exdx-20250930

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2025
☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 001-39049

EXAGEN INC.

(Exact name of registrant as specified in its charter)

Delaware

20-0434866

(State or Other Jurisdiction of
Incorporation or Organization)

(I.R.S. Employer
Identification No.)

1261 Liberty Way

Vista,

92081

(Address of Principal Executive Offices)

(Zip Code)


(760)			560-1501
(Registrant's Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.001 per share

XGN

The Nasdaq Global Market

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☐

Accelerated filer

☐

Non-accelerated filer

☒

Smaller reporting company

☒

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Securities Act ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Total shares of common stock outstanding as of the close of business on October 31, 2025 was 22,663,099.

TABLE OF CONTENTS


		Page
Part I.	Financial Information
Item 1.	Financial Statements	1
	Unaudited Condensed Balance Sheets as of September 30, 2025 and December 31, 2024	1
	Unaudited Condensed Statements of Operations for the Three and Nine Months ended September 30, 2025 and 2024	2
	Unaudited Condensed Statements of Stockholders' Equity for the Three and Nine Months ended September 30, 2025 and 2024	3
	Unaudited Condensed Statements of Cash Flows for the Nine Months ended September 30, 2025 and 2024	5
	Notes to Unaudited Condensed Financial Statements	6
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	21
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	34
Item 4.	Controls and Procedures	35

Part II.	Other Information
Item 1.	Legal Proceedings	36
Item 1A.	Risk Factors	36
Item 5.	Other Information	37
Item 6.	Exhibits	38
	Signatures	39

Part I. Financial Information

Item 1. Financial Statements

Exagen Inc.

Unaudited Condensed Balance Sheets

(in thousands, except share and per share amounts)


	September 30, 2025		December 31, 2024

Assets
Current assets:
Cash and cash equivalents	$	35,652	$	22,036
Accounts receivable, net	11,092		7,835
Prepaid expenses and other current assets	5,845		6,584
Total current assets	52,589		36,455
Property and equipment, net	7,494		5,283
Operating lease right-of-use assets	1,685		2,401
Other assets	1,055		550
Total assets	$	62,823	$	44,689
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	3,559	$	4,137
Accrued and other current liabilities	5,684		6,916
Deferred revenue	641		733
Finance lease liabilities, current	1,134		201
Operating lease liabilities, current	1,192		1,096
Borrowings, current	680		423
Total current liabilities	12,890		13,506
Borrowings, non-current, net of discounts and debt issuance costs	22,261		19,822
Finance lease liabilities, non-current	2,141		157
Operating lease liabilities, non-current	759		1,664
Warrant liability	6,634		—

Total liabilities	44,685		35,149
Commitments and contingencies (Note 5)
Stockholders' equity:
Preferred stock, $0.001 par value per share; 10,000,000 shares authorized, no shares issued or outstanding as of September 30, 2025 and December 31, 2024	—		—
Common stock, $0.001 par value per share; 200,000,000 shares authorized as of September 30, 2025 and December 31, 2024; 22,510,313 and 17,640,328 shares issued and outstanding as of September 30, 2025 and December 31, 2024, respectively	23		18
Additional paid-in capital	327,724		303,853
Accumulated deficit	(309,609)		(294,331)
Total stockholders' equity	18,138		9,540
Total liabilities and stockholders' equity	$	62,823	$	44,689

The accompanying notes are an integral part of these unaudited condensed financial statements

Exagen Inc.

Unaudited Condensed Statements of Operations

(in thousands, except share and per share amounts)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024

Revenue	$	17,244	$	12,507	$	49,944	$	41,986
Cost of revenue	7,169		5,526		20,351		17,351
Gross profit	10,075		6,981		29,593		24,635
Operating expenses:
Selling, general and administrative expenses	11,445		10,163		34,191		31,169
Research and development expenses	1,730		1,481		4,497		3,719
Total operating expenses	13,175		11,644		38,688		34,888
Loss from operations	(3,100)		(4,663)		(9,095)		(10,253)
Interest expense	(1,319)		(562)		(2,988)		(1,671)
Loss on extinguishment of debt	—		—		(295)		—
Change in fair value of warrant liability	(2,670)		—		(3,108)		—
Interest income	3		197		246		570
Loss before income taxes	(7,086)		(5,028)		(15,240)		(11,354)
Income tax expense	(1)		—		(38)		—
Net loss	$	(7,087)	$	(5,028)	$	(15,278)	$	(11,354)
Net loss per share, basic and diluted	$	(0.31)	$	(0.28)	$	(0.73)	$	(0.63)
Weighted-average number of shares used to compute net loss per share, basic and diluted	22,940,412		18,254,937		20,878,373		18,127,549

The accompanying notes are an integral part of these unaudited condensed financial statements

Exagen Inc.

Unaudited Condensed Statements of Stockholders' Equity

(in thousands, except share amounts)


	Common Stock			Additional Paid-In Capital		Accumulated Deficit		Total Stockholders' Equity
	Shares	Amount






Balances as of December 31, 2024	17,640,328	$	18	$	303,853	$	(294,331)	$	9,540
Issuance of stock from vested restricted stock units	229,151	—		—		—		—
Issuance of stock under Employee Stock Purchase Plan	80,554	—		198		—		198
Stock-based compensation	—	—		417		—		417
Net loss	—	—		—		(3,752)		(3,752)
Balances as of March 31, 2025	17,950,033	18		304,468		(298,083)		6,403
Issuance of stock from public offering, net of issuance costs of $1,598	3,852,500	4		18,623		—		18,627
Issuance of stock from warrant exercises	107,969	—		—		—		—
Issuance of stock from vested restricted stock units	88,129	—		—		—		—
Exercise of stock options	108	—		—		—		—
Stock-based compensation	—	—		443		—		443
Net loss	—	—		—		(4,439)		(4,439)
Balances as of June 30, 2025	21,998,739	22		323,534		(302,522)		21,034
Issuance of stock under ATM, net of issuance costs of $145	360,554	1		3,397		—		3,398

Issuance of stock from vested restricted stock units	74,235	—		—		—		—
Issuance of stock under Employee Stock Purchase Plan	76,785	—		200		—		200

Stock-based compensation	—	—		593		—		593
Net loss	—	—		—		(7,087)		(7,087)
Balances as of September 30, 2025	22,510,313	$	23	$	327,724	$	(309,609)	$	18,138

The accompanying notes are an integral part of these unaudited condensed financial statements

Exagen Inc.

Unaudited Condensed Statements of Stockholders' Equity

(in thousands, except share amounts)


	Common Stock			Additional Paid-In Capital		Accumulated Deficit		Total Stockholders' Equity
	Shares	Amount





Balances as of December 31, 2023	17,045,954	$	17	$	301,893	$	(279,216)	$	22,694
Issuance of stock from vested restricted stock units	217,056	—		—		—		—
Exercise of stock options	326	—		—		—		—
Issuance of stock under Employee Stock Purchase Plan	54,605	—		104		—		104
Stock-based compensation	—	—		553		—		553
Net loss	—	—		—		(3,360)		(3,360)
Balances as of March 31, 2024	17,317,941	17		302,550		(282,576)		19,991
Issuance of stock from vested restricted stock units	62,998	—		—		—		—
Exercise of stock options	636	—		—		—		—
Stock-based compensation	—	—		560		—		560
Net loss	—	—		—		(2,966)		(2,966)
Balances as of June 30, 2024	17,381,575	17		303,110		(285,542)		17,585
Issuance of stock from vested restricted stock units	13,155	—		—		—		—
Exercise of stock options	84,162	—		22		—		22
Issuance of stock under Employee Stock Purchase Plan	41,443	1		71		—		72
Stock-based compensation	—	—		217		—		217
Net loss	—	—		—		(5,028)		(5,028)
Balances as of September 30, 2024	17,520,335	$	18	$	303,420	$	(290,570)	$	12,868

The accompanying notes are an integral part of these unaudited condensed financial statements

Exagen Inc.

Unaudited Condensed Statements of Cash Flows

(in thousands)


	Nine Months Ended September 30,
	2025		2024

Cash flows from operating activities:
Net loss	$	(15,278)	$	(11,354)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	1,518		1,309
Amortization of debt discount and debt issuance costs	247		112
Amortization of loan commitment fees	461		—
Change in fair value of warrant liability	3,108		—
Loss on extinguishment of debt	295		—




Non-cash operating lease expense	717		656
Stock-based compensation	1,453		1,330
Other	147		317
Changes in assets and liabilities:
Accounts receivable, net	(3,257)		(2,836)
Prepaid expenses and other current assets	1,358		662
Other assets	494		50
Operating lease liabilities	(808)		(720)
Accounts payable	(545)		(2,028)
Deferred revenue	(92)		—
Accrued and other current liabilities	(430)		(1,140)
Net cash used in operating activities	(10,612)		(13,642)
Cash flows from investing activities:
Purchases of property and equipment	(597)		(369)
Proceeds from disposal of property and equipment	6		—
Net cash used in investing activities	(591)		(369)
Cash flows from financing activities:

Proceeds from common stock issued in public offering, net of issuance costs	18,627		—
Proceeds from common stock issued under ATM, net of issuance costs	3,436		—
Proceeds from common stock issued under Employee Stock Purchase Plan	398		176
Proceeds from exercise of stock options	—		22
Principal payments on finance lease obligations	(313)		(379)
Principal payments on notes payable obligations	(427)		(266)
Proceeds from issuance of debt and warrants, net of discounts	23,672		—
Payment to extinguish debt	(19,705)		—

Payment of debt issuance costs	(869)		—
Net cash provided by (used in) financing activities	24,819		(447)
Net increase (decrease) in cash, cash equivalents and restricted cash	13,616		(14,458)
Cash, cash equivalents and restricted cash, beginning of period	22,236		36,693
Cash, cash equivalents and restricted cash, end of period	$	35,852	$	22,235
Supplemental disclosure of cash flow information:
Cash paid for interest	$	2,107	$	1,307
Cash paid for taxes	$	38	$	12
Supplemental disclosure of non-cash items:
Unpaid equipment settled under financing arrangement	$	682	$	—

Right-of-use assets obtained in exchange for finance lease liabilities	$	3,231	$	—
Recognition of warrant liability	$	3,525	$	—
Equipment purchased under notes payable obligations	$	—	$	706
Unpaid financing costs included in accounts payable and accrued liabilities	$	39	$	—
Costs incurred, but not paid, in connection with capital expenditures	$	17	$	20

The accompanying notes are an integral part of these unaudited condensed financial statements

Exagen Inc.

Notes to Unaudited Interim Condensed Financial Statements

Note 1. Organization

Description of Business

Exagen Inc. (the Company) is a medical technology company primarily focused on the design, development and commercialization of a next-generation portfolio of testing products under the AVISE® brand, which allow for the differential diagnosis, prognosis and monitoring of complex rheumatic, autoimmune and autoimmune-related disease including, among others, systemic lupus erythematosus (SLE) and rheumatoid arthritis (RA).

Liquidity

The Company has incurred recurring losses and negative cash flows from operating activities since inception. The Company anticipates that it will continue to incur net losses in future periods. As of September 30, 2025, the Company had cash and cash equivalents of $35.7 million and had an accumulated deficit of $309.6 million. Since inception, the Company has financed its operations primarily through a combination of equity financings, debt financing arrangements, and revenue from sales of the Company's products. Based on the Company's current business plan, management believes that its existing capital resources will be sufficient to fund the Company's obligations for at least twelve months following the issuance of these condensed financial statements.

On April 25, 2025, the Company and Perceptive Credit Holdings IV, LP (Perceptive) entered into the Credit Agreement (as defined below), under which an initial term loan of $25.0 million was funded, $19.7 million of which the Company used to repay the 2017 Term Loan (as defined below). The Company received $3.0 million in proceeds, net of issuance costs and repayment of the 2017 Term Loan. The term loan facility allows the Company to draw up to an aggregate principal amount of $75.0 million in several tranches, subject to specified milestone requirements. Additionally, pursuant to the Credit Agreement, the Company also issued a warrant certificate to purchase up to 1,150,000 shares of common stock (the Warrant Certificate), 400,000 of which vested and became exercisable upon issuance (the Tranche A Warrant Shares) and up to 750,000 of which will vest and become exercisable if and when the additional debt tranches are drawn by the Company. See “Note 4 Borrowings—Perceptive Term Loan Facility” for more information.

On May 9, 2025, the Company issued and sold an aggregate of 3,852,500 shares of its common stock at a public offering price of $5.25 per share, for aggregate net proceeds of $18.6 million after deducting underwriting discounts and commissions and other offering expenses. See “Note 7 Stockholders' Equity—2025 Public Offering” for more information.

To execute its business plans, the Company may need additional funding to support its continuing operations and pursue its growth strategy. Until such time as the Company can achieve significant cash flows from operations, if ever, it may need to finance its operations through the sale of its stock, debt financings or other strategic transactions. Although the Company has been successful in raising capital in the past, there is no assurance that it will be successful in obtaining such additional financing on terms acceptable to the Company, if at all. The terms of any financing may adversely affect the holdings or the rights of the Company's stockholders. Although management believes the Company's existing capital resources are adequate to fund operations for the next twelve months, if the Company is unable to obtain additional funding in the future, the Company could be forced to delay, reduce or eliminate some or all of its programs, product portfolio expansion plans or commercialization efforts, which could have a material adverse effect on the Company's business, operating results and financial condition and the Company's ability to achieve its intended business objectives.

Note 2. Summary of Significant Accounting Policies

Basis of Presentation and Use of Estimates

The accompanying unaudited interim condensed balance sheets as of September 30, 2025, condensed statements of operations and stockholders' equity for the three and nine months ended September 30, 2025 and 2024, cash

flows for the nine months ended September 30, 2025 and 2024 and the related footnote disclosures are unaudited and have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (SEC), and with accounting principles generally accepted in the United States (GAAP) applicable to interim financial statements. These unaudited condensed financial statements and related footnote disclosures should be read in conjunction with the Company’s audited financial statements for the fiscal year ended December 31, 2024, included in its Annual Report on Form 10-K filed with the SEC on March 11, 2025 (the 2024 Annual Report). In management's opinion, the unaudited interim condensed financial statements have been prepared on the same basis as the audited financial statements included in the 2024 Annual Report and include all normal adjustments, necessary for the fair presentation of the Company's financial position as of September 30, 2025 and its results of operations for the periods presented. The results for the three and nine months ended September 30, 2025 are not necessarily indicative of the results expected for the full fiscal year or any other interim period. The year-end condensed balance sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP. Certain reclassifications have been made to prior period amounts to conform to the current presentation.

The preparation of the accompanying unaudited condensed financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities as of the date of the condensed financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could materially differ from those estimates.

Significant estimates and assumptions made in the accompanying unaudited condensed financial statements include, but are not limited to revenue recognition, the fair value of the warrant liability, the estimated incremental borrowing rate for the determination of the Company's operating and finance lease right-of-use (ROU) assets, and the recoverability of its long-lived assets and net deferred tax assets (and related valuation allowance). The Company evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors and adjusts those estimates and assumptions when facts and circumstances dictate. Actual results could materially differ from those estimates.

Concentration of Credit Risk and Other Risk and Uncertainties

Financial instruments that potentially subject the Company to credit risk consist principally of cash, cash equivalents and accounts receivable. Substantially all the Company's cash and cash equivalents are held at one financial institution that management believes is of high credit quality. Such deposits may, at times, exceed federally insured limits. The Company has not experienced any losses on its cash or cash equivalents.

Significant payors and customers are those which represent more than 10% of the Company's total revenue or accounts receivable balance at each respective balance sheet date. For each significant payor and customer, revenue as a percentage of total revenue and accounts receivable as a percentage of total accounts receivable are as follows:


	Revenue
	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Customer A	24	%	20	%	23	%	24	%
Customer B	21	%	22	%	19	%	21	%
Customer C	*		*		10	%	*


	Accounts Receivable, Net
	September 30, 2025		December 31, 2024
Customer A	14	%	13	%
Customer B	17	%	25	%
Customer C	16	%	*



*						Less than 10%.

For the three months ended September 30, 2025 and 2024, approximately 87% and 93%, respectively, of the Company's revenue was related to the AVISE® CTD test. Revenue related to AVISE® CTD test for the nine months ended September 30, 2025 and 2024 was approximately 89% and 91%, respectively.

The Company is dependent on key suppliers for certain laboratory materials, consisting primarily of reagents and biomarkers used in our diagnostic tests. For the three months ended September 30, 2025 and 2024 approximately 97% and 98%, respectively, of the Company's diagnostic testing supplies were purchased from two suppliers. For the nine months ended September 30, 2025 and 2024, approximately 95% and 97%, respectively, of the Company's diagnostic testing supplies were purchased from three suppliers. An interruption in the supply of these materials would impact the Company's ability to perform testing services.

Disaggregation of Revenue

The following table includes the Company's revenues as disaggregated by payor and customer category (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Revenue:
Commercial	$	9,454	$	6,779	$	27,025	$	22,314
Government	3,988		2,633		11,621		10,276
Client direct bill(1)	3,733		2,981		11,100		9,175
Other(2)	69		114		198		221
Total revenue	$	17,244	$	12,507	$	49,944	$	41,986

(1)Includes hospitals, other laboratories, etc.

(2)Includes patient self-pay.

Cash, Cash Equivalents and Restricted Cash

The Company considers all highly liquid investments purchased with a remaining maturity date of three months or less upon acquisition to be cash equivalents. These investments are stated at cost, which approximates fair value.

The Company has an arrangement with a financial institution with which it has an existing banking relationship, whereby in exchange for the issuance of corporate credit cards, the Company agreed to obtain a certificate of deposit with this financial institution in the amount of $0.2 million as collateral for the balances borrowed on these cards (the Credit Card Program). The Company has classified the value of this certificate of deposit (including all interest earned thereon) within other assets in the accompanying balance sheets. The Company has the right to terminate the Credit Card Program at any time. Upon termination of the Credit Card Program and repayment of all outstanding balances owed, the Company may redeem the certificate of deposit (and all interest earned thereon).

Cash, cash equivalents, and restricted cash presented in the accompanying condensed statements of cash flows consist of the following (in thousands):


	September 30, 2025		December 31, 2024
Cash and cash equivalents	$	35,652	$	22,036
Restricted cash	200

SEC Form 10-Q filed by Exagen Inc.