exdx-20220630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q/A

(Amendment No. 1)

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2022
☐			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,

California

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 and post 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 Securities Exchange Act of 1934.

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 July 29, 2022 was 16,260,445.

Explanatory Note

Exagen Inc. (the Company) hereby amends its Quarterly Report on Form 10-Q for the quarter ended June 30, 2022, filed with the Securities and Exchange Commission (the SEC) on August 4, 2022 (the Original Quarterly Report), as set forth in this Amendment No. 1 on Form 10-Q/A (the Form 10-Q/A or Amended Quarterly Report), to amend and restate its financial statements and related disclosures as of and for the three and six months ended June 30, 2022.

Restatement Background

On November 13, 2022, management and the audit committee of our board of directors determined that the Company made certain errors in revenue resulting from erroneous and duplicate billings related to changes in billing practices. The errors were due to the inadequate design and implementation and precision of internal controls and procedures to evaluate and monitor the accounting for revenue recognition. As a result, revenue and accounts receivable were overstated and other liabilities was understated for the quarter and year to date periods ended June 30, 2022.

In connection with the restatement, the Company has also corrected errors associated with revenue that it determined to be immaterial, both individually and in the aggregate, to the financial statements for the fiscal quarter ended June 30, 2022. A summary of the accounting impacts of these adjustments to the Company's financial statements as of and for the three and six months ended June 30, 2022 is provided in Note 1 "Restatement of Previously Issued Financial Statements," of the Notes to Condensed Financial Statements of this Form 10-Q/A. The effect of these errors was a $1.4 million overstatement of revenue for the three and six months ended June 30, 2022; in addition to, a $0.9 million overstatement of accounts receivable and a $0.5 million understatement of other liabilities as of June 30, 2022.

This Amended Quarterly Report also amends and restates the Company's Management's Discussion and Analysis of Financial Condition and Results of Operations, Risk Factors and other disclosures made in the Original Quarterly Report, as appropriate, to reflect the restatement of the relevant periods.

In accordance with Rule 12b-15 under the Securities Exchange Act of 1934, as amended, or the Exchange Act, the Company is also including with this Amended Quarterly Report currently dated certifications of the Company's principal executive officer and principal financial officer (attached as Exhibits 31.1, 31.2, and 32.1).

Except as discussed above and as further described in Note 1, Note 1A, Note 2 and Note 3 in the Notes to Condensed Financial Statements, the Company has not modified or updated disclosures presented in this Amended Quarterly Report. Accordingly, the Amended Quarterly Report does not reflect events occurring after the Original Quarterly Report or modify or update those disclosures affected by subsequent events. Information not affected by the restatement is unchanged and reflects disclosures made at the time of the filing of the Original Quarterly Report.

In connection with the restatement, the Company has concluded there was a material weakness in its internal control over financial reporting as of June 30, 2022, and its disclosure controls and procedures were not effective. See additional discussion included in Part I, Item 4 of this Amended Quarterly Report.

TABLE OF CONTENTS


		Page
Part I.	Financial Information
Item 1.	Unaudited Condensed Financial Statements (As Restated)	1
	Unaudited Condensed Balance Sheets as of June 30, 2022 (As R e stated) and December 31, 2021	1
	Unaudited Condensed Statements of Operations for the Three and Six Months ended June 30, 2022 (As Restated) and 2021	2
	Unaudited Condensed Statements of Stockholders' Equity for the Three and Six Months ended June 30, 2022 (As Restated) and 2021	3
	Unaudited Condensed Statements of Cash Flows for the Six Months ended June 30, 2022 (As Restated) and 2021	4
	Notes to Unaudited Condensed Financial Statements (As Restated)	5
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations (As Restated)	23
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	35
Item 4.	Controls and Procedures (As Restated)	36

Part II.	Other Information
Item 1.	Legal Proceedings	38
Item 1A.	Risk Factors (As Restated)	38
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	42
Item 3.	Defaults Upon Senior Securities	43
Item 4.	Mine Safety Disclosures	43
Item 5.	Other Information	43
Item 6.	Exhibits

SEC Form 10-Q/A filed by Exagen Inc. (Amendment)