Interpace Biosciences®, Inc. Annual report [Section 13 and 15(d), not S-K Item 405]

Annual report [Section 13 and 15(d), not S-K Item 405]

Restatement of Previously Issued Consolidated Financial Statements

Restatement of Previously Issued Consolidated Financial Statements

12 Months Ended

Dec. 31, 2024

Accounting Changes and Error Corrections [Abstract]

Restatement of Previously Issued Consolidated Financial Statements

2. Restatement of Previously Issued Consolidated Financial Statements

We have restated herein our audited consolidated financial statements as of December 31, 2023 and for the year ended December 31, 2023 as well as unaudited financial statements for the periods as of and the periods ending March 31, 2023, June 30, 2023, September 30, 2023, March 31, 2024, June 30, 2024 and September 30, 2024. We have also restated impacted amounts within the accompanying footnotes to the consolidated financial statements which have been noted as such.

As a result of a review of the Company’s existing royalty agreements it was determined that the Company should not have been accruing royalty expenses on certain agreements. As a result, the Company determined that prior period financial statements should be restated.

On February 28, 2025, the Company’s management concluded and subsequently confirmed with the Audit Committee of the Company’s Board of Directors that (1) the royalty accrual was materially misstated and should be reversed; (2) the consolidated financial statements contained in the Company’s Annual Reports on Form 10-K for the years ended December 31, 2015 through December 31, 2023, as well as the consolidated financial statements contained in the Quarterly Reports on Form 10-Q for each quarterly period within those fiscal years as well as the quarterly periods ended March 31, 2024, June 30, 2024, and September 30, 2024 should no longer be relied upon. As a result, the Company is restating its consolidated financial statements for the year ended December 31, 2023, and the quarterly periods for 2023 and 2024.

The following tables present reconciliation from our prior periods as previously reported to the restated values for the consolidated financial statements. A description of misstatements is listed below:

Royalty expense - We recorded royalty expense with respect to certain royalty agreements through September 30, 2024. The reversal of that expense will be reflected in the financial statements below.

Revenue adjustments – Adjustments related to the timing on which revenue is recognized as per our revenue recognition policy. The Company identified a material control weakness in 2023 related to these adjustments.

The following tables present a reconciliation of the as previously reported consolidated financial statements to the restated amounts as of and for the year ended December 31, 2023.

INTERPACE BIOSCIENCES, INC.

CONSOLIDATED BALANCE SHEET

(in thousands, except share and per share data)


	December 31, 2023
	As Previously Reported			Restatement Amount			Restatement Reference	As Restated

ASSETS
Current assets:
Cash and cash equivalents	$	3,498		$	-			$	3,498
Accounts receivable		4,983			95		(b)		5,078
Other current assets		1,841							1,841
Total current assets		10,322			95				10,417
Property and equipment, net		790			-				790
Operating lease right of use assets		1,864			-				1,864
Other long-term assets		45			-				45
Total assets	$	13,021		$	95			$	13,116

LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable	$	1,544		$	-			$	1,544
Accrued salary and bonus		1,969			-				1,969
Other accrued expenses		8,201			(6,038	)	(a)		2,163
Note payable at fair value, current		5,100			-				5,100
Current liabilities of discontinued operations		660			-				660
Total current liabilities		17,474			(6,038	)			11,436
Operating lease liabilities, net of current portion		1,472			-				1,472
Note payable at fair value		4,243			-				4,243
Other long-term liabilities		4,968			-				4,968
Total liabilities		28,157			(6,038	)			22,119

Redeemable preferred stock, $.01 par value; 5,000,000 shares authorized, 47,000 shares Series B issued and outstanding		46,536			-				46,536

Stockholders’ deficit:
Common stock, $.01 par value; 100,000,000 shares authorized;
4,447,489 shares issued and 4,351,445 shares outstanding;		405			-				405
Common stock, $.01 par value; 100,000,000 shares authorized;4,447,489 shares issued and 4,351,445 shares outstanding;		405			-				405
Additional paid-in capital		188,146			-				188,146
Accumulated deficit		(248,215	)		6,133		(a) (b)		(242,082	)
Treasury stock, at cost (96,044 shares)		(2,008	)		-				(2,008	)
Total stockholders’ deficit		(61,672	)		6,133				(55,539	)
Total liabilities and stockholders’ deficit		(33,515	)		95				(33,420	)

Total liabilities, preferred stock and stockholders’ deficit	$	13,021		$	95			$	13,116

The accompanying notes are an integral part of these condensed consolidated financial statements

INTERPACE BIOSCIENCES, INC.

CONSOLIDATED STATEMENTS OF OPERATION

(in thousands, except for per share data)

	As Previously Reported			Restatement Amount			Restatement Reference	As Restated
	For the Year Ended December 31, 2023
	As Previously Reported			Restatement Amount			Restatement Reference	As Restated

Revenue, net	$	40,214		$	(178	)	(b)	$	40,036
Cost of revenue		16,310			(1,330	)	(a)		14,980
Gross profit		23,904			1,152				25,056
Operating expenses:
Sales and marketing		10,233			-				10,233
Research and development		636			-				636
General and administrative		9,363			-				9,363
Acquisition related amortization expense		861			-				861
Change in fair value of contingent consideration		7			-				7
Total operating expenses		21,100			-				21,100

Operating income from continuing operations		2,804			1,152				3,956
Interest accretion expense		(112	)		-				(112	)
Note payable interest expense		(896	)		-				(896	)
Other expense, net		(667	)		-				(667	)
Income from continuing operations before tax		1,129			1,152				2,281
Provision for income taxes		17			-				17
Income from continuing operations		1,112			1,152				2,264

Loss from discontinued operations, net of tax		(310	)		-				(310	)

Net income	$	802		$	1,152			$	1,954

Basic net income (loss) per share of common stock:
From continuing operations	$	0.26		$	0.27			$	0.52
From discontinued operations		(0.07	)		-				(0.07	)
Net income (loss) per basic share of common stock	$	0.19		$	0.27			$	0.45

Diluted net income (loss) per share of common stock:
From continuing operations	$	0.25		$	0.26			$	0.52
From discontinued operations		(0.07	)		-				(0.07	)
Net income (loss) per diluted share of common stock	$	0.18		$	0.26			$	0.45

Weighted average number of common shares and common share equivalents outstanding:
Basic		4,317			4,317				4,317
Diluted		4,364			4,364				4,364

The accompanying notes are an integral part of these condensed consolidated financial statements

Consolidated Statement of Stockholders’ Deficit

	Shares		Amount		Shares		Amount			Capital		Deficit			Total
										Additional
	Common Stock				Treasury Stock					Paid in		Accumulated
	Shares		Amount		Shares		Amount			Capital		Deficit			Total

Balance -December 31, 2023 as reported		4,447,489	$	405		96,044	$	(2,008	)	$	188,146	$	(248,215	)	$	(61,672	)

Cumulative adjustments to accumulated deficit in prior years		-		-		-		-			-		4,981			4,981
Cumulative adjustments to net income		-		-		-		-			-		1,152			1,152

Balance -December 31, 2023 as restated		4,447,489	$	405		96,044	$	(2,008	)	$	188,146	$	(242,082	)	$	(55,539	)

INTERPACE BIOSCIENCES, INC.

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

(unaudited, in thousands)

	As Previously Reported			Restatement Amount			Restatement Reference	As Restated
	For The Year Ended December 31,
	2023							2023
	As Previously Reported			Restatement Amount			Restatement Reference	As Restated

Cash Flows From Operating Activities
Net income	$	802		$	1,152		(a) (b)	$	1,954
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization		1,026			-				1,026
Interest accretion expense		112			-				112
Amortization of deferred financing fees		42			-				42
Amortization on operating lease right of use asset		575							575
Stock-based compensation		630			-				630
Credit loss expense		-			-				-
Change in fair value of note payable		678			-				678
Change in fair value of contingent consideration		7							7
Other changes in operating assets and liabilities:
Accounts receivable		49			178		(b)		227
Other current assets		(89	)		-				(89	)
Accounts payable		489			-				489
Accrued salaries and bonus		513			-				513
Other accrued expenses		(936	)		(1,330	)	(a)		(2,266	)
Operating lease liabilities		(376	)						(376	)
Long-term liabilities		267			-				267
Net cash provided by operating activities		3,789			-				3,789

Cash Flows From Investing Activity
Proceeds from sale of Interpace Pharma Solutions, net		383							383
Purchase of property and equipment		(470	)		-				(470	)
Net cash used in investing activities		(87	)		-				(87	)

Cash Flows From Financing Activities
Payment of BroadOak terminal payment		(2,500	)						(2,500	)
Payments on line of credit		(2,500	)						(2,500	)
Cash paid for repurchase of restricted shares		(32	)		-				(32	)
Net cash used in financing activities		(5,032	)		-				(5,032	)

Net decrease in cash and cash equivalents		(1,330	)		-				(1,330	)
Cash and cash equivalents from continuing operations– beginning		4,828			-				4,828
Cash and cash equivalents from discontinued operations– beginning		-			-				-
Cash and cash equivalents – beginning	$	4,828		$	-			$	4,828
Cash and cash equivalents from continuing operations– ending	$	3,498		$	-			$	3,498
Cash and cash equivalents from discontinued operations– ending		-			-				-
Cash and cash equivalents – ending	$	3,498		$	-			$	3,498