What changed in this filing

/stocks — the workspaceLOADING

Item 5. Market for Registrant’s Common Equity

2022-03-31 compared with 2021-04-01 · 9 added, 587 removed, 6 unchanged (99% of the section changed)

FOR OUR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

February 25, 2021, our common stock was delisted from The Nasdaq Capital Market and was listed for trading on the OTCQX Best Market

under the symbol “IDXG.”

February 25, 2021, our common stock was delisted from The Nasdaq Capital Market and began trading on the OTCQX Best Market under the

symbol “IDXG.” OTCQX Best Market quotations reflect inter-dealer prices and may not necessarily represent actual transactions.

January 15, 2020, we effected a one-for-ten reverse split of our issued and outstanding shares of our common stock.

At the effective

time of the reverse split, every 10 shares of common stock issued and outstanding were automatically combined into one share of

issued and outstanding common stock, without any change in the par value per share.

Our common stock began trading on a reverse

stock split-adjusted basis on January 15, 2020.

had 194 stockholders of record as of March 12, 2021.

time of the reverse split, every 10 shares of common stock issued and outstanding were automatically combined into one share of issued

and outstanding common stock, without any change in the par value per share.

Our common stock began trading on a reverse stock split-adjusted

basis on January 15, 2020.

had 197 stockholders of record as of February 28, 2022.

Not reflected in the number of stockholders of record are persons who beneficially

1 unchanged sentence

have not declared any cash dividends and do not intend to declare or pay any cash dividends in the foreseeable future.

earnings, if any, will be used to finance the future operation and growth of our businesses.

FINANCIAL DATA

are a “smaller reporting company”

for purposes of the disclosure requirements of Item 301 of Regulation S-K and, therefore,

we are not required to provide this information.

MANAGEMENT’S

DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

following Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction

with our consolidated financial statements and the related notes appearing elsewhere in this Annual Report on Form 10-K.

discussion and analysis includes certain forward-looking statements that involve risks, uncertainties and assumptions.

review the Risk Factors section of this Form 10-K for a discussion of important factors that could cause actual results to differ

materially from the results described in or implied by such forward-looking statements.

See Cautionary Note Regarding Forward-Looking

Information at the beginning of this Form 10-K.

are an emerging leader in enabling precision medicine principally in oncology by offering specialized services along the therapeutic

value chain from early diagnosis and prognostic planning to targeted therapeutic applications through our clinical and pharma

Through our clinical services, we enable physicians to personalize the clinical management of each individual patient

by providing genomic information to better diagnose, monitor and inform cancer treatment.

Our clinical services provide clinically

useful molecular diagnostic tests, bioinformatics and pathology services for evaluating risk of cancer by leveraging the latest

technology in personalized medicine for improved patient diagnosis and management.

Through our pharma services, we develop, commercialize

and provide molecular- and biomarker-based tests and services and provide companies with customized solutions for patient stratification

and treatment selection through an extensive suite of molecular and biomarker-based testing services, DNA- and RNA- extraction

and customized assay development and trial design consultation.

Our pharma services provide pharmacogenomics testing, genotyping,

biorepository and other specialized services to the pharmaceutical and biotech industries and advance personalized medicine by

partnering with pharmaceutical, academic and technology leaders to effectively integrate pharmacogenomics into drug development

and clinical trial programs with the goals of delivering safer, more effective drugs to market more quickly, and improving patient

Biosciences, Inc.

Report on Form 10-K

of COVID-19 pandemic

have taken what we believe are necessary precautions to safeguard our employees from the COVID-19 pandemic.

We continue to follow

CDC guidance and the recommendations and restrictions provided by state and local authorities.

The majority of our employees who

do not work in a lab setting are currently able to successfully work remotely.

Our labs require in-person staffing and we have

been able to continue to operate our labs, minimizing infection risk to lab staff through a combination of social distancing and

appropriate protective equipment.

There can be no assurance, however, that key employees will not become ill or that we will able

to continue to operate our labs successfully.

second quarter Fiscal 2020 revenues were impacted by lower than expected clinical service volume which we believe resulted from

the pandemic-related temporary reduction in non-essential testing procedures.

Our pharma services business also softened during

the second quarter of 2020.

During the third and fourth quarters of 2020, our clinical services business recovered to levels prior

to the pandemic and our pharma services business is was also recovering, but more slowly.

continuing impact that the COVID-19 pandemic will have on our operations, including duration, severity and scope, remains highly

uncertain and cannot be fully predicted at this time.

Accordingly, we believe that the COVID-19 pandemic could continue to adversely

impact our results of operations, cash flows and financial condition in the future.

optimize the operations of laboratory operations within our pharma services, we transitioned activities from the Rutherford, NJ

facility to our Morrisville, NC facility.

We invested several million dollars to facilitate this relocation, including but not

limited to the transfer of personnel, expansion of the Morrisville facility and validation of transferred processes over the next

several months.

We believe that this investment will result in a reduction in future operating costs;

however, it is not certain

whether we will successfully implement the relocation or whether the transition will produce the predicted financial benefits.

of our laboratories are currently in operation and, in our view, are appropriately staffed for current volumes.

While we do not

anticipate any laboratory closures at this time beyond periodic, temporary work stoppages to clean and disinfect the labs, this

could change in the future based upon conditions caused by the pandemic.

Further, while we have acquired additional inventories

of laboratory supplies, including reagents, it is possible that we could experience supply chain shortages if the pandemic continues

for a prolonged period and/or if one or more suppliers is unable to continue to provide us with inventory.

For the foreseeable

future, however, we do not anticipate supply chain shortages of critical supplies or delays from our third-party clinical services

billing and collections company.

We continue to monitor the actual and potential impact of the pandemic upon our operations and

will continue to do so.

Biosciences, Inc.

Report on Form 10-K

clinical services provide clinically useful molecular diagnostic tests, bioinformatics and pathology services for evaluating cancer

risk by leveraging the latest technology in personalized medicine for improved patient diagnosis and management.

We develop and

commercialize genomic tests and related first line assays principally focused on early detection of patients with indeterminate

biopsies and at high risk of cancer using the latest technology to help personalized medicine and improve patient diagnosis and

Our tests and services provide mutational analysis of genomic material contained in suspicious cysts, nodules and

lesions with the goal of better informing treatment decisions in patients at risk of thyroid, pancreatic, and other cancers.

laboratory developed molecular diagnostic tests we offer are designed to enable healthcare providers to better assess cancer risk,

helping to avoid unnecessary surgical treatment in patients at low risk.

We currently have five commercialized molecular

diagnostic tests in the marketplace:

PancraGEN ®

, which is a pancreatic cyst and pancreaticobiliary solid lesion

genomic test that helps PanDNA, a “molecular only”

version of PancraGEN that provides physicians a snapshot of

a limited number of factors;

physicians better assess risk of pancreaticobiliary cancers using our proprietary PathFinderTG ®

platform; ThyGeNEXT ®

, which is an expanded oncogenic mutation panel that helps identify malignant thyroid

nodules; ThyraMIR ®

, which assesses thyroid nodules for risk of malignancy utilizing a proprietary microRNA

gene expression assay;

and RespriDx ®

, which is a genomic test that helps physicians differentiate metastatic or

recurrent lung cancer from the presence of newly formed primary lung cancer and which also utilizes our PathFinderTG ®

platform to compare the genomic fingerprint of two or more sites of lung cancer.

BarreGEN ®

, an esophageal

cancer risk classifier for Barrett’s Esophagus that also utilizes our PathFinder TG ®

have a multicenter study underway to further assess the ability of BarreGEN ®

to accurately predict progression

to high grade dysplasia or cancer and to assist us in positioning our product for full launch, partnering, and potentially

supporting reimbursement with payers.

mission is to provide personalized medicine through genomics-based diagnostics and innovation to advance patient care based on

rigorous science.

Our laboratories are licensed pursuant to federal law under CLIA and are accredited by CAP and New York State.

leverage our laboratories to develop and commercialize our assays and products.

We aim to provide physicians and patients with

diagnostic options for detecting genomic and other molecular alterations that are associated with gastrointestinal, endocrine,

and lung cancers.

Our customers consist primarily of physicians, hospitals and clinics.

global molecular diagnostics market is estimated to be approximately $8.7 billion in 2020 and is a segment within the estimated

$69.2 billion in vitro diagnostics market in 2019 according to statistics from Kalorama Information, publisher of the Worldwide

Market for In Vitro Diagnostic Tests .

believe that the molecular diagnostics market offers significant growth and strong patient value given the substantial opportunity

it affords to lower healthcare costs by helping to reduce unnecessary surgeries and ensuring the appropriate frequency of monitoring.

We are keenly focused on growing our test volumes, securing additional insurance coverage and reimbursement, maintaining and growing

our current reimbursement and supporting revenue growth for our molecular diagnostic tests, introducing related first line product

and service extensions, as well as expanding our business by developing and promoting synergistic products in our markets.

also believe that BarreGEN ®

is a potentially significant pipeline product, and we are providing necessary resources

to accelerate our development process.

Further, we believe BarreGEN ®

is synergistic with our capabilities in the

gastrointestinal market, which is one of the sectors in which we operate.

pharma services provide pharmacogenomics testing, genotyping, biorepository and other specialized services to the pharmaceutical

and biotech industries.

Laboratory and testing services are performed for pharmaceutical and biotech companies engaged in clinical

trials and focuses on providing these clients with oncology specific and non-oncology genetic testing services for phase I-IV

clinical trials along with critical support of ancillary services.

These services include:

biorepository, clinical trial logistics,

clinical trial design, bioinformatics analysis, customized assay development, DNA and RNA extraction and purification, genotyping,

gene expression and biomarker analyses.

We also seek to apply our expertise in laboratory developed tests to assist in developing

and commercializing drug-specific companion diagnostics.

We have established business relationships with key instrument manufacturers

to support their platforms in the market, and to drive acceptance among biopharmaceutical sponsors developing innovative immuno-oncology

and biomarker-based testing services have been altering the clinical trials landscape by providing biotech and pharmaceutical

companies with information about trial subjects’

genetic profiles that may be able to inform researchers whether or not

a subject will benefit from the trial drug or will experience adverse effects.

Streamlined subject selection and stratification,

and tailored therapies selected to maximally benefit each group of subjects may increase the number of trials that result in approved

therapies and make conducting clinical trials more efficient and less costly for biotech and pharmaceutical companies.

48 new drugs were approved by the FDA, and nearly a quarter of these drugs were oncology-focused, highlighting the potential value

of incorporating genomic information into oncology clinical trial design.

Biosciences, Inc.

Report on Form 10-K

addition to the tests and services provided to our pharma customers, we custom develop Next Generation Sequencing (NGS) panels

for our customers focused on pharmacogenomics and oncology.

also utilize our laboratories to provide clinical trial services to the pharmaceutical and biotech industries to improve the efficiency

and economic viability of clinical trials.

Our clinical trials services leverage our knowledge of clinical oncology and molecular

diagnostics and our laboratories’

fully integrated capabilities.

We believe our laboratory is one of a few with the capability

to combine somatic and germline mutational analyses in clinical trials.

We operate through a CLIA certificated and CAP accredited

laboratory located in Raleigh, North Carolina.

laboratory possesses capabilities in histology, immunohistochemistry (IHC), flow cytometry, cytogenetics and fluorescent in-situ

hybridization (FISH), as well as sophisticated molecular analysis techniques, including next generation sequencing.

for comprehensive customized testing within one lab enterprise, with our CAP-accredited biorepository laboratory serving as a

central hub for specimen tracking.

Using this approach, we are able to support demanding clinical trial protocols requiring multiple

assays and techniques aimed at capturing data on multiple biomarkers.

Our suite of available testing platforms allows for highly

customized clinical trial design which is supported by our dedicated group of development scientists and technical personnel.

also provide genetic testing for drug metabolism to aid biotech and pharmaceutical companies identify subjects’

likely responses

to treatment, allowing these companies to conduct more efficient and safer clinical trials.

We believe pharmacogenomics drug metabolism

testing helps deliver the promise of personalized medicine by enabling researchers to tailor therapies in development to differences

in patients’

genomic profiles.

February 25, 2021, the Company’s common stock was delisted from The Nasdaq Stock Market LLC (“Nasdaq”) due

to the Company’s failure to regain compliance with Nasdaq’s minimum $2,500,000 stockholders’

equity requirement

for continued listing as set forth in Nasdaq Listing Rule 5550(b) (the “Rule”) and the Company’s failure to

timely execute its plan to regain compliance under the Rule.

February 24, 2021, the Company was approved to have its common stock quoted on the OTCQX®

Best Market tier of the OTC Markets

(the “OTCQX”), an electronic quotation service operated by OTC Markets Group Inc.

The trading of the Company’s

common stock commenced on OTCQX at the open of business on February 25, 2021 under the trading symbol IDXG.

OF REPORTING SEGMENTS

operate under one segment which is the business of developing and selling diagnostic clinical and pharma services.

ACCOUNTING POLICIES

prepare our consolidated financial statements in accordance with U.S.

generally accepted accounting principles, or (“GAAP”).

The preparation of financial statements and related disclosures in conformity with GAAP requires management to make judgments,

estimates and assumptions at a specific point in time that affect the amounts reported in our consolidated financial statements

and disclosed in the accompanying notes.

These assumptions and estimates are inherently uncertain.

Outlined below are accounting

policies, which are important to our financial position and results of operations and require our management to make significant

judgments in their application.

Some of those judgments can be subjective and complex.

Management’s estimates are based

on historical experience, information from third-party professionals, facts and circumstances available at the time and various

other assumptions that are believed to be reasonable.

Actual results could differ from those estimates.

Additionally, changes

in estimates could have a material impact on our consolidated results of operations in any one period.

For a summary of all of

our significant accounting policies, including the accounting policies discussed below, see Note 1, Nature of Business and

Significant Accounting Policies , to our consolidated financial statements included in this Annual Report on Form 10-K.

Biosciences, Inc.

Report on Form 10-K

and Cost of Revenue

Company’s revenue is primarily generated from the performance of its proprietary molecular diagnostic tests for its clinical

customers and its DNA-based testing services in support of clinical trials for its pharma services customers.

The Company’s

performance obligation is fulfilled upon completion, review and release of test results and subsequent billing to the third-party

payer, hospital or service provider, or biopharma companies.

606 Revenue Recognition

services derive its revenues from the performance of its proprietary assays or tests.

The Company’s performance obligation

is fulfilled upon completion, review and release of test results to the customer.

The Company subsequently bills third-party payers

or direct-bill payers for the tests performed.

Revenue is recognized based on the estimated transaction price or net realizable

value (“NRV”), which is determined based on historical collection rates by each payer category for each proprietary

test offered by the Company.

To the extent the transaction price includes variable consideration, for all third party and direct-bill

payers and proprietary tests, the Company estimates the amount of variable consideration that should be included in the transaction

price using the expected value method based on historical experience.

our clinical services, we regularly review the ultimate amounts received from the third-party and direct-bill payers and related

estimated reimbursement rates and adjust the NRV’s and related contractual allowances accordingly.

If actual collections

and related NRV’s vary significantly from our estimates, we adjust the estimates of contractual allowances, which would

affect net revenue in the period such variances become known.

our pharma services customers, performance obligations are satisfied at a point in time as the Company processes samples delivered

by the customer.

Project level activities, including study setup and project management, are satisfied over the life of the contract.

Revenues are recognized at a point in time when the test results or other deliverables are reported to the customer.

our pharma services, project level fee revenue is recognized as deferred revenue and recorded at fair value.

It represents payments

received in advance of services rendered and is recognized ratably over the life of the contract.

Company determines if an arrangement contains a lease in whole or in part at the inception of the contract.

Right-of-use (“ROU”)

assets represent the Company’s right to use an underlying asset for the lease term while lease liabilities represent our

obligation to make lease payments arising from the lease.

All leases with terms greater than twelve months result in the recognition

of a ROU asset and a liability at the lease commencement date based on the present value of the lease payments over the lease

Unless a lease provides all of the information required to determine the implicit interest rate, we use our incremental

borrowing rate based on the information available at the commencement date in determining the present value of the lease payments.

We use the implicit interest rate in the lease when readily determinable.

lease terms include all non-cancelable periods and may include options to extend (or to not terminate) the lease when it is reasonably

certain that we will exercise that option.

Leases with terms of twelve months or less at the commencement date are expensed on

a straight-line basis over the lease term and do not result in the recognition of an asset or liability.

See Note 9, Leases .

Biosciences, Inc.

Report on Form 10-K

Assets, including Finite-Lived Intangible Assets

review the recoverability of long-lived assets and finite-lived intangible assets whenever events or changes in circumstances

indicate that the carrying value of such assets may not be recoverable.

If the sum of the expected future undiscounted cash flows

is less than the carrying amount of the asset, an impairment loss is recognized by reducing the recorded value of the asset to

its fair value measured by future discounted cash flows.

This analysis requires estimates of the amount and timing of projected

cash flows and, where applicable, judgments associated with, among other factors, the appropriate discount rate.

Such estimates

are critical in determining whether any impairment charge should be recorded and the amount of such charge if an impairment loss

is deemed to be necessary.

a result of overall economic conditions related to the coronavirus pandemic, the impact of the coronavirus pandemic on the Company’s

financial results, and the decrease in the price of the Company’s common stock noted during the third quarter of fiscal

2020, the Company performed an internal review of its long-lived assets.

Due to an extended delay in the launch of the Company’s

Barrett’s test, the Company believes there was a triggering event in Fiscal 2016.

The Company applied the required procedures

under ASC 360 and assessed the estimated future cash flows related to the Barrett’s intangible asset on an undiscounted

It was determined that the carrying value of the asset was in excess of the undiscounted cash flows as of December 31,

As a result, the Company performed a formal valuation of the asset on a discounted basis in order to measure the related

Additionally, the Company concluded that amortization of both the Barrett’s intangible asset and its Thyroid

intangible assets should have commenced upon acquisition of those assets as opposed to the Company’s previously disclosed

policy of beginning asset amortization when the product was launched and generating revenue.

Contingencies

the normal course of business, we are subject to various contingencies.

Contingencies are recorded in the consolidated financial

statements when it is probable that a liability will be incurred and the amount of the loss can be reasonably estimated, or otherwise

disclosed, in accordance with ASC 450, Contingencies.

Significant judgment is required in both the determination of probability

and the determination as to whether a loss is reasonably estimable.

In the event we determine that a loss is not probable, but

is reasonably possible, and it becomes possible to develop what we believe to be a reasonable range of possible loss, then we

will include disclosures related to such matter as appropriate and in compliance with ASC 450.

To the extent there is a reasonable

possibility that the losses could exceed the amounts already accrued, we will, when applicable, adjust the accrual in the period

the determination is made, disclose an estimate of the additional loss or range of loss, indicate that the estimate is immaterial

with respect to its financial statements as a whole or, if the amount of such adjustment cannot be reasonably estimated, disclose

that an estimate cannot be made.

We are currently a party to legal proceedings that are incidental to our business.

we have accrued our estimate of the probable costs for the resolution of these claims.

These estimates are developed in consultation

with outside counsel and are based upon an analysis of potential results, assuming a combination of litigation and settlement

Predicting the outcome of claims and litigation, and estimating related costs and exposures, involves substantial

uncertainties that could cause actual costs to vary materially from estimates.

Biosciences, Inc.

Report on Form 10-K

taxes are based on income for financial reporting purposes calculated using our expected annual effective rate and reflect a current

tax liability or asset for the estimated taxes payable or recoverable on the current year tax return and expected annual changes

in deferred taxes.

account for income taxes using the asset and liability method.

This method requires recognition of deferred tax assets and liabilities

for expected future tax consequences of temporary differences that currently exist between tax bases and financial reporting bases

of our assets and liabilities based on enacted tax laws and rates.

Deferred tax expense (benefit) is the result of changes in

the deferred tax asset and liability.

A valuation allowance is established, when necessary, to reduce the deferred income tax

assets when it is more likely than not that all or a portion of a deferred tax asset will not be realized.

operate in multiple tax jurisdictions and provide taxes in each jurisdiction where we conduct business and are subject to taxation.

The breadth of our operations and the complexity of the various tax laws require assessments of uncertainties and judgments in

estimating the ultimate taxes we will pay.

The final taxes paid are dependent upon many factors, including negotiations with taxing

authorities in various jurisdictions, outcomes of tax litigation and resolution of proposed assessments arising from federal and

state audits.

We have established estimated liabilities for uncertain federal and state income tax positions.

Uncertain tax positions

are recognized in the financial statements when it is more likely than not (for example, a likelihood of more than fifty percent)

that a position taken or expected to be taken in a tax return would be sustained upon examination by tax authorities that have

full knowledge of all relevant information.

A recognized tax position is then measured as the largest amount of benefit that is

greater than fifty percent likely to be realized upon ultimate settlement.

We adjust our accruals for unrecognized tax benefits

as facts and circumstances change, such as the progress of a tax audit.

We believe that any potential audit adjustments will not

have a material adverse effect on our financial condition or liquidity.

However, any adjustments made may be material to our consolidated

results of operations or cash flows for a reporting period.

Penalties and interest, if incurred, would be recorded as a component

of current income tax expense.

Management plans to commence filing tax clearance certificates in states and related tax jurisdictions

in which un-recognized tax benefits attributable to its former operating entities are recorded as long-term liabilities on the

accompanying balance sheet.

This process can range from 6 to 18 months before the Company receives clearance as to balances, if

any, it may owe to a particular state or tax jurisdiction.

Upon receipt and acknowledgment from a state or tax jurisdiction, the

Company will settle the remaining obligation or reverse the recorded amount owed during the period in which the tax clearance

certificate is obtained.

judgment is also required in evaluating the need for and magnitude of appropriate valuation allowances against deferred tax assets.

We currently have significant deferred tax assets resulting from net operating loss carryforwards and deductible temporary differences.

The realization of these assets is dependent on generating future taxable income.

We perform an analysis quarterly to determine

whether the expected future income will more likely than not be sufficient to realize the deferred tax assets.

Our recent operating

results and projections of future income weighed heavily in our overall assessment.

The existing and forecasted levels of pretax

earnings for financial reporting purposes are not sufficient to generate future taxable income and realize our deferred tax assets

and, as a result, we established a full federal and state valuation allowance for the net deferred tax assets at December 31,

2020 and 2019, as we determined that it was more likely than not that these assets would not be realized.

NOL carry forwards are subject to review and possible adjustment by the Internal Revenue Service and state tax authorities.

tax credit carry forwards may become subject to an annual limitation in the event of certain cumulative changes in the ownership interest

of significant stockholders over a three year period in excess of 50%, as defined under Sections 382 and 383 of the Internal Revenue

Code of 1986, as amended, or the Code, as well as similar state tax provisions.

The amount of the annual limitation, if any, will be

determined based on the value of our company immediately prior to an ownership change.

Subsequent ownership changes may further affect

the limitation in future years.

Additionally, U.S.

tax laws limit the time during which these carry forwards may be applied against future

taxes, therefore, we may not be able to take full advantage of these carry forwards for federal income tax purposes.

It was determined

that the Company underwent an ownership change and as a result, NOLs attributable to the pre-ownership change are subject to a substantial

annual limitation under Section 382 of the Internal Revenue Code due to the ownership changes.

The Company has adjusted their NOL carryforwards

to address the impact of the 382 ownership change.

Compensation Costs

compensation cost associated with the granting of stock-based awards is based on the grant date fair value of the stock award.

We recognize the compensation cost, net of estimated forfeitures, over the shorter of the vesting period or the period from the

grant date to the date when retirement eligibility is achieved.

Forfeitures are initially estimated based on historical information

and subsequently updated over the life of the awards to ultimately reflect actual forfeitures.

As a result, changes in forfeiture

activity can influence the amount of stock compensation cost recognized from period-to-period.

Biosciences, Inc.

Report on Form 10-K

primarily use the Black-Scholes option pricing model to determine the fair value of stock options and stock-based stock appreciation

rights (SARs).

The determination of the fair value of stock-based payment awards is made on the date of grant and is affected

by our stock price as well as assumptions made regarding a number of complex and subjective variables.

These assumptions include:

our expected stock price volatility over the term of the awards;

actual and projected employee stock option exercise behaviors;

the risk-free interest rate;

and expected dividend yield.

in the valuation assumptions could result in a significant change to the cost of an individual award.

However, the total cost

of an award is also a function of the number of awards granted, and as result, we have the ability to manage the cost and value

of our equity awards by adjusting the number of awards granted.

RESULTS OF OPERATIONS

following table sets forth the selected statements of operations data ($ in thousands) as a percentage of revenue for the periods

The trends illustrated in this table may not be indicative of future operating results.

Ended December 31,

Cost of revenue

Operating expenses:

Sales and marketing

General and administrative

Acquisition related

amortization expense

in fair value of contingent consideration

operating expenses

Operating loss

Interest accretion expense

(expense), net

Loss from continuing

operations before tax

Benefit (provision)

for income taxes

Loss from continuing

Loss from discontinued

operations, net of tax

Biosciences, Inc.

Report on Form 10-K

revenue for the year ended December 31, 2020 increased by $8.2 million, or 34%, to $32.4 million, compared to the year ended December

This increase was primarily attributable to the full year of revenue from pharma services as compared to the partial

year in 2019 and the accounts receivable adjustment we recorded in the fourth quarter of 2019 of $8.7 million, which was recorded

as a reduction in net revenue (representing a change in estimate in accordance with ASC 606) due to third party collection issues,

of which $3.5 million was related to billings in 2018 and $5.2 million related to billings in 2019.

cost of revenue for the year ended December 31, 2020 increased by $5.8 million, or 36%, to $21.7 million,

compared to the year ended December 31, 2019 primarily due to pharma services acquired in July 2019.

gross profit for the year ended December 31, 2020 increased $2.4 million, or 29%, to $10.7 million, compared

to $8.3 million for the year ended December 31, 2019.

This increase was attributable to the $8.7 million revenue adjustment discussed

above which was recorded in the fourth quarter of 2019.

and marketing expense

sales and marketing expense was $9.3 million for the year ended December 31, 2020, as compared to $11.1 million for the year ended

December 31, 2019.

As a percentage of revenue, sales and marketing expense decreased to 29% from 46% in the comparable prior year

The decrease in sales and marketing expense primarily reflects the slowdown of sales activity for clinical services due

to the COVID-19 pandemic.

and development

research and development expense was approximately $2.8 million in the periods ended December 31, 2020 and 2019, and as a percentage

of revenue was 9% for the year ended December 31, 2020 and 12% for the year ended December 31, 2019.

The decrease as a percentage

of revenue was due to higher revenue in 2020.

and administrative

and administrative expense for the year ended December 31, 2020 was $20.8 million as compared to $14.4 million for the

year ended December 31, 2019.

The increase was primarily attributable to costs associated with the acquired pharma services.

a percentage of net revenue, general and administrative expense was 64% for the year ended December 31, 2020 as compared to 59%

for the year ended December 31, 2019.

related expense

the year ended December 31, 2019, we incurred approximately $2.5 million in external costs related to our acquisition of pharma

services on July 15, 2019.

related amortization expense

the years ended December 31, 2020 and December 31, 2019, we recorded amortization expense of approximately $4.5 million and $4.0

million, respectively, which is related to intangible assets associated with our acquisitions.

Biosciences, Inc.

Report on Form 10-K

in fair value of contingent consideration

the year ended December 31, 2020, there was a $0.5 million decrease in the contingent consideration liability.

During the year

ended December 31, 2019, there was a $0.04 million decrease in the contingent consideration liability.

were consolidated operating losses from continuing operations of $26.1 million and $26.4 million during the years ended

December 31, 2020 and 2019, respectively.

(benefit) for income taxes

had income tax expense of $0.1 million for the year ended December 31, 2020 and an income tax benefit of $28,000 for the year

ended December 31, 2019.

Income tax expense for 2020 was primarily driven by minimum state and local taxes.

from discontinued operations, before tax

had a loss from discontinued operations of $0.3 million for the year ended December 31, 2020 as compared to a loss from

discontinued operations of $0.1 million for the year ended December 31, 2019.

AND CAPITAL RESOURCES

the fiscal year ended December 31, 2020, we had an operating loss of $26.1 million.

As of December 31, 2020, we had cash,

cash equivalents and restricted cash of $3.4 million, total current assets of $14.1 million and current

liabilities of $18.2 million.

As of March 25, 2021, we had approximately $3.2 million of cash on hand,

excluding restricted cash.

the year ended December 31, 2020, net cash used in operating activities was $14.0 million.

The main component of cash used

in operating activities was our net loss of $26.5 million which was partially offset by non-cash expenses of $7.7

During the year ended December 31, 2019, net cash used in operating activities was $19.0 million, all but $0.03 million

of which was used in continuing operations.

The main component of cash used in operating activities was our net loss of $26.7

the year ended December 31, 2020, cash provided from financing activities was $16.6 million, $19.2 million which resulted

from the issuance of preferred stock in January 2020 and $0.4 million from sales of Common Stock, partially offset by the repayment

of $3.0 million of borrowed funds under our Revolver.

For the year ended December 31, 2019, there was cash provided from financing

activities of $29.2 million, $6.5 million of which resulted from the issuance of common stock in our underwritten public offering

completed in January 2019, $25.7 million which resulted from the issuance of Preferred Stock in July and October 2019, and $3.0

million from the drawing down of funds under our revolving line of credit with Silicon Valley Bank (“SVB”).

partially offset by the payment of the note payable to Cancer Genetics of $6.0 million as part of the acquisition of the pharma

services business in July 2019.

the year ended December 31, 2020, cash used in investing activities was $1.6 million, primarily related to capital expenditures

associated with the moving of our Rutherford, New Jersey lab to North Carolina.

For the year ended December 31, 2019, there was

cash used in investing activities of $13.9 million, $13.8 million of which was used in our acquisition of the pharma services

September 2019, we entered into the Equity Distribution Agreement (the “Agreement”) with Oppenheimer & Co.

as sales agent (the “Agent”), pursuant to which we, from time to time, issued and sold shares of our common stock

in an aggregate offering price of up to $4.8 million through the Agent.

See Note 13, Equity of the notes to the financial statements

for more details.

In 2020, approximately 178,000 shares were sold for net proceeds of approximately $0.4 million.

In 2019, approximately

98,000 shares (as adjusted for the reverse stock split) of common stock were sold for net proceeds of approximately $0.2 million.

Further, upon the filing of this Report, we will no longer remain eligible to use Form S-3 and therefore we will lose our ability

to sell Shares under the Equity Distribution Agreement.

Biosciences, Inc.

Report on Form 10-K

of July 31, 2020, the Company was in violation of a financial covenant under the SVB Loan Agreement.

Additionally, due to the

untimely filing of our second quarter Form 10-Q with the SEC, the Company was in default under the SVB Loan Agreement.

September 2020, the Company paid down the outstanding Revolver balance of $3.4 million in full and transferred $0.35 million into

a restricted cash money market account with SVB to serve as collateral for the Company’s letters of credit supporting its

Prior to September 2020, the collateral for the letters of credit was accounted for as a reduction in the availability

under the Revolver.

As of September 30, 2020, and through the date of termination of the SVB Loan Agreement, there was no balance

outstanding on the Revolver.

On October 19, 2020 SVB agreed to forebear from exercising its rights and remedies with respect

to the defaults and the Company as a result was in compliance with the terms of the SVB Loan Agreement through the

date of its termination in January 2021.

January 2020, we sold 20,000 preferred shares to investors, led by 1315 Capital, for net proceeds of approximately $19.5 million;

see Note 13, Equity of the footnotes to the financial statements for more detail.

April 2020, the Company applied for various federal stimulus grants and advances made available under Title 1 of the CARES Act.

As of September 30, 2020, we received $2.1 million in advances under the CMS accelerated and advance payment program, as well

as a $0.65 million grant from HHS.

The CMS advance will be offset against future Medicare billings of the Company, and we applied

the HHS grant in its entirety towards qualified second quarter expenses.

These expenses related to lab equipment and supplies

purchased to prevent, prepare for, and respond to coronavirus, including development of coronavirus and serology tests, as well

as expenses that would have been covered by revenue lost to coronavirus during the second quarter.

April and early May 2020, the Company made payments totaling $888,000 to CGI for funds withheld from the Excess Consideration

Note to satisfy certain adjustments and indemnification obligations under the Asset Purchase Agreement dated July 15, 2019.

January 7, 2021, the Company entered into promissory notes with Ampersand, in the amount of $3 million, and 1315 Capital, in the

amount of $2 million, respectively (together, the “Notes”) and a related security agreement (the “Security Agreement”).

rate of interest on the Notes is equal to eight percent (8.0%) per annum and their maturity date is the earlier of (a) June 30,

2021 and (b) the date on which all amounts become due upon the occurrence of any event of default as defined in the Notes.

interest payments are due on the Notes until their maturity date.

All payments on the Notes are pari passu.

connection with the Security Agreement, the Notes are secured by a first priority lien and security interest on substantially

all of the assets of the Company.

Additionally, if a change of control of the Company occurs (as defined in the Notes) the Company

is required to make a prepayment of the Notes in an amount equal to the unpaid principal amount, all accrued and unpaid interest,

and all other amounts payable under the Notes out of the net cash proceeds received by the Company from the consummation of the

transactions related to such change of control.

The Company may prepay the Notes in whole or in part at any time or from time

to time without penalty or premium by paying the principal amount to be prepaid together with accrued interest thereon to the

date of prepayment.

No prepaid amount may be re-borrowed.

of December 31, 2020, contractual obligations with terms exceeding one year and estimated minimum future rental payments required

by non-cancelable operating leases with initial or remaining lease terms exceeding one year are as follows:

lease obligations

Biosciences, Inc.

Report on Form 10-K

Company has and may continue to delay, scale-back, or eliminate certain of its activities and other aspects of its operations

until such time as the Company is successful in securing additional funding.

The Company is exploring various dilutive and non-dilutive

sources of funding, including equity and debt financings, strategic alliances, business development and other sources.

success of the Company is dependent upon its ability to obtain additional funding.

There can be no assurance, however, that the

Company will be successful in obtaining such funding in sufficient amounts, on terms acceptable to the Company, or at all.

factors raise substantial doubt about the Company’s ability to continue as a going concern.

Company’s cash and cash equivalents balance is decreasing and we will not generate positive cash flows from operations for

the year ending December 31, 2021.

We intend to meet our ongoing capital needs by using our available cash, including the Ampersand

and 1315 Capital loans, as well as revenue growth and margin improvement;

collection of accounts receivable;

containment of costs;

and the potential use of other financing options.

the Company’s delisting from Nasdaq in February 2021, its ability to raise additional capital may be materially adversely

In addition, the Company’s inability to use Form S-3 after it files this Report may have an adverse impact on

our ability to raise additional capital.

There is no assurance we will be successful in meeting our capital requirements prior

to becoming cash flow positive.

AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

are a “smaller reporting company”

for purposes of the disclosure requirements of Item 305 of Regulation S-K and, therefore,

we are not required to provide this information.

STATEMENTS AND SUPPLEMENTARY DATA

statements and the financial statement schedule specified by this Item 8, together with the report thereon of BDO USA, LLP, are

presented following Item 15 of this Annual Report on Form 10-K.

IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES

Future earnings,

if any, will be used to finance the future operation and growth of our businesses.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 5. Market for Registrant’s Common Equity