10-Q
0001580063falseP4Y0.31250.8333P2YQ2P1Y--12-310001580063us-gaap:SegmentDiscontinuedOperationsMember2020-04-012020-06-300001580063prog:UnsecuredConvertiblePromissoryNoteMember2020-05-082020-05-0800015800632021-04-012021-06-300001580063prog:AveroDiagnosticsMemberus-gaap:RecourseMember2021-06-300001580063srt:MinimumMember2020-01-012020-03-3100015800632021-06-012021-06-300001580063prog:GovernmentHealthBenefitProgramsMember2020-04-012020-06-300001580063us-gaap:CustomerConcentrationRiskMemberus-gaap:SalesRevenueNetMemberprog:AetnaMember2021-01-012021-06-300001580063us-gaap:SeriesAPreferredStockMember2021-01-012021-06-3000015800632019-01-012020-03-310001580063us-gaap:TreasuryStockMember2020-12-310001580063us-gaap:CustomerConcentrationRiskMemberprog:AnthemMemberus-gaap:AccountsReceivableMember2020-01-012020-12-310001580063us-gaap:TreasuryStockMember2021-03-310001580063prog:TwoThousandAndTwentyEmployeeStockPurchasePlanMember2020-12-310001580063us-gaap:ConvertibleCommonStockMember2020-12-310001580063us-gaap:CommonStockMemberus-gaap:IPOMember2020-06-182020-06-180001580063us-gaap:AdditionalPaidInCapitalMember2021-06-300001580063us-gaap:MoneyMarketFundsMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001580063us-gaap:CustomerConcentrationRiskMemberus-gaap:SalesRevenueNetMemberprog:UnitedHealthcareMember2020-01-012020-06-300001580063us-gaap:InterestExpenseMember2021-04-012021-06-300001580063prog:CommonStockWarrantMember2021-06-300001580063prog:EquityIncentivePlanMember2021-06-300001580063prog:PatientLaboratoryDistributionPartnersMember2020-01-012020-06-300001580063us-gaap:RestrictedStockUnitsRSUMember2020-12-310001580063us-gaap:SeriesBPreferredStockMemberus-gaap:PreferredStockMember2020-03-310001580063prog:SouthernDistrictOfNewYorkCivilSettlementAgreementMembersrt:MinimumMember2020-07-222020-07-230001580063prog:CommercialThirdPartyPayorsMember2021-01-012021-06-300001580063prog:AugustTwoThousandNineteenFinancingMembersrt:MaximumMember2021-06-300001580063us-gaap:SeriesBPreferredStockMemberprog:CreditAgreementAmendmentMember2020-03-310001580063prog:AveroDiagnosticsMember2015-06-012015-06-300001580063us-gaap:AdditionalPaidInCapitalMember2020-01-012020-03-310001580063us-gaap:IPOMemberus-gaap:AdditionalPaidInCapitalMember2020-04-012020-06-300001580063prog:TwoThousandEighteenThirdAmendedPlanMember2021-05-052021-05-050001580063us-gaap:RetainedEarningsMember2021-01-012021-03-310001580063prog:UnsecuredConvertiblePromissoryNoteMemberus-gaap:NonoperatingIncomeExpenseMember2020-01-012020-06-300001580063prog:SouthernDistrictOfNewYorkCivilSettlementAgreementMember2020-07-230001580063us-gaap:FairValueInputsLevel3Memberus-gaap:MoneyMarketFundsMemberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001580063us-gaap:AdditionalPaidInCapitalMember2021-04-012021-06-300001580063us-gaap:SeriesBPreferredStockMemberus-gaap:PreferredStockMember2019-12-310001580063us-gaap:SeriesBPreferredStockMemberprog:CreditAndSecurityAgreementAndSeriesBConvertiblePreferredStockPurchaseAgreementWithPrivateEquityFirmMemberprog:TwoThousandSeventeenTermLoanMember2017-10-272017-10-270001580063prog:AugustTwoThousandNineteenFinancingMember2019-01-012019-12-310001580063us-gaap:MoneyMarketFundsMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2021-06-300001580063prog:LaboratoryEquipmentMember2020-12-310001580063prog:ComericaBankMember2020-12-310001580063us-gaap:CustomerConcentrationRiskMemberprog:UnitedHealthcareMemberus-gaap:AccountsReceivableMember2021-01-012021-06-300001580063us-gaap:CommonStockMember2020-01-012020-03-310001580063us-gaap:SegmentDiscontinuedOperationsMember2020-01-012020-06-300001580063us-gaap:EmployeeStockOptionMember2021-06-300001580063us-gaap:PreferredStockMemberprog:SeriesAAndAOnePreferredStockMember2020-04-012020-06-300001580063us-gaap:SegmentContinuingOperationsMember2021-04-012021-06-300001580063us-gaap:SeriesAPreferredStockMember2020-01-012020-06-300001580063us-gaap:SeriesBPreferredStockMemberprog:AdditionalEquityFinancingMember2019-12-192019-12-190001580063prog:AugustTwoThousandNineteenFinancingMemberprog:SeriesBPreferredStockPurchaseWarrantMember2019-08-2700015800632021-08-050001580063prog:AveroDiagnosticsMemberus-gaap:RecourseMember2020-12-310001580063prog:SeriesAOnePreferredStockMember2019-11-120001580063us-gaap:AccountingStandardsUpdate201912Member2021-06-300001580063us-gaap:PrivatePlacementMemberprog:SecuritiesPurchaseAgreementMember2021-06-012021-06-300001580063us-gaap:CustomerConcentrationRiskMemberprog:AnthemMemberus-gaap:AccountsReceivableMember2021-01-012021-06-300001580063prog:CreditAndSecurityAgreementAndSeriesBConvertiblePreferredStockPurchaseAgreementWithPrivateEquityFirmMemberprog:TwoThousandSeventeenTermLoanMember2021-01-012021-06-300001580063us-gaap:FairValueInputsLevel2Memberus-gaap:DerivativeMemberus-gaap:FairValueMeasurementsRecurringMember2021-06-300001580063prog:CommonStockWarrantMember2020-12-310001580063us-gaap:PrivatePlacementMemberprog:SecuritiesPurchaseAgreementMember2021-06-300001580063prog:TwoThousandEighteenThirdAmendedPlanMember2021-01-0100015800632020-06-300001580063us-gaap:CustomerConcentrationRiskMemberprog:GovernmentHealthBenefitsProgramsMemberus-gaap:AccountsReceivableMember2020-01-012020-12-310001580063prog:ExchangeAgreementMember2019-08-270001580063us-gaap:AdditionalPaidInCapitalMember2020-04-012020-06-300001580063prog:ComputersAndSoftwareMember2020-12-310001580063us-gaap:IPOMemberprog:UnsecuredConvertiblePromissoryNoteMember2020-06-012020-06-300001580063prog:BuildingAndLeaseholdImprovementsMember2020-12-310001580063us-gaap:CommonStockMemberus-gaap:OverAllotmentOptionMember2020-12-012020-12-310001580063us-gaap:RetainedEarningsMember2021-03-310001580063srt:MinimumMemberprog:SevenPointTwoFivePercentageConvertibleSeniorNotesDueTwoThousandTwentyFiveMember2021-06-300001580063prog:CommonStockWarrantMember2021-01-012021-06-300001580063prog:TwoThousandSeventeenTermLoanMember2020-12-310001580063prog:TwoThousandSeventeenTermLoanMember2020-12-072020-12-070001580063prog:ThirdAmendedAndRestatedTwoThousandAndEighteenEquityIncentivePlanMember2020-03-040001580063us-gaap:SellingAndMarketingExpenseMember2020-04-012020-06-300001580063us-gaap:PreferredStockMemberprog:SeriesAAndAOnePreferredStockMember2019-12-310001580063srt:MinimumMember2020-11-152020-11-160001580063us-gaap:LandMember2020-12-310001580063us-gaap:InterestExpenseMember2021-01-012021-06-300001580063us-gaap:CustomerConcentrationRiskMemberprog:BlueShieldOfTexasMemberus-gaap:AccountsReceivableMember2020-01-012020-12-310001580063prog:SevenPointTwoFivePercentageConvertibleSeniorNotesDueTwoThousandTwentyFiveMember2021-04-012021-06-300001580063prog:UnsecuredConvertiblePromissoryNoteMember2021-06-300001580063us-gaap:FairValueInputsLevel2Memberus-gaap:DerivativeMemberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001580063us-gaap:CustomerConcentrationRiskMemberus-gaap:SalesRevenueNetMemberprog:AetnaMember2021-04-012021-06-300001580063us-gaap:IPOMember2020-04-012020-06-300001580063us-gaap:CustomerConcentrationRiskMemberprog:BlueShieldOfTexasMemberus-gaap:AccountsReceivableMember2021-01-012021-06-300001580063us-gaap:CustomerConcentrationRiskMemberprog:AetnaMemberus-gaap:AccountsReceivableMember2020-01-012020-12-3100015800632021-02-012021-02-280001580063us-gaap:TreasuryStockMember2021-01-012021-03-310001580063us-gaap:MortgagesMember2021-06-300001580063prog:UnsecuredConvertiblePromissoryNoteMember2020-06-012020-06-300001580063us-gaap:CommonStockMemberus-gaap:OverAllotmentOptionMember2020-12-310001580063us-gaap:SellingAndMarketingExpenseMember2021-04-012021-06-300001580063us-gaap:CommonStockMemberus-gaap:IPOMemberprog:TwoThousandSeventeenTermLoanMember2020-12-3100015800632020-01-012020-12-310001580063us-gaap:AdditionalPaidInCapitalMember2020-06-300001580063prog:TwoThousandEighteenThirdAmendedPlanMember2021-05-050001580063us-gaap:SeriesBPreferredStockMemberprog:AugustTwoThousandNineteenFinancingMember2021-01-012021-06-300001580063prog:AveroDiagnosticsMemberprog:CignaSettlementObligationMember2018-12-050001580063us-gaap:RetainedEarningsMember2021-04-012021-06-300001580063us-gaap:EmployeeStockOptionMember2020-12-310001580063us-gaap:FairValueInputsLevel3Memberus-gaap:MoneyMarketFundsMemberus-gaap:FairValueMeasurementsRecurringMember2021-06-300001580063prog:NovemberSeriesBPreferredStockPurchaseAgreementMemberus-gaap:SeriesBPreferredStockMember2019-11-122019-11-120001580063prog:UnitedHealthGroupSettlementAgreementMember2018-10-180001580063us-gaap:NonoperatingIncomeExpenseMemberprog:UnsecuredConvertiblePromissoryNoteMember2020-06-012020-06-3000015800632021-03-3100015800632020-12-212020-12-220001580063us-gaap:ConvertibleCommonStockMember2021-06-300001580063us-gaap:CustomerConcentrationRiskMemberprog:BlueShieldOfTexasMemberus-gaap:SalesRevenueNetMember2020-01-012020-06-3000015800632021-06-300001580063prog:UnsecuredConvertiblePromissoryNoteMember2020-05-080001580063us-gaap:RetainedEarningsMember2020-12-310001580063us-gaap:CommonStockMember2020-03-310001580063us-gaap:IPOMember2020-05-080001580063prog:FurnitureFixturesAndOfficeEquipmentMember2021-06-300001580063prog:ComericaBankMember2014-01-310001580063prog:AugustTwoThousandNineteenFinancingMemberprog:SeriesBPreferredStockPurchaseWarrantMember2017-10-270001580063prog:EquityIncentivePlanMember2020-12-310001580063us-gaap:LandMember2021-06-3000015800632020-01-012020-06-300001580063us-gaap:AdditionalPaidInCapitalMember2020-12-310001580063us-gaap:TreasuryStockMember2021-06-300001580063prog:TwoThousandSeventeenTermLoanMember2021-06-300001580063us-gaap:SeriesBPreferredStockMemberprog:AdditionalEquityFinancingMember2019-11-220001580063us-gaap:RestrictedStockUnitsRSUMember2020-01-012020-06-300001580063us-gaap:CustomerConcentrationRiskMemberus-gaap:AccountsReceivableMemberprog:UnitedHealthcareMember2020-01-012020-12-3100015800632020-10-010001580063us-gaap:SeriesBPreferredStockMember2020-01-012020-06-300001580063prog:ComericaBankMember2021-01-012021-06-300001580063us-gaap:ResearchAndDevelopmentExpenseMember2021-01-012021-06-300001580063us-gaap:MoneyMarketFundsMemberus-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001580063us-gaap:CustomerConcentrationRiskMemberprog:GovernmentHealthBenefitsProgramsMemberus-gaap:SalesRevenueNetMember2021-04-012021-06-300001580063prog:UnitedStatesFederalGovernmentMemberprog:SouthernDistrictOfCaliforniaCivilSettlementAgreementMember2020-07-210001580063us-gaap:CommonStockMember2020-06-300001580063prog:NovemberSeriesBPreferredStockPurchaseAgreementMemberus-gaap:SeriesBPreferredStockMemberprog:SeriesBPreferredStockPurchaseWarrantIssuedAndOutstandingMember2021-01-012021-06-300001580063us-gaap:RestrictedStockUnitsRSUMember2021-01-012021-06-300001580063us-gaap:AccountingStandardsUpdate201712Member2021-01-012021-06-300001580063prog:SouthernDistrictOfCaliforniaCivilSettlementAgreementMember2020-07-210001580063us-gaap:FairValueInputsLevel1Memberus-gaap:DerivativeMemberus-gaap:FairValueMeasurementsRecurringMember2021-06-300001580063prog:CommercialThirdPartyPayorsMember2021-04-012021-06-300001580063us-gaap:CustomerConcentrationRiskMemberus-gaap:SalesRevenueNetMemberprog:UnitedHealthcareMember2020-04-012020-06-300001580063us-gaap:ResearchAndDevelopmentExpenseMember2020-04-012020-06-300001580063prog:UnitedStatesFederalGovernmentMemberprog:SouthernDistrictOfNewYorkCivilSettlementAgreementMember2020-07-230001580063prog:AccountingStandardsUpdate202006Member2021-06-300001580063us-gaap:CommonStockMemberus-gaap:OverAllotmentOptionMember2020-01-012020-12-310001580063prog:SecondAmendedAndRestatedTwoThousandAndTwelveStockPlanMember2018-02-280001580063prog:AveroDiagnosticsMemberprog:CignaSettlementObligationMember2020-01-012020-06-300001580063us-gaap:PreferredStockMemberprog:SeriesAAndAOnePreferredStockMember2020-03-310001580063prog:SeriesBPreferredStockPurchaseWarrantMember2020-01-012020-06-300001580063us-gaap:TreasuryStockMember2019-12-310001580063prog:PatientLaboratoryDistributionPartnersMember2021-04-012021-06-300001580063us-gaap:FairValueInputsLevel3Memberus-gaap:DerivativeMemberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001580063us-gaap:ResearchAndDevelopmentExpenseMember2020-01-012020-06-300001580063prog:AmericanBankOfCommerceMember2021-01-012021-06-300001580063us-gaap:CommonStockMemberprog:ExchangeAgreementMember2019-08-272019-08-270001580063prog:CreditAndSecurityAgreementAndSeriesBConvertiblePreferredStockPurchaseAgreementWithPrivateEquityFirmMemberprog:TwoThousandSeventeenTermLoanMember2017-10-272017-10-270001580063prog:AmericanBankOfCommerceMember2020-12-310001580063prog:SouthernDistrictOfNewYorkCivilSettlementAgreementMember2021-01-012021-06-300001580063us-gaap:SeriesBPreferredStockMemberprog:UnsecuredConvertiblePromissoryNoteMember2020-05-080001580063us-gaap:CommonStockMemberus-gaap:IPOMemberprog:SeriesBPreferredStockPurchaseWarrantMember2020-06-180001580063prog:ConversionOfConvertibleNotesMember2021-01-012021-06-300001580063prog:NovemberSeriesBPreferredStockPurchaseAgreementMember2019-11-122019-11-120001580063us-gaap:CustomerConcentrationRiskMemberus-gaap:SalesRevenueNetMemberprog:UnitedHealthcareMember2021-04-012021-06-300001580063us-gaap:RetainedEarningsMember2021-06-300001580063prog:SouthernDistrictOfNewYorkCivilSettlementAgreementMember2021-06-300001580063us-gaap:PrivatePlacementMemberprog:SecuritiesPurchaseAgreementMember2021-02-012021-02-280001580063prog:SouthernDistrictOfNewYorkCivilSettlementAgreementMember2020-01-012020-12-310001580063us-gaap:SeriesBPreferredStockMemberprog:SubscriptionAgreementWithLenderMember2020-03-310001580063us-gaap:RetainedEarningsMember2020-03-310001580063us-gaap:SegmentDiscontinuedOperationsMember2021-01-012021-06-300001580063us-gaap:CustomerConcentrationRiskMemberprog:AnthemMemberus-gaap:SalesRevenueNetMember2020-04-012020-06-300001580063us-gaap:CustomerConcentrationRiskMemberprog:GovernmentHealthBenefitsProgramsMemberus-gaap:SalesRevenueNetMember2021-01-012021-06-300001580063us-gaap:SellingAndMarketingExpenseMember2021-01-012021-06-300001580063prog:SouthernDistrictOfCaliforniaCivilSettlementAgreementMembersrt:MinimumMember2020-07-192020-07-210001580063prog:CreditAndSecurityAgreementAndSeriesBConvertiblePreferredStockPurchaseAgreementWithPrivateEquityFirmMember2017-10-272017-10-270001580063us-gaap:ConvertibleDebtMember2021-06-3000015800632020-03-310001580063us-gaap:SegmentDiscontinuedOperationsMember2021-04-012021-06-300001580063prog:AetnaSettlementAgreementMember2018-06-242018-06-250001580063us-gaap:SeriesBPreferredStockMemberus-gaap:PreferredStockMember2020-04-012020-06-3000015800632019-12-310001580063prog:CreditAndSecurityAgreementAndSeriesBConvertiblePreferredStockPurchaseAgreementWithPrivateEquityFirmMember2020-01-012020-06-300001580063prog:ComericaBankMember2021-06-300001580063us-gaap:RetainedEarningsMember2020-04-012020-06-300001580063prog:TwoThousandEighteenThirdAmendedPlanMember2021-06-300001580063us-gaap:CommonStockMember2021-06-300001580063us-gaap:CommonStockMember2019-12-310001580063srt:MinimumMemberprog:CreditAndSecurityAgreementAndSeriesBConvertiblePreferredStockPurchaseAgreementWithPrivateEquityFirmMemberprog:TwoThousandSeventeenTermLoanMember2017-10-270001580063us-gaap:SeriesBPreferredStockMemberprog:AdditionalEquityFinancingMember2019-12-190001580063us-gaap:CommonStockMember2021-03-310001580063us-gaap:RestrictedStockUnitsRSUMember2021-06-300001580063us-gaap:SeriesBPreferredStockMember2020-04-032020-04-0300015800632020-11-160001580063us-gaap:AdditionalPaidInCapitalMember2021-01-012021-03-310001580063prog:PatientLaboratoryDistributionPartnersMember2020-04-012020-06-3000015800632020-04-012020-06-300001580063us-gaap:CustomerConcentrationRiskMemberprog:AnthemMemberus-gaap:SalesRevenueNetMember2021-04-012021-06-300001580063prog:SouthernDistrictOfCaliforniaCivilSettlementAgreementMember2021-01-012021-06-300001580063us-gaap:SellingAndMarketingExpenseMember2020-01-012020-06-300001580063prog:OtherLongTermLiabilitiesMember2021-06-300001580063us-gaap:CustomerConcentrationRiskMemberprog:GovernmentHealthBenefitsProgramsMemberus-gaap:SalesRevenueNetMember2020-01-012020-06-300001580063us-gaap:MoneyMarketFundsMemberus-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2021-06-300001580063prog:AveroDiagnosticsMember2021-06-300001580063us-gaap:SeriesBPreferredStockMemberprog:AdditionalEquityFinancingMember2019-11-222019-11-220001580063prog:CommonStockWarrantMember2020-01-012020-06-300001580063us-gaap:ConstructionInProgressMember2020-12-310001580063us-gaap:CommonStockMember2020-04-012020-06-300001580063us-gaap:AccountingStandardsUpdate201613Member2021-06-300001580063prog:LaboratoryEquipmentMember2021-06-3000015800632021-01-012021-03-310001580063prog:SecondAmendedAndRestatedTwoThousandAndEighteenEquityIncentivePlanMember2019-12-310001580063prog:AveroDiagnosticsMemberprog:CignaSettlementObligationMember2020-04-012020-06-300001580063srt:MinimumMember2021-01-012021-06-3000015800632021-01-012021-06-300001580063srt:MinimumMember2021-06-300001580063prog:TwoThousandAndEighteenEquityIncentivePlanMember2019-03-310001580063us-gaap:PrivatePlacementMemberprog:SecuritiesPurchaseAgreementMemberprog:PreFundedWarrantsMember2021-06-300001580063us-gaap:CustomerConcentrationRiskMemberprog:BlueShieldOfTexasMemberus-gaap:SalesRevenueNetMember2021-04-012021-06-300001580063us-gaap:CustomerConcentrationRiskMemberprog:BlueShieldOfTexasMemberus-gaap:SalesRevenueNetMember2020-04-012020-06-3000015800632021-07-300001580063prog:SevenPointTwoFivePercentageConvertibleSeniorNotesDueTwoThousandTwentyFiveMember2021-01-012021-06-300001580063us-gaap:FairValueInputsLevel1Memberus-gaap:DerivativeMemberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001580063prog:NovemberSeriesBPreferredStockPurchaseAgreementMemberus-gaap:SeriesBPreferredStockMemberprog:SeriesBPreferredStockPurchaseWarrantIssuedAndOutstandingMember2019-11-122019-11-120001580063us-gaap:CustomerConcentrationRiskMemberprog:BlueShieldOfTexasMemberus-gaap:SalesRevenueNetMember2021-01-012021-06-300001580063us-gaap:CommonStockMember2021-04-012021-06-300001580063us-gaap:RestrictedStockUnitsRSUMember2021-01-012021-06-300001580063prog:CommercialThirdPartyPayorsMember2020-04-012020-06-300001580063us-gaap:SegmentContinuingOperationsMember2020-04-012020-06-300001580063prog:SevenPointTwoFivePercentageConvertibleSeniorNotesDueTwoThousandTwentyFiveMember2021-06-300001580063us-gaap:SegmentContinuingOperationsMember2021-01-012021-06-300001580063prog:SevenPointTwoFivePercentageConvertibleSeniorNotesDueTwoThousandTwentyFiveMember2020-12-310001580063srt:MaximumMember2020-11-152020-11-160001580063us-gaap:CustomerConcentrationRiskMemberprog:GovernmentHealthBenefitsProgramsMemberus-gaap:AccountsReceivableMember2021-01-012021-06-300001580063us-gaap:EmployeeStockOptionMember2020-01-012020-06-300001580063prog:AveroDiagnosticsMember2020-12-310001580063prog:AugustTwoThousandNineteenFinancingMember2021-01-012021-06-300001580063us-gaap:EmployeeStockOptionMember2021-01-012021-06-300001580063us-gaap:ConstructionInProgressMember2021-06-300001580063prog:UnitedHealthGroupSettlementAgreementMemberprog:AccruedExpensesAndOtherCurrentLiabilitiesMember2020-12-310001580063us-gaap:CommonStockMember2020-06-182020-06-180001580063us-gaap:CustomerConcentrationRiskMemberprog:AnthemMemberus-gaap:SalesRevenueNetMember2021-01-012021-06-300001580063prog:SeriesAOnePreferredStockMemberprog:ExchangeAgreementMember2019-08-270001580063prog:FurnitureFixturesAndOfficeEquipmentMember2020-12-310001580063prog:PatientLaboratoryDistributionPartnersMember2021-01-012021-06-300001580063us-gaap:GeneralAndAdministrativeExpenseMember2020-04-012020-06-300001580063srt:MaximumMember2021-06-300001580063prog:SevenPointTwoFivePercentageConvertibleSeniorNotesDueTwoThousandTwentyFiveMember2020-12-012020-12-310001580063prog:TwoThousandAndTwentyEmployeeStockPurchasePlanMember2021-06-300001580063us-gaap:FairValueInputsLevel3Memberus-gaap:DerivativeMemberus-gaap:FairValueMeasurementsRecurringMember2021-06-300001580063us-gaap:GeneralAndAdministrativeExpenseMember2020-01-012020-06-300001580063us-gaap:DiscontinuedOperationsHeldforsaleMember2021-06-300001580063us-gaap:CommonStockMemberus-gaap:IPOMember2020-04-012020-06-300001580063prog:SeriesBPreferredStockPurchaseWarrantMember2021-01-012021-06-300001580063us-gaap:GeneralAndAdministrativeExpenseMember2021-01-012021-06-300001580063prog:CreditAndSecurityAgreementAndSeriesBConvertiblePreferredStockPurchaseAgreementWithPrivateEquityFirmMember2020-04-012020-06-300001580063us-gaap:SeriesBPreferredStockMember2021-01-012021-06-300001580063prog:TwoThousandSeventeenTermLoanMember2020-01-012020-12-310001580063us-gaap:RetainedEarningsMember2020-01-012020-03-310001580063us-gaap:SeriesBPreferredStockMember2020-04-030001580063prog:AetnaSettlementAgreementMember2018-06-250001580063prog:AugustTwoThousandNineteenFinancingMembersrt:MinimumMember2021-06-300001580063us-gaap:PrivatePlacementMemberprog:SecuritiesPurchaseAgreementMember2021-02-280001580063prog:TwoThousandAndTwentyEmployeeStockPurchasePlanMember2021-01-010001580063us-gaap:CustomerConcentrationRiskMemberus-gaap:SalesRevenueNetMemberprog:UnitedHealthcareMember2021-01-012021-06-300001580063prog:NovemberSeriesBPreferredStockPurchaseAgreementMemberus-gaap:SeriesBPreferredStockMember2019-11-120001580063prog:UnitedHealthGroupSettlementAgreementMemberprog:AccruedExpensesAndOtherCurrentLiabilitiesMember2021-06-300001580063us-gaap:SegmentContinuingOperationsMember2020-01-012020-06-300001580063prog:GovernmentHealthBenefitProgramsMember2021-01-012021-06-300001580063us-gaap:ResearchAndDevelopmentExpenseMember2021-04-012021-06-3000015800632020-07-210001580063us-gaap:SubsequentEventMember2021-07-210001580063us-gaap:CommonStockMemberus-gaap:PrivatePlacementMemberprog:SecuritiesPurchaseAgreementMember2021-02-012021-02-280001580063us-gaap:CommonStockMember2021-01-012021-06-300001580063us-gaap:CustomerConcentrationRiskMemberprog:AetnaMemberus-gaap:SalesRevenueNetMember2020-04-012020-06-300001580063us-gaap:AccountingStandardsUpdate201602Member2021-06-300001580063us-gaap:CommonStockMemberus-gaap:IPOMemberprog:TwoThousandSeventeenTermLoanMember2020-01-012020-12-310001580063us-gaap:NonoperatingIncomeExpenseMember2021-01-012021-06-300001580063prog:ComputersAndSoftwareMember2021-06-300001580063us-gaap:RetainedEarningsMember2020-06-3000015800632021-07-3100015800632019-01-012020-03-030001580063prog:SeriesAOnePreferredStockMember2019-08-270001580063us-gaap:SeriesBPreferredStockMember2020-02-292020-02-290001580063us-gaap:DiscontinuedOperationsHeldforsaleMember2020-12-3100015800632020-01-012020-03-310001580063us-gaap:CustomerConcentrationRiskMemberprog:AnthemMemberus-gaap:SalesRevenueNetMember2020-01-012020-06-300001580063us-gaap:GeneralAndAdministrativeExpenseMember2021-04-012021-06-300001580063us-gaap:AccountingStandardsUpdate201712Memberus-gaap:CommonStockMember2021-01-012021-06-300001580063prog:BuildingAndLeaseholdImprovementsMember2021-06-300001580063us-gaap:SeriesBPreferredStockMemberus-gaap:PreferredStockMember2020-01-012020-03-310001580063us-gaap:TreasuryStockMember2020-03-310001580063srt:MaximumMember2021-01-012021-06-300001580063us-gaap:AdditionalPaidInCapitalMember2019-12-310001580063prog:TwoThousandAndFifteenConsultantStockPlanMember2018-02-280001580063us-gaap:CustomerConcentrationRiskMemberprog:GovernmentHealthBenefitsProgramsMemberus-gaap:SalesRevenueNetMember2020-04-012020-06-300001580063prog:GovernmentHealthBenefitProgramsMember2020-01-012020-06-300001580063prog:TwoThousandAndTwentyEmployeeStockPurchasePlanMember2020-06-012020-06-300001580063prog:CommercialThirdPartyPayorsMember2020-01-012020-06-300001580063us-gaap:AdditionalPaidInCapitalMember2020-03-310001580063us-gaap:CommonStockMemberus-gaap:IPOMember2020-06-180001580063us-gaap:SeriesBPreferredStockMember2020-02-290001580063us-gaap:RetainedEarningsMember2019-12-310001580063us-gaap:CommonStockMember2021-01-012021-03-310001580063us-gaap:IPOMember2020-05-082020-05-080001580063us-gaap:SeriesBPreferredStockMemberprog:ExchangeAgreementMember2019-08-272019-08-2700015800632020-12-310001580063prog:AccruedExpensesAndOtherCurrentLiabilitiesMember2021-06-3000015800632020-12-022020-12-030001580063prog:GovernmentHealthBenefitProgramsMember2021-04-012021-06-300001580063prog:ComericaBankMemberus-gaap:LondonInterbankOfferedRateLIBORMember2021-06-300001580063us-gaap:CommonStockMember2020-12-310001580063prog:SouthernDistrictOfNewYorkCivilSettlementAgreementMember2020-07-222020-07-230001580063us-gaap:ConvertibleDebtMember2020-12-310001580063prog:AmericanBankOfCommerceMember2021-06-300001580063us-gaap:CommonStockMemberus-gaap:PrivatePlacementMemberprog:SecuritiesPurchaseAgreementMember2021-06-012021-06-300001580063us-gaap:CustomerConcentrationRiskMemberprog:AetnaMemberus-gaap:AccountsReceivableMember2021-01-012021-06-300001580063us-gaap:TreasuryStockMember2021-04-012021-06-300001580063prog:SouthernDistrictOfCaliforniaCivilSettlementAgreementMember2020-07-192020-07-210001580063us-gaap:AdditionalPaidInCapitalMember2021-03-310001580063us-gaap:CustomerConcentrationRiskMemberus-gaap:SalesRevenueNetMemberprog:AetnaMember2020-01-012020-06-300001580063us-gaap:TreasuryStockMember2020-06-300001580063prog:ConversionOfConvertibleNotesMember2020-01-012020-06-300001580063prog:UnitedHealthGroupSettlementAgreementMember2018-10-172018-10-180001580063prog:CreditAndSecurityAgreementAndSeriesBConvertiblePreferredStockPurchaseAgreementWithPrivateEquityFirmMember2017-10-27prog:Periodxbrli:purexbrli:sharesiso4217:USDxbrli:sharesutr:Dprog:Stateiso4217:USDprog:Voteprog:Case

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 10-Q

 

 

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

 

For the quarterly period ended June 30, 2021

or

 

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

 

For the transition period from                     to

Commission File Number: 001-39334

 

 

Progenity, Inc.

(Exact name of registrant as specified in its charter)

 

 

Delaware

 

27-3950390

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

 

 

 

4330 La Jolla Village Drive, Suite 200, San Diego, CA

 

92122

(Address of principal executive offices)

 

(Zip Code)

 

(855) 293-2639

(Registrant’s telephone number, including area code)

 

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

 

Title of each class

 

Trading Symbol(s)

 

Name of each exchange on which registered

 

 

Common Stock, par value $0.001 per share

 

PROG

 

The Nasdaq Global Market

 

 

 

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

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

 

  

Accelerated filer

 

Non-accelerated filer

 

☒ 

  

Smaller reporting company

 

Emerging growth company

 

 

 

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

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

As of August 5, 2021, the registrant had 79,406,317 shares of common stock, par value $0.001 per share, outstanding.

 

 


 

Progenity, Inc.

INDEX

 

PART I—FINANCIAL INFORMATION

 

 

 

 

 

Item 1.

 

Financial Statements (unaudited)

 

1

 

 

 

 

 

 

 

Condensed Consolidated Balance Sheets

 

1

 

 

 

 

 

 

 

Condensed Consolidated Statements of Operations

 

2

 

 

 

 

 

 

 

Condensed Consolidated Statements of Stockholders’ Deficit

 

3

 

 

 

 

 

 

 

Condensed Consolidated Statements of Cash Flows

 

5

 

 

 

 

 

 

 

Notes to Condensed Consolidated Financial Statements

 

7

 

 

 

 

 

Item 2.

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

32

 

 

 

 

 

Item 3.

 

Quantitative and Qualitative Disclosures About Market Risk

 

44

 

 

 

 

 

Item 4.

 

Controls and Procedures

 

44

 

PART II—OTHER INFORMATION

 

 

 

 

 

Item 1.

 

Legal Proceedings

 

45

 

 

 

 

 

Item 1A.

 

Risk Factors

 

46

 

 

 

 

 

Item 6.

 

Exhibits

 

93

 

 

 

 

Signatures

 

94

 

 

TRADEMARKS AND CERTAIN TERMS

In this Quarterly Report on Form 10-Q, “Progenity,” “we,” “us” and “our” refer to Progenity, Inc., and our wholly-owned subsidiaries on a consolidated basis, unless the context otherwise provides.

Progenity® is a registered service mark of Progenity. Any other brand names or trademarks appearing in this Quarterly Report on Form 10-Q are the property of their respective holders.

 

 

i


 

PART I. FINANCIAL INFORMATION

Item 1.  Financial Statements.

PROGENITY, INC.

Condensed Consolidated Balance Sheets

(In thousands, except share and per share data)

(Unaudited)

 

 

 

June 30,
2021

 

 

December 31,
2020

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

65,991

 

 

$

91,520

 

Accounts receivable, net

 

 

5,047

 

 

 

6,634

 

Prepaid expenses and other current assets

 

 

13,107

 

 

 

8,107

 

Current assets of disposal group held for sale

 

 

30,181

 

 

 

20,077

 

Total current assets

 

 

114,326

 

 

 

126,338

 

Property and equipment, net

 

 

5,474

 

 

 

8,660

 

Other assets

 

 

146

 

 

 

169

 

Long-term assets of disposal group held for sale

 

 

 

 

 

19,273

 

Total assets

 

$

119,946

 

 

$

154,440

 

Liabilities and Stockholders' Deficit

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

14,560

 

 

$

12,657

 

Accrued expenses and other current liabilities

 

 

58,172

 

 

 

51,206

 

Current portion of mortgages payable

 

 

74

 

 

 

72

 

Current portion of capital lease obligations

 

 

128

 

 

 

266

 

Current liabilities of disposal group held for sale

 

 

12,703

 

 

 

8,469

 

Total current liabilities

 

 

85,637

 

 

 

72,670

 

Capital lease obligations, net of current portion

 

 

 

 

 

42

 

Mortgages payable, net of current portion

 

 

1,238

 

 

 

1,275

 

Convertible notes, net of unamortized discount of $8,767 and $9,614 as of June 30, 2021
   and December 31, 2020, respectively

 

 

157,533

 

 

 

158,886

 

Embedded derivative liability

 

 

388

 

 

 

18,370

 

Other long-term liabilities

 

 

14,759

 

 

 

8,239

 

Long-term liabilities of disposal group held for sale

 

 

 

 

 

1,952

 

Total liabilities

 

$

259,555

 

 

$

261,434

 

Commitments and contingencies

 

 

 

 

 

 

Stockholders' deficit:

 

 

 

 

 

 

Common stock – $0.001 par value. 350,000,000 shares authorized as of June 30, 2021
   and December 31, 2020;
81,995,756 and 59,287,331 shares issued as of
   June 30, 2021 and December 31, 2020, respectively;
78,347,655 and
   
55,772,303 shares outstanding as of June 30, 2021 and December 31, 2020, respectively

 

 

82

 

 

 

59

 

Additional paid-in capital

 

 

531,156

 

 

 

452,992

 

Accumulated deficit

 

 

(652,069

)

 

 

(541,274

)

Treasury stock – at cost; 3,648,101 and 3,515,028 shares of common stock as of
   June 30, 2021 and December 31, 2020, respectively

 

 

(18,778

)

 

 

(18,771

)

Total stockholders' deficit

 

 

(139,609

)

 

 

(106,994

)

Total liabilities and stockholders' deficit

 

$

119,946

 

 

$

154,440

 

 

See accompanying notes to unaudited condensed consolidated financial statements.

1


 

PROGENITY, INC.

Condensed Consolidated Statements of Operations

(In thousands, except share and per share data)

(Unaudited)

 

 

 

Three Months Ended
June 30,

 

 

Six Months Ended
June 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Revenues

 

$

463

 

 

$

 

 

$

630

 

 

$

 

Cost of sales

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

 

463

 

 

 

 

 

 

630

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

13,401

 

 

 

12,234

 

 

 

25,074

 

 

 

23,476

 

Selling and marketing

 

 

2,006

 

 

 

1,547

 

 

 

3,864

 

 

 

3,235

 

General and administrative

 

 

20,709

 

 

 

12,702

 

 

 

38,809

 

 

 

24,421

 

Total operating expenses

 

 

36,116

 

 

 

26,483

 

 

 

67,747

 

 

 

51,132

 

Loss from operations

 

 

(35,653

)

 

 

(26,483

)

 

 

(67,117

)

 

 

(51,132

)

Interest expense

 

 

(3,502

)

 

 

(2,489

)

 

 

(7,022

)

 

 

(4,771

)

Loss on warrant liability

 

 

(5,146

)

 

 

 

 

 

(2,496

)

 

 

 

Interest and other income (expense), net

 

 

2,901

 

 

 

(3,751

)

 

 

17,774

 

 

 

(3,771

)

Loss before income taxes

 

 

(41,400

)

 

 

(32,723

)

 

 

(58,861

)

 

 

(59,674

)

Income tax benefit

 

 

 

 

 

 

 

 

 

 

 

(37,697

)

Loss from continuing operations

 

 

(41,400

)

 

 

(32,723

)

 

 

(58,861

)

 

 

(21,977

)

Loss from discontinued operations

 

 

(37,131

)

 

 

(20,060

)

 

 

(51,934

)

 

 

(47,958

)

Net loss

 

 

(78,531

)

 

 

(52,783

)

 

 

(110,795

)

 

 

(69,935

)

Dividend paid to preferred stockholders

 

 

 

 

 

(268

)

 

 

 

 

 

(268

)

Net loss attributable to common stockholders

 

$

(78,531

)

 

$

(53,051

)

 

$

(110,795

)

 

$

(70,203

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss per share from continuing operations,
   basic and diluted

 

$

(0.65

)

 

$

(3.77

)

 

$

(0.97

)

 

$

(3.21

)

Net loss per share from discontinued operations,
   basic and diluted

 

$

(0.58

)

 

$

(2.31

)

 

$

(0.85

)

 

$

(7.01

)

Net loss per share, basic and diluted

 

$

(1.23

)

 

$

(6.08

)

 

$

(1.82

)

 

$

(10.22

)

Net loss per share attributable to common stockholders,
    basic and diluted

 

$

(1.23

)

 

$

(6.11

)

 

$

(1.82

)

 

$

(10.26

)

Weighted average number of shares outstanding used in calculating
   net loss per share, basic and diluted

 

 

63,942,298

 

 

 

8,687,250

 

 

 

60,770,246

 

 

 

6,840,321

 

 

See accompanying notes to unaudited condensed consolidated financial statements.

2


 

PROGENITY, INC.

Condensed Consolidated Statements of Stockholders’ Deficit

(In thousands, except share data)

(Unaudited)

 

 

 

Common Stock

 

 

Additional
Paid-In

 

 

Accumulated

 

 

Treasury Stock

 

 

Total
Stockholders'

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Shares

 

 

Amount

 

 

Deficit

 

Balance at December 31, 2020

 

 

59,287,331

 

 

$

59

 

 

$

452,992

 

 

$

(541,274

)

 

 

(3,515,028

)

 

$

(18,771

)

 

$

(106,994

)

Issuance of common stock, net

 

 

4,370,629

 

 

 

4

 

 

 

11,258

 

 

 

 

 

 

 

 

 

 

 

 

11,262

 

Issuance of common stock upon exercise
   of options

 

 

71,284

 

 

 

 

 

 

88

 

 

 

 

 

 

 

 

 

 

 

 

88

 

Issuance of common stock upon vesting
   of restricted stock unit awards

 

 

174,730

 

 

 

 

 

 

(228

)

 

 

 

 

 

(48,581

)

 

 

(1

)

 

 

(229

)

Stock-based compensation expense

 

 

 

 

 

 

 

 

2,630

 

 

 

 

 

 

 

 

 

 

 

 

2,630

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(32,264

)

 

 

 

 

 

 

 

 

(32,264

)

Balance at March 31, 2021

 

 

63,903,974

 

 

$

63

 

 

$

466,740

 

 

$

(573,538

)

 

 

(3,563,609

)

 

$

(18,772

)

 

$

(125,507

)

Issuance of common stock, net

 

 

15,694,332

 

 

 

16

 

 

 

11,991

 

 

 

 

 

 

 

 

 

 

 

 

12,007

 

Issuance of common stock upon exercise
   of options

 

 

25,498

 

 

 

 

 

 

26

 

 

 

 

 

 

(5,050

)

 

 

(6

)

 

 

20

 

Issuance of common stock under employee stock purchase plan

 

 

254,832

 

 

 

1

 

 

 

560

 

 

 

 

 

 

 

 

 

 

 

 

561

 

Issuance of common stock upon vesting
   of restricted stock unit awards

 

 

237,388

 

 

 

 

 

 

(251

)

 

 

 

 

 

(79,442

)

 

 

 

 

 

(251

)

Issuance of stock purchase warrant

 

 

 

 

 

 

 

 

41,926

 

 

 

 

 

 

 

 

 

 

 

 

41,926

 

Issuance of common stock upon conversion of debt, net

 

 

611,616

 

 

 

1

 

 

 

2,068

 

 

 

 

 

 

 

 

 

 

 

 

2,069

 

Issuance of common stock upon conversion of interest, net

 

 

1,268,116

 

 

 

1

 

 

 

3,626

 

 

 

 

 

 

 

 

 

 

 

 

3,627

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

4,470

 

 

 

 

 

 

 

 

 

 

 

 

4,470

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(78,531

)

 

 

 

 

 

 

 

 

(78,531

)

Balance at June 30, 2021

 

 

81,995,756

 

 

$

82

 

 

$

531,156

 

 

$

(652,069

)

 

 

(3,648,101

)

 

$

(18,778

)

 

$

(139,609

)

 

3


 

PROGENITY, INC.

Condensed Consolidated Statements of Stockholders’ Deficit

(In thousands, except share data)

(Unaudited)

 

 

 

Common Stock

 

 

Series A and A-1
Preferred Stock

 

 

Series B Preferred Stock

 

 

Additional
Paid-In

 

 

Accumulated

 

 

Treasury Stock

 

 

Total
Stockholders'

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Shares

 

 

Amount

 

 

Deficit

 

Balance at December 31, 2019

 

 

8,451,415

 

 

$

9

 

 

 

4,120,000

 

 

$

4

 

 

 

101,867,405

 

 

$

102

 

 

$

283,260

 

 

$

(348,478

)

 

 

(3,474,572

)

 

$

(18,771

)

 

$

(83,874

)

Issuance of common stock upon exercise
   of options

 

 

56,729

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

103

 

 

 

 

 

 

 

 

 

 

 

 

103

 

Issuance of Series B Preferred Stock, net
   of issuance cost

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6,033,796

 

 

 

6

 

 

 

14,066

 

 

 

 

 

 

 

 

 

 

 

 

14,072

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,057

 

 

 

 

 

 

 

 

 

 

 

 

2,057

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(17,152

)

 

 

 

 

 

 

 

 

(17,152

)

Balance at March 31, 2020

 

 

8,508,144

 

 

$

9

 

 

 

4,120,000

 

 

$

4

 

 

 

107,901,201

 

 

$

108

 

 

$

299,486

 

 

$

(365,630

)

 

 

(3,474,572

)

 

$

(18,771

)

 

$

(84,794

)

Issuance of common stock upon exercise
   of options

 

 

20,880

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

45

 

 

 

 

 

 

 

 

 

 

 

 

45

 

Issuance of common stock upon initial
   public offering, net

 

 

6,666,667

 

 

 

7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

88,658

 

 

 

 

 

 

 

 

 

 

 

 

88,665

 

Issuance of Series B Preferred Stock, net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4,444,444

 

 

 

4

 

 

 

9,929

 

 

 

 

 

 

 

 

 

 

 

 

9,933

 

Automatic conversion of preferred stock

 

 

33,443,562

 

 

 

33

 

 

 

(4,120,000

)

 

 

(4

)

 

 

(112,345,645

)

 

 

(112

)

 

 

83