0000950170-21-001377 | 10-Q | XBRL Viewer

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Document and Entity Information - shares	6 Months Ended
Document and Entity Information - shares	Jun. 30, 2021	Aug. 05, 2021
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2021
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q2
Entity Registrant Name	Progenity, Inc.
Entity Central Index Key	0001580063
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		79,406,317
Entity File Number	001-39334
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	27-3950390
Entity Address, Address Line One	4330 La Jolla Village Drive
Entity Address, Address Line Two	Suite 200
Entity Address, City or Town	San Diego
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	92122
City Area Code	855
Local Phone Number	293-2639
Document Quarterly Report	true
Document Transition Report	false
Title of 12(b) Security	Common Stock, par value $0.001 per share
Trading Symbol	PROG
Security Exchange Name	NASDAQ

Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Jun. 30, 2021	Dec. 31, 2020
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
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 March 31, 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

Condensed Consolidated Balance Sheets (Parenthetical) (Unaudited) - USD ($) $ in Thousands	Jun. 30, 2021	Dec. 31, 2020
Unamortized discount	$ 8,800	$ 9,600
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	350,000,000	350,000,000
Common stock, shares issued	81,995,756	59,287,331
Common stock, shares outstanding	78,347,655	55,772,303
Treasury stock, at cost shares	3,648,101	3,515,028
Convertible Notes
Unamortized discount	$ 8,767	$ 9,614

Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Income Statement [Abstract]
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

Condensed Consolidated Statements of Stockholders' Deficit (Unaudited) - USD ($) $ in Thousands	Total	IPO	Common Stock	Common Stock IPO	Preferred Stock Series A and A-1 Preferred Stock	Preferred Stock Series B Preferred Stock	Additional Paid-In Capital	Additional Paid-In Capital IPO	Accumulated Deficit	Treasury Stock
Beginning Balance at Dec. 31, 2019	$ (83,874)		$ 9		$ 4	$ 102	$ 283,260		$ (348,478)	$ (18,771)
Beginning Balance, shares at Dec. 31, 2019			8,451,415		4,120,000	101,867,405				(3,474,572)
Issuance of stock, net	14,072					$ 6	14,066
Issuance of stock, net, shares						6,033,796
Issuance of common stock upon exercise of options	103						103
Issuance of common stock upon exercise of options, shares			56,729
Stock-based compensation expense	2,057						2,057
Net loss	(17,152)								(17,152)
Ending Balance at Mar. 31, 2020	(84,794)		$ 9		$ 4	$ 108	299,486		(365,630)	$ (18,771)
Ending Balance, shares at Mar. 31, 2020			8,508,144		4,120,000	107,901,201				(3,474,572)
Beginning Balance at Dec. 31, 2019	(83,874)		$ 9		$ 4	$ 102	283,260		(348,478)	$ (18,771)
Beginning Balance, shares at Dec. 31, 2019			8,451,415		4,120,000	101,867,405				(3,474,572)
Net loss	(69,935)
Ending Balance at Jun. 30, 2020	(17,160)		$ 50				420,242		(418,681)	$ (18,771)
Ending Balance, shares at Jun. 30, 2020			50,022,606							(3,474,572)
Beginning Balance at Mar. 31, 2020	(84,794)		$ 9		$ 4	$ 108	299,486		(365,630)	$ (18,771)
Beginning Balance, shares at Mar. 31, 2020			8,508,144		4,120,000	107,901,201				(3,474,572)
Issuance of stock, net	9,933	$ 88,665		$ 7		$ 4	9,929	$ 88,658
Issuance of stock, net, shares				6,666,667		4,444,444
Issuance of common stock upon exercise of options	45						45
Issuance of common stock upon exercise of options, shares			20,880
Automatic conversion of preferred stock			$ 33		$ (4)	$ (112)	83
Automatic conversion of preferred stock, shares			33,443,562		(4,120,000)	(112,345,645)
Issuance of common stock upon conversion of debt	18,750		$ 1				18,749
Issuance of common stock upon conversion of debt, shares			1,250,000
Issuance of stock purchase warrant							268		(268)
Issuance of common stock upon vesting of restricted stock unit awards, shares			133,353
Stock-based compensation expense	3,024						3,024
Net loss	(52,783)								(52,783)
Ending Balance at Jun. 30, 2020	(17,160)		$ 50				420,242		(418,681)	$ (18,771)
Ending Balance, shares at Jun. 30, 2020			50,022,606							(3,474,572)
Beginning Balance at Dec. 31, 2020	(106,994)		$ 59				452,992		(541,274)	$ (18,771)
Beginning Balance, shares at Dec. 31, 2020			59,287,331							(3,515,028)
Issuance of stock, net	11,262		$ 4				11,258
Issuance of stock, net, shares			4,370,629
Issuance of common stock upon exercise of options	88						88
Issuance of common stock upon exercise of options, shares			71,284
Issuance of common stock upon vesting of restricted stock unit awards	(229)						(228)			$ (1)
Issuance of common stock upon vesting of restricted stock unit awards, shares			174,730							(48,581)
Stock-based compensation expense	2,630						2,630
Net loss	(32,264)								(32,264)
Ending Balance at Mar. 31, 2021	(125,507)		$ 63				466,740		(573,538)	$ (18,772)
Ending Balance, shares at Mar. 31, 2021			63,903,974							(3,563,609)
Beginning Balance at Dec. 31, 2020	$ (106,994)		$ 59				452,992		(541,274)	$ (18,771)
Beginning Balance, shares at Dec. 31, 2020			59,287,331							(3,515,028)
Issuance of common stock upon exercise of options, shares	96,782
Net loss	$ (110,795)
Ending Balance at Jun. 30, 2021	(139,609)		$ 82				531,156		(652,069)	$ (18,778)
Ending Balance, shares at Jun. 30, 2021			81,995,756							3,648,101
Beginning Balance at Mar. 31, 2021	(125,507)		$ 63				466,740		(573,538)	$ (18,772)
Beginning Balance, shares at Mar. 31, 2021			63,903,974							(3,563,609)
Issuance of stock, net	12,007		$ 16				11,991
Issuance of stock, net, shares			15,694,332
Issuance of common stock upon exercise of options	20						26			$ (6)
Issuance of common stock upon exercise of options, shares			25,498							(5,050)
Issuance of common stock upon conversion of debt	2,069		$ 1				2,068
Issuance of common stock upon conversion of debt, shares			611,616
Issuance of stock purchase warrant	41,926						41,926
Issuance of common stock under employee stock purchase plan	561		$ 1				560
Issuance of common stock under employee stock purchase plan, shares			254,832
Issuance of common stock upon conversion of interest, net	3,627		$ 1				3,626
Issuance of common stock upon conversion of interest, net, shares			1,268,116
Issuance of common stock upon vesting of restricted stock unit awards	(251)						(251)
Issuance of common stock upon vesting of restricted stock unit awards, shares			237,388							(79,442)
Stock-based compensation expense	4,470						4,470
Net loss	(78,531)								(78,531)
Ending Balance at Jun. 30, 2021	$ (139,609)		$ 82				$ 531,156		$ (652,069)	$ (18,778)
Ending Balance, shares at Jun. 30, 2021			81,995,756							3,648,101

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended		12 Months Ended
	Jun. 30, 2021	Jun. 30, 2021	Jun. 30, 2020	Dec. 31, 2020
Operating Activities:
Net loss		$ (110,795)	$ (69,935)
Adjustments to reconcile net loss to net cash used in operating activities:
Loss from discontinued operations		51,934	47,958
Non-cash revenue reserve		172	23,729
Depreciation and amortization		965	789
Stock-based compensation expense		5,625	4,285
Loss on extinguishment of convertible note		242	3,401
Amortization of debt discount		4,753	1,330
Loss on disposal of property and equipment			18
Change in fair value of derivative liability		(17,977)	126
Change in fair value of warrant liability	$ 5,146	2,496
Changes in operating assets and liabilities:
Income tax receivable			(14,961)
Prepaid expenses and other current assets		(4,888)	762
Other Assets		22
Accounts payables		1,683	707
Accrued expenses and other liabilities		7,041	(7,519)
Other long-term liabilities		6,591	490
Net cash used in operating activities - continuing operations		(52,136)	(8,820)
Net cash used in operating activities - discontinued operations		(32,114)	(34,382)
Net cash used in operating activities		(84,250)	(43,202)
Investing Activities:
Purchases of property and equipment		(853)	(683)
Net Cash Provided by (Used in) Investing Activities, Continuing Operations, Total		(853)	(683)
Net cash used in investing activities discontinued operations		(168)	(944)
Net cash used in investing activities		(1,021)	(1,627)
Financing Activities:
Proceeds from issuance of common stock, net		23,377	90,937
Proceeds from issuance of Series B Preferred Stock, net			21,307
Proceeds from issuance of convertible note, net			14,895
Proceeds from issuance of common stock warrants		39,430
Payment of deferred offering costs		(50)
Payments for insurance financing		(2,680)
Principal payments on mortgages payable		(35)	(34)
Principal payments on capital lease obligations		(179)	(376)
Net cash provided by financing activities - continuing operations		59,863	126,729
Net cash used in financing activities - discontinued operations		(121)	(128)
Net cash provided by financing activities		59,742	126,601
Net (decrease) increase in cash and cash equivalents		(25,529)	81,772
Cash and cash equivalents at beginning of period		91,520	31,204	$ 31,204
Cash and cash equivalents at end of period	$ 65,991	65,991	112,976	$ 91,520
Supplemental disclosure of cash flow information:
Cash paid for interest		3,068	1,901
Cash paid for income taxes		46	54
Supplemental schedule of non-cash investing and financing activities:
Conversion of convertible note		2,069	18,750
Issuance of common stock upon conversion of interest		3,627
Equity offering costs incurred but not paid		2,150	2,133
Debt offering costs incurred but not paid		62
Issuance of preferred stock in settlement of interest payable			2,698
Issuance of stock options in settlement of accrued bonuses			754
Purchases of property and equipment in accounts payable		$ 135	$ 262

Organization and Description of Business

6 Months Ended

Jun. 30, 2021

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Organization and Description of Business

1. Organization and Description of Business

Progenity, Inc. (the “Company” or “Progenity”), a Delaware corporation, commenced operations in 2010 with its corporate office located in San Diego, California. Progenity’s historical operations include a licensed Clinical License Improvement Amendment and College of American Pathologists certified laboratory located in Michigan specializing in the molecular testing markets serving women’s health providers in the obstetric, gynecological, fertility, and maternal fetal medicine specialty areas in the United States.

Previously, the Company’s core business was focused on the prenatal carrier screening and noninvasive prenatal test market, targeting preconception planning, and routine pregnancy management for genetic disease risk assessment. Through its affiliation with Mattison Pathology, LLP (“Mattison”), a Texas limited liability partnership doing business as Avero Diagnostics (“Avero”), located in Lubbock and Dallas, Texas, the Company’s operations also include anatomic and molecular pathology testing products in the United States.

In order to refocus efforts and resources on the Company's research and development pipeline, in June 2021, the Company announced a strategic transformation that included the closure of the Progenity genetics lab in Ann Arbor, Michigan and indicated that the Company is seeking strategic alternatives for Avero, together referred to as Laboratory Operations. The Company will continue testing out of the Avero laboratory while it continues to explore ways of monetizing this asset. The Company has excluded from continuing operations for all periods presented in this report revenues and expenses associated with its Laboratory Operations, which are reported as discontinued operations. See Note 4 for additional information on the Laboratory Operations.

Liquidity

As of June 30, 2021, the Company had cash and cash equivalents of $66.0 million and an accumulated deficit of $652.1 million. For the six months ended June 30, 2021, the Company reported a net loss of $110.8 million and cash used in operating activities of $52.1 million. The Company’s primary sources of capital have historically been the sale of common stock, private placements of preferred stock and incurrence of debt. As of June 30, 2021, the Company had $157.5 million of convertible senior notes ("Convertible Notes") outstanding (see Note 8), and mortgages outstanding of $1.3 million (see Note 10). Management does not believe that the current available cash and cash equivalents will be sufficient to fund the Company’s planned expenditures and meet its obligations for at least 12 months following the financial statement issuance date without raising additional funding. As a result, there is substantial doubt about the Company’s ability to continue as a going concern for 12 months following the issuance date of the condensed consolidated financial statements for the three and six months ended June 30, 2021.

The Company’s ability to continue as a going concern is dependent upon its ability to raise additional funding. Management believes that the Company’s liquidity position provides sufficient runway to achieve critical research and development pipeline milestones and continue operating into the fourth quarter of 2021. Management intends to raise additional capital through equity offerings and/or debt financings, or from other potential sources of liquidity, which may include new collaborations, licensing or other commercial agreements for one or more of the Company’s research programs or patent portfolios or divestitures of the Company's assets. Adequate funding, if needed, may not be available to the Company on acceptable terms, or at all. The Company’s ability to raise additional funds may be adversely impacted by potential worsening global economic conditions and the disruptions to, and volatility in, the credit and financial markets in the United States and worldwide resulting from the ongoing COVID-19 pandemic. If the Company is unable to raise capital when needed or on attractive terms, it would be forced to delay, reduce, or eliminate its research and development programs or other operations. If any of these events occur, the Company’s ability to achieve its operational goals would be adversely affected.

Uncertainties Related to the COVID-19 Pandemic

The ongoing COVID‑19 pandemic has negatively impacted the global economy, disrupted global supply chains and created significant volatility and disruption of financial markets. The Company has been materially and negatively affected by the COVID-19 pandemic; however, the extent of the impact of the COVID-19 pandemic on the Company’s operational and financial performance, including its ability to execute its business strategies and initiatives in the expected time frame, will depend on future developments, including the duration and spread of the pandemic and related restrictions on travel and transports, all of which are uncertain and cannot be predicted. The Company could be further negatively affected by the widespread outbreak of an illness or any other communicable disease, or any other public health crisis that results in economic and trade disruptions, including the disruption of global supply chains. An extended period of global supply chain and economic disruption could materially affect the Company’s business, results of operations, access to sources of liquidity and financial condition.

The estimates used for, but not limited to, determining the amount to be collected for accounts receivable, fair value of long-lived assets, and fair value of goodwill could be impacted by the pandemic. While the full impact of COVID-19 is unknown at this time, the Company has made appropriate estimates based on the facts and circumstances available as of the reporting date. These estimates may change as new events occur and additional information is obtained.

Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2021

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

Basis of Presentation

The Company’s condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. These financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, as filed with the Securities and Exchange Commission, (“SEC”), from which management derived the Company’s condensed consolidated balance sheet as of December 31, 2020. Certain amounts in prior periods have been reclassified to reflect the impact of the discontinued operations treatment of the Company's Laboratory Operations in order to conform to the current period presentation. The condensed consolidated financial statements include the accounts of Progenity, Inc., its wholly owned subsidiaries, and an affiliated professional partnership with Avero with respect to which the Company currently has a specific management arrangement. The Company has determined that Avero is a variable interest entity and that the Company is the primary beneficiary resulting in the consolidation of Avero as required by the accounting guidance for consolidation (see Note 3). All significant intercompany balances and transactions have been eliminated in consolidation.

As a result of the anticipated divestiture of the Laboratory Operations, the Company has retrospectively revised the consolidated statements of operations for the three and six months ended June 30, 2020, the cash flows for the six months ended June 30, 2020 and the consolidated balance sheet as of December 31, 2020, to reflect the operations and cash flows of the Laboratory Operations as discontinued operations and the related assets and liabilities as held for sale.

Unaudited Interim Financial Information

The accompanying condensed consolidated balance sheet as of June 30, 2021, the statements of operations and the statements of stockholders’ deficit for the three and six months ended June 30, 2021 and 2020 and the statements of cash flows for the six months ended June 30, 2021 and 2020 are unaudited. The unaudited interim financial statements have been prepared on the same basis as the audited annual financial statements and, in the opinion of management, reflect all adjustments, consisting of normal recurring adjustments, that are necessary to present fairly the results for the interim periods presented. Results are not necessarily indicative of results to be expected for the year ending December 31, 2021, any other interim periods, or any future year or period, particularly in light of the COVID-19 pandemic and its impact on domestic and global economies. The balance sheet as of December 31, 2020 included herein was derived from the audited financial statements as of that date. Certain disclosures have been condensed or omitted from the interim financial statements.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant items subject to such estimates include the estimate of variable consideration in connection with the recognition of revenue, the valuation of stock options, the valuation of goodwill and intangible assets, the valuation of the derivative liability associated with the Convertible Notes, accrual for reimbursement claims and settlements, the valuation of the warrant liability, the valuation of assets held for sale, assessing future tax exposure and the realization of deferred tax assets, and the useful lives and the recoverability of property and equipment. The

Company bases these estimates on historical and anticipated results, trends, and various other assumptions that the Company believes are reasonable under the circumstances, including assumptions as to future events. These estimates form the basis for making judgments about the carrying values of assets and liabilities and recorded revenues and expenses that are not readily apparent from other sources. Actual results could differ from those estimates and assumptions.

Assets Held for Sale and Discontinued Operations

Assets and liabilities are classified as held for sale when all of the following criteria for a plan of sale have been met: (1) management, having the authority to approve the action, commits to a plan to sell the assets; (2) the assets are available for immediate sale, in their present condition, subject only to terms that are usual and customary for sales of such assets; (3) an active program to locate a buyer and other actions required to complete the plan to sell the assets have been initiated; (4) the sale of the assets is probable and is expected to be completed within one year; (5) the assets are being actively marketed for a price that is reasonable in relation to their current fair value; and (6) actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or the plan will be withdrawn. When all of these criteria have been met, the assets and liabilities are classified as held for sale in the condensed consolidated balance sheet. Assets classified as held for sale are reported at the lower of their carrying value or fair value less costs to sell. Depreciation and amortization of assets ceases upon designation as held for sale.

Discontinued operations comprise activities that were disposed of, discontinued or held for sale at the end of the period, represent a separate major line of business that can be clearly distinguished for operational and financial reporting purposes and represent a strategic business shift having a major effect on the Company’s operations and financial results according to Accounting Standard Codification (“ASC”) Topic 205, Presentation of Financial Statements.

Additional details surrounding the Company's assets and liabilities held for sale and discontinued operations are included in Note 4.

Revenue Recognition

Revenue is recognized in accordance with the Financial Accounting Standards Board (“FASB”) ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”). In accordance with ASC 606, the Company follows a five-step process to recognize revenues: 1) identify the contract with the customer, 2) identify the performance obligations, 3) determine the transaction price, 4) allocate the transaction price to the performance obligations and 5) recognize revenues when the performance obligations are satisfied.

Revenue is primarily derived from providing molecular testing products, which are reimbursed through arrangements with third-party payors, laboratory distribution partners, and amounts from individual patients. Third-party payors include commercial payors, such as health insurance companies, health maintenance organizations and government health benefit programs, such as Medicare and Medicaid. The Company’s contracts generally contain a single performance obligation, which is the delivery of the test results, and the Company satisfies its performance obligation at a point in time upon the delivery of the results, which then triggers the billing for the product. The amount of revenue recognized reflects the amount of consideration the Company expects to be entitled to (“transaction price”) and considers the effects of variable consideration. Revenue is recognized when control of the promised product is transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those products.

The Company applies the following practical expedients and exemptions:



Incremental costs incurred to obtain a contract are expensed as incurred because the related amortization period would be one year or less. The costs are included in selling and marketing expenses.



No adjustments to amounts of promised consideration are made for the effects of a significant financing component because the Company expects, at contract inception, that the period between the transfer of a promised good or service and customer payment for that good or service will be one year or less.

Payor Concentration

The Company relies upon reimbursements from third-party government payors and private-payor insurance companies to collect accounts receivable. The Company’s significant third-party payors and their related accounts receivable balances and revenues as a percentage of total accounts receivable balances and revenues are as follows:


	Percentage of Accounts Receivable
	June 30, 2021			December 31, 2020
Blue Shield of Texas		18.1	%		17.8	%
Government Health Benefits Programs		26.4	%		26.2	%
Aetna		5.0	%		4.0	%
Anthem		3.0	%		3.5	%
United Healthcare		6.3	%		6.6	%


	Percentage of Revenue (1)
	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2021			2020			2021			2020
Blue Shield of Texas		24.9	%		41.9	%		23.7	%		42.2	%
Government Health Benefits Programs (2)		25.2	%		(14.4	)%		24.2	%		(26.6	)%
Aetna		7.0	%		13.8	%		7.4	%		12.9	%
Anthem		5.3	%		14.0	%		3.2	%		12.1	%
United Healthcare		7.1	%		4.8	%		6.9	%		4.4	%

(1) Percentage of revenue table shows amounts as a percentage of total revenue, including revenue classified as discontinued operations. Refer to Note 5 for details of the breakdown of revenue.

(2) The negative amounts presented in the percentage of revenues include accruals for reimbursement claims and settlements included in the estimate of variable consideration recorded during the three and six months ended June 30, 2020. Revenues recognized consider the effects of variable consideration, and include adjustments for estimates of disallowed cases, discounts, and refunds. The variable consideration includes reductions in revenues for the accrual for reimbursement claims and settlements.

Accounts Receivable

Accounts receivable is recorded at the transaction price and considers the effects of variable consideration. The total consideration the Company expects to collect is an estimate and may be fixed or variable. Variable consideration includes reimbursement from third-party payors, laboratory distribution partners, and amounts from individual patients, and is adjusted for disallowed cases, discounts, and refunds using the expected value approach. The Company monitors these estimates at each reporting period based on actual cash collections in order to assess whether a revision to the estimate is required. Amounts included in accounts receivable consist of receivables generated from Progenity’s genetics lab in Ann Arbor, Michigan. The Company plans to continue to collect these receivables and has not included these amounts as assets held for sale.

Fair Value of Financial Instruments

The Company’s financial assets and liabilities are carried at fair value or at amounts that, because of their short-term nature, approximate current fair value, with the exception of its Convertible Notes, which are carried at amortized cost. The carrying value of the Company’s accounts receivable, accounts payable, and accrued expenses and other current liabilities are considered to be representative of their respective fair values because of their short-term nature. The carrying value of the Company’s mortgages payable approximates their estimated fair values because the instruments bear interest at rates, and have terms that are comparable to those available to the Company for similar loan instruments at June 30, 2021 and December 31, 2020. (See Note 7).

Embedded Derivative Related to Convertible Notes

During 2020, the Company issued Convertible Notes with an embedded derivative that is required to be bifurcated from the host contract and remeasured to fair value at each balance sheet date. Any resulting gain or loss related to the change in the fair value of the embedded derivative is recorded to interest and other income (expense), net on the condensed consolidated statements of operations. Changes in the Company’s assumptions, such as the Company’s stock price and volatility of common stock, could result in material changes in the valuation in future periods.

Stock-Based Compensation

Stock-based compensation related to stock options, restricted stock units (“RSUs”) and the 2020 Employee Stock Purchase Plan (“ESPP”) awards granted to the Company’s employees is measured at the grant date based on the fair value of the award. The fair value is recognized as expense over the requisite service period, which is generally the vesting period of the respective awards. Compensation related to service-based awards is recognized starting on the grant date on a straight-line basis over the vesting period, which is typically four years. For the ESPP, the requisite service period is generally the period of time from the offering date to the purchase date. In addition, the Company grants stock option awards that vest upon achievement of certain performance criteria ("Performance Awards"). The fair value is recognized as expense over the requisite service period when the Company has concluded that achieving the performance criteria is probable. The probability of achieving the performance criteria is assessed each reporting period. The Company accounts for the forfeitures in the period in which they occur. The fair value of RSUs is estimated based on the closing price of the Company's common stock on the date of the grant.

The fair value of stock options, ESPP awards and Performance Awards is estimated using the option-pricing model and is affected by the Company’s assumptions regarding a number of complex and subjective variables. These variables include, but are not limited to, the fair value of the common stock at the date of grant, the expected term of the awards, the expected stock price volatility over the term of the awards, risk-free interest rate, and dividend rate. The Company’s assumptions with respect to these variables are as follows:

Fair Value of Common Stock—Prior to the IPO, the Company’s common stock was not publicly traded, therefore the Company estimated the fair value of its common stock. Following the IPO, the fair value of the Company’s common stock for awards with service-based vesting is the closing price of its common stock on the date of grant or other relevant determination date.

Expected Term—The expected term represents the period that the stock-based awards are expected to be outstanding. The Company determines the expected term using the simplified method. The simplified method deems the term to be the average of the time-to-vesting and the contractual life. For stock options granted to non-employees, the expected term equals the remaining contractual term of the option from the vesting date. For the ESPP, the expected term is the period of time from the offering date to the purchase date.

Expected Volatility—Given the limited period of time the Company’s stock has been traded in an active market, the expected volatility is estimated by taking the average historical volatility for industry peers, consisting of several public companies in the Company’s industry that are similar in size, stage, or financial leverage, over a period of time commensurate with the expected term of the awards.

Risk-Free Interest Rate—The risk-free interest rate is calculated using the average of the published interest rates of U.S. Treasury zero-coupon issues with maturities that are commensurate with the expected term.

Dividend Rate—The dividend yield assumption is zero, as the Company has no plans to pay dividends.

Net Loss Per Share

Basic and diluted net loss per share attributable to common stockholders is presented in conformity with the two-class method required for participating securities. The Company considers all series of preferred stock to be participating securities as the holders of such stock are entitled to receive non-cumulative dividends on an as-converted basis in the event that a dividend is paid on common stock. Under the two-class method, the net loss attributable to common stockholders is not allocated to the preferred stock as the holders of preferred stock do not have a contractual obligation to share in the Company’s losses. Under the two-class method, net income is attributed to common stockholders and participating securities based on their participation rights. Basic 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 shares of common stock outstanding during the period. Net loss attributable to common stockholders is calculated by adjusting net loss with dividends to preferred stockholders, if any. As the Company has reported net losses for all periods presented, all potentially dilutive securities are antidilutive and, accordingly, basic net loss per share equals diluted net loss per share.

Comprehensive Loss

The Company did not have any other comprehensive income or loss for any of the periods presented, and therefore comprehensive loss was the same as the Company’s net loss.

Recent Accounting Pronouncements Adopted

In December 2019, FASB issued Accounting Standards Update (“ASU”) No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which simplified income tax accounting in various areas. The Company adopted this standard on January 1, 2021, which did not have a material impact on the condensed consolidated financial statements.

Recent Accounting Pronouncements Not Yet Adopted

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which supersedes FASB ASC Topic 840, Leases (Topic 840), and provides principles for the recognition, measurement, presentation and disclosure of leases for both lessees and lessors. The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method for finance leases or on a straight-line basis over the term of the lease for operating leases. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases. In June 2020, the FASB issued ASU No. 2020-05, Revenue from Contracts with Customers (Topic 606) and Leases (Topic 842): Effective Dates for Certain Entities, which further defers the effective date for certain entities. As a result, the ASU is now effective for EGCs for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. If the Company maintains EGC status, it plans to adopt the new lease standard effective January 1, 2022, using the effective date method with the cumulative effect of the change, if any, reflected in retained earnings. The Company plans to elect the package of practical expedients available in the new lease standard, allowing it not to reassess: (a) whether expired or existing contracts contain leases under the new definition of a lease; (b) lease classification for expired or existing leases; and (c) whether previously capitalized initial direct costs would qualify for capitalization under the new lease standard.

The Company continues to monitor FASB activity to assess certain interpretative issues and the associated implementation of the new standard and is in the process of reviewing its lease arrangements, including property, equipment and vehicle leases. The Company is not yet able to estimate the anticipated impact to its consolidated financial statements from the implementation of the new standard as it continues to interpret the principles of the new standard.

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses, which requires the measurement of expected credit losses for financial instruments carried at amortized cost, such as accounts receivable, held at the reporting date based on historical experience, current conditions and reasonable forecasts. The main objective of this standard 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. In November 2018, the FASB issued ASU No. 2018-19, Codification Improvements to Topic 326, Financing Instruments–Credit Losses, which included an amendment of the effective date. The standard is effective for the Company for annual reporting periods beginning after December 15, 2022. The Company does not expect the adoption of this standard to have a significant impact on its consolidated financial statements.

In August 2020, the FASB issued ASU No. 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)-Accounting for Convertible Instruments and Contracts in an Entity's Own Equity, which simplifies the accounting for convertible instruments, amends the guidance on derivative scope exceptions for contracts in an entity's own equity, and modifies the guidance on diluted earnings per share calculations as a result of these changes. The standard is effective for the Company for annual reporting periods beginning after December 15, 2023. The Company is currently evaluating the impact the adoption of this standard may have on its consolidated financial statements.

Variable Interest Entities

6 Months Ended

Jun. 30, 2021

Text Block [Abstract]

Variable Interest Entity

3. Variable Interest Entity

In June 2015, the Company, through a wholly-owned subsidiary, entered into a series of agreements with Avero. The subsidiary entity entered into a purchase agreement to acquire certain assets from Mattison used in the operations of Avero. The purchase agreement was accounted for under the acquisition method in accordance with the provisions of ASC Topic 805, Business Combinations. The subsidiary entity also entered into a nominee agreement which provides it with the right, but not the obligation, to purchase, or to designate a person(s) to purchase, the stock of Avero at any time for a nominal amount.

The Company's subsidiary entity also entered into a management services arrangement that authorizes the Company to perform the management services in the manner that it deems reasonably appropriate to meet the day-to-day business needs of Avero. The management services include funding ongoing operational needs, directing activities related to contract negotiation, billing, human resources, and legal and administrative matters and processes, among others. In exchange for the management services provided, the Company's subsidiary entity is entitled to receive an annual management fee equal to the amount of the net operating income of Avero. The term of the agreement with Avero is 10 years, subject to automatic renewals. The agreement can be terminated by either party with a 90-day notice before the end of the term.

Through the management services arrangement with Avero, the Company has (1) the power to direct the activities of Avero that most significantly impact its economic performance, and (2) the obligation to absorb losses of Avero or the right to receive benefits from Avero that could potentially be significant to Avero. Based on these determinations, the Company has determined that Avero is a variable interest entity and that the Company is the primary beneficiary. The Company does not own any equity interest in Avero;

however, as these agreements provide the Company the controlling financial interest in Avero, the Company consolidates Avero’s balances and activities within its consolidated financial statements.

In December 2018, Avero entered into a settlement agreement with Cigna (the “Cigna settlement obligation”) whereby Avero agreed to pay an aggregate amount of $12.0 million with an upfront payment of $6.0 million and the remaining $6.0 million was paid over 24 months. The Company provided financial support to Avero in the amount of $0.8 million and $1.5 million during the three and six months ended June 30, 2020, respectively, related to the Cigna settlement obligation, which was fully settled as of December 31, 2020. The Company did not provide any additional financial support to Avero during the three and six months ended June 30, 2021 and 2020, other than the Cigna settlement obligation and agreed upon management services.

The following table presents the assets and liabilities of Avero that are included in the Company’s condensed consolidated balance sheets as of June 30, 2021 and December 31, 2020 (in thousands). All of the following is included in assets and liabilities held for sale - Avero, refer to Note 4. The creditors of Avero have no recourse to the general credit of the Company, with the exception of $1.6 million and $1.7 million in mortgages payable guaranteed by the Company as of June 30, 2021 and December 31, 2020, respectively (see Note 10). The assets and liabilities exclude intercompany balances that eliminate in consolidation:


	June 30, 2021		December 31, 2020
Assets of Avero that can only be used to settle obligations of Avero
Cash and cash equivalents	$	1,247	$	556
Accounts receivable, net		3,647		6,047
Inventory		2,038		3,382
Prepaid expenses and other current assets		2,236		1,254
Property and equipment, net		5,453		5,436
Other assets		30		30
Goodwill		6,219		6,219
Other intangible assets, net		3,384		3,843
Total assets of Avero that can only be used to settle obligations of Avero	$	24,254	$	26,767
Liabilities of Avero
Accounts payable	$	5,271	$	4,722
Accrued expenses and other accrued liabilities		3,590		3,472
Current portion of capital lease obligations		27		46
Current portion of mortgage payable		202		199
Capital lease obligations, net of current portion		—		4
Mortgage payable, net of current portion		1,418		1,520
Other long-term liabilities		306		428
Total liabilities of Avero	$	10,814	$	10,391

Assets Held for Sale and Discontinued Operations

6 Months Ended

Jun. 30, 2021

Discontinued Operations and Disposal Groups [Abstract]

Assets Held for Sale and Discontinued Operations

4. Assets Held for Sale and Discontinued Operations

In June 2021, the Company announced its plan to reallocate resources to research and development to better position the business for future growth. The plan includes the closure of the Progenity genetics laboratory in Ann Arbor, Michigan and the potential divestiture of Avero. The Company will continue testing out of the Avero laboratory while it continues to explore ways of monetizing this asset. This plan represents a strategic business shift having a major effect on the Company's operations and financial results. As of June 30, 2021, the Company stopped providing genetic laboratory-developed test services in its Ann Arbor, Michigan laboratory and determined that the Laboratory Operations, including Avero, met the requirements of discontinued operations. The Company has classified the results of its Laboratory Operations as discontinued operations in its condensed consolidated statements of operations and cash flows for all periods presented. The Company recognized a loss of $19.3 million for the three and six months ended June 30, 2021 related to contract terminations, severance, inventory and fixed asset write-downs in discontinued operations related to the Progenity genetics laboratory shut down. Additionally, the related assets and liabilities have been reported as assets and liabilities held for sale in the Company’s condensed consolidated balance sheet as of June 30, 2021 and December 31, 2020.

The following table presents the combined results of discontinued operations of the Laboratory Operations (in thousands):


	Three Months Ended June 30,						Six Months Ended June 30,
	2021			2020			2021			2020
Revenues	$	18,242		$	17,266		$	42,601		$	34,094
Cost of sales		26,233			21,835			48,466			48,405
Gross loss		(7,991	)		(4,569	)		(5,865	)		(14,311	)
Operating expenses:
Research and development		1,590			—			1,590			(2	)
Selling and marketing		20,127			11,189			32,917			23,937
General and administrative		7,413			4,479			11,533			9,869
Total operating expenses		29,130			15,668			46,040			33,804
Interest and other (expense) income, net		(10	)		177			(29	)		157
Net loss from discontinued operations	$	(37,131	)	$	(20,060	)	$	(51,934	)	$	(47,958	)

The following table presents the carrying amounts of the classes of assets and liabilities held for sale related to the Laboratory Operations as of June 30, 2021 and December 31, 2020 (in thousands):


	June 30, 2021		December 31, 2020

Carrying amounts of assets of disposal group held for sale
Current assets:
Cash and cash equivalents	$	1,247	$	556
Accounts receivable, net		3,647		6,047
Inventory		3,686		12,220
Prepaid expenses and other current assets		2,236		1,254
Total current assets of disposal group held for sale (1)				20,077
Property and equipment, net		9,732		9,181
Other assets		30		30
Goodwill		6,219		6,219
Other intangible assets, net		3,384		3,843
Total assets of disposal group held for sale (1)	$	30,181	$	39,350
Carrying amounts of disposal group held for sale
Current liabilities:
Accounts payable		5,285		4,722
Accrued expenses and other current liabilities		5,770		3,503
Current portion of mortgages payable		1,620		198
Current portion of capital lease obligations		28		46
Total current liabilities of disposal group held for sale (1)		12,703		8,469
Capital lease obligations, net of current portion		—		4
Mortgages payable, net of current portion		—		1,520
Other long-term liabilities		—		428
Total liabilities of disposal group held for sale (1)	$	12,703	$	10,421

(1) The assets and liabilities of the Laboratory Operations are classified as held for sale and are classified as current in the unaudited condensed consolidated balance sheet at June 30, 2021, because they are expected to be sold within one year.

Revenues

6 Months Ended

Jun. 30, 2021

Revenue From Contract With Customer [Abstract]

Revenues

5. Revenues

Revenues are derived from contracts with healthcare insurers, government payors, laboratory partners and patients in connection with sales of prenatal genetic, anatomic or molecular pathology tests. The Company enters into contracts with healthcare insurers related to tests provided to patients who have health insurance coverage. Insurance carriers are considered third-party payors on behalf of the patients, and the patients who receive genetic, anatomic or molecular pathology test products are considered the customers. Tests may be billed to insurance carriers, patients, or a combination of insurance carriers and patients. The Company also sells tests to laboratory partners, which are also considered to be customers.

In accordance with ASC 606, a performance obligation represents a promise in a contract to transfer a distinct good or service to a customer and the consideration should be allocated to each distinct performance obligation and recognized as revenue when or as the performance obligation is satisfied. The Company has evaluated its contracts with healthcare insurers, government payors, laboratory partners and patients and identified a single performance obligation, the delivery of a test result. The Company satisfies its performance obligation at a point in time upon the delivery of the test result, at which point the Company can bill for its products. The amount of revenue recognized reflects the transaction price and considers the effects of variable consideration, which is discussed below.

Once the Company satisfies its performance obligations upon delivery of a test result and bills for the product, the timing of the collection of payments may vary based on the payment practices of the third-party payor. The Company bills patients directly for co-pays and deductibles that they are responsible for and also bills patients directly in cases where the customer does not have insurance.

The Company has established an accrual for refunds of payments previously made by healthcare insurers based on historical experience and executed settlement agreements with healthcare insurers. The refunds are accounted for as reductions in revenues in the consolidated statements of operations as an element of variable consideration. In the United States, the American Medical Association (“AMA”) generally assigns specific billing codes for laboratory tests under a coding system known as Current Procedure Terminology (“CPT”), which the Company and its ordering healthcare providers must use to bill and receive reimbursement for molecular tests. Effective January 1, 2019, the AMA issued a CPT code for genetic testing for severe inherited conditions that includes sequencing of at least 15 genes, which affects potential reimbursement for the Company’s Preparent expanded carrier screening tests. As part of the Company’s work to improve its compliance program, including its internal auditing and monitoring function, the Company commissioned a third-party review of its billing processes. In connection with that audit, the Company identified that it had not effectively transitioned to the implementation of the new CPT code in 2019, and as a result the Company received an overpayment of approximately $10.3 million from government payors during 2019 and early 2020. As of December 31, 2020, the Company settled all existing obligations to the relevant government programs as due and will continue to settle any future obligation as they arise.

The transaction price is an estimate and may be fixed or variable. Variable consideration includes reimbursement from healthcare insurers, government payors, and patients and is adjusted for estimates of disallowed cases, discounts, and refunds using the expected value approach. Tests billed to healthcare insurers and directly to patients can take up to nine months to collect and the Company may be paid less than the full amount billed or not paid at all. For insurance carriers and government payors, management utilizes the expected value method using a portfolio of relevant historical data for payors with similar reimbursement characteristics. The portfolio estimate is developed using historical reimbursement data from payors and patients, as well as known current reimbursement trends not reflected in the historical data. Such variable consideration is included in the transaction price only to the extent it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainties with respect to the amount are resolved. The Company monitors these estimates at each reporting period based on actual cash collections and the status of settlement agreements with third-party payors, in order to assess whether a revision to the estimate is required. Both the initial estimate and any subsequent revision to the estimate contain uncertainty and require the use of judgment in the estimation of the transaction price and application of the constraint for variable consideration. If actual results in the future vary from the Company’s estimates, the Company will adjust these estimates, which would affect revenue and earnings in the period such variances become known. The consideration expected from laboratory partners is generally a fixed amount.

The Company periodically updates its estimate of the variable consideration recognized for previously delivered performance obligations. These updates resulted in an additional $0.8 million and $3.0 million of revenue reported for the three and six months ended June 30, 2021, respectively, and a reduction of $6.1 million and $18.9 million of revenue reported for the three and six months ended June 30, 2020, respectively. These amounts included (i) adjustments for actual collections versus estimated variable consideration as of the beginning of the reporting period and (ii) cash collections and the related recognition of revenue in the current period for tests delivered in prior periods due to the release of the constraint on variable consideration, offset by (iii) reductions in revenue for the accrual for reimbursement claims and settlements described in Note 11.

Disaggregation of Revenues

The following tables shows revenues disaggregated by payor type and revenue classification (in thousands):


	Three Months Ended June 30,					Six Months Ended June 30,
Payor	2021		2020			2021		2020
Commercial third-party payors	$	13,044	$	18,030		$	29,495	$	39,592
Government health benefit programs(1)		4,725		(2,922	)		10,450		(9,065	)
Patient/laboratory distribution partners		936		2,158			3,286		3,567
Total revenues	$	18,705	$	17,266		$	43,231	$	34,094

(1) The revenue amounts include accruals for reimbursement claims and settlements included in the estimates of variable consideration recorded during the three and six months ended June 30, 2021 and 2020. Revenues recognized reflect the effects of variable consideration, and include adjustments for estimates of disallowed cases, discounts, and refunds. The variable consideration includes reductions in revenues for the accrual for reimbursement claims and settlements.


	Three Months Ended June 30,				Six Months Ended June 30,
Classification	2021		2020		2021		2020
Revenue from continuing operations	$	463	$	—	$	630	$	—
Revenue reported under discontinued operations		18,242		17,266		42,601		34,094
Total revenues	$	18,705	$	17,266	$	43,231	$	34,094

- Definition

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-URI http://asc.fasb.org/topic&trid=49130388

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 10
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130551-203045

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (b)(2)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130556-203045

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 9
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130550-203045

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (e)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (d)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 15
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130558-203045

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (c)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045

+ Details

Balance Sheet Components

6 Months Ended

Jun. 30, 2021

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Balance Sheet Components

6. Balance Sheet Components

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consisted of the following (in thousands):


	June 30, 2021		December 31, 2020
Prepaid expenses	$	12,568	$	7,996
Other current assets		539		111
Total	$	13,107	$	8,107

Property and Equipment, Net

Property and equipment, net consisted of the following (in thousands):


	June 30, 2021			December 31, 2020
Computers and software	$	5,885		$	8,770
Building and leasehold improvements		747			747
Laboratory equipment		3,569			3,556
Furniture, fixtures, and office equipment		1,438			1,438
Construction in progress		496			2,774
Land		346			346
Total property and equipment		12,481			17,631
Less accumulated depreciation and amortization		(7,007	)		(8,971	)
Property and equipment, net	$	5,474		$	8,660

Depreciation expense included in continuing operations was $1.0 million for both the six months ended June 30, 2021 and $0.8 million for the six months ended June 30, 2020.

Intangible Assets, Net

All intangible assets have been reclassified into assets held for sale, refer to Note 4. Amortization expense was $0.2 million and $0.5 million for the three and six months ended June 30, 2021 and $0.2 million and $0.5 million for the three and six months ended June 30, 2020, respectively and is included in discontinued operations.

Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following (in thousands):


	June 30, 2021		December 31, 2020
Accrual for reimbursement claims and settlements, current (1)	$	27,874	$	30,487
Commission and bonus		3,366		3,934
Vacation and payroll benefits		10,347		7,364
Accrued professional services		1,099		3,142
Accrued interest		1,183		855
Insurance financing		9,019		1,799
Contract liabilities		443		378
Other (2)		4,841		3,247
Total	$	58,172	$	51,206

(1) All of the Company's revenues related to Progenity's Laboratory Operations have been discontinued, these amounts related to the revenue reserve generated from the Progenity Laboratory Operations are not included in the assets held for sale.

(2) Included in this amount are contracts that Progenity will be responsible for that can not be terminated, as there is no future benefit to the Company, they have been expensed in discontinued operations, but are not included in assets held for sale.

Other Long-term Liabilities

Other long-term liabilities consisted of the following (in thousands):


	June 30, 2021		December 31, 2020
Accrual for reimbursement claims and settlements, net of current portion (1)	$	7,053	$	7,053
Other (2)		7,706		1,186
Total	$	14,759	$	8,239

Fair Value Measurements

6 Months Ended

Jun. 30, 2021

Fair Value Disclosures [Abstract]

Fair Value Measurements

7. Fair Value Measurements

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date. The authoritative guidance establishes a three-level valuation hierarchy that prioritizes the inputs to valuation techniques used to measure fair value based upon whether such inputs are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect market assumptions made by the reporting entity. This hierarchy requires the Company to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value. The three-level hierarchy for the inputs to valuation techniques is summarized as follows:

Level 1 - Quoted prices in active markets for identical assets and liabilities that the Company has the ability to access.

Level 2 - Observable market-based inputs or unobservable inputs that are corroborated by market data, such as quoted prices, interest rates, and yield curves.

Level 3 - Inputs that are unobservable data points that are not corroborated by market data.

There were no significant transfers between these fair value measurement classifications during the six months ended June 30, 2021 and 2020.

Fair Value of Financial Instruments

The Company’s Level 3 liabilities consist of the embedded derivative liability associated with the Company’s Convertible Notes (See Note 8). The Company periodically assesses the fair value of the conversion feature related to the Convertible Note. The conversion feature was bifurcated and recorded as an embedded derivative liability with a corresponding discount at the date of issuance that is netted against the principal amount of the Convertible Notes. The Company utilizes a Monte Carlo simulation method to determine the fair value of the conversion feature, which utilizes inputs including the common stock price, volatility of common stock, the risk-free interest rate and the probability of conversion to common shares at the conversion rate in the event of a major transaction (e.g. a change in control). Due to the use of significant unobservable inputs, the overall fair value measurement of the conversion feature is classified as Level 3.

The following table presents information about the Company’s assets and liabilities that are measured at fair value on a recurring basis and indicates the fair value hierarchy of the valuation techniques utilized to determine such fair value (in thousands):


	Level 1		Level 2		Level 3
June 30, 2021
Money market funds(1)	$	64,360	$	—	$	—
Embedded derivative liability	$	—	$	—	$	388

December 31, 2020
Money market funds(1)	$	90,254	$	—	$	—
Embedded derivative liability	$	—	$	—	$	18,370

(1) Included in cash and cash equivalents in the accompanying condensed consolidated balance sheets.

The carrying value of the Company’s Convertible Notes does not approximate its fair value because the carrying value of the Convertible Notes reflects the balance of unamortized discount related to the derivative liability associated with the value of conversion feature assessed at inception. The carrying value of the Company’s Convertible Notes, net of discount, was $157.5 million and $158.9 million at June 30, 2021 and December 31, 2020, respectively. Based on unadjusted quoted prices in active market obtained from third-party pricing services, the Company determined the fair value of the Convertible Notes was $169.0 and $250.2 million as of June 30, 2021 and December 31, 2020, respectively.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Convertible Notes

6 Months Ended

Jun. 30, 2021

Debt Disclosure [Abstract]

Convertible Notes

8. Convertible Notes

In December 2020, the Company issued a total of $168.5 million principal amount of its Convertible Notes in a private offering of the Convertible Notes pursuant to Rule 144A under the Securities Act. The Convertible Notes were issued pursuant to, and are governed by, an indenture, dated as of December 7, 2020, by and between the Company and The Bank of New York Mellon Trust Company, N.A., as trustee (the “Indenture”). The Convertible Notes are due on December 1, 2025, unless earlier repurchased, redeemed or converted, and accrue interest at a rate per annum equal to 7.25% payable semi-annually in arrears on June 1 and December 1 of each year, with the initial payment on June 1, 2021. During the three and six months ended June 30, 2021, the Company recognized interest expense on the Convertible Notes of $3.1 million and $6.2 million, respectively.

At any time, noteholders may convert their Convertible Notes at their option into shares of the Company’s common stock, together, if applicable, with cash in lieu of any fractional share, at the then-applicable conversion rate. The initial conversion rate is 278.0094 shares of common stock per $1,000 principal amount of Convertible Notes, which represents an initial conversion price of approximately $3.60 per share of common stock. Noteholders that convert their Convertible Notes before December 1, 2022 will, in certain circumstances, be entitled to an additional cash payment representing the present value of any remaining interest payments on the Convertible Notes through December 1, 2022. The conversion rate and conversion price are subject to customary adjustments upon the occurrence of certain dilutive events. In addition, if certain corporate events that constitute a “Make-Whole Fundamental Change” (as defined in the Indenture) occur, then the conversion rate will, in certain circumstances, be increased for a specified period of time.

The Convertible Notes are redeemable, in whole and not in part, at the Company’s option at any time on or after December 1, 2023, at a cash redemption price equal to the principal amount of the Convertible Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date, but only if the last reported sale price per share of the Company’s common stock exceeds 130% of the conversion price on (i) each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the trading day immediately before the date the Company sends the related redemption notice; and (ii) the trading day immediately before the date the Company sends such notice. In addition, calling the Convertible Notes will constitute a Make-Whole Fundamental Change, which will result in an increase to the conversion rate in certain circumstances for a specified period of time.

The Convertible Notes have customary provisions relating to the occurrence of “Events of Default” (as defined in the Indenture), which include the following: (i) certain payment defaults on the Convertible Notes (which, in the case of a default in the payment of interest on the Convertible Notes, will be subject to a 30-day cure period); (ii) the Company’s failure to send certain notices under the Indenture within specified periods of time; (iii) the Company’s failure to comply with certain covenants in the Indenture relating to the Company’s ability to consolidate with or merge with or into, or sell, lease or otherwise transfer, in one transaction or a series of transactions, all or substantially all of the assets of the Company and its subsidiaries, taken as a whole, to another person; (iv) a default by the Company in its other obligations or agreements under the Indenture or the Convertible Notes if such default is not cured or waived within 60 days after notice is given in accordance with the Indenture; (v) certain defaults by the Company or any of its subsidiaries with respect to indebtedness for borrowed money of at least $7.5 million; (vi) the rendering of certain judgments against the Company or any of its subsidiaries for the payment of at least $7.5 million, where such judgments are not discharged or stayed within 60 days after the date on which the right to appeal has expired or on which all rights to appeal have been extinguished; and (vii) certain events of bankruptcy, insolvency and reorganization involving the Company or any of the Company’s significant subsidiaries. As of June 30, 2021 and December 31, 2020, the Company was in compliance with all such covenants.

The Convertible Notes have a conversion option which was required to be bifurcated upon issuance and then periodically remeasured to fair value separately as an embedded derivative. The conversion option includes additional interest payments payable to the noteholders if converted prior to December 1, 2022. The conversion feature was bifurcated as recorded separately as an embedded derivative as (1) the conversion feature is not clearly and closely related to the debt instrument and is not considered to be indexed to the Company’s equity, (2) the conversion feature standing alone meets the definition of a derivative, and (3) the Convertible Notes are not remeasured at fair value each reporting period with changes in fair value recorded in the consolidated statement of operations.

As of June 30, 2021 and December 31, 2020, the fair value of the derivative liability was $0.4 million and $18.4 million, respectively. The change in the fair value of the derivative liability of $18.0 million is included in interest and other income (expense), net in the condensed consolidated statements of operations for the six months ended June 30, 2021. As of June 30, 2021 and December 31, 2020, the unamortized debt discount was $8.8 million and $9.6 million, respectively. The Company amortizes the debt discount using the effective interest method over the term of the Convertible Notes, resulting in an effective interest rate of approximately 8.7%. For the three and six months ended June 30, 2021, the amortization of the Convertible Notes debt discount was $0.4 million and $0.8 million, respectively, and was included in interest expense in the condensed consolidated statements of operations.

Related Party Transactions

6 Months Ended

Jun. 30, 2021

Related Party Transactions

9. Related Party Transactions

On October 27, 2017, the Company entered into a Credit and Security Agreement and a Series B Convertible Preferred Stock Purchase Agreement with a private equity firm (“2017 Transaction”). The 2017 Transaction provided for the 2017 Term Loan, the issuance of Series B Preferred Stock (“Series B Preferred Stock”), and the issuance of a warrant to purchase Series B Preferred Stock (“Series B Preferred Stock Purchase Warrant”). The 2017 Term Loan accrued interest at a rate per annum equal to 9.5% and was due October 27, 2022.

The 2017 Term Loan contained customary covenants, including a requirement to maintain a minimum unrestricted cash balance at all times of at least $5.0 million, and was secured by all tangible and intangible property and assets of the Company, with the exception of its intellectual property.

The total proceeds of $124.2 million from the 2017 Transaction were allocated to the 2017 Term Loan, Series B Preferred Stock, and the Series B Preferred Stock Purchase Warrant based on the relative fair value of the term loan, equity, and warrant issued. As a result, the Company allocated proceeds of $65.7 million to the 2017 Term Loan. As the proceeds allocated to the 2017 Term Loan are lower than the stated loan amount of $75.0 million, the resulting $9.3 million discount was amortized as interest expense using the effective interest method over the term of the loan.

During the three and six months ended June 30, 2020, the Company recognized interest expense of $2.5 million and $4.7 million, inclusive of $0.7 million and $1.1 million of discount amortization, respectively. The Term Loan was discharged in December 2020 in connection with the offering of Convertible Notes.

In connection with the Company’s initial public offering (“IPO”), on June 18, 2020, the Series B Preferred Stock Purchase Warrant became exercisable for 400,160 shares of common stock.

On March 31, 2020, the Company entered into the First Amendment to the Credit Agreement (“Credit Agreement Amendment”), with the collateral agent and lender party thereto, providing for the payment of interest due and payable as of March 31, 2020 in shares of Series B Preferred Stock, and further providing for the payment of interest due and payable as of June 30, 2020 in shares of the Series B Preferred Stock in the event the IPO has not been consummated by such date. Pursuant to the Credit Agreement Amendment, the Company concurrently entered into a Series B Preferred Stock Subscription Agreement (“Subscription Agreement”), with the lender, which provided for the issuance of 967,130 shares of Series B Preferred Stock at a subscription price of $2.25 per share, as payment for interest due and payable as of March 31, 2020 and all applicable fees as set forth in the Credit Agreement Amendment.

On May 8, 2020, the Company entered into an unsecured convertible promissory note (“Note”) with the same private equity firm pursuant to a note purchase agreement, in an aggregate principal amount of $15.0 million, with an annual interest rate of 8.0% and a maturity date of May 8, 2022. The Note was convertible into (i) common stock upon an initial public offering at the lesser of the conversion price then in effect and a conversion price equal to 80% of the public offering price (or, if not a “qualified IPO” as defined in the Company’s certificate of incorporation, at the election of a majority of the holders), (ii) on the maturity date or at the election of a majority of the holders, Series B preferred stock at an initial conversion price of $13.90 per share subject to certain adjustments, or (iii) at the election of a majority of the holders, shares of another class of equity securities issued by the Company in a future financing at 80% of the price per share of such class of equity securities issued in such offering. Interest under the Note was not generally payable except that if the Note is not converted pursuant to its terms on or prior to the maturity date and there are not sufficient authorized and unissued shares of Series B preferred stock for issuance upon the conversion of the Note on the maturity date, then the Company is required to pay all outstanding principal and any accrued and unpaid interest under the Note in cash. If the holders of the Note have not elected to convert the Note prior to, or in connection with, any sale transaction or a liquidation, dissolution or winding up of the Company, either voluntary or involuntary, then, upon any such sale transaction or liquidation, dissolution or winding up of the Company, the Company would have been required to pay in cash the outstanding principal balance of the Note, together with accrued and unpaid interest thereon, plus a make whole premium of 50% of the aggregate principal amount (less accrued and unpaid interest). The Company evaluated the economic features embedded in the Note and identified features that were required to be bifurcated and accounted for separately as a derivative. Accordingly, a derivative liability of $3.6 million was recorded on the issuance date of the Note and $3.8 million was subsequently reclassified to equity representing the fair value of the derivative liability on the date of extinguishment. The change in the fair value of the derivative liability of $0.2 million is included in interest and other income (expense), net in the accompanying condensed consolidated statements of operations for the six months ended June 30, 2020. In June 2020, in connection with completion of the IPO, the Note was converted into 1,250,000 shares of common stock and all obligations under the Note were extinguished. Upon the conversion, the Company recorded a $3.6 million loss on extinguishment of the debt, which represented the difference between the carrying value of the Note and the derivative liability and the fair value of the shares of common stock issued to the Note holder of $3.4 million combined with amortization of the related debt discount of $0.2 million. The same private equity firm participated in the IPO and acquired 3,333,333 shares at a price of $15.00 per share, which was at par with the price to other investors.

In December 2020, the private equity firm discharged any and all amounts owed and any obligations outstanding under the 2017 Term Loan in exchange for $78.5 million principal amount of Convertible Notes issued by the Company’s. The exchange was accounted for as an extinguishment of the 2017 Term Loan and resulted in $7.6 million of loss on extinguishment, which was included in the interest and other income (expense), net in the consolidated statement of operations for the year ended December 31, 2020. This private equity firm also acquired an additional $25.0 million principal amount of the Company’s Convertible Notes for cash in this private offering, which resulted in $103.5 million aggregate principal amount of the Convertible Notes acquired by this private equity firm (see Note 8). As of June 30, 2021 and December 31, 2020, the accrued interest expense related to the Convertible Notes held by this private equity firm was $0.6 million and $0.5 million, respectively. In December 2020, the same private equity firm participated in the underwritten public offering and acquired 4,128,440 shares at a price of $3.27 per share, resulting in proceeds to the Company of $13.2 million before expenses.

In June 2021, the private equity firm participated in a private placement. Refer to Note 12 for further details.

Mortgages Payable

6 Months Ended

Jun. 30, 2021

Debt Disclosure [Abstract]

Mortgages Payable

10. Mortgages Payable

In January 2014, the Company executed a mortgage with Comerica Bank for $1.8 million for the purpose of acquiring property located in Ann Arbor, Michigan, which is used for laboratory testing and research purposes. The mortgage matures in 2024 and requires monthly principal and interest payments at a fixed interest rate of 2.94% plus a floating rate at LIBOR. As of both June 30, 2021 and December 31, 2020, the outstanding balance of this mortgage was $1.3 million. The Company also has a mortgage with American Bank of Commerce (originally executed in February 2008) outstanding on Avero’s property located in Lubbock, Texas, that matures in 2029 and requires monthly principal and interest payments at an interest rate of 3.25%. As of June 30, 2021 and December 31, 2020, the outstanding balance of this mortgage of $1.6 million and $1.7 million, respectively is included in assets held for sale and excluded from the table below.

As of June 30, 2021, the minimum principal payments under the mortgages payable were as follows (in thousands):


Year ending December 31,	Minimum Mortgages Payable Payments Obligations
Remainder of 2021	$	37
2022		76
2023		80
2024		1,119
2025 and thereafter		—
Total future minimum payments		1,312
Less current portion of mortgages payable		(74	)
Mortgages payable, net of current portion	$	1,238

Commitments and Contingencies

6 Months Ended

Jun. 30, 2021

Commitments And Contingencies Disclosure [Abstract]

Commitments and Contingencies

. Commitments and Contingencies

Operating Leases

The Company has entered into various noncancelable operating lease agreements, primarily for office space, laboratory space, and vehicles, which expire over the next two to four years. Minimum rent payments under operating leases are recognized on a straight-line basis over the term of the lease. Rent expense included in continuing operations for operating leases was $1.7 million and $3.1 million, for the three and six months ended June 30, 2021, respectively, and $0.6 million and $3.4 million for the three and six months ended June 30, 2020, respectively.

As of June 30, 2021, net minimum payments under the non-cancelable operating leases were as follows (in thousands):


Year ending December 31,	Minimum Operating Lease Payments
Remainder of 2021	$	1,716
2022		1,929
2023		933
2024		35
2025 and thereafter		—
Total future minimum lease payments	$	4,613

Contingencies

The Company, in the ordinary course of its business, can be involved in lawsuits, threats of litigation, and audit and investigative demands from third parties. While management is unable to predict the exact outcome of such matters, it is management’s current belief, that any potential liabilities resulting from these contingencies, individually or in the aggregate, could have a material impact on the Company’s financial position and results of operations.

Federal Investigations

The regulations governing government reimbursement programs (e.g., Medicaid, Tricare, and Medicare) and commercial payor reimbursement programs are complex and may be subject to interpretation. As a provider of services to patients covered under government and commercial payor programs, post payment review audits, and other forms of reviews and investigations are routine. The Company believes it complies in all material respects with the statutes, regulations, and other requirements applicable to its laboratory operations.

In April 2018, the Company received a civil investigative demand from an Assistant U.S. Attorney (“AUSA”) for the Southern District of New York (“SDNY”) and a Health Insurance Portability and Accountability Act subpoena issued by an AUSA for the Southern District of California (“SDCA”). In May 2018, the Company received a subpoena from the State of New York Medicaid Fraud Control Unit.

On July 21, 2020, July 23, 2020, and October 1, 2020, the Company entered into agreements with certain governmental agencies and the 45 states participating in the settlement (“State AGs”) to resolve, with respect to such agencies and State AGs, all of such agencies’ and State AGs’ outstanding civil, and, where applicable, federal criminal investigations described above. Specifically, the Company has entered into:



a civil settlement agreement, effective July 23, 2020, with the U.S. Department of Justice ("DOJ") through the AUSA for SDNY, and on behalf of the Office of Inspector General of the Department of Health and Human Services (“OIG”), and with the relator named therein (“SDNY Civil Settlement Agreement”);



a civil settlement agreement, effective July 23, 2020, with the DOJ through the AUSA for SDCA, and on behalf of the Defense Health Agency, the Tricare Program and the Office of Personnel Management, which administers the Federal Employees Health Benefits Program (“SDCA Civil Settlement Agreement”);



a non-prosecution agreement, effective July 21, 2020, with the AUSA for SDCA (“Non-Prosecution Agreement”) in resolution of all criminal allegations;



a corporate integrity agreement, effective July 21, 2020, with the OIG (“Corporate Integrity Agreement”); and



civil settlement agreements, effective October 1, 2020, with the State Attorney Generals (“State Settlement Agreements”).

The Company refers to the SDNY Civil Settlement Agreement, the SDCA Civil Settlement Agreement, the Non-Prosecution Agreement, the Corporate Integrity Agreement and the State Settlement Agreements collectively as the Agreements.

SDNY Civil Settlement Agreement

Pursuant to the SDNY Civil Settlement Agreement, the Company is required to pay a settlement amount of approximately $19.4 million, which includes approximately $9.7 million designated as restitution to the U.S. federal government. During the six months ended June 30, 2021, the Company did not make any settlement payments. The outstanding settlement amount is payable in two remaining annual installments as follows:



approximately $2.0 million on or before December 31, 2021; and



approximately $2.8 million on or before December 31, 2022.

The remaining amounts payable to the government will be subject to interest at a rate of 1.25% per annum, and any or all amounts may be paid earlier at the option of the Company.

Furthermore, the Company has agreed that, if during calendar years 2020 through 2023, and so long as amounts payable to the government remain unpaid, the Company receives any civil settlement, damages awards, or tax refunds, to the extent that the amounts exceed $5.0 million in a calendar year, it will pay 26% of the amount received in such civil settlement, damages award, or tax refunds as an accelerated payment of the scheduled amounts set forth above, up to a maximum total acceleration of $4.1 million. During the year ended December 31, 2020, the Company received a tax refund of approximately $37.7 million related to the NOL carryback provisions available under the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) and made accelerated payments of approximately $4.1 million under the SDNY Civil Settlement Agreement. The Company did not receive any tax refunds during the six months ended June 30, 2021.

SDCA Civil Settlement Agreement

The SDCA Civil Settlement Agreement requires the Company to pay a settlement amount of approximately $16.4 million, which includes approximately $10.0 million designated as restitution to the U.S. federal government. During the six months ended June 30, 2021, the Company did not make any settlement payments. The outstanding settlement amount is payable in two remaining annual installments as follows:



approximately $1.7 million on or before December 31, 2021; and



approximately $2.2 million on or before December 31, 2022.

The remaining amounts payable to the government will be subject to interest at a rate of 1.25% per annum, and any or all amounts may be paid earlier at the option of the Company. On July 21, 2020, the Company issued a promissory note to the U.S. federal government for the full settlement amount in connection with the SDCA Civil Settlement Agreement (“Promissory Note”). The Promissory Note contains customary events of default and related acceleration of payment provisions. In addition, the Promissory Note provides, among other terms, that, if during calendar years 2020 through 2023, and so long as amounts payable to the government remain unpaid, the Company receives any civil settlement, damages awards, or tax refunds, to the extent that the amounts exceed $5.0 million in a calendar year, the Company will pay 22% of the amount received in such civil settlement, damages award, or tax refunds as an accelerated payment of the scheduled amounts set forth above, up to a maximum total acceleration of approximately $3.4 million. The Company did not receive any tax refunds during the six months ended June 30, 2021.

Non-Prosecution Agreement

Effective July 21, 2020, the Company entered into the Non-Prosecution Agreement, pursuant to which the Company agreed with the DOJ to (i) pay the restitution provided for under the SDCA Civil Settlement Agreement, (ii) not commit any felonies, (iii) continue to implement a compliance and ethics program designed to prevent and detect violations of applicable fraud and kickback laws throughout its operations and (iv) fulfill certain other disclosure, reporting and cooperation obligations. The DOJ agreed that it will not prosecute the Company for any conduct described in the Non-Prosecution Agreement provided that the Company performs its obligations under the Non-Prosecution Agreement during the period from July 21, 2020 through July 21, 2021. The Non-Prosecution Agreement expired on July 21, 2021.

Corporate Integrity Agreement

In connection with the resolution of the investigated matters, and in exchange for the OIG’s agreement not to exercise its authority to permissively exclude the Company from participating in federal healthcare programs, effective July 21, 2020, the Company entered into a five-year Corporate Integrity Agreement with the OIG. The Corporate Integrity Agreement requires, among other matters, that the Company maintain a Compliance Officer, a Compliance Committee, board review and oversight of certain federal healthcare compliance matters, compliance programs, and disclosure programs; provide management certifications and compliance training and education; engage an independent review organization to conduct claims and arrangements reviews; and implement a risk assessment and internal review process. The Company’s failure to comply with its obligations under the Corporate Integrity Agreement could result in monetary penalties and/or the Company being excluded from participating in federal healthcare programs.

State Settlement Agreements

Effective October 1, 2020, the Company entered into agreements with the State Attorney Generals with respect to the investigated matters. The State Settlement Agreements require the Company to pay a settlement amount of approximately $13.2 million to the participating states. The State Settlement Agreements include acceleration provisions similar to the SDNY Civil

Settlement Agreement and the SDCA Civil Settlement Agreements described above upon the Company’s receipt of civil settlements, damages awards, and tax refunds, with the amount to be accelerated and the timing of accelerated payment subject to such receipts. The outstanding settlement amount is payable in three remaining installments as follows:



approximately $1.4 million on or before December 31, 2021;



approximately $1.9 million on or before December 31, 2022; and



approximately $0.2 million on or before December 31, 2023.

Settlement Accruals

As of December 31, 2020, the Company had accrued an aggregate of $12.1 million associated with a potential settlement with the DOJ and the participating State Attorney Generals within accrued expenses and other current liabilities and as a reduction of revenue as reflected on the consolidated balance sheets as of December 31, 2020 and consolidated statements of operations for the year ended December 31, 2020. As of June 30, 2021, the Company’s accrual consists of $5.0 million in accrued expenses and other current liabilities and $7.1 million in other long-term liabilities.

Colorado Recoupment

On July 21, 2021, the Company received a letter from the Colorado Department of Health Care Policy and Financing, ("Department"), informing the Company that, as a result of a post-payment review of Medicaid claims from October 2014 to June 2018, the Department is seeking recoupment for historical payments in an aggregate amount of approximately $5.7 million. The historical payments for which the Department is seeking recoupment are claimed to relate to the Company’s Preparent expanded carrier screening tests primarily on the basis that such tests were not medically necessary.

The State Settlement Agreements discussed above include the State of Colorado as part of the settlement with respect to certain civil claims related to its discontinued legacy billing practices for its non-invasive prenatal tests and microdeletion tests and the provision of alleged kickbacks or inducements to physicians and patients.

The Company intends to dispute this claim of recoupment with the Department and seek to offset any amounts previously paid to the Department by the Company in connection with the State Settlement Agreements. As stated previously, such provider-payor disputes are not uncommon and the Company expects to approach this dispute with an aim to resolve in a mutually satisfactory manner. At this very preliminary stage, the Company is unable to predict the ultimate outcome of this action, and therefore cannot estimate the reasonably possible loss or range of loss, if any, that may result from this action.

California Subpoena

On July 19, 2021, the Company received a subpoena from the California Attorney General’s Office, Division of Public Rights, requesting documents and information related to Progenity’s genetic testing practices, including NIPT, particularly those with a nexus to California patients. The subpoena is captioned “In the Matter of the Investigation of: Prenatal Genetic Testing Companies.” At this very preliminary stage, the Company is unable to predict the ultimate outcome of this action, and therefore cannot estimate the reasonably possible loss or range of loss, if any, that could result from any unfavorable outcome related to this action.

UnitedHealth Group Settlement Agreements

On June 25, 2018, the Company received a letter from Aetna’s external legal counsel that included various allegations relating to the Company’s past practices. In November 2019, the Company and Aetna entered into a settlement agreement for $15.0 million. The Aetna settlement obligation was fully settled during the first quarter of 2021.

On October 18, 2018, the Company received a letter from UnitedHealth Group that included various allegations relating to the Company’s past practices. On September 30, 2019, the Company entered into a settlement agreement with United HealthCare Services, Inc. and UnitedHealthcare Insurance Company (“United”) in which the Company agreed to pay an aggregate amount of $30.0 million. As of June 30, 2021 the remaining settlement accrual related to United is $12.0 million and is included in accrued expenses and other current liabilities.

Payor Recoveries

As noted above, the regulations governing government reimbursement programs (e.g., Medicaid, Tricare, and Medicare) and commercial payor reimbursement programs are complex and may be subject to interpretation. As a provider of services to patients covered under government reimbursement and commercial payor programs, the Company is routinely subject to post-payment review

audits and other forms of reviews and investigations. If a third-party payor successfully challenges that a payment to the Company for prior testing was in breach of contract or otherwise contrary to policy or law, they may recoup such payment. The Company may also decide to negotiate and settle with a third-party payor in order to resolve an allegation of overpayment. In the ordinary course of business, the Company addresses and evaluates a number of such claims from payors. In the past, the Company has negotiated and settled these types of claims with third-party payors. The Company may be required to resolve further disputes in the future. While management is unable to predict the exact outcome of any such claims, it is management’s current belief that any potential liabilities resulting from these contingencies, individually or in the aggregate, could have a material impact on the Company’s financial position and results of operations.

In connection with the third-party review of the Company’s coding and billing processes (see Note 5), which identified that the Company had not effectively transitioned to the implementation of the new CPT code for reimbursement for the Company’s Preparent expanded carrier screening tests during 2019 and early 2020, the Company reviewed its reimbursement from commercial payors for these tests over the same time period. The Company may need to engage with payors in order to determine if any amounts could be subject to recovery or recoupment, as it is customarily done with commercial payors. Any amounts subject to recovery or recoupment will depend on the interpretation of widely variable payor medical and billing policies. The Company will not know if any overpayments exist until it completes this engagement with individual commercial payors. If negotiations with payors result in claims or conclusions that overpayments have been made, this could have a material impact on the Company’s financial results and position. The Company is unable to predict the ultimate outcome of this action, and therefore cannot estimate the reasonably possible loss or range of loss, if any, that may result from this action.

Payor Dispute

On November 16, 2020, the Company received a letter from Anthem, Inc. (“Anthem”) informing the Company that Anthem is seeking recoupment for historical payments made by Anthem in an aggregate amount of approximately $27.4 million. The historical payments for which Anthem is seeking recoupment are claimed to relate primarily to discontinued legacy billing practices for the Company’s NIPT and microdeletion tests and secondarily to the implementation of the new CPT code for reimbursement for the Company’s Preparent expanded carrier screening tests.

As noted above, the Company has historically negotiated and settled similar claims with third-party payors. Although the Company’s practice in resolving disputes with other similar large commercial payors has generally led to agreed-upon settlement amounts substantially less than the originally claimed amount, there can be no assurance that the Company will be successful in negotiating a similar settlement amount in any ongoing or future dispute. In management’s experience with negotiations with similarly situated commercial payors, a settlement may take six to twelve months to negotiate, and the time period over which a negotiated settlement payment may be paid could extend from one to two years, or longer. Historical settlement amounts and payment time periods may not be indicative of the final settlement terms with Anthem, if any. Management intends to negotiate and/or dispute this claim of recoupment with Anthem and seek to offset any amounts owed by Anthem to the Company. Such provider-payor disputes are not uncommon and the Company expects to approach this dispute with an aim to resolve in a mutually satisfactory manner. The Company has recorded an accrual for the estimated probable loss for this matter as of December 31, 2020 and June 30, 2021.

Natera Settlement

On June 17, 2020, Natera, Inc. filed suit in the Western District of Texas (W.D. Texas Civil Action No. 6:20-cv-532) asserting the Company’s infringement of six Natera patents based on a portion of the Company’s NIPT product offering. In August 2021, the Company and Natera entered into a settlement agreement. The agreement does not require a cash payment by the Company. The settlement agreement is subject to court approval.

Ravgen Lawsuit

On December 22, 2020, Ravgen, Inc. (“Ravgen”) filed suit in the District of Delaware (D. Del. Civil Action No. 1:20-cv-1734)
asserting the Company’s infringement of two Ravgen patents. The Company responded to the complaint on March 23, 2021.

Management believes the claims in Ravgen’s complaint are without merit, and the Company is vigorously defending against them.

IPO Litigation

On June 23, 2020, the Company closed its initial public offering of common stock (“IPO”). Lawsuits were filed on August 28, 2020 and September 11, 2020 against the Company, certain of its executive officers and directors, and the underwriters of the IPO. On December 3, 2020, the U.S. District Court for the Southern District of California consolidated the two actions, appointed Lin Shen, Lingjun Lin and Fusheng Lin to serve as Lead Plaintiffs, and approved Glancy Prongay & Murray LLP to be Lead Plaintiffs’ Counsel. Lead Plaintiffs filed their amended complaint on February 4, 2021. It alleges that the Company’s registration statement and related prospectus for the IPO contained false and misleading statements and omissions in violation of the Securities Act of 1933 by

failing to disclose that the Company (i) had overbilled government payors by $10.3 million and thus overstated its revenues for the full fiscal year 2019 and first quarter of 2020, and (ii) was allegedly suffering from material negative trends with respect to testing volumes, average selling prices for its tests, and revenues. Lead Plaintiffs seek certification as a class, unspecified compensatory damages, interest, costs and expenses including attorneys’ fees, and unspecified extraordinary, equitable, and/or injunctive relief. Together with the underwriters of the IPO, the Company moved to dismiss the amended complaint on April 5, 2021. Lead Plaintiffs’ filed their opposition to the motion on June 4, 2021. Together with the underwriters of the IPO, the Company filed a reply in support of the motion to dismiss on July 19, 2021. The Company intends to continue to vigorously defend against these claims. Subject to a reservation of rights, the Company is advancing expenses subject to indemnification to the underwriters of the IPO.

On June 4, 2021, a purported shareholder filed a lawsuit in the U.S. District Court for the Southern District of California, claiming to sue derivatively on behalf of the Company. The complaint names certain of the Company’s officers and directors as defendants, and names the Company as a nominal defendant. Premised largely on the same allegations as the above-described securities lawsuit, it alleges that the individual defendants breached their fiduciary duties to the Company, wasted corporate assets, and caused the Company to issue a misleading proxy statement in violation of the Securities Exchange Act of 1934. The complaint seeks the award of unspecified damages to the Company, equitable and injunctive remedies, and an order directing the Company to reform and improve its internal controls and board oversight. It also seeks the costs and disbursements associated with bringing suit, including attorneys’, consultants’, and experts’ fees. The case is stayed pending the outcome of the motion to dismiss in the above-described securities lawsuit. The Company intends to vigorously defend against these claims.

Given the uncertainty of litigation, the preliminary stages of the Ravgen and IPO litigations, and the legal standards that must be met for, among other things, success on the merits, the Company is unable to predict the ultimate outcome of these actions, and therefore cannot estimate the reasonably possible loss or range of loss, if any, that may result from these actions.

Stockholders' Equity

6 Months Ended

Jun. 30, 2021

Stockholders Equity Note [Abstract]

Stockholders' Equity

12. Stockholders’ Equity

Common Stock

Pursuant to the Company’s eighth amended and restated certificate of incorporation, which went into effect immediately prior to the completion of the IPO, the Company is authorized to issue 350,000,000 shares of common stock and 10,000,000 shares of undesignated preferred stock. Each holder of common stock is entitled to one vote per share of common stock held.

On June 18, 2020, the Company completed its IPO. In the IPO, the Company issued and sold 6,666,667 shares of its common stock, at a price to the public of $15.00 per share. The Company received approximately $88.7 million in net proceeds, after deducting $7.0 million in underwriting discounts and commissions and $4.3 million in other offering expenses payable by the Company. Other offering costs consisted primarily of legal and accounting fees, which were direct and incremental fees related to the IPO.

In December 2020, the Company issued and sold 8,792,047 shares of its common stock in an underwritten public offering, at a price of $3.27 per share. The Company received approximately $26.9 million in net proceeds, after deducting underwriting discounts and commissions and other offering expenses payable by the Company.

In February 2021, the Company entered into a Securities Purchase Agreement for a private placement with certain institutional and accredited investors (“February Purchasers”). Pursuant to the Securities Purchase Agreement, the February Purchasers purchased an aggregate of 4,370,629 units (“February Units”), representing (i) 4,370,629 shares of the Company’s common stock and (ii) warrants to purchase up to 4,370,629 shares of common stock. The purchase price for each February Unit was $5.72, for an aggregate purchase price of approximately $25.0 million. The warrants are exercisable for cash at an exercise price of $6.86 per share, subject to adjustments as provided under the terms of the warrants. The warrants are exercisable at any time for cash and expire on the fifth anniversary of the date of issuance. If exercised for cash, the warrants would result in additional gross proceeds to the Company of approximately $30.0 million.

Pursuant to ASC 815-40, Derivatives and Hedging – Contracts in Entity’s Own Equity ("ASC 815"), the Company deemed the warrants to be liability classified and allocated the proceeds from issuance between the warrants and common stock using the with-and-without method. $12.8 million of the proceeds, equal to the fair value of the warrants determined using the Black-Scholes Model, were allocated to the warrant liability, and the remaining proceeds of $12.2 million were allocated to the common stock. The Company incurred a total of $1.4 million in issuance costs, which were allocated between the warrants and common stock on a relative fair value basis, $0.5 million and $0.9 million, respectively. The warrant liability was remeasured at $10.2 million as of March 31, 2021 and the Company recognized a gain on warrant liability in the amount of $2.6 million associated with this transaction during the quarter ended March 31, 2021. On April 1, 2021, the registration statement to register the shares of common stock underlying the warrants was declared effective by the SEC. As a result, the warrants met the conditions to be classified in equity and the related warrant liability was reclassified from liability to equity on April 1, 2021.

In June 2021, the Company entered into a Securities Purchase Agreement for a private placement with certain institutional and accredited investors (“June Purchasers”). Pursuant to the Securities Purchase Agreement, the June Purchasers purchased an aggregate of 16,194,332 units (“June Units”), representing (i) 15,694,332 shares of the Company’s common stock (ii) warrants to purchase up to 16,194,332 shares of common stock and (iii) pre-funded warrants to purchase up to 500,000 shares of common stock. The purchase price for each June Unit was $2.47, for an aggregate purchase price of approximately $40.0 million. The warrants are exercisable for cash at an exercise price of $2.84 per share, subject to adjustments as provided under the terms of the warrants. The warrants are exercisable at any time and expire on the fifth anniversary of the date of issuance. If exercised for cash, the warrants would result in additional gross proceeds to the Company of approximately $46.0 million. The pre-funded warrants are exercisable at an exercise price of $0.001 per share and have no expiration date. In July 2021, the Company issued 500,000 shares of common stock as a result of the exercise of the outstanding pre-funded warrants at an exercise price of $0.001 per share.

Pursuant to ASC 815, the Company deemed the warrants to be liability classified and allocated the proceeds from issuance between the warrants and common stock using the with-and-without method. $26.6 million of the proceeds, equal to the fair value of the warrants determined using the Black-Scholes Model, were allocated to the warrant liability, and the remaining proceeds of $13.4 million were allocated to the common stock. The Company incurred a total of $2.1 million in issuance costs, which were allocated between the warrants and common stock on a relative fair value basis, $0.7 million and $1.4 million, respectively. The warrant liability was remeasured at $31.8 million as of June 30, 2021 and the Company recognized a loss on warrant liability in the amount of $5.1 million in the condensed consolidated statements of operations during the three and six months ended June 30, 2021. On June 30, 2021, the registration statement to register the shares of common stock underlying the warrants was declared effective by the SEC. As a result, the warrants met the conditions to be classified in equity and the related warrant liability was reclassified from liability to equity on June 30, 2021.

Convertible Preferred Stock

On August 27, 2019, the Company issued 9,090,910 shares of Series B Preferred Stock at an issuance price of $2.75 per share for an aggregate consideration of $25.0 million (“August 2019 Financing”) pursuant to a Series B Preferred Stock Purchase Agreement with a private equity firm. In addition, the Company amended the Series B Preferred Stock Purchase Warrant dated October 27, 2017 to increase the Series B Preferred Stock underlying the Series B Preferred Stock Purchase Warrant from 1,416,431 shares to 1,818,182 shares and adjust the exercise price to $2.75 per share. The $25.0 million of proceeds from the August 2019 Financing were allocated among the newly issued Series B Preferred Stock shares and additional shares of Series B Preferred Stock Purchase Warrant based on their relative fair values.

In connection with the August 2019 Financing, the Board of Directors and stockholders approved a 1.28-for-1 stock split for the Company’s Series B Preferred Stock and Series B Preferred Stock Purchase Warrant issued and outstanding prior to the August 2019 Financing, which was effected on August 27, 2019 pursuant to an amendment to the amended and restated certificate of incorporation. The conversion price of the Series B Preferred Stock and exercise price of the outstanding Series B Preferred Stock Purchase Warrant was lowered from $3.53 to $2.75 per share. As a result, the Company issued 4,017,512 additional shares of Series B Preferred Stock as a stock dividend to the preferred stockholders, which was recorded as a $13.1 million increase to accumulated deficit in the consolidated statements of stockholders’ deficit during the year ended December 31, 2019.

On August 27, 2019, the Company entered into an Exchange Agreement with holders of Series A-1 Preferred Stock (“Exchange Agreement”) pursuant to which the outstanding 1,500,000 shares of Series A-1 Preferred Stock were exchanged for 35,664,240 shares of Series B Preferred Stock. The exchange ratio was 1.2 to 1 on an as-if converted to 4,810,651 shares of common stock that the Series A-1 Preferred Stock can be converted to, based on the conversion rate of 3.2 to 1. The Company determined that such exchange constituted a modification to the Series A-1 Preferred Stock. Accordingly, the increase comparing the fair value of the Series B Preferred Stock with the fair value of the Series A-1 Preferred Stock represented a dividend to the preferred stockholders of approximately $27.6 million, which was recorded as an increase to accumulated deficit in the consolidated statements of stockholders’ deficit during the year ended December 31, 2019.

On November 12, 2019, the Company entered into a Series B Preferred Stock Purchase Agreement (“November Series B Preferred Stock Purchase Agreement”) with a private equity firm and received $25.0 million (“November 2019 Financing”) in exchange for the issuance of 11,111,111 shares of Series B Preferred Stock at $2.25 per share. In connection with the November 2019 Financing, the Board of Directors and stockholders approved a 1.22-for-1 stock split for the Company’s Series B Preferred Stock and Series B Preferred Stock Purchase Warrant issued and outstanding prior to the November 2019 Financing. The conversion price of the Series B Preferred Stock and exercise price of the outstanding Series B Preferred Stock Purchase Warrant was lowered from $2.75 to $2.25 per share. As a result, the Company issued 13,985,993 additional shares of Series B Preferred Stock and adjusted the Series B Preferred Stock Purchase Warrant to purchase up to 2,222,222 shares of Series B Preferred Stock. The issuance of additional shares represented a stock dividend to the preferred stockholders, which was recorded as a $36.4 million increase to accumulated deficit in the consolidated statements of stockholders’ deficit during the year ended December 31, 2019. In connection with the November 2019

Financing, the Company amended the certificate of incorporation. Following the amendment, there are no authorized or outstanding shares of Series A-1 Preferred Stock.

On November 22, 2019, the Company completed an additional equity financing pursuant to the November Series B Preferred Stock Purchase Agreement with certain existing, accredited investors for an aggregate of $6.1 million in exchange for the issuance of an aggregate of 2,722,222 shares of Series B Preferred Stock at $2.25 per share.

On December 19, 2019, the Company completed an additional equity financing pursuant to the November Series B Preferred Stock Purchase Agreement with the same private equity firm as the November 2019 Financing for $25.0 million in exchange for the issuance of 11,111,111 shares of Series B Preferred Stock at $2.25 per share.

In February 2020, the Company issued and sold an aggregate of 5,066,666 shares of Series B Preferred Stock at a purchase price of $2.25 per share to existing investors in exchange for aggregate consideration of approximately $11.4 million.

On March 31, 2020, in connection with the Credit Agreement Amendment, which provided for the payment of interest due and payable as of March 31, 2020 and June 30, 2020 (only in the event the IPO had not been consummated by such date) in shares of Series B Preferred Stock, the Company issued an aggregate of 967,130 shares of Series B Preferred Stock at a subscription price of $2.25 per share to existing investors as payment for interest due and payable as of March 31, 2020 and all applicable fees.

On April 3, 2020, the Company issued and sold an aggregate of 4,444,444 shares of its Series B Preferred Stock at a purchase price of $2.25 per share to existing investors in exchange for aggregate consideration of approximately $10.0 million in cash.

The fair value of the preferred stock was estimated using a hybrid between a probability-weighted expected return method (“PWERM”) and option pricing model (“OPM”), estimating the probability weighted value across multiple scenarios, while using an OPM to estimate the allocation of value within one or more of these scenarios. Under a PWERM, the value of the Company’s various classes of stock was estimated based upon an analysis of future values for the Company assuming various future outcomes, including two IPO scenarios and one scenario contemplating the continued operation of the Company as a privately held enterprise. Guideline public company multiples were used to value the Company under its various scenarios. Share value for each class of stock was based upon the probability-weighted present value of expected future share values, considering each of these possible future outcomes, as well as the rights of each share class.

The significant unobservable inputs into the valuation model used to estimate the fair value of the preferred stock include the timing of potential events (primarily the IPO) and their probability of occurring, the selection of guideline public company multiples, a discount for the lack of marketability of the common stock, and the discount rate used to calculate the present value of the estimated equity value allocated to each share class.

In connection with the IPO, on June 18, 2020, all outstanding Series A Preferred Stock and Series B Preferred Stock converted into 33,443,562 shares of common stock, including the issuance of 2,045,522 shares of common stock pursuant to an adjustment in the conversion rate of all of the shares of Series B Preferred Stock outstanding immediately prior to the IPO. Upon conversion of the convertible preferred stock, the Company reclassified their carrying value to common stock and additional paid-in capital.

Common Stock Reserved for Future Issuance

The Company reserved shares of common stock, on an as-if-converted basis, for future issuance as follows:


	June 30, 2021		December 31, 2020
Outstanding options to purchase common stock		11,166,946		4,268,945
Restricted stock units outstanding		4,377,826		1,468,765
Available for future issuance under equity incentive plan		4,876,797		2,938,616
Common stock issuable upon conversion of Convertible Notes		50,856,253		51,529,036
Common stock warrant		21,465,121		400,160
Total		92,742,943		60,605,522

Stock-Based Compensation

6 Months Ended

Jun. 30, 2021

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Stock-Based Compensation

13. Stock-Based Compensation

In February 2018, the Company adopted the 2018 Equity Incentive Plan (“2018 Plan”). The 2018 Plan is the successor to and continuation of the Second Amended and Restated 2012 Stock Plan (“2012 Plan”) and the 2015 Consultant Stock Plan (“2015 Plan”) and is administered with either stock options or restricted stock units. The Board of Directors administers the plans. Upon adoption of

the 2018 Plan, no new stock options or awards are issuable under the 2012 Plan, as amended, or the 2015 Plan. The 2018 Plan also provides for other types of equity to issue awards, which at this time the Company does not plan to utilize. The 2018 Plan was amended in March 2019 with 1,100,000 shares available for future grant.

In December 2019, the Company adopted the Second Amended and Restated 2018 Equity Incentive Plan, which increased the number of shares available for future grant to 2,700,000 shares. On March 4, 2020, the Board of Directors adopted the Third Amended and Restated 2018 Equity Incentive Plan (“2018 Third Amended Plan”), which increased the number of shares available for future grant to a total of 7,615,733 shares and was approved by stockholders on March 5, 2020.

The 2018 Third Amended Plan provides for automatic annual increase in the number of shares of common stock reserved for issuance, which resulted in an additional 4,537,676 shares reserved for future issuance effective January 1, 2021. On May 5, 2021, holders of a majority of the outstanding common stock executed a written consent approving the Fourth Amended and Restated 2018 Equity Incentive Plan ("2018 Fourth Amended Plan") and an increase of 7,700,000 shares authorized for issuance, resulting in a total of 19,853,409 shares authorized for issuance under the 2018 Fourth Amended Plan. As of June 30, 2021, the number of shares available for grant under the 2018 Fourth Amended Plan was 4,876,797.

Stock Options

The following table summarizes stock option activity, which includes Performance Awards, under the 2012 Plan, the 2015 Plan, and the 2018 Third Amended Plan during the six months ended June 30, 2021 (in thousands, except share and per share data):


	Stock Options Outstanding			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value
Balance at December 31, 2020		4,268,945		$	8.14
Options granted		8,387,906			3.62
Options exercised		(96,782	)		1.27
Options forfeited/cancelled		(1,217,632	)		4.61
Options expired		(175,491	)		10.72
Balance at June 30, 2021		11,166,946		$	5.15		8.91	$	2,065
Vested and expected to vest at June 30, 2021		11,166,946		$	5.15		8.91	$	2,065
Vested and exercisable at June 30, 2021		2,225,549		$	7.76		6.21	$	793

The Company uses the Black-Scholes option pricing model to estimate the fair value of each option grant on the date of grant or any other measurement date. The following table sets forth the assumptions used to determine the fair value of stock options granted during the six months ended June 30, 2021:


Risk-free interest rate		0.6% - 1.1%
Expected volatility		52.9% - 69.9%
Expected dividend yield		—%
Expected life (years)		3.0 - 6.3 years

The weighted-average grant date fair value of options granted during the six months ended June 30, 2021 and 2020 was $2.13 per option and $6.78 per option, respectively.

Restricted Stock Units

The following table summarizes RSU activity for the six months ended June 30, 2021:


	Number of Shares			Weighted- Average Grant Date Fair Value
Balance at December 31, 2020		1,468,765		$	8.73
Granted		3,920,143			3.37
Vested		(412,118	)		7.37
Forfeited/cancelled		(598,964	)		4.84
Balance at June 30, 2021		4,377,826		$	4.59

2020 Employee Stock Purchase Plan

In June 2020, the Company’s board of directors adopted the ESPP. At December 31, 2020, 510,000 shares of common stock were reserved for future issuance under the ESPP. The ESPP also provides for automatic annual increases in the number of shares of common stock reserved for issuance, which resulted in an additional 557,723 shares reserved for future issuance effective January 1, 2021. As of June 30, 2021 there were 812,891 total shares of common stock reserved for future issuance.

The Company commenced a series of offerings under the ESPP on December 1, 2020. The initial offering began December 1, 2020, ends on November 30, 2022 (unless terminated earlier, as described below) and consists of four purchase periods. The purchase periods end on the last trading day of May and November of each year. Eligible employees who enroll in the initial offering or any subsequent offering will be able to purchase shares of the Company’s common stock at a discount through payroll deductions, subject to certain limitations. The purchase price of the shares of common stock will be the lesser of (i) 85% of the fair market value of such shares on the offering date and (ii) 85% of the fair market value of such shares on the purchase date. Following the commencement of the initial offering, a new 24-month offering with four six-month purchase periods will automatically begin approximately every six months thereafter over the term of the ESPP. Offerings will be concurrent, but in the event the fair market value of a share of common stock on the first day of any purchase period during an offering (“New Offering”) is less than or equal to the fair market value of a share of common stock on the offering date for an ongoing offering (“Ongoing Offering”), then the Ongoing Offering terminates immediately following the purchase of shares on the purchase date immediately preceding the New Offering and the participants in the terminated Ongoing Offering are automatically enrolled in the New Offering. Notwithstanding the above, the Company’s board of directors (or an authorized committee thereof) may modify the terms of or suspend any future offerings prior to their commencement. The Company issues new shares for purchases of stock made pursuant to the ESPP.

Stock-Based Compensation Expense

The following table presents total stock-based compensation expense included in each functional line item in the accompanying condensed consolidated statements of operations (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Research and development		1,080		823		1,675		1,472
Selling and marketing		310		511		660		882
General and administrative		2,000		1,240		3,290		1,931
Discontinued operations		1,080		450		1,475		796
Total stock-based compensation expense	$	4,470	$	3,024	$	7,100	$	5,081

At June 30, 2021 and December 31, 2020, there was $23.2 million and $12.8 million, respectively, of compensation cost related to unvested stock options expected to be recognized over a remaining weighted average vesting period of 2.82 and 2.93 years, respectively.

Income Taxes

6 Months Ended

Jun. 30, 2021

Income Tax Disclosure [Abstract]

Income Taxes

14. Income Taxes

The Company calculates its interim income tax provision in accordance with ASC Topic 270, Interim Reporting, and Topic 740, Accounting for Income Taxes. At the end of each interim period, management estimates the annual effective tax rate and applies such rate to the Company’s ordinary quarterly earnings to calculate income tax expense related to ordinary income. Due to maintenance of a full valuation allowance, the Company had a zero effective tax rate for the three and six months ended June 30, 2021. The tax effects of items significant, unusual and infrequent in nature are discretely calculated and recognized in the period during which they occur.

On March 27, 2020, the CARES Act was enacted. The CARES Act includes several significant provisions for corporations, including those pertaining to net operating loss (“NOL”) carryforwards, interest deductions and payroll tax benefits. Corporate taxpayers may carryback NOLs originating during 2018 through 2020 for up to five years. During the first quarter of 2020, the Company recorded a discrete tax benefit of $37.7 million related to the NOL carryback provisions available under the CARES Act legislation corresponding to anticipated tax refunds applicable to taxable years 2013, 2014, 2015, and 2017. If any tax refund is received that is more than $5.0 million in a single year, along with other civil settlements, damages awards, and tax refunds, the Company has agreed to pay 65% of all such amounts received to accelerate payments to the government in connection with the government settlement (see Note 10). The Company received a tax refund of $37.7 million related to the NOL carryback provisions available under the CARES Act during 2020. There is no additional carryback for the six months ended June 30, 2021.

The Company’s NOL carryforwards and research and expenditure credit carryforwards may be subject to an annual limitation under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended (“Code”), and similar state provisions if the Company

experiences an ownership change within the meaning of such Code sections. In general, an ownership change, as defined by Sections 382 and 383 of the Code, occurs when there is a 50 percentage points or more shift in ownership, consisting of shareholders owning more than 5% in the Company, occurring within a three-year testing period. During the year ended December 31, 2020, the Company completed a formal Section 382 study and concluded that an ownership change, within the meaning of Sections 382 and 383, limiting future utilization of existing tax attribute carry-forwards, had not occurred. Any future ownership changes under Section 382 and 383 could have an impact to the utilization of the net operating losses and general business credits.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References + Details

Net Loss Per Share

6 Months Ended

Jun. 30, 2021

Earnings Per Share [Abstract]

Net Loss Per Share

15. Net Loss Per Share

Net loss per share is computed by dividing net loss attributable to common stockholders for the period by the weighted average number of common shares outstanding during the period. Diluted loss per share reflects the additional dilution from potential issuances of common stock, such as stock issuable pursuant to the exercise of stock options, as well as from the possible conversion of the Company’s preferred stock and exercise of the outstanding warrant. The treasury stock and if-converted methods are used to calculate the potential dilutive effect of these common stock equivalents. However, potentially dilutive shares are excluded from the computation of diluted loss per share when their effect is antidilutive. Due to the Company reporting a net loss attributable to common stockholders for all periods presented, all potentially dilutive securities were antidilutive and have been excluded from the computation of diluted loss per share.

The table below provides potentially dilutive securities in equivalent common shares not included in the Company’s calculation of diluted loss per share because to do so would be antidilutive:


	June 30, 2021		June 30, 2020
Options to purchase common stock		11,166,946		3,848,838
Restricted stock units		4,377,826		1,095,095
Common stock warrant		21,465,121		400,160
Common stock issuable upon conversion of Convertible Notes		50,856,253		—
Series A Preferred Stock		—		—
Series B Preferred Stock		—		—
Series B Preferred Stock Purchase Warrant		—		—
Total		87,866,146		5,344,093

Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2021

Accounting Policies [Abstract]

Basis of Presentation

Unaudited Interim Financial Information

Use of Estimates

Assets Held for Sale and Discontinued Operations

Additional details surrounding the Company's assets and liabilities held for sale and discontinued operations are included in Note 4.

Revenue Recognition

The Company applies the following practical expedients and exemptions:



Incremental costs incurred to obtain a contract are expensed as incurred because the related amortization period would be one year or less. The costs are included in selling and marketing expenses.



Payor Concentration


	Percentage of Accounts Receivable
	June 30, 2021			December 31, 2020
Blue Shield of Texas		18.1	%		17.8	%
Government Health Benefits Programs		26.4	%		26.2	%
Aetna		5.0	%		4.0	%
Anthem		3.0	%		3.5	%
United Healthcare		6.3	%		6.6	%


	Percentage of Revenue (1)
	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2021			2020			2021			2020
Blue Shield of Texas		24.9	%		41.9	%		23.7	%		42.2	%
Government Health Benefits Programs (2)		25.2	%		(14.4	)%		24.2	%		(26.6	)%
Aetna		7.0	%		13.8	%		7.4	%		12.9	%
Anthem		5.3	%		14.0	%		3.2	%		12.1	%
United Healthcare		7.1	%		4.8	%		6.9	%		4.4	%

(1) Percentage of revenue table shows amounts as a percentage of total revenue, including revenue classified as discontinued operations. Refer to Note 5 for details of the breakdown of revenue.

Accounts Receivable

Fair Value Of Financial Instruments

Fair Value of Financial Instruments

Embedded Derivative Related to Convertible Notes

Stock-Based Compensation

Dividend Rate—The dividend yield assumption is zero, as the Company has no plans to pay dividends.

Net Loss Per Share

Comprehensive Loss

The Company did not have any other comprehensive income or loss for any of the periods presented, and therefore comprehensive loss was the same as the Company’s net loss.

Recent Accounting Pronouncements Adopted

Recent Accounting Pronouncements Not Yet Adopted

Summary of Significant Accounting Policies (Tables)

6 Months Ended

Jun. 30, 2021

Accounting Policies [Abstract]

Schedule of Accounts Receivable Balances and Revenues as Percentage of Total Accounts Receivable Balances and Revenues


	Percentage of Accounts Receivable
	June 30, 2021			December 31, 2020
Blue Shield of Texas		18.1	%		17.8	%
Government Health Benefits Programs		26.4	%		26.2	%
Aetna		5.0	%		4.0	%
Anthem		3.0	%		3.5	%
United Healthcare		6.3	%		6.6	%


	Percentage of Revenue (1)
	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2021			2020			2021			2020
Blue Shield of Texas		24.9	%		41.9	%		23.7	%		42.2	%
Government Health Benefits Programs (2)		25.2	%		(14.4	)%		24.2	%		(26.6	)%
Aetna		7.0	%		13.8	%		7.4	%		12.9	%
Anthem		5.3	%		14.0	%		3.2	%		12.1	%
United Healthcare		7.1	%		4.8	%		6.9	%		4.4	%

(1) Percentage of revenue table shows amounts as a percentage of total revenue, including revenue classified as discontinued operations. Refer to Note 5 for details of the breakdown of revenue.

Variable Interest Entities (Tables)

6 Months Ended

Jun. 30, 2021

Text Block [Abstract]

Schedule of Assets and Liabilities


	June 30, 2021		December 31, 2020
Assets of Avero that can only be used to settle obligations of Avero
Cash and cash equivalents	$	1,247	$	556
Accounts receivable, net		3,647		6,047
Inventory		2,038		3,382
Prepaid expenses and other current assets		2,236		1,254
Property and equipment, net		5,453		5,436
Other assets		30		30
Goodwill		6,219		6,219
Other intangible assets, net		3,384		3,843
Total assets of Avero that can only be used to settle obligations of Avero	$	24,254	$	26,767
Liabilities of Avero
Accounts payable	$	5,271	$	4,722
Accrued expenses and other accrued liabilities		3,590		3,472
Current portion of capital lease obligations		27		46
Current portion of mortgage payable		202		199
Capital lease obligations, net of current portion		—		4
Mortgage payable, net of current portion		1,418		1,520
Other long-term liabilities		306		428
Total liabilities of Avero	$	10,814	$	10,391

- Definition

Tabular disclosure of the significant judgments and assumptions made in determining whether a variable interest (as defined) held by the entity requires the variable interest entity (VIE) (as defined) to be consolidated and (or) disclose information about its involvement with the VIE, individually or in aggregate (as applicable); the nature of restrictions, if any, on the consolidated VIE's assets and on the settlement of its liabilities reported by an entity in its statement of financial position, including the carrying amounts of such assets and liabilities; the nature of, and changes in, the risks associated with involvement in the VIE; how involvement with the VIE affects the entity's financial position, financial performance, and cash flows; the lack of recourse if creditors (or beneficial interest holders) of the consolidated VIE have no recourse to the general credit of the primary beneficiary (if applicable); the terms of arrangements, giving consideration to both explicit arrangements and implicit variable interests, if any, that could require the entity to provide financial support to the VIE, including events or circumstances that could expose the entity to a loss; the methodology used by the entity for determining whether or not it is the primary beneficiary of the variable interest entity; the significant factors considered and judgments made in determining that the power to direct the activities of a VIE that most significantly impact the VIE's economic performance are shared (as defined); the carrying amounts and classification of assets and liabilities of the VIE included in the statement of financial position; the entity's maximum exposure to loss, if any, as a result of its involvement with the VIE, including how the maximum exposure is determined and significant sources of the entity's exposure to the VIE; a comparison of the carrying amounts of the assets and liabilities and the entity's maximum exposure to loss; information about any liquidity arrangements, guarantees, and (or) other commitments by third parties that may affect the fair value or risk of the entity's variable interest in the VIE; whether or not the entity has provided financial support or other support (explicitly or implicitly) to the VIE that it was not previously contractually required to provide or whether the entity intends to provide that support, including the type and amount of the support and the primary reasons for providing the support; and supplemental information the entity determines necessary to provide.

+ References + Details

Assets Held for Sale and Discontinued Operations (Tables)

6 Months Ended

Jun. 30, 2021

Discontinued Operations and Disposal Groups [Abstract]

Summary of Results of Discontinued Operations and Class of Assets and Liabilities

The following table presents the combined results of discontinued operations of the Laboratory Operations (in thousands):


	Three Months Ended June 30,						Six Months Ended June 30,
	2021			2020			2021			2020
Revenues	$	18,242		$	17,266		$	42,601		$	34,094
Cost of sales		26,233			21,835			48,466			48,405
Gross loss		(7,991	)		(4,569	)		(5,865	)		(14,311	)
Operating expenses:
Research and development		1,590			—			1,590			(2	)
Selling and marketing		20,127			11,189			32,917			23,937
General and administrative		7,413			4,479			11,533			9,869
Total operating expenses		29,130			15,668			46,040			33,804
Interest and other (expense) income, net		(10	)		177			(29	)		157
Net loss from discontinued operations	$	(37,131	)	$	(20,060	)	$	(51,934	)	$	(47,958	)

The following table presents the carrying amounts of the classes of assets and liabilities held for sale related to the Laboratory Operations as of June 30, 2021 and December 31, 2020 (in thousands):


	June 30, 2021		December 31, 2020

Carrying amounts of assets of disposal group held for sale
Current assets:
Cash and cash equivalents	$	1,247	$	556
Accounts receivable, net		3,647		6,047
Inventory		3,686		12,220
Prepaid expenses and other current assets		2,236		1,254
Total current assets of disposal group held for sale (1)				20,077
Property and equipment, net		9,732		9,181
Other assets		30		30
Goodwill		6,219		6,219
Other intangible assets, net		3,384		3,843
Total assets of disposal group held for sale (1)	$	30,181	$	39,350
Carrying amounts of disposal group held for sale
Current liabilities:
Accounts payable		5,285		4,722
Accrued expenses and other current liabilities		5,770		3,503
Current portion of mortgages payable		1,620		198
Current portion of capital lease obligations		28		46
Total current liabilities of disposal group held for sale (1)		12,703		8,469
Capital lease obligations, net of current portion		—		4
Mortgages payable, net of current portion		—		1,520
Other long-term liabilities		—		428
Total liabilities of disposal group held for sale (1)	$	12,703	$	10,421

- Definition

Tabular disclosure of information related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component.

+ References

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+ Details

Revenues (Tables)

6 Months Ended

Jun. 30, 2021

Revenue From Contract With Customer [Abstract]

Summary of Disaggregation of Revenues by Payor

The following tables shows revenues disaggregated by payor type and revenue classification (in thousands):


	Three Months Ended June 30,					Six Months Ended June 30,
Payor	2021		2020			2021		2020
Commercial third-party payors	$	13,044	$	18,030		$	29,495	$	39,592
Government health benefit programs(1)		4,725		(2,922	)		10,450		(9,065	)
Patient/laboratory distribution partners		936		2,158			3,286		3,567
Total revenues	$	18,705	$	17,266		$	43,231	$	34,094


	Three Months Ended June 30,				Six Months Ended June 30,
Classification	2021		2020		2021		2020
Revenue from continuing operations	$	463	$	—	$	630	$	—
Revenue reported under discontinued operations		18,242		17,266		42,601		34,094
Total revenues	$	18,705	$	17,266	$	43,231	$	34,094

Balance Sheet Components (Tables)

6 Months Ended

Jun. 30, 2021

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Summary of Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consisted of the following (in thousands):


	June 30, 2021		December 31, 2020
Prepaid expenses	$	12,568	$	7,996
Other current assets		539		111
Total	$	13,107	$	8,107

Summary of Property and Equipment, Net

Property and equipment, net consisted of the following (in thousands):


	June 30, 2021			December 31, 2020
Computers and software	$	5,885		$	8,770
Building and leasehold improvements		747			747
Laboratory equipment		3,569			3,556
Furniture, fixtures, and office equipment		1,438			1,438
Construction in progress		496			2,774
Land		346			346
Total property and equipment		12,481			17,631
Less accumulated depreciation and amortization		(7,007	)		(8,971	)
Property and equipment, net	$	5,474		$	8,660

Summary of Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following (in thousands):


	June 30, 2021		December 31, 2020
Accrual for reimbursement claims and settlements, current (1)	$	27,874	$	30,487
Commission and bonus		3,366		3,934
Vacation and payroll benefits		10,347		7,364
Accrued professional services		1,099		3,142
Accrued interest		1,183		855
Insurance financing		9,019		1,799
Contract liabilities		443		378
Other (2)		4,841		3,247
Total	$	58,172	$	51,206

Summary of Other Long-term Liabilities

Other long-term liabilities consisted of the following (in thousands):


	June 30, 2021		December 31, 2020
Accrual for reimbursement claims and settlements, net of current portion (1)	$	7,053	$	7,053
Other (2)		7,706		1,186
Total	$	14,759	$	8,239

Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2021

Fair Value Disclosures [Abstract]

Summary of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis


	Level 1		Level 2		Level 3
June 30, 2021
Money market funds(1)	$	64,360	$	—	$	—
Embedded derivative liability	$	—	$	—	$	388

December 31, 2020
Money market funds(1)	$	90,254	$	—	$	—
Embedded derivative liability	$	—	$	—	$	18,370

(1) Included in cash and cash equivalents in the accompanying condensed consolidated balance sheets.

Mortgages Payable (Tables)

6 Months Ended

Jun. 30, 2021

Debt Disclosure [Abstract]

Schedule of Minimum Principal Payments

As of June 30, 2021, the minimum principal payments under the mortgages payable were as follows (in thousands):


Year ending December 31,	Minimum Mortgages Payable Payments Obligations
Remainder of 2021	$	37
2022		76
2023		80
2024		1,119
2025 and thereafter		—
Total future minimum payments		1,312
Less current portion of mortgages payable		(74	)
Mortgages payable, net of current portion	$	1,238

Commitments and Contingencies (Tables)

6 Months Ended

Jun. 30, 2021

Commitments And Contingencies Disclosure [Abstract]

Schedule of Net Minimum Payments Under Non-Cancelable Operating Leases

As of June 30, 2021, net minimum payments under the non-cancelable operating leases were as follows (in thousands):


Year ending December 31,	Minimum Operating Lease Payments
Remainder of 2021	$	1,716
2022		1,929
2023		933
2024		35
2025 and thereafter		—
Total future minimum lease payments	$	4,613

Stockholders' Equity (Tables)

6 Months Ended

Jun. 30, 2021

Stockholders Equity Note [Abstract]

Schedule of Reserved Shares of Common Stock, On An As-if-converted Basis, for Future Issuance

The Company reserved shares of common stock, on an as-if-converted basis, for future issuance as follows:


	June 30, 2021		December 31, 2020
Outstanding options to purchase common stock		11,166,946		4,268,945
Restricted stock units outstanding		4,377,826		1,468,765
Available for future issuance under equity incentive plan		4,876,797		2,938,616
Common stock issuable upon conversion of Convertible Notes		50,856,253		51,529,036
Common stock warrant		21,465,121		400,160
Total		92,742,943		60,605,522

Stock-Based Compensation (Tables)

6 Months Ended

Jun. 30, 2021

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Summary of Stock Options Activity under Plans


	Stock Options Outstanding			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value
Balance at December 31, 2020		4,268,945		$	8.14
Options granted		8,387,906			3.62
Options exercised		(96,782	)		1.27
Options forfeited/cancelled		(1,217,632	)		4.61
Options expired		(175,491	)		10.72
Balance at June 30, 2021		11,166,946		$	5.15		8.91	$	2,065
Vested and expected to vest at June 30, 2021		11,166,946		$	5.15		8.91	$	2,065
Vested and exercisable at June 30, 2021		2,225,549		$	7.76		6.21	$	793

Summary of Assumptions used to Determine Fair Value of Stock Options Granted

The following table sets forth the assumptions used to determine the fair value of stock options granted during the six months ended June 30, 2021:


Risk-free interest rate		0.6% - 1.1%
Expected volatility		52.9% - 69.9%
Expected dividend yield		—%
Expected life (years)		3.0 - 6.3 years

The weighted-average grant date fair value of options granted during the six months ended June 30, 2021 and 2020 was $2.13 per option and $6.78 per option, respectively.

Summary of Restricted Stock Units Activity

The following table summarizes RSU activity for the six months ended June 30, 2021:


	Number of Shares			Weighted- Average Grant Date Fair Value
Balance at December 31, 2020		1,468,765		$	8.73
Granted		3,920,143			3.37
Vested		(412,118	)		7.37
Forfeited/cancelled		(598,964	)		4.84
Balance at June 30, 2021		4,377,826		$	4.59

Schedule of Stock-based Compensation Expense

The following table presents total stock-based compensation expense included in each functional line item in the accompanying condensed consolidated statements of operations (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Research and development		1,080		823		1,675		1,472
Selling and marketing		310		511		660		882
General and administrative		2,000		1,240		3,290		1,931
Discontinued operations		1,080		450		1,475		796
Total stock-based compensation expense	$	4,470	$	3,024	$	7,100	$	5,081

Net Loss Per Share (Tables)

6 Months Ended

Jun. 30, 2021

Earnings Per Share [Abstract]

Summary of Potentially Dilutive Securities Not Included in Calculation of Diluted Loss Per Share

The table below provides potentially dilutive securities in equivalent common shares not included in the Company’s calculation of diluted loss per share because to do so would be antidilutive:


	June 30, 2021		June 30, 2020
Options to purchase common stock		11,166,946		3,848,838
Restricted stock units		4,377,826		1,095,095
Common stock warrant		21,465,121		400,160
Common stock issuable upon conversion of Convertible Notes		50,856,253		—
Series A Preferred Stock		—		—
Series B Preferred Stock		—		—
Series B Preferred Stock Purchase Warrant		—		—
Total		87,866,146		5,344,093

Organization and Description of Business - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended				6 Months Ended
	Jun. 30, 2021	Mar. 31, 2021	Jun. 30, 2020	Mar. 31, 2020	Jun. 30, 2021	Jun. 30, 2020	Dec. 31, 2020
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]
Cash and cash equivalents	$ 65,991				$ 65,991		$ 91,520
Accumulated deficit	652,069				652,069		541,274
Net loss	78,531	$ 32,264	$ 52,783	$ 17,152	110,795	$ 69,935
Cash used in operating activities					52,136	$ 8,820
Mortgages
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]
Outstanding balance	1,300				1,300
7.25% Convertible Senior Notes due 2025
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]
Principal amount	$ 157,500				$ 157,500		$ 168,500

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

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-URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

Reference 20: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 260
-SubTopic 10
-Section 45
-Paragraph 60B
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=121326447&loc=SL5780133-109256

Reference 21: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 323
-SubTopic 10
-Section 50
-Paragraph 3
-Subparagraph (c)
-URI http://asc.fasb.org/extlink&oid=114001798&loc=d3e33918-111571

Reference 22: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (c)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599

Reference 23: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 8
-URI http://asc.fasb.org/extlink&oid=109234566&loc=d3e22658-107794

+ Details

Summary of Significant Accounting Policies - Additional Information (Details)	6 Months Ended
	Jun. 30, 2021 USD ($)
Summary Of Significant Accounting Policies [Line Items]
Vesting period of stock options	4 years
Expected dividend yield	0.00%
Other comprehensive income or loss	$ 0
Accounting Standards Update 2019-12
Summary Of Significant Accounting Policies [Line Items]
Change in accounting principle, accounting standards update, adopted [true false]	true
Change in accounting principle, accounting standards update, adoption date	Jan. 01, 2021
Change in accounting principle, accounting standards update, immaterial effect [true false]	true
Accounting Standards Update 2016-02
Summary Of Significant Accounting Policies [Line Items]
Change in accounting principle, accounting standards update, adopted [true false]	false
Accounting Standards Update 2016-13
Summary Of Significant Accounting Policies [Line Items]
Change in accounting principle, accounting standards update, adopted [true false]	false
Accounting Standards Update 2020-06
Summary Of Significant Accounting Policies [Line Items]
Change in accounting principle, accounting standards update, adopted [true false]	false
Maximum
Summary Of Significant Accounting Policies [Line Items]
Amortization period	1 year

Summary of Significant Accounting Policies - Schedule of Accounts Receivable Balances and Revenues as Percentage of Total Accounts Receivable Balances and Revenues (Details) - Customer Concentration Risk

3 Months Ended

6 Months Ended

12 Months Ended

Jun. 30, 2021

Jun. 30, 2020

Jun. 30, 2021

Jun. 30, 2020

Dec. 31, 2020

Blue Shield of Texas | Accounts Receivable

Concentration Risk [Line Items]

Percentage of accounts receivable

18.10%

17.80%

Blue Shield of Texas | Revenue

Concentration Risk [Line Items]

Percentage of revenues

^[1]

24.90%

41.90%

23.70%

42.20%

Government Health Benefits Programs | Accounts Receivable

Concentration Risk [Line Items]

Percentage of accounts receivable

26.40%

26.20%

Government Health Benefits Programs | Revenue

Concentration Risk [Line Items]

Percentage of revenues

^[1],[2]

25.20%

(14.40%)

24.20%

(26.60%)

Aetna | Accounts Receivable

Concentration Risk [Line Items]

Percentage of accounts receivable

5.00%

4.00%

Aetna | Revenue

Concentration Risk [Line Items]

Percentage of revenues

^[1]

7.00%

13.80%

7.40%

12.90%

Anthem | Accounts Receivable

Concentration Risk [Line Items]

Percentage of accounts receivable

3.00%

3.50%

Anthem | Revenue

Concentration Risk [Line Items]

Percentage of revenues

^[1]

5.30%

14.00%

3.20%

12.10%

United Healthcare | Accounts Receivable

Concentration Risk [Line Items]

Percentage of accounts receivable

6.30%

6.60%

United Healthcare | Revenue

Concentration Risk [Line Items]

Percentage of revenues

^[1]

7.10%

4.80%

6.90%

4.40%

[1]

Percentage of revenue table shows amounts as a percentage of total revenue, including revenue classified as discontinued operations. Refer to Note 5 for details of the breakdown of revenue.

[2]

The negative amounts presented in the percentage of revenues include accruals for reimbursement claims and settlements included in the estimate of variable consideration recorded during the three and six months ended June 30, 2020. Revenues recognized consider the effects of variable consideration, and include adjustments for estimates of disallowed cases, discounts, and refunds. The variable consideration includes reductions in revenues for the accrual for reimbursement claims and settlements.

Variable Interest Entities - Additional Information (Details) - USD ($)	1 Months Ended	3 Months Ended	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2020	Jun. 30, 2020	Jun. 30, 2021	Dec. 31, 2020	Dec. 05, 2018
Variable Interest Entity [Line Items]
Liabilities				$ 259,555,000	$ 261,434,000
Avero
Variable Interest Entity [Line Items]
Term of agreement	10 years
Liabilities				10,814,000	10,391,000
Mortgage payable				1,600,000	1,700,000
Avero \| Recourse
Variable Interest Entity [Line Items]
Liabilities				$ 0	$ 0
Avero \| Cigna Settlement Obligation
Variable Interest Entity [Line Items]
Litigation settlement amount agreed to pay to other party						$ 12,000,000.0
Litigation settlement upfront payment						6,000,000.0
Remaining settlement amount						$ 6,000,000.0
Financial support for obligation settlement		$ 800,000	$ 1,500,000

Variable Interest Entities - Schedule of Assets and Liabilities (Details) - USD ($) $ in Thousands	Jun. 30, 2021	Dec. 31, 2020
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
Property and equipment, net	5,474	8,660
Other assets	146	169
Total assets	119,946	154,440
Liabilities of Avero
Accounts payable	14,560	12,657
Current portion of mortgages payable	74	72
Capital lease obligations, net of current portion		42
Mortgages payable, net of current portion	1,238	1,275
Other long-term liabilities	14,759	8,239
Total liabilities	259,555	261,434
Avero
Assets
Cash and cash equivalents	1,247	556
Accounts receivable, net	3,647	6,047
Inventory	2,038	3,382
Prepaid expenses and other current assets	2,236	1,254
Property and equipment, net	5,453	5,436
Other assets	30	30
Goodwill	6,219	6,219
Other intangible assets, net	3,384	3,843
Total assets	24,254	26,767
Liabilities of Avero
Accounts payable	5,271	4,722
Accrued expenses and other accrued liabilities	3,590	3,472
Current portion of capital lease obligations	27	46
Current portion of mortgages payable	202	199
Capital lease obligations, net of current portion	0	4
Mortgages payable, net of current portion	1,418	1,520
Other long-term liabilities	306	428
Total liabilities	$ 10,814	$ 10,391

Assets Held for Sale and Discontinued Operations (Additional Information) (Details) - USD ($) $ in Millions	3 Months Ended	6 Months Ended
	Jun. 30, 2021	Jun. 30, 2021
Discontinued Operations and Disposal Groups [Abstract]
Loss on contract termination	$ 19.3	$ 19.3

Assets Held for Sale and Discontinued Operations - Summary of Results of Discontinued Operations (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Revenue	$ 18,242	$ 17,266	$ 42,601	$ 34,094
Cost of sales	26,233	21,835	48,466	48,405
Gross loss	(7,991)	(4,569)	(5,865)	(14,311)
Research and development	1,590	0	1,590	(2)
Selling and marketing	20,127	11,189	32,917	23,937
General and administrative	7,413	4,479	11,533	9,869
Total operating expenses	29,130	15,668	46,040	33,804
Interest and other (expense) income, net	(10)	177	(29)	157
Net loss from discontinued operations	$ (37,131)	$ (20,060)	$ (51,934)	$ (47,958)

Assets Held for Sale and Discontinued Operations - Summary of Carrying Amounts of the Classes of Assets and Liabilities of Discontinued Operations (Details) - USD ($)
$ in Thousands

Jun. 30, 2021

Dec. 31, 2020

Current assets:

Current assets of disposal group held for sale

$ 30,181

$ 20,077

Current liabilities:

Current liabilities of disposal group held for sale

12,703

8,469

Discontinued Operations, Held-for-sale [Member]

Current assets:

Cash and cash equivalents

1,247

556

Accounts receivable, net

3,647

6,047

Inventory

3,686

12,220

Prepaid expenses and other current assets

2,236

1,254

Current assets of disposal group held for sale

^[1]

20,077

Property and equipment, net

9,732

9,181

Other assets

Goodwill

6,219

Other intangible assets, net

3,384

3,843

Total assets held for sale

^[1]

30,181

39,350

Current liabilities:

Accounts payable

5,285

4,722

Accrued expenses and other current liabilities

5,770

3,503

Current portion of mortgages payable

1,620

198

Current portion of capital lease obligations

Current liabilities of disposal group held for sale

^[1]

12,703

8,469

Capital lease obligations, net of current portion

Mortgages payable, net of current portion

1,520

Other long-term liabilities

428

Total liabilities held for sale

^[1]

$ 12,703

$ 10,421

[1]	(1) The assets and liabilities of the Laboratory Operations are classified as held for sale and are classified as current in the unaudited condensed consolidated balance sheet at June 30, 2021, because they are expected to be sold within one year.

Revenues - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended		14 Months Ended	15 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020	Mar. 03, 2020	Mar. 31, 2020
Revenue From Contract With Customer [Abstract]
Amount of reimbursement overpayment received from government payors					$ 10.3	$ 10.3
Performance obligations resulted in increase (decrease) of revenue	$ 0.8	$ (6.1)	$ 3.0	$ (18.9)

Revenues - Summary of Disaggregation of Revenues by Payor (Details) - USD ($)
$ in Thousands

3 Months Ended

6 Months Ended

Jun. 30, 2021

Jun. 30, 2020

Jun. 30, 2021

Jun. 30, 2020

Disaggregation Of Revenue [Line Items]

Total revenues

$ 18,705

$ 17,266

$ 43,231

$ 34,094

Commercial Third-party Payors

Disaggregation Of Revenue [Line Items]

Total revenues

13,044

18,030

29,495

39,592

Government Health Benefit Programs

Disaggregation Of Revenue [Line Items]

Total revenues

^[1]

4,725

(2,922)

10,450

(9,065)

Patient/Laboratory Distribution Partners

Disaggregation Of Revenue [Line Items]

Total revenues

$ 936

$ 2,158

$ 3,286

$ 3,567

[1]

The revenue amounts include accruals for reimbursement claims and settlements included in the estimates of variable consideration recorded during the three and six months ended June 30, 2021 and 2020. Revenues recognized reflect the effects of variable consideration, and include adjustments for estimates of disallowed cases, discounts, and refunds. The variable consideration includes reductions in revenues for the accrual for reimbursement claims and settlements.

- Definition

Amount of revenue recognized from goods sold, services rendered, insurance premiums, or other activities that constitute an earning process. Includes, but is not limited to, investment and interest income before deduction of interest expense when recognized as a component of revenue, and sales and trading gain (loss).

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 22
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8736-108599

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 323
-SubTopic 10
-Section 50
-Paragraph 3
-Subparagraph (c)
-URI http://asc.fasb.org/extlink&oid=114001798&loc=d3e33918-111571

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 28
-Subparagraph (f)
-URI http://asc.fasb.org/extlink&oid=75031198&loc=d3e14064-108612

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 22
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8736-108599

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 40
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9031-108599

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 30
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8906-108599

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 41
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9038-108599

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 42
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9054-108599

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(g)(1)(ii))
-URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 235
-Section S99
-Paragraph 1
-Subparagraph (SX 210.9-05(b)(2))
-URI http://asc.fasb.org/extlink&oid=120399901&loc=d3e537907-122884

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SX 210.5-03(1))
-URI http://asc.fasb.org/extlink&oid=120395209&loc=SL114868664-224227

+ Details

Revenues - Summary Of Disaggregation Of Revenue classification (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Disaggregation Of Revenue [Line Items]
Total revenues	$ 18,705	$ 17,266	$ 43,231	$ 34,094
Revenue from Continuing Operations
Disaggregation Of Revenue [Line Items]
Total revenues	463		630
Revenue from Discontinued Operations
Disaggregation Of Revenue [Line Items]
Total revenues	$ 18,242	$ 17,266	$ 42,601	$ 34,094

- Definition

+ References

+ Details

Balance Sheet Components - Summary of Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands	Jun. 30, 2021	Dec. 31, 2020
Organization Consolidation And Presentation Of Financial Statements [Abstract]
Prepaid expenses	$ 12,568	$ 7,996
Other current assets	539	111
Total	$ 13,107	$ 8,107

Balance Sheet Components - Summary of Property and Equipment, Net (Details) - USD ($) $ in Thousands	Jun. 30, 2021	Dec. 31, 2020
Property, Plant and Equipment [Line Items]
Total property and equipment	$ 12,481	$ 17,631
Less accumulated depreciation and amortization	(7,007)	(8,971)
Property and equipment, net	5,474	8,660
Computers and Software
Property, Plant and Equipment [Line Items]
Total property and equipment	5,885	8,770
Building and Leasehold Improvements
Property, Plant and Equipment [Line Items]
Total property and equipment	747	747
Laboratory Equipment
Property, Plant and Equipment [Line Items]
Total property and equipment	3,569	3,556
Furniture, Fixtures, and Office Equipment
Property, Plant and Equipment [Line Items]
Total property and equipment	1,438	1,438
Construction in Progress
Property, Plant and Equipment [Line Items]
Total property and equipment	496	2,774
Land
Property, Plant and Equipment [Line Items]
Total property and equipment	$ 346	$ 346

Balance Sheet Components - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Organization Consolidation And Presentation Of Financial Statements [Abstract]
Depreciation expense			$ 1.0	$ 0.8
Amortization expense of intangible assets	$ 0.2	$ 0.2	$ 0.5	$ 0.5

Balance Sheet Components - Summary of Accrued Expenses and Other Current Liabilities (Details) - USD ($)
$ in Thousands

Jun. 30, 2021

Dec. 31, 2020

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Accrual for reimbursement claims and settlements, current

^[1]

$ 27,874

$ 30,487

Commission and bonus

3,366

3,934

Vacation and payroll benefits

10,347

7,364

Accrued professional services

1,099

3,142

Accrued interest

1,183

855

Insurance financing

9,019

1,799

Contract liabilities

443

378

Other

^[2]

4,841

3,247

Total

$ 58,172

$ 51,206

[1]	All of the Company's revenues related to Progenity's Laboratory Operations have been discontinued, these amounts related to the revenue reserve generated from the Progenity Laboratory Operations are not included in the assets held for sale.
[2]	Included in this amount are contracts that Progenity will be responsible for that can not be terminated, as there is no future benefit to the Company, they have been expensed in discontinued operations, but are not included in assets held for sale.

Balance Sheet Components - Summary of Other Long-term Liabilities (Details) - USD ($)
$ in Thousands

Jun. 30, 2021

Dec. 31, 2020

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Accrual for reimbursement claims and settlements, net of current portion

^[1]

$ 7,053

Other

^[2]

7,706

1,186

Total

$ 14,759

$ 8,239

[1]	All of the Company's revenues related to Progenity's Laboratory Operations have been discontinued, these amounts related to the revenue reserve generated from the Progenity Laboratory Operations are not included in the assets held for sale.
[2]	Included in this amount are contracts that Progenity will be responsible for that can not be terminated, as there is no future benefit to the Company, they have been expensed in discontinued operations, but are not included in assets held for sale.

Fair Value Measurements - Summary of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - Fair Value on Recurring Basis - USD ($)
$ in Thousands

Jun. 30, 2021

Dec. 31, 2020

Level 1 | Money Market Funds

Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]

Total assets at fair value

^[1]

$ 64,360

$ 90,254

Level 1 | Embedded Derivative

Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]

Total liabilities at fair value

Level 2 | Money Market Funds

Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]

Total assets at fair value

^[1]

Level 2 | Embedded Derivative

Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]

Total liabilities at fair value

Level 3 | Money Market Funds

Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]

Total assets at fair value

^[1]

Level 3 | Embedded Derivative

Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]

Total liabilities at fair value

$ 388

$ 18,370

[1]	Included in cash and cash equivalents in the accompanying condensed consolidated balance sheets.

Fair Value Measurements - Additional Information (Details) - USD ($)	6 Months Ended
	Jun. 30, 2021	Dec. 31, 2020
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Transfer of assets from level 1 to level 2	$ 0
Transfer of assets from level 2 to level 1	0
Transfer of liability into level 3	0
Transfer of liability out of level 3	0
Carrying value of convertible notes, net of discount	157,533,000	$ 158,886,000
Fair value of convertible notes	$ 169,000,000.0	$ 250,200,000

Convertible Notes - Additional Information (Details) $ / shares in Units, $ in Thousands	1 Months Ended	3 Months Ended		6 Months Ended
	Dec. 31, 2020 USD ($)	Jun. 30, 2021 USD ($) $ / shares	Jun. 30, 2020 USD ($)	Jun. 30, 2021 USD ($) d $ / shares	Jun. 30, 2020 USD ($)
Debt Instrument [Line Items]
Interest expense		$ 3,502	$ 2,489	$ 7,022	$ 4,771
Derivative liabilities fair value	$ 18,400	400		400
Change in fair value of derivative liability				17,977	(126)
Debt Instrument Unamortized Discount	9,600	8,800		8,800
Amortization of debt discount				4,753	$ 1,330
Interest and Other Income (Expense), Net
Debt Instrument [Line Items]
Change in fair value of derivative liability				18,000
Interest Expense
Debt Instrument [Line Items]
Amortization of debt discount		400		800
7.25% Convertible Senior Notes due 2025
Debt Instrument [Line Items]
Principal amount	$ 168,500	157,500		157,500
Debt instrument, annual interest rate	7.25%
Debt instrument, issuance date	Dec. 07, 2020
Debt instrument, frequency of periodic payment	semi-annually
Debt instrument due date	Dec. 01, 2025
Debt instrument, initial payment date	Jun. 01, 2021
Interest expense		$ 3,100		$ 6,200
Debt instrument, convertible, initial conversion rate per $1,000 principal amount of convertible notes				278.0094
Debt instrument convertible initial conversion price \| $ / shares		$ 3.60		$ 3.60
Debt instrument, redemption period, start date				Dec. 01, 2023
Debt instrument, convertible, threshold percentage of stock price trigger				130.00%
Debt instrument, convertible, threshold trading days \| d				20
Debt instrument, convertible, threshold consecutive trading days \| d				30
Events of default, description				The Convertible Notes have customary provisions relating to the occurrence of “Events of Default” (as defined in the Indenture), which include the following: (i) certain payment defaults on the Convertible Notes (which, in the case of a default in the payment of interest on the Convertible Notes, will be subject to a 30-day cure period); (ii) the Company’s failure to send certain notices under the Indenture within specified periods of time; (iii) the Company’s failure to comply with certain covenants in the Indenture relating to the Company’s ability to consolidate with or merge with or into, or sell, lease or otherwise transfer, in one transaction or a series of transactions, all or substantially all of the assets of the Company and its subsidiaries, taken as a whole, to another person; (iv) a default by the Company in its other obligations or agreements under the Indenture or the Convertible Notes if such default is not cured or waived within 60 days after notice is given in accordance with the Indenture; (v) certain defaults by the Company or any of its subsidiaries with respect to indebtedness for borrowed money of at least $7.5 million; (vi) the rendering of certain judgments against the Company or any of its subsidiaries for the payment of at least $7.5 million, where such judgments are not discharged or stayed within 60 days after the date on which the right to appeal has expired or on which all rights to appeal have been extinguished; and (vii) certain events of bankruptcy, insolvency and reorganization involving the Company or any of the Company’s significant subsidiaries.
Debt instrument, effective interest rate		8.70%		8.70%
7.25% Convertible Senior Notes due 2025 \| Minimum
Debt Instrument [Line Items]
Debt instrument, debt default, amount		$ 7,500		$ 7,500

Related Party Transactions - Additional Information (Details) - USD ($)				1 Months Ended	3 Months Ended			6 Months Ended		12 Months Ended
	Dec. 07, 2020	May 08, 2020	Oct. 27, 2017	Jun. 30, 2020	Jun. 30, 2021	Mar. 31, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020	Dec. 31, 2020	Jul. 31, 2021	Jun. 18, 2020	Apr. 03, 2020	Mar. 31, 2020	Feb. 29, 2020
Related Party Transaction [Line Items]
Debt discount amortization								$ 4,753,000	$ 1,330,000
Interest expense					$ 3,502,000		$ 2,489,000	7,022,000	4,771,000
Warrants exercisable											500,000
Derivative liability, fair value					400,000			400,000		$ 18,400,000
Change in fair value of derivative liability								17,977,000	(126,000)
Loss on extinguishment of convertible note								242,000	3,401,000
Interest and Other Income (Expense), Net
Related Party Transaction [Line Items]
Change in fair value of derivative liability								18,000,000.0
Unsecured Convertible Promissory Note
Related Party Transaction [Line Items]
Debt instrument due date		May 08, 2022
Principal amount		$ 15,000,000.0
Debt discount amortization				$ 200,000
Debt instrument, annual interest rate		8.00%
Conversion price percentage on IPO price		80.00%
Percentage of premium on aggregate principal amount		50.00%
Derivative liability, fair value		$ 3,600,000			$ 3,800,000			3,800,000
Fair value of common shares issued				3,400,000
Unsecured Convertible Promissory Note \| Interest and Other Income (Expense), Net
Related Party Transaction [Line Items]
Change in fair value of derivative liability									200,000
Loss on extinguishment of convertible note				$ 3,600,000
IPO
Related Party Transaction [Line Items]
Issuance of stock		3,333,333
Shares issued, price per share		$ 15.00
IPO \| Unsecured Convertible Promissory Note
Related Party Transaction [Line Items]
Number of shares on debt conversion				1,250,000
Common Stock
Related Party Transaction [Line Items]
Issuance of stock					15,694,332	4,370,629
Common Stock \| IPO
Related Party Transaction [Line Items]
Issuance of stock							6,666,667
Shares issued, price per share												$ 15.00
Series B Preferred Stock
Related Party Transaction [Line Items]
Preferred stock, shares issued													4,444,444		5,066,666
Shares issued, price per share															$ 2.25
Series B Preferred Stock \| Unsecured Convertible Promissory Note
Related Party Transaction [Line Items]
Debt instrument convertible initial conversion price		$ 13.90
Percentage of price per share		80.00%
Series B Preferred Stock Purchase Warrant \| Common Stock \| IPO
Related Party Transaction [Line Items]
Warrants exercisable												400,160
2017 Term Loan
Related Party Transaction [Line Items]
Principal amount										103,500,000
Loss on extinguishment of convertible note										7,600,000
Exchanged for principal amount of convertible notes	$ 78,500,000
Acquired additional principal amount										25,000,000.0
Accrued interest expense					$ 600,000			$ 600,000		$ 500,000
2017 Term Loan \| Common Stock \| IPO
Related Party Transaction [Line Items]
Shares issued, price per share										$ 3.27
Common stock issued underwritten public offering price acquired										4,128,440
Gross proceeds from issuance of common stock underwritten public offering price										$ 13,200,000
Credit and Security Agreement and Series B Convertible Preferred Stock Purchase Agreement with Private Equity Firm
Related Party Transaction [Line Items]
Principal amount			$ 75,000,000.0
Debt discount amortization			$ 9,300,000				$ 700,000		1,100,000
Interest expense							$ 2,500,000		$ 4,700,000
Credit and Security Agreement and Series B Convertible Preferred Stock Purchase Agreement with Private Equity Firm \| 2017 Term Loan
Related Party Transaction [Line Items]
Debt instrument, interest rate per annum			9.50%
Debt instrument due date			Oct. 27, 2022
Debt instrument, covenant description								The 2017 Term Loan contained customary covenants, including a requirement to maintain a minimum unrestricted cash balance at all times of at least $5.0 million, and was secured by all tangible and intangible property and assets of the Company, with the exception of its intellectual property.
Proceeds from term loan			$ 65,700,000
Credit and Security Agreement and Series B Convertible Preferred Stock Purchase Agreement with Private Equity Firm \| 2017 Term Loan \| Series B Preferred Stock
Related Party Transaction [Line Items]
Proceeds from term loan, preferred stock and preferred stock purchase warrant			124,200,000
Credit and Security Agreement and Series B Convertible Preferred Stock Purchase Agreement with Private Equity Firm \| 2017 Term Loan \| Minimum
Related Party Transaction [Line Items]
Unrestricted cash			$ 5,000,000.0
Subscription Agreement with Lender \| Series B Preferred Stock
Related Party Transaction [Line Items]
Preferred stock, shares issued														967,130
Shares issued, price per share														$ 2.25

Mortgages Payable - Additional Information (Details) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2021	Dec. 31, 2020	Jan. 31, 2014
Comerica Bank
Debt Instrument [Line Items]
Mortgages Payable			$ 1.8
Outstanding balance	$ 1.3	$ 1.3
Mortgage maturity year	2024
Comerica Bank \| London Interbank Offered Rate (LIBOR)
Debt Instrument [Line Items]
Interest rate	2.94%
American Bank of Commerce
Debt Instrument [Line Items]
Outstanding balance	$ 1.6	$ 1.7
Interest rate	3.25%
Mortgage maturity year	2029

Mortgages Payable - Schedule of Minimum Principal Payments (Details) - Mortgages $ in Thousands	Jun. 30, 2021 USD ($)
Debt Instrument [Line Items]
Remainder of 2021	$ 37
2022	76
2023	80
2024	1,119
2025 and thereafter	0
Total future minimum payments	1,312
Less current portion of mortgages payable	(74)
Mortgages payable, net of current portion	$ 1,238

Commitments and Contingencies - Additional Information (Details)								3 Months Ended			6 Months Ended		12 Months Ended	14 Months Ended	15 Months Ended
	Dec. 22, 2020 Case	Dec. 03, 2020 Case	Nov. 16, 2020 USD ($)	Jul. 23, 2020 USD ($)	Jul. 21, 2020 USD ($) State	Oct. 18, 2018 USD ($)	Jun. 25, 2018 USD ($)	Jun. 30, 2021 USD ($)	Jun. 30, 2020 USD ($)	Mar. 31, 2020 USD ($)	Jun. 30, 2021 USD ($)	Jun. 30, 2020 USD ($)	Dec. 31, 2020 USD ($)	Mar. 03, 2020 USD ($)	Mar. 31, 2020 USD ($)	Jul. 21, 2021 USD ($)	Oct. 01, 2020 USD ($)
Commitment And Contingencies [Line Items]
Rent expense for operating leases								$ 1,700,000	$ 600,000		$ 3,100,000	$ 3,400,000
Number of states participating in settlement \| State					45
Contractual obligation								13,200,000			13,200,000						$ 13,200,000
Contractual obligation in December 2021																	1,400,000
Contractual obligation in December 2022																	1,900,000
Income taxes percentage of payments related to civil settlement damages awards and tax refund, CARES Act										65.00%
Income tax discrete benefit related to net operating loss, CARES Act													$ 37,700,000
Contractual obligation in December 2023																	$ 200,000
Accrual settlement amount													12,100,000
Aggregate amount of historical payments			$ 27,400,000
Number of actions pending \| Case	2	2
Amount of reimbursement overpayment received from government payors														$ 10,300,000	$ 10,300,000
Subsequent Event
Commitment And Contingencies [Line Items]
Aggregate amount of historical payments																$ 5,700,000
Accrued Expenses And Other Current Liabilities
Commitment And Contingencies [Line Items]
Remaining accrual balance								5,000,000.0			5,000,000.0
Other Long Term Liabilities
Commitment And Contingencies [Line Items]
Remaining accrual balance								7,100,000			7,100,000
Aetna Settlement Agreement
Commitment And Contingencies [Line Items]
Litigation settlement agreement date							November 2019
Litigation settlement amount agreed to pay to other party							$ 15,000,000.0
United Health Group Settlement Agreement
Commitment And Contingencies [Line Items]
Litigation settlement agreement date						September 30, 2019
Litigation settlement amount agreed to pay to other party						$ 30,000,000.0
United Health Group Settlement Agreement \| Accrued Expenses And Other Current Liabilities
Commitment And Contingencies [Line Items]
Remaining accrual balance								12,000,000.0			12,000,000.0		12,000,000.0
SDNY Civil Settlement Agreement
Commitment And Contingencies [Line Items]
Contractual obligation				$ 19,400,000
Settlement payments											0
Contractual obligation in December 2021				2,000,000.0
Contractual obligation in December 2022				$ 2,800,000
Interest rate				1.25%
Income taxes percentage of payments related to civil settlement damages awards and tax refund, CARES Act				26.00%
Maximum acceleration amount				$ 4,100,000
Income tax discrete benefit related to net operating loss, CARES Act											0		$ 37,700,000
Accelerated payments								$ 4,100,000			4,100,000
SDNY Civil Settlement Agreement \| U.S. Federal Government
Commitment And Contingencies [Line Items]
Contractual obligation				9,700,000
SDCA Civil Settlement Agreement
Commitment And Contingencies [Line Items]
Contractual obligation					$ 16,400,000
Settlement payments											0
Contractual obligation in December 2021					1,700,000
Contractual obligation in December 2022					$ 2,200,000
Interest rate					1.25%
Income taxes percentage of payments related to civil settlement damages awards and tax refund, CARES Act					22.00%
Maximum acceleration amount					$ 3,400,000
Income tax discrete benefit related to net operating loss, CARES Act											$ 0
SDCA Civil Settlement Agreement \| U.S. Federal Government
Commitment And Contingencies [Line Items]
Contractual obligation					10,000,000.0
Minimum
Commitment And Contingencies [Line Items]
Noncancelable operating lease term								2 years			2 years
Income taxes civil settlement damages awards and tax refund amount in single year, CARES Act										$ 5,000,000.0
Negotiated settlement payment period			1 year
Minimum \| SDNY Civil Settlement Agreement
Commitment And Contingencies [Line Items]
Income taxes civil settlement damages awards and tax refund amount in single year, CARES Act				$ 5,000,000.0
Minimum \| SDCA Civil Settlement Agreement
Commitment And Contingencies [Line Items]
Income taxes civil settlement damages awards and tax refund amount in single year, CARES Act					$ 5,000,000.0
Maximum
Commitment And Contingencies [Line Items]
Noncancelable operating lease term								4 years			4 years
Negotiated settlement payment period			2 years

Commitments and Contingencies - Schedule of Net Minimum Payments Under Non-Cancelable Operating Leases (Details) $ in Thousands	Jun. 30, 2021 USD ($)
Commitments And Contingencies Disclosure [Abstract]
Remainder of 2021	$ 1,716
2022	1,929
2023	933
2024	35
2025 and thereafter	0
Total future minimum lease payments	$ 4,613

Stockholders' Equity - Additional Information (Details) $ / shares in Units, $ in Thousands									1 Months Ended			3 Months Ended				6 Months Ended		12 Months Ended
	Jun. 18, 2020 USD ($) $ / shares shares	May 08, 2020 $ / shares shares	Apr. 03, 2020 USD ($) $ / shares shares	Feb. 29, 2020 USD ($) $ / shares shares	Dec. 19, 2019 USD ($) $ / shares shares	Nov. 22, 2019 USD ($) $ / shares shares	Nov. 12, 2019 USD ($) $ / shares shares	Aug. 27, 2019 USD ($) $ / shares shares	Jun. 30, 2021 USD ($) $ / shares shares	Feb. 28, 2021 USD ($) $ / shares shares	Dec. 31, 2020 USD ($) $ / shares shares	Jun. 30, 2021 USD ($) $ / shares shares	Mar. 31, 2021 USD ($) shares	Jun. 30, 2020 USD ($) shares	Mar. 31, 2020 USD ($) $ / shares shares	Jun. 30, 2021 USD ($) Vote $ / shares shares	Jun. 30, 2020 USD ($) shares	Dec. 31, 2020 USD ($) $ / shares shares	Dec. 31, 2019 USD ($) shares	Jul. 31, 2021 shares	Jul. 30, 2021 $ / shares	Oct. 27, 2017 shares
Class Of Stock [Line Items]
Common stock authorized to issue									350,000,000		350,000,000	350,000,000				350,000,000		350,000,000
Undesignated preferred stock									10,000,000			10,000,000				10,000,000
Number of vote per share of common stock held \| Vote																1
Proceeds from issuance of common stock, net \| $																$ 23,377	$ 90,937
Adjusted preferred stock purchase warrant to purchase shares of preferred stock																				500,000
Issuance of stock, net \| $												$ 12,007	$ 11,262	$ 9,933	$ 14,072
Warrants exercise price per share \| $ / shares																					$ 0.001
Warrants exercisable																				500,000
Proceeds from issuance of common stock warrants \| $																39,430
Total issuance cost \| $										$ 1,400						2,100
Warrant issuance cost \| $									$ 700							500
Common stock issuance cost \| $									1,400							900
Remeasurement of warrant liability \| $									$ 31,800			31,800	10,200			31,800
Gain on warrant liability \| $												$ (5,100)	$ 2,600			$ (5,100)
Stock repurchased during period									3,648,101		3,515,028	3,648,101				3,648,101		3,515,028
Stock value repurchased during period \| $									$ 18,778		$ 18,771	$ 18,778				$ 18,778		$ 18,771
Accumulated deficit \| $									$ 652,069		$ 541,274	$ 652,069				652,069		$ 541,274
Amount received in exchange for issuance of shares of preferred stock \| $																	$ 21,307
Series B Preferred Stock
Class Of Stock [Line Items]
Share issued, price per share \| $ / shares			$ 2.25
Preferred stock, shares issued			4,444,444	5,066,666
Amount received in exchange for issuance of shares of preferred stock \| $			$ 10,000	$ 11,400
Shares issued, price per share \| $ / shares				$ 2.25
Series A-1 Preferred Stock
Class Of Stock [Line Items]
Undesignated preferred stock							0
Exchange ratio of shares								83.33%
Outstanding shares of preferred stock							0
August 2019 Financing
Class Of Stock [Line Items]
Preferred stock dividends, shares																4,017,512
Increase in accumulated deficit \| $																			$ 13,100
August 2019 Financing \| Minimum
Class Of Stock [Line Items]
Convertible conversion and exercise price \| $ / shares									$ 2.75			$ 2.75				$ 2.75
August 2019 Financing \| Maximum
Class Of Stock [Line Items]
Convertible conversion and exercise price \| $ / shares									$ 3.53			$ 3.53				$ 3.53
August 2019 Financing \| Series B Preferred Stock Purchase Warrant
Class Of Stock [Line Items]
Share issued, price per share \| $ / shares								$ 2.75
Preferred stock, shares issued								9,090,910
Consideration paid \| $								$ 25,000
Amended underlying preferred stock purchase warrant								1,416,431														1,818,182
August 2019 Financing \| Series B Preferred Stock
Class Of Stock [Line Items]
Stock split																1.28
Stock split, description																1.28-for-1
Exchange Agreement
Class Of Stock [Line Items]
Exchange ratio of shares								31.25%
Accumulated deficit \| $								$ (27,600)
Exchange Agreement \| Series B Preferred Stock
Class Of Stock [Line Items]
Number of shares issued on conversion/exchange								35,664,240
Exchange Agreement \| Series A-1 Preferred Stock
Class Of Stock [Line Items]
Shares outstanding								1,500,000
November Series B Preferred Stock Purchase Agreement
Class Of Stock [Line Items]
Increase in accumulated deficit \| $							$ 36,400
November Series B Preferred Stock Purchase Agreement \| Series B Preferred Stock
Class Of Stock [Line Items]
Adjusted preferred stock purchase warrant to purchase shares of preferred stock							2,222,222
Warrants exercisable							2,222,222
Preferred stock, shares issued							11,111,111
Amount received in exchange for issuance of shares of preferred stock \| $							$ 25,000
Shares issued, price per share \| $ / shares							$ 2.25
Additional shares of preferred stock issued							13,985,993
November Series B Preferred Stock Purchase Agreement \| Series B Preferred Stock \| Series B Preferred Stock Purchase Warrant Issued and Outstanding
Class Of Stock [Line Items]
Stock split							1.22
Stock split, description																1.22-for-1 stock split
Conversion price and exercise price of preferred stock and preferred stock purchase warrants \| $ / shares							$ 2.75
Reduction in conversion price and exercise price of preferred stock and preferred stock purchase warrants \| $ / shares							$ 2.25
Additional Equity Financing \| Series B Preferred Stock
Class Of Stock [Line Items]
Preferred stock, shares issued					11,111,111	2,722,222
Amount received in exchange for issuance of shares of preferred stock \| $					$ 25,000	$ 6,100
Shares issued, price per share \| $ / shares					$ 2.25	$ 2.25
Credit Agreement Amendment \| Series B Preferred Stock
Class Of Stock [Line Items]
Preferred stock, shares issued															967,130
Shares issued, price per share \| $ / shares															$ 2.25
Derivatives and Hedging (ASC 815)
Class Of Stock [Line Items]
Proceeds from issuance of common stock, net \| $																$ 12,200
Proceeds from issuance of common stock warrants \| $																12,800
Common Stock
Class Of Stock [Line Items]
Issuance of stock, net, shares												15,694,332	4,370,629
Issuance of stock, net \| $												$ 16	$ 4
Proceeds from issuance of common stock warrants \| $																$ 13,400
Shares outstanding									81,995,756		59,287,331	81,995,756	63,903,974	50,022,606	8,508,144	81,995,756	50,022,606	59,287,331	8,451,415
Number of shares issued on conversion/exchange	33,443,562											611,616		1,250,000
Number of shares issued to an adjustment in the conversion rate	2,045,522
Common Stock \| Exchange Agreement
Class Of Stock [Line Items]
Number of shares issued on conversion/exchange								4,810,651
Common Stock \| Derivatives and Hedging (ASC 815)
Class Of Stock [Line Items]
Proceeds from issuance of common stock warrants \| $																$ 26,600
IPO
Class Of Stock [Line Items]
Shares issued, price per share \| $ / shares		$ 15.00
Shares issued, price per share \| $ / shares		$ 15.00
Issuance of stock, net, shares		3,333,333
Issuance of stock, net \| $														$ 88,665
IPO \| Common Stock
Class Of Stock [Line Items]
Common stock issued and sold	6,666,667
Shares issued, price per share \| $ / shares	$ 15.00
Proceeds from issuance of common stock, net \| $	$ 88,700
Underwriting discounts and commissions \| $	7,000
Other offering expenses \| $	$ 4,300
Shares issued, price per share \| $ / shares	$ 15.00
Issuance of stock, net, shares														6,666,667
Issuance of stock, net \| $														$ 7
IPO \| Common Stock \| Series B Preferred Stock Purchase Warrant
Class Of Stock [Line Items]
Adjusted preferred stock purchase warrant to purchase shares of preferred stock	400,160
Warrants exercisable	400,160
Underwritten Public Offering \| Common Stock
Class Of Stock [Line Items]
Common stock issued and sold											8,792,047
Shares issued, price per share \| $ / shares											$ 3.27							$ 3.27
Proceeds from issuance of common stock, net \| $																		$ 26,900
Shares issued, price per share \| $ / shares											$ 3.27							$ 3.27
Private Placement \| Securities Purchase Agreement
Class Of Stock [Line Items]
Issuance of stock, net, shares									16,194,332	4,370,629
Adjusted preferred stock purchase warrant to purchase shares of preferred stock									16,194,332	4,370,629		16,194,332				16,194,332
Share issued, price per share \| $ / shares									$ 2.47	$ 5.72		$ 2.47				$ 2.47
Issuance of stock, net \| $									$ 40,000	$ 25,000
Warrants exercise price per share \| $ / shares									$ 2.84	$ 6.86		$ 2.84				$ 2.84
Warrants exercisable									16,194,332	4,370,629		16,194,332				16,194,332
Proceeds from issuance of common stock warrants \| $									$ 46,000	$ 30,000
Private Placement \| Common Stock \| Securities Purchase Agreement
Class Of Stock [Line Items]
Issuance of stock, net, shares									15,694,332	4,370,629
Private Placement \| Pre- funded warrant \| Securities Purchase Agreement
Class Of Stock [Line Items]
Adjusted preferred stock purchase warrant to purchase shares of preferred stock									500,000			500,000				500,000
Warrants exercise price per share \| $ / shares									$ 0.001			$ 0.001				$ 0.001
Warrants exercisable									500,000			500,000				500,000

Stockholders' Equity - Schedule of Reserved Shares of Common Stock, On An As-if-converted Basis, for Future Issuance (Details) - shares	Jun. 30, 2021	Dec. 31, 2020
Class Of Stock [Line Items]
Common stock shares reserved for future issuance	92,742,943	60,605,522
Common Stock Issuable Upon Conversion of Convertible Notes
Class Of Stock [Line Items]
Common stock shares reserved for future issuance	50,856,253	51,529,036
Common Stock Warrant
Class Of Stock [Line Items]
Common stock shares reserved for future issuance	21,465,121	400,160
Outstanding Options to Purchase Common Stock
Class Of Stock [Line Items]
Common stock shares reserved for future issuance	11,166,946	4,268,945
Restricted Stock Units Outstanding
Class Of Stock [Line Items]
Common stock shares reserved for future issuance	4,377,826	1,468,765
Available for Future Issuance under Equity Incentive Plan
Class Of Stock [Line Items]
Common stock shares reserved for future issuance	4,876,797	2,938,616

Stock-Based Compensation - Additional Information (Details) $ / shares in Units, $ in Millions		1 Months Ended	3 Months Ended		6 Months Ended		12 Months Ended
	May 05, 2021 shares	Jun. 30, 2020 Period	Jun. 30, 2021 USD ($) shares	Mar. 31, 2021 shares	Jun. 30, 2021 USD ($) $ / shares shares	Jun. 30, 2020 $ / shares	Dec. 31, 2020 USD ($) shares	Jan. 01, 2021 shares	Mar. 04, 2020 shares	Dec. 31, 2019 shares	Mar. 31, 2019 shares	Feb. 28, 2018 shares
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Common stock shares reserved for future issuance			92,742,943		92,742,943		60,605,522
Weighted-average grant date fair value of options granted \| $ / shares					$ 2.13	$ 6.78
Unrecognized compensation cost related to unvested stock options expected to be recognized amount \| $			$ 23.2		$ 23.2		$ 12.8
Unrecognized compensation cost related to unvested stock options expected to be recognized over remaining weighted average vesting period					2 years 9 months 25 days		2 years 11 months 4 days
Common stock authorized to issue			350,000,000		350,000,000		350,000,000
Restricted Stock Units (RSUs)
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Common stock shares reserved for future issuance			4,377,826		4,377,826		1,468,765
Options to Purchase Common Stock
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Common stock shares reserved for future issuance			11,166,946		11,166,946		4,268,945
2018 Equity Incentive Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Shares available for future grant											1,100,000
Second Amended and Restated 2012 Stock Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock options issuable under the plan												0
2015 Consultant Stock Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock options issuable under the plan												0
Second Amended and Restated 2018 Equity Incentive Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Shares available for future grant										2,700,000
Third Amended and Restated 2018 Equity Incentive Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Shares available for future grant									7,615,733
2018 Third Amended Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Shares available for future grant			4,876,797		4,876,797
Common stock shares reserved for future issuance								4,537,676
Increase of shares authorized for issuance	7,700,000
Common stock authorized to issue	19,853,409
2020 Employee Stock Purchase Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Common stock shares reserved for future issuance			812,891		812,891		510,000	557,723
Percentage of fair market value of shares on the offering date		85.00%
Percentage of fair market value of shares on the purchase date		85.00%
Maximum duration for purchase under employee stock purchase plan		24 months
Number of purchase periods \| Period		4
Duration of each purchase period		6 months
Common Stock
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Issuance of stock			15,694,332	4,370,629

Stock-Based Compensation - Summary of Stock Options Activity under Plans (Details) - USD ($) $ / shares in Units, $ in Thousands	6 Months Ended
	Jun. 30, 2021
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Stock Options Outstanding Balance at December 31, 2020	4,268,945
Stock Options Outstanding Options granted	8,387,906
Stock Options Outstanding Options exercised	(96,782)
Stock Options Outstanding Options forfeited/cancelled	(1,217,632)
Stock Options Outstanding Options expired	(175,491)
Stock Options Outstanding Balance at June 30, 2021	11,166,946
Stock Options Outstanding Vested and expected to vest at June 30, 2021	11,166,946
Stock Options Outstanding Vested and exercisable at June 30, 2021	2,225,549
Weighted-Average Exercise Price Balance at December 31, 2020	$ 8.14
Weighted-Average Exercise Price Options granted	3.62
Weighted-Average Exercise Price Options exercised	1.27
Weighted-Average Exercise Price Options forfeited/cancelled	4.61
Weighted-Average Exercise Price Options expired	10.72
Weighted-Average Exercise Price Balance at June 30, 2021	5.15
Weighted-Average Exercise Price Vested and expected to vest at June 30, 2021	5.15
Weighted-Average Exercise Price Vested and exercisable at June 30, 2021	$ 7.76
Weighted-Average Remaining Contractual Term (in years) Balance at June 30, 2021	8 years 10 months 28 days
Weighted-Average Remaining Contractual Term (in years) Vested and expected to vest at June 30, 2021	8 years 10 months 28 days
Weighted-Average Remaining Contractual Term (in years) Vested and exercisable at June 30, 2021	6 years 2 months 15 days
Aggregate Intrinsic Value Balance at June 30, 2021	$ 2,065
Aggregate Intrinsic Value Vested and expected to vest at June 30, 2021	2,065
Aggregate Intrinsic Value Vested and exercisable at June 30, 2021	$ 793

Stock-Based Compensation - Summary of Assumptions used to Determine Fair Value of Stock Options Granted (Details)	6 Months Ended
	Jun. 30, 2021
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Risk-free interest rate, minimum	0.60%
Risk-free interest rate, maximum	1.10%
Expected volatility, minimum	52.90%
Expected volatility, maximum	69.90%
Expected dividend yield	0.00%
Minimum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Expected life (years)	3 years
Maximum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Expected life (years)	6 years 3 months 18 days

Stock-Based Compensation - Summary of Restricted Stock Units Activity (Details) - Restricted Stock Units (RSUs)	6 Months Ended
	Jun. 30, 2021 $ / shares shares
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of Shares, Beginning Balance \| shares	1,468,765
Number of Shares, Granted \| shares	3,920,143
Number of Shares, Vested \| shares	(412,118)
Number of Shares, Forfeited/cancelled \| shares	(598,964)
Number of Shares, Ending Balance \| shares	4,377,826
Weighted Average Grant Date Fair Value beginning of period \| $ / shares	$ 8.73
Weighted Average Grant Date Fair Value, Granted \| $ / shares	3.37
Weighted Average Grant Date Fair Value, Vested \| $ / shares	7.37
Weighted Average Grant Date Fair Value, Forfeited/cancelled \| $ / shares	4.84
Weighted Average Grant Date Fair Value end of period \| $ / shares	$ 4.59

Stock-Based Compensation - Schedule of Stock-based Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Total stock-based compensation expense	$ 4,470	$ 3,024	$ 7,100	$ 5,081
Research and Development
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Total stock-based compensation expense	1,080	823	1,675	1,472
Selling and Marketing
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Total stock-based compensation expense	310	511	660	882
General and Administrative
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Total stock-based compensation expense	2,000	1,240	3,290	1,931
Discontinued Operations
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Total stock-based compensation expense	$ 1,080	$ 450	$ 1,475	$ 796

Income Taxes - Additional Information (Details) - USD ($)	3 Months Ended		6 Months Ended	12 Months Ended
	Jun. 30, 2021	Mar. 31, 2020	Jun. 30, 2021	Dec. 31, 2020
Income Tax [Line Items]
Effective tax rate	0.00%		0.00%
Income tax discrete benefit related to net operating loss CARES Act				$ 37,700,000
Income taxes percentage of payments related to civil settlement damages awards and tax refund CARES Act		65.00%
Income tax refund related to net operating loss CARES Act			$ 0	$ 37,700,000
Maximum
Income Tax [Line Items]
Net operating loss carryback period in CARES Act			5 years
Testing period for ownership change			3 years
Minimum
Income Tax [Line Items]
Income taxes civil settlement damages awards and tax refund amount in single year CARES Act		$ 5,000,000.0
Percentage of shift in stock ownership to determine whether ownership change occurred			50.00%
Percentage of shareholders ownership			5.00%

Net Loss Per Share - Summary of Potentially Dilutive Securities Not Included in Calculation of Diluted Loss Per Share (Details) - shares	6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Antidilutive securities not included in calculation of diluted loss per share	87,866,146	5,344,093
Options to Purchase Common Stock
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Antidilutive securities not included in calculation of diluted loss per share	11,166,946	3,848,838
Restricted Stock Units (RSUs)
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Antidilutive securities not included in calculation of diluted loss per share	4,377,826	1,095,095
Common Stock Warrant
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Antidilutive securities not included in calculation of diluted loss per share	21,465,121	400,160
Common Stock Issuable Upon Conversion of Convertible Notes
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Antidilutive securities not included in calculation of diluted loss per share	50,856,253	0
Series A Preferred Stock
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Antidilutive securities not included in calculation of diluted loss per share	0	0
Series B Preferred Stock
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Antidilutive securities not included in calculation of diluted loss per share	0	0
Series B Preferred Stock Purchase Warrant
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Antidilutive securities not included in calculation of diluted loss per share	0	0

Subsequent Events - Additional Information (Details) - shares	3 Months Ended
	Jun. 30, 2021	Mar. 31, 2021	Dec. 31, 2020
Subsequent Event [Line Items]
Common stock authorized to issue	350,000,000		350,000,000
Common Stock
Subsequent Event [Line Items]
Issuance of stock, net, shares	15,694,332	4,370,629