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Revenue
 12 Months Ended
Dec. 31, 2020
Revenue From Contract With Customer [Abstract]  
Revenue

Note 13 - Revenue

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 large 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):

 

 

 

Year Ended December 31,

 

 

 

2020

 

 

2019

 

Diagnostic tests

 

$

40,919

 

 

$

17,315

 

Services

 

 

4,638

 

 

 

7,237

 

Total revenue

 

$

45,557

 

 

$

24,552

 

 

The Company’s fiscal 2020 diagnostic test revenue consists of $28.3 million in COVID-19 test revenue, which began in late fiscal 2020, and $12.6 million in lung diagnostic revenue.

 

Contract Liabilities

Contract liabilities consist of cash payments from customers received in advance of delivery (advance deposits). As products are shipped and control transfers, the Company recognizes the deferred revenue in ‘Revenues’ in the statements of operations. At January 1 and December 31, 2020, $1.3 million and $3.5 million, respectively, of advance deposits were reported in ‘Deferred revenue’ in the accompanying balance sheets. Of the $1.3 million in deferred revenue recorded at January 1, 2020, $0.7 million was recognized in revenues during the year ended December 31, 2020. The deferred revenue of $3.5 million at December 31, 2020 is expected to be recognized in revenues during 2021 as test results are delivered.