Acquisition of Lineagen (Tables)

9 Months Ended

Sep. 30, 2020

Business Combinations [Abstract]

Schedule of Business Acquisition

The following is the estimated purchase price for the acquisition of Lineagen:

Cash (a)	$	1,940,000
Cash transferred for repayment of Lineage PPP Loan (b)	$	1,104,000
Shares common stock issued as consideration (c)	6,167,510
Estimated shares of common stock to be returned to the Company (c)	(138,247)
Stock price per share on Effective Date	$	0.68
Value of estimated common stock consideration (c)	$	4,100,000
Total estimated purchase price (c)	$	7,144,000

(a) The Company paid approximately $1.9 million in cash to certain creditors of Lineagen.

(b) The Company paid approximately $1.1 million to satisfy all outstanding principal and accrued interest amounts due pursuant to the Lineagen PPP Loan.

(c) The total number of shares of the Company’s common stock issued or reserved for issuance as consideration for the Merger was 6,167,510 shares. 925,126 of the Merger Shares will be held in an escrow fund for purposes of satisfying any post-closing purchase price adjustments and indemnification claims under the Merger Agreement. The total number of Merger Shares is subject to adjustment for cash, accounts receivable, unpaid indebtedness, unpaid transaction expenses and certain other liabilities of Lineagen. The value of the estimated common stock consideration and the total estimated purchase price incorporate the return of an estimated 138,247 Escrowed Shares to the Company based on a preliminary estimate of this adjustment.

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed

The total estimated purchase price was allocated to Lineagen’s tangible and identifiable intangible assets acquired and liabilities assumed on based on their estimated fair values as of the acquisition date, with the excess recorded as goodwill, as follows:

Cash and cash equivalents	$	596,000
Accounts receivable	569,000
Other assets	209,000
Property and equipment, net	111,000
Intangible assets	1,580,000
Goodwill	6,941,000
Accounts payable and other accrued liabilities	(2,862,000)
Net assets acquired	$	7,144,000

Schedule of Intangible Assets Acquired as Part of Business Combination

The acquisition date fair values of identifiable intangible assets acquired are as following:

Customer relationships	$	950,000
Trade name	630,000
Fair value of identifiable intangible assets	$	1,580,000

Business Acquisition, Pro Forma Information

The amounts of revenue and net loss of Lineagen included in the Company’s Services and Other Revenue on the condensed consolidated statement of operations from the acquisition date to September 30, 2020 are as follows (in thousands):

Revenue	$	445,000
Net loss	$	(330,000)

The following unaudited pro forma financial information is for informational purposes only and is not necessarily indicative of the results of operations that would have been achieved as if the acquisition had taken place as of January 1, 2019.

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Revenue	$	3,018,000	$	5,123,000	$	7,948,000	$	13,287,000
Net loss	(10,087,000)		(7,588,000)		(30,375,000)		(26,892,000)
Basic and diluted net loss per share	$	(0.07)	$	(0.45)	$	(0.33)	$	(1.61)