Company Announces Exit from Resolve mdx Business, Anticipates Restructuring Charges
As part of its Q1 results announcement last night, the company stated: "On April 20, 2026, the Company received a Medicare contractor recoupment decision from Novitas Solutions totaling approximately $10.4 million related to a retrospective review of certain historical Resolve mdx claims. The Company strongly disagrees with the contractor's findings and is vigorously contesting the contractor's decision on substantive and procedural grounds. Management has evaluated the matter and concluded that the recognition criteria for an accrual have not been met. The existence and ultimate amount of any obligation are contingent on the outcomes of a multi-level appeals process, which are uncertain future events not wholly within the Company's control. At this time no reliable estimate of any obligation can be made. Accordingly, the matter is accounted for as a contingent liability, and no provision has been recorded for the first quarter ended March 31, 2026. On May 8, 2026, the Company approved a strategic plan to exit the Resolve mdx business, including the cessation of operations at its laboratory facility in Plano, Texas. As a result of this decision, the Company expects to incur restructuring and other exit-related charges in connection with the wind-down. These charges are expected to consist principally of (i) employee severance and other termination benefits, (ii) charges associated with the Plano facility lease, including accelerated amortization of the right-of-use asset and leasehold improvements, (iii) impairment of long-lived assets associated with the Resolve mdx business, including capitalized assets and equipment, (iv) charges relating to the disposition or termination of vendor and supplier contracts, and (v) other exit-related costs. The amount and timing of these charges has not been finalized and will be determined and recognized in accordance with applicable IFRS in future periods as the wind-down is executed and additional information becomes available." Shares are down 40% in pre-market at $1.19.
