) and recognize the Pharma Services revenue at that time, on an accrual basis.
Upon our completion of the service to the customer in accordance with the contract, we have the right to bill the customer for the agreed upon price (either on a per test or per deliverable basis) and recognize the Laboratory Services revenue at that time, on an accrual basis.
We will continue development of GraftAssureCore, GraftAssureIQ, GraftAssureDx, DetermaIO and DetermaCNI. Our future research and development efforts and expenses will also depend on the amount of capital that we are able to raise to finance those activities and whether we acquire rights to any new diagnostic tests.
We will continue development of GraftAssureCore, GraftAssureIQ and GraftAssureDx. Our future research and development efforts and expenses will also depend on the amount of capital that we are able to raise to finance those activities and whether we acquire rights to any new diagnostic tests.
We may need to meet significant cash payment or stock obligations to former Insight and Chronix shareholders in connection with our acquisition of those companies, as disclosed in Note 3 to the consolidated financial statements included elsewhere in this Report.
We may need to meet significant cash payment or stock obligations to former IGI and Chronix shareholders in connection with our acquisition of those companies, as disclosed in Note 3 to the consolidated financial statements included elsewhere in this Report.
Investors may be reluctant to provide us with capital until our tests are approved for reimbursement by Medicare or reimbursement by private healthcare insurers or healthcare providers, or until we begin generating significant amounts of revenue from performing those tests.
Investors may be reluctant to provide us with capital until our tests are approved for reimbursement by Medicare or reimbursement by private healthcare insurers or healthcare providers, or until we begin generating significant amounts of revenue from selling and performing those tests.
Since the royalty-based contingent consideration payments are based on future revenues and linear payouts, management believes the use of the single scenario method is appropriate. The fair value of contingent consideration after the acquisition date is reassessed by us as changes in circumstances and conditions occur, with the subsequent change in fair value recorded in our consolidated statements of operations.
Since the royalty-based contingent consideration payments are based on future revenues and linear payouts, management believes the use of the single scenario method is appropriate. 51 Table of Contents The fair value of contingent consideration after the acquisition date is reassessed by us as changes in circumstances and conditions occur, with the subsequent change in fair value recorded in our consolidated statements of operations.
Our cash used in operating activities during 2024 did not include the following noncash items: $1.6 million in depreciation and amortization expenses, $1.8 million in stock-based compensation, $160,000 in other equity compensation expenses, $4.3 million gain from change in fair value of contingent consideration, $41.9 million loss from intangible asset impairments, and $169,000 impairment loss on held for sale assets.
Our cash used in operating activities during 2024 did not include the following noncash items: $1.6 million in depreciation and amortization expenses, $1.8 million in stock-based compensation, $160,000 in other equity compensation expenses, $4.3 million gain from change in fair value of contingent consideration, $41.9 million loss from intangible asset impairments, $169,000 impairment loss on held for sale assets, and unrealized foreign currency gains of $4,000.
Cash requirements are generally derived from our operating and investing activities including expenditures for working capital, human capital, equipment purchases, business development, investments in intellectual property, and business combinations.
Our cash requirements are generally derived from our operating and investing activities including expenditures for working capital, human capital, equipment purchases, lease payments, business development, investments in intellectual property, and business combinations.
The extent of any future impacts from inflation on our business and our results of operations will be dependent upon how long elevated inflation levels persist and the extent to which the rate of inflation were to increase, if at all, neither of which we are able to predict.
The extent of any future impacts from inflation on our business and our results of operations will depend upon how long elevated inflation levels persist and the extent to which the rate of inflation were to increase, if at all, neither of which we are able to predict.
This Management’s Discussion and Analysis of Financial Condition and Results of Operations contains a number of forward-looking statements, all of which are based on our current expectations and could be affected by the uncertainties and risks described throughout this filing, particularly under Risk Factors in Part I, Item 1A of this Report.
This Management’s Discussion and Analysis of Financial Condition and Results of Operations contains a number of forward-looking statements, all of which are based on our current expectations and could be affected by the uncertainties and risks described throughout this filing, particularly under “Risk Factors” in Part I, Item 1A. of this Report.
Revenue Recognition and Allowance for Credit Losses Pharma Services Pharma Services are generally performed under individual scope of work (“SOW”) arrangements or license agreements (together with SOW the “Pharma Services Agreements”) with specific deliverables defined by the customer. Pharma Services are performed on a (i) time and materials basis or (ii) per test completed basis.
Revenue Recognition and Allowance for Credit Losses Laboratory Services Laboratory Services are generally performed under individual scope of work (“SOW”) arrangements or license agreements (together with SOW the “Laboratory Services Agreements”) with specific deliverables defined by the customer. Laboratory Services are performed on a (i) time and materials basis or (ii) per test completed basis.
The inherent uncertainties of developing and commercializing new diagnostic tests for medical use make it impossible to predict the amount of time and expense that will be required to complete the development and commercialization of those tests.
The inherent uncertainties of developing and commercializing new diagnostic tests for medical use make it impossible to predict the amount of time and expense that will be required to complete the development and commercialization of our oncology tests.
Although we intend to market our diagnostic tests in the United States through our own sales force, we are also beginning to make marketing arrangements with distributors in other countries.
Although we intend to market our diagnostic tests in the United States through our own sales force, we are also making marketing arrangements with distributors in other countries.
We may also explore a range of other commercialization options in order to enter overseas markets and to reduce our capital needs and expenditures, and the risks associated with the timelines and uncertainty for attaining the Medicare reimbursement approvals that will be essential for the successful commercialization of additional diagnostic tests.
We are exploring a range of other commercialization options in order to enter overseas markets and to reduce our capital needs and expenditures, and the risks associated with the timelines and uncertainty for attaining the Medicare reimbursement approvals that will be essential for the successful commercialization of additional diagnostic tests.
For additional information, refer to Note 8 to our consolidated financial statements included elsewhere in this Report.
For additional information, see Note 8 to our consolidated financial statements included elsewhere in this Report.
Within these categories, we have developed or are in the process of developing LDTs that can be run at our Nashville, Tennessee lab, kitted RUO tests, and kitted clinical tests that can be run by local labs. Our primary near-term strategic market is organ transplant.
Within these categories, we have developed or are in the process of developing LDTs that can be run at our Franklin, Tennessee laboratory, kitted RUO tests, and IVD kitted clinical tests that can be run by local labs. Our primary near-term strategic market is organ transplant.
See below for additional details. 42 • Change in fair value of contingent consideration was a gain of $4.3 million in 2024 compared to a gain of $5.8 million in 2023. This change was due to changes in the fair value model inputs and revised estimates on if and when future payouts will occur.
See below for additional details. • Change in fair value of contingent consideration was a loss of $5.9 million in 2025 compared to a gain of $4.3 million in 2024. This change was due to changes in the fair value model inputs and revised estimates on if and when future payouts will occur.
For all payers other than Medicare, we must consider the novelty of the test, the uncertainty of receiving payment, or being subject to claims for a refund, from payers with whom it does not have a sufficient payment collection history or contractual reimbursement agreements. Accordingly, for those payers, we have recognized revenue upon payment.
For all payers other than Medicare, we needed to consider the novelty of the test, the uncertainty of receiving payment, or being subject to claims for a refund, from payers with whom iMDx did not have a sufficient payment collection history or contractual reimbursement agreements. Accordingly, for those payers, we recognized revenue upon payment.
For additional information, refer to Note 1 to our consolidated financial statements included elsewhere in this Report. Contingent Consideration Liabilities Contingent consideration is estimated and recorded at fair value as of the acquisition date as part of the total consideration transferred.
For additional information, including our current assessment results, see Note 1 to our consolidated financial statements included elsewhere in this Report. Contingent Consideration Liabilities Contingent consideration is estimated and recorded at fair value as of the acquisition date as part of the total consideration transferred.
Critical Accounting Estimates Our consolidated financial statements are prepared in conformity with GAAP. In preparing these financial statements, we make assumptions, judgments and estimates that involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on our financial condition or results of operations.
In preparing these financial statements, we make assumptions, judgments and estimates that involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on our financial condition or results of operations.
As of December 31, 2024 and 2023, we had an allowance for credit losses of $16,000 and $5,000, respectively, related to Pharma Services. 50 Stock-Based Compensation We recognize compensation expense related to share-based payment awards made to employees, board directors and other non-employees based on estimated fair values.
As of December 31, 2025 and 2024, we had an allowance for credit losses of $11,000 and $16,000, respectively, related to Laboratory Services. Stock-Based Compensation We recognize compensation expense related to stock-based payment awards made to employees, board directors and other non-employees based on estimated fair values.
During the fourth quarter of 2024, the IPR&D balances were reassessed using the MPEEM approach and the results of the valuations noted that the carrying values of certain oncology related IPR&D intangible assets were greater than the fair market values. We recorded a total impairment of $41.9 million as of December 31, 2024.
During the fourth quarter of 2024, the IPR&D balances were reassessed using the multi-period excess earnings method (“MPEEM”) approach and the results of the valuations noted that the carrying values of certain oncology related IPR&D intangible assets were greater than the fair market values. We recorded a total impairment of $41.9 million during the year ended December 31, 2024.
A portion of our costs for leasing and operating our CLIA laboratory in Tennessee, and in Germany with Chronix, will also be included in research and development expenses to the extent allocated to the development of our diagnostic tests. We intend to pursue a clinical trial in conjunction with our IVD submission in 2025, supporting our transplant products.
A portion of our costs for leasing and operating our CLIA-certified laboratory in Tennessee, and in Germany, will also be included in research and development expenses to the extent allocated to the development of our diagnostic tests. In 2025, we started a clinical trial in conjunction with our IVD submission for GraftAssureDx.
On April 5, 2024, we entered into a global strategic partnership agreement with Bio-Rad to collaborate in the development and the commercialization of RUO and IVD kitted transplant products.
In April 2024, we entered into a global strategic partnership agreement with Bio-Rad to collaborate in the development and the commercialization of RUO and IVD kitted transplant products using Bio-Rad’s ddPCR instruments and reagents.
We have incurred operating losses and negative cash flows since inception and had an accumulated deficit of $350.5 million as of December 31, 2024. At December 31, 2024, we had $8.6 million of cash and cash equivalents. On February 10, 2025, we raised substantial additional capital as discussed below.
We have incurred operating losses and negative operating cash flows since inception and had an accumulated deficit of $400.8 million as of December 31, 2025. At December 31, 2025, we had $11.6 million of cash and cash equivalents. On February 12, 2026, we raised additional capital as discussed below.
Future Pharma Services revenue is expected to be impacted as a result of our shift in strategic focus on commercializing our transplant kitted tests, and deploying our sales personnel toward signing new hospital research laboratory customers. Loss from continuing operations was $60.7 million for the year ended December 31, 2024, compared to $24.9 million for the comparable prior period.
Future Laboratory Services revenue is expected to be impacted as a result of our shift in strategic focus on commercializing our transplant kitted tests, and deploying our sales personnel toward signing new laboratory customers. Net loss was $50.2 million for the year ended December 31, 2025, compared to $60.7 million for the comparable prior period.
Item 7. Management’s Disc ussion and Analysis of Financial Condition and Results of Operations.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
We establish an allowance for credit losses based on the evaluation of the collectability of its Pharma Services accounts receivables after considering a variety of factors, including the length of time receivables are past due, significant events that may impair the customer’s ability to pay, such as a bankruptcy filing or deterioration in the customer’s operating results or financial condition, reasonable and supportable forecast that affect the collectability of the reported amount, and historical experience.
As performance obligations are satisfied under the Laboratory Services Agreements, any amounts earned as revenue and billed to the customer are included in accounts receivable. 52 Table of Contents We establish an allowance for credit losses based on the evaluation of the collectability of its Laboratory Services accounts receivables after considering a variety of factors, including the length of time receivables are past due, significant events that may impair the customer’s ability to pay, such as a bankruptcy filing or deterioration in the customer’s operating results or financial condition, reasonable and supportable forecast that affect the collectability of the reported amount, and historical experience.
Net changes in operating assets and liabilities for the period were $1.3 million as an additional use of cash. 47 During the year ended December 31, 2023, our total research and development expenses were $9.3 million, our sales and marketing expenses were $2.8 million, and our general and administrative expenses were $11.2 million.
Net changes in operating assets and liabilities for the period were $2.7 million as a source of additional cash. During the year ended December 31, 2024, our total research and development expenses were $9.8 million, our sales and marketing expenses were $3.9 million, and our general and administrative expenses were $10.2 million.
Inflation Although historically not significant to our results of operations, financial condition and cash flows, we may experience inflationary pressures, primarily in personnel costs, with certain laboratory supplies and from inventory costs related to certain raw materials.
Inflation Although historically not significant to our results of operations, financial condition and cash flows, we may experience inflationary pressures, primarily in personnel costs, with certain laboratory supplies, from inventory costs related to certain raw materials, with essential vendors including audit fees and regulatory consultants, and from tariff policies and potential countermeasures.
We expect to continue to incur operating losses and negative cash flows for the near future.
Management anticipates that we may continue to incur operating losses and negative operating cash flows for the near future.
Refer to Note 2, “Revenue Recognition – Pharma Services Revenue” and “Disaggregation of Revenues and Concentrations of Credit Risk,” to our consolidated financial statements included elsewhere in this Report for additional information. Laboratory Developed Test Services generally relate to payments received from sales prior to the Razor Sale Transaction.
See Note 2, “Revenue Recognition – Laboratory Services” and “Disaggregation of Revenues and Concentrations of Credit Risk,” to our consolidated financial statements included elsewhere in this Report for additional information. 45 Table of Contents Laboratory Developed Test Services generally related to payments received from sales prior to the Razor Sale Transaction (see Note 2, “Investments in Privately Held Companies,” to our consolidated financial statements included elsewhere in this Report).
Our future expenditures on sales and marketing will also depend on the amount of revenue that those efforts are likely to generate.
Our commercialization efforts and expenses will also depend on the amount of capital that we are able to access to finance commercialization of our tests. Our future expenditures on sales and marketing will also depend on the amount of revenue that those efforts are likely to generate.
Cash Used in Operations During the year ended December 31, 2024, our total research and development expenses were $9.8 million, our sales and marketing expenses were $3.9 million, and our general and administrative expenses were $10.2 million. We also incurred $1.1 million in total cost of revenues, including $88,000 for amortization of intangible expenses.
Cash Flow from Operating Activities During the year ended December 31, 2025, our total research and development expenses were $15.9 million, our sales and marketing expenses were $6.3 million, and our general and administrative expenses were $10.6 million. We also incurred $1.8 million in total cost of revenues, including $7,000 for amortization of intangible assets.
Our office lease obligations (net of sublease payments) and financing lease obligations, and contingent consideration obligations are further described in Note 6 and Note 3, respectively, to our consolidated financial statements included elsewhere in this Report. Historically, we have not entered into any off-balance sheet arrangements.
Our office lease obligations (net of sublease payments) and financing lease obligations, and contingent consideration obligations are further described in Note 6 and Note 3, respectively, to our consolidated financial statements included elsewhere in this Report.
Intangible Assets We consider various factors and risks for potential impairment of IPR&D intangible assets, including the current legal and regulatory environment and the competitive landscape.
Intangible Assets We consider various factors and risks for potential impairment of in-process research and development (“IPR&D”) intangible assets, including the current legal and regulatory environment and the competitive landscape.
As such, the effects of inflation may adversely impact our results of operations, financial condition and cash flows. 45 Liquidity and Capital Resources Our foreseeable material cash requirements as of December 31, 2024, are recognized as liabilities or generally are otherwise described in Note 6, “Commitments and Contingencies,” to our consolidated financial statements included elsewhere in this Report.
Liquidity and Capital Resources Our foreseeable material cash requirements as of December 31, 2025, are recognized as liabilities in the consolidated balance sheet or generally are otherwise described in Note 6, “Commitments and Contingencies,” to our consolidated financial statements included elsewhere in this Report.
We are currently unaware of any tax issues under review. For additional information, refer to Note 12, “Income Taxes,” to our consolidated financial statements included elsewhere in this Report. Ite m 7A. Quantitative and Qualitative Disclosures about Market Risk.
We are currently unaware of any tax issues under review. For additional information, see Note 12, “Income Taxes,” to our consolidated financial statements included elsewhere in this Report.
Consolidated net loss for the period was $60.7 million, and our consolidated net cash used in operating activities amounted to $20.7 million.
Net loss for the period was $50.2 million, and our net cash used in operating activities amounted to $22.2 million.
Upon completion of the service to the customer in accordance with a Pharma Services Agreement, we have the right to bill the customer for the agreed upon price (either on a per test or per deliverable basis) and recognizes Pharma Service revenue at that time. Insight identifies each sale of its Pharma Service offering as a single performance obligation.
Upon completion of the service to the customer in accordance with a Laboratory Services Agreement, we have the right to bill the customer for the agreed upon price (either on a per test or per deliverable basis) and recognize Laboratory Service revenue at that time.
Refer to Note 2, “Revenue Recognition – Laboratory Developed Test Services,” to our consolidated financial statements included elsewhere in this Report for additional information.
See Note 2, “Revenue Recognition – Kitted Products,” to our consolidated financial statements included elsewhere in this Report for additional information.
Cash Provided by Financing Activities During the year ended December 31, 2024, net cash provided by financing activities was $20.4 million from $26.0 million of net cash proceeds from the April 2024 Offering, the August 2024 Offering and the October 2024 Offering, partially offset by the redemption of our remaining Series A Preferred Stock of $5.4 million and repayments of financing lease obligations of $201,000.
During the year ended December 31, 2024, net cash provided by financing activities was $20.4 million from $26.0 million of net cash proceeds from the April 2024 Offering, the August 2024 Offering and the October 2024 Offering, partially offset by the redemption of our remaining Series A Preferred Stock of $5.4 million and repayments of financing lease obligations of $201,000. 50 Table of Contents Critical Accounting Estimates Our consolidated financial statements are prepared in conformity with U.S. generally accepted accounting principles.
The main drivers of the increase were personnel-related expenses, depreciation and amortization, and other expenses, which are primarily comprised of travel and entertainment, partially offset by facilities costs and stock-based compensation (see below for additional details). • General and administrative expenses decreased by $978,000, primarily due to decreases in facilities costs, stock-based compensation and severance costs, partially offset by personnel-related expenses and professional fees.
The main drivers of the increase were personnel-related expenses, depreciation and amortization, marketing and advertising, professional fees, and travel and entertainment. See below for additional details. • General and administrative expenses increased by $429,000, primarily due to increases in personnel-related expenses and board fees, and stock-based compensation, partially offset by facilities and insurance, and professional fees.
We also incurred $1.1 million in total cost of revenues, including $88,000 for amortization of intangible expenses. Consolidated net loss for the period was $27.8 million, of which $2.9 million was from discontinued operations, and our consolidated net cash used in operating activities amounted to $23.3 million.
We also incurred $1.1 million in total cost of revenues, including $88,000 for amortization of intangible expenses. Net loss for the period was $60.7 million, and our net cash used in operating activities amounted to $20.7 million.
Income Taxes We did not record any provision or benefit for income taxes for the years ended December 31, 2024 and 2023, as we had a full valuation allowance for the periods presented (see Note 12 to our consolidated financial statements included elsewhere in this Report).
Interest expense is incurred from our financing lease obligations (see Note 6 to our consolidated financial statements included elsewhere in this Report) and insurance financing activity. 47 Table of Contents Income Taxes We did not record any provision or benefit for income taxes for the years ended December 31, 2025 and 2024, as we had a full valuation allowance for the periods presented.
During the period between completion or abandonment, the IPR&D assets will not be amortized but will be tested for impairment on an annual basis and between annual tests if we become aware of any events occurring or changes in circumstances that would indicate a reduction in the fair value of the IPR&D projects below their respective carrying amounts. 49 During the first quarter of 2023, due to changes in management and our economic condition, management shifted our business strategy to direct efforts on fewer studies and to transition from tests that are LDTs to RUO sales.
During the period between completion or abandonment, the IPR&D assets will not be amortized but will be tested for impairment on an annual basis and between annual tests if we become aware of any events occurring or changes in circumstances that would indicate a reduction in the fair value of the IPR&D projects below their respective carrying amounts.
See Note 14, “Subsequent Events – Private Placement Transaction” and “Subsequent Events – Registered Direct Offering,” to our consolidated financial statements included elsewhere in this Report for additional information. 46 We expect that our general operating expenses will be commensurate with the market opportunity as we continue to manage our available cash.
See Note 6, “Office and Facilities Leases – Irvine Office Lease,” to our consolidated financial statements included elsewhere in this Report for additional information. We expect that our general operating expenses will be commensurate with the market opportunity as we continue to manage our available cash.
For additional information, refer to Note 5 to our consolidated financial statements included elsewhere in this Report.
See Note 2, “Income Taxes,” to our consolidated financial statements included elsewhere in this Report for additional information.
Net changes in operating assets and liabilities were $4.0 million as an additional use of cash. Cash Used in Investing Activities During the year ended December 31, 2024, net cash used in investing activities was $512,000, primarily from cash paid for construction in progress and purchase of furniture and equipment.
Net changes in operating assets and liabilities for the period were $1.3 million as an additional use of cash. Cash Flow from Investing Activities During the year ended December 31, 2025, net cash used in investing activities was $3.2 million from cash paid for construction in progress and purchases of machinery and equipment.
On February 10, 2025, we consummated the February 2025 Offering. The aggregate gross proceeds from the February 2025 Offering were approximately $29.1 million. After deducting offering expenses payable by the Company of $480,000, the resulting net proceeds were approximately $28.7 million.
On February 10, 2025, we consummated the February 2025 Offering. The aggregate gross proceeds from the February 2025 Offering were approximately $29.1 million. After deducting offering expenses payable of $487,000, the resulting net proceeds were approximately $28.7 million. We are using the net proceeds received for general corporate purposes and working capital.
Further, given the complexities of the reimbursement landscape in which we operate, our payers may be unwilling or unable to increase reimbursement rates to compensate for inflationary impacts.
Further, given the complexities of the reimbursement landscape in which we operate, our payers may be unwilling or unable to increase reimbursement rates to compensate for inflationary impacts. As such, the effects of inflation may adversely impact our results of operations, financial condition and cash flows.
We believe that of the significant accounting policies discussed in Note 2 to our consolidated financial statements included elsewhere in this Report, the following accounting policies involve a significant level of estimation uncertainty and require our most difficult, subjective or complex assumptions, judgments and estimates: • Going Concern Assessment; • Contingent Consideration Liabilities; • Intangible Assets; • Impairment of Long-Lived Assets; • Revenue Recognition and Allowance for Credit Losses; • Stock-Based Compensation; and • Income Taxes. 48 Going Concern Assessment We assess going concern uncertainty in our consolidated financial statements to determine if we have sufficient cash and cash equivalents on hand and working capital, including available loans or lines of credit, if any, to operate for a period of at least one year from the date our consolidated financial statements are issued (the “look-forward period”).
We believe that of the significant accounting policies discussed in Note 1 and Note 2 to our consolidated financial statements included elsewhere in this Report, the following accounting policies involve a significant level of estimation uncertainty and require our most difficult, subjective or complex assumptions, judgments and estimates: • Going Concern Assessment; • Contingent Consideration Liabilities; • Intangible Assets; • Impairment of Long-Lived Assets; • Revenue Recognition and Allowance for Credit Losses; • Stock-Based Compensation; and • Income Taxes.
The main drivers of the increase were personnel-related expenses and facilities costs, partially offset by depreciation and amortization, stock-based compensation and severance costs (see below for additional details). • Sales and marketing expenses increased by $1.1 million, primarily attributable to continued ramp up in sales, marketing and advertising activities related to the transplant business, as well as supporting the commercialization efforts within oncology.
The main drivers of the increase were professional fees, laboratory costs, and clinical trial costs, partially offset by stock-based compensation. See below for additional details. • Sales and marketing expenses increased by $2.4 million, primarily attributable to continued ramp up in sales, marketing and advertising activities related to the transplant business.
Chronix identifies the processing of test samples as a separate performance obligation (considered a series) within license agreements with customers. Completion of the service and satisfaction of the performance obligation is typically evidenced by access to the report or test made available to the customer or any other form or applicable manner of delivery defined in the Pharma Services Agreements.
Completion of the service and satisfaction of the performance obligation is typically evidenced by acknowledgment of completed services, and access to the report or test made available to the customer or any other form or applicable manner of delivery defined in the Laboratory Services Agreements.
As of December 31, 2024 and 2023, we had unrecognized tax benefits totaling $1.1 million and $2.3 million, respectively (see Note 12, “Income Taxes,” to our consolidated financial statements included elsewhere in this Report). Since formation, we have financed our operations primarily through the sale of our common stock, preferred stock and warrants.
As of December 31, 2025 and 2024, we had unrecognized tax benefits totaling $1.6 million and $1.1 million, respectively (see Note 12, “Income Taxes,” to our consolidated financial statements included elsewhere in this Report).
See above Results of Operations explanation for additional information. Other Income and Expenses Other income and expenses are primarily comprised of interest income and expense, and gains/losses from marketable equity securities, which were sold in 2023 (see Note 2, “Marketable Equity Securities,” to our consolidated financial statements included elsewhere in this Report).
See Note 3 to our consolidated financial statements included elsewhere in this Report for additional information. Other Income and Expenses Other income and expenses are primarily comprised of interest income, interest expense, and foreign currency gains and losses (see Note 2, “Foreign Currency Gains and Losses,” to our consolidated financial statements included elsewhere in this Report).
Our mission is to democratize access to novel molecular diagnostic testing to improve patient outcomes. We do this primarily by developing molecular diagnostic test kits that empower our customers to run their own tests to participate in the patient-care value chain, which is counter-positioned with the central laboratory model.
Our mission is to expand access to novel molecular diagnostic testing, most immediately in the transplanted organ rejection testing category. We are developing molecular diagnostic test kits designed to empower our customers to run their own tests in-house to participate in the patient-care value chain, which is counter-positioned with the send-out-testing central laboratory model.
During the years ended December 31, 2024 and 2023, we recognized impairment losses on held for sale assets of $169,000 and $1.3 million, respectively. For additional information, refer to Note 2, “Assets Held for Sale and Discontinued Operations,” to our consolidated financial statements included elsewhere in this Report.
During the year ended December 31, 2024, we recognized an impairment loss on held for sale assets of $169,000. We recorded no such impairments during 2025. For additional information, see Note 2, “Assets Held for Sale,” to our consolidated financial statements included elsewhere in this Report.
Changes in key assumptions can materially affect the estimated fair value of contingent consideration liabilities and, accordingly, the resulting gain or loss that we record in our consolidated financial statements. During the years ended December 31, 2024 and 2023, we recorded gains of $4.3 million and $5.8 million, respectively, related to the fair value of contingent consideration.
Changes in key assumptions can materially affect the estimated fair value of contingent consideration liabilities and, accordingly, the resulting gain or loss that we record in our consolidated financial statements.
The prior year impairment losses related to two asset impairments, including in-process research and development intangible assets of $5.0 million (see Note 5 to our consolidated financial statements included elsewhere in this Report for additional information) and leasehold improvements of $1.8 million (see Note 4 to our consolidated financial statements included elsewhere in this Report for additional information). • Impairment loss on held for sale assets relates to various agreements to sell laboratory equipment and the subsequent fair value adjustments.
See Note 5 to our consolidated financial statements included elsewhere in this Report for additional information. • Impairment loss on held for sale assets in 2024 relates to various agreements to sell laboratory equipment and the subsequent fair value adjustments.
We cannot assure that adequate long-term financing will be available on favorable terms, if at all. See Note 1 and Note 7 to our consolidated financial statements included elsewhere in this Report for additional information about our liquidity discussion and equity offerings, respectively.
See Note 1 and Note 7 to our consolidated financial statements included elsewhere in this Report for additional information about our liquidity discussion and equity offerings, respectively.
See below for additional information. • The current year impairment losses relate to our in-process research and development intangible assets. During the fourth quarter of 2024, it was determined that our DetermaIO and DetermaCNI intangible assets were impaired by $41.9 million (see Note 5 to our consolidated financial statements included elsewhere in this Report for additional information).
See below for additional information. • For the periods presented, impairment losses relate to our in-process research and development intangible assets. During the fourth quarter of 2025, it was determined that our DetermaIO and DetermaCNI intangible assets were fully impaired, amounting to $14.6 million.
We will need to continue to raise additional capital to finance our operations, including the development and commercialization of our diagnostic tests, and making payments that may become due under our obligations to former Chronix shareholders and former Insight shareholders, until such time as we are able to generate sufficient revenues to cover our operating expenses.
In 2025, we earned our first Kitted Products revenue, accordingly, we began to pay related royalties to Chronix. 49 Table of Contents We may need to continue to access additional forms of capital, beyond what is provided by cash flow from operations, to finance our operations, including the development and commercialization of our diagnostic tests, and making payments that may become due under our obligations to former IGI and Chronix shareholders, until such time as we are able to generate sufficient revenues to cover our operating expenses.
We have entered into a global strategic partnership agreement with Bio-Rad to collaborate in the development and the commercialization of RUO and IVD kitted transplant products for clinical use (see Note 10, “Collaborative Arrangements,” to our consolidated financial statements included elsewhere in this Report for additional information). 40 Under strict regulatory rules, our kitted tests may not be used in a clinical treatment setting until they have attained IVD clearance from the FDA in the U.S. and In Vitro Diagnostic Medical Devices Regulation approval in the European Union.
Consequently, we have entered into a global strategic partnership agreement with Bio-Rad to collaborate in the development and the commercialization of kitted transplant products for clinical use (see Note 10, “Collaborative Arrangements,” to our consolidated financial statements included elsewhere in this Report for additional information).
Our cash used in operating activities during 2023 did not include the following noncash items: $1.7 million in depreciation and amortization expenses, $2.8 million in stock-based compensation, $5.8 million gain from change in fair value of contingent consideration, $6.8 million loss from asset impairments, $1.5 million loss related to discontinued operations, $1.3 million loss on disposal and held for sale assets, $127,000 in other equity compensation expenses, and $61,000 in losses from marketable equity securities.
Our cash used in operating activities during 2025 did not include the following noncash items: $2.2 million in depreciation and amortization expenses, $2.2 million in stock-based compensation, $164,000 in other equity compensation expenses, $5.9 million loss from the change in fair value of contingent consideration, $14.6 million loss from intangible asset impairments, and unrealized foreign currency losses of $185,000.
On November 8, 2024, Oncocyte and Bio-Rad entered into a memorandum of understanding with respect to such agreement to establish additional activities to be performed by each party pursuant to such agreement. See Note 10, “Collaborative Arrangements,” to our consolidated financial statements included elsewhere in this Report for additional information.
In November 2024, iMDx and Bio-Rad entered into a memorandum of understanding with respect to such agreement to establish additional activities to be performed by each party pursuant to such agreement.
Revenues The following table shows our service revenues: Years Ended December 31, 2024 2023 $ Change % Change (In thousands, except percentage change values) Pharma Services $ 1,859 $ 1,467 $ 392 27 % Laboratory Developed Test Services 22 36 (14 ) (39 )% Total $ 1,881 $ 1,503 $ 378 25 % Pharma Services are generally performed on a time and materials basis.
Revenues The following table shows our revenues by type: Years Ended December 31, 2025 2024 $ Change % Change (In thousands, except percentage change values) Laboratory Services $ 4,031 $ 1,859 $ 2,172 117 % Laboratory Developed Test Services — 22 (22 ) (100 )% Kitted Products 24 — 24 100 % Total $ 4,055 $ 1,881 $ 2,174 116 % Laboratory Services are generally performed on a time and materials basis.
The gross proceeds from the October 2024 Offering were approximately $10.2 million. After deducting placement agent fees and expenses and offering expenses payable by the Company of $836,000, the resulting net proceeds were approximately $9.4 million. See Note 7, “Common Stock – October 2024 Offering,” to our consolidated financial statements included elsewhere in this Report for additional information.
The purchase price for one common share was $2.05. The aggregate gross proceeds from the February 2025 Offering were approximately $29.1 million. After deducting offering expenses of $487,000, the resulting net proceeds were approximately $28.7 million. See Note 7, “Common Stock – February 2025 Offering,” to our consolidated financial statements included elsewhere in this Report for additional information.
See Note 2, “Assets Held for Sale and Discontinued Operations,” to our consolidated financial statements included elsewhere in this Report for additional information. • Total other income, net increased by $97,000, primarily due to additional interest income and miscellaneous income in 2024 compared to 2023. See below for additional information.
See Note 2, “Assets Held for Sale,” to our consolidated financial statements included elsewhere in this Report for additional information. • Total other income, net increased by $524,000, primarily due to additional interest income related to higher cash balances from our February 2025 Offering, partially offset by additional foreign currency losses and interest expense related to our financing leases.
Accordingly, different customers may account for greater or lesser portions of Pharma Services during different accounting periods, and Pharma Services revenues may exhibit a larger variance from accounting period to accounting period than other revenues such as Laboratory Developed Test Services revenue.
Laboratory Services revenues are generated under discrete agreements for particular customer projects that generally expire with the completion or termination of the customer’s project. Accordingly, different customers may account for greater or lesser portions of Laboratory Services during different accounting periods, and Laboratory Services revenues may exhibit a larger variance from accounting period to accounting period than other revenues.

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