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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2024
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from            to          
Commission File Number: 001-35756
NEOGENOMICS, INC.
(Exact name of registrant as specified in its charter)
 
Nevada 74-2897368
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
   
9490 NeoGenomics Way,Fort Myers, 
Florida 33912
(Address of principal executive offices) (Zip Code)
 
(239) 768-0600
(Registrant’s telephone number, including area code)
 
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
Common stock ($0.001 par value)NEOThe Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   Yes  S No  ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  S   No  ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
S
Accelerated filer☐
Non-accelerated filer☐Smaller Reporting Company☐
 Emerging Growth Company☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   Yes  ☐   No  S
As of November 1, 2024, the registrant had 128,360,871 shares of common stock, par value $0.001 per share outstanding.



TABLE OF CONTENTS



FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking statements. These forward-looking statements generally can be identified by the use of words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “forecast,” “goal,” “intends,” “may,” “plan,” “potential,” “project,” “will,” “would,” and similar expressions, although not all forward-looking statements contain these identifying words. These forward-looking statements address various matters, including the Company’s strategy, future operations, future financial position, future revenues, changing reimbursement levels from government payers and private insurers, projected costs, prospects and plans, and objectives of management. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties that could cause our actual results, performance or achievements to differ materially from those expressed or implied by the forward-looking statements, including, without limitation, the risks set forth in Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K as filed with the Securities and Exchange Commission (the “SEC”) on February 20, 2024, and in Part II, Item 1A, “Risk Factors” in this Quarterly Report on Form 10-Q.
The forward-looking statements included in this Quarterly Report on Form 10-Q speak only as of the date of this report, and the Company undertakes no obligation to update any forward-looking statement or statements to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events. New factors emerge from time to time and it is not possible for management to predict all of such factors, nor can it assess the impact of each such factor on the business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.






































3


Glossary
Throughout this Quarterly Report on Form 10-Q, we may use certain abbreviations, acronyms and terms which are described below:
ACAThe Patient Protection and Affordable Care Act
ACLAAmerican Clinical Laboratory Association
AKSAnti-Kickback Statute
CAPCollege of American Pathologists
CDxCompanion Diagnostic
CLIAClinical Laboratory Improvement Amendments of 1988
CMSCenters for Medicare and Medicaid Services
CROContract research organizations
DHSDesignated health services
FCAThe federal False Claims Act
FDAU.S. Federal Drug Administration
FISHFluorescence In-Situ Hybridization
GAAPU.S generally accepted accounting principles
GDPRThe European Union’s General Data Protection Regulation
HIPAAThe Health Insurance Portability and Accountability Act of 1996
IHCImmunohistochemistry
LDTLaboratory developed tests
LIMSLaboratory Information Management System
MolDxMolecular Diagnostic Services Program
MRDMinimal residual disease
NGSNext-generation sequencing
OIGThe Office of Inspector General of the Department of Health and Human Services
PCRPolymerase chain reaction
PHIProtected health information
4

PART I — FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
NEOGENOMICS, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
(unaudited)
September 30, 2024
December 31, 2023
ASSETS
Current assets
Cash and cash equivalents$361,992 $342,488 
Marketable securities, at fair value25,821 72,715 
Accounts receivable, net151,428 131,227 
Inventories24,457 24,156 
Prepaid assets18,235 17,987 
Other current assets8,308 8,239 
Total current assets590,241 596,812 
Property and equipment (net of accumulated depreciation of $181,340 and $158,211, respectively)
93,038 92,012 
Operating lease right-of-use assets81,442 91,769 
Intangible assets, net348,042 373,128 
Goodwill522,766 522,766 
Other assets5,582 4,742 
Total non-current assets1,050,870 1,084,417 
Total assets$1,641,111 $1,681,229 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable$16,514 $20,334 
Accrued compensation52,165 53,161 
Accrued expenses and other liabilities22,998 15,069 
Current portion of operating lease liabilities3,716 5,610 
Current portion of convertible senior notes, net200,424 — 
Contract liabilities589 2,130 
Total current liabilities296,406 96,304 
Long-term liabilities
Operating lease liabilities62,172 67,871 
Convertible senior notes, net339,956 538,198 
Deferred income tax liabilities, net22,771 24,285 
Other long-term liabilities11,596 13,034 
Total long-term liabilities436,495 643,388 
     Total liabilities$732,901 $739,692 
Commitments and contingencies (Note 11)
Stockholders’ equity
Common stock, $0.001 par value, (250,000,000 shares authorized; 128,061,944 and 127,369,142 shares issued and outstanding, respectively)
$128 $127 
Additional paid-in capital1,219,182 1,190,139 
Accumulated other comprehensive loss(643)(1,674)
Accumulated deficit(310,457)(247,055)
     Total stockholders’ equity$908,210 $941,537 
     Total liabilities and stockholders’ equity$1,641,111 $1,681,229 
See the accompanying notes to the unaudited Consolidated Financial Statements.
5

NEOGENOMICS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)

 Three Months Ended September 30,Nine Months Ended September 30,
 2024202320242023
NET REVENUE  
Clinical Services$145,783 $127,553 $421,706 $365,578 
Advanced Diagnostics22,041 24,401 66,860 70,513 
Total net revenue167,824 151,954 488,566 436,091 
COST OF REVENUE92,944 89,643 275,723 259,075 
GROSS PROFIT74,880 62,311 212,843 177,016 
Operating expenses:
General and administrative66,969 61,486 196,094 183,343 
Research and development7,684 5,285 23,190 20,182 
Sales and marketing20,415 17,610 62,313 52,770 
Restructuring charges1,009 2,125 4,951 9,883 
Total operating expenses96,077 86,506 286,548 266,178 
LOSS FROM OPERATIONS(21,197)(24,195)(73,705)(89,162)
Interest income(4,673)(4,525)(14,099)(12,057)
Interest expense1,642 1,685 4,993 5,226 
Other (income) expense, net(317)96 (52)(520)
Loss before taxes(17,849)(21,451)(64,547)(81,811)
Income tax benefit(150)(2,935)(1,145)(8,169)
NET LOSS$(17,699)$(18,516)$(63,402)$(73,642)
NET LOSS PER SHARE
Basic$(0.14)$(0.15)$(0.50)$(0.59)
Diluted$(0.14)$(0.15)$(0.50)$(0.59)
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
Basic126,953 125,687 126,491 125,358 
Diluted126,953 125,687 126,491 125,358 
See the accompanying notes to the unaudited Consolidated Financial Statements.
6

NEOGENOMICS, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(in thousands)
(unaudited)

Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
NET LOSS$(17,699)$(18,516)$(63,402)$(73,642)
OTHER COMPREHENSIVE INCOME:
Net unrealized gain on marketable securities, net of tax379 726 1,031 2,053 
Total other comprehensive income, net of tax379 726 1,031 2,053 
COMPREHENSIVE LOSS$(17,320)$(17,790)$(62,371)$(71,589)
See the accompanying notes to the unaudited Consolidated Financial Statements.
7

NEOGENOMICS, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(unaudited, in thousands, except share data)
Common StockAdditional Paid-In CapitalAccumulated Other Comprehensive LossAccumulated DeficitTotal
Shares Amount
Balance, December 31, 2023127,369,142 $127 $1,190,139 $(1,674)$(247,055)$941,537 
Issuance of common stock for ESPP70,278 — 917 — — 917 
Issuance of restricted stock, net of forfeitures(17,398)— (199)— — (199)
Issuance of common stock for stock options12,764 — 102 — — 102 
Stock issuance fees and expenses— — (4)— — (4)
Stock-based compensation expense— — 7,774 — — 7,774 
Net unrealized gain on marketable securities, net of tax— — — 344 — 344 
Net loss— — — — (27,061)(27,061)
Balance, March 31, 2024127,434,786 $127 $1,198,729 $(1,330)$(274,116)$923,410 
Issuance of common stock for ESPP102,112 — 1,280 — — 1,280 
Issuance of restricted stock, net of forfeitures32,607 — (1,631)— — (1,631)
Issuance of common stock for stock options281,608 1 2,320 — — 2,321 
Stock issuance fees and expenses— — (3)— — (3)
Stock-based compensation expense— — 8,841 — — 8,841 
Net unrealized gain on marketable securities, net of tax— — — 308 — 308 
Net loss— — — — (18,642)(18,642)
Balance, June 30, 2024127,851,113 $128 $1,209,536 $(1,022)$(292,758)$915,884 
Issuance of common stock for ESPP75,238 — 897 — — 897 
Issuance of restricted stock, net of forfeitures56,443 — (603)— — (603)
Issuance of common stock for stock options79,150 — 886 — — 886 
Stock issuance fees and expenses— — (4)— — (4)
Stock-based compensation expense— — 8,470 — — 8,470 
Net unrealized gain on marketable securities, net of tax— — — 379 — 379 
Net loss— — — — (17,699)(17,699)
Balance, September 30, 2024128,061,944 $128 $1,219,182 $(643)$(310,457)$908,210 
8

NEOGENOMICS, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(unaudited, in thousands, except share data)
Common StockAdditional Paid-In CapitalAccumulated Other Comprehensive LossAccumulated DeficitTotal
Shares Amount
Balance, December 31, 2022126,913,992 $127 $1,160,882 $(3,899)$(159,087)$998,023 
Issuance of common stock for ESPP96,733 — 811 — — 811 
Issuance of restricted stock, net of forfeitures114,738 — (147)— — (147)
Issuance of common stock for stock options75,028 — 751 — — 751 
Stock issuance fees and expenses— — (4)— — (4)
Stock-based compensation expense— — 4,758 — — 4,758 
Net unrealized gain on marketable securities, net of tax— — — 1,065 — 1,065 
Net loss— — — — (30,795)(30,795)
Balance, March 31, 2023127,200,491 $127 $1,167,051 $(2,834)$(189,882)$974,462 
Issuance of common stock for ESPP78,302 — 1,029 — — 1,029 
Issuance of restricted stock, net of forfeitures(194,448)— (1,527)— — (1,527)
Issuance of common stock for stock options60,073 — 610 — — 610 
Stock issuance fees and expenses— — (18)— — (18)
Stock-based compensation expense— — 5,705 — — 5,705 
Net unrealized gain on marketable securities, net of tax— — — 262 — 262 
Net loss— — — — (24,331)(24,331)
Balance, June 30, 2023127,144,418 $127 $1,172,850 $(2,572)$(214,213)$956,192 
Issuance of common stock for ESPP64,785 — 863 — — 863 
Issuance of restricted stock, net of forfeitures(35,670)— (41)— — (41)
Issuance of common stock for stock options87,943 — 1,026 — — 1,026 
Stock issuance fees and expenses— — (1)— — (1)
Stock-based compensation expense— — 7,179 — — 7,179 
Net unrealized gain on marketable securities, net of tax— — — 726 — 726 
Net loss— — — — (18,516)(18,516)
Balance, September 30, 2023127,261,476 $127 $1,181,876 $(1,846)$(232,729)$947,428 
See the accompanying notes to the unaudited Consolidated Financial Statements.

9

NEOGENOMICS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands) 
(unaudited) 
 Nine Months Ended September 30,
20242023
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss$(63,402)$(73,642)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation29,274 27,872 
Amortization of intangibles25,085 26,350 
Stock-based compensation25,085 17,643 
Non-cash operating lease expense7,022 6,860 
Amortization of convertible debt discount2,041 2,015 
Amortization of debt issue costs141 139 
Loss on disposal of assets, net63 334 
Impairment of assets333 1,703 
Other adjustments141 122 
Changes in assets and liabilities, net
Accounts receivable, net(20,201)(12,928)
Inventories(408)(252)
Prepaid and other assets(1,206)(5,165)
Operating lease liabilities(4,287)(5,871)
Deferred income tax liabilities, net(1,514)(9,380)
Accrued compensation(996)7,453 
Accounts payable and other liabilities52 (2,990)
Net cash used in operating activities(2,777)(19,737)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of marketable securities— (6,756)
Proceeds from maturities of marketable securities47,784 87,963 
Purchases of property and equipment(29,462)(21,695)
Net cash provided by investing activities18,322 59,512 
CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of equipment financing obligations— (66)
Issuance of common stock, net3,959 3,350 
Net cash provided by financing activities3,959 3,284 
Net change in cash and cash equivalents19,504 43,059 
Cash and cash equivalents, beginning of period342,488 263,180 
Cash and cash equivalents, end of period$361,992 $306,239 

Supplemental disclosure of cash flow information:
Interest paid$2,139 $2,121 
Income taxes paid, net$319 $175 
Supplemental disclosure of non-cash investing and financing information:
Purchases of property and equipment included in accounts payable$1,688 $636 

See the accompanying notes to the unaudited Consolidated Financial Statements.
10
NEOGENOMICS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

Note 1. Nature of the Business
NeoGenomics, Inc., a Nevada corporation (the “Company,” or “NeoGenomics”), and its subsidiaries provide a wide range of oncology diagnostic testing and consultative services which includes technical laboratory services and professional interpretation of laboratory test results by licensed physicians who specialize in pathology and oncology. The Company operates a network of cancer-focused testing laboratories in the United States and the United Kingdom.
Note 2. Summary of Significant Accounting Policies
Basis of Presentation
The accompanying interim Consolidated Financial Statements are unaudited and have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) for interim financial information. All intercompany transactions and balances have been eliminated in the accompanying Consolidated Financial Statements.
The accounting policies of the Company are the same as those set forth in Note 2. Summary of Significant Accounting Policies, to the audited Consolidated Financial Statements contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, except for new accounting standards discussed under Recent Accounting Pronouncements.
Unaudited Interim Financial Information
Certain information and footnote disclosures normally included in the Company’s annual audited Consolidated Financial Statements and accompanying notes have been condensed or omitted in the accompanying interim Consolidated Financial Statements and footnotes. Accordingly, the accompanying interim unaudited Consolidated Financial Statements included herein should be read in conjunction with the audited Consolidated Financial Statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.
The results of operations presented in this Quarterly Report on Form 10-Q are not necessarily indicative of the results of operations that may be expected for any future periods. In the opinion of management, these unaudited Consolidated Financial Statements include all adjustments and accruals, consisting only of normal, recurring adjustments that are necessary for a fair statement of the results of all interim periods reported herein.
Use of Estimates
The Company prepares its Consolidated Financial Statements in conformity with GAAP. These principles require management to make estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, together with amounts disclosed in the related notes to the Consolidated Financial Statements. Actual results and outcomes may differ from management’s estimates, judgments and assumptions. Significant estimates, judgments and assumptions used in these Consolidated Financial Statements include, but are not limited, to those related to revenues, accounts receivable and related allowances, contingencies, useful lives and recovery of long-term assets and intangible assets, income taxes and valuation allowances, stock-based compensation, impairment analysis of goodwill, and restructuring reserves. These estimates, judgments, and assumptions are reviewed periodically and the effects of material revisions in estimates are reflected on the Consolidated Financial Statements prospectively from the date of the change in estimate.
Sales and Marketing Expenses
Sales and marketing expenses are primarily attributable to employee-related costs including sales management, sales representatives, sales and marketing consultants, and marketing and customer service personnel in the Clinical Services segment. Advertising costs are expensed at the time they are incurred and were immaterial for the three and nine months ended September 30, 2024 and 2023.
Restructuring charges
Restructuring charges relate to a restructuring program to improve execution and drive efficiency across the organization. Restructuring charges consist of severance and other employee costs, costs for optimizing the Company’s geographic presence, and consulting and other costs. For further details on the Company’s restructuring activities, please refer to Note 8. Restructuring.
Accounting Pronouncements Pending Adoption
In November 2024, the FASB issued ASU No. 2024-03, Income Statement—Reporting Comprehensive Income (Topic 220): Expense Disaggregation Disclosures. This update requires entities to disaggregate operating expenses into specific categories, such as salaries and wages, depreciation, and amortization, to provide enhanced transparency into the nature and function of expenses. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, with early adoption permitted. ASU
11
NEOGENOMICS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
2024-03 may be applied retrospectively or prospectively. The Company is currently evaluating the impact of this standard on its financial statement presentation and disclosures.
In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This update requires entities to consistently categorize and provide greater disaggregation of information in the rate reconciliation and to further disaggregate income taxes paid by jurisdiction. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. ASU 2023-09 may be applied retrospectively or prospectively. The Company is currently evaluating the impact of this standard on its annual disclosures.
In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. This update requires entities to disclose significant segment expenses by reportable segment if they are regularly provided to the Chief Operating Decision Maker (CODM) and included in each reported measure of segment profit or loss and requires disclosure of other segment items by reportable segment and a description of its composition. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. ASU 2023-07 should be applied retrospectively to all prior periods presented in the financial statements. The Company is currently evaluating the impact of this standard on its annual disclosures.
Note 3. Fair Value Measurements
Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. A fair value hierarchy has been established based on three levels of inputs, of which the first two are considered observable and the last unobservable.
Level 1: Quoted prices in active markets for identical assets or liabilities. These are typically obtained from real-time quotes for transactions in active exchange markets involving identical assets.
Level 2: Inputs, other than quoted prices included within Level 1, which are observable for the asset or liability, either directly or indirectly. These are typically obtained from readily available pricing sources for comparable instruments.
Level 3: Unobservable inputs, where there is little or no market activity for the asset or liability. These inputs reflect the reporting entity’s own assumptions of the data that market participants would use in pricing the asset or liability, based on the best information available in the circumstances.
Assets and Liabilities that are Measured at Fair Value on a Recurring Basis
The Company measures certain financial assets at fair value on a recurring basis, including its marketable securities and certain cash equivalents. The Company considers all securities available-for-sale, including those with maturity dates beyond 12 months, and therefore these securities are classified within current assets on the Consolidated Balance Sheets as they are available to support current operational liquidity needs. The money market accounts are valued based on quoted market prices in active markets and are included in cash and cash equivalents on the Consolidated Balance Sheets. The marketable securities are generally valued based on other observable inputs for those securities (including market corroborated pricing or other models that utilize observable inputs such as interest rates and yield curves) based on information provided by independent third-party pricing entities, except for U.S. Treasury securities which are valued based on quoted market prices in active markets.
The following tables set forth the amortized cost, gross unrealized gains, gross unrealized losses and fair values of the Company’s marketable securities accounted for as available-for-sale securities as of September 30, 2024 and December 31, 2023.
September 30, 2024
(in thousands)Amortized CostGross Unrealized GainsGross Unrealized LossesFair Value
Financial Assets:
Short-term marketable securities:
     Agency bonds$2,491 $— $(11)$2,480 
     Municipal bonds9,597 — (228)9,369 
     Corporate bonds14,190 — (218)13,972 
Total$26,278 $— $(457)$25,821 
12
NEOGENOMICS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
December 31, 2023
(in thousands)Amortized CostGross Unrealized GainsGross Unrealized LossesFair Value
Financial Assets:
Short-term marketable securities:
     U.S. Treasury securities$15,437 $— $(64)$15,373 
     Yankee bonds2,601 — (13)2,588 
     Agency bonds6,056 — (56)6,000 
     Municipal bonds12,694 — (597)12,097 
     Asset-backed securities4,971 — (37)4,934 
     Corporate bonds32,442 — (719)31,723 
Total$74,201 $— $(1,486)$72,715 

The Company had $1.4 million and $1.7 million of accrued interest receivable at September 30, 2024 and December 31, 2023, respectively, included in other current assets on its Consolidated Balance Sheets related to its marketable securities. There were no realized gains or losses on marketable securities for the three and nine months ended September 30, 2024 and September 30, 2023.
The following tables set forth the fair value of available-for-sale marketable securities by contractual maturity at September 30, 2024 and December 31, 2023.
September 30, 2024
(in thousands)One Year or LessOver One Year Through Five YearsOver Five YearsTotal
Financial Assets:
Marketable Securities:
     Agency bonds$2,480 $— $— $2,480 
     Municipal bonds9,369 — — 9,369 
     Corporate bonds13,972 — — 13,972 
Total$25,821 $— $— $25,821 
December 31, 2023
(in thousands)One Year or LessOver One Year Through Five YearsOver Five YearsTotal
Financial Assets:
Marketable Securities:
     U.S. Treasury securities$15,373 $— $— $15,373 
     Yankee bonds2,588 — — 2,588 
     Agency bonds6,000 — — 6,000 
     Municipal bonds3,528 8,569 — 12,097 
     Asset-backed securities4,934 — — 4,934 
     Corporate bonds23,062 8,661 — 31,723 
Total$55,485 $17,230 $— $72,715 

The following tables set forth the Company’s cash equivalents and marketable securities accounted for as available-for-sale securities that were measured at fair value on a recurring basis based on the fair value hierarchy as of September 30, 2024 and December 31, 2023.
13
NEOGENOMICS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
September 30, 2024
(in thousands)Level 1Level 2Level 3Total
Financial Assets:
  Cash equivalents:
     Money market funds$351,980 $— $— $351,980 
Marketable securities:
     Agency bonds2,480 — — 2,480 
     Municipal bonds9,369 — — 9,369 
     Corporate bonds— 13,972 — 13,972 
Total$363,829 $13,972 $— $377,801 
December 31, 2023
(in thousands)Level 1Level 2Level 3Total
Financial Assets:
  Cash equivalents:
     Money market funds$334,762 $— $— $334,762 
Marketable securities:
     U.S. Treasury securities15,373 — — 15,373 
     Yankee bonds2,588 — — 2,588 
     Agency bonds6,000 — — 6,000 
     Municipal bonds12,097 — — 12,097 
     Asset-backed securities— 4,934 — 4,934 
     Corporate bonds— 31,723 — 31,723 
Total$370,820 $36,657 $— $407,477 

There were no transfers of financial assets or liabilities into or out of Level 1, Level 2, or Level 3 for the three and nine months ended September 30, 2024 and September 30, 2023.
The carrying value of cash and cash equivalents, accounts receivable, net, accounts payable, accrued expenses and other liabilities, and other current assets and liabilities, are considered reasonable estimates of their respective fair values at September 30, 2024 and December 31, 2023 due to their short-term nature.

Note 4. Goodwill and Intangible Assets
The following table summarizes the carrying amounts of goodwill by segment at September 30, 2024 and December 31, 2023 (in thousands):
September 30, 2024December 31, 2023
Clinical Services$458,782 $458,782 
Advanced Diagnostics63,984 63,984 
Total$522,766 $522,766 

14
NEOGENOMICS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
Intangible assets consisted of the following (in thousands):
  September 30, 2024
 Amortization
Period (years)		CostAccumulated
Amortization		Net
Customer Relationships
7 - 15
$143,101 $72,951 $70,150 
Developed Technology
10 - 15
310,226 70,428 239,798 
Marketing Assets
4
549 480 69 
Trademarks
15
31,473 6,895 24,578 
Trade Name
2.5
2,584 2,584 — 
Trademark - Indefinite lived—13,447 — 13,447 
Total $501,380 $153,338 $348,042 
 
  December 31, 2023
 Amortization
Period (years)		CostAccumulated
Amortization		Net
Customer Relationships
7 - 15
$143,101 $65,534 $77,567 
Developed Technology
10 - 15
310,226 54,438 255,788 
Marketing Assets4549 376 173 
Trademarks1531,473 5,321 26,152 
Trade Name2.52,584 2,583 1 
Trademark - Indefinite lived—13,447 — 13,447 
Total$501,380 $128,252 $373,128 
 
The Company records amortization expense within cost of revenue and general and administrative expense on the Consolidated Statement of Operations. The following table summarizes the amortization expense for the three and nine months ended September 30, 2024 and 2023 (in thousands):
Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
Amortization of intangibles included in cost of revenue$4,910 $4,853 $14,729 $14,560 
Amortization of intangibles included in general and administrative expenses3,452 3,93110,35611,790
Total amortization of intangibles$8,362 $8,784 $25,085 $26,350 
The estimated amortization expense related to amortizable intangible assets for each of the following periods as of September 30, 2024 is as follows (in thousands):
 
Remainder of 2024$8,362 
202533,343 
202633,308 
202732,758 
202832,758 
Thereafter194,066 
Total$334,595 
 
Note 5. Debt
2028 Convertible Senior Notes
On January 11, 2021, the Company completed the sale of $345.0 million of Convertible Senior Notes with a stated interest rate of 0.25% and a maturity date of January 15, 2028 (the “2028 Convertible Notes”), unless earlier converted, redeemed, or repurchased.
The last reported sales price of the Company’s common stock was not greater than or equal to 130.0% of the conversion price of the 2028 Convertible Notes on at least 20 of the last 30 consecutive trading days of the quarter ended June 30, 2024. Based
15
NEOGENOMICS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
on the terms of the 2028 Convertible Notes, the holders could not have converted all or a portion of their 2028 Convertible Notes in the third quarter of 2024. The last reported sales price of the Company’s common stock was not greater than or equal to 130.0% of the conversion price of the 2028 Convertible Notes on at least 20 of the last 30 consecutive trading days of the quarter ended September 30, 2024. Based on the terms of the 2028 Convertible Notes, the holders cannot convert all or a portion of their 2028 Convertible Notes in the fourth quarter of 2024. The value of the 2028 Convertible Notes, if-converted, does not exceed the principal amount based on a closing stock price of $14.75 on September 30, 2024.
The interest expense recognized on the 2028 Convertible Notes includes $0.2 million, $0.4 million and $8,500 for the contractual coupon interest, the amortization of the debt discount and the amortization of the debt issuance costs, respectively, for the three months ended September 30, 2024. The interest expense recognized on the 2028 Convertible Notes includes $0.6 million, $1.1 million and $26,000 for the contractual coupon interest, the amortization of the debt discount and the amortization of the debt issuance costs, respectively, for the nine months ended September 30, 2024. The interest expense recognized on the 2028 Convertible Notes includes $0.2 million, $0.4 million and $8,500 for the contractual coupon interest, the amortization of the debt discount and the amortization of the debt issuance costs, respectively, for the three months ended September 30, 2023. The interest expense recognized on the 2028 Convertible Notes includes $0.6 million, $1.1 million and $26,000 for the contractual coupon interest, the amortization of the debt discount and the amortization of the debt issuance costs, respectively, for the nine months ended September 30, 2023. The effective interest rate on the 2028 Convertible Notes is 0.70%, which includes the interest on the 2028 Convertible Notes and amortization of the debt discount and debt issuance costs. The 2028 Convertible Notes bear interest at a rate of 0.25% per annum, payable semi-annually in arrears on January 15 and July 15 of each year, beginning on July 15, 2021.
At September 30, 2024, the estimated fair value (Level 2) of the 0.25% Convertible Senior Notes due 2028 was $285.9 million. At December 31, 2023, the estimated fair value (Level 2) of the 0.25% Convertible Senior Notes due 2028 was $262.4 million.
2025 Convertible Senior Notes
On May 4, 2020, the Company completed the sale of $201.3 million of Convertible Senior Notes with a stated interest rate of 1.25% and a maturity date of May 1, 2025 (the “2025 Convertible Notes”), unless earlier converted, redeemed, or repurchased. As of June 30, 2024, the 2025 Convertible Notes were classified as current liabilities on the Consolidated Balance Sheets.
The last reported sales price of the Company’s common stock was not greater than or equal to 130.0% of the conversion price of the 2025 Convertible Notes on at least 20 of the last 30 consecutive trading days of the quarter ended June 30, 2024. Based on the terms of the 2025 Convertible Notes, the holders could not have converted all or a portion of their 2025 Convertible Notes in the third quarter of 2024. The last reported sales price of the Company’s common stock was not greater than or equal to 130.0% of the conversion price of the 2025 Convertible Notes on at least 20 of the last 30 consecutive trading days of the quarter ended September 30, 2024. Based on the terms of the 2025 Convertible Notes, the holders cannot convert all or a portion of their 2025 Convertible Notes in the fourth quarter of 2024. The value of the 2025 Convertible Notes, if-converted, does not exceed the principal amount based on a closing stock price of $14.75 on September 30, 2024.
The interest expense recognized on the 2025 Convertible Notes includes $0.6 million, $0.3 million and $38,700 for the contractual coupon interest, the amortization of the debt discount and the amortization of the debt issuance costs, respectively, for the three months ended September 30, 2024. The interest expense recognized on the 2025 Convertible Notes includes $1.9 million, $0.9 million and $0.1 million for the contractual coupon interest, the amortization of the debt discount and the amortization of the debt issuance costs, respectively, for the nine months ended September 30, 2024. The interest expense recognized on the 2025 Convertible Notes includes $0.6 million, $0.3 million and $37,900 for the contractual coupon interest, the amortization of the debt discount and the amortization of the debt issuance costs, respectively, for the three months ended September 30, 2023. The interest expense recognized on the 2025 Convertible Notes includes $1.9 million, $0.9 million and $0.1 million for the contractual coupon interest, the amortization of the debt discount and the amortization of the debt issuance costs, respectively, for the nine months ended September 30, 2023. The effective interest rate on the 2025 Convertible Notes is 1.96%, which includes the interest on the 2025 Convertible Notes and amortization of the debt discount and debt issuance costs. The 2025 Convertible Notes bear interest at a rate of 1.25% per annum, payable semi-annually in arrears on May 1 and November 1 of each year, which began on November 1, 2020.
At September 30, 2024, the estimated fair value (Level 2) of the 1.25% Convertible Senior Notes due 2025 was $196.2 million. At December 31, 2023, the estimated fair value (Level 2) of the 1.25% Convertible Senior Notes due 2025 was $197.3 million.

16
NEOGENOMICS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
Note 6. Stock-Based Compensation
The Company recorded stock-based compensation on the Consolidated Statement of Operations for the three and nine months ended September 30, 2024 and 2023 as follows (in thousands):
Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
Cost of revenue$353 $— $1,106 $— 
General and administrative7,081 7,180 21,237 17,643 
Research and development233 — 641 — 
Sales and marketing803 — 2,101 — 
Total stock-based compensation$8,470 $7,180 $25,085 $17,643 
Stock Options
A summary of the stock option activity under the Company’s plans for the nine months ended September 30, 2024 is as follows:
 
Number of
Shares		Weighted Average Exercise Price
Outstanding at December 31, 20234,381,099 $15.87 
Granted1,602,783 $14.99 
Exercised(373,522)$8.86 
Forfeited(392,401)$16.01 
Outstanding at September 30, 20245,217,959 $19.29 
Exercisable at September 30, 20241,797,255 $19.29 
The fair value of each stock option award granted during the nine months ended September 30, 2024 was estimated as of the grant date using a Black-Scholes model with the following assumptions:
 Nine Months Ended
September 30, 2024
Expected term (in years)
5.5 - 6.5
Risk-free interest rate (%)
3.7% - 4.6%
Expected volatility (%)
54.9% - 64.6%
Dividend yield (%)—
Weighted average grant date fair value per share$8.90
As of September 30, 2024, there was approximately $14.5 million of unrecognized stock-based compensation expense related to stock options that will be recognized over a weighted-average period of approximately 1.5 years.
Restricted Stock
A summary of the restricted stock activity under the Company’s plans for the nine months ended September 30, 2024 is as follows:
Number of Restricted
Shares		Weighted Average Grant Date Fair Value
Nonvested at December 31, 20231,961,919 $13.83 
Granted1,010,690 $15.02 
Vested(592,414)$14.39 
Forfeited(177,425)$14.24 
Nonvested at September 30, 20242,202,770 $14.19 
As of September 30, 2024, there was approximately $16.5 million of unrecognized stock-based compensation expense related to restricted stock that will be recognized over a weighted-average period of approximately 1.6 years.

17
NEOGENOMICS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
Performance-Based Restricted Stock Units
In the nine months ended September 30, 2024, the Company granted 194,257 PSUs subject to a performance condition and 194,256 PSUs subject to a market condition with an aggregated grant date fair value of approximately $3.1 million and $3.6 million, respectively. If the performance targets are achieved, the awards will vest at the end of the three-year requisite service period so long as the employee remains employed with the Company through the applicable vesting date. For PSUs subject to a performance condition, compensation cost is recognized straight-line over the requisite service period if the achievement of the performance condition is probable. As of September 30, 2024, the Company has determined it is probable that the performance condition will be met. For PSUs subject to a market condition, compensation cost is recognized straight-line over the requisite service period, regardless of when, if ever, the market condition is satisfied.
A summary of the PSU activity under the Company’s plans for the nine months ended September 30, 2024 is as follows:

Number of Stock UnitsWeighted Average Grant Date Fair Value
Nonvested at December 31, 2023305,105 $21.83 
Granted388,513 $17.43 
Vested— $— 
Forfeited(46,534)$19.56 
Nonvested at September 30, 2024647,084 $19.35 
The fair value of each PSU granted subject to a market condition during the nine months ended September 30, 2024 was estimated as of the grant date using a Monte Carlo with the following assumptions:
Nine Months Ended
September 30, 2024
Expected term (in years)3.0
Risk-free interest rate (%)
4.5% - 4.7%
Expected volatility (%)
71.3% - 72.2%
Dividend yield (%)—
Weighted average grant date fair value per share$17.43
As of September 30, 2024, there was approximately $8.4 million of unrecognized stock-based compensation expense related to nonvested PSUs that will be recognized over a weighted-average period of approximately 2.1 years.

Modification of Stock Option and Restricted Stock
In the three months ended June 30, 2024, upon the departure of an executive and in accordance with the terms of their employment agreement, in addition to the retirement of a director of the Company and with approval from the Culture and Compensation Committee of the Company’s Board of Directors, the vesting of 69,049 shares of previously granted time-based vesting stock options and 41,693 shares of previously granted time-based vesting restricted stock was accelerated. The Company accounted for the effects of the accelerated vesting of these stock awards as modifications and recognized $0.6 million of stock-based compensation which consisted of $0.3 million and $0.3 million for the acceleration of stock options and restricted stock, respectively, within general and administrative expenses on the Consolidated Statements of Operations for the nine months ended September 30, 2024. There were no such amounts for the three months ended September 30, 2024.
In the three months ended June 30, 2023, upon the departure of certain executives from the Company and in accordance with the terms of each of their respective employment agreements, the vesting of 101,937 shares of previously granted time-based vesting stock options and 61,746 shares of previously granted time-based vesting restricted stock accelerated. The Company accounted for the effects of the accelerated vesting of these stock awards as modifications and recognized $0.9 million of stock-based compensation which consisted of $0.3 million and $0.6 million for the acceleration of stock options and restricted stock, respectively, within general and administrative expenses on the Consolidated Statements of Operations for the nine months ended September 30, 2023. There were no such amounts for the three months ended September 30, 2023.
18
NEOGENOMICS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
Note 7. Revenue Recognition
The Company’s two reportable segments for which it recognizes revenue are (1) Clinical Services and (2) Advanced Diagnostics. The Clinical Services segment provides various clinical testing services to community-based pathology practices, oncology practices, hospital pathology labs, reference labs, and academic centers with reimbursement from various payers including client direct billing, commercial insurance, Medicare and other government payers, and patients. The Advanced Diagnostics segment supports pharmaceutical firms in their drug development programs by providing testing services and data analytics for clinical trials and research.
Clinical Services Revenue
The Company’s specialized diagnostic services are performed based on a written test requisition form or an electronic equivalent. The performance obligation is satisfied and revenues are recognized once the diagnostic services have been performed and the results have been delivered to the ordering physician. These diagnostic services are billed to various payers, including client direct billing, commercial insurance, Medicare and other government payers, and patients. Revenue is recorded for all payers based on the amount expected to be collected, which considers implicit price concessions. Implicit price concessions represent differences between amounts billed and the estimated consideration the Company expects to receive based on negotiated discounts, historical collection experience, and other anticipated adjustments, including anticipated payer denials.
Advanced Diagnostics Revenue
The Company’s Advanced Diagnostics segment generally enters into contracts with pharmaceutical and biotech customers as well as other CROs to provide research and clinical trial services. Such services also include validation studies and assay development. The Company records revenue on a unit-of-service basis based on the number of units completed towards the satisfaction of a performance obligation. In addition, certain contracts include upfront fees and the revenue for those contracts is recognized over time as services are performed.
Additional offerings within the Advanced Diagnostics portfolio includes Informatics, which involves the licensing of de-identified data to pharmaceutical and biotech customers in the form of either retrospective records or prospective deliveries of data. Informatics revenue is recognized at a point in time upon delivery of retrospective data or over time for prospective data feeds. The Company negotiates billing schedules and payment terms on a contract-by-contract basis, and contract terms generally provide for payments based on a unit-of-service arrangement.
Amounts collected in advance of services being provided are deferred as contract liabilities on the Consolidated Balance Sheets. The associated revenue is recognized and the contract liability is reduced as the contracted services are subsequently performed. Contract assets are established for revenue recognized but not yet billed. These contract assets are reduced once the customer is invoiced and a corresponding receivable is recorded. Additionally, Advanced Diagnostics incurs sales commissions in the process of obtaining contracts with customers. Sales commissions that are payable upon contract award are recognized as assets and amortized over the expected contract term. The amortization of commission expense is based on the weighted average contract duration for all commissionable awards in the respective business in which the commission expense is paid, which approximates the period over which goods and services are transferred to the customer. For offerings with primarily short-term contracts, such as Informatics, the Company applies the practical expedient which allows costs to obtain a contract to be expensed when incurred, if the amortization period of the assets that would otherwise have been recognized is one year or less. Contract assets and capitalized commissions are included in other current assets and other assets on the Consolidated Balance Sheets.
Most contracts are terminable by the customers, either immediately or according to advance notice terms specified within the contracts. All contracts require payment of fees to the Company for services rendered through the date of termination and may require payment for subsequent services necessary to conclude the study or close out the contract.
The following table summarizes the values of contract assets, capitalized commissions and contract liabilities (in thousands):
19
NEOGENOMICS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
September 30, 2024December 31, 2023
Current contract assets (1)
$— $37 
Total contract assets$— $37 
Current capitalized commissions (1)
$413 $935 
Long-term capitalized commissions (2)
34 53 
Total capitalized commissions$447 $988 
Current contract liabilities$589 $2,130 
Long-term contract liabilities (3)
396 — 
Total contract liabilities$985 $2,130 

(1) Recorded within other current assets on the Consolidated Balance Sheets.
(2) Recorded within other assets on the Consolidated Balance Sheets.
(3) Recorded within other long-term liabilities on the Consolidated Balance Sheets.
Revenue recognized for the three and nine months ended September 30, 2024 related to contract liability balances outstanding at the beginning of the period was $0.1 million and $1.5 million, respectively. Revenue recognized for the three and nine months ended September 30, 2023 related to contract liability balances outstanding at the beginning of the period was $1.4 million and $4.9 million, respectively. Amortization of capitalized commissions for the three and nine months ended September 30, 2024 was $0.3 million and $0.8 million, respectively. Amortization of capitalized commissions for the three and nine months ended September 30, 2023 was $0.2 million and $0.7 million, respectively.
Disaggregation of Revenue
The Company considered various factors for both its Clinical Services and Advanced Diagnostics segments in determining appropriate levels of homogeneous data for its disaggregation of revenue, including the nature, amount, timing, and uncertainty of revenue and cash flows. Clinical Services categories align with the types of customers due to similarities of billing method, level of reimbursement, and timing of cash receipts. Unbilled amounts are accrued and allocated to payer categories based on historical experience. In future periods actual billings by payer