NeoGenomics(NEO) - 2024 Q1 - Quarterly Report

PART I FINANCIAL INFORMATION Item 1. Financial Statements (unaudited) This section presents the unaudited consolidated financial statements for NeoGenomics, Inc., including the balance sheets, statements of operations, comprehensive loss, stockholders' equity, and cash flows, along with their accompanying notes, for the period ended March 31, 2024 Consolidated Balance Sheets | Metric | March 31, 2024 ($ in thousands) | December 31, 2023 ($ in thousands) | Change ($ in thousands) | | :----------------------------------- | :------------------------------- | :--------------------------------- | :---------------------- | | Total assets | 1,640,339 | 1,681,229 | (40,890) | | Total liabilities | 716,929 | 739,692 | (22,763) | | Total stockholders' equity | 923,410 | 941,537 | (18,127) | | Cash and cash equivalents | 331,914 | 342,488 | (10,574) | | Marketable securities, at fair value | 52,916 | 72,715 | (19,799) | | Goodwill | 522,766 | 522,766 | 0 | | Convertible senior notes, net | 538,923 | 538,198 | 725 | | Accrued compensation | 34,609 | 53,161 | (18,552) | | Total current liabilities | 76,710 | 96,304 | (19,594) | Consolidated Statements of Operations | Metric | Three Months Ended March 31, 2024 ($ in thousands) | Three Months Ended March 31, 2023 ($ in thousands) | Change ($ in thousands) | % Change | | :-------------------------- | :--------------------------------------- | :--------------------------------------- | :---------------------- | :------- | | Total net revenue | 156,240 | 137,220 | 19,020 | 13.9 % | | Clinical Services revenue | 134,535 | 114,869 | 19,666 | 17.1 % | | Advanced Diagnostics revenue | 21,705 | 22,351 | (646) | (2.9)% | | Gross profit | 65,469 | 54,814 | 10,655 | 19.4 % | | Gross profit margin | 41.9 % | 39.9 % | +2.0 pp | | | Net loss | (27,061) | (30,795) | 3,734 | (12.1)% | | Basic net loss per share | (0.21) | (0.25) | 0.04 | (16.0)% | | Diluted net loss per share | (0.21) | (0.25) | 0.04 | (16.0)% | Consolidated Statements of Comprehensive Loss | Metric | Three Months Ended March 31, 2024 ($ in thousands) | Three Months Ended March 31, 2023 ($ in thousands) | | :-------------------------------------- | :--------------------------------------- | :--------------------------------------- | | Net loss | (27,061) | (30,795) | | Net unrealized gain on marketable securities, net of tax | 344 | 1,065 | | Comprehensive loss | (26,717) | (29,730) | Consolidated Statements of Stockholders' Equity | Metric | December 31, 2023 ($ in thousands) | March 31, 2024 ($ in thousands) | | :-------------------------- | :------------------------------- | :------------------------------ | | Total Stockholders' Equity | 941,537 | 923,410 | | Accumulated Deficit | (247,055) | (274,116) | | Stock-based compensation expense (Q1) | N/A | 7,774 | | Net unrealized gain on marketable securities, net of tax (Q1) | N/A | 344 | Consolidated Statements of Cash Flows | Metric | Three Months Ended March 31, 2024 ($ in thousands) | Three Months Ended March 31, 2023 ($ in thousands) | | :-------------------------------- | :--------------------------------------- | :--------------------------------------- | | Net cash used in operating activities | (25,915) | (12,692) | | Net cash provided by investing activities | 14,525 | 23,742 | | Net cash provided by financing activities | 816 | 1,379 | | Net change in cash and cash equivalents | (10,574) | 12,429 | | Cash and cash equivalents, end of period | 331,914 | 275,609 | Notes to Consolidated Financial Statements Note 1. Nature of the Business - NeoGenomics, Inc. provides oncology diagnostic testing and consultative services, including technical laboratory services and professional interpretation by licensed physicians specializing in pathology and oncology, operating a network of cancer-focused testing laboratories in the United States and the United Kingdom[27] Note 2. Summary of Significant Accounting Policies - The interim Consolidated Financial Statements are unaudited and prepared in accordance with GAAP, consistent with the Company's Annual Report on Form 10-K for 2023, with updates for new accounting standards[28][29][30] - The Company is evaluating the planned adoption date and impact of ASU No. 2023-09 (Income Taxes) and ASU No. 2023-07 (Segment Reporting), effective for fiscal years beginning after December 15, 2024, and December 15, 2023, respectively[35][37][38] Note 3. Fair Value Measurements - The Company measures certain financial assets, including marketable securities and cash equivalents, at fair value on a recurring basis, primarily using Level 1 and Level 2 inputs[42][51] | Metric | March 31, 2024 ($ in thousands) | December 31, 2023 ($ in thousands) | | :-------------------------- | :------------------------------- | :--------------------------------- | | Total marketable securities (Fair Value) | 52,916 | 72,715 | | Total cash equivalents (Money market funds) | 324,772 | 334,762 | | Total Financial Assets at Fair Value | 377,688 | 407,477 | Note 4. Goodwill and Intangible Assets | Metric | March 31, 2024 ($ in thousands) | December 31, 2023 ($ in thousands) | | :-------------------- | :------------------------------- | :--------------------------------- | | Goodwill | 522,766 | 522,766 | | Total Intangible assets, net | 364,764 | 373,128 | | Total amortization of intangibles (Q1) | 8,362 | 8,783 | - Estimated amortization expense for amortizable intangible assets is $25.1 million for the remainder of 2024 and $351.3 million in total thereafter[57] Note 5. Debt - The Company has $345.0 million of 0.25% Convertible Senior Notes due 2028 and $201.3 million of 1.25% Convertible Senior Notes due 2025. Neither series was convertible in Q1 2024 or Q2 2024 based on stock price conditions[58][61][64][65] | Metric | 2028 Convertible Notes (Q1 2024) | 2025 Convertible Notes (Q1 2024) | | :-------------------- | :----------------------------- | :----------------------------- | | Contractual coupon interest | $0.2 million | $0.6 million | | Amortization of debt discount | $0.4 million | $0.3 million | | Amortization of debt issuance costs | $8,500 | $38,000 | | Effective interest rate | 0.70% | 1.96% | | Estimated fair value (March 31, 2024) | $275.1 million | $195.5 million | Note 6. Stock-Based Compensation | Metric | Three Months Ended March 31, 2024 ($ in thousands) | Three Months Ended March 31, 2023 ($ in thousands) | | :-------------------------- | :--------------------------------------- | :--------------------------------------- | | Total stock-based compensation | 7,774 | 4,758 | | Unrecognized stock-based compensation (Stock Options) | $15.8 million (over ~1.7 years) | N/A | | Unrecognized stock-based compensation (Restricted Stock) | $17.9 million (over ~1.8 years) | N/A | | Unrecognized stock-based compensation (PSUs) | $10.8 million (over ~2.6 years) | N/A | - In Q1 2024, the Company granted 634,134 stock options (weighted average grant date fair value $9.77), 378,996 restricted stock awards (weighted average grant date fair value $16.40), and 358,666 PSUs (aggregate grant date fair value $6.4 million)[71][72][73][76] Note 7. Revenue Recognition - The Company recognizes revenue from two reportable segments: Clinical Services (diagnostic testing to healthcare providers) and Advanced Diagnostics (testing services and data analytics for pharmaceutical firms)[77] | Metric | March 31, 2024 ($ in thousands) | December 31, 2023 ($ in thousands) | | :-------------------------- | :------------------------------- | :--------------------------------- | | Current contract assets | 236 | 37 | | Total capitalized commissions | 908 | 988 | | Current contract liabilities | 1,144 | 2,130 | | Revenue Source | Three Months Ended March 31, 2024 ($ in thousands) | Three Months Ended March 31, 2023 ($ in thousands) | | :-------------------- | :--------------------------------------- | :--------------------------------------- | | Clinical Services | 134,535 | 114,869 | | Advanced Diagnostics | 21,705 | 22,351 | | Total Revenue | 156,240 | 137,220 | Note 8. Restructuring - Restructuring charges decreased by $2.3 million (48.8%) to $2,398 thousand for the three months ended March 31, 2024, compared to the same period in 2023[150][153] - The Company expects to incur additional restructuring charges of approximately $3.8 million in 2024, with the program anticipated to be complete by December 31, 2024[88][153] | Restructuring Component | Balance as of Dec 31, 2023 ($ in thousands) | Restructuring charges incurred (Q1 2024) ($ in thousands) | Cash payments and other adjustments (Q1 2024) ($ in thousands) | Balance as of Mar 31, 2024 ($ in thousands) | | :-------------------------- | :-------------------------------------- | :------------------------------------------ | :------------------------------------------------ | :------------------------------------- | | Severance and Other Employee Costs | 687 | 697 | (771) | 613 | | Facility Footprint Optimization | 1,389 | 964 | (1,796) | 547 | | Consulting and Other Costs | 537 | 747 | (1,125) | 159 | | Total | 2,613 | 2,408 | (3,692) | 1,319 | Note 9. Income Taxes - The Company's U.S. and U.K. operations are in a three-year cumulative loss position, leading to the establishment of partial valuation allowances against the majority of forecasted U.S. net operating loss and tax credit carryforwards and a portion of U.K. deferred tax assets[93][94] - Full valuation allowances have been established for loss jurisdictions including Switzerland, Singapore, and China, excluding them from the estimated annual effective tax rate computation for 2024[95] Note 10. Net Loss Per Share | Metric | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | NET LOSS ($ in thousands) | (27,061) | (30,795) | | Basic net loss per share | (0.21) | (0.25) | | Diluted net loss per share | (0.21) | (0.25) | - Potentially dilutive shares, including stock options (557 thousand), restricted stock awards (1,031 thousand), 2025 Convertible Notes (5,538 thousand), 2028 Convertible Notes (5,215 thousand), and PSU awards (663,771 shares), were excluded from diluted EPS calculation as their effect would be anti-dilutive[97][99] Note 11. Commitments and Contingencies - The Company is involved in patent infringement lawsuits with Natera, Inc. regarding its InVisionFirst®-Lung and RaDaR® cancer diagnostic tests, with a preliminary injunction issued against RaDaR® in December 2023, which the Company is appealing[100] - Shareholder class action and derivative lawsuits have been filed alleging material misrepresentations and/or omissions related to the Company's public disclosures[100] - A $11.2 million reserve is held for potential damages and liabilities associated with a regulatory matter involving compliance of certain consulting and service agreements with federal healthcare laws, with an ongoing investigation by the OIG and DOJ[101][103] Note 12. Related Party Transactions - The Company recognized $0.2 million of Advanced Diagnostics revenue in Q1 2023 from HOOKIPA Pharma, Inc., an entity with which a Company director was previously affiliated. No such revenue was recognized in Q1 2024[104] Note 13. Segment Information - The Company operates under two reportable segments: Clinical Services and Advanced Diagnostics[105] | Segment | Net Revenues Q1 2024 ($ in thousands) | Net Revenues Q1 2023 ($ in thousands) | % Change | | :------------------- | :------------------------------------ | :------------------------------------ | :------- | | Clinical Services | 134,535 | 114,869 | 17.1 % | | Advanced Diagnostics | 21,705 | 22,351 | (2.9)% | | Total Revenue | 156,240 | 137,220 | 13.9 % | | Segment | Gross Profit Q1 2024 ($ in thousands) | Gross Profit Q1 2023 ($ in thousands) | % Change | | :------------------- | :------------------------------------ | :------------------------------------ | :------- | | Clinical Services | 57,691 | 47,577 | 21.3 % | | Advanced Diagnostics | 7,778 | 7,237 | 7.5 % | | Total Gross Profit | 65,469 | 54,814 | 19.4 % | Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on NeoGenomics' financial condition and results of operations for the three months ended March 31, 2024, compared to the same period in 2023. It covers business overview, operational performance, non-GAAP measures, liquidity, and critical accounting policies Introduction - The discussion and analysis should be read in conjunction with the unaudited Consolidated Financial Statements and notes, and includes forward-looking statements subject to risks and uncertainties[111] Overview - NeoGenomics operates cancer-focused testing laboratories in the United States and the United Kingdom, with a mission to improve patient care and a vision to become the world's leader in cancer testing, information, and decision support[112][113] - The Company offers a comprehensive suite of testing services including Cytogenetics, FISH, Flow cytometry, Immunohistochemistry (IHC) and Digital Imaging, Molecular testing (e.g., NGS), and Morphologic analysis[114][115] - Clinical Services segment provides specialized diagnostic services to community-based pathology practices, oncology practices, hospital labs, reference labs, and academic centers, with NGS panels and liquid biopsy technologies (InVisionFirst®-Lung, RaDaR®) as key growth drivers[116][117] - Advanced Diagnostics segment supports pharmaceutical firms in drug development, clinical trials, research, validation services, and informatics, aiming to bring effective oncology treatments to market, including companion diagnostics (CDx)[118][119][123] - 2024 focus areas include profitably growing the core business (volume, NGS mix, market penetration, revenue cycle management), accelerating Advanced Diagnostics (Neo Comprehensive 2.0, liquid biopsy CGP, gross margin improvement), driving value creation (productivity, LIMS Phase 1, quality systems), and enhancing people and culture[125] - Competitive strengths include consistently improving turnaround times for test results, innovative service offerings (extensive tech-only FISH, flow cytometry, IHC, comprehensive NGS panels), and a national direct sales force[128][129][131][132] - Clinical testing volume experiences modest seasonal declines during summer, holidays, and adverse weather, while Advanced Diagnostics volume varies based on contract terms and patient enrollment for clinical trials[133][135] - The FDA issued a final rule on April 29, 2024, to phase out general enforcement discretion for Laboratory Developed Tests (LDTs) over four years, with exceptions for currently marketed tests and NYS-approved tests; the Company is assessing the impact[136] Results of Operations for the Three Months Ended March 31, 2024 as Compared to the Three Months Ended March 31, 2023 Revenue | Metric | Q1 2024 ($ in thousands) | Q1 2023 ($ in thousands) | $ Change | % Change | | :------------------- | :----------------------- | :----------------------- | :------- | :------- | | Clinical Services | 134,535 | 114,869 | 19,666 | 17.1 % | | Advanced Diagnostics | 21,705 | 22,351 | (646) | (2.9)% | | Total revenue | 156,240 | 137,220 | 19,020 | 13.9 % | - Clinical Services revenue increased due to higher test volume, a more favorable test mix, and an increase in average unit price from strategic reimbursement initiatives[139] - Advanced Diagnostics revenue decreased primarily due to macro clinical trial trends in the pharmaceutical industry and the prioritization of projects with long-term profitable impact[140] Cost of Revenue and Gross Profit | Metric | Q1 2024 ($ in thousands) | Q1 2023 ($ in thousands) | % Change | | :----------------------- | :----------------------- | :----------------------- | :------- | | Total cost of revenue | 90,771 | 82,406 | 10.2 % | | Cost of revenue as a % of revenue | 58.1 % | 60.1 % | -2.0 pp | | Total gross profit | 65,469 | 54,814 | 19.4 % | | Gross profit margin | 41.9 % | 39.9 % | +2.0 pp | - Consolidated cost of revenue increased primarily due to higher compensation and benefit costs, increased supplies expense, higher technology fees, and increased depreciation expense, partially offset by a decrease in shipping fees[141] - Gross profit margin improved by 2.0 percentage points, primarily related to the increase in revenue offset by higher compensation and benefit costs and an increase in supplies expense[142] General and Administrative Expenses | Metric | Q1 2024 ($ in thousands) | Q1 2023 ($ in thousands) | $ Change | % Change | | :-------------------------- | :----------------------- | :----------------------- | :------- | :------- | | General and administrative | 65,797 | 61,549 | 4,248 | 6.9 % | | As a % of revenue | 42.1 % | 44.9 % | -2.8 pp | | - The increase was partially due to a $4.2 million increase in legal and professional fees and a $1.8 million increase in compensation and benefit costs, partially offset by a $1.1 million decrease in technology and equipment costs and a $0.5 million decrease in credit card fees[145] Research and Development Expenses | Metric | Q1 2024 ($ in thousands) | Q1 2023 ($ in thousands) | $ Change | % Change | | :-------------------------- | :----------------------- | :----------------------- | :------- | :------- | | Research and development | 7,620 | 7,395 | 225 | 3.0 % | | As a % of revenue | 4.9 % | 5.4 % | -0.5 pp | | - The increase was primarily due to a $0.3 million increase in compensation and benefit costs and a $0.3 million increase in technology and equipment costs, partially offset by a $0.4 million decrease in professional fees[146] - Research and development expenditures are anticipated to increase in the future as the Company continues to invest in innovation projects and bringing new tests to market[147] Sales and Marketing Expenses | Metric | Q1 2024 ($ in thousands) | Q1 2023 ($ in thousands) | $ Change | % Change | | :-------------------- | :----------------------- | :----------------------- | :------- | :------- | | Sales and marketing | 20,221 | 16,259 | 3,962 | 24.4 % | | As a % of revenue | 12.9 % | 11.8 % | +1.1 pp | | - The increase was primarily due to a $3.7 million increase in salaries, sales commissions, and other compensation and benefit costs[148] - Higher commissions expense is expected in coming quarters as sales representatives generate new business, with long-term alignment to revenue changes[149] Restructuring charges | Metric | Q1 2024 ($ in thousands) | Q1 2023 ($ in thousands) | $ Change | % Change | | :-------------------- | :----------------------- | :----------------------- | :------- | :------- | | Restructuring charges | 2,398 | 4,684 | (2,286) | (48.8)% | | As a % of revenue | 1.5 % | 3.4 % | -1.9 pp | | - Restructuring charges decreased by $2.3 million, comprising $0.7 million in severance, $1.0 million in Facility Footprint Optimization, and $0.7 million in consulting and other costs[153] - The Company expects to incur an additional $3.8 million in restructuring charges in 2024, with the program anticipated to be complete by December 31, 2024[153] Interest Income | Metric | Q1 2024 ($ in thousands) | Q1 2023 ($ in thousands) | $ Change | % Change | | :------------- | :----------------------- | :----------------------- | :------- | :------- | | Interest income | 4,834 | 3,224 | 1,610 | 49.9 % | - The increase in interest income was due to the higher interest rate environment experienced when compared to the same period in 2023, earned on cash equivalent and marketable securities accounts[154] Interest Expense | Metric | Q1 2024 ($ in thousands) | Q1 2023 ($ in thousands) | $ Change | % Change | | :------------- | :----------------------- | :----------------------- | :------- | :------- | | Interest expense | 1,685 | 1,757 | (72) | (4.1)% | - Interest expense primarily reflects the effective interest rate on the 2028 Convertible Notes (0.70%) and the 2025 Convertible Notes (1.96%)[156] Net Loss Per Share | Metric | Q1 2024 | Q1 2023 | | :----------------------- | :------ | :------ | | Basic net loss per share | (0.21) | (0.25) | | Diluted net loss per share | (0.21) | (0.25) | - Net loss per share improved to $(0.21) in Q1 2024 from $(0.25) in Q1 2023[158] Non-GAAP Measures Use of Non-GAAP Financial Measures - Non-GAAP financial measures are used to provide greater transparency into operating performance by excluding items not directly attributable to core operating results or inconsistent in amounts and frequency, aiding in analysis and comparison[159] Definitions of Non-GAAP Measures - Adjusted EBITDA is defined as net (loss) income from continuing operations before interest income, interest expense, tax (benefit) or expense, depreciation and amortization expense, non-cash stock-based compensation expense, restructuring charges, and other significant or non-operating (income) or expenses, net[160] | Metric | Q1 2024 ($ in thousands) | Q1 2023 ($ in thousands) | | :-------------------------- | :----------------------- | :----------------------- | | Net loss (GAAP) | (27,061) | (30,795) | | EBITDA (non-GAAP) | (12,563) | (17,356) | | Adjusted EBITDA (non-GAAP) | 3,492 | (7,116) | - Adjusted EBITDA improved significantly to $3.5 million in Q1 2024 from $(7.1) million in Q1 2023[161] Liquidity and Capital Resources Cash Flows from Operating Activities | Metric | Q1 2024 ($ in thousands) | Q1 2023 ($ in thousands) | | :-------------------------------- | :----------------------- | :----------------------- | | Net cash used in operating activities | (25,915) | (12,692) | - Cash used in operating activities increased by $13.2 million, primarily driven by a $19.7 million increase in cash used from net changes in operating assets and liabilities, despite a $6.5 million improvement in operating results[164] Cash Flows from Investing Activities | Metric | Q1 2024 ($ in thousands) | Q1 2023 ($ in thousands) | | :-------------------------------- | :----------------------- | :----------------------- | | Net cash provided by investing activities | 14,525 | 23,742 | - Cash provided by investing activities decreased primarily due to a $20.3 million decrease in proceeds from sales and maturities of marketable securities, and a $6.8 million decrease in purchases of marketable securities[165] Cash Flows from Financing Activities | Metric | Q1 2024 ($ in thousands) | Q1 2023 ($ in thousands) | | :-------------------------------- | :----------------------- | :----------------------- | | Net cash provided by financing activities | 816 | 1,379 | - Cash provided by financing activities decreased due to the timing of cash payments for stock option exercises[166] Liquidity Outlook - As of March 31, 2024, the Company had $331.9 million in unrestricted cash and cash equivalents and $52.9 million in marketable securities, which are anticipated to be sufficient to fund near-term capital and operating needs for at least the next 12 months[167] Capital Expenditures - Capital expenditures for the year ending December 31, 2024, are anticipated to be in the range of $35.0 million to $40.0 million[168] - During Q1 2024, the Company purchased approximately $5.6 million of capital equipment, software, and leasehold improvements with cash and financing[168] Critical Accounting Policies and Estimates - The preparation of financial statements requires management to make estimates and assumptions that affect reported amounts, with actual results potentially differing from these estimates[169] - Refer to the Annual Report on Form 10-K for the year ended December 31, 2023, and Note 2 of the accompanying financial statements for a complete description of significant accounting policies[169][170] Item 3. Quantitative and Qualitative Disclosures About Market Risk This section discusses the Company's exposure to market risks, specifically interest rate risk and foreign currency exchange risk, and how these risks are managed Interest Rate Risk - The Company's 2025 and 2028 Convertible Notes have fixed annual interest rates (1.25% and 0.25% respectively), limiting economic interest rate exposure, though their fair value is exposed to interest rate and common stock price fluctuations[172] - Investments in highly liquid, high-quality U.S. government and other highly credit-rated debt securities with short maturities minimize exposure to interest rate risk; a 1% change in interest rates would not materially affect the fair value of the investment portfolio[173] Foreign Currency Exchange Risk - Operations in Cambridge, United Kingdom, expose the Company to foreign currency exchange rate fluctuations (primarily British Pounds against the U.S. dollar)[174] - The Company does not hedge foreign currency exchange risks and does not currently believe these risks are significant[174] Item 4. Controls and Procedures This section details the Company's disclosure controls and procedures and reports on any changes in internal control over financial reporting Disclosure Controls and Procedures - Management, including the principal executive officer and principal financial officer, concluded that the Company's disclosure controls and procedures were effective at a reasonable assurance level as of March 31, 2024[176] Changes in Internal Control over Financial Reporting - There were no changes in internal control over financial reporting during the quarter ended March 31, 2024, that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting[177] PART II OTHER INFORMATION Item 1. Legal Proceedings This section refers to Note 11 of the financial statements for details on ongoing legal proceedings - For further information on legal proceedings, refer to Note 11. Commitments and Contingencies, in the notes to the unaudited Consolidated Financial Statements[180] Item 1A. Risk Factors This section directs readers to the risk factors detailed in the Company's Annual Report on Form 10-K for December 31, 2023, and other information in this 10-Q - Readers should carefully consider the risk factors described in Part I, Item 1A, "Risk Factors" in the Annual Report on Form 10-K for the year ended December 31, 2023, and other information in this Quarterly Report on Form 10-Q[181] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This section reports on unregistered sales of equity securities and issuer purchases of equity securities - There were no unregistered sales of equity securities for the quarterly period ended March 31, 2024[182] | Period of Repurchase | Total Number of Shares Purchased | Average Price Paid per Share | | :--------------------------------- | :------------------------------- | :--------------------------- | | January 1, 2024 - January 31, 2024 | 7,460 | $16.16 | | February 1, 2024 - February 29, 2024 | 3,930 | $14.62 | | March 1, 2024 - March 31, 2024 | 1,355 | $15.63 | | Total | 12,745 | N/A | - The Company purchased 12,745 shares of common stock in Q1 2024, primarily to satisfy tax withholding obligations related to the vesting of restricted stock awards[183] Item 3. Defaults Upon Senior Securities No defaults upon senior securities were reported for the period - No defaults upon senior securities were reported[184] Item 4. Mine Safety Disclosures This item is not applicable to the Company - This item is not applicable to the Company[185] Item 5. Other Information This section provides other material information not covered elsewhere, including insider trading plans and changes in executive compensation Insider Trading Plans - No director or Section 16 officer adopted, modified, or terminated any "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement" during the quarter ended March 31, 2024[186] Disclosure Pursuant to Item 5.02 of Form 8-K - Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. - Melody Harris was appointed Chief Operations Officer and President, Informatics, with a new base salary of $575,000, an annual incentive cash bonus target of 60% of salary, and an annual equity-based target award of $1,750,000, plus an incremental $500,000 equity grant for 2024[187] - Warren Stone was appointed Chief Commercial Officer, with a new base salary of $580,000, an annual incentive cash bonus target of 65% of salary, and an annual equity-based target award of $2,000,000, plus an incremental $750,000 equity grant for 2024[187] - The position of President, Advanced Diagnostics, previously held by Vishal Sikri, was eliminated effective April 29, 2024[188] Item 6. Exhibits This section lists the exhibits filed as part of the Form 10-Q, including employment agreements, certifications, and XBRL documents - Exhibits include the Form of PSU Agreement, amendments to employment agreements for Warren Stone and Melody Harris, and certifications by the Principal Executive Officer and Principal Financial Officer[190] SIGNATURES This section contains the required signatures for the Form 10-Q, certifying its submission - The report was signed on April 30, 2024, by Christopher M. Smith, Director and Chief Executive Officer, and Jeffrey S. Sherman, Chief Financial Officer[193]