[CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS](index=3&type=section&id=CAUTIONARY%20NOTE%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) [Forward-Looking Statements](index=3&type=section&id=Forward-Looking%20Statements) This section serves as a cautionary note regarding forward-looking statements within the report, emphasizing that such statements involve risks and uncertainties and actual results may differ materially. The company does not undertake to update these statements - Forward-looking statements pertain to future financial and/or operating results, future growth in research, technology, clinical development, and potential opportunities for **Insight Molecular Diagnostics Inc.** (**iMDx**)[7](index=7&type=chunk) - These statements involve risks and uncertainties, including those inherent in product development, clinical trials, regulatory approvals, capital needs, and intellectual property rights[7](index=7&type=chunk) - **iMDx** undertakes no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements, except as required by law[7](index=7&type=chunk) [PART I - FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements, including the balance sheets, statements of operations, comprehensive loss, shareholders' equity, and cash flows, along with detailed notes explaining the company's accounting policies and specific financial items [CONDENSED CONSOLIDATED BALANCE SHEETS](index=4&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) The condensed consolidated balance sheets show a significant increase in total assets, primarily driven by a substantial rise in cash and cash equivalents, while total liabilities also increased, leading to a positive shift in shareholders' equity from a deficit position Condensed Consolidated Balance Sheet Highlights (In thousands) | Metric | June 30, 2025 (Unaudited) | December 31, 2024 | | :----------------------------------- | :-------------------------- | :------------------ | | Cash and cash equivalents | $24,287 | $8,636 | | Total current assets | $26,842 | $11,759 | | Total assets | $50,517 | $35,081 | | Total current liabilities | $6,652 | $7,275 | | Total liabilities | $49,419 | $47,355 | | Total shareholders' equity (deficit) | $1,098 | $(12,274) | - Cash and cash equivalents increased by **$15.7 million** from December 31, 2024, to June 30, 2025[13](index=13&type=chunk) - Total shareholders' equity shifted from a deficit of **$(12.3 million)** to a positive **$1,098 thousand**[13](index=13&type=chunk) [UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS](index=5&type=section&id=UNAUDITED%20CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) The company experienced a substantial increase in net revenue for both the three and six months ended June 30, 2025, compared to the prior year, but also saw a significant rise in operating expenses, particularly due to changes in contingent consideration fair value, leading to an increased net loss Unaudited Condensed Consolidated Statements of Operations Highlights (In thousands, except per share data) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net revenue | $518 | $104 | $2,656 | $280 | | Gross profit | $350 | $50 | $1,675 | $95 | | Total operating expenses | $10,192 | $4,682 | $18,316 | $13,994 | | Loss from operations | $(9,842) | $(4,632) | $(16,641) | $(13,899) | | Net loss | $(9,742) | $(4,530) | $(16,413) | $(13,659) | | Net loss per share - basic and diluted | $(0.30) | $(0.36) | $(0.57) | $(1.32) | - Net revenue increased by **398%** for the three months ended June 30, 2025, and by **849%** for the six months ended June 30, 2025, compared to the respective prior periods[14](index=14&type=chunk) - Net loss increased by **115%** for the three months ended June 30, 2025, and by **20%** for the six months ended June 30, 2025, primarily due to a significant change in the fair value of contingent consideration and increased operating expenses[14](index=14&type=chunk) [UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS](index=6&type=section&id=UNAUDITED%20CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20COMPREHENSIVE%20LOSS) The unaudited condensed consolidated statements of comprehensive loss show that the net loss is the primary component of comprehensive loss, with minor adjustments from foreign currency translation Unaudited Condensed Consolidated Statements of Comprehensive Loss Highlights (In thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net loss | $(9,742) | $(4,530) | $(16,413) | $(13,659) | | Foreign currency translation adjustments | $44 | $(3) | $64 | $(12) | | Comprehensive loss | $(9,698) | $(4,533) | $(16,349) | $(13,671) | [UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF SERIES A REDEEMABLE CONVERTIBLE PREFERRED STOCK AND SHAREHOLDERS' EQUITY](index=7&type=section&id=UNAUDITED%20CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20SERIES%20A%20REDEEMABLE%20CONVERTIBLE%20PREFERRED%20STOCK%20AND%20SHAREHOLDERS%27%20EQUITY) The statements of Series A Redeemable Convertible Preferred Stock and Shareholders' Equity reflect the redemption of all Series A Preferred Stock in 2024, significant increases in common stock due to new issuances, and a substantial accumulated deficit, which improved to a positive equity position by June 30, 2025 Shareholders' Equity Highlights (In thousands) | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | Common Stock Amount | $367,965 | $338,244 | | Accumulated Deficit | $(366,952) | $(350,539) | | Total Shareholders' Equity (Deficit) | $1,098 | $(12,274) | - All Series A Redeemable Convertible Preferred Stock was redeemed by **April 15, 2024**[19](index=19&type=chunk)[21](index=21&type=chunk) - Common stock increased significantly due to the sale of **11,146 thousand** shares, generating **$28.7 million** in net proceeds during the six months ended June 30, 2025[21](index=21&type=chunk) [UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS](index=9&type=section&id=UNAUDITED%20CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) The unaudited condensed consolidated statements of cash flows show that while operating activities continued to use cash, significant cash was provided by financing activities, primarily from the sale of common shares, resulting in a substantial net increase in cash, cash equivalents, and restricted cash for the six months ended June 30, 2025 Unaudited Condensed Consolidated Statements of Cash Flows Highlights (In thousands) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------ | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(12,137) | $(9,808) | | Net cash used in investing activities | $(656) | $(215) | | Net provided by financing activities | $28,444 | $9,847 | | NET CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH | $15,651 | $(176) | | CASH, CASH EQUIVALENTS AND RESTRICTED CASH, ENDING | $25,987 | $10,956 | - Net cash provided by financing activities increased by **$18.6 million**, primarily due to proceeds from the sale of common shares in 2025[23](index=23&type=chunk) - The company's ending cash, cash equivalents, and restricted cash significantly increased from **$11.0 million** in 2024 to **$26.0 million** in 2025[23](index=23&type=chunk) [NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS](index=10&type=section&id=NOTES%20TO%20UNAUDITED%20CONDENSED%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) These notes provide detailed explanations and breakdowns for various financial statement line items, accounting policies, business acquisitions, commitments, and related party transactions, offering crucial context for the condensed consolidated financial statements [1. Organization and Description of the Business](index=10&type=section&id=1.%20Organization%20and%20Description%20of%20the%20Business) **Insight Molecular Diagnostics Inc.** (**iMDx**) is a diagnostics technology company focused on organ transplant and oncology, which recently changed its name and relocated its headquarters. The company has incurred operating losses but believes it has sufficient liquidity for the next twelve months, supported by recent financing and commercialization efforts for its **GraftAssureCore** and **GraftAssureIQ** products - **iMDx**'s mission is to democratize access to novel molecular diagnostic testing to improve patient outcomes, with an intellectual property portfolio in organ transplant, oncology therapy selection, and oncology therapy monitoring[25](index=25&type=chunk) - In **June 2025**, the company changed its name from 'Oncocyte Corporation' to '**Insight Molecular Diagnostics Inc.**' and moved its headquarters from Irvine, California, to Nashville, Tennessee[26](index=26&type=chunk) - **GraftAssureCore** (Kidney) received a positive coverage decision from **MolDx** in **August 2023**, became commercially available in **January 2024**, and received a boosted reimbursement rate of **$2,753** per result in **May 2025**[29](index=29&type=chunk) - The company began commercializing **GraftAssureIQ** (RUO kitted test) in **July 2024** and sold its first kits in **May 2025**, with plans to commercialize its oncology product line, including **DetermaIO**, over the next **9 months**[29](index=29&type=chunk)[30](index=30&type=chunk) - **iMDx** had an accumulated deficit of **$367.0 million** as of **June 30, 2025**, but management believes it has sufficient cash to meet projected operating requirements for at least the next twelve months following a **$29.1 million** gross proceeds offering in **February 2025**[28](index=28&type=chunk)[32](index=32&type=chunk)[36](index=36&type=chunk) [2. Summary of Significant Accounting Policies](index=12&type=section&id=2.%20Summary%20of%20Significant%20Accounting%20Policies) This note details the company's accounting practices, including GAAP compliance, principles of consolidation, use of estimates, segment reporting (single segment), fair value measurements (Level 1, 2, 3 inputs), revenue recognition (five-step model), and stock-based compensation. It also covers recent accounting pronouncements and income tax policies, noting a full valuation allowance - The financial statements are prepared in accordance with U.S. GAAP, and the company operates as one reportable segment[37](index=37&type=chunk)[42](index=42&type=chunk) - Fair value measurements utilize a hierarchy of inputs (Level 1, 2, 3), with contingent consideration liabilities being Level 3 due to unobservable inputs[43](index=43&type=chunk)[49](index=49&type=chunk)[52](index=52&type=chunk) - Revenue is recognized when control of goods or services is transferred to customers, following a five-step model, with Laboratory Services, Laboratory Developed Test Services, and Kitted Products as revenue types[71](index=71&type=chunk)[72](index=72&type=chunk)[73](index=73&type=chunk)[74](index=74&type=chunk)[78](index=78&type=chunk)[79](index=79&type=chunk) - Stock-based compensation expense is recognized over the vesting period, with fair value estimated using the Black-Scholes model for time-based options and Monte Carlo simulation for market/performance-based awards[91](index=91&type=chunk)[92](index=92&type=chunk)[93](index=93&type=chunk) - The company did not record any income tax provision or benefit due to a full valuation allowance against deferred tax assets for all periods presented[98](index=98&type=chunk)[99](index=99&type=chunk) [3. Business Combinations and Contingent Consideration Liabilities](index=33&type=section&id=3.%20Business%20Combinations%20and%20Contingent%20Consideration%20Liabilities) This note details the contingent consideration liabilities arising from the acquisitions of Insight Genetics, Inc. (IGI) and Chronix Biomedical, Inc., which are measured at fair value using Level 3 inputs. The fair value of these liabilities is reassessed periodically, leading to changes recorded in the consolidated statements of operations - Contingent consideration for the IGI Merger includes Milestone Contingent Consideration (Milestone 1, 2, 3) and Royalty Contingent Consideration, with contractual values up to **$6.0 million** for milestones[107](index=107&type=chunk)[108](index=108&type=chunk)[109](index=109&type=chunk) - The fair value of IGI contingent consideration decreased by approximately **$73 thousand** for the six months ended June 30, 2025, primarily due to revised estimates of future payouts[111](index=111&type=chunk) - Chronix contingent consideration involves earnout payments of **10%** of net collections for specified tests and products, and **5%** of gross proceeds from patent sales[114](index=114&type=chunk) - The fair value of Chronix contingent consideration increased by approximately **$3.8 million** for the six months ended June 30, 2025, due to revised estimates of future payouts[115](index=115&type=chunk) Contingent Consideration Fair Value (In thousands) | Acquisition | Balance at Dec 31, 2024 | Change in Estimated Fair Value (6M 2025) | Balance at June 30, 2025 | | :---------- | :---------------------- | :--------------------------------------- | :----------------------- | | IGI | $2,593 | $(73) | $2,520 | | Chronix | $35,346 | $3,756 | $39,102 | | Total | $37,939 | $3,683 | $41,622 | [4. Property and Equipment, Net](index=37&type=section&id=4.%20Property%20and%20Equipment%2C%20Net) This note provides a breakdown of the company's property and equipment, net, which includes right-of-use and financing lease assets, machinery, equipment, and construction in progress. The total value increased slightly from December 2024 to June 2025, with associated depreciation and amortization expenses Property and Equipment, Net (In thousands) | Category | June 30, 2025 | December 31, 2024 | | :-------------------------------------------------- | :------------ | :---------------- | | Right-of-use and financing lease assets | $4,703 | $5,323 | | Machinery, equipment and leasehold improvements | $9,860 | $8,366 | | Accumulated depreciation and amortization | $(8,153) | $(7,705) | | Right-of-use and financing lease assets and machinery and equipment, net | $6,410 | $5,984 | | Construction in progress | $263 | $340 | | Total | $6,673 | $6,324 | - Property and equipment depreciation and amortization expense was **$1.0 million** for the six months ended June 30, 2025, up from **$617 thousand** in the prior year[120](index=120&type=chunk) [5. Intangible Assets, Net](index=37&type=section&id=5.%20Intangible%20Assets%2C%20Net) This note details the company's intangible assets, primarily acquired In-Process Research and Development (IPR&D) related to **DetermaIO** and **DetermaCNI**, and customer relationships. Significant impairment losses were recorded in 2024 for oncology-related IPR&D, but no new impairments occurred in 2025 Intangible Assets, Net (In thousands) | Category | June 30, 2025 | December 31, 2024 | | :------------------------------------ | :------------ | :---------------- | | Acquired IPR&D - **DetermaIO** | $2,900 | $2,900 | | Acquired IPR&D - **DetermaCNI** | $11,700 | $11,700 | | Acquired intangible assets - customer relationship | $440 | $440 | | Total intangible assets | $15,040 | $15,040 | | Accumulated amortization - customer relationship | $(440) | $(433) | | Intangible assets, net | $14,600 | $14,607 | - The company recorded total impairment losses of **$41.9 million** related to **DetermaIO** and **DetermaCNI** IPR&D in 2024, but no such impairments in 2025[121](index=121&type=chunk)[274](index=274&type=chunk) - Amortization of customer relationship intangible assets, included in cost of revenues, became fully amortized in the first quarter of 2025[123](index=123&type=chunk)[231](index=231&type=chunk) [6. Commitments and Contingencies](index=38&type=section&id=6.%20Commitments%20and%20Contingencies) This note outlines the company's various commitments and contingencies, including office and facilities leases in Irvine (subleased) and Nashville, financing leases for equipment, and potential liabilities from litigation, tax filings, employment contracts, and indemnification agreements - The Irvine office lease, which served as the principal executive office until **June 2025**, is subleased, and a **$1.7 million** letter of credit (backed by restricted cash) will be reduced monthly starting **July 2025**[124](index=124&type=chunk)[125](index=125&type=chunk)[129](index=129&type=chunk)[130](index=130&type=chunk)[131](index=131&type=chunk) - The Nashville CLIA-certified laboratory and office space leases were renewed and expanded in **January 2024**, with an aggregate of **10,681 square feet** and increasing base monthly rent[135](index=135&type=chunk)[136](index=136&type=chunk) Future Minimum Lease Commitments (In thousands) | Year Ending December 31, | Operating Leases | Financing Leases | | :----------------------- | :--------------- | :--------------- | | 2025 | $577 | $275 | | 2026 | $1,182 | $507 | | 2027 | $696 | $299 | | 2028 | — | $31 | | Total minimum lease payments | $2,455 | $1,112 | - The company is involved in a dispute regarding a claimed milestone payment obligation related to its **DetermaIO** immuno-oncology assay for breast cancer, which it strongly disputes[143](index=143&type=chunk) - Accrued severance obligations of approximately **$2.3 million** related to the Chronix acquisition are classified as current and noncurrent contingent consideration[145](index=145&type=chunk) [7. Series A Redeemable Convertible Preferred Stock and Shareholders' Equity](index=45&type=section&id=7.%20Series%20A%20Redeemable%20Convertible%20Preferred%20Stock%20and%20Shareholders%27%20Equity) This note details the company's equity structure, including the full redemption of Series A Preferred Stock in April 2024, and significant common stock issuances through various offerings in April 2024, October 2024, and February 2025, which raised substantial capital. It also covers outstanding common stock purchase warrants - All **5,882** shares of Series A Redeemable Convertible Preferred Stock were redeemed by **April 15, 2024**, for approximately **$5.4 million**[152](index=152&type=chunk) - The **April 2024** Offering generated approximately **$15.8 million** in gross proceeds from the sale of common stock and pre-funded warrants[156](index=156&type=chunk)[158](index=158&type=chunk) - The **October 2024** Offering generated approximately **$10.2 million** in gross proceeds from the sale of **3,461,138** shares of common stock[163](index=163&type=chunk)[164](index=164&type=chunk) - The **February 2025** Offering generated approximately **$29.1 million** in aggregate gross proceeds from the sale of common stock and pre-funded warrants[165](index=165&type=chunk)[167](index=167&type=chunk)[169](index=169&type=chunk) - As of **June 30, 2025**, the company had **760,866** common stock purchase warrants outstanding, with exercise prices ranging from **$30.60** to **$109.20** per share and a weighted average remaining life of **1.82 years**[171](index=171&type=chunk) [8. Stock-Based Compensation](index=51&type=section&id=8.%20Stock-Based%20Compensation) This note details the company's equity incentive plans, including the 2018 Incentive Plan, and the stock-based compensation expense recognized for options and restricted stock units (RSUs). It also outlines the valuation methodologies and assumptions used - As of **June 30, 2025**, **4,060,000** aggregate shares of common stock were reserved for issuance under equity incentive plans, with **1,822,912** shares available for grant[176](index=176&type=chunk) - Total stock-based compensation expense was **$977 thousand** for the six months ended June 30, 2025, compared to **$804 thousand** in the prior year[183](index=183&type=chunk) Stock-Based Compensation Expense by Category (In thousands) | Category | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Research and development | $173 | $202 | $368 | $409 | | Sales and marketing | $42 | $41 | $80 | $83 | | General and administrative | $289 | $147 | $529 | $314 | | Total | $504 | $386 | $977 | $804 | - The weighted average grant date fair value of RSUs granted during the six months ended June 30, 2025, was **$3.16** per unit[180](index=180&type=chunk) - Unrecognized stock-based compensation expense as of **June 30, 2025**, was **$3.4 million**, to be amortized over a weighted average remaining recognition period of **2.84 years**[183](index=183&type=chunk) [9. Related Party Transactions](index=54&type=section&id=9.%20Related%20Party%20Transactions) This note discloses various financing transactions with related parties, including Broadwood, AWM, and **Bio-Rad**, through common stock and warrant offerings. It also details operational transactions with **Bio-Rad**, highlighting the company's dependence on this strategic partner for development and commercialization of transplant products - Broadwood, AWM, and **Bio-Rad** participated in multiple common stock and pre-funded warrant offerings, including the **April 2024**, **October 2024**, and **February 2025** offerings, contributing significantly to capital raises[189](index=189&type=chunk)[190](index=190&type=chunk)[191](index=191&type=chunk) - During the six months ended June 30, 2025, the company purchased **$1.1 million** in laboratory equipment and incurred **$215 thousand** in laboratory-related costs from **Bio-Rad**[192](index=192&type=chunk) - As of **June 30, 2025**, the company had accounts payable due to **Bio-Rad** of **$757 thousand**[194](index=194&type=chunk) - The company entered into a global strategic partnership with **Bio-Rad** in **April 2024** for the development and commercialization of RUO and IVD kitted transplant products, making the company dependent on **Bio-Rad** for ongoing operations and future performance[195](index=195&type=chunk)[254](index=254&type=chunk) [10. Collaborative Arrangement](index=58&type=section&id=10.%20Collaborative%20Arrangement) This note details the **10-year** Collaboration Agreement with **Bio-Rad** for the development and commercialization of RUO and IVD kitted transplant products. The agreement outlines shared responsibilities for development, marketing, and sales, including royalty payments to **Bio-Rad** and the establishment of pilot study sites - The Collaboration Agreement with **Bio-Rad**, effective **April 5, 2024**, is for a **10-year** term, focusing on developing **GraftAssureIQ™** RUO Assays and **GraftAssureDx™** IVD Kits[196](index=196&type=chunk)[197](index=197&type=chunk) - **iMDx** is responsible for manufacturing and supplying RUO Assays, while **Bio-Rad** supplies ddPCR instruments and reagents. They co-promote in the US and Germany, with **Bio-Rad** having exclusive sales rights outside the Territory[198](index=198&type=chunk) - **Bio-Rad** has a **90-day** exclusive negotiating period post-regulatory clearance for worldwide IVD Kit promotion, marketing, and sales, with an option to purchase additional common stock[199](index=199&type=chunk) - A Memorandum of Understanding in **November 2024** established additional activities for pilot study sites outside the Territory for RUO Assays, with **iMDx** selling and supporting sites and paying royalties to **Bio-Rad**[200](index=200&type=chunk)[201](index=201&type=chunk) [11. Segment Reporting](index=60&type=section&id=11.%20Segment%20Reporting) The company operates as a single reportable segment focused on the research, development, and commercialization of diagnostic tests. This note provides disaggregated revenue and long-lived tangible asset information by geographic area, highlighting the concentration of revenues in the United States - The company operates and reports its results in one reportable segment, which includes the research, development, and commercialization of diagnostic tests[203](index=203&type=chunk) Revenues by Geographic Area (In thousands) | Geographic Area | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | United States | $494 | $67 | $2,632 | $89 | | Europe | $24 | — | $24 | — | | United Kingdom | — | — | — | $45 | | Asia-Pacific | — | $37 | — | $146 | | Total net revenues | $518 | $104 | $2,656 | $280 | Long-Lived Tangible Assets by Geographic Area (In thousands) | Geographic Area | June 30, 2025 | December 31, 2024 | | :---------------- | :------------ | :---------------- | | United States | $4,716 | $5,543 | | Europe | $1,356 | $611 | | United Kingdom | $485 | — | | Asia-Pacific | $116 | $170 | | Total | $6,673 | $6,324 | [12. Subsequent Events](index=63&type=section&id=12.%20Subsequent%20Events) Management has evaluated subsequent events through the financial statement issuance date and determined that no events or transactions require disclosure - No events or transactions requiring disclosure occurred after the reporting period through the date the consolidated financial statements were issued[209](index=209&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=64&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial performance, liquidity, and capital resources, including an overview of the business, recent developments, detailed analysis of operating results, and critical accounting estimates. It highlights significant revenue growth, increased operating expenses, and ongoing capital needs [Overview](index=64&type=section&id=Overview) **Insight Molecular Diagnostics Inc.** (**iMDx**) is a pioneering diagnostics technology company focused on democratizing access to molecular diagnostic testing, primarily through developing test kits for organ transplant and oncology. The company has achieved commercial milestones for its **GraftAssureCore** (Kidney) and **GraftAssureIQ** products and is advancing its oncology pipeline, including **DetermaIO** - **iMDx**'s mission is to democratize access to novel molecular diagnostic testing to improve patient outcomes, focusing on developing molecular diagnostic test kits for customers like hospitals and transplant centers[212](index=212&type=chunk)[213](index=213&type=chunk)[215](index=215&type=chunk) - The company's intellectual property portfolio spans organ transplant, oncology therapy selection, and oncology therapy monitoring, developing both laboratory developed tests (LDTs) and kitted research-use-only (RUO) and clinical tests[218](index=218&type=chunk) - **GraftAssureCore** (Kidney) is commercially available and received a boosted Medicare reimbursement rate of **$2,753** per result in **May 2025**. **GraftAssureIQ** (RUO) began commercialization in **July 2024**, with first kits sold in **May 2025**[219](index=219&type=chunk)[220](index=220&type=chunk) - **DetermaIO**, an oncology test for checkpoint inhibitor response, is in development, with commercialization of the oncology product line expected over the next **9 months**[223](index=223&type=chunk) [Recent Developments](index=66&type=section&id=Recent%20Developments) Recent developments include the successful **February 2025** Offering, which raised approximately **$28.7 million** in net proceeds, and the company's rebranding to **Insight Molecular Diagnostics Inc.** (**IMDX**) along with the relocation of its headquarters to Nashville, Tennessee - The **February 2025** Offering generated approximately **$29.1 million** in gross proceeds and **$28.7 million** in net proceeds from the sale of common stock and pre-funded warrants[227](index=227&type=chunk) - In **June 2025**, the company changed its name from 'Oncocyte Corporation' to '**Insight Molecular Diagnostics Inc.**' and its Nasdaq trading symbol to '**IMDX**'[228](index=228&type=chunk) - The company relocated its headquarters from Irvine, California, to Nashville, Tennessee, in **June 2025**[228](index=228&type=chunk) [Results of Operations](index=68&type=section&id=Results%20of%20Operations) The company experienced significant revenue growth for both the three and six months ended June 30, 2025, primarily from Laboratory Services and Kitted Products. However, this was offset by substantial increases in operating expenses, particularly in research and development, sales and marketing, and a significant loss from the change in fair value of contingent consideration, leading to an increased net loss [Summary Results of Operations](index=68&type=section&id=Summary%20Results%20of%20Operations) A high-level comparison of key financial metrics shows substantial revenue growth but also increased net loss due to rising operating expenses and contingent consideration adjustments Summary Results of Operations (In thousands, except percentage change values) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | % Change (3M) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | % Change (6M) | | :-------------------------------- | :--------------------------- | :--------------------------- | :------------ | :--------------------------- | :--------------------------- | :------------ | | Net revenue | $518 | $104 | 398% | $2,656 | $280 | 849% | | Loss from operations | $(9,842) | $(4,632) | 112% | $(16,641) | $(13,899) | 20% | | Net loss | $(9,742) | $(4,530) | 115% | $(16,413) | $(13,659) | 20% | [Results of Operations – Three Months Ended June 30, 2025 Compared with the Three Months Ended June 30, 2024](index=68&type=section&id=Results%20of%20Operations%20%E2%80%93%20Three%20Months%20Ended%20June%2030%2C%202025%20Compared%20with%20the%20Three%20Months%20Ended%20June%2030%2C%202024) For the three months ended June 30, 2025, net revenue increased significantly by **$414 thousand**, driven by Laboratory Services and Kitted Products. However, net loss increased by **$5.2 million**, primarily due to a **$3.8 million** change in fair value of contingent consideration (from a gain to a loss) and higher operating expenses, particularly in R&D and S&M - Net revenue increased to **$518 thousand** (**398%** increase) for the three months ended June 30, 2025, primarily from Laboratory Services (**$493 thousand**) and first Kitted Products revenue (**$24 thousand**)[230](index=230&type=chunk)[231](index=231&type=chunk) - Net loss increased by **$5.2 million** to **$9.7 million**, mainly due to a **$3.8 million** negative change in fair value of contingent consideration (from a **$1.0 million** gain in 2024 to a **$2.8 million** loss in 2025) and increased operating expenses[231](index=231&type=chunk)[233](index=233&type=chunk) - Research and development expenses increased by **$828 thousand** (**34%**), driven by higher facilities and insurance costs, and professional fees[231](index=231&type=chunk) - Sales and marketing expenses increased by **$607 thousand** (**71%**), attributable to ramp-up in transplant business activities and oncology commercialization efforts[233](index=233&type=chunk) [Results of Operations – Six Months Ended June 30, 2025 Compared with the Six Months Ended June 30, 2024](index=70&type=section&id=Results%20of%20Operations%20%E2%80%93%20Six%20Months%20Ended%20June%2030%2C%202025%20Compared%20with%20the%20Six%20Months%20Ended%20June%2030%2C%202024) For the six months ended June 30, 2025, total net revenue surged to **$2.7 million**, primarily from Laboratory Services. However, net loss increased by **$2.8 million** to **$16.4 million**, driven by higher operating expenses across R&D, S&M, and G&A, and a larger loss from the change in fair value of contingent consideration - Total net revenue increased to **$2.7 million** (**849%** increase) for the six months ended June 30, 2025, primarily from Laboratory Services (**$2.6 million**) and Kitted Products (**$24 thousand**)[232](index=232&type=chunk)[234](index=234&type=chunk) - Net loss increased by **$2.8 million** to **$16.4 million**, mainly due to increased operating expenses and a **$3.7 million** loss from the change in fair value of contingent consideration[233](index=233&type=chunk)[234](index=234&type=chunk) - Research and development expenses increased by **$1.4 million** (**30%**), driven by facilities and insurance costs, professional fees, and laboratory costs[234](index=234&type=chunk) - Sales and marketing expenses increased by **$967 thousand** (**57%**), due to ramp-up in transplant business activities, marketing, advertising, and travel[234](index=234&type=chunk) - General and administrative expenses increased by **$682 thousand** (**13%**), primarily from personnel-related expenses and stock-based compensation[234](index=234&type=chunk) [Revenues](index=72&type=section&id=Revenues) Revenue growth was primarily driven by Laboratory Services, which saw a substantial increase, and the introduction of Kitted Products revenue in 2025, while Laboratory Developed Test Services revenue declined Revenues by Type (In thousands, except percentage change values) | Revenue Type | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | % Change (3M) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | % Change (6M) | | :-------------------------- | :--------------------------- | :--------------------------- | :------------ | :--------------------------- | :--------------------------- | :------------ | | Laboratory Services | $494 | $104 | 375% | $2,632 | $258 | 920% | | Laboratory Developed Test Services | — | — | — | — | $22 | (100)% | | Kitted Products | $24 | — | 100% | $24 | — | 100% | | Total | $518 | $104 | 398% | $2,656 | $280 | 849% | - Laboratory Services revenue increased by **$2.374 million** (**920%**) for the six months ended June 30, 2025, primarily from one existing customer[235](index=235&type=chunk) - Kitted Products revenue of **$24 thousand** was recognized for the first time in 2025 from **GraftAssureIQ** RUO kitted tests[235](index=235&type=chunk)[237](index=237&type=chunk) [Cost of Revenues](index=72&type=section&id=Cost%20of%20Revenues) Cost of revenues increased due to higher labor and allocated overhead associated with performing Laboratory Services, reflecting the growth in revenue-generating activities - Cost of revenues increased by **$136 thousand** for the three months and **$833 thousand** for the six months ended June 30, 2025, primarily due to labor and allocated overhead for Laboratory Services[231](index=231&type=chunk)[234](index=234&type=chunk) - Components of cost of revenues include materials, direct labor, equipment and infrastructure expenses, clinical sample costs, and amortization of acquired intangible assets[238](index=238&type=chunk) [Research and Development Expenses](index=73&type=section&id=Research%20and%20Development%20Expenses) Research and development expenses increased significantly, driven by higher facilities and insurance costs, professional fees, and laboratory supplies, as the company continues to develop its **GraftAssure** and **DetermaIO** product lines Research and Development Expenses (In thousands, except percentage change values) | Category | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | % Change (3M) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | % Change (6M) | | :------------------------------------ | :--------------------------- | :--------------------------- | :------------ | :--------------------------- | :--------------------------- | :------------ | | Facilities and insurance | $685 | $194 | 253% | $1,345 | $380 | 254% | | Professional fees, legal, and outside services | $368 | $35 | 951% | $575 | $269 | 114% | | Laboratory supplies and expenses | $557 | $555 | 0% | $1,013 | $802 | 26% | | Total | $3,281 | $2,453 | 34% | $6,205 | $4,765 | 30% | - R&D expenses increased by **$828 thousand** (**34%**) for the three months and **$1.4 million** (**30%**) for the six months ended June 30, 2025, as development continues for **GraftAssureCore**, **GraftAssureIQ**, **GraftAssureDx**, **DetermaIO**, and **DetermaCNI**[239](index=239&type=chunk) - The company expects to continue incurring significant R&D expenses, including for a clinical trial in conjunction with its IVD submission in 2025 for transplant products[240](index=240&type=chunk) [Sales and Marketing Expenses](index=73&type=section&id=Sales%20and%20Marketing%20Expenses) Sales and marketing expenses increased substantially, driven by higher personnel-related costs, depreciation, marketing, and travel, reflecting intensified commercialization efforts for transplant and oncology products Sales and Marketing Expenses (In thousands, except percentage change values) | Category | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | % Change (3M) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | % Change (6M) | | :-------------------------- | :--------------------------- | :--------------------------- | :------------ | :--------------------------- | :--------------------------- | :------------ | | Personnel-related expenses | $770 | $600 | 28% | $1,534 | $1,215 | 26% | | Depreciation and amortization | $145 | $1 | 100% | $255 | $1 | 100% | | Marketing and advertising | $159 | $44 | 261% | $224 | $82 | 173% | | Travel and entertainment | $168 | $100 | 68% | $284 | $142 | 100% | | Total | $1,460 | $853 | 71% | $2,666 | $1,699 | 57% | - S&M expenses increased by **$607 thousand** (**71%**) for the three months and **$967 thousand** (**57%**) for the six months ended June 30, 2025, due to ramp-up in sales, marketing, and advertising for the transplant business and oncology commercialization[241](index=241&type=chunk) - Future S&M expenses are expected to increase as product development completes and commercialization efforts for **DetermaIO**, **GraftAssureIQ**, **GraftAssureCore**, **GraftAssureDx**, and **DetermaCNI** intensify, contingent on capital and reimbursement approvals[242](index=242&type=chunk) [General and Administrative Expenses](index=74&type=section&id=General%20and%20Administrative%20Expenses) General and administrative expenses increased, primarily driven by higher personnel-related expenses, board fees, and stock-based compensation, partially offset by decreases in professional fees and facilities costs General and Administrative Expenses (In thousands, except percentage change values) | Category | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | % Change (3M) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | % Change (6M) | | :------------------------------------ | :--------------------------- | :--------------------------- | :------------ | :--------------------------- | :--------------------------- | :------------ | | Personnel-related expenses and board fees | $1,227 | $901 | 36% | $2,468 | $1,917 | 29% | | Stock-based compensation | $289 | $147 | 97% | $529 | $314 | 68% | | Professional fees, legal, and outside services | $657 | $880 | (25)% | $1,702 | $1,738 | (2)% | | Total | $2,647 | $2,407 | 10% | $5,762 | $5,080 | 13% | [Change in Fair Value of Contingent Consideration](index=74&type=section&id=Change%20in%20Fair%20Value%20of%20Contingent%20Consideration) The change in fair value of contingent consideration resulted in a significant loss for both the three and six months ended June 30, 2025, compared to the prior year, reflecting reassessments of key assumptions and future payout estimates related to business acquisitions - The change in fair value of contingent consideration resulted in a loss of **$2.8 million** for the three months ended June 30, 2025 (compared to a **$1.0 million** gain in 2024), and a loss of **$3.7 million** for the six months ended June 30, 2025 (compared to a **$2.3 million** loss in 2024)[229](index=229&type=chunk)[233](index=233&type=chunk)[234](index=234&type=chunk) - These changes are based on reassessments of key assumptions and revised estimates on the timing and likelihood of future payouts under the IGI and Chronix merger agreements[244](index=244&type=chunk) [Other Income and Expenses](index=74&type=section&id=Other%20Income%20and%20Expenses) Other income and expenses primarily consist of interest income from money market funds and interest expense from financing lease obligations and insurance financing activity - Total other income, net, decreased by **$2 thousand** for the three months and **$12 thousand** for the six months ended June 30, 2025, primarily due to additional interest expense related to financing leases[229](index=229&type=chunk)[233](index=233&type=chunk)[234](index=234&type=chunk) - Interest income is earned from money market funds, while interest expense arises from financing lease obligations and insurance financing[245](index=245&type=chunk) [Income Taxes](index=74&type=section&id=Income%20Taxes) The company did not record any income tax provision or benefit for the periods presented due to a full valuation allowance against its deferred tax assets, reflecting the uncertainty of realizing future tax benefits from net operating loss carry-forwards - No provision or benefit for income taxes was recorded for the three and six months ended June 30, 2025 and 2024, due to a full valuation allowance[246](index=246&type=chunk)[247](index=247&type=chunk) - A full valuation allowance was established due to the uncertainty of realizing future tax benefits from net operating loss carry-forwards and other deferred tax assets[247](index=247&type=chunk) [Inflation](index=75&type=section&id=Inflation) The company acknowledges potential inflationary pressures on personnel, laboratory supplies, inventory, and vendor costs, which could diminish purchasing power, increase expenses, and impact capital resources, especially if reimbursement rates do not keep pace - The company may experience inflationary pressures on personnel costs, laboratory supplies, raw materials, and essential vendor fees[248](index=248&type=chunk) - Elevated inflation could diminish the purchasing power of cash, increase expenses faster than anticipated, and lead to earlier utilization of capital resources[248](index=248&type=chunk) - Payers may be unwilling or unable to increase reimbursement rates to compensate for inflationary impacts, potentially adversely affecting results of operations, financial condition, and cash flows[248](index=248&type=chunk) [Liquidity and Capital Resources](index=75&type=section&id=Liquidity%20and%20Capital%20Resources) The company has historically financed operations through equity sales and continues to incur operating losses and negative cash flows, resulting in an accumulated deficit. Despite this, management believes recent financing, including the **February 2025** Offering, provides sufficient cash for the next twelve months. However, ongoing capital raises will be necessary to fund development and commercialization efforts, with risks of dilution and dependence on strategic partnerships like **Bio-Rad** - **iMDx** had an accumulated deficit of **$367.0 million** and **$24.3 million** in cash and cash equivalents as of **June 30, 2025**[250](index=250&type=chunk) - The **February 2025** Offering generated approximately **$28.7 million** in net proceeds, which management believes provides sufficient cash for at least the next twelve months[251](index=251&type=chunk)[250](index=250&type=chunk) - The remaining **$1.7 million** restricted cash balance, related to the Irvine office lease, will be reduced monthly starting **July 2025**[252](index=252&type=chunk) - The company relies on its global strategic partnership with **Bio-Rad** for the development and commercialization of RUO and IVD kitted transplant products[254](index=254&type=chunk) - Future capital raises will be necessary to finance operations, including development and commercialization of diagnostic tests, and to meet contingent payment obligations, with potential risks of shareholder dilution and financing availability[257](index=257&type=chunk)[258](index=258&type=chunk) [Cash Flow from Operating Activities](index=77&type=section&id=Cash%20Flow%20from%20Operating%20Activities) Net cash used in operating activities increased for the six months ended June 30, 2025, primarily due to higher operating expenses and a larger net loss, partially offset by non-cash adjustments like depreciation, stock-based compensation, and the change in fair value of contingent consideration - Net cash used in operating activities was **$12.1 million** for the six months ended June 30, 2025, compared to **$9.8 million** in the prior year[260](index=260&type=chunk)[261](index=261&type=chunk) - Key non-cash items for the six months ended June 30, 2025, included **$1.1 million** in depreciation and amortization, **$977 thousand** in stock-based compensation, and a **$3.7 million** loss from the change in fair value of contingent consideration[260](index=260&type=chunk) [Cash Flow from Investing Activities](index=79&type=section&id=Cash%20Flow%20from%20Investing%20Activities) Net cash used in investing activities increased for the six months ended June 30, 2025, primarily due to increased purchases of machinery, equipment, and construction in progress - Net cash used in investing activities was **$656 thousand** for the six months ended June 30, 2025, up from **$215 thousand** in the prior year[263](index=263&type=chunk) - This increase was driven by cash paid for construction in progress and purchases of machinery and equipment[263](index=263&type=chunk) [Cash Flow from Financing Activities](index=79&type=section&id=Cash%20Flow%20from%20Financing%20Activities) Net cash provided by financing activities significantly increased for the six months ended June 30, 2025, primarily due to substantial net proceeds from the **February 2025** Offering, partially offset by financing lease repayments - Net cash provided by financing activities was **$28.4 million** for the six months ended June 30, 2025, a substantial increase from **$9.8 million** in the prior year[264](index=264&type=chunk)[265](index=265&type=chunk) - The primary driver was **$28.7 million** in net cash proceeds from the **February 2025** Offering, partially offset by **$212 thousand** in repayments of financing lease obligations[264](index=264&type=chunk) [Critical Accounting Estimates](index=79&type=section&id=Critical%20Accounting%20Estimates) This section identifies and explains the critical accounting estimates that involve significant judgment and estimation uncertainty, including going concern assessment, contingent consideration liabilities, intangible assets, impairment of long-lived assets, revenue recognition, stock-based compensation, and income taxes - Critical accounting estimates include 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[268](index=268&type=chunk) [Going Concern Assessment](index=79&type=section&id=Going%20Concern%20Assessment) The company assesses its ability to continue as a going concern for at least one year from the financial statement issuance date, considering various scenarios and potential expenditure curtailments. Management believes it has sufficient cash for the next twelve months - Management evaluates going concern uncertainty by assessing cash, working capital, and ability to operate for at least one year, considering scenarios, forecasts, and potential expenditure curtailments[267](index=267&type=chunk) - Based on this assessment, management believes it will have sufficient cash to meet projected operating requirements for at least the next twelve months[250](index=250&type=chunk)[267](index=267&type=chunk) [Contingent Consideration Liabilities](index=81&type=section&id=Contingent%20Consideration%20Liabilities) Contingent consideration liabilities, arising from business acquisitions, are recorded at fair value using scenario analysis for milestone-based payments and single scenario analysis for royalty/revenue share-based payments. Changes in fair value are recognized in the consolidated statements of operations - Contingent consideration is estimated and recorded at fair value as of the acquisition date, representing obligations for future payments based on milestones or revenue achievements[269](index=269&type=chunk) - Milestone-based contingent consideration is valued using a scenario analysis, while royalty/revenue share-based consideration uses a single scenario analysis, both incorporating significant management judgment and assumptions[270](index=270&type=chunk)[271](index=271&type=chunk) - Changes in the fair value of contingent consideration resulted in losses of **$3.7 million** and **$2.3 million** for the six months ended June 30, 2025 and 2024, respectively[272](index=272&type=chunk) [Intangible Assets](index=81&type=section&id=Intangible%20Assets) In-Process Research and Development (IPR&D) intangible assets are capitalized and tested for impairment annually or when circumstances indicate a reduction in fair value. Significant impairment losses were recorded in 2024 for oncology-related IPR&D - IPR&D projects acquired in business combinations are capitalized as indefinite-lived intangible assets and tested for impairment annually or when indicators exist[273](index=273&type=chunk) - Factors for potential impairment include adverse clinical trial results, delays in regulatory approvals or reimbursement, and competitive advancements[273](index=273&type=chunk) - A total impairment of **$41.9 million** was recorded in 2024 for oncology-related IPR&D (**DetermaIO** and **DetermaCNI**), with no impairments in 2025[274](index=274&type=chunk) [Impairment of Long-Lived Assets](index=81&type=section&id=Impairment%20of%20Long-Lived%20Assets) The company assesses long-lived assets for impairment when events or changes in circumstances indicate that their carrying amount may not be recoverable. An impairment loss of **$169 thousand** was recognized in 2024 for held-for-sale assets - Impairment of long-lived assets (right-of-use assets, machinery, equipment, finite-lived intangibles) is assessed when events indicate carrying value may not be recoverable[275](index=275&type=chunk) - An impairment loss of **$169 thousand** on held-for-sale assets was recognized during the six months ended June 30, 2024, with no such impairments in 2025[275](index=275&type=chunk) [Revenue Recognition and Allowance for Credit Losses](index=83&type=section&id=Revenue%20Recognition%20and%20Allowance%20for%20Credit%20Losses) Revenue from Laboratory Services is recognized upon completion of service, either on a time and materials or per test basis. Kitted Products revenue is recognized from RUO tests. An allowance for credit losses is established based on collectability factors and historical experience - Laboratory Services revenue is recognized upon completion of service, either on a time and materials basis or per test completed, with performance obligations satisfied by delivery of reports or tests[276](index=276&type=chunk) - Kitted Products revenue is recognized from **GraftAssureIQ** RUO kitted tests sold to research laboratory customers[79](index=79&type=chunk) - An allowance for credit losses is established for Laboratory Services accounts receivables, considering factors like past due status, customer's ability to pay, and historical experience[277](index=277&type=chunk) - As of **June 30, 2025**, the allowance for credit losses related to Laboratory Services was **$5 thousand**[277](index=277&type=chunk) [Stock-Based Compensation](index=83&type=section&id=Stock-Based%20Compensation) Stock-based compensation expense is recognized based on estimated fair values of awards, using the Black-Scholes model for time-based options and Monte Carlo simulation for market/performance-based awards. These valuations rely on complex and subjective variables - Compensation expense for share-based payment awards is recognized based on estimated fair values over the requisite service period[278](index=278&type=chunk) - The Black-Scholes model is used for time-based options, while the Monte Carlo simulation model is used for market-based and time-based vesting conditions, incorporating variables like expected volatility and term[278](index=278&type=chunk) - Total stock-based compensation recognized was **$977 thousand** for the six months ended June 30, 2025, and **$804 thousand** for the same period in 2024[278](index=278&type=chunk) [Income Taxes](index=84&type=section&id=Income%20Taxes) Income taxes are accounted for using the asset and liability method, with deferred tax assets reduced by a full valuation allowance due to uncertainty of realization. No income tax provision or benefit was recorded for the periods presented - Income taxes are accounted for using the asset and liability method, with deferred tax asset/liability balances calculated using current tax laws and rates[279](index=279&type=chunk) - A full valuation allowance is established to reduce deferred tax assets when their realization is not more-likely-than-not, leading to no income tax provision or benefit for the periods presented[279](index=279&type=chunk)[280](index=280&type=chunk) - The company is currently unaware of any uncertain tax positions that could result in significant additional payments or accruals[280](index=280&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=84&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) As a smaller reporting company, **Insight Molecular Diagnostics Inc.** is not required to provide quantitative and qualitative disclosures about market risk - The company is not required to provide quantitative and qualitative disclosures about market risk as it qualifies as a smaller reporting company under SEC rules[281](index=281&type=chunk) [Item 4. Controls and Procedures](index=84&type=section&id=Item%204.%20Controls%20and%20Procedures) This section confirms management's evaluation of the effectiveness of the company's disclosure controls and procedures and states that there were no material changes in internal control over financial reporting during the quarter [Evaluation of Disclosure Controls and Procedures](index=84&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) Management, including the principal executive and financial officers, reviewed and concluded that the company's disclosure controls and procedures were effective as of the end of the reporting period - Management, including the principal executive officer and principal financial officer, determined that the company's disclosure controls and procedures are effective as of **June 30, 2025**[282](index=282&type=chunk) [Changes in Internal Controls](index=84&type=section&id=Changes%20in%20Internal%20Controls) There were no changes in the company's internal control over financial reporting during the quarterly period that materially affected or are reasonably likely to materially affect it - No changes in internal control over financial reporting occurred during the quarterly period that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[283](index=283&type=chunk) [PART II - OTHER INFORMATION](index=85&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=85&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently involved in any material pending litigation, though it is disputing a claim regarding a milestone payment obligation related to its **DetermaIO** assay - The company is not presently involved in any material pending litigation or proceedings[285](index=285&type=chunk) - A letter was received on **March 3, 2025**, claiming a milestone payment obligation for the **DetermaIO** immuno-oncology assay, which the company strongly disputes[143](index=143&type=chunk) [Item 1A. Risk Factors](index=85&type=section&id=Item%201A.%20Risk%20Factors) This section highlights key risks, including the need for FDA and other regulatory approvals for IVDs, the potential reclassification of LDTs as IVDs, and the critical dependence on Medicare reimbursement for products like **GraftAssureCore** (Kidney), with a new draft LCD proposing caps on surveillance tests - The company will need to obtain FDA and other regulatory approvals for any IVDs developed, or if currently marketed products are reclassified as IVDs, which could lead to withdrawal from the market[287](index=287&type=chunk) - Commercialization is dependent on increasing Medicare reimbursement for tests, and any loss or significant reduction in reimbursement would materially impact the business[290](index=290&type=chunk) - A new '**MolDX**: Molecular Testing for Solid Organ Allograft Rejection' draft LCD (L38671) published on **July 17, 2025**, proposes capping surveillance tests for kidney, heart, and lung, which could impact future reimbursement[295](index=295&type=chunk) - Any decision by CMS or its local contractors to reduce or deny coverage for tests would significantly adversely affect revenue, results of operations, and ability to raise capital[298](index=298&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=87&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company issued unregistered common stock to consulting firms, PCG Advisory, Inc. and LifeSci Advisors, LLC, in reliance on the exemption from registration under Section 4(a)(2) of the Securities Act - On **April 24, 2025**, **10,620** shares of common stock were issued to PCG Advisory, Inc[299](index=299&type=chunk) - On **April 24**, **May 27**, **June 24**, and **July 24, 2025**, a total of **9,844** shares were granted to LifeSci Advisors, LLC[299](index=299&type=chunk) - These shares were issued without registration under the Securities Act in reliance on the exemption from registration under Section **4(a)(2)**[299](index=299&type=chunk) [Item 3. Defaults Upon Senior Securities](index=89&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities - There were no defaults upon senior securities[301](index=301&type=chunk) [Item 4. Mine Safety Disclosures](index=89&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Mine Safety Disclosures are not applicable to the company[302](index=302&type=chunk) [Item 5. Other Information](index=89&type=section&id=Item%205.%20Other%20Information) The company reported no other information requiring disclosure under this item - No other information is reported under this item[303](index=303&type=chunk) [Item 6. Exhibits](index=90&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of the Form 10-Q, including corporate governance documents, warrant forms, securities purchase agreements, and certifications - Key exhibits include the Certificate of Ownership and Third Amended and Restated Bylaws (filed **June 17, 2025**), Form of Pre-Funded Warrant (filed **February 10, 2025**), and Securities Purchase Agreements (dated **February 7, 2025**)[304](index=304&type=chunk) - Certifications of the Principal Executive Officer and Principal Financial Officer pursuant to Rule **13a-14** and **18 U.S.C. Section 1350** are filed herewith[304](index=304&type=chunk)[305](index=305&type=chunk) [SIGNATURES](index=91&type=section&id=SIGNATURES) [Report Signatures](index=91&type=section&id=Report%20Signatures) The report is duly signed on behalf of **Insight Molecular Diagnostics Inc.** by its President and Chief Executive Officer, Joshua Riggs, and Chief Financial Officer, Andrea James, on **August 11, 2025** - The report was signed by Joshua Riggs, President and Chief Executive Officer (Principal Executive Officer), and Andrea James, Chief Financial Officer (Principal Financial Officer), on **August 11, 2025**[309](index=309&type=chunk)

[Letter to Shareholders & Business Highlights](index=1&type=section&id=Letter%20to%20Shareholders%20%26%20Business%20Highlights) [Introduction & Market Opportunity](index=1&type=section&id=Introduction%20%26%20Market%20Opportunity) Insight Molecular Diagnostics Inc. (**iMDx**) is nearing the launch of its regulated kitted transplant monitoring assay, **GraftAssureDx**, targeting a **$1 billion** transplant rejection testing market, emphasizing its strategy to democratize access to complex molecular diagnostics by developing **FDA** and **EU**-equivalent authorized kitted tests for localized hospital testing - **iMDx** is close to launching a regulated kitted transplant monitoring assay, **GraftAssureDx**, aiming to capture share in the **$1 billion** total addressable transplant rejection testing market[1](index=1&type=chunk) - The company's strategy involves designing kitted tests for **FDA** and **EU** regulatory approval to democratize access to complex molecular diagnostics, allowing hospitals to run tests themselves[2](index=2&type=chunk)[3](index=3&type=chunk) [GraftAssureDx Regulatory & Clinical Progress](index=2&type=section&id=GraftAssureDx%20Regulatory%20%26%20Clinical%20Progress) **iMDx** has made consistent progress on its **GraftAssureDx** kitted development, **FDA** submission preparation, and ongoing clinical trial, marked by productive **FDA** meetings, attracting leading transplant hospitals, and presenting strong head-to-head data comparing its digital **PCR**-based test kits favorably against **NGS** kits - **iMDx** remains on track to submit **GraftAssureDx** for **FDA** review by the end of **2025**, with potential marketing authorization as soon as **mid-2026**[6](index=6&type=chunk) - The company completed a productive second pre-submission meeting with the **FDA** on **July 30, 2025**, and its clinical trial has attracted top transplant hospitals including **Mayo Clinic**, Tampa General, **Cleveland Clinic**, **Vanderbilt University**, and **Intermountain Health**[7](index=7&type=chunk) - New data presented at major conferences confirmed the utility of dd-cfDNA and demonstrated **iMDx**'s digital **PCR** assay's ability to combine relative and absolute measurements into a single score, potentially improving positive predictive values and reducing unnecessary biopsies[8](index=8&type=chunk) [FDA Submission & Meetings](index=2&type=section&id=FDA%20Submission%20%26%20Meetings) **iMDx** reiterated its timeline for **FDA** submission of **GraftAssureDx** by the end of **2025**, with potential marketing authorization by **mid-2026**, following a productive second pre-submission meeting with the **FDA** on **July 30** that maintained encouraging dialogue and guidance - Reiterated timeline for **FDA** submission of **GraftAssureDx** by end of **2025**, with potential marketing authorization by **mid-2026**[5](index=5&type=chunk)[6](index=6&type=chunk) - Completed a productive second pre-submission meeting with the **FDA** on **July 30, 2025**, continuing encouraging dialogue and guidance[7](index=7&type=chunk) [Clinical Trial & Key Data](index=2&type=section&id=Clinical%20Trial%20%26%20Key%20Data) The **GraftAssureDx** clinical trial, publicly accessible since **July 15**, includes leading transplant hospitals like **Mayo Clinic** and **Cleveland Clinic**, with Dr. Anthony J. Langone of **Vanderbilt University Medical Center** as the national principal investigator, and recent data favorably compared **iMDx**'s digital **PCR**-based test kits with **NGS** kits, presenting late-breaking data at the World Transplant Congress showing a novel combined score for dd-cfDNA that significantly improved positive predictive values for graft rejection - Clinical trial listing became publicly accessible on **July 15**, including top transplant hospitals: **Mayo Clinic** in Florida, Tampa General Hospital, **Cleveland Clinic**, **Vanderbilt University**, and **Intermountain Health**[7](index=7&type=chunk) - Dr. Anthony J. Langone of **Vanderbilt University Medical Center** was announced as the national principal investigator for the **GraftAssureDx** trial[7](index=7&type=chunk) - New head-to-head data favorably compared **iMDx**'s digital **PCR**-based test kits with **NGS** kits, and late-breaking data at the World Transplant Congress showed a combined score for dd-cfDNA that significantly improved positive predictive values for graft rejection[8](index=8&type=chunk) [Reimbursement & Market Clarity](index=3&type=section&id=Reimbursement%20%26%20Market%20Clarity) Medicare boosted reimbursement for **GraftAssureCore**, the Lab Developed Test (**LDT**) version of **iMDx**'s assay, to **$2,753** per result, setting a benchmark for future kitted test reimbursement, while **MolDx** also provided clarity on surveillance testing with a draft local coverage determination (**LCD**) recommending four cfDNA tests in the first year post-transplant and two per year thereafter, aligning with **iMDx**'s market thesis - Medicare boosted reimbursement for the Lab Developed Test (**LDT**) version of **GraftAssureCore** to **$2,753** per result, establishing a benchmark for future kitted test reimbursement[8](index=8&type=chunk) - **MolDx**'s draft local coverage determination (**LCD**) set a baseline for cfDNA surveillance testing in kidney transplant patients, recommending four tests in the first year and two per year thereafter, aligning with **iMDx**'s total addressable market and investment thesis[8](index=8&type=chunk) [GraftAssureIQ Commercialization & "Land and Expand" Strategy](index=4&type=section&id=GraftAssureIQ%20Commercialization%20%26%20%22Land%20and%20Expand%22%20Strategy) **iMDx**'s **GraftAssureIQ** research-use-only (**RUO**) kit program is driving its "Land and Expand" strategy, with the company booking its first revenue from **GraftAssureIQ RUO** kits in **Q2 2025** from a major Swiss hospital and beginning to ship optimized second-generation kits in June, observing positive demand trends at European conferences with pilot users generating initial data sets - Booked first revenue from first-generation **GraftAssureIQ** research-use-only kits in **Q2 2025** from a major hospital in Switzerland, serving as a key proof point for the **RUO** pilot program[5](index=5&type=chunk)[9](index=9&type=chunk) - Began shipping optimized second-generation **GraftAssureIQ** kits in early June, incorporating ease-of-use improvements based on pilot site feedback[5](index=5&type=chunk)[9](index=9&type=chunk) - Incremental data points for demand trended positively, with significant follow-up interest from laboratory professionals after attending European conferences[9](index=9&type=chunk) [New Product Pipeline & IP Expansion](index=4&type=section&id=New%20Product%20Pipeline%20%26%20IP%20Expansion) **iMDx** is actively investing in and preparing for its new product pipeline, particularly in oncology, gaining momentum by signing a non-binding development letter of intent with a major instrument maker for its **DetermaIO** immuno-oncology assay, and strengthening its intellectual property with a new U.S. patent (**No. 12,359,252 B2**) for detecting colorectal cancer using circulating nucleic acid biomarkers, supporting expansion into blood-based cancer diagnostics - Oncology pipeline gained momentum with the signing of a non-binding development letter of intent with a major instrument maker regarding the **DetermaIO** immuno-oncology assay[9](index=9&type=chunk) - Awarded U.S. Patent **No. 12,359,252 B2** on **July 15, 2025**, covering a method for detecting colorectal cancer using circulating nucleic acid biomarkers, reinforcing **IP** for noninvasive cancer detection[9](index=9&type=chunk) [Corporate Updates & Future Outlook](index=5&type=section&id=Corporate%20Updates%20%26%20Future%20Outlook) In **Q2 2025**, the company rebranded from Oncocyte to **Insight Molecular Diagnostics** and relocated its headquarters to Nashville, Tennessee, home of its accredited lab, with a high focus on concluding its clinical trial and submitting **GraftAssureDx** to the **FDA** by year-end, and anticipating at least six potential areas for clinical and regulatory expansion of its dd-cfDNA kitted assays from **2026** to **2028**, including monitoring therapeutic response, recurrence, and expansions into heart, lung, and liver transplant rejection testing - Renamed the company from Oncocyte to **Insight Molecular Diagnostics** and moved headquarters to Nashville, Tenn., in **Q2 2025**[10](index=10&type=chunk) - High focus on concluding the clinical trial and submitting **GraftAssureDx** to the **FDA** by the end of **2025**, with no change from prior communication[11](index=11&type=chunk) - From **2026** to **2028**, the company sees at least six potential areas for clinical and regulatory expansion of its dd-cfDNA kitted assays, including monitoring therapeutic response, recurrence, and expansions into heart, lung, and liver transplant rejection testing[12](index=12&type=chunk) [Q2 2025 Financial Overview](index=6&type=section&id=Q2%202025%20Financial%20Overview) [Revenue & Gross Profit](index=6&type=section&id=Revenue%20%26%20Gross%20Profit) **iMDx** reported total revenues of **$518,000** in **Q2 2025**, primarily from laboratory services and the first sale of **GraftAssureIQ** kitted products, with gross profit reaching **$350,000**, representing a **67.6%** gross margin, an increase from **62%** in **Q1 2025**, driven by operational efficiencies and the full amortization of certain acquired intangibles Revenue and Gross Profit Summary | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | | :------------------------- | :--------------------- | :--------------------- | | Laboratory Services | $494 | $104 | | Kitted Products | $24 | — | | **Total Revenue** | **$518** | **$104** | | Gross Profit | $350 | $50 | | Gross Margin | 67.6% | 48.1% | - Gross margin expanded to **67.6%** in **Q2 2025**, up from **62%** in **Q1 2025**, primarily due to operational efficiencies in the Nashville lab and the full amortization of certain acquired intangibles[19](index=19&type=chunk) [Operating Expenses & Net Loss](index=6&type=section&id=Operating%20Expenses%20%26%20Net%20Loss) Total operating expenses in **Q2 2025** were **$10.2 million**, including significant non-cash charges, with operating expenses increasing **1%** sequentially (excluding these charges), reflecting increased investment in the **FDA** program and sales and marketing, while research and development expenses rose **12%** sequentially to **$3.3 million**, sales and marketing expenses grew **21%** sequentially to **$1.5 million**, and general and administrative expenses declined **15%** sequentially to **$2.6 million** due to cost discipline and a **Q1** one-time charge, resulting in a net loss of **$9.7 million**, or (**$0.30**) per share for **Q2 2025** Operating Expenses and Net Loss Summary | Metric (in thousands) | Q2 2025 | Q2 2024 | | :-------------------- | :------ | :------ | | Operating Expenses | $10,192 | $4,682 | | Net Loss | $(9,742)| $(4,530)| | Net Loss Per Share | $(0.30) | $(0.36) | | Weighted Average Shares Outstanding | 32,023 | 12,870 | - Research and development expenses increased **12%** sequentially to **$3.3 million**, reflecting increased investment in kitted product development, **FDA**-compliant software, and regulatory consulting[20](index=20&type=chunk) - Sales and marketing expenses grew **21%** sequentially to **$1.5 million**, driven by go-to-market investments ahead of commercial launch[20](index=20&type=chunk) - General and administrative expenses declined **15%** sequentially to **$2.6 million**, attributed to cost discipline and the absence of a **Q1** one-time charge[20](index=20&type=chunk) [Cash Position & Cash Flow](index=7&type=section&id=Cash%20Position%20%26%20Cash%20Flow) The company's cash, cash equivalents, and restricted cash balance stood at **$26.0 million** at the end of **Q2 2025**, including **$28.7 million** in net financing cash flow from a February **2025** offering, with net cash used in operating activities at **$6.3 million** and capital expenditures at **$349,000**, generally aligning with the targeted quarterly average spend of **$6 million** Cash Flow Summary | Metric (in thousands) | Q2 2025 | | :-------------------- | :------ | | Cash, Cash Equivalents, and Restricted Cash (end of quarter) | $25,987 | | Net Cash Used in Operating Activities | $(6,279) | | Capital Expenditures | $(349) | - The cash balance includes **$28.7 million** in net financing cash flow from a registered direct offering and private placement in February **2025**[20](index=20&type=chunk) - Outgoing cash flow from operations of **$6.3 million**, combined with capital expenditures of **$349,000**, were generally in line with the targeted quarterly average spend of **$6 million**[20](index=20&type=chunk) [Non-GAAP Financial Measures](index=7&type=section&id=Non-GAAP%20Financial%20Measures) **iMDx** reported a **Q2 2025** non-GAAP loss from operations of **$5.98 million**, excluding certain non-cash items such as stock-based compensation, depreciation and amortization expenses, and changes in the fair value of contingent consideration, providing additional insight into the company's core operating performance Non-GAAP Loss from Operations Reconciliation | Metric (in thousands) | Q2 2025 | | :------------------------------------ | :------ | | Consolidated GAAP loss from operations | $(9,842) | | Stock-based compensation | $504 | | Depreciation and amortization expenses | $559 | | Change in fair value of contingent consideration | $2,804 | | **Consolidated Non-GAAP loss from operations, as adjusted** | **$(5,975)** | - The non-GAAP measure excludes certain non-cash and/or intangible items to provide insight into the Company's core operating performance[32](index=32&type=chunk) [Company Information & Disclosures](index=8&type=section&id=Company%20Information%20%26%20Disclosures) [Webcast and Conference Call Information](index=8&type=section&id=Webcast%20and%20Conference%20Call%20Information) **Insight Molecular Diagnostics** hosted a live Zoom call and webcast for its **Q2 2025** earnings on Monday, **August 11, 2025**, and a virtual Key Opinion Leader (**KOL**) event featuring Dr. Anthony Langone of **Vanderbilt University** was scheduled for Friday, **August 15, 2025** - Live Zoom call and webcast for **Q2 2025** earnings held on Monday, **August 11, 2025**[21](index=21&type=chunk) - Virtual Key Opinion Leader (**KOL**) event featuring Dr. Anthony Langone of **Vanderbilt University** scheduled for Friday, **August 15, 2025**[24](index=24&type=chunk) [About Insight Molecular Diagnostics, Inc.](index=8&type=section&id=About%20Insight%20Molecular%20Diagnostics%2C%20Inc.) **Insight Molecular Diagnostics Inc.** (**iMDx**) is a pioneering diagnostics technology company focused on democratizing access to novel molecular diagnostic testing to improve patient outcomes, with a mission to lead in molecular diagnostics by developing proprietary algorithms that drive scalable value - **Insight Molecular Diagnostics** is a pioneering diagnostics technology company with a mission to democratize access to novel molecular diagnostic testing to improve patient outcomes[26](index=26&type=chunk) - The company aims to lead in molecular diagnostics by developing proprietary algorithms that drive scalable value[10](index=10&type=chunk) [Forward-Looking Statements](index=8&type=section&id=Forward-Looking%20Statements) The report contains forward-looking statements regarding the company's continued development of a regulated kitted assay, regulatory progress, clinical trials, market strategy, product pipeline, and future financial expectations, which involve inherent risks and uncertainties, including those related to test development, regulatory approvals, supply chains, capital needs, intellectual property, and third-party reimbursement, and actual results may differ materially - Statements in the report containing words like "will," "believes," "plans," "anticipates," "expects," "estimates," "may," and similar expressions are forward-looking statements[27](index=27&type=chunk) - Forward-looking statements involve risks and uncertainties, including those related to development and commercialization of diagnostic tests, regulatory approvals, clinical trial results, supply chains, capital, intellectual property, and reimbursement[27](index=27&type=chunk) - Actual results may differ materially from anticipated results, and readers are cautioned not to place undue reliance on these statements, which speak only as of their original date[27](index=27&type=chunk) [Investor Contact](index=8&type=section&id=Investor%20Contact) For investor inquiries, contact Doug Farrell of LifeSci Advisors LLC - Investor contact: Doug Farrell, LifeSci Advisors LLC, dfarrell@lifesciadvisors.com[28](index=28&type=chunk) [Condensed Consolidated Financial Statements](index=9&type=section&id=Condensed%20Consolidated%20Financial%20Statements) [Condensed Consolidated Balance Sheets](index=9&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of **June 30, 2025**, **iMDx** reported total assets of **$50.5 million**, a significant increase from **$35.1 million** at **December 31, 2024**, primarily driven by a rise in cash and cash equivalents to **$24.3 million** from **$8.6 million**, with total liabilities also increasing to **$49.4 million** mainly due to an increase in noncurrent contingent consideration liabilities, and shareholders' equity shifting from a deficit of (**$12.3 million**) to a positive **$1.1 million** Condensed Consolidated Balance Sheet | Metric (in thousands) | June 30, 2025 (Unaudited) | December 31, 2024 | | :------------------------------------ | :------------------------ | :---------------- | | **ASSETS** | | | | Cash and cash equivalents | $24,287 | $8,636 | | Total current assets | $26,842 | $11,759 | | Total assets | $50,517 | $35,081 | | **LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)** | | | | Total current liabilities | $6,652 | $7,275 | | Total liabilities | $49,419 | $47,355 | | Total shareholders' equity (deficit) | $1,098 | $(12,274) | [Unaudited Condensed Consolidated Statements of Operations](index=10&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations) For the three months ended **June 30, 2025**, **iMDx** reported net revenue of **$518,000**, a substantial increase from **$104,000** in the prior year period, with gross profit rising to **$350,000** from **$50,000**, but total operating expenses significantly increased to **$10.2 million**, primarily due to a **$2.8 million** change in the fair value of contingent consideration and increased **R&D** and **S&M**, resulting in a net loss of **$9.7 million**, or (**$0.30**) per share, compared to a net loss of **$4.5 million**, or (**$0.36**) per share, in **Q2 2024** Condensed Consolidated Statements of Operations | Metric (in thousands, except per share) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :-------------------------------------- | :------------------------------- | :------------------------------- | | Net revenue | $518 | $104 | | Gross profit | $350 | $50 | | Total operating expenses | $10,192 | $4,682 | | Loss from operations | $(9,842) | $(4,632) | | Net loss | $(9,742) | $(4,530) | | Net loss per share | $(0.30) | $(0.36) | | Weighted average shares outstanding | 32,023 | 12,870 | [Unaudited Condensed Consolidated Statements of Cash Flows](index=11&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the three months ended **June 30, 2025**, **iMDx** used **$6.3 million** in operating activities, an increase from **$6.0 million** in the prior year, with investing activities using **$349,000**, primarily for machinery and equipment purchases, and financing activities resulting in a net outflow of **$114,000**, a significant change from a net inflow of **$9.8 million** in **Q2 2024**, which included proceeds from common share sales, leading to a net decrease of **$6.7 million** in cash, cash equivalents, and restricted cash, ending the quarter with **$26.0 million** Condensed Consolidated Statements of Cash Flows | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | | Net cash used in operating activities | $(6,279) | $(5,978) | | Net cash used in investing activities | $(349) | $(191) | | Net provided by financing activities | $(114) | $9,847 | | Net change in cash, cash equivalents and restricted cash | $(6,742) | $3,678 | | Cash, cash equivalents and restricted cash, ending | $25,987 | $10,956 | [Reconciliation of Non-GAAP Financial Measure](index=12&type=section&id=Reconciliation%20of%20Non-GAAP%20Financial%20Measure) **iMDx** provides a reconciliation of its non-GAAP adjusted loss from operations to the most directly comparable **GAAP** measure, showing that for **Q2 2025**, the **GAAP** loss from operations was (**$9.8 million**), and after adjusting for non-cash items such as stock-based compensation (**$504,000**), depreciation and amortization expenses (**$559,000**), and the change in fair value of contingent consideration (**$2.8 million**), the consolidated non-GAAP loss from operations was (**$5.98 million**) Non-GAAP Loss from Operations Reconciliation | Metric (in thousands) | Three Months Ended June 30, 2025 | | :------------------------------------ | :------------------------------- | | Consolidated GAAP loss from operations | $(9,842) | | Stock-based compensation | $504 | | Depreciation and amortization expenses | $559 | | Change in fair value of contingent consideration | $2,804 | | **Consolidated Non-GAAP loss from operations, as adjusted** | **$(5,975)** | - The non-GAAP measure excludes certain non-cash and/or intangible items to provide insight into the Company's core operating performance[32](index=32&type=chunk)

Core Insights - Insight Molecular Diagnostics Inc. has rebranded from Oncocyte Corporation and relocated its headquarters to Nashville, Tennessee, with a new stock symbol "IMDX" effective June 18, 2025 [1][2][3] Company Strategy - The rebranding reflects the company's expanded strategic direction beyond oncology, now including a focus on transplant medicine, aiming to deliver a molecular diagnostic kit for kidney transplant patients [2][3] - The company targets a $1 billion addressable market for transplant rejection testing and is transitioning from product development to commercialization [3][4] Operational Changes - The relocation to Nashville aligns operations with the company's CLIA-certified lab and healthcare innovation hub, while maintaining a laboratory in Göttingen, Germany [4] - The company is unifying its transplant diagnostics under the GraftAssure brand, retiring the VitaGraft name [11][16] Product Development - The GraftAssure product line includes GraftAssureCore (lab-developed test), GraftAssureIQ (research-use-only kit), and GraftAssureDx (in vitro diagnostic kit in development) [11][12][16] - The company is actively participating in the European Society for Organ Transplantation (ESOT) Congress to promote its GraftAssureIQ pilot site program [7][9] Branding and Identity - The new logo symbolizes the company's commitment to healthcare providers and reflects its mission to provide insights through science [5][6] - The rebranding leverages existing rights to the name Insight Genetics, acquired in 2020, and emphasizes a healthcare provider-centric philosophy [5][6]

Core Insights - Oncocyte Corp. has announced a positive update regarding the pricing of its next-generation lab-developed test (LDT), GraftAssureCore, which enhances its position in the transplant rejection testing market and indicates potential growth in its estimated $1 billion total addressable market [1][6] Pricing and Reimbursement - The Centers for Medicare & Medicaid Services (CMS) has increased the reimbursement rate for GraftAssureCore to $2,753 per result, up from $2,222 for first-time testing and $1,029 for subsequent tests [2] - This new pricing aligns with existing competitive technologies and expands market appeal for future FDA-cleared kitted products at transplant centers [6] Company Strategy and Future Prospects - Oncocyte has invested significantly in improving the scalability and manufacturability of its workflow, which supports its kitted test program [3] - The new reimbursement rate establishes a benchmark for future kitted tests, such as GraftAssureDx, which is expected to be submitted for FDA review by the end of the year [3] - The company anticipates that receiving FDA authorization will enable broader adoption of its technology, allowing transplant centers to access high-quality, FDA-cleared kits with established reimbursement [4] Clinical Trials and Market Engagement - Oncocyte has received approval from a Central Institutional Review Board for its clinical trial, with final preparations underway at participating transplant centers [4] - The company expects participation from three of the top 10 U.S. transplant centers, representing nearly 10% of annual U.S. transplant volume [4] Technology and Market Position - Oncocyte's technology quantifies donor-derived cell-free DNA (dd-cfDNA), which has been established as a trusted biomarker for transplant rejection [5] - The company is rebranding its test portfolio under the GraftAssure brand, with GraftAssureCore being the new name for its previously marketed VitaGraft assay [5]

Financial Data and Key Metrics Changes - Pharma services revenue for the quarter was $2.1 million, exceeding expectations due to a large order processed quickly, resulting in $1.4 million invoiced just days before the quarter ended [16][17] - The company ended the first quarter with nearly $33 million in cash, including restricted cash, and reported a free cash flow of negative $6.2 million, aligning with the target average quarterly cash burn of $6 million [19][20] Business Line Data and Key Metrics Changes - The majority of revenue in Q1 came from a single corporate customer, which has led to potential partnership opportunities for one of the oncology assays [17] - The company has 10 sites running its research use only (RUO) assay across various regions, including the US, Germany, UK, Switzerland, Austria, and Southeast Asia [9][10] Market Data and Key Metrics Changes - The company expects to have 20 sites trained on its graft assay workflow by the end of the year, which is part of a strategy to land hospitals with the RUO product and expand to selling the clinical kitted product post-FDA clearance [9][12] - Interest from several university hospitals in the clinical trial has been noted, with expectations to include at least three of the top 10 transplant centers in the US [6][9] Company Strategy and Development Direction - The company is focused on finalizing its clinical assay and trial design, preparing for an FDA submission by the end of the year, and expanding its customer base in the transplant sector [5][8] - A corporate name change is planned to better reflect the strategic direction, moving away from the name OncoCyte, which no longer aligns with the company's primary focus on transplant [12][13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the progress made towards building a sustainable business in the transplant market, with increasing interest from potential corporate partners [15] - The company anticipates that the strong interest in the clinical trial will translate into future demand for its IVD assay [7][8] Other Important Information - The company is investing in improving and simplifying digital PCR workflows, which are seen as a differentiator compared to NGS, particularly for transplant centers with lower sample volumes [10][11] - The company is preparing for a significant increase in cash burn due to clinical trial costs and FDA-compliant software development [20] Q&A Session Summary Question: Can you expand on the larger revenue-generating pharma customer interested in oncology? - Management confirmed that the interest is related to DetermaIO and a kitted version, with potential for collaboration on immunotherapy response [24] Question: What are the next milestones for DetermaIO? - The company is looking forward to data from the SWOG study involving 800 patients, which is expected to be reported towards the end of the year [26][28] Question: What feedback has been received from US transplant centers regarding the study? - Management described the relationship with transplant centers as enthusiastic, with a strong desire for access to the technology [30] Question: How does the company view the impact of the IOTA model on market growth? - Management acknowledged skepticism from partners but remains hopeful for increased demand for testing tools as more marginal organs are used [39] Question: What is the focus for the upcoming Q-sub meeting with the FDA? - The focus will be on finalizing the submission and addressing specific questions from the FDA to ensure acceptance of the final submission [48]

Financial Data and Key Metrics Changes - Pharma services revenue for Q1 2025 was $2.1 million, exceeding expectations due to a large order processed quickly, with $1.4 million invoiced in the last few days of the quarter [16][17] - Gross margins for pharma services reached 62%, extending the company's cash runway and deepening customer relationships [16][17] - The company ended Q1 2025 with nearly $33 million in cash, including restricted cash, and reported a free cash flow of negative $6.2 million, aligning with the target average quarterly cash burn of $6 million [20][22] Business Line Data and Key Metrics Changes - The majority of revenue in Q1 came from a single corporate customer, which is now seeking partnership opportunities on one of the oncology assays [17] - The company has 10 sites running its research use only (RUO) assay across various countries, including the US, Germany, UK, Switzerland, Austria, and Southeast Asia [8][12] Market Data and Key Metrics Changes - The company expects to have 20 sites trained on its graft to share workflow by the end of 2025, which is part of a strategy to land hospitals with the RUO product and expand to selling the clinical kitted product post-FDA clearance [8][12] - Interest from several university hospitals in the clinical trial has been noted, with expectations to include at least three of the top 10 transplant centers in the US [6][8] Company Strategy and Development Direction - The company is focused on finalizing its clinical assay and trial design, preparing for an FDA submission by the end of 2025, and spring loading revenue for the second half of 2026 [5][6] - A strategic pivot has been made towards transplant diagnostics, with plans to unveil a new company name that reflects this direction [12][13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the progress made and the future potential of the transplant product, noting increased interest from corporate partners [15] - The company is optimistic about the FDA approval timeline, targeting the first half of 2026 for approval [8][21] Other Important Information - The company is investing in improving and simplifying digital PCR workflows, which are seen as a differentiator compared to NGS platforms [10][11] - The company plans to announce a new Nasdaq ticker alongside the name change, emphasizing a resource-conscious approach to capital allocation [22] Q&A Session Summary Question: Inquiry about the larger revenue-generating pharma customer and oncology interest - Management confirmed that the interest is related to DetermaIO and potential kitted versions, indicating unique advantages in tougher cancers [25] Question: Next milestones for DetermaIO - The focus is on the SWOG study involving 800 patients, with data expected towards the end of the year [28] Question: Feedback from US transplant centers regarding the study - Management reported enthusiasm from transplant centers, indicating a strong desire for in-house technology access [31] Question: Impact of the IOTA model on market growth - Management acknowledged skepticism from partners but noted that increased demand for testing is anticipated [41] Question: Potential friction between transplant centers and physicians regarding test orders - Management indicated that most centers allow physicians to choose tests, emphasizing the importance of demonstrating the technology's performance [45] Question: Final Q-sub meeting expectations - The company is on track for submission and has incorporated FDA feedback into the Q-sub [49]

Revenue Growth - Total net revenue increased to $2.1 million for the three months ended March 31, 2025, compared to $176,000 in the same period in 2024, representing a 1115% increase [212]. - Pharma Services revenue increased by $2.0 million, with revenue from one existing customer amounting to approximately $2.1 million during Q1 2025 [214]. Expenses - Research and development expenses rose by $612,000, driven by costs associated with the development of GraftAssureCore, GraftAssureIQ, DetermaIO, and DetermaCNI [214]. - Sales and marketing expenses increased by $360,000, primarily due to ramped-up activities related to the transplant business and oncology commercialization efforts [214]. - General and administrative expenses increased by $442,000, mainly due to higher personnel-related expenses and professional fees [214]. - Research and development expenses increased by 26% to $2.9 million for the three months ended March 31, 2025, compared to $2.3 million in the same period of 2024 [219]. - Sales and marketing expenses rose by 43% to $1.2 million for the three months ended March 31, 2025, up from $846,000 in the prior year [221]. - General and administrative expenses increased by 17% to $3.1 million for the three months ended March 31, 2025, compared to $2.7 million in 2024 [222]. Net Loss and Financial Position - The net loss for the three months ended March 31, 2025, was $6.7 million, a reduction of $2.5 million compared to a net loss of $9.1 million in the prior year [214]. - The net loss for the period was $6.7 million, with net cash used in operating activities amounting to $5.9 million [240]. - The company had an accumulated deficit of $357.2 million as of March 31, 2025 [229]. - Cash and cash equivalents stood at $31.0 million as of March 31, 2025 [229]. Financing Activities - A private placement in February 2025 raised approximately $29.1 million in gross proceeds, with net proceeds of approximately $28.7 million after expenses [211]. - The gross proceeds from the February 2025 Offering were approximately $29.1 million, with net proceeds of approximately $28.7 million after expenses [231]. Strategic Developments - The company received a positive coverage decision from MolDx for GraftAssureCore (Kidney) in August 2023, with commercial availability starting in January 2024 [203]. - The company confirmed Medicare reimbursement for monitoring certain high-risk patients in December 2024 [203]. - The company is focusing on commercializing its oncology product line, including DetermaIO, over the next 12 months [207]. - A global strategic partnership with Bio-Rad was established to collaborate on the development and commercialization of transplant products [234]. Contingent Consideration and Impairments - As of March 31, 2025, total contingent consideration liabilities were $38.8 million, up from $37.9 million as of December 31, 2024 [251]. - Stock-based compensation for the three months ended March 31, 2025, was $473,000, compared to $418,000 for the same period in 2024 [257]. - A total impairment of $41.9 million was recorded for certain oncology-related IPR&D intangible assets as of December 31, 2024 [253]. - An impairment loss of $169,000 was recognized on held for sale assets during the three months ended March 31, 2024 [254]. - The company established an allowance for credit losses of $36,000 as of March 31, 2025, compared to $16,000 as of December 31, 2024 [256]. Cash Flow and Investment Activities - Net cash used in operating activities amounted to $3.8 million, excluding noncash items totaling $4.0 million [241]. - Cash used in investing activities for the three months ended March 31, 2024, was $24,000 [242].

[Executive Summary](index=1&type=section&id=Executive%20Summary) Oncocyte achieved significant Q1 2025 progress with strong pharmaceutical services revenue and gross margin, advancing its first clinical molecular diagnostic kit for transplant rejection, and planning a corporate rebranding [Q1 2025 Highlights](index=1&type=section&id=Q1%202025%20Highlights) Oncocyte achieved significant progress in Q1 2025, with pharmaceutical services revenue from its Nashville lab exceeding expectations and a substantial increase in gross margin. The company made key advancements in commercializing its clinical molecular diagnostic kit for transplant rejection testing and plans a corporate renaming in Q2 to reflect broader market opportunities - Pharmaceutical services revenue from the Nashville lab reached **$2.1 million** in Q1 2025, exceeding expectations[2](index=2&type=chunk) - Gross margin increased from **40% in Q4 2024 to 62% in Q1 2025**, primarily due to process improvements[2](index=2&type=chunk) - At least three of the top ten U.S. transplant centers are expected to participate in clinical trials, collectively representing nearly **10% of U.S. organ transplants**[5](index=5&type=chunk) - The company plans to rename in Q2 to better reflect its broader market opportunities in transplant and oncology[7](index=7&type=chunk) [Strategic Priorities](index=1&type=section&id=Strategic%20Priorities) The company's top priority for 2025 is to launch its first clinical molecular diagnostic kit to capture the estimated **$1 billion** transplant rejection testing market. Q1 efforts focused on advancing key steps from development to commercialization - The primary objective is to launch the first clinical molecular diagnostic kit, targeting an estimated **$1 billion** transplant rejection testing market[1](index=1&type=chunk) - Q1 efforts focused on advancing key steps from development to commercialization[1](index=1&type=chunk) [Clinical Trial Progress](index=1&type=section&id=Clinical%20Trial%20Progress) Oncocyte has finalized clinical trial design and secured IRB approval, with top U.S. transplant centers expected to join, aiming for **2026** FDA market authorization via a Class II de novo pathway [Trial Design and Regulatory Approvals](index=1&type=section&id=Trial%20Design%20and%20Regulatory%20Approvals) Oncocyte has completed the clinical trial design for its molecular diagnostic test kit and secured approval from a large central Institutional Review Board (IRB), a critical step for initiating multi-center clinical trials - Clinical trial design is complete, and approval from a large central IRB has been secured, a critical step for initiating clinical trials[4](index=4&type=chunk) [Clinical Site Recruitment](index=1&type=section&id=Clinical%20Site%20Recruitment) The company anticipates at least three of the top ten U.S. transplant centers will join as clinical trial participants in the coming weeks, collectively representing nearly **10%** of U.S. organ transplants. The company looks forward to announcing the first patient enrollment and introducing the study's National Principal Investigator (NPI) and key opinion leaders - At least three of the top ten U.S. transplant centers are expected to participate in clinical trials, collectively representing nearly **10% of U.S. organ transplants**[5](index=5&type=chunk) - Anticipation for announcing the first patient enrollment and introducing the study's National Principal Investigator (NPI) and key opinion leaders[6](index=6&type=chunk) [Regulatory Pathway and FDA Engagement](index=2&type=section&id=Regulatory%20Pathway%20and%20FDA%20Engagement) Upcoming clinical trials are expected to meet FDA clinical evidence requirements, with the company pursuing a Class II de novo pathway and anticipating U.S. market authorization in **2026**. The company has secured CLIA validation and CMS reimbursement for its laboratory-developed test and is satisfied with FDA communications, with a final pre-submission meeting imminent - Upcoming clinical trials are expected to meet FDA clinical evidence requirements, targeting a Class II de novo pathway with anticipated U.S. market authorization in **2026**[9](index=9&type=chunk) - The laboratory-developed test (LDT) version has received **CLIA validation and CMS reimbursement**[9](index=9&type=chunk) - Satisfaction with FDA communications and anticipation of a final pre-submission (Q-Sub) meeting in the coming weeks[10](index=10&type=chunk) [Business Update and Product Development](index=2&type=section&id=Business%20Update%20and%20Product%20Development) GraftAssure RUO adoption is expanding with strong market interest, leveraging digital PCR technology for new applications, while the DetermaIO oncology test shows promise in predicting immunotherapy response [GraftAssure RUO Adoption and Commercialization](index=2&type=section&id=GraftAssure%20RUO%20Adoption%20and%20Commercialization) Currently, **10** leading transplant centers are utilizing the GraftAssure Research Use Only (RUO) kit, with the company on track to achieve its target of **20** centers by year-end **2025**. GraftAssure RUO has exceeded market expectations since its summer **2024** launch, with usability improvements completed and initial commercial orders anticipated later this year - Currently, **10** leading transplant centers (**3 in the U.S., 6 in Europe, 1 in Southeast Asia**) are using the GraftAssure Research Use Only (RUO) kit[11](index=11&type=chunk)[13](index=13&type=chunk) - The company is on track to achieve its goal of at least **20** transplant centers adopting the GraftAssure RUO kit by year-end **2025**[11](index=11&type=chunk) - Interest in GraftAssure RUO has exceeded expectations, with usability improvements completed and initial commercial orders anticipated later this year[12](index=12&type=chunk) - Upon FDA IVD authorization, each transplant center using the company's kit could generate hundreds of thousands to **$2 million** in high-margin revenue annually[11](index=11&type=chunk) [GraftAssure Technology and Pipeline Expansion](index=3&type=section&id=GraftAssure%20Technology%20and%20Pipeline%20Expansion) GraftAssure's digital PCR technology is a key differentiator, offering rapid, simple, quantitative, and more economical testing results with low sample volumes. This technology is being explored for new applications, such as microchimerism detection, and successfully identified graft rejection in patients up to **13 years** post-transplant in a published study - GraftAssure's digital PCR technology is a key differentiator, providing rapid, simple, quantitative, and more economical test results with low sample volumes[15](index=15&type=chunk)[16](index=16&type=chunk) - Researchers are using GraftAssure to detect microchimerism, an increasingly important area in transplant biology, offering insights into graft health and early signs of rejection[14](index=14&type=chunk) - A study published in *Transplantation Direct* positively confirmed the test's utility in identifying graft rejection in patients up to **13 years** post-transplant[17](index=17&type=chunk) [Oncology Pipeline Advancement (DetermaIO)](index=3&type=section&id=Oncology%20Pipeline%20Advancement%20(DetermaIO)) The company has advanced its oncology pipeline, with the NeoTRIP study accelerating the strategic and scientific direction of the DetermaIO test. DetermaIO, a **27-gene** expression test, predicts which Stage II/III triple-negative breast cancer patients benefit from adding immunotherapy to chemotherapy and is poised to support "drug rescue" strategies - The NeoTRIP study has accelerated the strategic and scientific direction of the DetermaIO test, attracting pharmaceutical partners and clinical collaborators[18](index=18&type=chunk) - The DetermaIO test can statistically predict which Stage II/III triple-negative breast cancer patients benefit from adding immunotherapy (atezolizumab) to chemotherapy[19](index=19&type=chunk) - DetermaIO-positive patients showed pathological complete response benefits with atezolizumab, while negative patients did not[19](index=19&type=chunk) - This test is expected to support "drug rescue" strategies by enriching for likely responders, thereby increasing drug success rates in future studies[20](index=20&type=chunk) [Corporate and Product Rebranding](index=4&type=section&id=Corporate%20and%20Product%20Rebranding) Oncocyte is rebranding its corporate identity and transplant diagnostic portfolio, discontinuing "VitaGraft" and adopting "GraftAssure" as the umbrella brand for its dd-cfDNA tests [Company Renaming](index=4&type=section&id=Company%20Renaming) Oncocyte plans to introduce a new company name this year to better reflect its broader strategic direction and product pipeline in organ transplantation and oncology, as "Oncocyte" no longer encompasses its expanded mission - The company will introduce a new corporate name this year to better reflect its strategic direction and product pipeline in organ transplantation and oncology[21](index=21&type=chunk) - The former name "Oncocyte" (derived from Greek for "tumor") no longer adequately covers the company's broader mission[21](index=21&type=chunk) - The renaming is expected to be an efficient and relatively low-cost initiative[22](index=22&type=chunk) [Product Portfolio Rebranding](index=4&type=section&id=Product%20Portfolio%20Rebranding) The company is rebranding its transplant diagnostic portfolio, discontinuing the "VitaGraft" name and adopting "GraftAssure" as the umbrella brand for its dd-cfDNA test suite. New naming conventions include GraftAssureCore (LDT), GraftAssureIQ (RUO kit), and GraftAssureDx (IVD kit) - The "VitaGraft" name will be discontinued, with "GraftAssure" serving as the umbrella brand for the dd-cfDNA test portfolio[23](index=23&type=chunk) - New product naming conventions include GraftAssureCore (Laboratory Developed Test, LDT), GraftAssureIQ (Research Use Only kit, RUO), and GraftAssureDx (In Vitro Diagnostic kit, IVD)[26](index=26&type=chunk) [Q1 2025 Financial Overview](index=5&type=section&id=Q1%202025%20Financial%20Overview) Oncocyte reported **$2.14 million** in Q1 2025 revenue with a **62%** gross margin, a **$6.7 million** net loss, and a **$32.7 million** cash balance after a **$28.7 million** financing round [Revenue and Gross Margin](index=5&type=section&id=Revenue%20and%20Gross%20Margin) Oncocyte generated **$2.14 million** in revenue in Q1 2025, entirely from pharmaceutical services at its Nashville lab. The company's gross margin significantly improved to **62%**, driven by enhanced operational efficiencies, including automation and workflow optimization Q1 2025 Revenue and Gross Margin | Metric | Q1 2025 (Million USD) | | :--- | :--- | | Revenue | 2.14 | | Gross Profit | 1.33 | | Gross Margin | 62% | - Revenue was entirely from pharmaceutical services at the Nashville lab, not yet including commercial transplant test kit sales[28](index=28&type=chunk) - Gross margin increased from **40% in Q4 2024 to 62% in Q1 2025**, primarily due to operational efficiencies achieved at the Nashville lab, such as automation and workflow enhancements[28](index=28&type=chunk) [Operating Expenses](index=5&type=section&id=Operating%20Expenses) Operating expenses for Q1 2025 totaled **$8.1 million**, including non-cash items. R&D expenses increased due to kit product development, sales and marketing expenses remained flat, and general and administrative expenses included a **$279,000** one-time charge related to the termination of the Needham & Company sales agreement Q1 2025 Operating Expenses | Operating Expense Category | Q1 2025 (Million USD) | | :--- | :--- | | Total Operating Expenses | 8.1 | | Research and Development Expenses | 2.9 | | Sales and Marketing Expenses | 1.2 | | General and Administrative Expenses | 3.1 | - Research and development expenses increased to **$2.9 million**, primarily for kit product development, including FDA-compliant software development, lab supplies, and personnel[28](index=28&type=chunk) - Sales and marketing expenses remained flat quarter-over-quarter at **$1.2 million**, benefiting from cost controls[28](index=28&type=chunk) - General and administrative expenses were **$3.1 million**, including a **$279,000** one-time charge related to the termination of the Needham & Company sales agreement[28](index=28&type=chunk) [Net Loss and EPS](index=5&type=section&id=Net%20Loss%20and%20EPS) The company reported a net loss of **$6.7 million** in Q1 2025, with a loss per share of **$0.26**. Non-GAAP operating loss was **$5.0 million**, reflecting core operational performance excluding certain non-cash items Q1 2025 Net Loss and EPS | Metric | Q1 2025 | | :--- | :--- | | Net Loss | $6.7 Million | | Net Loss Per Share | ($0.26) | | Non-GAAP Operating Loss | $5.0 Million | | Weighted Average Shares Outstanding | 25.7 Million Shares | - As of May 12, including shares issued in February 2025 and private placements, the company had **28.6 million** shares outstanding[28](index=28&type=chunk) [Cash Position and Cash Flow](index=6&type=section&id=Cash%20Position%20and%20Cash%20Flow) As of Q1 end, Oncocyte's cash, cash equivalents, and restricted cash balance was **$32.7 million**, including **$28.7 million** net cash flow from February **2025** financing activities. Cash outflow from operating activities (net cash used in operating activities) was **$5.9 million**, and capital expenditures were **$307,000**, aligning with the company's targeted average quarterly spend Q1 2025 Cash Position and Cash Flow | Metric | Q1 2025 End (Million USD) | | :--- | :--- | | Cash, Cash Equivalents, and Restricted Cash | 32.7 | | Net Cash Outflow from Operating Activities | 5.9 | | Capital Expenditures | 0.307 | - Cash balance includes **$28.7 million** in net financing cash flow from a February **2025** registered direct offering and private placement[34](index=34&type=chunk) - Operating cash outflow and capital expenditures align with the company's targeted **$6 million** average quarterly spend[34](index=34&type=chunk) - Accounts receivable at Q1 end was **$3.5 million**, with **$1.4 million** collected in the first week of April[34](index=34&type=chunk) [Financial Statements](index=8&type=section&id=Financial%20Statements) The Q1 2025 financial statements show increased assets and positive equity, improved net revenue and narrowed operating loss, significant cash inflow from financing, and a reconciliation of non-GAAP operating loss [Condensed Consolidated Balance Sheets](index=8&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2025, total assets were **$60.36 million**, a significant increase from **$35.081 million** on December 31, 2024, primarily due to growth in cash and cash equivalents. Total liabilities were **$50.142 million**, and stockholders' equity (deficit) turned positive at **$10.218 million** Condensed Consolidated Balance Sheets | Metric (Thousands USD) | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and Cash Equivalents | 31,029 | 8,636 | | Accounts Receivable, Net | 3,540 | 1,613 | | Total Current Assets | 36,263 | 11,759 | | Total Assets | 60,360 | 35,081 | | **Liabilities and Stockholders' Equity** | | | | Total Current Liabilities | 9,683 | 7,275 | | Total Liabilities | 50,142 | 47,355 | | Total Stockholders' Equity (Deficit) | 10,218 | (12,274) | [Unaudited Condensed Consolidated Statements of Operations](index=9&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations) In Q1 2025, net revenue was **$2.138 million**, a significant increase from **$0.176 million** in the prior year. Gross profit was **$1.325 million**, compared to **$0.045 million** last year. Operating loss narrowed from **$9.267 million** in the prior year to **$6.799 million**. Net loss was **$6.671 million**, with a net loss per share of **$0.26** Unaudited Condensed Consolidated Statements of Operations | Metric (Thousands USD) | March 31, 2025 | March 31, 2024 | | :--- | :--- | :--- | | Net Revenue | 2,138 | 176 | | Cost of Sales | 806 | 109 | | Gross Profit | 1,325 | 45 | | Operating Expenses | 8,124 | 9,312 | | Operating Loss | (6,799) | (9,267) | | Net Loss | (6,671) | (9,129) | | Net Loss Per Share | (0.26) | (1.13) | | Weighted Average Shares Outstanding | 25,694 | 8,264 | [Unaudited Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) In Q1 2025, net cash outflow from operating activities was **$5.858 million**. Net cash outflow from investing activities was **$0.307 million**. Financing activities provided **$28.558 million** in net cash, primarily from common stock sales. Total cash, cash equivalents, and restricted cash at period-end significantly increased to **$32.729 million** from **$10.336 million** at the beginning of the period Unaudited Condensed Consolidated Statements of Cash Flows | Metric (Thousands USD) | March 31, 2025 | March 31, 2024 | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | (5,858) | (3,830) | | Net Cash Used in Investing Activities | (307) | (24) | | Net Cash Provided by Financing Activities | 28,558 | — | | Net Change in Cash, Cash Equivalents, and Restricted Cash | 22,393 | (3,854) | | Cash, Cash Equivalents, and Restricted Cash at Period End | 32,729 | 7,278 | [Reconciliation of Non-GAAP Financial Measure](index=11&type=section&id=Reconciliation%20of%20Non-GAAP%20Financial%20Measure) The company provides a reconciliation of non-GAAP operating loss, excluding non-cash and/or intangible items such as stock-based compensation, depreciation and amortization, changes in fair value of contingent consideration, and impairment losses, to better reflect core operational performance. Non-GAAP operating loss for Q1 2025 was **$4.956 million** Reconciliation of Non-GAAP Financial Measure | Metric (Thousands USD) | March 31, 2025 | December 31, 2024 | March 31, 2024 | | :--- | :--- | :--- | :--- | | GAAP Consolidated Operating Loss | (6,799) | (33,627) | (9,267) | | Stock-Based Compensation | 473 | 499 | 418 | | Depreciation and Amortization Expense | 491 | 563 | 335 | | Change in Fair Value of Contingent Consideration | 879 | (13,696) | 3,312 | | Impairment Loss | — | 41,900 | — | | Impairment Loss on Assets Held for Sale | — | — | 169 | | Non-GAAP Consolidated Operating Loss (Adjusted) | (4,956) | (4,361) | (5,033) | [Additional Information](index=6&type=section&id=Additional%20Information) Additional information includes details on the Q1 2025 earnings webcast, company overview, forward-looking statements with associated risks, and investor contact information [Webcast and Conference Call](index=6&type=section&id=Webcast%20and%20Conference%20Call) The company held its Q1 2025 earnings webcast and conference call on March 12, 2025, providing registration and replay information - The company held its Q1 2025 earnings webcast and conference call on **March 12, 2025**[29](index=29&type=chunk) [About Oncocyte](index=6&type=section&id=About%20Oncocyte) Oncocyte is a diagnostic technology company dedicated to democratizing novel molecular diagnostic tests to improve patient outcomes. The report lists the company's trademarks - Oncocyte is a diagnostic technology company dedicated to democratizing novel molecular diagnostic tests to improve patient outcomes[33](index=33&type=chunk) [Forward-Looking Statements](index=7&type=section&id=Forward-Looking%20Statements) The report contains forward-looking statements regarding the company's future expectations, beliefs, goals, plans, or prospects, including clinical trials, FDA approvals, commercialization plans, and financial projections. These statements involve risks and uncertainties, and actual results may differ materially from expectations - The report contains forward-looking statements regarding the company's future expectations, beliefs, goals, plans, or prospects, including clinical trials, FDA approvals, commercialization plans, and financial projections[35](index=35&type=chunk) - Forward-looking statements involve risks and uncertainties, and actual results may differ materially from expectations; investors are advised to refer to the "Risk Factors" in the company's SEC filings[35](index=35&type=chunk) [Investor Contact](index=7&type=section&id=Investor%20Contact) Investor contact information is provided for further company-related inquiries - Investors can contact Doug Farrell for additional information[36](index=36&type=chunk)

Core Insights - Oncocyte Corp. is focused on launching its first clinical molecular diagnostic test kit for transplant rejection testing, targeting a $1 billion market opportunity [1][8][25] - The company reported $2.1 million in pharma services revenue for Q1 2025, with gross margins improving from 40% in Q4 2024 to 62% in Q1 2025 due to operational efficiencies [2][31] Clinical Trial Progress - Oncocyte has completed the clinical trial design for its diagnostic testing kit and received approval from a central institutional review board (IRB) [4] - The company expects participation from at least three of the top 10 transplant centers in the U.S., which represent nearly 10% of U.S. transplanted organ volume [5][7] - The upcoming clinical trial is anticipated to meet clinical evidence requirements for FDA submission, with clearance expected in 2026 [8] Business Update - Ten leading transplant centers are currently using Oncocyte's GraftAssure research-use-only kits, with plans to expand to at least 20 centers by the end of 2025 [11] - The GraftAssure test is expected to generate annual revenue of several hundred thousand dollars up to $2 million per center once FDA clearance is achieved [11] - The company is rebranding its product portfolio, with GraftAssure becoming the umbrella brand for its dd-cfDNA test portfolio [24][22] Financial Overview - Q1 2025 revenues were $2.14 million, with a gross profit of $1.33 million, reflecting a 62% gross margin [31][36] - Operating expenses for Q1 2025 totaled $8.1 million, leading to a net loss of $6.7 million, or ($0.26) per share [31][36] - The company ended Q1 2025 with $32.7 million in cash and equivalents, bolstered by a recent financing round [31][38]

Company Announcement - Oncocyte Corp. will report its first quarter 2025 financial results after the market closes on May 12, 2025 [1] - A live Zoom webinar will be held at 2:00 p.m. PT on the same day to discuss the financial results [1][2] Investor Information - The webinar will include a Q&A session and requires registration for access [2] - An archived replay of the webinar will be available on Oncocyte's investor relations website after the call concludes [2] Company Overview - Oncocyte is a diagnostics technology company focused on democratizing access to novel molecular diagnostic testing to enhance patient outcomes [3]