neo-20240331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


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

For the quarterly period ended March 31, 2024


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

For the transition period from to

Commission File Number: 001-35756

NEOGENOMICS, INC.

(Exact name of registrant as specified in its charter)


Nevada		74-2897368
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

9490 NeoGenomics Way,	Fort Myers,
Florida		33912
(Address of principal executive offices)		(Zip Code)

(239) 768-0600

(Registrant’s telephone number, including area code)

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

Title of each class

Trading Symbol

Name of each exchange on which registered

Common stock ($0.001 par value)

NEO

The Nasdaq Stock Market LLC

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

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes S 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 Exchange Act. ☐

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

As of April 26, 2024, the registrant had 127,711,930 shares of Common Stock, par value $0.001 per share outstanding.

TABLE OF CONTENTS


PART I FINANCIAL INFORMATION
Item 1. Financial Statements (unaudited)						5
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations						24
Item 3. Quantitative and Qualitative Disclosures About Market Risk						35
Item 4. Controls and Procedures						35

PART II OTHER INFORMATION
Item 1. Legal Proceedings						36
Item 1A. Risk Factors						36
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds						36
Item 3. Defaults Upon Senior Securities						36
Item 4. Mine Safety Disclosures						36
Item 5. Other Information						36
Item 6. Exhibits						38
SIGNATURES						39

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements. These forward-looking statements generally can be identified by the use of words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “forecast,” “goal,” “intends,” “may,” “plan,” “potential,” “project,” “will,” “would,” and similar expressions, although not all forward-looking statements contain these identifying words. These forward-looking statements address various matters, including the Company’s strategy, future operations, future financial position, future revenues, changing reimbursement levels from government payers and private insurers, projected costs, prospects and plans, and objectives of management. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties that could cause our actual results, performance or achievements to differ materially from those expressed or implied by the forward-looking statements, including, without limitation, the risks set forth in Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K as filed with the Securities and Exchange Commission (the “SEC”) on February 20, 2024, and in Part II, Item 1A, “Risk Factors” in this Quarterly Report on Form 10-Q.

The forward-looking statements included in this Quarterly Report on Form 10-Q speak only as of the date of this report, and the Company undertakes no obligation to update any forward-looking statement or statements to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events. New factors emerge from time to time and it is not possible for management to predict all of such factors, nor can it assess the impact of each such factor on the business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

Glossary

Throughout this Quarterly Report on Form 10-Q, we may use certain abbreviations, acronyms and terms which are described below:


ACA						The Patient Protection and Affordable Care Act
ACLA						American Clinical Laboratory Association
AKS						Anti-Kickback Statute
CAP						College of American Pathologists
CDx						Companion Diagnostic
CLIA						Clinical Laboratory Improvement Amendments of 1988
CMS						Centers for Medicare and Medicaid Services
CRO						Contract research organizations
DHS						Designated health services
FCA						The federal False Claims Act
FDA						U.S. Federal Drug Administration
FISH						Fluorescence In-Situ Hybridization
GAAP						U.S generally accepted accounting principles
GDPR						The European Union’s General Data Protection Regulation
HIPAA						The Health Insurance Portability and Accountability Act of 1996
IHC						Immunohistochemistry
LDT						Laboratory developed tests
LIMS						Laboratory Information Management System
MolDx						Molecular Diagnostic Services Program
MRD						Minimal residual disease
NGS						Next-generation sequencing
OIG						The Office of Inspector General of the Department of Health and Human Services
PCR						Polymerase chain reaction
PHI						Protected health information

PART I — FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

NEOGENOMICS, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)


	(unaudited) March 31, 2024		December 31, 2023
ASSETS
Current assets
Cash and cash equivalents	$	331,914	$	342,488

Marketable securities, at fair value	52,916		72,715
Accounts receivable, net	140,279		131,227
Inventories	20,320		24,156
Prepaid assets	19,155		17,987

Other current assets	9,312		8,239
Total current assets	573,896		596,812
Property and equipment (net of accumulated depreciation of $167,584 and $158,211, respectively)	87,865		92,012
Operating lease right-of-use assets	86,578		91,769

Intangible assets, net	364,764		373,128
Goodwill	522,766		522,766




Other assets	4,470		4,742
Total non-current assets	1,066,443		1,084,417
Total assets	$	1,640,339	$	1,681,229
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	18,336	$	20,334
Accrued compensation	34,609		53,161
Accrued expenses and other liabilities	18,134		15,069

Current portion of operating lease liabilities	4,487		5,610


Contract liabilities	1,144		2,130
Total current liabilities	76,710		96,304
Long-term liabilities
Convertible senior notes, net	538,923		538,198

Operating lease liabilities	64,773		67,871


Deferred income tax liabilities, net	23,490		24,285
Other long-term liabilities	13,033		13,034
Total long-term liabilities	640,219		643,388
Total liabilities	$	716,929	$	739,692
Commitments and contingencies (Note 11)
Stockholders’ equity
Common stock, $0.001 par value, (250,000,000 shares authorized; 127,434,786 and 127,369,142 shares issued and outstanding, respectively)	$	127	$	127
Additional paid-in capital	1,198,729		1,190,139
Accumulated other comprehensive loss	(1,330)		(1,674)
Accumulated deficit	(274,116)		(247,055)
Total stockholders’ equity	$	923,410	$	941,537
Total liabilities and stockholders’ equity	$	1,640,339	$	1,681,229

See the accompanying notes to the unaudited Consolidated Financial Statements.

NEOGENOMICS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

(unaudited)


	Three Months Ended March 31,
	2024		2023
NET REVENUE
Clinical Services	$	134,535	$	114,869
Advanced Diagnostics	21,705		22,351
Total net revenue	156,240		137,220

COST OF REVENUE	90,771		82,406

GROSS PROFIT	65,469		54,814
Operating expenses:
General and administrative	65,797		61,549
Research and development	7,620		7,395
Sales and marketing	20,221		16,259
Restructuring charges	2,398		4,684
Total operating expenses	96,036		89,887
LOSS FROM OPERATIONS	(30,567)		(35,073)
Interest income	(4,834)		(3,224)
Interest expense	1,685		1,757
Other expense (income), net	263		114


Loss before taxes	(27,681)		(33,720)
Income tax benefit	(620)		(2,925)
NET LOSS	$	(27,061)	$	(30,795)






NET LOSS PER SHARE
Basic	$	(0.21)	$	(0.25)
Diluted	$	(0.21)	$	(0.25)

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
Basic	126,111		125,026
Diluted	126,111		125,026

See the accompanying notes to the unaudited Consolidated Financial Statements.

NEOGENOMICS, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(in thousands)

(unaudited)


	Three Months Ended March 31,
	2024		2023
NET LOSS	$	(27,061)	$	(30,795)

OTHER COMPREHENSIVE GAIN:

Net unrealized gain on marketable securities, net of tax	344		1,065


Total other comprehensive gain, net of tax	344		1,065
COMPREHENSIVE LOSS	$	(26,717)	$	(29,730)

See the accompanying notes to the unaudited Consolidated Financial Statements.

NEOGENOMICS, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands, except share data)

(unaudited)


	Common Stock		Additional Paid-In Capital			Accumulated Other Comprehensive Loss		Accumulated Deficit		Total
		Shares			Amount
Balance, December 31, 2023		127,369,142	$	127		$	1,190,139	$	(1,674)	$	(247,055)	$	941,537
Issuance of common stock for ESPP		70,278	—			917		—		—		917
Issuance of restricted stock, net of forfeitures		(17,398)	—			(199)		—		—		(199)
Issuance of common stock for stock options		12,764	—			102		—		—		102
Stock issuance fees and expenses		—	—			(4)		—		—		(4)

Stock-based compensation expense		—	—			7,774		—		—		7,774
Net unrealized gain on marketable securities, net of tax		—	—			—		344		—		344
Net loss		—	—			—		—		(27,061)		(27,061)
Balance, March 31, 2024		127,434,786	$	127		$

SEC Form 10-Q filed by NeoGenomics Inc.