Controls and Procedures.
−Removed: Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures
−Removed: We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that the information required to be disclosed by us in such reports is accumulated and communicated to our management, including our principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
+Added: Evaluation of Disclosure Controls and Procedures
+Added: We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that the information we are required to disclose in such reports is accumulated and communicated to our management, including our principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable and not absolute assurance of achieving the desired control objectives.
1 unchanged sentence
In addition, the design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions;
−Removed: over time, control may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate.
+Added: over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate.
Our management, with the participation of our principal executive officer and our principal financial officer, evaluated, as of the end of the period covered by this Annual Report on Form 10-K, the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act).
−Removed: Based on that evaluation, our principal executive officer and principal financial officer have concluded that as of December 31, 2023, our disclosure controls and procedures were effective at the reasonable assurance level.
−Removed: Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and our management necessarily applies its judgement in evaluating the cost-benefit relationship of possible controls and procedures.
+Added: Based on that evaluation, our principal executive officer and principal financial officer have concluded that as of December 31, 2024, our disclosure controls and procedures were effective at a reasonable level of assurance.
Management's Report on Internal Control over Financial Reporting
6 unchanged sentences
Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.
−Removed: As of December 31, 2023, our management assessed the effectiveness of our internal control over financial reporting using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in
−Removed: Internal Control-Integrated Framework (2013 framework) .
+Added: As of December 31, 2024, our management assessed the effectiveness of our internal control over financial reporting using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework (2013) .
Based on this assessment, our management concluded that, as of December 31, 2024, our internal control over financial reporting was effective.
−Removed: Remediation of Previously Disclosed Material Weaknesses
−Removed: On November 13, 2022, management and the Audit Committee determined that we made certain errors in revenue resulting from erroneous and duplicate billings related to changes in billing practices.
−Removed: The errors were due to the inadequate design, implementation and precision of internal controls and procedures to evaluate and monitor the accounting for revenue recognition.
−Removed: As a result, revenue and accounts receivable were overstated and other liabilities was understated for the quarter and year to date periods ended June 30, 2022.
−Removed: We concluded that these were material errors in the financial statements requiring a restatement of the Form 10-Q for the three and six months ended June 30, 2022.
−Removed: Accordingly, management determined that this control deficiency constituted a material weakness as of December 31, 2022.
−Removed: In response to the material weaknesses, and as previously disclosed in Item 9A of our annual report on Form 10-K for the year ended December 31, 2022, we implemented a remediation plan which included, but was not limited to, evaluating the staffing level, skills and qualification of accounting department personnel, enhancement of our existing control structure and processes for revenue recognition and improving the detailed review process of our revenue recognition models.
−Removed: The enhancements made to our control environment were in place as of December 31, 2023, and based on the evaluation of relevant internal controls, management has concluded that the material weaknesses previously identified have been remediated as of December 31, 2023.
−Removed: Attestation Report of the Registered Public Accounting Firm
−Removed: This Annual Report on Form 10-K does not include an attestation report of our registered public accounting firm due to an exemption provided by the JOBS Act for "emerging growth companies."
Changes in Internal Control Over Financial Reporting
−Removed: Other than the remediation of the material weakness discussed above, there have been no changes in our internal control over financial reporting during the three months ended December 31, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
+Added: There have been no changes in our internal control over financial reporting during the three months ended December 31, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Inherent Limitations on Effectiveness of Controls and Procedures
2 unchanged sentences
Other Information.
−Removed: Not applicable.
+Added: Rule 10b5-1 trading arrangements
+Added: During the twelve months ended December 31, 2024, none of our directors or officers adopted or terminated a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement," as each term is defined in Item 408 of Regulation S-K.
+Added: Insider Trading Policy
+Added: We maintain an Insider Trading Policy that, among other things, prohibits all officers, directors, and other employees with access to sensitive Company information from engaging in “hedging” transactions with respect to our shares.
+Added: This includes short sales, hedging of share ownership positions, and transactions involving derivative securities relating to our shares.
+Added: The Insider Trading Policy also generally prohibits borrowing or other arrangements involving the non-recourse pledge of our shares.
+Added: This policy is included as Exhibit 19 to this Annual Report.
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.
1 unchanged sentence
Directors, Executive Officers and Corporate Governance.
−Removed: The information required by this item is incorporated herein by reference to our Proxy Statement with respect to our 2023 Annual Meeting of Stockholders to be filed with the SEC within 120 days of the end of the fiscal year covered by this Annual Report on Form 10-K.
+Added: The information required by this item is incorporated herein by reference to our Proxy Statement with respect to our 2025 Annual Meeting of Stockholders to be filed with the SEC within 120 days of the end of the fiscal year covered by this Annual Report.
Executive Compensation.
−Removed: The information required by this item is incorporated herein by reference to our Proxy Statement with respect to our 2023 Annual Meeting of Stockholders to be filed with the SEC within 120 days of the end of the fiscal year covered by this Annual Report on Form 10-K.
+Added: The information required by this item is incorporated herein by reference to our Proxy Statement with respect to our 2025 Annual Meeting of Stockholders to be filed with the SEC within 120 days of the end of the fiscal year covered by this Annual Report.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
−Removed: The information required by this item is incorporated herein by reference to our Proxy Statement with respect to our 2023 Annual Meeting of Stockholders to be filed with the SEC within 120 days of the end of the fiscal year covered by this Annual Report on Form 10-K.
+Added: The information required by this item is incorporated herein by reference to our Proxy Statement with respect to our 2025 Annual Meeting of Stockholders to be filed with the SEC within 120 days of the end of the fiscal year covered by this Annual Report.
Certain Relationships and Related Transactions, and Director Independence.
−Removed: The information required by this item is incorporated herein by reference to our Proxy Statement with respect to our 2023 Annual Meeting of Stockholders to be filed with the SEC within 120 days of the end of the fiscal year covered by this Annual Report on Form 10-K.
+Added: The information required by this item is incorporated herein by reference to our Proxy Statement with respect to our 2025 Annual Meeting of Stockholders to be filed with the SEC within 120 days of the end of the fiscal year covered by this Annual Report.
Principal Accountant Fees and Services.
Our independent registered public accounting firm is BDO USA, P.C., San Diego, California, PCAOB ID # 243 .
−Removed: The information required by this item is incorporated herein by reference to our Proxy Statement with respect to our 2023 Annual Meeting of Stockholders to be filed with the SEC within 120 days of the end of the fiscal year covered by this Annual Report on Form 10-K.
+Added: The information required by this item is incorporated herein by reference to our Proxy Statement with respect to our 2025 Annual Meeting of Stockholders to be filed with the SEC within 120 days of the end of the fiscal year covered by this Annual Report.
Exhibits and Financial Statement Schedules.
Financial Statements and Financial Statement Schedules
−Removed: A list of exhibits is set forth on the Exhibit Index immediately preceding the signature page of this Annual Report on Form 10-K and is incorporated herein by reference.
+Added: A list of exhibits is set forth on the Exhibit Index immediately preceding the signature page of this Annual Report and is incorporated herein by reference.
(2) All financial statements
−Removed: The financial statements of Exagen Inc., together with the report thereon of BDO USA, P.C., an independent registered public accounting firm, are included in this Annual Report on Form 10-K beginning on page F-2.
+Added: The financial statements of Exagen Inc., together with the report thereon of BDO USA, P.C., an independent registered public accounting firm, are included in this Annual Report beginning on page F-2.
(3) Financial statement schedules
9 unchanged sentences
8-K 001-39049 3.1 3/22/2021
−Removed: 3.3 A mendment to A mended and Restated Bylaws, dated January 19, 2023.
+Added: 3.3 Amendment to Amended and Restated Bylaws, dated January 19, 2023.
8-K 001-39049 3.1 1/23/2023
1 unchanged sentence
S-1/A 333-233446 4.1 9/9/2019
−Removed: 4.2 Amended and Restated Investors’ Rights Agreement, dated July 12, 2019, by and among the Company and certain of its stockholders.
−Removed: S-1/A 333-233446 4.2 9/9/2019
−Removed: 4.3 Amended and Restated Stockholders' Agreement, dated July 12, 2019, by and among the Company and certain of its stockholders.
−Removed: S-1/A 333-233446 4.3 9/9/2019
4.2 Form of Common Stock Purchase Warrant issued to investors by the Company in connection with private placement financings.
7 unchanged sentences
4.6 Description of Securities .
−Removed: 10.1# Exagen Corporation 2002 Stock Option Plan, as amended, and form of option agreement thereunder.
−Removed: S-1/A 333-233446 10.1 9/9/2019
+Added: 10-K 001-39049 4.8 3/18/2024
10.1# Exagen Diagnostics, Inc.
29 unchanged sentences
10.10 Amendment No.
−Removed: Four to Asset Purchase Agreement, dated October 8, 2013, by and between Royalty Pharma Collection Trust, Proprius, Inc.
+Added: Four to Asset Purchase Agreement and Consent , dated October 8, 2013, by and between Royalty Pharma Collection Trust, Proprius, Inc.
and the Company.
25 unchanged sentences
10-Q 001-39049 10.2 7/28/2020
−Removed: 10.22 Second Amendment to Standard Industrial/Commercial Multi-Tenant Lease, dated April 29, 2016, by and between RGS Properties and the Company.
+Added: 10.21 Second A ddendum to Standard Industrial/Commercial Multi-Tenant Lease, dated April 29, 2016, by and between RGS Properties and the Company.
10-K 001-39049 10.27 3/25/2020
−Removed: 10.23 Third Amendment to Standard Industrial/Commercial Multi-Tenant Lease, dated June 16, 2017, by and between RGS Properties and the Company.
+Added: 10.22 Third A ddendum to Standard Industrial/Commercial Multi-Tenant Lease, dated June 16, 2017, by and between RGS Properties and the Company.
10-K 001-39049 10.28 3/25/2020
−Removed: 10.24 Fourth Amendment to Standard Industrial/Commercial Multi-Tenant Lease, dated March 16, 2020, by and between RGS Properties and the Company.
+Added: 10.23 Fourth A ddendum to Standard Industrial/Commercial Multi-Tenant Lease, dated March 16, 2020, by and between RGS Properties and the Company.
10-K 001-39049 10.29 3/25/2020
−Removed: 10.25 Fifth Amendment to Standard Industrial/Commercial Multi-Tenant Lease, dated October 19, 2021, by and between RGS Properties and the Company.
+Added: 10.24 Fifth A ddendum to Standard Industrial/Commercial Multi-Tenant Lease, dated October 19, 2021, by and between RGS Properties and the Company.
10-Q 001-39049 10.3 11/10/2021
1 unchanged sentence
S-1/A 333-233446 10.31 9/9/2019
−Removed: 10.27 First Amendment to Standard Industrial/Commercial Single-Tenant Lease, dated August 2, 2017, by and between Geiger Court, LLC and the Company.
+Added: 10.26 First A ddendum to Standard Industrial/Commercial Single-Tenant Lease, dated August 2, 2017, by and between Geiger Court, LLC and the Company.
10-K 001-39049 10.31 3/25/2020
7 unchanged sentences
10-K 001-39049 10.33 3/25/2020
−Removed: 10.32 First Amendment to Standard Industrial/Commercial Multi-Tenant Lease, dated October 19, 2021, by and between RGS Properties and the Company.
+Added: 10.31 First A ddendum to Standard Industrial/Commercial Multi-Tenant Lease, dated October 19, 2021, by and between RGS Properties and the Company.
10-Q 001-39049 10.4 11/10/2021
11 unchanged sentences
10-Q 001-39049 10.5 11/10/2021
−Removed: 10.39# Offer Letter, dated October 12, 2010, by and between Thierry Dervieux, Ph.D.
−Removed: and the Company, as amended on September 9, 2011 and September 6, 2019.
−Removed: S-1/A 333-233446 10.34 9/9/2019
10.38 Form of Indemnification Agreement for Directors and Officers.
S-1/A 333-233446 10.35 9/9/2019
−Removed: 10.41# Offer Letter, dated October 7, 2011, by and between Fortunato Ron Rocca and the Company, as amended on September 4, 2019.
−Removed: S-1/A 333-233446 10.36 9/9/2019
−Removed: 10.42# Offer Letter, dated May 16, 2017, by and between Kamal Adawi and the Company, as amended on September 4, 2019.
−Removed: S-1/A 333-233446 10.37 9/9/2019
−Removed: 10.43# Offer Letter dated February 21, 2020, by and between Debra Zack, MD Ph.D.
−Removed: and the Company.
−Removed: 10-K 001-39049 10.41 3/25/2020
10.39# Non-Employee Director Compensation Program.
S-1/A 333-233446 10.38 9/9/2019
−Removed: 10.45# Executive Change in Control Severance Plan.
−Removed: 10-K 001-39049 10.46 3/16/2021
+Added: 10.40# Exagen Inc.
+Added: Amended and Restated Executive Change in Control and Severance Plan.
+Added: 10-Q 001-39049 10.3 8/5/2024
10.41# Employment Agreement, dated as of October 16, 2022, by and between the Company and John Aballi
8-K 001-39049 10.1 10/16/2022
−Removed: 10.47# Severance Agreement, dated as of October 14, 2022, by and between the Company and Ron Rocca
−Removed: 8-K 001-39049 10.2 10/16/2022
−Removed: 10.48 Sales Agreement, dated as of September 15, 2022, by and between the Company and Cowen and Company, LLC
+Added: 10.42# Employment Agreement, dated as of September 1, 2024, by and between the Company and Jeff Black.
8-K 001-39049 10.1 8/2/2024
−Removed: 10.49 Consulting Agreement, dated as of December 5, 2022, by and between the Company and Debra Zack, M.D., Ph.D.
+Added: 10.43 Sales Agreement, dated as of September 15, 2022, by and between the Company and TD Securities (USA) LLC
8-K 001-39049 1.1 9/15/2022
1 unchanged sentence
8-K 001-39049 10.1 5/4/2023
+Added: 10.45 Fourth Amendment to Loan and Security Agreement, dated April 12, 2024, by and among Innovatus Life Sciences Lending I, LP, other lenders, and the Company.
+Added: 10-Q 001-39049 10.1 5/13/2024
10.46 Assignment and Assumption Agreement, by and among Liberty Vista, L.P., Mindera Corporation and the Company.
2 unchanged sentences
8-K 001-39049 10.1 12/11/2023
+Added: 19 Insider Trading Policies and Procedures.
23.1 Consent of Independent Registered Public Accounting Firm.
24 unchanged sentences
Power of Attorney
−Removed: KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints John Aballi and Kamal Adawi as his or her true and lawful attorneys-in-fact, and each of them, with full power of substitution, for him or her in any and all capacities, to sign any amendments to this Annual Report on Form 10-K and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact, and either of them, or his or their substitute or substitutes may do or cause to be done by virtue hereof.
+Added: KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints John Aballi and Jeffrey G.
+Added: Black as his or her true and lawful attorneys-in-fact, and each of them, with full power of substitution, for him or her in any and all capacities, to sign any amendments to this Annual Report on Form 10-K and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact, and either of them, or his or their substitute or substitutes may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, this Annual Report on Form 10-K has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
2 unchanged sentences
John Aballi (Principal Executive Officer)
−Removed: /s/ Kamal Adawi Chief Financial Officer and Corporate Secretary March 18, 2024
−Removed: Kamal Adawi (Principal Financial and Accounting Officer)
+Added: /s/ Jeffrey G.
+Added: Black Chief Financial Officer and Corporate Secretary March 11, 2025
+Added: Black (Principal Financial and Accounting Officer)
Executive Chairman of the Board March 11, 2025
−Removed: /s/ Brian Birk Director March 18, 2024
/s/ Ana Hooker Director March 11, 2025
−Removed: Johnson Director March 18, 2024
−Removed: /s/ Paul Kim Director March 18, 2024
−Removed: /s/ Ebetuel Pallares, Ph.D.
+Added: /s/ Scott Kahn, Ph.D.
Director March 11, 2025
−Removed: Ebetuel Pallares, Ph.D.
+Added: Scott Kahn, Ph.D.
+Added: /s/ Paul Kim Director March 11, 2025
Robertson, Ph.D.
30 unchanged sentences
We believe that our audits provide a reasonable basis for our opinion.
+Added: Critical Audit Matter
+Added: The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:
+Added: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.
+Added: The communication of the critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
+Added: Revenue Recognition – Estimation of Transaction Price
+Added: As described in Note 2 to the financial statements, the Company’s revenue was $55.6 million for the year ended December 31, 2024, substantially all of which has been derived from sales of its testing products.
+Added: Net revenues recognized consist of amounts billed net of allowances for differences between amounts billed and the estimated consideration the Company expects to receive from payors.
+Added: The process for estimating revenues involves significant judgment and estimation.
+Added: The Company considers historical denial and collection experience and insurance reimbursement policies and other factors, to estimate allowances and implicit price concessions.
+Added: The transaction price is estimated using an expected value method on a portfolio basis.
+Added: The Company's portfolios are grouped per payor (i.e., each individual commercial payor, Medicare, Medicaid, client payors, patient self-pay, etc.) and per test.
+Added: We identified the estimation of the transaction price using an expected value method for certain portfolios as a critical audit matter.
+Added: Significant judgment is used in considering historical denial and collection experience and insurance reimbursement policies to determine the estimated consideration the Company expects to receive.
+Added: Auditing these elements involved especially subjective auditor judgment due to the nature and extent of audit effort required to address these matters.
+Added: The primary procedures we performed to address this critical audit matter included:
+Added: • Testing the Company’s process to estimate transaction price using an expected value method for certain portfolios by evaluating the reasonableness of the Company’s assumptions regarding historical denial and collection experience and insurance reimbursement policies by developing an expectation of those assumptions using historical data inputs.
+Added: • Testing the completeness and accuracy of a sample of tests used by management as data inputs in their analysis to monitor historical denial and collection experience and insurance reimbursement policies by comparing the data to physician test requisition forms, evidence of test delivery and cash collection activity.
/s/ BDO USA, P.C.
41 unchanged sentences
Revenue $ 55,641 $ 52,548
−Removed: Operating expenses:
Costs of revenue 22,529 23,092
+Added: Gross margin 33,112 29,456
+Added: Operating expenses:
Selling, general and administrative expenses 41,373 47,428
Research and development expenses 5,375 4,865
−Removed: Goodwill impairment — 5,506
Total operating expenses 46,748 52,293
3 unchanged sentences
Loss before income taxes ( 15,103 ) ( 23,656 )
−Removed: Income tax (expense) benefit ( 33 ) 282
+Added: Income tax expense ( 12 ) ( 33 )
Net loss $ ( 15,115 ) $ ( 23,689 )
10 unchanged sentences
Balances at December 31, 2022 16,549,984 $ 17 $ 297,970 $ ( 255,527 ) $ 42,460
−Removed: Issuance of stock from vested restricted stock units and payment of employees' taxes 64,064 — ( 239 ) — ( 239 )
+Added: Issuance of stock from vested restricted stock units 273,042 — — — —
Exercise of stock options 93,335 — 27 — 27
19 unchanged sentences
Non-cash interest expense
−Removed: Deferred income taxes — ( 306 )
Loss on disposal of assets 111 189
1 unchanged sentence
Non-cash lease expense 884 939
−Removed: Long-lived assets impairment — 397
−Removed: Goodwill impairment — 5,506
Stock-based compensation 1,763 3,617
13 unchanged sentences
Proceeds from exercise of stock options 22 27
−Removed: Payments of taxes withheld on vested restricted stock units — ( 239 )
Proceeds from common stock issued under Employee Stock Purchase Plan 176 279
9 unchanged sentences
Supplemental disclosure of non-cash items:
−Removed: Equipment purchased under finance lease obligations $ — $ 741
Equipment purchased under notes payable obligations $ 706 $ 250
3 unchanged sentences
Description of Business
−Removed: (the Company) is a commercial-stage diagnostics company which exists to provide clarity in autoimmune disease decision making with the goal of improving patients' clinical outcomes.
+Added: (the Company) is a medical technology company primarily focused on the design, development and commercialization of a next-generation portfolio of testing products under our AVISE ® brand, which allow for the differential diagnosis, prognosis and monitoring of complex rheumatic, autoimmune and autoimmune-related disease including, among others, systemic lupus erythematosus (SLE) and rheumatoid arthritis (RA).
The Company has incurred recurring losses and negative cash flows from operating activities since inception.
−Removed: The Company anticipates that it will continue to incur net losses into the foreseeable future.
+Added: The Company anticipates that it will continue to incur net losses in future periods.
At December 31, 2024, the Company had cash and cash equivalents of $ 22.0 million and had an accumulated deficit of $ 294.3 million.
2 unchanged sentences
To execute its business plans, the Company may need additional funding to support its continuing operations and pursue its growth strategy.
−Removed: Until such time as the Company can achieve significant cash flows from operations, if ever, it expects to finance its operations through the sale of its stock, debt financings or other strategic transactions.
+Added: Until such time as the Company can achieve significant cash flows from operations, if ever, it may need to finance its operations through the sale of its stock, debt financings or other strategic transactions.
Although the Company has been successful in raising capital in the past, there is no assurance that it will be successful in obtaining such additional financing on terms acceptable to the Company, if at all.
15 unchanged sentences
Significant payors and customers are those which represent more than 10% of the Company's total revenue or accounts receivable balance at each respective balance sheet date.
−Removed: For each significant payor and customer, revenue as a percentage of total revenue and accounts receivable as a percentage of total accounts receivable are as follows:
+Added: For each significant payor and customer,
+Added: revenue as a percentage of total revenue and accounts receivable as a percentage of total accounts receivable are as follows:
Year Ended December 31,
1 unchanged sentence
Medicare Advantage 20 % 17 %
+Added: United Healthcare 10 % *
+Added: * Less than 10%.
Accounts Receivable
−Removed: Medicare 42 % 21 %
Medicare Advantage 25 % 16 %
+Added: Medicare 13 % 42 %
For the years ended December 31, 2024 and 2023, approximately 91 % and 88 %, respectively, of the Company's revenue was related to the AVISE ® CTD test.
The Company is dependent on key suppliers for certain laboratory materials.
−Removed: For each of the years ended December 31, 2023 and 2022, approximately 96 % of the Company's diagnostic testing supplies were purchased from two suppliers.
+Added: For the year ended December 31, 2024, approximately 71 % and 26 % of the Company's diagnostic testing supplies were purchased from two suppliers, respectively.
+Added: For the year ended December 31, 2023, approximately 66 % and 30 % of the Company's diagnostic testing supplies were purchased from two suppliers, respectively.
An interruption in the supply of these materials would impact the Company's ability to perform testing services.
30 unchanged sentences
Operating lease assets are amortized over the term of the leases.
−Removed: In considering whether long-lived assets are impaired, the Company combines its intangible assets and other long-lived assets into groupings, a determination which is made principally on the basis of whether the assets are specific to a particular test offered or technology being developed.
+Added: In considering whether long-lived assets are impaired, the Company combines its long-lived assets into groupings, a determination which is made principally on the basis of whether the assets are specific to a particular test offered or technology being developed.
If the Company identifies a change in the circumstances related to its long-lived assets that indicates the carrying value of any such asset may not be recoverable, the Company will perform an impairment analysis.
2 unchanged sentences
Any required impairment loss would be measured as the amount by which the asset’s carrying value exceeds its fair value, and would be recorded as a reduction in the carrying value of the related asset and a charge to operating expense.
−Removed: The Company operates in a single operating segment and reporting unit for the measurement of goodwill.
−Removed: Goodwill was reviewed for impairment annually (during the fourth quarter) or more frequently if indicators of impairment existed.
−Removed: The Company would first assess qualitative factors to determine whether it was more likely than not that the fair value of the reporting unit was less than its carrying amount as a basis for determining whether it was necessary to perform a quantitative assessment.
−Removed: If, after assessing qualitative factors, the Company determined it was not more likely than not that the fair value of a reporting unit was less than its carrying amount, then performing a quantitative assessment was unnecessary.
−Removed: If deemed necessary, a quantitative assessment compared the fair value of the reporting unit with its carrying amount, including goodwill.
−Removed: If the fair value of the reporting unit exceeded its carrying amount, goodwill was not considered impaired;
−Removed: otherwise, an impairment loss was recorded.
The Company categorizes leases at their commencement as either operating or finance leases.
10 unchanged sentences
Payments made prior to the completion of clinical study services are capitalized as a prepaid expense.
−Removed: The prepaid amounts are expensed as the related goods are delivered or the services are performed, or when it is no longer expected that the goods will be delivered or the
−Removed: services rendered.
+Added: The prepaid amounts are expensed as the related goods are delivered or the services are performed, or when it is no longer expected that the goods will be delivered or the services rendered.
Expenses associated with clinical study activities are recorded in research and development expenses in the accompanying statement of operations.
3 unchanged sentences
The healthcare professionals who order the Company's testing products and to whom test results are reported are generally not responsible for payment for these products.
−Removed: The parties that pay for these services (each, a payor) consist of commercial payors (healthcare insurers), government payors (primarily Medicare and Medicaid), client payors (i.e., hospitals, other laboratories, etc.) and patient self-pay.
−Removed: The Company recognizes revenue in accordance with Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (ASC 606) and follows a five-step process to determine the amount and timing of revenue recognized:
+Added: The parties that pay for these services (each, a payor) consist of commercial payors (healthcare insurers), government payors (primarily Medicare and Medicaid), client payors (hospitals, other laboratories, etc.) and patient self-pay.
+Added: The Company recognizes revenue in accordance with Accounting Standards Codification Topic 606, Revenue from Contracts with Customers and follows a five-step process to determine the amount and timing of revenue recognized:
(1) identify the contract with the customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to performance obligations in the contract, and (5) recognize revenue when (or as) the performance obligation is satisfied.
6 unchanged sentences
Further adjustments to the allowances, based on actual receipts, are recorded upon settlement.
−Removed: Included in revenues for the years ended December 31, 2023 and 2022 was a net revenue increase of $ 3.4 million and a net revenue decrease of $ 2.4 million, respectively, associated with changes in estimated variable consideration related to performance obligations satisfied in previous periods.
+Added: Included in revenues for the years ended December 31, 2024 and 2023 were net revenue increases of $ 6.6 million and $ 3.4 million, respectively, associated with changes in estimated variable consideration related to performance obligations satisfied in previous periods.
The transaction price is estimated using an expected value method on a portfolio basis.
8 unchanged sentences
Collection of the Company's net revenues from payors is normally a function of providing complete and correct billing information, along with any requested medical or other claims-related information to the healthcare insurers.
−Removed: This generally occurs within 30 to 90 days of billing, however, the amount and timing of any reimbursements or collections for our billed tests may vary by payor and other circumstances.
+Added: This generally occurs within 30 to 90 days of billing, however, the amount and timing of any reimbursements or collections for the Company's billed tests may vary by payor and other circumstances.
Contracts do not contain significant financing components based on the typical period of time between performance of services and collection of consideration.
3 unchanged sentences
We generally do not perform evaluations of the financial condition of our customers and generally do not require collateral.
−Removed: The allowance for credit losses was zero as of December 31, 2023.
−Removed: There was no allowance for credit losses recognized as of December 31, 2022.
+Added: The allowance for credit losses was zero as of each of December 31, 2024 and 2023.
Adjustments for implicit price concessions attributable to variable consideration, as discussed above, are incorporated into the measurement of the accounts receivable balances and are not part of the allowance for credit losses.
−Removed: Accounts receivable was $ 6.6 million, $ 6.1 million, $ 9.7 million for the years ended December 31, 2023, 2022 and 2021, respectively.
+Added: Accounts receivable was $ 7.8 million, $ 6.6 million, and $ 6.1 million for the years ended December 31, 2024, 2023 and 2022, respectively.
Research and Development
Costs associated with research and development activities are expensed as incurred and include, but are not limited to, personnel-related expenses, including stock-based compensation expense;
−Removed: laboratory supplies;
consulting costs;
9 unchanged sentences
The Company recognizes compensation expense for all stock-based awards to employees and directors based on the grant-date estimated fair values over the requisite service period of the awards (usually the vesting period) on a straight-line basis.
−Removed: The fair value of stock options and purchases under the Company's 2019 Employee Stock Purchase Plan (ESPP) rights is determined using the Black-Scholes-Merton (BSM) option pricing model, which requires management to make certain assumptions regarding a number of complex and subjective variables.
Equity award forfeitures are recorded as they occur.
−Removed: The BSM option pricing model incorporates various inputs, including the fair value of the Company's common stock, expected volatility, expected term and risk-free interest rates.
−Removed: Volatility is based on the Company's historical calculated volatility since being publicly traded.
−Removed: The weighted-average expected term of options was calculated using the simplified method, as we have concluded that our stock option exercise history does not provide a reasonable basis upon which to estimate the expected term.
−Removed: The risk-free interest rate for periods within the contractual term of the option is based on the U.S.
−Removed: Treasury yield in effect at the time of grant.
−Removed: The dividend yield is zero , as the Company has never declared or paid dividends and has no plans to do so in the foreseeable future.
The fair value of each restricted stock unit (RSU) is determined on the grant date using the closing price of the Company's common stock on that date.
The Company's RSUs generally vest in equal annual installments over four years from the date of grant or, for grants to new hires, date of hire.
−Removed: Vesting of RSUs is subject to the holder's continued service with the Company.
−Removed: The Company issues new shares to satisfy RSUs upon vesting.
+Added: Vesting of the RSU is subject to the holder's continued service with the Company.
+Added: The Company issues new shares of common stock to satisfy the RSUs upon vesting.
Comprehensive Loss
11 unchanged sentences
Net Loss Per Share
−Removed: Basic net loss per share attributable to common stockholders is calculated by dividing the net loss attributable to common stockholders by the weighted-average number of common shares outstanding during the period.
−Removed: Diluted net loss per share attributable to common stockholders is computed by dividing the net loss attributable to common stockholders by the weighted-average number of common stock equivalents outstanding for the period determined using the treasury-stock and if-converted methods.
+Added: Basic net loss per share attributable to common stockholders is calculated by dividing the net loss attributable to common stockholders by the weighted-average number of common stock outstanding during the period.
+Added: Diluted net loss per share attributable to common stockholders is computed by dividing the net loss attributable to common
+Added: stockholders by the weighted-average number of common stock equivalents outstanding for the period determined using the treasury-stock and if-converted methods.
The weighted-average number of shares used to compute basic and diluted shares includes shares issuable upon the exercise of pre-funded warrants at a nominal price.
−Removed: Potentially dilutive common stock equivalents are comprised of warrants for the purchase of common stock, stock options, RSUs outstanding under the Company's 2019 Incentive Award Plan (the 2019 Plan) and shares of the Company's common stock pursuant to the ESPP.
+Added: Potentially dilutive common stock equivalents are comprised of warrants for the purchase of common stock, stock options, RSUs outstanding under the Company's 2019 Incentive Award Plan (the 2019 Plan) and shares of the Company's common stock pursuant to the Exagen Inc.
+Added: 2019 Employee Stock Purchase Plan (ESPP).
For each of the years ended December 31, 2024 and 2023, there is no difference in the number of shares used to calculate basic and diluted shares outstanding as the inclusion of the potentially dilutive securities would be antidilutive.
6 unchanged sentences
Total 2,582,460 2,828,086
−Removed: Segment Reporting
−Removed: Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker in making decisions regarding resource allocation and assessing performance.
−Removed: The Company views its operations as, and manages its business in, one operating segment.
Recent Accounting Pronouncements
From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (FASB), or other standard setting bodies and adopted by the Company as of the specified effective date.
−Removed: Under the Jumpstart Our Business Startups Act of 2012 (JOBS Act), the Company meets the definition of an emerging growth company.
−Removed: The Company has elected to use the extended transition period for complying with new or revised accounting standards pursuant to Section 107(b) of the JOBS Act.
Unless otherwise discussed, Accounting Standards Updates (ASU) not included in the Company’s disclosures were assessed and determined to be either not applicable or are not expected to have a material impact on the Company’s financial statements or disclosures.
−Removed: In November 2023, the FASB issued ASU No.
−Removed: 2023-07, Segment Reporting (Topic 280):
−Removed: Improvements to Reportable Segment Disclosures (ASU 2023-07), which requires public entities to disclose significant segment expenses that are regularly provided to the Chief Operating Decision Maker (CODM) and details of how the CODM uses financial reporting to assess the performance of a segment.
−Removed: ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted.
−Removed: This ASU will likely result in additional required disclosure when adopted.
−Removed: The Company is currently evaluating the provisions of this ASU and the impact on its financial statements and related disclosures.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):
−Removed: Improvements to Income Tax Disclosures (ASU 2023-09), which requires additional income tax disclosures in the rate reconciliation table for federal, state and foreign income taxes, in addition to more details about the reconciling items in some categories
−Removed: when items meet a certain quantitative threshold.
+Added: Improvements to Income Tax Disclosures (ASU 2023-09), which requires additional income tax disclosures in the rate reconciliation table for federal, state and foreign income taxes, in addition to more details about the reconciling items in some categories when items meet a certain quantitative threshold.
ASU 2023-09 is effective for annual periods beginning after December 15, 2024 with early adoption permitted.
−Removed: The Company is currently evaluating the impact of this standard, but does not expect that it will have a material impact on its financial statements.
+Added: This update will result in enhanced income tax disclosures, and the Company does not expect any impact to income tax expense.
+Added: In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40) (“ASU 2024-03”).
+Added: This update requires entities to include more detailed information about the types of expenses, including purchases of inventory, employee compensation, depreciation, amortization, and depletion, in commonly presented expense captions such as cost of sales, research and development, and selling, general and administrative expenses.
+Added: ASU 2024-03 is effective for annual periods beginning after December 15, 2026, with early adoption permitted.
+Added: The company is currently evaluating the impact of this standard on its financial statement presentation and disclosures.
Recently Adopted Accounting Standards
−Removed: In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326):
−Removed: Measurement of Credit Losses on Financial Instruments , which requires the measurement of expected credit losses (based on historical experience, current conditions and reasonable forecasts) for financial instruments (such as accounts receivable) held at the reporting date which are carried at amortized cost.
−Removed: The main objective of this ASU is to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date.
−Removed: In November 2018, the FASB issued ASU 2018-19, Codification Improvements to Topic 326, Financing Instruments-Credit Losses , which included an amendment of the effective date for nonpublic entities.
−Removed: The Company adopted this pronouncement on January 1, 2023.
−Removed: The adoption did not have material impact on its financial statements.
−Removed: In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40) .
−Removed: ASU 2020-06 eliminates the beneficial conversion and cash conversion accounting models for convertible instruments.
−Removed: It also amends the accounting for certain contracts in an entity’s own equity that are currently accounted for as derivatives because of specific settlement provisions.
−Removed: In addition, ASU 2020-06 modifies how particular convertible instruments and certain contracts that may be settled in cash or shares impact the diluted EPS computation.
−Removed: The amendments in ASU 2020-06 are effective for smaller reporting companies as defined by the SEC for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years.
−Removed: The Company early adopted ASU 2020-06 as of January 1, 2023.
−Removed: The adoption did not have an impact on its financial statements.
+Added: In November 2023, the FASB issued ASU No.
+Added: 2023-07, Segment Reporting (Topic 280):
+Added: Improvements to Reportable Segment Disclosures (ASU 2023-07), which requires public entities to disclose significant segment expenses that are regularly provided to the Chief Operating Decision Maker (CODM) and details of how the CODM uses financial reporting to assess the performance of a segment.
+Added: The Company adopted this pronouncement in 2024 and retrospectively to all prior periods using the significant segment expense categories identified.
+Added: The impact of the adoption of the amendments in this update was not material to the Company’s financial position and results of operations, as the requirements impact only segment reporting disclosures in the footnotes to the Company’s financial statements.
Other Financial Information
2 unchanged sentences
Diagnostic testing supplies $ 5,725 $ 2,871
−Removed: Prepaid product royalties 35 40
−Removed: Prepaid maintenance and insurance contracts 1,860 2,072
Other prepaid expenses and other current assets 859 1,926
Prepaid expenses and other current assets $ 6,584 $ 4,797
−Removed: Property and Equipment
+Added: Property and Equipment, net
Property and equipment consist of the following (in thousands):
8 unchanged sentences
Depreciation and amortization expense for the years ended December 31, 2024 and 2023, was approximately $ 1.7 million and $ 2.2 million, respectively.
−Removed: At December 31, 2023 and 2022, the gross book value of assets under finance leases was $ 2.5 million and $ 2.8 million, respectively, and is classified in "Laboratory equipment" in the table above.
+Added: At December 31, 2024 and 2023, the gross book value of assets under finance leases was $ 2.0 million and $ 2.5 million, respectively.
Loss on Lease Assignment
3 unchanged sentences
The loss was classified within selling, general and administrative expenses in the accompanying statements of operations.
−Removed: Impairment of Long-Lived Assets and Goodwill
−Removed: During the year ended December 31, 2022, the Company recorded an impairment charge of $ 0.4 million related to previously capitalized equipment used in research and development activities that were halted in the fourth quarter of 2022.
−Removed: The impairment charge was classified within research and development expenses in the accompanying statements of operations.
−Removed: During the year ended December 31, 2022, the Company also determined that a sustained decrease in its market capitalization constituted an indicator of impairment of goodwill and as a result, instead of performing a qualitative test, the Company chose to proceed directly to performing a quantitative test during the fourth quarter.
−Removed: The Company determined the fair value of the reporting unit using the discounted cash flow (DCF) method, which is considered a Level 3 measurement.
−Removed: In applying the DCF method, cash flows are estimated for a five-year financial forecast developed by management.
−Removed: A terminal value, which represents the value of additional cash flows into perpetuity, is also calculated.
−Removed: Cash flows are then discounted to present value at a discount rate commensurate with their risk.
−Removed: Based on this analysis, the carrying value of the reporting unit was in excess of the fair value and the goodwill was fully impaired.
−Removed: During the year ended December 31, 2022, the Company recorded a goodwill impairment charge of $ 5.5 million.
−Removed: The following table presents details of the Company's goodwill for the year ended December 31, 2022 (in thousands):
−Removed: Balance as of December 31, 2021 $ 5,506
−Removed: Goodwill impairment ( 5,506 )
−Removed: Balance as of December 31, 2022 $ —
Accrued and Other Current Liabilities
1 unchanged sentence
Accrued payroll and related expenses $ 5,046 $ 4,738
−Removed: Accrued interest 139 142
−Removed: Accrued purchases of goods and services 720 803
−Removed: Accrued royalties 463 514
−Removed: Accrued clinical study activity 118 162
−Removed: Finance lease obligations, current portion 490 700
−Removed: Refund liability 302 445
Other accrued liabilities 2,804 2,793
5 unchanged sentences
The Amended Loan Agreement was treated as a modification.
−Removed: In connection with the Amended Loan Agreement, the Company repaid $ 10.0 million of the principal balance outstanding, for which the prepayment premium was waived.
+Added: In connection with the Amended Loan Agreement, the Company repaid $ 10.0 million of
+Added: the principal balance outstanding, for which the prepayment premium was waived.
Pursuant to the Amended Loan Agreement, the interest rate on all borrowings under the Amended Loan Agreement is the sum (the Basic Rate) of (a) the greater of 8.0 % or The Wall Street Journal prime rate (the Prime Rate), plus (b) 2.0 %, which is paid-in-kind in the form of additional term loans (PIK Loans).
8 unchanged sentences
At December 31, 2024, $ 18.5 million in principal and PIK loans are outstanding, all of which is included in borrowings-non-current portion on the accompanying balance sheet.
−Removed: The Amended Loan Agreement currently requires a prepayment premium of 1 % of the aggregate outstanding principal for any prepayments made prior to November 1, 2024.
The Amended Loan Agreement is collateralized by a first priority security interest in substantially all of the Company's assets, including intellectual property.
1 unchanged sentence
The affirmative covenants require that the Company achieve a specified level of revenue, as measured quarterly on a rolling twelve-month basis, however the Company is not required to comply with the revenue covenant for any quarter during which it maintains a minimum aggregate cash balance equal to fifty percent of the aggregate principal amount of the Amended Loan Agreement (excluding any capitalized interest paid-in-kind) at all times during such quarter.
−Removed: The consequences of failing to achieve the performance covenants, when applicable, will be cured if, (i) within thirty days of failing to achieve the performance covenant, the Company submits a new Board approved financial plan to Innovatus under which the Company is expected to break even on a cash flow basis prior to the maturity date, and (ii) within thirty days of the submission of such financial plan, the Company issues additional equity securities or subordinated debt with net proceeds sufficient to fund any cash flow deficiency generated from operations, as defined in the Amended Loan Agreement.
+Added: The consequences of failing to achieve the performance covenants, when applicable, will be cured if, (i) within thirty days of failing to achieve the performance covenant, the Company submits a new financial plan approved by the Company's board of directors (the Board) to Innovatus under which the Company is expected to break even on a cash flow basis prior to the maturity date, and (ii) within thirty days of the submission of such financial plan, the Company issues additional equity securities or subordinated debt with net proceeds sufficient to fund any cash flow deficiency generated from operations, as defined in the Amended Loan Agreement.
The Amended Loan Agreement requires that the Company maintain certain levels of minimum liquidity and maintains an unrestricted cash balance of $ 2.0 million.
4 unchanged sentences
Although repayment of the 2017 Term Loan can be accelerated under certain circumstances, the Company believes acceleration of this loan is not probable as of the date of these financial statements.
−Removed: Accordingly, the Company has reflected the amounts of the Third Loan Amendment due beyond twelve months of the balance sheet date as non-current.
+Added: Accordingly, the Company has reflected the amounts of the Amended Loan Agreement due beyond twelve months of the balance sheet date as non-current.
Equipment Notes Payable
−Removed: In May 2022, the Company purchased laboratory equipment using notes payable.
−Removed: At December 31, 2023, the total notes payable balance related to this financed equipment was $ 0.8 million, with $ 0.3 million classified within borrowings-current portion and $ 0.5 million within borrowings-non-current portion, net of discounts and debt issuance costs in the accompanying balance sheets.
+Added: The Company has purchased laboratory equipment in the normal course of business using notes payable.
+Added: At December 31, 2024, the total notes payable balance related to the financed equipment was $ 1.1 million, with
+Added: $ 0.4 million classified within borrowings-current portion and $ 0.7 million within borrowings-non-current portion, net of discounts and debt issuance costs in the accompanying balance sheets.
At December 31, 2023, the total notes payable balance related to this financed equipment was $ 0.8 million, with $ 0.3 million classified within borrowings-current portion and $ 0.5 million within borrowings-non-current portion, net of discounts and debt issuance costs in the accompanying balance sheets.
−Removed: The financed equipment is subject to a 5.28 % effective interest rate and will mature on October 1, 2026.
+Added: The financed equipment is subject to effective interest rates between 5.28 % and 10.50 %, and will mature between October 1, 2026 and April 1, 2028.
Future Minimum Payments on Outstanding Borrowings
11 unchanged sentences
The Company's payments under the lease are subject to escalation clauses.
−Removed: The Company leases additional office space in Carlsbad, California, under a sub-lease which commenced in October 2021 and expires in April 2027.
−Removed: Monthly base rent under the sub-lease agreement is $ 70,042 .
+Added: The Company leases additional office space in Carlsbad, California, under a sublease which commenced in October 2021 and expires in April 2027.
+Added: Monthly base rent under the sublease agreement is $ 72,143 .
The monthly base rent increases by approximately 3 % annually, each October 1, through the remainder of the lease term.
42 unchanged sentences
2026 1,315 147
−Removed: 2026 1,315 147
Total minimum lease payments 3,037 423
4 unchanged sentences
Commitments and Contingencies
−Removed: Acquisition-related liabilities
−Removed: In connection with the acquisition of the medical diagnostics division of Royalty Pharma Collection Trust (Royalty Pharma) (formerly known as Cypress Bioscience, Inc.) in 2010, the Company had royalty payment obligations of 2.5 % on net sales of products which incorporate certain acquired technologies through December 31, 2023.
−Removed: These obligations no longer exist for products sold after December 31, 2023.
Licensing Agreements
3 unchanged sentences
Supply Agreements
−Removed: In December 2021, the Company amended a supply agreement with one supplier for reagents which includes minimum annual purchase commitments of $ 8.0 million and $ 9.2 million for the years ended December 31, 2024 and 2025, respectively.
+Added: In August 2024, the Company amended a supply agreement with one supplier for reagents, which includes pricing terms and minimum purchase commitments, through December 31, 2025, for new consumable products related to the Company's launch of the Anti-RA33 IgA, Anti-RA33 IgG and Anti-RA33 IgM biomarkers.
+Added: The aggregate minimum annual purchase commitment related to such agreement for the year ending December 31, 2025 is $ 10.4 million.
Collaboration Obligations
−Removed: In May 2021, the Company entered into a master research collaboration agreement with Allegheny Health Network Research Institute (AHN), pursuant to which the Company is required to pay AHN a collaboration fee of $ 0.4 million per year.
+Added: In May 2021, the Company entered into an exclusive license agreement with Allegheny Health Network Research Institute (AHN), pursuant to which the Company is required to pay AHN a collaboration fee of $ 0.4 million per year.
Collaboration expenses under the master research collaboration agreement were $ 0.3 million for each of the years ended December 31, 2024 and 2023.
8 unchanged sentences
In October 2023, the Company resolved an investigation with the U.S.
−Removed: Attorney’s Office for the District of Massachusetts that was initiated by a qui tam lawsuit.
−Removed: Pursuant to a Settlement Agreement, the Company made a single lump-sum remittance to the government in the amount of $ 0.7 million in connection with specimen processing arrangements that Exagen historically had with physicians.
−Removed: Attorney’s Office dismissed this “covered conduct” in the qui tam lawsuit with prejudice, while non-covered conduct was dismissed without prejudice.
−Removed: In November 2023 the complaint was unsealed and served on Exagen.
+Added: Attorney’s Office for the District of Massachusetts that was initiated by a qui tam lawsuit (the October 2023 Lawsuit).
+Added: Pursuant to a settlement agreement entered into by and between the Company and the U.S.
+Added: Department of Justice (the Settlement Agreement), the Company made a single lump-sum remittance to the government in the amount of $ 0.7 million, including interest, in connection with specimen processing arrangements that Exagen historically had with
+Added: Attorney’s Office dismissed this “covered conduct” in the October 2023 Lawsuit with prejudice, while non-covered conduct was dismissed without prejudice.
+Added: The Department of Justice excused itself from the case in connection with the settlement.
+Added: In November 2023, the complaint was unsealed by the court and served on Exagen by the relator.
Exagen filed a motion to dismiss the complaint.
−Removed: In December 2023, the Company's insurance carrier provided reimbursement for certain defense costs the Company incurred in the October 2023 qui tam lawsuit.
+Added: In December 2023, the Company's insurance carrier provided reimbursement for certain defense costs the Company incurred in the October 2023 Lawsuit.
In February 2024, the relator filed a motion for leave to amend the complaint.
Exagen opposed this motion, and all motions are still pending.
+Added: The Company cannot predict when these matters will be resolved, the outcome of these matters, or their potential impact, which may materially and adversely affect the Company's business, prospects, and financial condition.
The Company intends to vigorously defend against the claims being asserted in the complaint.
1 unchanged sentence
Fair Value Measurements
−Removed: The carrying values of the Company's cash, cash equivalents and restricted cash, accounts receivable, prepaid expenses and other current assets, accounts payable and accrued and other current liabilities approximate their fair values due to their short-term nature and are considered to be Level 1 measurements.
−Removed: The estimated fair value of the Company's long-term borrowings is determined by Level 2 inputs and based primarily on quoted market prices for the same or similar issues.
+Added: The carrying values of the Company's cash, cash equivalents and restricted cash, accounts receivable, prepaid expenses and other current assets, accounts payable and accrued and other current liabilities are determined to be a Level 1 measurement.
+Added: The carrying values of these items approximate their fair values due to their short-term nature.
+Added: The estimated fair value of the Company's long-term borrowings is determined by Level 2 inputs and based primarily on quoted market prices for similar issues.
As of December 31, 2024, the Amended Loan Agreement had a carrying value of $ 19.1 million and a fair value of $ 19.2 million.
−Removed: As of December 31, 2022, the 2017 Term Loan had a carrying value of $ 28.3 million and a fair value of $ 26.9 million.
+Added: As of December 31, 2023, the Amended Loan Agreement had a carrying value of $ 18.7 million and a fair value of $ 19.7 million.
The estimated fair value of the Amended Loan Agreement was determined based on a discounted cash flow approach using available market information on discount and borrowing rates with similar terms, maturities, and credit ratings.
−Removed: The carrying value of the Company's other long-term borrowing as of December 31, 2023 was $ 0.8 million, which approximated its fair value.
+Added: The aggregate carrying value of the Company's other long-term borrowings as of December 31, 2024 was $ 1.1 million and approximated its fair value.
Fair value is defined as the exchange price that would be received for an asset or an exit price paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.
2 unchanged sentences
Level 1 - Unadjusted quoted prices in active markets for identical assets or liabilities;
−Removed: Level 2 - Inputs other than quoted prices included within Level I that are observable, unadjusted quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities;
+Added: Level 2 - Inputs other than quoted prices included within Level 1 that are observable, unadjusted quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities;
Level 3 - Unobservable inputs that are supported by little or no market activity for the related assets or liabilities.
7 unchanged sentences
Money market funds, included in cash and cash equivalents $ 14,386 $ 14,386 $ — $ —
−Removed: Certificate of deposit, included in cash and cash equivalents 30,100 30,100 — —
−Removed: Total $ 59,538 $ 59,538 $ — $ —
The fair value of the Company's money market funds is based on quoted market prices.
4 unchanged sentences
At The Market Sales Agreement
−Removed: On September 15, 2022, the Company entered into a sales agreement, as amended on November 17, 2023 (the Sales Agreement) with Cowen and Company, LLC as sales agent, pursuant to which the Company may offer and sell, from time to time, shares of Company common stock having an aggregate offering price of up to $ 50.0 million.
+Added: On September 15, 2022, the Company entered into a sales agreement, as amended on November 17, 2023 (the Sales Agreement) with TD Securities (USA) LLC as sales agent, pursuant to which the Company may offer and sell, from time to time, shares of Company common stock having an aggregate offering price of up to $ 50.0 million.
The Company is not obligated to sell any shares of Company common stock in the offering.
6 unchanged sentences
Common stock warrants 131 1.84 April 1, 2016 April 1, 2026
−Removed: Common stock warrants 83,778 14.32 September 7, 2017 September 7, 2024
Common stock warrants 20,944 14.32 December 7, 2018 December 7, 2025
3 unchanged sentences
2019 Incentive Award Plan
−Removed: In September 2019, the Company's board of directors adopted, and the Company's stockholders approved, the 2019 Plan.
+Added: In September 2019, the Board adopted, and the Company's stockholders approved, the 2019 Plan.
Under the 2019 Plan, which expires in September 2029, the Company may grant stock options, stock appreciation rights, restricted stock, RSUs and other awards to individuals who are then employees, officers, non-employee directors or consultants of the Company or its subsidiaries.
The options generally expire ten years after the date of grant and are exercisable to the extent vested.
−Removed: Vesting is established by the Company's board of directors and is generally four years from the date of grant or, for grants to new hires, date of hire.
+Added: Vesting is established by the Board and is generally four years from the date of grant or, for grants to new hires, date of hire.
The 2019 Plan contains an "evergreen provision" that allows annual increases in the number of shares available for issuance on the first day of each calendar year through January 1, 2029 in an amount equal to the lesser of:
−Removed: (i) 4 % of the outstanding capital stock on each December 31st, or (ii) such lesser amount determined by the Company's board of directors.
+Added: (i) 4 % of the outstanding capital stock on each December 31st, or (ii) such lesser amount determined by the Board.
As of December 31, 2024, 2,189,228 shares of common stock remained available for future awards.
3 unchanged sentences
Shares Weighted-
−Removed: Grant Date Fair Value Aggregate
+Added: Grant Date Fair Value Per Share Aggregate
+Added: (in thousands)
Outstanding, December 31, 2023
7 unchanged sentences
The fair value of RSUs vested in the years ended December 31, 2024 and 2023 was $ 0.9 million and $ 0.6 million, respectively.
−Removed: The weighted average grant date fair value for RSUs granted during the years ended December 31, 2023 and 2022 was $ 2.39 and $ 5.89 , respectively.
+Added: The weighted average grant date fair value per share for RSUs granted during the years ended December 31, 2024 and 2023 was $ 2.11 and $ 2.39 , respectively.
As of December 31, 2024, total unrecognized compensation cost related to RSUs was $ 3.4 million, which is expected to be recognized over a remaining weighted-average vesting period of 2.8 years.
Stock Options
−Removed: Stock option activity under the Company's 2019 Plan is set forth below:
+Added: Stock option activity under the 2019 Plan is set forth below:
Options Weighted-
−Removed: Exercise Price Weighted-
+Added: Exercise Price Per Share Weighted-
Term (Years) Aggregate
+Added: (in thousands)
Outstanding, December 31, 2023
14 unchanged sentences
The fair value of the Company's common stock was $ 4.10 and $ 1.99 per share at December 31, 2024 and 2023, respectively.
−Removed: As of December 31, 2023, total unrecognized compensation cost related to option awards was $ 0.3 million, which is expected to be recognized over a remaining weighted-average vesting period of 0.8 years.
+Added: As of December 31, 2024, total unrecognized compensation cost related to option awards was negligible.
2019 Employee Stock Purchase Plan
−Removed: In September 2019, the Company's board of directors adopted, and the Company's stockholders approved, the ESPP.
−Removed: The ESPP became effective on the day the ESPP was adopted by the Company's board of directors.
+Added: In September 2019, the Board adopted, and the Company's stockholders approved, the ESPP.
+Added: The ESPP became effective on the day the ESPP was adopted by the Board.
The ESPP permits participants to purchase common stock through payroll deductions of up to 20 % of their eligible compensation.
−Removed: The number of shares of common stock available for issuance under the ESPP will be annually increased on the first day of each calendar year during the term of the ESPP through January 1, 2029 in an amount equal to the lesser of (i) 1 % of the outstanding capital stock on each December 31st, or (ii) such lesser amount determined by the Company's board of directors.
+Added: The number of shares of common stock available for issuance under the ESPP will be annually increased on the first day of each calendar year during the term of the ESPP through January 1, 2029 in an amount equal to the lesser of (i) 1% of the outstanding capital stock on each December 31st, or (ii) such lesser amount determined by the Board.
During the year ended December 31, 2024, the Company issued 96,048 shares of common stock pursuant to scheduled purchases under the ESPP.
4 unchanged sentences
Stock-Based Compensation Expense
−Removed: Total non-cash stock-based compensation expense recorded related to options, RSUs and stock purchase rights granted under the ESPP in the statement of operations is as follows (in thousands):
+Added: Total non-cash stock-based compensation expense recorded related to options granted, RSUs granted and stock purchase rights granted under the ESPP in the statement of operations is as follows (in thousands):
Year Ended December 31,
7 unchanged sentences
Common stock reserved for issuance upon vesting of outstanding restricted stock units 1,710,373
−Removed: Common shares available for grant under the 2019 Plan 1,831,107
−Removed: Common shares available for future issuance under ESPP 449,332
+Added: Common stock available for grant under the 2019 Plan 2,189,228
+Added: Common stock available for future issuance under ESPP 523,744
Total 6,042,922
4 unchanged sentences
Total current ( 12 ) ( 33 )
−Removed: Federal — 137
Total deferred — —
−Removed: Income tax (expense) benefit $ ( 33 ) $ 282
+Added: Income tax expense $ ( 12 ) $ ( 33 )
The effective tax rate of our provision for income taxes differs from the federal statutory rate as follows:
10 unchanged sentences
A valuation allowance has been established as realization of the Company’s deferred tax assets has not met the more likely-than-not threshold requirement.
−Removed: If the Company’s judgment changes and it is determined that the Company will be able to realize these deferred tax assets, the tax benefits relating to any reversal of the valuation allowance on deferred tax assets will be accounted for as a reduction to income tax expense.
+Added: If the Company’s judgment changes and it is determined
+Added: that the Company will be able to realize these deferred tax assets, the tax benefits relating to any reversal of the valuation allowance on deferred tax assets will be accounted for as a reduction to income tax expense (in thousands).
Deferred tax assets:
15 unchanged sentences
Net deferred tax assets $ — $ —
−Removed: Changes in the valuation allowance for deferred tax assets during the years ended December 31, 2023 and 2022, which related primarily to increases in net operating loss (NOL) carryforwards, research and development tax credits, capitalization of research and experimentation costs, and impairment of goodwill were as follows (in thousands):
+Added: Changes in the valuation allowance for deferred tax assets during the years ended December 31, 2024 and 2023, which related primarily to increases in net operating loss (NOL) carryforwards, research and development tax credits, and capitalization of research and experimentation costs were as follows (in thousands):
Valuation allowance at the beginning of the year $ 42,942 $ 38,567
12 unchanged sentences
As the deferred tax assets associated with the tax attribute carry forwards were fully offset by a valuation allowance, a corresponding reduction in the Company's valuation allowance was also recorded, resulting in no income tax impact.
−Removed: The Company is subject to taxation in the U.S.
−Removed: and in various state jurisdictions.
+Added: The Company is subject to taxation in the United States and in various state jurisdictions.
The Company’s tax years for 2004 and forward are subject to examination by the U.S.
−Removed: and state tax authorities due to the carryforward of unutilized net operating losses and research and development credits.
+Added: and state tax authorities due to the carryforward of unutilized NOLs and research and development credits.
The Company recognizes interest and/or penalties related to income tax matters in its provision for income taxes.
7 unchanged sentences
For each of the years ended December 31, 2024 and 2023, the Company made contributions to the 401(k) Plan at 4 % of qualified employee compensation.
−Removed: For the years ended December 31, 2023 and 2022, these contributions totaled approximately $ 0.8 million and $ 0.9 million, respectively.
+Added: For each of the years ended December 31, 2024 and 2023, these contributions totaled approximately $ 0.8 million.
+Added: Segment Reporting
+Added: Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the CODM in making decisions regarding resource allocation and assessing performance.
+Added: The Company operates in a single operating segment focused on the design, development and commercialization of testing products which allow for the differential diagnosis, prognosis and monitoring of complex rheumatic, autoimmune and autoimmune-related disease.
+Added: Segment revenue is primarily derived from the sale of the Company’s testing products, most of which is attributable to its AVISE ® CTD test.
+Added: The Company’s CODM is its Chief Executive Officer.
+Added: The CODM assesses performance for the segment and decides how to allocate resources based on revenue and net loss as reported on the Statement of Operations, after taking into account the Company’s strategic priorities, its cash balance and its expected use of cash.
+Added: The CODM considers budget/forecast versus actual results on a quarterly basis when making decisions about the allocation of resources.
+Added: The measure of segment assets is reported on the balance sheet as total assets and were $ 44.7 million and $ 56.9 million for the years ended December 31, 2024 and 2023, respectively.
+Added: Segment revenue and net loss, including significant segment expenses regularly provided to the CODM are as follows (in thousands):
+Added: Year Ended December 31,
+Added: Revenue $ 55,641 $ 52,548
+Added: Costs of revenue 22,529 23,092
+Added: Gross margin 33,112 29,456
+Added: Segment operating expenses:
+Added: Employee expense 27,753 27,070
+Added: Outside services 4,253 5,920
+Added: Facilities related 3,674 5,125
+Added: Travel & entertainment 2,440 2,469
+Added: Stock compensation 1,604 3,426
+Added: Depreciation and amortization 1,041 1,426
+Added: Total segment operating expenses 46,748 52,293
+Added: Loss from operations ( 13,636 ) ( 22,837 )
+Added: Interest expense ( 2,234 ) ( 2,335 )
+Added: Interest income 767 1,516
+Added: Loss before income taxes ( 15,103 ) ( 23,656 )
+Added: Income tax expense ( 12 ) ( 33 )
+Added: Segment net loss $ ( 15,115 ) $ ( 23,689 )
+Added: 1 Other segment items included in Segment net loss include insurance expenses, trade show and conference expenses, fulfillment expenses, board compensation, clinical trial expenses, collaboration expenses and bank fees, among others.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.