Revenue & Accounts Receivable Credit Concentration

3 Months Ended

Mar. 31, 2021

Revenue From Contract With Customer [Abstract]

Revenue & Accounts Receivable Credit Concentration

Note 9 – Revenue & Accounts Receivable Credit Concentration

The Company’s revenue is generated from (i) diagnostic tests and (ii) assay development and testing services. Diagnostic test revenues consist of blood-based lung tests and COVID-19 tests, which are recognized in the amount expected to be received in exchange for diagnostic tests when the diagnostic tests are delivered. The Company conducts diagnostic tests and delivers the completed test results to the prescribing physician or patient, as applicable. The fees for diagnostic tests are billed either to a third party such as Medicare, medical facilities, commercial insurance payers, or to the patient. The Company determines the transaction price related to its diagnostic test contracts by considering the nature of the payer and historical price concessions granted to groups of customers. For diagnostic test revenue, the Company estimates the transaction price, which is the amount of consideration it expects to be entitled to receive in exchange for providing services based on its historical collection experience, using a portfolio approach. The Company recognizes revenues for diagnostic tests upon delivery of the tests to the physicians requesting the tests or patient, as applicable.

Services revenue consists of on-market tests, pipeline tests, custom diagnostic testing, and other scientific services for a purpose as defined by any individual customer, which is often with biopharmaceutical companies. The performance obligations and related revenue for these sales is defined by a written agreement between the Company and the customer. These services are generally completed upon the delivery of testing results, or other contractually defined milestone(s), to the customer. Revenue for these services is recognized upon delivery of the completed test results, or upon completion of the contractual milestone(s).

Revenues consisted of the following (in thousands):

	Three Months ended March 31,
	2021		2020
Diagnostic tests	$	27,195	$	3,603
Services		1,671		1,493
Total revenue	$	28,866	$	5,096

Deferred Revenue

Deferred revenue consists of cash payments from customers received in advance of delivery. As test results are delivered, the Company recognizes the deferred revenue in ‘Revenues’ in the statements of operations. Of the $3.5 million in deferred revenue recorded at December 31, 2020, $1.2 million was recognized in revenues, and we received additional advance deposits of $0.1 million, during the three months ended March 31, 2021. The deferred revenue of $2.4 million at March 31, 2021 is expected to be recognized in revenues during 2021 as test results are delivered and services are performed.

The Company’s customers in excess of 10% of total revenue, and their related revenue as a percentage of total revenue were as follows:

	Three Months ended March 31,
	2021			2020
The Big Ten Conference		58	%		—
Pfizer, Inc.		—			16	%
Percent of total revenue		58	%		16	%

In addition to the above table, we collect reimbursement on behalf of customers covered by Medicare, which accounted for 7% and 41% of the Company’s total revenue for the three months ended March 31, 2021 and 2020, respectively.

The Company is subject to credit risk from its accounts receivable related to services provided to its customers. The Company does not perform evaluations of customers' financial condition and does not require collateral. The Company’s third-party payors and other customers in excess of 10% of accounts receivable, and their related accounts receivable as a percentage of total accounts receivable were as follows:

	As of
	March 31, 2021			December 31, 2020
The Big Ten Conference		66	%		35	%
Centura Healthcare		7	%		24	%
Purdue University		10	%		—
Percent of total accounts receivable		83	%		59	%