EXAGEN INC.
For the period ended Sep 30, 2026. Filed Nov 10, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2026 · Filed Nov 10, 2026
XGN$5.26-25.9%Stored close · as of Nov 10, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-06-30; filed 2026-08-04.
0001274737-26-000048
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-09-30; filed 2026-11-10.
0001274737-26-000065
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 123 previous paragraphs and 127 current paragraphs.
77 unchanged; 34 reworded; 13 added; 9 removed; 3 previous and 3 current paragraphs rearranged.
Tables are not compared: 3 previous and 3 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (13)
Current report
In-process research and development expenses include costs to acquire certain in-process research and development (IPR&D) assets including technology, software, source code, know-how and patents comprising an AI-enabled rheumatology practice workflow-optimization software platform. The IPR&D was deemed to have no alternative future use and we expensed all costs on the acquisition date.
Current report
Loss on Extinguishment of Debt
Current report
Income Tax (Expense) Benefit
Current report
Selling, general and administrative expenses increased $1.4 million, or 12.1%, for the three months ended September 30, 2026 compared to the three months ended September 30, 2025. This increase was primarily due to increases of $0.7 million in employee-related expenses (including an increase of $0.6 million in stock-based compensation), $0.3 million in outside services, $0.1 million in travel and entertainment, $0.1 million in facilities-related expenses, and $0.2 million in other expenses.
Current report
Research and development expenses increased $0.1 million, or 5.4%, for the three months ended September 30, 2026 compared to the three months ended September 30, 2025. This increase was primarily due to an increase of $0.1 million in outside services.
Current report
We expect our research and development expenses to remain relatively stable in the near term, or even decrease year-over-year as a percentage of revenue.
Current report
In-process research and development expenses increased by $0.6 million for the three months ended September 30, 2026 compared to the three months ended September 30, 2025 due to the cost to acquire the certain IPR&D assets, including the rights to technology, software code, know-how and patents comprising an AI-enabled rheumatology practice workflow-optimization software platform.
Current report
Selling, general and administrative expenses increased $3.2 million, or 9.4%, for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025. This increase was primarily due to increases of $2.6 million in employee-related expenses (including an increase of $1.2 million in stock-based compensation), $0.7 million in outside services and $0.3 million in facilities-related expenses, partially offset by a decrease of $0.4 million in other expenses.
Current report
We expect our research and development expenses to remain relatively stable in the near term, or even decrease year-over-year as a percentage of revenue.
Current report
In-process research and development expenses increased by $0.6 million for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025 due to the cost to acquire the certain IPR&D assets, including the rights to technology, software code, know-how and patents comprising an AI-enabled rheumatology practice workflow-optimization software platform.
Current report
Loss on Extinguishment of Debt
Current report
The fair value of the warrant liability decreased by $2.7 million for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025, primarily due to the Credit Agreement executed in April 2025.
Current report
On November 9, 2026, the Company entered into a new sales agreement (the 2026 Sales Agreement) with TD Cowen as sales agent pursuant to which the Company may offer and sell, from time to time, shares of the Company's common stock having an aggregate offering price of up to $50.0 million. The 2026 Sales Agreement superseded the 2022 Sales Agreement. The Company is not obligated to sell any shares of the Company's common stock in the offering and the Company may not sell any shares of the Company’s common stock in the offering prior to the effectiveness of the 2026 Shelf Registration Statement.
Removed paragraphs (9)
Previous report
Income Tax Expense
Previous report
Selling, general and administrative expenses increased $1.0 million, or 8.4%, for the three months ended June 30, 2026 compared to the three months ended June 30, 2025. This increase was primarily due to increases of $1.0 million in employee-related expenses (including salaries, benefits, commissions, bonuses and stock-based compensation), $0.3 million in outside services, and $0.2 million in facilities-related expenses, partially offset by a decrease of $0.5 million in other expenses.
Previous report
Research and development expenses decreased $0.1 million, or 3.8%, for the three months ended June 30, 2026 compared to the three months ended June 30, 2025. This decrease was primarily due to decreases of $0.1 million in facilities related expenses, $0.1 million in clinical trial expenses, and $0.1 million in outside services, partially offset by a $0.2 million increase in employee-related expenses (including salaries, benefits, bonuses and stock-based compensation).
Previous report
We expect that our research and development expenses may increase moderately in absolute dollars in the near-term as we execute on additional pipeline initiatives, but expect our research and development expenses to decrease year-over-year as a percentage of revenue.
Previous report
Selling, general and administrative expenses increased $1.8 million, or 8.1%, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. This increase was primarily due to increases of $1.8 million in employee-related expenses (including salaries, benefits, commissions, bonuses and stock-based compensation), $0.4 million in outside services and $0.2 million in facilities-related expenses, partially offset by a decrease of $0.6 million in other expenses.
Previous report
We expect that our research and development expenses may increase moderately in absolute dollars in the near-term as we execute on additional pipeline initiatives, but expect our research and development expenses to decrease year-over-year as a percentage of revenue.
Previous report
Other Income (Expense), net
Previous report
Other income (expense), net decreased by $0.2 million for the six months ended June 30, 2026 compared to the six months ended June 30, 2025, primarily due to a $0.3 million net loss on debt modification related to the First Amendment executed in March 2026, partially offset by an increase of $0.1 million in interest income.
Previous report
Net cash used in financing activities for the six months ended June 30, 2026 was $0.4 million, primarily resulting from payments on finance lease and notes payable obligations, partially offset by proceeds from ESPP purchases.
Reworded paragraphs (34)
Previous wording
You should read the following discussion of our financial condition and results of operations in conjunction with the unaudited condensed financial statements and the notes thereto included elsewhere in this Quarterly Report on Form 10-Q (this Quarterly Report) and with our audited financial statements and notes thereto included in our 2025 Annual Report.
Current wording
You should read the following discussion of our financial condition and results of operations in conjunction with the unaudited condensed consolidated financial statements and the notes thereto included elsewhere in this Quarterly Report on Form 10-Q (this Quarterly Report) and with our audited financial statements and notes thereto included in our 2025 Annual Report.
Previous wording
Since launching AVISE® CTD, we have produced an extensive body of peer-reviewed literature supporting the test’s clinical validity and utility, demonstrating the importance of AVISE® CTD in patient care. Revenue from this product comprised 90% and 91% of our revenue for the six months ended June 30, 2026 and 2025, respectively.
Current wording
Since launching AVISE® CTD, we have produced an extensive body of peer-reviewed literature supporting the test’s clinical validity and utility, demonstrating the importance of AVISE® CTD in patient care. Revenue from this product comprised 90% and 89% of our revenue for the nine months ended September 30, 2026 and 2025, respectively.
Previous wording
▪Lupus Nephritis (LN) Biomarkers. We continue to leverage our intellectual property licensed from Johns Hopkins University to develop a test for detecting protein analytes in urine that can aid rheumatologists in the ongoing management and risk stratification of patients suffering from LN. We tested a new customized array and presented novel data on the use of urinary biomarkers (especially Tenascin‑C) for the prediction of kidney function loss during the 2025 American College of Rheumatology annual meeting (ACR 2025). During the first half of 2026, we expect further adoption by our existing and new pharma partnerships of our panel as part of exploratory trials. In addition, we continue our efforts in releasing our LN offering commercially through our clinical lab.
Current wording
▪Lupus Nephritis (LN) Biomarkers. We continue to leverage our intellectual property licensed from Johns Hopkins University to develop a test for detecting protein analytes in urine that can aid rheumatologists in the ongoing management and risk stratification of patients suffering from LN. We tested a new customized array and accepted to present our abstract on novel data on the use of urinary biomarkers (especially Tenascin‑C) for the prediction of kidney function loss during the 2026 American College of Rheumatology annual meeting (ACR 2026). During the first half of 2027, we intend to drive further adoption by our existing and new pharma partnerships of our panel as part of exploratory trials. In addition, we continue our efforts in releasing our LN offering commercially through our clinical lab.
Previous wording
In January 2025, we announced conditional approval by the New York State Department of Health (NYSDOH) and commercial launch of our new SLE and RA biomarker assays on the AVISE® CTD platform. Collectively, we believe these new biomarkers will further improve the clinical utility of AVISE® CTD, providing clinicians with the information they need to definitively diagnose patients and shorten their autoimmune diagnostic journeys. While these biomarkers have contributed positively to AVISE® CTD ASP, these gains have built gradually, and we remain encouraged by their progress. We expect that, over time, these new biomarkers will continue to drive gains in AVISE® CTD average selling price and gross margin, increase demand, and better position us for profitability.
Current wording
In January 2025, we announced conditional approval by the New York State Department of Health (NYSDOH) and commercial launch of our new SLE and RA biomarker assays on the AVISE® CTD platform. Collectively, we believe these new biomarkers have further improved the clinical utility of AVISE® CTD, providing clinicians with the information they need to definitively diagnose patients and shorten their autoimmune diagnostic journeys. While these biomarkers have contributed positively to AVISE® CTD ASP, these gains have built gradually, and we remain encouraged by their progress. We expect that, over time, these new biomarkers will continue to drive gains in AVISE® CTD average selling price and gross margin, increase demand, and better position us for profitability.
Previous wording
▪Reimbursement for Our Testing Products. Our revenue depends on achieving broad coverage and reimbursement for our tests from third-party payors, including both commercial payors and government payors. Payment from third-party payors differs depending on whether we are considered a "participating provider" (have entered into a contract with the payors as a participating provider) or a "non-participating provider" (do not have a contract and are considered a "non-participating provider"). Payors will often reimburse non-participating providers at a lower amount than participating providers, if at all. We have received a substantial portion of our revenue from a limited number of commercial payors, most of which have not contracted with us to be a participating provider. Historically, we have experienced situations where commercial payors proactively reduced the amounts they were willing to reimburse for our tests, and in other situations, commercial payors have determined that the amounts they previously paid were too high and have sought to recover those perceived excess payments by deducting such amounts from payments otherwise being made. When we contract to serve as a participating provider, reimbursements are made pursuant to a negotiated fee schedule and are limited to only covered indications. If we are not able to obtain or maintain coverage and adequate reimbursement from third-party payors, we may not be able to effectively increase our testing volume and revenue as expected. Additionally, changes in our estimated reimbursements for tests performed in prior periods can positively or negatively impact our revenue in the current period and cause our financial results to fluctuate. In addition, in connection with our revenue cycle management initiatives, we have in the past held claims in the first quarter of the fiscal year, which resulted in increases in our accounts receivable and an accelerated decrease in our cash in the same period. The trend subsequently reversed in the three months ended June 30, 2026 as we collected cash on billed tests.
Current wording
▪Reimbursement for Our Testing Products. Our revenue depends on achieving broad coverage and reimbursement for our tests from third-party payors, including both commercial payors and government payors. Payment from third-party payors differs depending on whether we are considered a "participating provider" (have entered into a contract with the payors as a participating provider) or a "non-participating provider" (do not have a contract and are considered a "non-participating provider"). Payors will often reimburse non-participating providers at a lower amount than participating providers, if at all. We have received a substantial portion of our revenue from a limited number of commercial payors, most of which have not contracted with us to be a participating provider. Historically, we have experienced situations where commercial payors proactively reduced the amounts they were willing to reimburse for our tests, and in other situations, commercial payors have determined that the amounts they previously paid were too high and have sought to recover those perceived excess payments by deducting such amounts from payments otherwise being made. When we contract to serve as a participating provider, reimbursements are made pursuant to a negotiated fee schedule and are limited to only covered indications. If we are not able to obtain or maintain coverage and adequate reimbursement from third-party payors, we may not be able to effectively increase our testing volume and revenue as expected. Additionally, changes in our estimated reimbursements for tests performed in prior periods can positively or negatively impact our revenue in the current period and cause our financial results to fluctuate. In addition, in connection with our revenue cycle management initiatives, we have in the past held claims in the first quarter of the fiscal year, which resulted in increases in our accounts receivable and an accelerated decrease in our cash in the same period. The trend subsequently reversed in the second quarter and third quarter of 2026 as we collected cash on billed tests.
Previous wording
▪Expanding Adoption of AVISE® CTD. Since the launch of AVISE® CTD in 2012 and through June 30, 2026, we have delivered over one million of these tests. During the three months ended June 30, 2026, the number of AVISE® CTD tests delivered increased by approximately 11% over the same period in 2025. Revenue growth for our testing products will depend, in part, on our ability to continue to expand our base of ordering healthcare providers and increase our penetration with existing healthcare providers and on the success of the T-Cell Biomarkers and RA Sub-Profile Biomarkers, which we added to our AVISE® CTD tests in 2025.
Current wording
▪Expanding Adoption of AVISE® CTD. Since the launch of AVISE® CTD in 2012 and through September 30, 2026, we have delivered over one million of these tests. During the nine months ended September 30, 2026, the number of AVISE® CTD tests delivered increased by approximately 8% over the same period in 2025. Revenue growth for our testing products will depend, in part, on our ability to continue to expand our base of ordering healthcare providers and increase our penetration with existing healthcare providers and on the continued success of the T-Cell Biomarkers and RA Sub-Profile Biomarkers, which we added to our AVISE® CTD tests in 2025.
Previous wording
During the year ended December 31, 2023, we implemented several revenue cycle management initiatives, including among others, withholding the submission of commercial payor claims for reimbursement until subsequent quarters, increasing appeals efforts, adjusting the documentation required of physicians when ordering our tests and implementing increases to our patient payment rates. Additionally, in November 2023, we increased the list price billed for our tests. These ongoing revenue cycle management initiatives aim to optimize our appeals process and the potential for cash collections. During the fiscal year ended December 31, 2024, we experienced moderate declines in test volume since the second half of the fiscal year ended December 31, 2023, as rheumatologists and patients adjusted to these changes. During the fiscal year ended December 31, 2025, we saw a return to volume growth. The number of AVISE® CTD tests delivered during the three months ended June 30, 2026 improved by approximately 11% as compared to the number of AVISE® CTD tests delivered during the three months ended June 30, 2025 due to continuing physician demand and adoption, early traction from our new biomarkers, and salesforce expansion. Additionally, the trailing-twelve-month ASP of our AVISE® CTD tests increased by approximately 4% during the three months ended June 30, 2026 compared to the same period in 2025.
Current wording
During the year ended December 31, 2023, we implemented several revenue cycle management initiatives, including among others, withholding the submission of commercial payor claims for reimbursement until subsequent quarters, increasing appeals efforts, adjusting the documentation required of physicians when ordering our tests and implementing increases to our patient payment rates. Additionally, in November 2023, we increased the list price billed for our tests. These ongoing revenue cycle management initiatives aim to optimize our appeals process and the potential for cash collections. During the fiscal year ended December 31, 2024, we experienced moderate declines in test volume since the second half of the fiscal year ended December 31, 2023, as rheumatologists and patients adjusted to these changes. During the fiscal year ended December 31, 2025, we saw a return to volume growth. The number of AVISE® CTD tests delivered during the nine months ended September 30, 2026 improved by approximately 8% as compared to the number of AVISE® CTD tests delivered during the nine months ended September 30, 2025 due to continuing physician demand and adoption, early traction from our new biomarkers, and salesforce expansion. Additionally, the trailing-twelve-month ASP of our AVISE® CTD tests increased by approximately 2% during the nine months ended September 30, 2026 compared to the same period in 2025.
Previous wording
Revenue increased $2.7 million, or 15.9%, for the three months ended June 30, 2026 compared to the three months ended June 30, 2025, primarily due to increases in test volume and expansion of our AVISE® CTD. The number of AVISE® CTD tests delivered in the three months ended June 30, 2026 increased by approximately 11% compared to the same period in 2025. Our AVISE® CTD trailing twelve-month ASP increased by 4% or $18 per test to $446 per test in the second quarter of 2026 from $428 per test in the second quarter of 2025. In addition, our pharma services revenue increased by approximately $0.7 million, to $1.0 million in the second quarter of 2026 from $0.3 million in the second quarter of 2025.
Current wording
Revenue increased $1.2 million, or 6.8%, for the three months ended September 30, 2026 compared to the three months ended September 30, 2025, primarily due to increases in test volume and expansion of our AVISE® CTD. The number of AVISE® CTD tests delivered in the three months ended September 30, 2026 increased by approximately 2% compared to the same period in 2025. Our AVISE® CTD trailing twelve-month ASP increased by 2% or $10 per test to $451 per test in the third quarter of 2026 from $441 per test in the third quarter of 2025. In addition, our pharma services revenue increased by approximately $0.1 million, to $0.9 million in the third quarter of 2026 from $0.8 million in the third quarter of 2025.
Previous wording
Cost of revenue increased $0.9 million, or 13.5%, for the three months ended June 30, 2026 compared to the three months ended June 30, 2025. This increase was primarily due to increases of $0.3 million in the cost of materials and supplies, $0.2 million in depreciation and amortization, $0.2 million in employee-related expenses (including salaries, benefits and stock-based compensation), and $0.3 million in other expenses, partially offset by a decrease of $0.1 million in royalty expenses.
Current wording
Cost of revenue increased $0.4 million, or 5.7%, for the three months ended September 30, 2026 compared to the three months ended September 30, 2025. This increase was primarily due to increases of $0.2 million in the cost of materials and supplies, $0.1 million in depreciation and amortization, and $0.1 million in royalties, consistent with the increase in related revenue.
Previous wording
Gross margin as a percentage of revenue increased to 61.3% for the three months ended June 30, 2026 compared to 60.4% for the three months ended June 30, 2025, primarily due to the changes to revenue and cost of revenue described above.
Current wording
Gross margin as a percentage of revenue increased to 58.8% for the three months ended September 30, 2026 compared to 58.4% for the three months ended September 30, 2025, primarily due to the changes to revenue and cost of revenue described above.
Previous wording
Interest expense increased by $0.1 million, for the three months ended June 30, 2026 compared to the three months ended June 30, 2025, primarily due to the Perceptive Term Loan Facility that we entered into in April 2025 and the embedded finance lease related to a supply agreement, as amended, with one of our suppliers for certain reagents. We expect to continue to incur this interest expense under the Perceptive Term Loan Facility.
Current wording
Interest expense decreased by $0.1 million, for the three months ended September 30, 2026 compared to the three months ended September 30, 2025, primarily due to the Perceptive Term Loan Facility that we entered into in April 2025 and the embedded finance lease related to a supply agreement, as amended, with one of our suppliers for certain reagents. We expect to continue to incur this interest expense under the Perceptive Term Loan Facility.
Previous wording
The fair value of the warrant liability increased by $0.9 million for the six months ended June 30, 2026 compared to the six months ended June 30, 2025, primarily due to the Credit Agreement executed in April 2025.
Current wording
The fair value of the warrant liability decreased by $1.8 million for the three months ended September 30, 2026 compared to the three months ended September 30, 2025, primarily due to the Credit Agreement executed in April 2025.
Previous wording
Comparison of the Six Months Ended June 30, 2026 and 2025 (in thousands):
Current wording
Comparison of the Nine Months Ended September 30, 2026 and 2025 (in thousands):
Previous wording
Revenue increased $4.5 million, or 13.9%, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025, due to increases in test volume and expansion of our AVISE® CTD. The number of AVISE® CTD tests delivered in the six months ended June 30, 2026 increased by approximately 11% compared to the same period in 2025. Our AVISE® CTD trailing twelve-month ASP increased by 4% or $18 per test to $446 per test in the second quarter of 2026 from $428 per test in the second quarter of 2025. In addition, our pharma services revenue increased by approximately $0.9 million, to $1.3 million in the six months ended June 30, 2026 from $0.4 million in the six months ended June 30, 2025.
Current wording
Revenue increased $5.7 million, or 11.5%, for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025, due to increases in test volume and expansion of our AVISE® CTD. The number of AVISE® CTD tests delivered in the nine months ended September 30, 2026 increased by approximately 8% compared to the same period in 2025. Our AVISE® CTD trailing twelve-month ASP increased by 2% or $10 per test to $451 per test in the third quarter of 2026 from $441 per test in the third quarter of 2025. In addition, our pharma services revenue increased by approximately $1.0 million, to $2.2 million in the nine months ended September 30, 2026 from $1.2 million in the nine months ended September 30, 2025.
Previous wording
Cost of revenue increased $1.6 million, or 12.5%, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. This increase was primarily due to increases of $0.9 million in materials and supplies, $0.4 million in depreciation and amortization, and $0.4 million in other expenses, partially offset by a decrease of $0.1 million in royalty expenses.
Current wording
Cost of revenue increased $2.1 million, or 10.1%, for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025. This increase was primarily due to increases of $1.1 million in materials and supplies, $0.5 million in depreciation and amortization, and $0.5 million in other expenses, consistent with increases in revenue.
Previous wording
Gross margin as a percentage of revenue increased slightly to 60.2% for the six months ended June 30, 2026 compared to 59.7% for the six months ended June 30, 2025, primarily due to the changes to revenue and cost of revenue described above.
Current wording
Gross margin as a percentage of revenue increased slightly to 59.7% for the nine months ended September 30, 2026 compared to 59.3% for the nine months ended September 30, 2025, primarily due to the changes to revenue and cost of revenue described above.
Previous wording
Research and development expenses increased $0.2 million, or 7.7%, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. This increase was primarily due to an increase of $0.4 million in employee-related expenses (including salaries, benefits and stock-based compensation), partially offset by decreases of $0.1 million in facilities-related expenses and $0.1 million in outside services expenses.
Current wording
Research and development expenses increased $0.3 million, or 6.8%, for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025. This increase was primarily due to an increase of $0.5 million in employee-related expenses (including an increase of $0.2 million in stock-based compensation), partially offset by decreases of $0.1 million in facilities-related expenses and $0.1 million in outside services expenses.
Previous wording
Interest expense increased by $0.8 million, including an increase of $0.3 million in non-cash interest expense, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025, primarily due to the Perceptive Term Loan Facility that we entered into in April 2025.
Current wording
Interest expense increased by $0.7 million, including an increase of $0.2 million in non-cash interest expense, for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025, primarily due to the Perceptive Term Loan Facility that we entered into in April 2025.
Previous wording
Loss on extinguishment of debt decreased by $0.3 million for the three months ended June 30, 2026 compared to the three months ended June 30, 2025, as a result of our early payoff of all outstanding indebtedness under the Amended Loan Agreement in April 2025.
Current wording
Loss on extinguishment of debt decreased by $0.3 million for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025, as a result of our early payoff of all outstanding indebtedness under the Amended Loan Agreement in April 2025.
Previous wording
We have incurred net losses since our inception. For the six months ended June 30, 2026 and 2025, we incurred a net loss of $7.2 million and $8.2 million, respectively, and we expect to incur additional losses in future periods. To date, we have generated only limited revenue, and despite any estimates we may make regarding our ability to become profitable, we may never achieve revenue sufficient to offset our expenses. As of June 30, 2026, we had an accumulated deficit of $321.4 million and cash and cash equivalents of $24.6 million. Cash in excess of immediate requirements is invested in accordance with our investment policy, primarily with a view to liquidity and capital preservation. Currently, our funds are held in cash. A total of an additional $40.0 million is available at our option under the Perceptive Term Loan Facility as amended in March 2026 should we attain specified revenue levels and satisfy other conditions. Consistent with historical practice, we held claims in the quarter ended March 31, 2026, which resulted in increases in our accounts receivable and an accelerated decrease in our cash and cash equivalents in the quarter ended March 31, 2026 and a reversal of that trend occurred in the quarter ended June 30, 2026 and is expected to continue in the remaining two quarters of the fiscal year ending December 31, 2026.
Current wording
We have incurred net losses since our inception. For the nine months ended September 30, 2026 and 2025, we incurred a net loss of $13.5 million and $15.3 million, respectively, and we expect to incur additional losses in future periods. To date, we have generated only limited revenue, and despite any estimates we may make regarding our ability to become profitable, we may never achieve revenue sufficient to offset our expenses. As of September 30, 2026, we had an accumulated deficit of $327.8 million and cash and cash equivalents of $28.1 million. Cash in excess of immediate requirements is invested in accordance with our investment policy, primarily with a view to liquidity and capital preservation. Currently, our funds are held in cash. A total of an additional $35.0 million is available at our option under the Perceptive Term Loan Facility as amended in March 2026, October 2026, and November 2026, including $5.0 million available under the Tranche B Loan should we attain specified revenue levels and satisfy other conditions and $30.0 million available under the Tranche D Loan. Consistent with historical practice, we held claims in the quarter ended March 31, 2026, which resulted in increases in our accounts receivable and an accelerated decrease in our cash and cash equivalents in the quarter ended March 31, 2026 and a reversal of that trend occurred in the quarters ended June 30, 2026 and September 30, 2026 and is expected to continue in the remaining quarter of the fiscal year ending December 31, 2026.
Previous wording
Our obligations under the Perceptive Term Loan Facility are secured by a first-priority lien on substantially all of our existing and future assets. In connection with the Credit Agreement, we issued the Warrant Certificate to Perceptive. The Warrant Certificate has a ten-year term from the applicable issuance date and includes protection for certain dilutive issuances and registration rights provisions. The Perceptive Term Loan Facility includes customary affirmative, negative, and financial covenants. These include, among others, restrictions on additional indebtedness, liens, dividends, mergers and acquisitions, and affiliate transactions. The Perceptive Term Loan Facility also requires that we maintain a minimum unrestricted cash balance of $3.0 million and achieve specified net revenue levels on a quarterly basis beginning with the quarter ending June 30, 2025. In addition, upon the occurrence of an event of default, Perceptive, among other things, can declare all indebtedness due and payable immediately, which would adversely impact our liquidity and reduce the availability of our cash flows to fund working capital needs, capital expenditures and other general corporate purposes. As of June 30, 2026, we were in compliance with all covenants of the Perceptive Term Loan Facility.
Current wording
The Perceptive Term Loan Facility includes customary affirmative, negative, and financial covenants. These include, among others, restrictions on additional indebtedness, liens, dividends, mergers and acquisitions, and affiliate transactions. The Perceptive Term Loan Facility also requires that we maintain a minimum unrestricted cash balance of $3.0 million and achieve specified net revenue levels on a quarterly basis beginning with the quarter ending June 30, 2025. In addition, upon the occurrence of an event of default, Perceptive, among other things, can declare all indebtedness due and payable immediately, which would adversely impact our liquidity and reduce the availability of our cash flows to fund working capital needs, capital expenditures and other general corporate purposes. As of September 30, 2026, we were in compliance with all covenants of the Perceptive Term Loan Facility.
Previous wording
On November 17, 2023, we filed the Shelf Registration Statement covering the offering, from time to time, of up to $150.0 million shares of our common stock, preferred stock, debt securities, warrants and units, of which $126.2 million remained available for sale at June 30, 2026.
Current wording
On November 17, 2023, we filed a registration statement on Form S-3 (the 2023 Shelf Registration Statement) covering the offering, from time to time, of up to $150.0 million of our common stock, preferred stock, debt securities, warrants and units, of which $119.6 million remained available for sale at September 30, 2026. The 2023 Shelf Registration Statement will expire on November 29, 2026. On November 10, 2026, we filed a registration statement on Form S-3 (the 2026 Shelf Registration Statement) covering the offering, from time to time, of up to $150.0 million of common stock, preferred stock, debt securities, warrants and units.
Previous wording
On September 15, 2022, we entered into the Amended Sales Agreement with TD Cowen, as sales agent, pursuant to which we may offer and sell, from time to time, shares of common stock having an aggregate offering price of up to $50.0 million. We are not obligated to sell any shares of our common stock under the Amended Sales Agreement. As of December 31, 2025, we have sold 360,554 shares of common stock under the Amended Sales Agreement at an average per share price of $9.82, for gross proceeds of approximately $3.5 million and net proceeds of approximately $3.4 million after deducting $0.1 million in commissions paid to TD Cowen and other offering expenses payable by us. During the six months ended June 30, 2026, we did not sell any shares of our common stock pursuant to the Amended Sales Agreement.
Current wording
On September 15, 2022, we entered into a sales agreement, as amended by Amendment No. 1 to Sales Agreement dated November 17, 2023 (the 2022 Sales Agreement), with TD Cowen, as sales agent, pursuant to which we may offer and sell, from time to time, shares of common stock having an aggregate offering price of up to $50.0 million. We are not obligated to sell any shares of our common stock under the 2022 Sales Agreement. During the three months ended September 30, 2026, we sold 1,010,965 shares of our common stock under the 2022 Sales Agreement at a weighted-average price per share of $6.58, for gross proceeds of approximately $6.7 million and net proceeds of approximately $6.4 million after deducting commissions paid to TD Cowen and other offering expenses payable by us.
Previous wording
Our primary use of cash is to fund our operations as we continue to grow our business. We expect to continue to incur operating losses in the near term. In the short-term, we expect increases in cost of revenue as a result of costs associated with the addition of the T-Cell Biomarkers and RA Sub-Profile Biomarkers to our AVISE® CTD test in 2025. We also anticipate increases in our selling, general and administrative expenses due to increased headcount. We expect research and development expenses to remain relatively consistent in the short-term. We believe we have sufficient laboratory capacity to support increased test volume. Cash used to fund operating expenses is impacted by the timing of when we pay expenses, as reflected in the change in our outstanding accounts payable and accrued expenses.
Current wording
Our primary use of cash is to fund our operations as we continue to grow our business. We expect to continue to incur operating losses in the near term. We also anticipate increases in our selling, general and administrative expenses due to increased headcount. We expect our research and development expenses to remain relatively stable in the near term, or even decrease year-over-year as a percentage of revenue. We believe we have sufficient laboratory capacity to support increased test volume. Cash used to fund operating expenses is impacted by the timing of when we pay expenses, as reflected in the change in our outstanding accounts payable and accrued expenses.
Previous wording
We expect that our near- and longer-term liquidity requirements will continue to consist of working capital and general corporate expenses associated with the growth of our business, including payments we may be required to make upon the achievement of previously negotiated milestones associated with intellectual property we have licensed, payments related to non-cancelable purchase obligations for reagents, payments related to our principal and interest under our long term borrowing arrangements, payments for operating leases related to our office and laboratory space in Vista, CA and our office space in Carlsbad, CA, and payments for operating and finance leases related to our laboratory equipment (see "Note 4. Borrowings,"and "Note 5. Commitments and Contingencies," to our unaudited condensed financial statements included in this Quarterly Report and "Note 5. Leases," to our financial statements included in our 2025 Annual Report). Based on our current business plan, we believe that our existing cash and cash equivalents and our anticipated future revenue, will be sufficient to meet our anticipated cash requirements for at least the next twelve months from the date of this filing.
Current wording
We expect that our near- and longer-term liquidity requirements will continue to consist of working capital and general corporate expenses associated with the growth of our business, including payments we may be required to make upon the achievement of previously negotiated milestones associated with intellectual property we have licensed, payments related to non-cancelable purchase obligations for reagents, payments related to our principal and interest under our long term borrowing arrangements, payments for operating leases related to our office and laboratory space in Vista, CA and our office space in Carlsbad, CA, and payments for operating and finance leases related to our laboratory equipment (see "Note 4. Borrowings,"and "Note 5. Commitments and Contingencies," to our unaudited condensed consolidated financial statements included in this Quarterly Report and "Note 5. Leases,"
Previous wording
•our ability to improve AVISE® CTD ASP as a result of the launch of the T-Cell Biomarkers and RA Sub-Profile Biomarkers, in addition to our ability to achieve adequate reimbursement for these additions to our AVISE® CTD test offering;
Current wording
•our ability to improve AVISE® CTD ASP, in addition to our ability to achieve adequate reimbursement for these additions to our AVISE® CTD test offering;
Previous wording
Until such time, if ever, as we can generate revenue to support our costs structure, we may be required to finance our operations as needed through equity offerings, debt financings or other capital sources, including potential collaborations, licenses and other similar arrangements. The Perceptive Term Loan Facility involves, and any additional debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our stockholders may be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our common stockholders. If additional funding is required or desired, there can be no assurance that additional funds will be available to us on acceptable terms on a timely basis, if at all, or that we will generate sufficient cash from operations to adequately fund our operating needs or achieve or sustain profitability. If we are unable to raise additional capital or generate sufficient cash from operations to adequately fund our operations, we will need to delay, reduce or eliminate some or all of our research and development programs, product portfolio expansion plans or commercialization efforts. Doing so will likely have an unfavorable effect on our ability to execute on our business plan and could have a negative impact on our commercial and strategic relationships. If we cannot expand our operations or otherwise capitalize on our business opportunities because we lack sufficient capital, our business, financial condition, and results of operations could be adversely affected.
Current wording
Until such time, if ever, as we can generate revenue to support our costs structure, we may be required to finance our operations as needed through equity offerings, debt financings or other capital sources, including potential collaborations, licenses, sales of our common stock under our at-the-market offering program pursuant to the 2026 Sales Agreement with TD Cowen and other similar arrangements. The Perceptive Term Loan Facility involves, and any additional debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our stockholders may be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our common stockholders. If additional funding is required or desired, there can be no assurance that additional funds will be available to us on acceptable terms on a timely basis, if at all, or that we will generate sufficient cash from operations to adequately fund our operating needs or achieve or sustain profitability. If we are unable to raise additional capital or generate sufficient cash from operations to adequately fund our operations, we will need to delay, reduce or eliminate some or all of our research and development programs, product portfolio expansion plans or commercialization efforts. Doing so will likely have an unfavorable effect on our ability to execute on our business plan and could have a negative impact on our commercial and strategic relationships. If we cannot expand our operations or otherwise capitalize on our business opportunities because we lack sufficient capital, our business, financial condition, and results of operations could be adversely affected.
Previous wording
Net cash used in operating activities for the six months ended June 30, 2026 was $6.4 million, primarily resulting from (i) our net loss of $7.2 million adjusted for non-cash charges of $3.9 million primarily related to change in fair value of warrant liability, stock-based compensation, depreciation and amortization, non-cash lease expense and non-cash interest and (ii) changes in our net operating assets of $3.2 million primarily related to net increases in accounts receivable, prepaid expenses and other current assets, and net decreases in accrued and other current liabilities and operating lease liabilities, partially offset by net increases in deferred revenue and accounts payable, and net decreases in other assets.
Current wording
Net cash used in operating activities for the nine months ended September 30, 2026 was $9.0 million, primarily resulting from (i) our net loss of $13.5 million adjusted for non-cash charges of $7.3 million primarily related to change in fair value of warrant liability, stock-based compensation, depreciation and amortization, non-cash lease expense and non-cash interest and (ii) changes in our net operating assets of $2.8 million primarily related to net increases in accounts receivable, prepaid expenses and other current assets, and net decreases in accounts payable and operating lease liabilities, partially offset by net increases in deferred revenue and accrued and other current liabilities, and net decreases in other assets.
Previous wording
Net cash used in operating activities for the six months ended June 30, 2025 was $13.6 million, primarily resulting from (i) our net loss of $8.2 million adjusted for non-cash charges of $3.9 million primarily related to stock-based compensation, depreciation, amortization, change in fair value of warrant liability, loss on extinguishment of debt, bad debt expense, non-cash lease expense and non-cash interest and (ii) changes in our net operating assets of $9.2 million primarily related to net increases in accounts receivable and net decreases in accrued and other current liabilities and accounts payable, partially offset by net decreases in prepaid expenses and other current assets.
Current wording
Net cash used in operating activities for the nine months ended September 30, 2025 was $10.6 million, primarily resulting from (i) our net loss of $15.3 million adjusted for non-cash charges of $7.9 million primarily related to stock-based compensation, depreciation, amortization, change in fair value of warrant liability, loss on extinguishment of debt, bad debt expense, non-cash lease expense and non-cash interest and (ii) changes in our net operating assets of $3.3 million primarily related to net increases in accounts receivable and net decreases in operating lease liabilities and accrued and other current liabilities and accounts payable, partially offset by net decreases in prepaid expenses and other current assets and other assets.
Previous wording
Net cash used in investing activities for the six months ended June 30, 2026 and 2025 was $0.8 million and $0.3 million, respectively, due to net purchases of property and equipment.
Current wording
Net cash used in investing activities for the nine months ended September 30, 2026 and 2025 was $1.0 million and $0.6 million, respectively, due to net purchases of property and equipment.
Previous wording
Net cash provided by financing activities for the six months ended June 30, 2025 was $21.9 million, primarily resulting from $23.7 million in proceeds from the issuance of debt and warrants, net of discounts, $18.8 million in proceeds from common stock issued, net of issuance costs and $0.2 million in proceeds from common stock issued under the ESPP, partially offset by a $19.7 million payment to early extinguish debt, $0.7 million in payments of debt issuance costs, $0.3 million in principal payments on notes payable obligations, and $0.1 million in principal payments on finance lease obligations.
Current wording
Net cash provided by financing activities for the nine months ended September 30, 2025 was $24.8 million, primarily resulting from $23.7 million in proceeds from the issuance of debt and warrants, net of discounts, $18.6 million in proceeds from common stock issued in public offering, net of issuance costs, $3.4 million in proceeds from common stock issued under the 2022 Sales Agreement with TD Cowen, net of issuance costs, and $0.4 million in proceeds from common stock issued under the ESPP, partially offset by a $19.7 million payment to early extinguish debt, $0.9 million in payments of debt issuance costs, $0.4 million in principal payments on notes payable obligations, and $0.3 million in principal payments on finance lease obligations.
Previous wording
Our management’s discussion and analysis of our financial condition and results of operations is based on our condensed financial statements, which have been prepared in accordance with GAAP. The year-end condensed balance sheets data was derived from audited financial statements, but does not include all disclosures required by GAAP. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported revenue generated and expenses incurred during the reporting periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions, and any such differences may be material.
Current wording
Our management’s discussion and analysis of our financial condition and results of operations is based on our condensed consolidated financial statements, which have been prepared in accordance with GAAP. The year-end condensed consolidated balance sheets data was derived from audited financial statements, but does not include all disclosures required by GAAP. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported revenue generated and expenses incurred during the reporting periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions, and any such differences may be material.
Previous wording
For a description of our critical accounting estimates, please see the section entitled "Management's Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Estimates" contained in our 2025 Annual Report. There have been no significant changes in our critical accounting policies and estimates during the six months ended June 30, 2026 as compared to the critical accounting policies and estimates disclosed in the Management’s Discussion and Analysis of Financial Condition and Operations included in our 2025 Annual Report.
Current wording
For a description of our critical accounting estimates, please see the section entitled "Management's Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Estimates" contained in our 2025 Annual Report. There have been no significant changes in our critical accounting policies and estimates during the nine months ended September 30, 2026 as compared to the critical accounting policies and estimates disclosed in the Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our 2025 Annual Report.
Previous wording
Please see "Note 2. Summary of Significant Accounting Policies," to the unaudited condensed financial statements included in this Quarterly Report for a summary of recent accounting pronouncements.
Current wording
Please see "Note 2. Summary of Significant Accounting Policies," to the unaudited condensed consolidated financial statements included in this Quarterly Report for a summary of recent accounting pronouncements.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
Our obligations under the Perceptive Term Loan Facility are secured by a first-priority lien on substantially all of our existing and future assets. In connection with the Credit Agreement, we issued the Warrant Certificate to Perceptive. The Warrant Certificate has a ten-year term from the applicable vesting date and includes protection for certain dilutive issuances and registration rights provisions. The Warrant Certificate was originally issued in reliance upon the exemption from registration under Section 4(a)(2) of the Securities Act. In satisfaction of the registration rights, the Company filed a registration statement on Form S-3 (File No. 333-288199) with the SEC on June 30, 2025, and declared effective on July 2, 2025, covering the resale of the Warrant Shares.
Current report — wording carried from elsewhere
to our financial statements included in our 2025 Annual Report). Based on our current business plan, we believe that our existing cash and cash equivalents and our anticipated future revenue, will be sufficient to meet our anticipated cash requirements for at least the next twelve months from the date of this filing.
Current report — wording carried from elsewhere
Net cash provided by financing activities for the nine months ended September 30, 2026 was $5.8 million, primarily resulting from $6.4 million in proceeds from common stock issued under the 2022 Sales Agreement with TD Cowen, net of issuance costs, and $0.5 million in proceeds from common stock issued under the ESPP, partially offset by $0.6 million in principal payments on finance lease obligations, and $0.5 million in principal payments on notes payable obligations.
Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
Change in Fair Value of Warrant Liability
Previous report — wording carried elsewhere
Loss on extinguishment of debt decreased by $0.3 million for the six months ended June 30, 2026 compared to the six months ended June 30, 2025, as a result of our early payoff of all outstanding indebtedness under the Amended Loan Agreement in April 2025.
Previous report — wording carried elsewhere
Change in Fair Value of Warrant Liability