INTERPACE BIOSCIENCES, INC. 10-K

ITEM 9A. CONTROLS AND PROCEDURES Disclosure Controls and Procedures Our principal executive officer and principal financial officer evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2021. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Based on that evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this Annual Report on Form 10-K. 80 Management’s Annual Report on Internal Control over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting as such term is defined in Exchange Act Rule 13a-15(f). Internal control over financial reporting is a process designed under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. As of December 31, 2021, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, our management concluded that, as of December 31, 2021, our internal control over financial reporting was effective based on those criteria. Changes in Internal Control over Financial Reporting There has been no change in our internal control over financial reporting during the quarter ended December 31, 2021 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. ITEM 9B. OTHER INFORMATION None. ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS Not applicable. 81 PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE Information relating to directors and executive officers of the registrant that is responsive to Item 10 of this Annual Report on Form 10-K will be included in an amendment hereto or will be included in our Proxy Statement for our 2022 annual meeting of stockholders and such information is incorporated by reference herein. ITEM 11. EXECUTIVE COMPENSATION Information relating to executive compensation of the registrant that is responsive to Item 11 of this Annual Report on Form 10-K will be included in an amendment hereto or will be included in our Proxy Statement for our 2022 annual meeting of stockholders, and such information is incorporated by reference herein. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS Information relating to security ownership of certain beneficial owners and management of the registrant that is responsive to Item 12 of this Annual Report on Form 10-K will be included in an amendment hereto or will be included in our Proxy Statement for our 2022 annual meeting of stockholders and such information is incorporated by reference herein. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE Information relating to certain relationships and related transactions of the registrant that is responsive to Item 13 of this Annual Report on Form 10-K will be included in an amendment hereto or will be included in our Proxy Statement for our 2022 annual meeting of stockholders and such information is incorporated by reference herein. ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES Information relating to principal accounting fees and services of the registrant that is responsive to Item 14 of this Annual Report on Form 10-K will be included in an amendment hereto or will be included in our Proxy Statement for our 2022 annual meeting of stockholders and such information is incorporated by reference herein. 82 PART IV ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES (a) The following documents are filed as part of this Form 10-K: (1) Financial Statements – See Index to Financial Statements on page F-1 of this Form 10-K. (2) Financial Statement Schedule Schedule II: Valuation and Qualifying Accounts All other schedules are omitted because they are not applicable or the required information is shown in the financial statements or notes thereto. (3) Exhibits Exhibit No. Description 2.1 Asset Purchase Agreement, dated August 13, 2014, by and between Interpace Diagnostics, LLC and Asuragen, Inc., incorporated by reference to Exhibit 2.2 of the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2014, filed with the SEC on November 5, 2014. 2.2 Asset Purchase Agreement, dated as of October 30, 2015, by and between Publicis Touchpoint Solutions, Inc. and PDI, Inc., incorporated by reference to Exhibit 2.1 of the Company’s Current Report on Form 8-K, filed with the SEC on November 2, 2015. 2.3 Asset Purchase Agreement by and among the Company and Diamir Biosciences Corp. dated March 16, 2021,incorporated by reference to Exhibit 2.1 of the Company’s quarterly report on Form 10-Q for the quarter ended March 31, 2021, filed with the SEC on May 11, 2021. 3.1+ Conformed version of Certificate of Incorporation of Interpace Biosciences, Inc., as amended by the Certificate of Amendment, effective January 15, 2020, and the Certificate of Designation of Preferences, Rights and Limitations of Series B Convertible Preferred Stock, filed January 17, 2020, incorporated by reference to Exhibit 3.1 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, filed with the SEC on April 22, 2020, as amended from time to time. 3.2 Amended and Restated Bylaws of Interpace Biosciences, Inc., incorporated by reference to Exhibit 3.2 of the Company’s Current Report on Form 8-K, filed with the SEC on November 14, 2019. 4.1 Description of Securities, incorporated by reference to Exhibit 4.1 of the Company’s Annual Report on Form 10-K, filed with the SEC on April 1, 2021. 4.2 Specimen Certificate Representing the Common Stock, incorporated by reference to Exhibit 4.1 of the Company’s Registration Statement on Form S-3 (File No. 333-227728), filed with the SEC on October 5, 2018. 4.3 Form of Common Stock Purchase Warrant, incorporated by reference to Exhibit 4.1 of the Company’s Current Report on Form 8-K, filed with the SEC on January 20, 2017. 4.4 Form of Common Stock Purchase Warrant, incorporated by reference to Exhibit 4.3 of the Company’s Current Report on Form 8-K, as amended, filed with the SEC on March 24, 2017. 4.5 Form of PreFunded Common Stock Purchase Warrant, incorporated by reference to Exhibit 4.2 of the Company’s Current Report on Form 8-K, filed with the SEC on June 21, 2017. 4.6 Form of Underwriters’ Warrants, incorporated by reference to Exhibit 4.1 of the Company’s Current Report on Form 8-K, filed with the SEC on June 21, 2017. 4.7 Form of Common Stock Purchase Warrant, incorporated by reference to Exhibit 4.3 of the Company’s Current Report on Form 8-K, filed with the SEC on June 21, 2017. 4.8 Form of Common Stock Purchase Warrant, incorporated by reference to Exhibit 4.1 of the Company’s Current Report on Form 8-K, filed with the SEC on October 12, 2017. 4.9 Loan and Security Agreement, dated November 13, 2018, by and among Silicon Valley Bank, Interpace Diagnostics Group, Inc., Interpace Diagnostics Corporation, and Interpace Diagnostics, LLC, incorporated by reference to Exhibit 4.9 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, filed with the SEC on April 22, 2020, as amended from time to time. 4.10 Form of Underwriter Common Stock Purchase Warrant, incorporated by reference to Exhibit 4.1 of the Company’s Current Report on Form 8-K, filed with the SEC on January 29, 2019. 4.11 Subordinated Seller Note of Interpace BioPharma, Inc., dated July 15, 2019, in favor of Cancer Genetics, Inc., incorporated by reference to Exhibit 4.1 of the Company’s Current Report on Form 8-K, filed with the SEC on July 19, 2019. 10.1* Amended and Restated 2004 Stock Award and Incentive Plan, incorporated by reference to Annex A of the Company’s definitive proxy statement, filed with the SEC on August 14, 2017. 10.2* Form of Restricted Stock Unit Agreement for Employees, incorporated by reference to Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2018, filed with the SEC on May 15, 2018. 83 Exhibit No. Description 10.3* Form of Restricted Stock Unit Agreement for Directors, incorporated by reference to Exhibit 10.2 of the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2018, filed with the SEC on May 15, 2018. 10.4* Form of Non-Qualified Stock Option Agreement, incorporated by reference to Exhibit 10.3 of the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2018, filed with the SEC on May 15, 2018. 10.5* Form of Incentive Stock Option Agreement, incorporated by reference to Exhibit 10.4 of the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2018, filed with the SEC on May 15, 2018. 10.6* Interpace Diagnostics Group, Inc. 2019 Equity Incentive Plan, incorporated by reference to Exhibit 4.1 of the Company’s quarterly report on Form 10-Q for the quarter ended September 30, 2019, filed with the SEC on November 14, 2019. 10.7* Amendment to the Interpace Biosciences, Inc. 2019 Equity Incentive Plan, incorporated by reference to Exhibit 10.8 of the Company’s quarterly report on Form 10-Q for the quarter ended March 31, 2020, filed with the SEC on June 26, 2020. 10.8* Form of Restricted Stock Unit Grant Notice and Restricted Stock Unit Agreement under the 2019 Equity Incentive Plan, incorporated by reference to Exhibit 4.3 of the Company’s quarterly report on Form 10-Q for the quarter ended September 30, 2019, filed with the SEC on November 14, 2019. 10.9* Form of Interpace Biosciences, Inc. 2019 Equity Incentive Plan Restricted Stock Unit And Restricted Stock Unit Agreement, incorporated by reference to Exhibit 10.9 of the Company’s quarterly report on Form 10-Q for the quarter ended March 31, 2020, filed with the SEC on June 26, 2020. 10.10* Form of Stock Option Grant Notice and Stock Option Agreement under the 2019 Equity Incentive Plan, incorporated by reference to Exhibit 4.4 of the Company’s quarterly report on Form 10-Q for the quarter ended September 30, 2019, filed with the SEC on November 14, 2019. 10.11* Interpace Diagnostics Group, Inc. Employee Stock Purchase Plan, incorporated by reference to Exhibit 4.2 of the Company’s quarterly report on Form 10-Q for the quarter ended September 30, 2019, filed with the SEC on November 14, 2019. 10.12* Employment agreement entered into May 10, 2021, effective February 1, 2021, between Thomas Freeburg and the Company, incorporated by reference to Exhibit 10.2 of the Company’s quarterly report on Form 10-Q for the quarter ended March 31, 2021, filed with the SEC on May 11, 2021. 10.15* Severance agreement and General Release, dated January 31, 2021, by and between the Company and Fred Knechtel, incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K, filed with the SEC on February 4, 2021. 10.16* Incentive Stock Option Agreement between Interpace Diagnostics Group, Inc. and Jack E. Stover, incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K, filed with the SEC on October 20, 2016. 10.17* Amended and Restated Employment Agreement dated December 5, 2018, between the Company and Jack E. Stover, incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K, filed with the SEC on December 11, 2018. 10.18* First Amendment to Amended and Restated Employment Agreement, dated January 29, 2020, by and between Interpace Biosciences, Inc. and Jack E. Stover, incorporated by reference to Exhibit 10.3 of the Company’s Current Report on Form 8-K, filed with the SEC on January 31, 2020. 10.20* Employment Agreement, dated November 23, 2020, between Thomas W. Burnell and Interpace Biosciences, Inc., incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K, filed with the SEC on November 25, 2020. 10.21* Separation and Consulting Agreement and General Release, dated November 23, 2020, between Jack E. Stover and Interpace Biosciences, Inc., incorporated by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K, filed with the SEC on November 25, 2020 . 10.22* Form of Indemnification Agreement by and between Interpace Diagnostics Group, Inc. and its directors and executive officers, incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K, filed with the SEC on August 8, 2016. 10.23* Form of Indemnification Agreement by and between Interpace Biosciences, Inc. and Indemnitee, incorporated by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K, filed with the SEC on January 17, 2020. 10.24 License Agreement, dated August 13, 2014, by and between Interpace Diagnostics, LLC and Asuragen, Inc., incorporated by reference to Exhibit 10.31 of the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2014, filed with the SEC on November 5, 2014. 84 Exhibit No. Description 10.25 CPRIT License Agreement, dated August 13, 2014, by and between Interpace Diagnostics, LLC and Asuragen, Inc., incorporated by reference to Exhibit 10.32 of the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2014, filed with the SEC on November 5, 2014. 10.26 Supply Agreement, dated August 13, 2014, by and between Interpace Diagnostics, LLC and Asuragen, Inc., incorporated by reference to Exhibit 10.33 of the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2014, filed with the SEC on November 5, 2014. 10.27 Guaranty, dated August 13, 2014 by the Company in favor of Asuragen, Inc., incorporated by reference to Exhibit 10.34 of the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2014, filed with the SEC on November 5, 2014. 10.28 Morris Corporate Center Lease, incorporated by reference to Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2009, filed with the SEC on November 5, 2009. 10.29 First Amendment to Lease, dated May 24, 2017, by and between Brookwood MC Investors, LLC, Brookwood MC II, LLC, and the Company, incorporated by reference to Exhibit 10.52 of the Company’s Registration Statement on Form S-1 (333-218140), as amended, filed with the SEC on June 13, 2017. 10.39 Lease Agreement, dated March 31, 2017, by and between Saddle Lane Realty, LLC and the Company, incorporated by reference to Exhibit 10.53 of the Company’s Registration Statement on Form S-1 (333-218140), as amended on June 13, 2017. 10.40 First Amendment, dated September 26, 2017, by and between Saddle Lane Realty, LLC and Interpace Diagnostics Corporation, incorporated by reference to Exhibit 10.36 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, filed with the SEC on April 22, 2020, as amended from time to time 10.41 Amendment No. 2 to Lease, dated March 15, 2018, between Saddle Lane Realty, LLC and Interpace Diagnostics Corporation, incorporated by reference to Exhibit 10.45 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2017, filed with the SEC on March 23, 2018. 10.42 Form of Securities Purchase Agreement, dated January 20, 2017, by and between Interpace Diagnostics Group, Inc. and certain purchasers named therein, incorporated by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K, filed with the SEC on January 20, 2017. 10.43 Warrant Agency Agreement, dated June 21, 2017, by and between Interpace Diagnostics Group, Inc. and American Stock Transfer & Trust Company, LLC, incorporated by reference to Exhibit 1.2 of the Company’s Current Report on Form 8-K, filed with the SEC on June 21, 2017. 85 Exhibit No. Description 10.44 Form of Warrant Exercise Agreement dated October 12, 2017, incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K, filed with the SEC on October 12, 2017. 10.45 Securities Purchase Agreement, dated July 15, 2019, by and between Interpace Diagnostics Group, Inc. and Ampersand 2018 Limited Partnership, incorporated by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K, filed with the SEC on July 19, 2019. 10.46 Transition Services Agreement, dated July 15, 2019, by and between Interpace BioPharma, Inc. and Cancer Genetics, Inc., incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K, filed with the SEC on July 19, 2019. 10.47 Form of Voting Agreement, incorporated by reference to Exhibit 10.4 of the Company’s Current Report on Form 8-K, filed with the SEC on July 19, 2019. 10.50 Consent to Assignment, dated July 19, 2019, by and among Meadows Landmark LLC, Cancer Genetics, Inc., and Interpace BioPharma, Inc, incorporated by reference to Exhibit 10.46 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, filed with the SEC on April 22, 2020, as amended from time to time. 10.51 Lease Agreement, dated June 12, 2004, by and between Southport Business Park Limited Partnership and Gentris Corporation, incorporated by reference to Exhibit 10.47 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, filed with the SEC on April 22, 2020, as amended from time to time. 10.52 Letter Amendment, dated October 21, 2004, by and between Southport Business Park Limited Partnership and Gentris Corporation, incorporated by reference to Exhibit 10.48 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, filed with the SEC on April 22, 2020, as amended from time to time. 10.53 Second Amendment to Lease, dated June 17, 2005, by and between Southport Business Park Limited Partnership and Gentris Corporation, incorporated by reference to Exhibit 10.49 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, filed with the SEC on April 22, 2020, as amended from time to time. 10.54 Third Amendment to Lease, dated May 25, 2006, by and between Southport Business Park Limited Partnership and Gentris Corporation, incorporated by reference to Exhibit 10.50 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, filed with the SEC on April 22, 2020, as amended from time to time. 10.55 Fourth Amendment to Lease, dated December 20, 2007, by and between Southport Business Park Limited Partnership and Gentris Corporation, incorporated by reference to Exhibit 10.51 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, filed with the SEC on April 22, 2020, as amended from time to time. 10.56 Fifth Amendment to Lease, dated June 15, 2009, by and between Southport Business Park Limited Partnership and Gentris Corporation, incorporated by reference to Exhibit 10.52 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, filed with the SEC on April 22, 2020, as amended from time to time. 86 Exhibit No. Description 10.57 Sixth Amendment to Lease, dated June 3, 2010, by and between Southport Business Park Limited Partnership and Gentris Corporation, incorporated by reference to Exhibit 10.53 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, filed with the SEC on April 22, 2020, as amended from time to time. 10.58 Seventh Amendment to Lease, dated October 26, 2010, by and between Southport Business Park Limited Partnership and Gentris Corporation, incorporated by reference to Exhibit 10.54 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, filed with the SEC on April 22, 2020, as amended from time to time. 10.59 Eighth Amendment to Lease, dated July 27, 2011, by and between Southport Business Park Limited Partnership and Gentris Corporation, incorporated by reference to Exhibit 10.55 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, filed with the SEC on April 22, 2020, as amended from time to time. 10.60 Ninth Amendment to Lease, dated November 7, 2012, by and between Southport Business Park Limited Partnership and Gentris Corporation, incorporated by reference to Exhibit 10.56 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, filed with the SEC on April 22, 2020, as amended from time to time. 10.61 Tenth Amendment to Lease, dated July 15, 2014, by and among Southport Business Park Limited Partnership, Gentris Corporation, and Gentris, LLC, incorporated by reference to Exhibit 10.57 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, filed with the SEC on April 22, 2020, as amended from time to time. 10.62 Eleventh Amendment to Lease, effective as of June 1, 2020, by and between Southport Business Park Limited Partnership and Interpace Pharma Solutions, Inc., incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K, filed with the SEC on June 9, 2020. 10.63 Assignment of Lease, dated July 15, 2019, by and between Cancer Genetics, Inc. and Interpace BioPharma, Inc., incorporated by reference to Exhibit 10.58 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, filed with the SEC on April 22, 2020, as amended from time to time. 10.64 Guaranty of Lease, dated July 15, 2019, by and between Interpace Diagnostics Group, Inc. and Southport Business Park Limited Partnership, incorporated by reference to Exhibit 10.59 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, filed with the SEC on April 22, 2020, as amended from time to time. 10.65 Equity Distribution Agreement, dated September 20, 2019, by and between Interpace Diagnostics Group, Inc. and Oppenheimer & Co. Inc., incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K, filed with the SEC on September 20, 2019. 10.66 Securities Purchase and Exchange Agreement, dated January 10, 2020, by and among Interpace Biosciences, Inc., 1315 Capital II, L.P. and Ampersand 2018 Limited Partnership, incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K, filed with the SEC on January 14, 2020. 10.67 Amended and Restated Investor Rights Agreement, dated as of January 15, 2020, by and among Interpace Biosciences, Inc., 1315 Capital II, L.P. and Ampersand 2018 Limited Partnership, incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K, filed with the SEC on January 17, 2020. 10.68 Support Agreement, dated April 7, 2020, by and between Ampersand 2018 Limited Partnership and Interpace Biosciences, Inc., incorporated by reference to Exhibit 10.1 of the Company’s quarterly report on Form 10-Q for the quarter ended June 30, 2020, filed with the SEC on October 19, 2020. 10.69 Termination Agreement, dated July 9, 2020, by and between Ampersand 2018 Limited Partnership and Interpace Biosciences, Inc., incorporated by reference to Exhibit 10.3 of the Company’s quarterly report on Form 10-Q for the quarter ended June 30, 2020, filed with the SEC on October 19, 2020. 10.70 Support Agreement, dated April 2, 2020, by and between 1315 Capital II, L.P. and Interpace Biosciences, Inc., incorporated by reference to Exhibit 10.2 of the Company’s quarterly report on Form 10-Q for the quarter ended June 30, 2020, filed with the SEC on October 19, 2020. 10.71 First Loan Modification Agreement, dated March 18, 2019, by and among Silicon Valley Bank, Interpace Diagnostics Group, Inc. (n/k/a Interpace Biosciences, Inc.), Interpace Diagnostics Corporation, and Interpace Diagnostics, LLC, incorporated by reference to Exhibit 10.6 of the Company’s quarterly report on Form 10-Q for the quarter ended June 30, 2020, filed with the SEC on October 19, 2020. 87 Exhibit No. Description 10.72 Joinder and Second Loan Modification Agreement, dated October 19, 2020, by and among the Company, Interpace Diagnostics Corporation, Interpace Diagnostics, LLC, Interpace Pharma Solutions, Inc. and Silicon Valley Bank, incorporated by reference to Exhibit 4.3 of the Company’s Current Report on Form 8-K, filed with the SEC on October 23, 2020. 10.73 Promissory Note entered into between the Company and Ampersand 2018 Limited Partnership, dated January 7, 2021,incorporated by reference to Exhibit 10.3 of the Company’s quarterly report on Form 10-Q for the quarter ended March 31, 2021, filed with the SEC on May 11, 2021. 10.74 Promissory Note entered into between the Company and 1315 Capital II, L.P, dated January 7, 2021, incorporated by reference to Exhibit 10.4 of the Company’s quarterly report on Form 10-Q for the quarter ended March 31, 2021, filed with the SEC on May 11, 2021. 10.75 Security Agreement entered into between the Company and Ampersand 2018 Limited Partnership, dated January 7, 2021, incorporated by reference to Exhibit 10.5 of the Company’s quarterly report on Form 10-Q for the quarter ended March 31, 2021, filed with the SEC on May 11, 2021. 10.76 Amendment to Secured Promissory Note dated May 10, 2021 with Ampersand 2018 Limited Partnership, incorporated by reference to Exhibit 10.1 of the Company’s quarterly report on Form 10-Q for the quarter ended June 30, 2021, filed with the SEC on August 11, 2021. 10.77 Amendment to Secured Promissory Note dated May 10, 2021 with1315 Capital II, L.P., incorporated by reference to Exhibit 10.2 of the Company’s quarterly report on Form 10-Q for the quarter ended June 30, 2021, filed with the SEC on August 11, 2021. 10.78 Amendment to Security Agreement dated May 10, 2021 by and between Ampersand 2018 Limited Partnership and Interpace Biosciences, Inc., incorporated by reference to Exhibit 10.3 of the Company’s quarterly report on Form 10-Q for the quarter ended June 30, 2021, filed with the SEC on August 11, 2021. 10.79 Second Amendment to Secured Promissory Note dated June 24, 2021 with Ampersand 2018 Limited Partnership, incorporated by reference to Exhibit 99.1 of the Company’s Current Report on Form 8-K, filed with the SEC on June 29, 2021. 10.80 Second Amendment to Secured Promissory Note dated June 25, 2021 with 1315 Capital II, L.P., incorporated by reference to Exhibit 99.2 of the Company’s Current Report on Form 8-K, filed with the SEC on June 29, 2021. 10.81 Third Amendment to Secured Promissory Note dated August 31, 2021 with Ampersand 2018 Limited Partnership, incorporated by reference to Exhibit 99.1 of the Company’s Current Report on Form 8-K, filed with the SEC on August 31, 2021. 10.82 Third Amendment to Secured Promissory Note dated August 31, 2021 with 1315 Capital II, L.P., incorporated by reference to Exhibit 99.2 of the Company’s Current Report on Form 8-K, filed with the SEC on August 31, 2021. 10.83 Fourth Amendment to Secured Promissory Note dated September 29, 2021 with Ampersand 2018 Limited Partnership, incorporated by reference to Exhibit 99.1 of the Company’s Current Report on Form 8-K, filed with the SEC on October 1, 2021. 10.84 Fourth Amendment to Secured Promissory Note dated September 29, 2021 with 1315 Capital II, L.P., incorporated by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K, filed with the SEC on October 1, 2021. 10.85 Loan and Security Agreement by and between Comerica Bank, Interpace Biosciences, Inc., Interpace Diagnostics Corporation, Interpace Diagnostics, LLC and Interpace Pharma Solutions, Inc., dated October 13, 2021, incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K, filed with the SEC on October 19, 2021. 10.86 Subordination Agreement by and between Ampersand 2018 Limited Partnership, 1315 Capital II. L.P., Comerica Bank Interpace Biosciences, Inc., Interpace Diagnostics Corporation, Interpace Diagnostics, LLC and Interpace Pharma Solutions, Inc., dated October 13, 2021, incorporated by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K, filed with the SEC on October 19, 2021. 10.87 Loan and Security Agreement by and between BroadOak Fund V, L.P., Interpace Biosciences, Inc., Interpace Diagnostics Corporation, Interpace Diagnostics, LLC and Interpace Pharma Solutions, Inc., dated October 29, 2021, incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K, filed with the SEC on November 3, 2021. 88 Exhibit No. Description 10.88 First Amendment to Loan and Security Agreement by and between Comerica Bank, Interpace Biosciences, Inc., Interpace Diagnostics Corporation, Interpace Diagnostics, LLC and Interpace Pharma Solutions, Inc., dated November 1, 2021, incorporated by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K, filed with the SEC on November 3, 2021. 10.89 Subordination and Intercreditor Agreement by and between Comerica Bank, BroadOak Fund V, L.P., Interpace Biosciences, Inc., Interpace Diagnostics Corporation, Interpace Diagnostics, LLC and Interpace Pharma Solutions, Inc., dated as of November 1, 2021, incorporated by reference to Exhibit 10.3 of the Company’s Current Report on Form 8-K, filed with the SEC on November 3, 2021. 21.1 Subsidiaries of the Registrant, incorporated by reference to Exhibit 21.1 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, filed with the SEC on April 22, 2020, as amended from time to time. 23.1 Consent of BDO USA, LLP, filed herewith. 31.1 Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith. 31.2 Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith. 32.1 Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed herewith. 32.2 Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed herewith. * Denotes compensatory plan, compensation arrangement or management contract. ITEM 16. Form 10-K Summary The Company has opted to not provide a summary. 89 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. INTERPACE BIOSCIENCES, INC. Date: March 31, 2022 /s/ Thomas W. Burnell Thomas W. Burnell President and Chief Executive Officer Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed by the following persons on behalf of the registrant and in the capacities indicated and on the dates indicated. Name Title Date /s/ Thomas W. Burnell President, Chief Executive Officer and Director March 31, 2022 Thomas W. Burnell (Principal Executive Officer) /s/ Thomas Freeburg Chief Financial Officer and Treasurer March 31, 2022 Thomas Freeburg (Principal Financial and Accounting Officer) /s/ Stephen J. Sullivan Director March 31, 2022 Stephen J. Sullivan /s/ Joseph Keegan Director March 31, 2022 Joseph Keegan /s/ Vijay Aggarwal Director March 31, 2022 Vijay Aggarwal /s/ Robert Gorman Chairman of the Board of Directors March 31, 2022 Robert Gorman /s/ Edward Chan Director March 31, 2022 Edward Chan /s/ Fortunato Ron Rocca Director March 31, 2022 Fortunato Ron Rocca 90 Interpace Biosciences, Inc. Index to Consolidated Financial Statements and Financial Statement Schedules Page Report of Independent Registered Public Accounting Firm (BDO USA, LLP; Woodbridge, NJ; PCAOB ID # 243 ) F-2 Consolidated Financial Statements Consolidated Balance Sheets at December 31, 2021 and 2020 F-4 Consolidated Statements of Operations for the years ended December 31, 2021 and 2020 F-5 Consolidated Statements of Stockholders’ Deficit for the years ended December 31, 2021 and 2020 F-6 Consolidated Statements of Cash Flows for the years ended December 31, 2021 and 2020 F-7 Notes to Consolidated Financial Statements F-8 Schedule II. Valuation and Qualifying Accounts F-32 F- 1 Report of Independent Registered Public Accounting Firm Shareholders and Board of Directors Interpace Biosciences, Inc. Parsippany, New Jersey Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheets of Interpace Biosciences, Inc. and Subsidiaries (the “Company”) as of December 31, 2021 and 2020, the related consolidated statements of operations, stockholders’ deficit, and cash flows for each of the two years in the period ended December 31, 2021, and the related notes and schedules (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2021 , in conformity with accounting principles generally accepted in the United States of America. Going Concern Uncertainty The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the consolidated financial statements, the Company has suffered operating losses, has negative operating cash flows and is dependent upon its ability to generate profitable operations in the future and/or obtain additional financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. These conditions raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 3. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. F- 2 Revenue Recognition As described in Note 1 of the consolidated financial statements, the Company’s clinical services derive revenue from the performance of its proprietary assays or tests. The Company’s performance obligation is fulfilled upon the 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, 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. We identified revenue recognition related to the measurement of the Company’s clinical services revenue recognized for each specified test based on an estimated transaction price or NRV as a critical audit matter. The principal considerations for our determination included the following: (i) the judgment applied by management based on historical collection rates, (ii) the estimation of the amount of variable consideration using the expected value method based on historical experience, and (iii) the expected collection for each test, as the estimate is affected by assumptions in payor behavior such as changes in payor mix, payor collections, current customer contractual requirements, and experience with ultimate collection from the third-party payors Auditing these elements involved especially challenging auditor judgment due to the nature and extent of audit effort required to address these matters, including the extent of specialized skill or knowledge needed. The primary procedures we performed to address this critical audit matter included: ● Evaluating the consistency and reasonableness of management’s judgments and estimates of variable consideration utilizing the expected value method based on its historical experience in its calculation of net realizable value. ● Comparing the significant assumptions and inputs used by management to the Company’s fee schedule, third-party payor collection trends, and assessing the historical accuracy of the cash collections used in the Company’s revenue models and assessing the completeness of adjustments to estimates of future cash collections as a result of significant subsequent contract amendments, changes in collection trends and changes in payor behavior. We have served as the Company’s auditor since 2012. /s/ BDO USA, LLP Woodbridge, New Jersey March 31, 2022 F- 3 INTERPACE BIOSCIENCES, INC. CONSOLIDATED BALANCE SHEETS (in thousands, except share and per share data) December 31, December 31, 2021 2020 ASSETS Current assets: Cash and cash equivalents $ 3,064 $ 2,772 Restricted cash 250 600 Accounts receivable, net of allowance for doubtful accounts of $ 72 and $ 275 , respectively 6,158 8,028 Other current assets 2,694 2,722 Total current assets 12,166 14,122 Property and equipment, net 6,349 7,349 Other intangible assets, net 7,287 11,351 Goodwill 8,433 8,433 Operating lease right of use assets 4,032 4,384 Other long-term assets 160 42 Total assets $ 38,427 $ 45,681 LIABILITIES AND STOCKHOLDERS’ DEFICIT Current liabilities: Accounts payable $ 2,694 $ 4,511 Accrued salary and bonus 3,024 3,161 Other accrued expenses 9,198 9,795 Current liabilities from discontinued operations 766 766 Total current liabilities 15,682 18,233 Contingent consideration 1,383 1,818 Operating lease liabilities, net of current portion 3,154 3,540 Line of credit 1,500 - Note payable at fair value 7,942 - Other long-term liabilities 4,648 4,637 Total liabilities 34,309 28,228 Commitments and contingencies (Note 11) - - Preferred stock, $ .01 par value; 5,000,000 shares authorized, 47,000 Series B issued and outstanding 46,536 46,536 Stockholders’ deficit: Common stock, $ .01 par value; 100,000,000 shares authorized; 4,228,169 and 4,075,257 shares issued, respectively; 4,195,412 and 4,055,593 shares outstanding, respectively 403 402 Additional paid-in capital 186,106 184,404 Accumulated deficit ( 227,059 ) ( 212,116 ) Treasury stock, at cost ( 32,757 and 19,664 shares, respectively) ( 1,868 ) ( 1,773 ) Total stockholders’ deficit ( 42,418 ) ( 29,083 ) Total liabilities and stockholders’ deficit $ ( 8,109 ) $ ( 855 ) Total liabilities, preferred stock and stockholders’ deficit $ 38,427 $ 45,681 The accompanying notes are an integral part of these consolidated financial statements F- 4 INTERPACE BIOSCIENCES, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except for per share data) 2021 2020 For The Years Ended December 31, 2021 2020 Revenue, net $ 41,314 $ 32,398 Cost of revenue (excluding amortization of $ 4,064 and $ 4,461 , respectively) 23,369 21,673 Gross profit 17,945 10,725 Operating expenses: Sales and marketing 10,067 9,254 Research and development 1,882 2,795 General and administrative 13,669 18,192 Transition expense 2,585 2,578 Loss on DiamiR transaction 13 - Acquisition related amortization expense 4,064 4,461 Change in fair value of contingent consideration ( 338 ) ( 489 ) Total operating expenses 31,942 36,791 Operating loss ( 13,997 ) ( 26,066 ) Interest accretion expense ( 496 ) ( 549 ) Related party interest ( 424 ) - Other (expense) income, net ( 496 ) 467 Loss from continuing operations before tax ( 15,413 ) ( 26,148 ) (Benefit) provision for income taxes ( 667 ) 53 Loss from continuing operations ( 14,746 ) ( 26,201 ) Loss from discontinued operations, net of tax ( 197 ) ( 250 ) Net loss ( 14,943 ) ( 26,451 ) Less adjustment for preferred stock deemed dividend - ( 3,033 ) Net loss attributable to common stockholders $ ( 14,943 ) $ ( 29,484 ) Basic and diluted loss per share of common stock: From continuing operations $ ( 3.57 ) $ ( 7.26 ) From discontinued operations ( 0.04 ) ( 0.06 ) Net loss per basic and diluted share of common stock $ ( 3.61 ) $ ( 7.32 ) Weighted average number of common shares and common share equivalents outstanding: Basic 4,135 4,029 Diluted 4,135 4,029 The accompanying notes are an integral part of these consolidated financial statements F- 5 INTERPACE BIOSCIENCES, INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT (in thousands) For The Year Ended For The Year Ended December 31, 2021 December 31, 2020 Shares Amount Shares Amount Common stock: Balance at January 1 4,075 $ 402 3,932 $ 393 Common stock issued 9 - 37 1 Restricted stock issued 12 - 6 - Common stock issued through market sales - - 80 8 Common stock issued through ESPP 36 - - - Balance at March 31 4,132 402 4,055 402 Common stock issued 10 - - - Balance at June 30 4,142 402 4,055 402 Common stock issued 13 - 5 - Common stock issued through ESPP 39 1 - - Balance at September 30 4,194 403 4,060 402 Common stock issued 34 - 15 - Balance at December 31 4,228 403 4,075 402 Treasury stock: Balance at January 1 20 ( 1,773 ) 12 ( 1,721 ) Treasury stock purchased - - - - Balance at March 31 20 ( 1,773 ) 12 ( 1,721 ) Treasury stock purchased - - 7 ( 49 ) Balance at June 30 20 ( 1,773 ) 19 ( 1,770 ) Treasury stock purchased - - - - Balance at September 30 20 ( 1,773 ) 19 ( 1,770 ) Treasury stock purchased 13 ( 95 ) 1 ( 3 ) Balance at December 31 33 ( 1,868 ) 20 ( 1,773 ) Additional paid-in capital: Balance at January 1 184,404 182,514 Common stock issued 108 - Extinguishment of Series A Shares - ( 828 ) Beneficial Conversion Feature in connection with Series B Issuance - 2,205 Amortization of Beneficial Conversion Feature - ( 2,205 ) Common stock issued through market sales - 476 Stock-based compensation expense 286 418 Balance at March 31 184,798 182,580 Stock-based compensation expense 551 400 Balance at June 30 185,349 182,980 Common stock issued 226 - Stock-based compensation expense 477 563 Balance at September 30 186,052 183,543 Common stock issued through market sales, net of expenses - - Stock-based compensation expense 54 861 Balance at December 31 186,106 184,404 Accumulated deficit: Balance at January 1 ( 212,116 ) ( 185,665 ) Net loss ( 4,207 ) ( 6,494 ) Adoption of ASC 842 - - Balance at March 31 ( 216,323 ) ( 192,159 ) Net loss ( 3,446 ) ( 5,580 ) Balance at June 30 ( 219,769 ) ( 197,739 ) Net loss ( 3,561 ) ( 6,234 ) Balance at September 30 ( 223,330 ) ( 203,973 ) Net loss ( 3,729 ) ( 8,143 ) Balance at December 31 ( 227,059 ) ( 212,116 ) Total stockholders’ deficit $ ( 42,418 ) $ ( 29,083 ) The accompanying notes are an integral part of these consolidated financial statements F- 6 INTERPACE BIOSCIENCES, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) 2021 2020 For The Years Ended December 31, 2021 2020 Cash Flows From Operating Activities Net loss $ ( 14,943 ) $ ( 26,451 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 5,374 5,501 Interest accretion expense 496 549 Bad debt (recovery) expense ( 140 ) 585 Reversal of 2019 bonus accrual - ( 1,156 ) Mark to market on warrants 50 ( 61 ) Amortization of deferred financing fees 122 - Accrued interest - note payable 120 - Note payable fees 312 - Stock-based compensation 1,255 2,187 ESPP expense 113 55 Change in fair value of note payable ( 58 ) - Deferred income taxes 38 37 Loss on DiamiR transaction 13 - Change in fair value of contingent consideration ( 338 ) ( 489 ) Asset impairment - 37 Other gains and expenses, net ( 2 ) - Other changes in operating assets and liabilities: Decrease in accounts receivable 2,148 1,725 Decrease in other current assets 28 241 Increase in other long-term assets ( 118 ) - Decrease in accounts payable ( 1,817 ) ( 198 ) (Decrease) increase in accrued salaries and bonus ( 137 ) 1,976 (Decrease) increase in accrued liabilities ( 1,086 ) 1,395 (Decrease) increase in long-term liabilities ( 149 ) 88 Net cash used in operating activities ( 8,719 ) ( 13,979 ) Cash Flows From Investing Activity Purchase of property and equipment ( 354 ) ( 1,575 ) Sale of property and equipment 39 - Net cash used in investing activities ( 315 ) ( 1,575 ) Cash Flows From Financing Activities Issuance of common stock, net of expenses 335 434 Issuance of Series B preferred stock, net of expenses - 19,223 Loan proceeds - related parties 7,500 - Loan proceeds - BroadOak 8,000 - Loan expenses - BroadOak ( 312 ) - Payment of related party note and related interest ( 7,924 ) - Financing fees - related party ( 123 ) - Borrowings (payments) on Line of Credit 1,500 ( 3,000 ) Cash paid for repurchase of restricted shares - ( 52 ) Net cash provided by financing activities 8,976 16,605 Net (decrease) increase in cash, cash equivalents and restricted cash ( 58 ) 1,051 Cash, cash equivalents and restricted cash – beginning 3,372 2,321 Cash, cash equivalents and restricted cash – ending $ 3,314 $ 3,372 The accompanying notes are an integral part of these consolidated financial statements F- 7 1. Nature of Business and Significant Accounting Policies Nature of Business Interpace Biosciences, Inc. (“Interpace” or the “Company”) enables personalized medicine, offering specialized services along the therapeutic value chain from early diagnosis and prognostic planning to targeted therapeutic applications and pharma services. The Company provides molecular diagnostics, bioinformatics and pathology services for evaluation of risk of cancer by leveraging the latest technology in personalized medicine for improved patient diagnosis and management. The Company also provides pharmacogenomics testing, genotyping, biorepository and other specialized services to the pharmaceutical and biotech industries. The Company advances personalized medicine by partnering with pharmaceutical, academic, and technology leaders to effectively integrate pharmacogenomics into their drug development and clinical trial programs. Principles of Consolidation The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). The consolidated financial statements include the accounts of Interpace Biosciences, Inc. fka Interpace Diagnostics Group, Inc., Interpace Diagnostics Corporation, Interpace Diagnostics, LLC and Interpace Pharma Solutions, Inc. fka Interpace Biopharma, Inc. Discontinued operations include the Company’s wholly-owned subsidiaries: Group DCA, LLC (“Group DCA”), InServe Support Solutions (Pharmakon), and TVG, Inc. (TVG, dissolved December 31, 2014) and its Commercial Services (“CSO”) business unit. All significant intercompany balances and transactions have been eliminated in consolidation. The Company has one reporting segment: the Company’s clinical and pharma services business. The Company’s current reporting segment structure is reflective of the way the Company’s management views the business, makes operating decisions and assesses performance. This structure allows investors to better understand Company performance, better assess prospects for future cash flows, and make more informed decisions about the Company. Accounting Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts of assets and liabilities reported and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management’s estimates are based on historical experience, facts and circumstances available at the time, and various other assumptions that are believed to be reasonable under the circumstances. Significant estimates include accounting for valuation allowances related to deferred income taxes, contingent consideration, allowances for doubtful accounts and notes, revenue recognition, unrecognized tax benefits, and asset impairments involving other intangible assets. The Company periodically reviews these matters and reflects changes in estimates as appropriate. Actual results could materially differ from those estimates. Reverse stock split On January 15, 2020, the Company effected a one-for-ten reverse split of its issued and outstanding shares of its common stock (the “Reverse Stock 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 . The Company’s issued and outstanding stock decreased from 39,323,701 to 3,932,370 and 39,205,895 to 3,920,589 at December 31, 2019. All information related to common stock, stock options, restricted stock units, warrants and earnings per share have been retroactively adjusted to give effect to the reverse stock split for all periods presented. F- 8 Cash and Cash Equivalents Cash and cash equivalents include unrestricted cash accounts, money market investments and highly liquid investment instruments with original maturity of three months or less at the date of purchase. Accounts Receivable, Net The Company’s accounts receivables represent unconditional rights to consideration and are generated using its proprietary tests and pharma services. The Company’s clinical services are fulfilled upon completion of the test, review and release of the test results. In conjunction with fulfilling these services, the Company bills the third-party payer or direct-bill payer. Contractual adjustments represent the difference between the list prices and the reimbursement rates set by third party payers, including Medicare, commercial payers, and amounts billed to direct-bill payers. Specific accounts may be written off after several appeals, which in some cases may take longer than twelve months. Pharma services represent, primarily, the performance of laboratory tests in support of clinical trials for pharma services customers. The Company bills these services directly to the customer. Other current assets Other current assets consisted of the following as of December 31, 2021 and 2020: Schedule of Current Assets December 31, 2021 December 31, 2020 Lab supply inventory $ 1,786 $ 2,052 Prepaid expenses 800 625 Other 108 45 Total other current assets $ 2,694 $ 2,722 Property and Equipment, net Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization is recognized on a straight-line basis, using the estimated useful lives of: seven to twelve years for furniture and fixtures; two to five years for office and computer equipment; three to twelve years for lab equipment; and leasehold improvements are amortized over the shorter of the estimated service lives or the terms of the related leases which are currently three to ten years . Repairs and maintenance are charged to expense as incurred. Upon disposition, the asset and related accumulated depreciation and amortization are removed from the related accounts and any gains or losses are reflected in operations. Software Costs Internal-Use Software - It is the Company’s policy to capitalize certain costs incurred in connection with developing or obtaining internal-use software. Capitalized software costs are included in property and equipment on the consolidated balance sheet and amortized over the software’s useful life, generally three to seven years . Software costs that do not meet capitalization criteria are expensed immediately. External-Use Software - It is the Company’s policy to capitalize certain costs incurred in connection with developing or obtaining external-use software. Capitalized software costs are included in property and equipment on the consolidated balance sheet and amortized over the software’s useful life, generally three years . Software costs that do not meet capitalization criteria are expensed immediately. See Note 6, Property and Equipment , for further information. Long-Lived Assets, including Finite-Lived Intangible Assets Finite-lived intangible assets are stated at cost less accumulated amortization. Amortization of finite-lived acquired intangible assets is recognized on a straight-line basis, using the estimated useful lives of the assets of approximately two years to ten years in acquisition related amortization expense in the Consolidated Statements of Operations. F- 9 The Company reviews 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. As 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 basis. It was determined that the carrying value of the asset was in excess of the undiscounted cash flows as of December 31, 2016. As a result, the Company performed a formal valuation of the asset on a discounted basis in order to measure the related impairment. Contingencies In the normal course of business, the Company is 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 is reasonably estimable, 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 the Company determines that a loss is not probable, but is reasonably possible, and it becomes possible to develop what the Company believes to be a reasonable range of possible loss, then the Company 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, the Company 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. The Company is not currently involved in any legal proceedings of a material nature and, accordingly, the Company has not accrued estimated costs related to any legal claims. Revenue Recognition Our clinical services derive its revenues from the performance of its proprietary assays or tests. The Company’s performance obligation is fulfilled upon the 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 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. For 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 will adjust the estimates of contractual allowances, which would affect net revenue in the period such variances become known. F- 10 For our pharma services, 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. The Company elected the practical expedient to expense contract costs as incurred related to clinical services because the contract term is less than one year. Contract costs for pharma services were not significant. Deferred Revenue For 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. Cost of revenue Cost of revenue consists primarily of the costs associated with operating our laboratories and other costs directly related to our tests. Personnel costs, which constitute the largest portion of cost of services, include all labor related costs, such as salaries, bonuses, fringe benefits and payroll taxes for laboratory personnel. Other direct costs include, but are not limited to, laboratory supplies, certain consulting expenses, royalty expenses, and facility expenses. Stock-Based Compensation The compensation cost associated with the granting of stock-based awards is based on the grant date fair value of the stock award. The Company recognizes 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. The Company primarily uses the Black-Scholes option-pricing model to determine the fair value of stock options. The determination of the fair value of stock-based payment awards is made on the date of grant and is affected by the Company’s stock price as well as assumptions made regarding a number of complex and subjective variables. These assumptions include: 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. The fair value of restricted stock units, or RSUs, and restricted shares is equal to the closing stock price on the date of grant. In 2020, the Company issued performance-based options and RSUs based on achieving stock price or certain other financial metrics. These require the Company to assess the likelihood of achieving certain performance milestones on a quarterly basis. In these instances, the Company has the initial valuation model prepared by an outside expert. See Note 15, Stock-Based Compensation, for further information. Treasury Stock Treasury stock purchases are accounted for under the cost method whereby the entire cost of the acquired stock is recorded as treasury stock. Upon reissuance of shares, the Company records any difference between the weighted-average cost of such shares and any proceeds received as an adjustment to additional paid-in capital. Leases The 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 term. 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. Our 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 8, Leases . F- 11 Income taxes Income taxes are based on income for financial reporting purposes calculated using the Company’s 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. Any interest or penalties on income tax are recognized as a component of income tax expense. The Company accounts 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 the Company’s 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. The Company operates in multiple tax jurisdictions and pays or provides for the payment of taxes in each jurisdiction where it conducts business and is subject to taxation. The breadth of the Company’s operations and the complexity of the tax law require assessments of uncertainties and judgments in estimating the ultimate taxes the Company 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. Uncertain tax positions are recognized in the financial statements when it is more likely than not (i.e., 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 . The Company adjusts accruals for unrecognized tax benefits as facts and circumstances change, such as the progress of a tax audit. However, any adjustments made may be material to the Company’s 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. Significant judgment is also required in evaluating the need for and magnitude of appropriate valuation allowances against deferred tax assets. Deferred tax assets are regularly reviewed for recoverability. The Company currently has significant deferred tax assets resulting from net operating loss carryforwards and deductible temporary differences, which should reduce taxable income in future periods, if generated. The realization of these assets is dependent on generating future taxable income. Income (Loss) per Share Basic earnings per common share are computed by dividing net income by the weighted average number of shares outstanding during the year including any unvested share-based payment awards that contain nonforfeitable rights to dividends. Diluted earnings per common share are computed by dividing net income by the sum of the weighted average number of shares outstanding and dilutive common shares under the treasury method. Unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents (whether paid or unpaid), are participating securities and are included in the computation of earnings per share pursuant to the two-class method. As a result of the losses incurred in both 2021 and 2020, the potentially dilutive common shares have been excluded from the earnings per share computation for these periods because its inclusion would have been anti-dilutive. Additionally, preferred shares have been excluded in the denominator of the earnings per share computation, on an if-converted basis, as such shares would have been anti-dilutive. F- 12 2. Recent Accounting Standards Recently Adopted Accounting Guidance In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”). ASU 2019-12 will simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The amendments also improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. The amendment was effective for annual periods beginning after December 15, 2020. The Company adopted this pronouncement on January 1, 2021 and the impact was not material to the Company’s Consolidated Financial Statements. Accounting Pronouncements Pending Adoption In February 2020, the FASB issued ASU 2020-02, Financial Instruments-Credit Losses (Topic 326) and Leases (Topic 842) - Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 119 and Update to SEC Section on Effective Date Related to Accounting Standards Update No. 2016-02, Leases (Topic 842) which amends the effective date of the original pronouncement for smaller reporting companies. ASU 2016-13 and its amendments will be effective for the Company for interim and annual periods in fiscal years beginning after December 15, 2022. The Company believes the adoption will modify the way the Company analyzes financial instruments, but it does not anticipate a material impact on results of operations. The Company is in the process of determining the effects adoption will have on its consolidated financial statements. In August 2020, the FASB issued ASU 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815 – 40), (“ASU 2020-06”). ASU 2020-06 simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. The ASU2020-06 amendments are effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Company does not expect this will have any impact on its unaudited consolidated financial statements. 3. Going Concern The accompanying consolidated financial statements have been prepared on a basis that assumes that the Company will continue as a going concern and that contemplates the continuity of operations, the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. Accordingly, the accompanying consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts of liabilities that might result from the outcome of this uncertainty. For the fiscal year ended December 31, 2021, we had an operating loss of $ 14.0 million. As of December 31, 2021, we had cash, cash equivalents and restricted cash of $ 3.3 million, total current assets of $ 12.2 million and current liabilities of $ 15.7 million. As of March 18, 2022, we had approximately $ 2.7 million of cash on hand, excluding restricted cash. In January 2022, the Company announced that CMS issued a new billing policy whereby CMS will no longer reimburse for the use of the Company’s ThyGeNEXT ® and ThyraMIR ® tests when billed together by the same provider/supplier for the same beneficiary on the same date of service. On February 28, 2022, the Company announced that the National Correct Coding Initiative (NCCI) program issued a response on behalf of CMS stating that the January 2022 billing policy reimbursement change for ThyGeNEXT ® (0245U) and ThyraMIR ® (0018U) tests has been retroactively reversed to January 1, 2022. CMS is currently reimbursing the Company for one of its two thyroid tests, and has agreed to retroactively reimburse for the second test once they have completed their internal administrative adjustments. We have been notified by CMS/NCCI that processing of claims for dates of service after January 1, 2022 will be completed beginning July 1, 2022. As of the date of this filing, the Company has not yet realized the full cash collection benefit of current and retroactive Thyroid testing and such cash collections may be temporarily reduced or delayed until we resolved the matter with CMS. As of the date of this Report, the Company currently anticipates that current cash and cash equivalents will be insufficient to meet its anticipated cash requirements through the next twelve months. These factors raise substantial doubt about the Company’s ability to continue as a going concern. On January 7, 2021, the Company entered into secured promissory notes in the amount of $ 3 million and $ 2 million with Ampersand (“Ampersand Note”) and 1315 Capital (“1315 Capital Note”), respectively. See Note 13, Notes Payable, of the notes to the financial statements. On May 10, 2021, the Company amended the Ampersand Note to increase the principal amount to $ 4.5 million and amended the 1315 Capital Note to increase the principal amount to $ 3.0 million. The maturity dates of the Notes were 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. On June 24, 2021, the Company and Ampersand amended the Ampersand Note to change its maturity date to the earlier of (a) August 31, 2021 and (b) the date on which all amounts become due upon the occurrence of any event of default as defined in the Ampersand Note. On June 25, 2021, the Company and 1315 Capital amended the 1315 Capital Note to change its maturity date in a similar manner. On August 31, 2021, the Company and Ampersand amended the Ampersand Note to change its maturity date to the earlier of (a) September 30, 2021 and (b) the date on which all amounts become due upon the occurrence of any event of default as defined in the Ampersand Note. On August 31, 2021, the Company and 1315 Capital amended the 1315 Capital Note to change its maturity date in a similar manner. F- 13 On September 29, 2021, the Company and Ampersand amended the Ampersand Note to change its maturity date to the earlier of (a) October 31, 2021 and (b) the date on which all amounts become due upon the occurrence of any event of default as defined in the Ampersand Note. On September 29, 2021, the Company and 1315 Capital amended the 1315 Capital Note to change its maturity date in a similar manner. In October 2021, the Company entered into a $ 7.5 million revolving credit facility with Comerica. See Note 19, Revolving Line of Credit , for more details. In addition, also in October 2021, the Company entered into the $ 8.0 million BroadOak Term Loan, the proceeds of which were used to repay in full at their maturity the notes extended by Ampersand and 1315 Capital discussed above. See Note 13, Notes Payable, for more details. Although the Company is targeting to achieve adjusted EBITDA and cash flow breakeven during Fiscal 2022, we may not generate positive cash flows from operations for the year ending December 31, 2022. We intend to meet our ongoing capital needs by using our available cash and availability under the Comerica Loan Agreement, as well as through revenue growth and margin improvement; collection of accounts receivable; containment of costs; and the potential use of other financing options. However, if we are unable to meet the financial covenants under the Comerica Loan Agreement, the revolving line of credit and notes payable will become due and payable immediately. The Company is exploring various dilutive and non-dilutive sources of funding, including equity and debt financings, strategic alliances, business development and other sources in order to provide additional liquidity and expand the business through acquisitions or other strategic transactions. With the Company’s delisting from Nasdaq in February 2021, its ability to raise additional capital on terms acceptable to the Company may be adversely impacted. There can be no assurance that the Company will be successful in obtaining such funding on terms acceptable to the Company. In January 2022, the Company’s registration statement for a rights offering become effective. The rights offering was subsequently terminated in January 2022. 4. Discontinued Operations The Company accounts for business dispositions and its businesses held for sale in accordance with ASC 205-20, Discontinued Operations. ASC 205-20 requires the results of operations of business dispositions to be segregated from continuing operations and reflected as discontinued operations in current and prior periods. The components of liabilities classified as discontinued operations relate to Commercial Services and consist of the following as of December 31, 2021 and December 31, 2020: Schedule of Discontinued Operations December 31, 2021 December 31, 2020 Accrued liabilities $ 766 $ 766 Current liabilities from discontinued operations 766 766 Total liabilities $ 766 $ 766 The table below presents the significant components of CSO, Group DCA’s, Pharmakon’s and TVG’s results included within loss from discontinued operations, net of tax in the consolidated statements of operations for the years ended December 31, 2021 and 2020. 2021 2020 Years Ended December 31, 2021 2020 Income from discontinued operations, before tax $ - $ - Income tax expense 197 250 Loss from discontinued operations, net of tax $ ( 197 ) $ ( 250 ) F- 14 5. Fair Value Measurements Cash and cash equivalents, accounts receivable, and accounts payable approximate fair value due to their relative short-term nature. The Company’s financial liabilities reflected at fair value in the consolidated financial statements include contingent consideration, notes payable, and warrant liability. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In determining fair value, the Company uses various methods including market, income and cost approaches. Based on these approaches, the Company often utilizes certain assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and/or the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market-corroborated, or generally unobservable inputs. The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. Based upon observable inputs used in the valuation techniques, the Company is required to provide information according to the fair value hierarchy. The fair value hierarchy ranks the quality and reliability of the information used to determine fair values into three broad levels as follows: Level 1: Valuations for assets and liabilities traded in active markets from readily available pricing sources for market transactions involving identical assets or liabilities. Level 2: Valuations for assets and liabilities traded in less active dealer or broker markets. Valuations are obtained from third-party pricing services for identical or similar assets or liabilities. Level 3: Valuations for assets and liabilities include certain unobservable inputs in the assumptions and projections used in determining the fair value assigned to such assets or liabilities. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. The valuation methodologies used for the Company’s financial instruments measured on a recurring basis at fair value, including the general classification of such instruments pursuant to the valuation hierarchy, is set forth in the tables below. Schedule of Financial Instrument Measured on Recurring Basis As of December 31, 2021 Fair Value Measurements Carrying Fair As of December 31, 2021 Amount Value Level 1 Level 2 Level 3 Liabilities: Contingent consideration: Asuragen $ 1,871 $ 1,871 $ - $ - $ 1,871 Other accrued expenses: Warrant liability 71 71 - - 71 Note payable: BroadOak loan 7,942 7,942 - - 7,942 $ 9,884 $ 9,884 $ - $ - $ 9,884 F- 15 As of December 31, 2020 Fair Value Measurements Carrying Fair As of December 31, 2020 Amount Value Level 1 Level 2 Level 3 Liabilities: Contingent consideration: Asuragen $ 2,216 $ 2,216 $ - $ - $ 2,216 Other long-term liabilities: Warrant liability 21 21 - - 21 $ 2,237 $ 2,237 $ - $ - $ 2,237 In connection with the acquisition of certain assets from Asuragen, the Company recorded contingent consideration related to contingent payments and other revenue-based payments. The Company determined the fair value of the contingent consideration based on a probability-weighted income approach derived from revenue estimates. The fair value measurement is based on significant inputs not observable in the market and thus represents a Level 3 measurement. In connection with the BroadOak loan, the Company records the loan at fair value. The fair value of the loan is determined by a probability-weighted approach regarding the loan’s change in control feature. See Note 13, Notes Payable, for more details. The fair value measurement is based on the estimated probability of a change in control and thus represents a Level 3 measurement. Schedule of Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation Adjustment Accretion/ to Fair Value/ December 31, 2020 Loan Received Payments Interest Accrued Mark to Market December 31, 2021 Asuragen $ 2,216 - $ ( 503 ) $ 496 $ ( 338 ) $ 1,871 Underwriters Warrants 21 - - - 50 71 BroadOak Loan - 8,000 - - ( 58 ) 7,942 $ 2,237 $ 8,000 $ ( 5 03 ) $ 496 $ ( 346 ) $ 9,884 Certain of the Company’s non-financial assets, such as other intangible assets are measured at fair value on a nonrecurring basis when there is an indicator of impairment and recorded at fair value only when an impairment charge is recognized. 6. Property and Equipment Property and equipment consisted of the following as of December 31, 2021 and 2020: Schedule of Property and Equipment 2021 2020 December 31, 2021 2020 Furniture and fixtures $ 339 $ 339 Lab and office equipment 7,837 7,536 Computer equipment 331 339 Internal-use software 1,572 1,572 Leasehold improvements 506 505 Property and equipment 10,585 10,291 Less accumulated depreciation and amortization ( 4,236 ) ( 2,942 ) Net property and equipment $ 6,349 $ 7,349 Depreciation and amortization expense from continuing operations was approximately $ 1.2 million and $ 0.8 million for the years ended December 31, 2021 and 2020, respectively. There was internal-use software amortization expense included in depreciation and amortization expense in 2021 of approximately $ 0.3 million. As of December 31, 2021, capitalized external-use software was fully amortized. F- 16 7. Goodwill and Other Intangible Assets Goodwill is attributable to the acquisition of the Biopharma business from CGI in July 2019. The carrying value of the intangible assets acquired was $ 15.6 million, with goodwill of approximately $ 8.3 million and identifiable intangible assets of approximately $ 7.3 million. The goodwill balance at December 31, 2021 was $ 8.4 million. The net carrying value of the identifiable intangible assets as of December 31, 2021 and December 31, 2020 is as follows: Schedule of Identifiable Intangible Assets Carrying Value As of December 31, 2021 As of December 31, 2020 Life Carrying Carrying (Years) Amount Amount Asuragen acquisition: Thyroid 9 $ 8,519 $ 8,519 RedPath acquisition: Pancreas test 7 16,141 16,141 Barrett’s test 9 6,682 6,682 BioPharma acquisition: Trademarks 10 1,600 1,600 Customer relationships 8 5,700 5,700 CLIA Lab 2.3 $ 609 $ 609 Total $ 39,251 $ 39,251 Accumulated Amortization $ ( 31,964 ) $ ( 27,900 ) Net Carrying Value $ 7,287 $ 11,351 The following table displays a roll forward of the carrying amount of goodwill from January 1, 2020 to December 31, 2021: Schedule of Goodwill Carrying Value Carrying Amount Balance as of January 1, 2020 $ 8,433 Adjustments - Balance as of December 31, 2020 $ 8,433 Adjustments - Balance as of December 31, 2021 $ 8,433 Amortization expense was approximately $ 4.1 million and $ 4.5 million for the years ended December 31, 2021 and 2020, respectively. Estimated amortization expense for the next five years is as follows: Schedule of Future Estimated Amortization Expense 2022 2023 2024 2025 2026 $ 2,143 $ 1,734 $ 873 $ 873 $ 873 F- 17 8. Leases Finance lease assets are included in fixed assets, net of accumulated depreciation. The table below presents the lease-related assets and liabilities recorded in the Condensed Consolidated Balance Sheet: Schedule of Financing and Operating Leases Classification on the Balance Sheet December 31, 2021 Assets Financing lease assets Property and equipment, net $ 636 Operating lease assets Operating lease right of use assets 4,032 Total lease assets $ 4,668 Liabilities Current Financing lease liabilities Other accrued expenses $ 79 Operating lease liabilities Other accrued expenses 1,041 Total current lease liabilities $ 1,120 Noncurrent Financing lease liabilities Other long-term liabilities 59 Operating lease liabilities Operating lease liabilities, net of current portion 3,154 Total long-term lease liabilities 3,213 Total lease liabilities $ 4,333 The weighted average remaining lease term for the Company’s operating leases was 6.4 years as of December 31, 2021 and 7.1 years as of December 31, 2020 and the weighted average discount rate for those leases was 6.5 % and 6.0 % as of December 31, 2021 and December 31, 2020, respectively. The Company’s operating lease expenses are recorded within “Cost of revenue” and “General and administrative expenses.” The table below reconciles the undiscounted cash flows to the lease liabilities recorded on the Company’s Consolidated Balance Sheet as of December 31, 2021: Schedule of Maturities of Operating and Financing Lease Liabilities Operating Leases Financing Leases 2022 $ 1,295 $ 86 2023 897 60 2024 567 - 2025 402 - 2026-2030 1,924 - Total minimum lease payments 5,085 146 Less: amount of lease payments representing effects of discounting 890 8 Present value of future minimum lease payments 4,195 138 Less: current obligations under leases 1,041 79 Long-term lease obligations $ 3,154 $ 59 F- 18 9. Retirement Plans The Company offers an employee 401(k) saving plan. Under the Interpace Biosciences, Inc. 401(k) Plan, employees may contribute up to 50 % of their pre- or post-tax base compensation. The Company currently offers a safe harbor matching contribution equal to 100 % of the first 3 % of the participant’s contributed base salary plus 50 % of the participant’s base salary contributed exceeding 3 % but not more than 5 % . Participants are not allowed to invest any of their 401(k) funds in the Company’s common stock. The Company’s total contribution expense from continuing operations related to the 401(k) plan for the years ended December 31, 2021 and December 31, 2020 was approximately $ 0.3 million and $ 0.4 million, respectively. 10. Accrued Expenses and Other Long-Term Liabilities Other accrued expenses consisted of the following as of December 31, 2021 and 2020: Schedule of Other Accrued Expenses December 31, 2021 December 31, 2020 Accrued royalties $ 3,890 $ 2,710 Contingent consideration 488 398 Upfront Medicare payment - 2,066 Operating lease liability 1,041 1,027 Financing lease liability 79 177 Deferred revenue 40 54 Interest payable 120 - Warrant liability 71 - Accrued sales and marketing - diagnostics 47 51 Accrued lab costs - diagnostics 228 161 Accrued professional fees 932 854 Taxes payable 245 334 Unclaimed property 565 565 All others 1,452 1,398 Total other accrued expenses $ 9,198 $ 9,795 Other long-term liabilities consisted of the following as of December 31, 2021 and 2020: Schedule of Long Term Liabilities December 31, 2021 December 31, 2020 Warrant liability $ - $ 21 Uncertain tax positions 4,577 4,342 Deferred revenue 13 136 Other 58 138 Total other long-term liabilities $ 4,648 $ 4,637 11. Commitments and Contingencies The Company leases facilities and certain equipment under agreements classified as operating leases, which expire at various dates through May 2030 . Substantially all of the property leases provide for increases based upon use of utilities and landlord’s operating expenses as well as pre-defined rent escalations. Total expense from continuing operations under these agreements for the years ended December 31, 2021 and 2020 was approximately $ 1.2 million and $ 2.1 million, respectively. F- 19 As of December 31, 2021, 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: Schedule of Future Minimum Lease Payments Under Non-Cancelable Leases Less than 1 to 3 3 to 5 After Total 1 Year Years Years 5 Years Operating lease obligations $ 5,085 $ 1,295 $ 1,464 $ 816 $ 1,510 Total $ 5,085 $ 1,295 $ 1,464 $ 816 $ 1,510 Litigation Due to the nature of the businesses in which the Company is engaged it is subject to certain risks. Such risks include, among others, risk of liability for personal injury or death to persons using products the Company promotes or commercializes. There can be no assurance that substantial claims or liabilities will not arise in the future due to the nature of the Company’s business activities and recent increases in litigation related to healthcare products. The Company could also be held liable for errors and omissions of its employees in connection with the services it performs that are outside the scope of any indemnity or insurance policy. The Company could be materially adversely affected if it were required to pay damages or incur defense costs in connection with a claim that is outside the scope of an indemnification agreement; if the indemnity, although applicable, is not performed in accordance with its terms; or if the Company’s liability exceeds the amount of applicable insurance or indemnity. 12. Equity Preferred Stock Issuance: Securities Purchase and Exchange Agreement On January 10, 2020, the Company entered into a Securities Purchase and Exchange Agreement (the “Securities Purchase and Exchange Agreement”) with 1315 Capital and Ampersand (collectively, the “Investors”) pursuant to which the Company agreed to sell to the Investors an aggregate of $ 20.0 million in Series B Preferred Stock of the Company, at an issuance price per share of $ 1,000 . Pursuant to the Securities Purchase and Exchange Agreement, 1315 Capital agreed to purchase 19,000 shares of Series B Preferred Stock at an aggregate purchase price of $ 19.0 million and Ampersand agreed to purchase 1,000 shares of Series B Preferred Stock at an aggregate purchase price of $ 1.0 million. In addition, the Company agreed to exchange $ 27.0 million of the Company’s existing Series A convertible preferred stock, par value $ 0.01 per share, held by Ampersand (the “Series A Preferred Stock”), represented by 270 shares of Series A Preferred Stock with a stated value of $ 100,000 per share, which represents all of the Company’s issued and outstanding Series A Preferred Stock, for 27,000 newly issued shares of Series B Preferred Stock (such shares of Series B Preferred Stock, the “Exchange Shares” and such transaction, the “Exchange”). Following the Exchange, no shares of Series A Preferred Stock remained designated, authorized, issued or outstanding. The Series B Preferred Stock has a conversion price of $ 6.00 as compared to a conversion price of $ 8.00 on the Series A Preferred Stock, but did not include certain rights applicable to the Series A Preferred Stock, including a six-percent ( 6 %) dividend and a conversion price adjustment for any failure by the Company to achieve a revenue target of $ 34.0 million in 2020 related to its clinical services or a weighted-average anti-dilution adjustment. Under the terms of the Securities Purchase and Exchange Agreement, Ampersand also agreed to waive all dividends and weighted-average anti-dilution adjustments accrued to date on the Series A Preferred Stock. F- 20 A convertible financial instrument includes a beneficial conversion feature if its conversion price is lower than the Company’s stock price at the commitment date. The Company determined that the sale of the Series B Preferred resulted in a beneficial conversion feature with an intrinsic value of $ 2.2 million, which the Company recorded as a reduction to additional paid-in capital upon the sale of the Series B Preferred stock. The Company calculated the intrinsic value of the beneficial conversion feature as the difference between the estimated fair value of the Common Stock on January 15, 2020 of $ 6.79 per share and the effective conversion price per share of $ 6.00 multiplied by the number of shares of common stock issuable upon conversion. The Company fully amortized the beneficial conversion feature during the three months ended March 31, 2020 in accordance with GAAP. The beneficial conversion feature resulted in an increase in the loss attributable to common shareholders for the three months ended March 31, 2020 in the Condensed Consolidated Statement of Operations, as it represented a deemed dividend to the preferred shareholders. In April 2020, the Company entered into support agreements with each of the Series B Investors, pursuant to which Ampersand and 1315 Capital, respectively, consented to, and agreed to vote (by proxy or otherwise), all shares of Series B Preferred Stock registered in its name or beneficially owned by it and/or over which it exercises voting control as of the date of the Support Agreement and any other shares of Series B Preferred Stock legally or beneficially held or acquired by such Series B Investor after the date of the Support Agreement or over which it exercises voting control, in favor of any Fundamental Action desired to be taken by the Company as determined by the Board. For purposes of each Support Agreement, “Fundamental Action” means any action proposed to be taken by the Company and set forth in Section 4(d)(i), 4(d)(ii), 4(d)(v), 4(d)(vi), 4(d)(viii) or 4(d)(ix) of the Certificate of Designation of Series B Preferred Stock or Section 8.5.1.1, 8.5.1.2, 8.5.1.5, 8.5.1.6, 8.5.1.8 or 8.5.1.9 of the Amended and Restated Investor Rights Agreement. The support agreement between the Company and Ampersand was terminated by mutual agreement on July 9, 2020; however, the support agreement entered into with 1315 Capital remains in effect. During October 2021, Ampersand and 1315 Capital provided consent to the Company to enter into the Comerica Loan Agreement and the BroadOak Term Loan. As of December 31, 2021 and 2020, there were 47,000 Series B issued and outstanding shares of preferred stock, respectively. 13. Notes Payable BroadOak Loan and Repayment of Promissory Notes On October 29, 2021, the Company and its subsidiaries entered into a Loan and Security Agreement (the “BroadOak Loan Agreement”) with BroadOak, providing for a term loan in the aggregate principal amount of $ 8,000,000 (the “Term Loan”). Funding of the Term Loan took place on November 1, 2021. The Term Loan matures upon the earlier of (i) October 31, 2024 or (ii) the occurrence of a change in control, and bears interest at the rate of 9 % per annum. The Term Loan is secured by a security interest in substantially all of the Company’s and its subsidiaries’ assets and is subordinate to the Company’s recently established $ 7,500,000 revolving credit facility with Comerica Bank. The Term Loan has an origination fee of 3 % of the Term Loan amount, and a terminal payment equal to (i) 15% of the original principal amount of the Term Loan if the change of control occurs on or prior to the first anniversary of the funding of the Term Loan, (ii) 20% of the original principal amount of the Term Loan if the change of control occurs after the first anniversary but on or prior to the second anniversary of the funding of the Term Loan and (iii) 30% of the original principal amount of the Term Loan if the change of control occurs after the second anniversary of the funding of the Term Loan, or if the Term Loan is repaid on its maturity date . The BroadOak Loan Agreement contains affirmative and negative restrictive covenants that are applicable from and after the date of the Term Loan advance. These restrictive covenants, which include restrictions on certain mergers, acquisitions, investments, encumbrances, etc., could adversely affect our ability to conduct our business. The BroadOak Loan Agreement also contains customary events of default. In connection with the BroadOak Loan Agreement, the Company and its subsidiaries entered into that certain First Amendment to Loan and Security Agreement and Consent with Comerica, dated as of November 1, 2021 (the “Comerica Amendment”), pursuant to which Comerica consented to the Company’s and its subsidiaries’ entry into the BroadOak Loan Agreement, and amended that certain Loan and Security Agreement among Comerica, the Company and its subsidiaries (the “Comerica Loan Agreement”) to, among other things, permit the indebtedness, liens and encumbrances contemplated by the BroadOak Loan Agreement. F- 21 As a condition for BroadOak to extend the Term Loan to the Company and its subsidiaries, the Company’s existing creditor, Comerica, and BroadOak entered into that certain Subordination and Intercreditor Agreement, dated as of November 1, 2021, pursuant to which BroadOak agreed to subordinate all of the indebtedness and obligations of the Company and its subsidiaries owing to BroadOak to all of the indebtedness and obligations of the Company and its subsidiaries owing to Comerica (the “Intercreditor Agreement”). BroadOak further agreed to subordinate all of its respective security interests in assets or property of the Company and its subsidiaries to Comerica’s security interests in such assets or property. The Intercreditor Agreement provides that it is solely for the benefit of BroadOak and Comerica and is not for the benefit of the Company or any of its subsidiaries. The Company concluded that the Note met the definition of a “recognized financial liability” which is an acceptable financial instrument eligible for the fair value option under ASC 825-10-15-4, and did not meet the definition of any of the financial instruments listed within ASC 825-10-15-5 that are not eligible for the fair value option. The Note is not convertible and does not have any component recorded to shareholders’ equity. Accordingly, the Company elected the fair value option for the Note. Secured Promissory Notes – Related Parties On 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”). Ampersand holds 28,000 shares of the Company’s Series B Convertible Preferred Stock, which are convertible from time to time into an aggregate of 4,666,666 shares of our Common Stock, and 1315 Capital holds 19,000 shares of the Company Series B Convertible Preferred Stock, which are convertible from time to time into an aggregate of 3,166,668 shares of our Common Stock. On an as-converted basis, such shares would represent approximately 38.7 % and 26.3 % of our fully-diluted shares of Common Stock, respectively. In addition, pursuant to the terms of the Series B Convertible Preferred Stock certificate of designation and an amended and restated investor rights agreement among the Company and Ampersand and 1315 Capital, they each have the right to (1) approve certain of our actions, including our borrowing of money and any public offering of securities, and (2) designate two directors to our Board of Directors; provided, that certain of such rights held by 1315 Capital have been delegated pursuant to the related Support Agreement (See Note 12, Equity ). As a result, the Company considers the Notes and Security Agreement to be a related party transaction. The rate of interest on the Notes was equal to eight percent ( 8.0 %) per annum and their maturity date was 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. No interest payments were due on the Notes until their maturity date. All payments on the Notes were pari passu. On May 10, 2021, (i) the Company and Ampersand amended the Ampersand Note to increase its principal amount to $ 4.5 million, (ii) the Company and 1315 Capital amended the 1315 Capital Note to increase its principal amount to $ 3.0 million and (iii) the Company and Ampersand amended the Security Agreement to include the new total principal amount of the Notes of $ 7.5 million. The maturity date of the Notes remained the earlier of June 30, 2021 and the date on which all amounts become due upon the occurrence of any event of default and the interest rate remained 8 %, and except with respect to their respective principal amounts, the terms of the Notes and the Security Agreement were otherwise unchanged. On June 24, 2021, August 31, 2021, and September 29, 2021, the Company and Ampersand amended the Ampersand Note to change its maturity date to the earlier of (a) August 31, 2021, September 30, 2021, and October 31, 2021, respectively and (b) the date on which all amounts become due upon the occurrence of any event of default as defined in the Ampersand Note. On June 25, 2021, August 31, 2021, and September 29, 2021, the Company and 1315 Capital amended the 1315 Capital Note to change its maturity date in a similar manner. Except with respect to their respective maturity dates, the terms of the Notes are otherwise unchanged. The Security Agreement remained in full force and effect, and was not amended in connection with the amendments to the Notes. In the case of the amendments, the Company reviewed the changes in accordance with ASC 470 and determined they should be treated as modifications. F- 22 The Notes contained certain negative covenants which prevented the Company from issuing any debt securities pursuant to which the Company issues shares, warrants or any other convertible security in the same transaction or a series of related transactions, except that Company may incur or enter into any capitalized and operating leases in the ordinary course of business consistent with past practice, or borrowed money or funded debt in an amount not to exceed $4.5 million (the “Debt Threshold”) that is subordinated to the Notes on terms acceptable to Ampersand and 1315 Capital; provided, that if the aggregate consolidated revenue recognized by the Company as reported on Form 10-K as filed with the SEC for any fiscal year ending after January 10, 2020 exceeds $45 million, the Debt Threshold for the following fiscal year shall increase to an amount equal to: (x) ten percent (10%); multiplied by (y) the consolidated revenue as reported by the Company on Form 10-K as filed with the SEC for the previous fiscal year . The Company used the proceeds of the BroadOak Term Loan discussed above to repay in full at their maturity all outstanding indebtedness under the promissory notes with Ampersand, dated January 7, 2021 and as last amended on September 29, 2021, in the amount of $ 4.5 million, and 1315 Capital, dated January 7, 2021 and as last amended on September 29, 2021, in the amount of $ 3 million, respectively. The Company, Ampersand, and 1315 Capital also terminated a related security agreement. 14. Warrants Warrants outstanding and warrant activity for the year ended December 31, 2021 are as follows: Schedule of Warrants Outstanding and Warrants Activity Description Classification Exercise Price Expiration Date Warrants Issued Balance December 31, 2020 Warrants Cancelled/ Expired Balance December 31, 2021 Private Placement Warrants, issued January 25, 2017 Equity $ 46.90 June 2022 85,500 85,500 - 85,500 RedPath Warrants, issued March 22, 2017 Equity $ 46.90 September 2022 10,000 10,000 - 10,000 Underwriters Warrants, issued June 21, 2017 Liability $ 13.20 December 2022 57,500 53,500 - 53,500 Base & Overallotment Warrants, issued June 21, 2017 Equity $ 12.50 June 2022 1,437,500 870,214 - 870,214 Warrants issued October 12, 2017 Equity $ 18.00 April 2022 320,000 320,000 - 320,000 Underwriters Warrants, issued January 25, 2019 Equity $ 9.40 January 2022 65,434 65,434 - 65,434 1,975,934 1,404,648 - 1,404,648 The weighted average exercise price of the warrants is $ 15.97 and the weighted average remaining contractual life is approximately 0.4 years. F- 23 15. Stock-Based Compensation The Company’s stock-incentive program is a long-term retention program that is intended to attract, retain and provide incentives for talented employees, officers and directors, and to align stockholder and employee interests. Currently, the Company is able to grant options, stock appreciation rights (“SARs”) and restricted shares from the Interpace Biosciences, Inc. 2019 Equity Incentive Plan. No new grants may be made under the Company’s prior stock incentive plan, the Interpace Diagnostics Group, Inc. (now known as Interpace Biosciences, Inc.) Amended and Restated 2004 Stock Award and Incentive Plan (the “2004 Plan”). Unless earlier terminated by action of the Company’s board of directors, the 2004 Plan will remain in effect until such time as no stock remains available for delivery and the Company has no further rights or obligations under the 2004 Plan with respect to outstanding awards thereunder. Historically, stock options have been granted with an exercise price equal to the market value of the common stock on the date of grant, expire 10 years from the date they are granted, and generally vested over a one to three-year period for employees and members of the Board. Upon exercise, new shares will be issued by the Company. The restricted shares and restricted stock units (“RSUs”) granted to employees generally have a three-year graded vesting period and are subject to accelerated vesting and forfeiture under certain circumstances. Restricted shares and RSUs granted to Board members generally have a three-year graded vesting period and are subject to accelerated vesting and forfeiture under certain circumstances . The Company primarily uses the Black-Scholes option-pricing model to determine the fair value of stock options. The determination of the fair value of stock-based payment awards on the date of grant using an option-pricing model is affected by the Company’s stock price as well as assumptions regarding a number of complex and subjective variables. These variables include the Company’s expected stock price volatility over the term of the awards, actual and projected employee stock option exercise behaviors, risk-free interest rate and expected dividends. Expected volatility is based on historical volatility. As there is no trading volume for the Company’s options, implied volatility is not representative of the Company’s current volatility so the historical volatility of the Company’s common stock is determined to be more indicative of the Company’s expected future stock performance. The expected life is determined using the safe-harbor method. The Company expects to use this simplified method for valuing employee options until more detailed information about exercise behavior becomes available over time. The Company bases the risk-free interest rate on U.S. Treasury zero-coupon issues with remaining terms similar to the expected term on the options. The Company does not anticipate paying any cash dividends in the foreseeable future and therefore uses an expected dividend yield of zero in the option valuation model. The Company is required to estimate forfeitures at the time of grant and revise those estimates in subsequent periods if actual forfeitures differ from those estimates. The Company uses historical data to estimate pre-vesting option forfeitures and records stock-based compensation expense only for those awards that are expected to vest. The Company recognizes compensation cost, net of estimated forfeitures, arising from the issuance of stock options on a straight-line basis over the vesting period of the grant. The Company began an employee stock purchase plan in 2020 and recognized approximately $ 0.1 million and $ 0.04 million in expense related to that plan for the years ended December 31, 2021 and 2020, respectively. The estimated compensation cost associated with the granting of restricted stock and restricted stock units is based on the fair value of the Company’s common stock on the date of grant. The Company recognizes the compensation cost, net of estimated forfeitures, arising from the issuance of restricted stock and restricted stock units on a straight-line basis over the shorter of the vesting period or the period from the grant date to the date when retirement eligibility is achieved. The following table provides the weighted average assumptions used in determining the fair value of the stock options granted during the years ended December 31, 2021 and December 31, 2020. Schedule of Stock Options, Valuation Assumptions December 31, 2021 December 31, 2020 Risk-free interest rate 0.79 % 0.75 % Expected life 6 .0 years 6.5 years Expected volatility 134.73 % 123.71 % Dividend yield - - The weighted-average fair value of stock options granted during the year ended December 31, 2021 was estimated to be $ 4.64 . The weighted-average fair value of stock options granted during the year ended December 31, 2020 was estimated to be $ 5.36 . There were 13,042 options exercised in 2021. There were no options exercised in 2020. Historically, shares issued upon the exercise of options have been new shares and have not come from treasury shares. F- 24 Stock-based compensation for the years ended December 31, 2021 and 2020 is as follows: Schedule of Share-Based Compensation Arrangements by Share-Based Payment Award 2021 2020 RSUs and restricted stock $ 433 $ 176 Performance-based awards 107 265 Common stock awards - 116 Options 715 1,630 Total stock-based compensation expense $ 1,255 $ 2,187 A summary of stock option activity for the year ended December 31, 2021, and changes during such year, is presented below: Schedule of Stock Option Activity Weighted-Average Weighted- Remaining Average Contractual Aggregate Grant Period Intrinsic Shares Price (in years) Value Outstanding at January 1, 2021 848,819 $ 8.76 8.59 $ - Granted 347,500 6.00 9.21 - Exercised ( 13,042 ) 9.45 Forfeited or expired ( 550,766 ) 9.15 - Outstanding at December 31, 2021 632,511 6.89 8.40 - Exercisable at December 31, 2021 206,732 9.14 7.53 - Vested and expected to vest 537,520 7.15 8.36 - A summary of the status of the Company’s non-vested options for the year ended December 31, 2021, and changes during such year, is presented below: Schedule of Non Vested Option Activity Shares Weighted- Average Grant Date Fair Value Nonvested at January 1, 2021 487,318 $ 5.81 Granted 347,500 4.64 Vested ( 127,696 ) 6.54 Forfeited ( 284,646 ) 5.72 Nonvested at December 31, 2021 422,476 $ 4.78 The aggregate fair value of options vested during the years ended December 31, 2021 and 2020 was $ 0.8 million and $ 1.5 million, respectively. The weighted-average grant date fair value of options vested during the year ended December 31, 2020 was $ 7.34 . F- 25 A summary of the Company’s non-vested shares of restricted stock and restricted stock units for the year ended December 31, 2021, and changes during such year, is presented below: Schedule of Share-Based Compensation, Restricted Stock and Restricted Stock Units Activity Average Weighted- Remaining Average Vesting Aggregate Grant Date Period Intrinsic Shares Fair Value (in years) Value Nonvested at January 1, 2021 239,457 $ 10.00 1.75 $ 1,348,781 Granted 207,438 5.46 - - Vested ( 65,577 ) 4.65 - - Forfeited ( 52,379 ) 5.23 - - Nonvested at December 31, 2021 328,939 $ 3.67 1.34 $ 2,467,043 The aggregate fair value of restricted stock units vested during each of the years ended December 31, 2021 and 2020 was $ 0.3 million and $ 0.4 million, respectively. As of December 31, 2021, there was approximately $ 2.0 million of total unrecognized compensation cost, net of estimated forfeitures, related to unvested stock options and restricted stock units. 16. Revenue Sources The Company’s clinical services customers consist primarily of physicians, hospitals and clinics. Its revenue channels include Medicare, Medicare Advantage, Medicaid, Client Billings (hospitals, etc.), and commercial payers. The following sets forth the net revenue generated by revenue channel accounted for more than 10% of the Company’s revenue from continuing operations during the years ended December 31, 2021 and 2020, respectively. For the years ended December 31, 2021 and December 31, 2020, revenue from Medicare was approximately 54 % and 50 % of total revenue, respectively. Schedule of Revenue by Major Customers Years Ended December 31, Customer 2021 2020 Medicare $ 17,778 $ 10,186 Medicare Advantage $ 5,859 $ 3,566 Commercial Payors $ 5,555 $ 4,136 Client Billings $ 3,752 $ 2,582 17. Income Taxes The benefit from income taxes on continuing operations for the years ended December 31, 2021 and 2020 is comprised of the following: Schedule of Components of Income Tax Expense (Benefit) 2021 2020 Current: Federal $ - $ - State ( 705 ) 16 Total current ( 705 ) 16 Deferred: Federal 24 23 State 14 14 Total deferred 38 37 (Benefit) provision from income taxes $ ( 667 ) $ 53 F- 26 The Company performs an analysis each year to determine whether the expected future income will more likely than not be sufficient to realize the deferred tax assets. The Company’s recent operating results and projections of future income weighed heavily in the Company’s overall assessment. As a result of this analysis, the Company continues to maintain a full valuation allowance against its federal and state net deferred tax assets at December 31, 2021 as the Company believes that it is more likely than not that these assets will not be realized. In the current year, the company maintains a full valuation allowance in consolidation and no separate company deferred tax liability recorded will be recorded. The tax effects of significant items comprising the Company’s deferred tax assets and (liabilities) as of December 31, 2021 and 2020 are as follows: Schedule of Deferred Tax Assets and Liabilities 2021 2020 Deferred tax assets: Federal net operating loss carryforwards $ 24,923 $ 17,015 State net operating loss carryforwards 3,498 2,953 Compensation 1,844 1,492 Allowances and reserves 585 436 Intangible assets 571 292 State taxes 942 900 Credit carryforward 2 229 163(j) interest 1,047 745 Leases 41 54 Deferred revenue 95 95 Valuation allowance ( 33,170 ) ( 23,684 ) Gross deferred tax assets 378 527 Deferred tax liability: Property and equipment ( 471 ) ( 582 ) Deferred tax liability-net valuation allowance $ ( 93 ) $ ( 55 ) The Company’s deferred tax asset and deferred tax liabilities are included within Other long-term liabilities , respectively, within the consolidated balance sheet as of December 31, 2021 and 2020. Federal tax attribute carryforwards at December 31, 2021, consist primarily of approximately $ 118.6 million of federal net operating losses. In addition, the Company has approximately $ 56.3 million of state net operating losses carryforwards post 382 ownership change. The utilization of the federal carryforwards as an available offset to future taxable income is subject to limitations under federal income tax laws. Under current federal income tax law, federal NOLs incurred in tax years beginning after December 31, 2017 may be carried forward indefinitely, but the deductibility of such federal NOLs is limited to 80% of Federal Taxable Income, and current state net operating losses not utilized begin to expire this year . The NOL carry forwards are subject to review and possible adjustment by the Internal Revenue Service and state tax authorities. NOL, and 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. During 2021, the Company completed a 382 assessment of the available NOLs under Section 382 and determined that the Company underwent an ownership change on March 30, 2017 and July 15, 2019 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 multiple ownership changes. The Company has adjusted their NOL carryforwards to address the impact of the 382 ownership change. Federal Net Operating Losses of $ 71.2 million are subject to annual limitation as of the ownership changes for ownership changes. The remaining $ 47.4 M of NOLs incurred post July 15, 2019 are not subject to any annual limitation and can be carried forward indefinitely. F- 27 A reconciliation of the difference between the federal statutory tax rates and the Company’s effective tax rate from continuing operations is as follows: Schedule of Effective Income Tax Rate Reconciliation 2021 2020 Federal statutory rate 21.0 % 21.0 % State income tax rate, net of Federal tax benefit 4.2 % 4.0 % Meals and entertainment ( 0.1 %) ( 0.1 %) Valuation allowance ( 25.3 )% ( 25.0 %) Naked credit ( 0.2 %) ( 0.1 %) NJ NOL credit sale 4.7 % 0.0 % Effective tax rate 4.3 % ( 0.2 %) The following table summarizes the change in uncertain tax benefit reserves for the two years ended December 31, 2020: Schedule of Unrecognized Tax Benefits Roll Forward Unrecognized Tax Benefits Balance of unrecognized benefits as of January 1, 2020 $ 877 Additions for tax positions of prior years - Balance as of January 1, 2021 $ 877 Additions for tax positions of prior years - Balance as of December 31, 2021 $ 877 As of December 31, 2021 and 2020, the total amount of gross unrecognized tax benefits was $ 0.9 million and $ 0.9 million, respectively. The total amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate as of December 31, 2021 and 2020 was $ 0.9 million and $ 0.9 million, respectively. The Company recognized interest and penalties of $ 0.2 million and $ 0.3 million, respectively, related to uncertain tax positions in income tax expense during each of the years ended December 31, 2021 and 2020. At December 31, 2021 and 2020, accrued interest and penalties, net were $ 3.6 million and $ 3.4 million, respectively, and included in the Other long-term liabilities in the consolidated balance sheets. The Company and its subsidiaries file a U.S. Federal consolidated income tax return and consolidated and separate income tax returns in numerous states and local tax jurisdictions. The following tax years remain subject to examination as of December 31, 2021: Schedule of Tax Years Subject to Examination Jurisdiction Tax Years Federal 2017 – 2021 State and Local 2016 – 2021 To the extent there was a failure to file a tax return in a previous year; the statute of limitation will not begin until the return is filed. There were no examinations in process by the Internal Revenue Service as of December 31, 2021. F- 28 18. Basic and Diluted Net Loss per Share A reconciliation of the number of shares used in the calculation of basic and diluted earnings per share for the years ended December 31, 2021 and 2020 are as follows (rounded to thousands): Schedule of Weighted Average Number of Shares Years Ended December 31, 2021 2020 Basic weighted average number of common shares 4,135 4,029 Potential dilutive effect of stock-based awards - - Diluted weighted average number of common shares 4,135 4,029 The Company’s Series B Preferred Stock, on an as converted basis of 7,833,334 shares and the following outstanding stock-based awards and warrants were excluded from the computation of the effect of dilutive securities on loss per share for the following periods as they would have been anti-dilutive (rounded to thousands): Schedule of Anti-dilutive Securities Excluded from Computation of Earnings Per Share Years Ended December 31, 2021 2020 Options 632 849 Restricted stock units (RSUs) 329 238 Warrants 1,405 1,405 2,366 2,492 19. Revolving Line of Credit On October 13, 2021, the Company and its subsidiaries entered into a Loan and Security Agreement (the “Comerica Loan Agreement”) with Comerica Bank (“Comerica”), providing for a revolving credit facility of up to $ 7,500,000 (the “Credit Facility”). The Company may use the proceeds of the Credit Facility for working capital and other general corporate purposes. The amount that may be borrowed under the Credit Facility is the lower of (i) the revolving limit of $ 7,500,000 (the “Revolving Line”) and (ii) 80 % of the Company’s eligible accounts receivable plus an applicable non-formula amount consisting of $ 2,000,000 of additional availability at close not based upon the Company’s eligible accounts receivable, with such additional availability reducing by $ 250,000 per quarter beginning with the quarter ending June 30, 2022. Borrowings on the Credit Facility are limited to $ 5,000,000 until 80 % of the Company’s and its subsidiaries’ customers are paying into a collection account or segregated governmental account with Comerica. The Revolving Line can also include, at the Company’s option, credit card services with a sublimit of $ 300,000 . Borrowings on the Revolving Line are subject to an interest rate equal to prime plus 0.50 %, with prime being the greater of (x) Comerica’s stated prime rate or (y) the sum of (A) the daily adjusting LIBOR rate plus (B) 2.5 % per annum. The Company is also required to pay an unused facility fee quarterly in arrears in an amount equal to 0.25 % per annum on the average unused but available portion of the Revolving Line for such quarter. F- 29 The Credit Facility matures on September 30, 2023 , and is secured by a first priority lien on substantially all of the assets of the Company and its subsidiaries. As of December 31, 2021, the balance of the revolving line was $ 1.5 million. The Comerica Loan Agreement contains affirmative and negative restrictive covenants that are applicable whether or not any amounts are outstanding under the Comerica Loan Agreement. These restrictive covenants, which include restrictions on certain mergers, acquisitions, investments, encumbrances, etc., could adversely affect our ability to conduct our business. The Comerica Loan Agreement also contains financial covenants requiring specified minimum liquidity and minimum revenue thresholds and also contains customary events of default. As a condition for Comerica to extend the Credit Facility to the Company and its subsidiaries, the Company’s existing creditors, Ampersand and 1315 Capital (the “Existing Creditors”), entered into that certain Subordination Agreement, dated as of October 13, 2021, pursuant to which each Existing Creditor agreed to subordinate all of the indebtedness and obligations of the Company and its subsidiaries owing to such Existing Creditor to all of the indebtedness and obligations of the Company and its subsidiaries owing to Comerica (the “Subordination Agreement”). Each Existing Creditor further agreed to subordinate all of its respective security interests in assets or property of the Company and its subsidiaries to Comerica’s security interests in such assets or property. The Subordination Agreement provides that it is solely for the benefit of Comerica and each of the Existing Creditors and is not for the benefit of the Company or any of its subsidiaries. Revolving Line of Credit – Silicon Valley Bank On November 13, 2018 the Company, Interpace Diagnostics Corporation, and Interpace Diagnostics, LLC entered into a Loan and Security Agreement (the “SVB Loan Agreement”) with Silicon Valley Bank (“SVB”), which provided for up to $ 4.0 million of debt financing consisting of a term loan of up to $ 850,000 and a revolving line of credit based on its outstanding accounts receivable (the “Revolving Line”) of up to $ 3.75 million. As of December 31, 2020, the balance of the Revolving Line with SVB was zero . On January 5, 2021, the Company terminated the SVB Loan Agreement in accordance with the terms of the agreement. In connection with the termination, SVB waived its right to any termination fees and released its security interest in the assets of the Company. 20. Transition Expenses These expenses are primarily related to the Rutherford, NJ lab closing and subsequent move to North Carolina, as well as other cost-saving initiatives, primarily reductions in headcount as well as certain legal expenses. The following is a roll forward of the transition expenses liabilities: Schedule of Transition Expenses Facilities/ Personnel Infrastructure Legal Total Balance at December 31, 2020 $ 885 $ 269 $ - $ 1,154 Transition expenses 1,044 1,036 505 2,585 Payments ( 1,929 ) ( 1,305 ) ( 505 ) ( 3,739 ) Balance at December 31, 2021 $ - $ - $ - $ - F- 30 21. Supplemental Cash Flow Information Supplemental Disclosure of Other Cash Flow Information (in thousands) Supplemental Cash Flow Information Cash paid for taxes $ 369 $ 218 Cash paid for interest $ 424 $ 60 Supplemental Disclosures of Non Cash Activities (in thousands) Years Ended December 31, 2021 2020 Operating Taxes accrued for repurchase of restricted shares $ 95 $ - Investing Preferred Stock Deemed Dividend $ - $ 3,033 Investment in DiamiR 248 - Financing Accrued financing costs $ - $ 31 22. Subsequent Events Centers for Medicare & Medicaid Services (CMS) Billing Policy Notice & Rights Offering On January 28, 2022, the Company announced that the Centers for Medicare & Medicaid Services (CMS) issued a new billing policy whereby CMS would no longer reimburse for the use of the Company’s ThyGeNEXT ® and ThyraMIR ® tests when billed together by the same provider/supplier for the same beneficiary on the same date of service and that the Company was terminating its previously announced rights offering and the mutual termination of the standby purchase agreement with 3K Limited Partnership. The CMS billing policy decision was subsequently reversed in February 2022, however the Company has not yet realized the full cash collection benefit of current and retroactive Thyroid testing and such cash collections may be temporarily reduced or delayed until we resolved the matter with CMS. F- 31 INTERPACE BIOSCIENCES, INC. VALUATION AND QUALIFYING ACCOUNTS YEARS ENDED DECEMBER 31, 2021 AND 2020 ($ in thousands) Schedule II - Valuation and Qualifying Accounts Additions Balance at (Reductions) (1) Balance at Beginning Charged to Deductions end Description of Period Operations Other of Period 2020 Allowance for doubtful accounts $ 25 - 250 $ 275 Allowance for doubtful notes $ 869 - - $ 869 Tax valuation allowance $ 17,027 - 6,657 $ 23,684 2021 Allowance for doubtful accounts $ 275 - ( 203 ) $ 72 Allowance for doubtful notes $ 869 - - $ 869 Tax valuation allowance $ 23,684 - 9,486 $ 33,170 (1) Includes payments and actual write offs, as well as changes in estimates in the reserves. F- 32