What changed in this filing

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Item 1. Business

2023-03-27 compared with 2022-03-31 · 496 added, 763 removed, 649 unchanged (66% of the section changed)

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

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

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

information to better diagnose, monitor and inform cancer treatment.

Our clinical services provide clinically useful molecular diagnostic

tests, bioinformatics and pathology services for evaluating risk of cancer by leveraging the latest technology in personalized medicine

for improved patient diagnosis and management.

Through our pharma services, we develop, commercialize and provide molecular- and biomarker-based

tests and services and provide companies with customized solutions for patient stratification and treatment selection through an extensive

suite of molecular and biomarker-based testing services, DNA and RNA extraction and customized assay development and trial design consultation.

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

and biotech industries and advance personalized medicine by partnering with pharmaceutical, academic and technology leaders to effectively

integrate pharmacogenomics into drug development and clinical trial programs with the goals of delivering safer, more effective drugs

to market more quickly, and improving patient care.

are a company that 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.

We develop and commercialize genomic tests

and related first line assays principally focused on early detection of patients with indeterminate biopsies and at high risk of cancer

using the latest technology.

● Cancer Centers

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Pathology groups

Pharmaceutical companies

● Biotech companies

● Contract Research Organizations

● Academic Researchers

● Diagnostic companies

services provide expert-based collaborative solutions, customized assays and high quality services in support of their pharmaceutical

and biotechnology clients’ therapeutic development programs.

By deploying deep scientific and medical expertise, pharma services

support all phases of drug development and accelerate their clients’ clinical programs.

clinical services’ customers consist primarily of physicians, hospitals, cancer centers, commercial laboratories, pathology groups

Our largest customer for ThyGeNEXT ® and ThyraMIR ® products in 2021 was [Laboratory Corporation

Our largest customer for ThyGeNEXT ® and ThyraMIR ® v2 products in 2022 was Laboratory Corporation

of America ® or LabCorp.

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client billings (for example, hospitals and clinics), and commercial payers such as Blue Cross Blue Shield, Aetna, Cigna, United Healthcare

partner with pharmaceutical and biotech companies and clinicians as oncology diagnostic specialists by supporting development and patient

care from bench to bedside.

Pharmaceutical and biotech companies work with us to provide molecular profiles on clinical trial participants.

Similarly, we believe the oncology industry is undergoing a rapid evolution in its approach to diagnostic, prognostic and treatment outcome

testing, embracing precision testing and individualized medicine as a means to drive higher standards of patient treatment and disease

These profiles may help identify biomarker and genomic variations that may be targetable for developing novel personalized

therapeutics or that may be responsible for differing responses to existing oncology therapies, thereby increasing the efficiency of

trials while lowering costs.

We believe tailored and combination therapies can revolutionize oncology care through molecular- and biomarker-based

testing services, enabling physicians and researchers to target the factors that make each patient and disease unique.

Our pharma services’

customers consist primarily of pharmaceutical and biotech companies.

optimize the operations of laboratory operations within our pharma services, during late 2020 and the first quarter of 2021, we

transitioned activities from our Rutherford, NJ facility to our Morrisville, NC facility.

We invested several million dollars to

facilitate this relocation, including but not limited to the transfer of personnel, expansion of the Morrisville facility and

validation of transferred processes.

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

have also undergone several other cost-cutting initiatives, primarily reductions in headcount, and those costs are categorized as

transition expenses as well.

It is not certain whether the transition will produce the predicted financial benefits.

During Fiscal

2021, the Company experienced a fairly significant decrease in volume within pharma services.

The decrease in revenue within pharma

services was approximately 32% from the comparable prior year period.

In October 2021, the Company

entered into a $7.5 million revolving credit facility with Comerica Bank (“Comerica”).

In addition, also in October 2021,

the Company entered into an $8.0 million term loan with BroadOak Fund V, L.P.

(“BroadOak”).

See Part II – Item 7 –

“Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources”

for more details.

of COVID-19 Pandemic

COVID-19 pandemic, together with related precautionary measures, continues to impact portions of the regions in which we operate.

regions are attempting to address the COVID-19 pandemic in varying ways, including stay-at-home orders, temporarily closing businesses,

restricting gatherings, restricting travel, and mandating social distancing and face coverings.

The level and nature of the disruption

caused by COVID-19 is unpredictable, may be cyclical and long-lasting and may vary from location to location.

Disposition of Pharma Business

August 31, 2022, Interpace Biosciences, Inc.

(“Interpace” or the “Company”) and Interpace Pharma Solutions, Inc.

(the “Subsidiary) entered into an Asset Purchase Agreement (the “Purchase Agreement”) with Flagship Biosciences, Inc.

(the “Purchaser”) pursuant to which the Purchaser agreed to (i) acquire substantially all of the assets of the Subsidiary

used in Subsidiary’s business of complex molecular analysis for the early diagnosis and treatment of cancer and supporting the

development of targeted therapeutics (the “Business”) and (ii) assume and pay certain liabilities related to the purchased

assets as set forth in the Purchase Agreement (collectively, the “Transaction”).

The Transaction closed on August 31, 2022.

consideration for the Transaction, under the Purchase Agreement, the Company received a total purchase price of approximately $6.2

million after working capital and other adjustments ($0.5 million of which was deposited into escrow), subject to the assumption by the Purchaser of certain specified liabilities.

addition, subject to the terms and conditions set forth in the Purchase Agreement, Purchaser was obligated to pay the Company an

earnout of up to $2.0 million based on revenue for the period beginning September 1, 2021 and ending August 31, 2022.

received an earnout payment of approximately $1.0 million in September 2022 which is the fully settled amount and there will be no

further earnout payments in the future.

Purchase Agreement includes a one-year commitment of the Company not to compete with the Business, recruit or hire any former employees

of the Subsidiary who accept employment with the Purchaser in connection with the Transaction, or divert or attempt to divert from Purchaser

any business to be performed from any of the contracts or agreements with customers as set forth in the Purchase Agreement.

Agreement also contains customary representations and warranties, post-closing covenants and mutual indemnification obligations for,

among other things, any inaccuracy or breach of any representation or warranty and any breach or non-fulfillment of any covenant.

connection with the Transaction, on August 31, 2022, the Company, the Subsidiary and the Purchaser entered into a Shared Services Agreement

(the “Shared Services Agreement”) pursuant to which Interpace agreed to provide, or cause its affiliates to provide, to the

Purchaser certain services set forth in the Shared Services Agreement on a transitional basis and subject to the terms and conditions

set forth in the Shared Services Agreement (the “Services”).

As consideration for the Services provided by the Company, the

Purchaser is paying the Company the amounts specified for each Service as set forth in the Shared Services Agreement.

The Company’s

obligations to provide the Services will terminate with respect to each Service as set forth in the Shared Services Agreement.

Purchaser is identified as a related party of the Company and is an affiliate of both Ampersand 2018 Limited Partnership (“Ampersand”),

a private equity investor in the Company, and BroadOak Fund V, L.P.

(“BroadOak”), a secured lender to the Company.

and BroadOak have each provided equity financing to the Purchaser, collectively own a majority of the Purchaser’s outstanding equity

securities and are represented on its Board of Directors.

Company is using the remaining net proceeds of the Transaction to fund its future business activities and for general working capital

As a result of the sale, the gain on sale and all operations from the Subsidiary have been classified as discontinued operations

for all periods presented.

Impact of COVID-19 Pandemic

in the first quarter of 2021, there has been a trend in many parts of the world of increasing availability and administration of vaccines

against COVID-19, as well as an easing of restrictions on social, business, travel and government activities and functions.

hand, infection rates and regulations continue to fluctuate in various regions and there are ongoing global impacts resulting from the

pandemic, including challenges and increases in costs for logistics and supply chains.

We have also previously been affected by temporary

laboratory closures, employment and compensation adjustments and impediments to administrative activities.

The level and nature of the

disruption caused by COVID-19 is unpredictable, may be cyclical and long-lasting and may vary from location to location.

addition, we have experienced and are experiencing varying levels of inflation resulting in part from various supply chain disruptions,

increased shipping and transportation costs, increased raw material and labor costs and other disruptions caused by the COVID-19 pandemic

and general global economic conditions.

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

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authorities and may take additional actions based upon their recommendations.

It is possible that we may have to make adjustments to

our operating plans in reaction to developments that are beyond our control.

closures experienced thus far by the Company have consisted of periodic, temporary work stoppages to clean and disinfect the labs;

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

It is also possible that we could experience supply chain

shortages if the pandemic worsens and if one or more suppliers is unable to continue to provide us with supplies.

For the foreseeable

future, however, we do not anticipate supply chain shortages of critical supplies.

have developed contingency plans and will continue to monitor and update them in order to mitigate pandemic-related, adverse financial

impacts upon our business.

At this time, the Biden Administration does not plan to

renew the COVID-19 national and public health emergencies when they expire on May 11, which has been extended every 90 days since they

were established in 2020.

This decision, therefore, appears to represent a de-escalation in the way the government treats the pandemic,

as well as a perception that most people have either been vaccinated or have recovered from a COVID-19 infection (or both), Despite this

anticipated change in policy, COVID-19 is still with us and as the virus continues to reproduce and mutate, the Administration’s

policy may need be adjusted.

In any event, it is likely that we will still need to make adjustments to our operating plans in reaction

to developments that are beyond our control.

of the ongoing military conflict between Russia and Ukraine.

February 2022, Russian military forces invaded Ukraine, and although the length, impact, and outcome of the ongoing war in Ukraine is

highly unpredictable, this war has led, and could continue to lead, to significant market and other disruptions, including instability

in financial markets, supply chain interruptions, political and social instability, and increases in cyberattacks, intellectual property

theft, and espionage.

We are actively monitoring the situation in Ukraine and assessing its impact on our business.

have no way to predict the progress or outcome of the war in Ukraine or its impacts in Ukraine, Russia, or Belarus as the war, and any

resulting government reactions, are rapidly developing and beyond our control.

The extent and duration of the war, sanctions, and resulting

market disruptions could be significant and could potentially have a substantial impact on the global economy and our business for an

unknown period of time.

Any of the above-mentioned factors could materially adversely affect our business, financial condition, and results

of operations.

Any such disruptions may also magnify the impact of other risks described in this Annual Report on Form 10-K.

Molecular Diagnostic Market

global molecular diagnostics market is estimated to be $23.2 billion (USD) in 2022 and is expected to grow to $30.2 billion (USD) by

2026 with a CAGR of 9.0% between 2021 and 2026, according to Market Data Forecast’s Molecular Diagnostics Market report (ID:

published January 2022).

global esoteric testing market size was valued at $20.2 billion in 2020, and is estimated to reach $66.2 billion by 2030, growing

at a CAGR of 12.5% from 2021 to 2030, according to an August 2021 report by Allied Market Research.

We believe that the specialty molecular

diagnostics market offers significant growth and strong patient value given the substantial opportunity it affords to lower healthcare

costs by helping to reduce unnecessary surgeries and ensuring the appropriate frequency of monitoring.

We are keenly focused on growing

our test volumes, securing additional insurance coverage and reimbursement, maintaining and growing our current reimbursement and supporting

revenue growth for our molecular diagnostic tests, introducing related first line product and service extensions, as well as expanding

our business by developing and promoting synergistic products in our markets.

We also believe that BarreGEN ® is a potentially

significant pipeline product, and we are providing necessary resources to support the development process.

Research Organization Market size was valued at over $43.9 billion in 2020 and is estimated to grow at a 7.8% CAGR between 2021

Growing demand for clinical trials in emerging countries coupled with increasing prevalence of chronic diseases is escalating

the market growth.

The pharma services (clinical research) segment in the contract research organization market accounted for $25.2

billion in 2020 and is projected to showcase an 8% growth rate by 2027.

2027 with a Compound Annual Growth rate or CAGR of 5.4% between 2022 and 2027, according to Markets and Markets’s Molecular Diagnostics

Market report (Report Code:

MD 2521, published May 2022).

global esoteric testing market is projected to reach 36.3 billion (USD) by 2026, growing at a CAGR of 11.6% from 2022 to 2026 (Markets

and Markets, Esoteric Testing Market report published June 2021, Report Code:

We believe that the specialty molecular diagnostics

market offers significant growth and strong patient value given the substantial opportunity it affords to lower healthcare costs by helping

to reduce unnecessary surgeries and ensuring the appropriate frequency of monitoring.

We are keenly focused on growing our test volumes;

securing additional insurance coverage and reimbursement;

maintaining and growing our current reimbursement;

supporting revenue growth

for our molecular diagnostic tests;

introducing related first-line product and service extensions;

and expanding our business by developing

and promoting synergistic products in our markets.

We also believe that BarreGEN ® is a potentially significant pipeline

product, and we are continuing to provide necessary resources to support the development process.

States Clinical Oncology Market

many advances in the treatment of cancer, it remains one of the greatest areas of unmet medical need.

In 2020, the World Health Organization

attributed nearly 10 million deaths globally to cancer, which is about one in six deaths.

Within the United States, cancer is the second

most common cause of death, exceeded only by heart disease, accounting for nearly one out of every five deaths.

Of note, pancreatic cancer

is now the third leading cause of cancer deaths in the United States.

The Agency for Healthcare Research and Quality estimated that the

direct medical treatment costs of cancer in the United States for 2015 were $80.2 billion.

In the United States in 2022, it is expected

that in total there will be approximately 1.9 million new cancer cases diagnosed, which is the equivalent of approximately 5,205 new

cases each day, according to the American Cancer Society.

many advances in the treatment of cancer, it remains one of the greatest areas of unmet medical need According to estimates from the

International Agency for Research on Cancer (IARC), by 2040 it is expected that there will be 16.3 million cancer deaths worldwide simply

due to the growth and aging of the global population.

Within the United States, cancer is the second most common cause of death, exceeded

only by heart disease.

In 2022, it is expected that there will be 1.9 million new cancer cases and almost 610,000 cancer-related deaths,

or about 1,670 deaths each day.

In the United States, while pancreatic cancer represents only about 3% of all new cancer cases, it is

the third leading cause of cancer death.

The incidence, deaths and economic loss caused by cancer are staggering.

following table published by The American Cancer Society shows estimated new cases and deaths in 2020 in the United States for selected

major cancer types:

Cancer-attributed medical

care costs in the United States are substantial and projected to increase dramatically by 2030 to an estimated $246 billion (USD).

following table taken from Common Cancer Types, originally published by the National Cancer Institute (Updated:

May 10, 2022) shows estimated

new cases and deaths in 2022 in the United States for selected major cancer types:

(Female – Male)

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Non-Hodgkin’s

Cancer Society:

Cancer Facts and Figures 2022.

American Cancer Society, 2022.

Also available online.

Last accessed February

States and International Clinical Trials Market Overview

United States is currently a world leader in biopharmaceutical research and development and manufacturing.

In fiscal year 2021, the National

Cancer Institute received a budget of $6.44 billion, an increase of $119 million over fiscal year 2020, to issue grants to support research,

with a targeted investment in enhanced and early detection of disease through the analysis of circulating biomarkers using minimally

invasive methods, as well as a focused investment in cancer prevention and treatment including research on new vaccines to prevent cancer-causing

infections and investigational immuno-oncology drugs and drug combinations.

The Pharmaceutical Research and Manufacturers of America

(PhRMA) reports that the average cost to develop a drug, including trial failures, can be as high as $2.6 billion and the approval process

from development to market may be as long as 15 years.

According to the National Cancer Institute, the overall cancer death rate in the

United States continues to decline.

Life expectancy increases can be attributed to earlier detection, new treatments and oncology medications.

of the United States, particularly in potential target geographies of the European and Asia Pacific (“APAC”) regions,

growth in the pharmaceuticals and clinical trials market is continuing.

Medicines spending in the top five European markets (France,

Germany, Italy, Spain, and the UK) is expected to increase at a CAGR of between 3% and 6%, or $51 billion, over the next five years

(2022 to 2026), up from $44 billion in the past five years, according to the IQVIA Institute analysis.

New brands were the largest

driver of growth from 2016 to 2021 and are expected to continue in the next five years (2022 to 2026) but may be hampered by

lingering effects of the pandemic on marketing operations and reimbursement decisions.

APAC’s location provides access to

large patient pools within favorable regulatory environments.

The CRO market is valued at approximately $7.6 billion as of 2021 and

is forecast to reach $11.9 billion by 2025.

As a result of ease in regulatory approval, low worker rates, availability of a large

patient pool, and the presence of key suppliers, the APAC region is anticipated to see a CAGR growth rate of 12% between 2017 and

oncology drugs have the potential to be among the most personalized therapeutics, very few have successfully made it to market.

The application

of pharmacogenomics to oncology clinical trials enables researchers to better predict differences in drug response, efficacy and toxicity

among trial participants, as well as to optimize treatment regimens based on these differences.

According to IQVIA, in 2021, more than

half (53%) of all pharmaceutical sales in the United States were from specialty drugs, a category of drugs including oncology treatments

tailored to patients’ genomic profiles.

We believe a growing demand for faster development of personalized medicines and more effective

clinical trials are growth drivers of this market, and our core expertise is pharmacogenomics, or the study of genetic analysis based

on a patient’s response to a particular therapy or drug.

primary goal is to become a leader in providing high quality and dependable personalized medicine with exceptional growth.

strategy is to grow our business both organically as well as by selective partnering, which could potentially include licensing, acquisitions

is to grow our business both organically as well as by selective partnering, which could potentially include licensing, acquisitions

or mergers, to generate positive returns for our shareholders and driving towards cash flow break-even.

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payer relationship and in-network contracts serving our diagnostic customers.

synergistic product and service opportunities developed for our clinical customers for use by our pharmaceutical and biotech customers;

and commercializing other related first-line clinical assays and expanding our service offerings such as PanDNA ® ,

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our data with potential collaborators.

internationally;

our average contract revenue from pharmaceutical and biotech customers by growing our services and product offerings while providing

dependable and timely service and unique solutions.

reliability of the volume growth from our clinical customers combined with more variable but scalable revenue from our pharmaceutical

and biotech customers, we believe, provides the opportunity to expand our services and grow our business.

We also believe that the synergistic

opportunities of our businesses are important especially in targeted product categories where we have a history of clinical data and

sample biorepositories as we expand our roster of pharmaceutical client opportunities.

We also believe that our LIM’s systems,

with the current investments we are making, is already an important tool to support our future growth as we begin to convert data into

usable and unique information and insights for our customers’ benefit.

Our unique commercial infrastructure focused on clinical

and pharmaceutical customers is one of our most important assets and we anticipate expanding it in the future with highly trained commercial

personnel that have growth potential and can effectively communicate our value proposition to our sophisticated customers.

The information

and analytics that we have, we believe, will help further differentiate us from our competitors.

Service Offerings

business is based on demand for molecular- and biomarker-based characterization of cancers from three main sectors:

(1) clinical services

for physicians, hospitals and clinics, (2) pharma services for biotechnology and pharmaceutical companies, and (3) pharma services for

the research community.

business is based on demand for molecular- and biomarker-based characterization of cancers from one main sector:

clinical services for

physicians, hospitals and clinics.

and oncologists in cancer centers and hospitals seek molecular-based testing since these methods often produce higher value and more

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collaborators seeking to develop new insights and treatments.

pharma services are sought by biotechnology and pharmaceutical companies engaged in designing and running clinical trials, from pre-clinical

to post market surveillance, for their value and efficacy in oncology and immuno-oncology treatments and therapeutics.

aim to provide physicians and patients with diagnostic options for detecting genomic and other molecular alterations that are associated

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We commercialize

genomic tests and related first line assays principally focused on early detection of patients at high risk of cancer using the latest

technology to help personalize medicine and improve patient diagnosis and management.

Our tests and services provide mutational analysis

of genomic material contained in suspicious cysts, nodules and lesions with the goal of better informing treatment decisions in patients

at risk of thyroid, pancreatic, and other cancers.

The molecular diagnostic tests we offer enable healthcare providers to better assess

cancer risk, helping to avoid unnecessary surgical treatment in patients at low risk, while also helping to identify high risk patients

genomic tests and related first-line assays principally focused on risk-stratification of cancer using the latest technology to help

personalize medicine and improve patient diagnosis and management.

Our tests and services provide mutational analysis of genomic material

contained in suspicious cysts, nodules, and lesions with the goal of better informing surgery or surveillance treatment decisions in

patients suspected of thyroid, pancreatic, and other cancers.

The molecular diagnostic tests we offer enable healthcare providers to

stratify cancer risk, helping to avoid unnecessary surgical treatment in patients at low risk, while also helping to identify patients

that would benefit from surgical intervention.

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

Our laboratories are licensed pursuant to federal law under Clinical Laboratory Improvement Amendments of 1988 (“CLIA”)

and are accredited by College of American Pathologists (“CAP”) and our products are approved by New York State.

We are leveraging

our licensed and accredited laboratories to refine and commercialize our assays and products.

We aim to provide physicians and patients

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

other cancers.

Our customers consist primarily of physicians, hospitals and clinics.

mission is to assist healthcare providers in the diagnosis, triage, and treatment of patients through advanced diagnostics.

Our laboratory

is licensed pursuant to federal law under Clinical Laboratory Improvement Amendments of 1988 (“CLIA”) and are accredited

by College of American Pathologists (“CAP”) and our products are approved by New York State.

We are leveraging our laboratory

to refine and commercialize our assays and products.

We aim to provide physicians and patients with diagnostic options for detecting

genomic and other molecular alterations that are associated with gastrointestinal, endocrine, and other cancers.

Our customers consist

primarily of physicians, hospitals, and clinics.

currently have five commercialized molecular diagnostic tests in the marketplace:

PancraGEN ® , which is a pancreatic cyst

and pancreaticobiliary solid lesion genomic test that helps physicians better assess risk of pancreaticobiliary cancers using our proprietary

PathFinderTG ® platform; PanDNA, a “molecular only” version of PancraGEN ® that provides

physicians a snapshot of a limited number of factors;

ThyGeNEXT ® , which is an expanded oncogenic mutation panel that helps

identify malignant thyroid nodules; ThyraMIR ® , which, in combination with ThyGeNEXT ® , assesses thyroid

nodules for risk of malignancy utilizing a proprietary microRNA gene expression assay.

and RespriDx ® , which is

a genomic test that helps physicians differentiate metastatic or recurrent lung cancer from the presence of newly formed primary lung

cancer and which also utilizes our PathFinderTG ® platform.

PancraGEN ® , a pancreatic cyst and

pancreaticobiliary solid lesion genomic test that helps physicians better risk-stratify pancreaticobiliary cancers using our

proprietary PathFinderTG ® platform and full integration of clinical factors; PanDNA ® , an

alternate reporting option of the PathFinderTG platform, that provides physicians the “molecular only” information

provided within PancraGEN;

ThyGeNEXT ® , an expanded oncogenic mutation panel that helps “rule-in” and

“rule-out” malignancy in thyroid nodules; ThyraMIR ® , used in combination with

ThyGeNEXT ® , which further stratifies thyroid nodules for malignancy risk utilizing a proprietary microRNA gene

expression assay;

and RespriDx ® a genomic test that also utilizes our PathFinderTG ® platform, to help

physicians differentiate metastatic or recurrent lung cancer from the presence of newly formed primary lung cancer.

Gastrointestinal

Cancer Products

current gastrointestinal integrated pathology risk diagnostic assay, PancraGEN ® is based on our PathFinderTG ®

PathFinderTG ® is designed to use advanced clinical algorithms to accurately stratify patients according

to risk of pancreatic cancer by assessing panels of DNA abnormalities in patients who have pancreaticobiliary lesions (cysts or solid

masses) with potential for cancer.

PanDNA is a “molecular only” reporting option for physicians that perform their own integration

of first line testing results.

PathFinderTG ® is supported by our state of the art CLIA certified, and CAP accredited laboratory

in Pittsburgh, Pennsylvania.

Our Pittsburgh laboratory is our largest clinical laboratory where we process the majority of our oncology

related commercial tests;

we also support our other gastrointestinal and endocrine commercial activities through this laboratory.

detection of pancreatic cancer is crucial.

Based on the American Cancer Society Cancer 2022 Cancer Facts and Figures, pancreatic cancer

is the third leading cause of cancer deaths in the U.S.

current diagnostic assay, PancraGEN ® , is a reporting option of our proprietary PathFinderTG ® platform.

This platform is designed to use advanced clinical algorithms to accurately risk-stratify patients suspected of having pancreatic cancer

by assessing panels of DNA abnormalities in patients who have pancreaticobiliary lesions (cysts or solid masses).

is a “molecular only” reporting option of PathFinderTG ® and is used by physicians who prefer to perform their

own integration of first-line testing results to stratify pancreatic cancer risk.

on the American Cancer Society Cancer 2023 Cancer Facts and Figures, pancreatic cancer is the third leading cause of cancer deaths in

(estimated) with an average five-year survival rate of 12%.

and PanDNA ® are designed to determine risk of malignancy in pancreatic cysts and pancreaticobiliary solid lesions,

which are more often than not benign lesions but have potential for developing into cancer.

We believe that PancraGEN ®

is the leader in the market for integrated molecular diagnostic tests for determining risk of pancreaticobiliary malignancy.

estimate that the immediate addressable market for PancraGEN ® is approximately 115,000 indeterminate pancreaticobiliary

lesions annually or approximately $200 million annually based on the current size of the patient population and reimbursement rates.

PancraGEN ® and PanDNA ® are designed

to determine the risk of malignancy in pancreatic cysts and pancreaticobiliary solid lesions, which have potential for developing into

We believe that PancraGEN ® is the leader in the market for integrated molecular diagnostic tests for determining

risk of pancreaticobiliary malignancy.

We currently estimate that the immediate addressable market for PancraGEN ® is approximately

124,000 indeterminate pancreaticobiliary lesions annually or approximately $200 million annually based on the current size of the patient

population and reimbursement rates.

To date, PancraGEN ® testing has been used in more than 64,000 clinical cases.

The National Pancreatic Cyst Registry study

published in Endoscopy in 2015 demonstrated that PancraGEN ® more accurately determines the malignant potential of pancreatic

cysts than international consensus 2012 imaging criteria, helping to ensure that surgery is reserved for the most appropriate patients.

When molecular analysis is not performed, the vast majority of all pancreatic cyst surgeries are performed on cystic lesions that do

not harbor malignancy.

National Pancreatic Cyst Registry study published in Endoscopy in 2015 demonstrated that PancraGEN ® more accurately

determined the malignancy potential of pancreatic cysts than international consensus 2012 imaging criteria, helping to ensure that surgery

is reserved for the most appropriate patients.

This is important because pancreatic surgery is high-risk surgery with over 40% postoperative

morbidity rates and 0%–15% postoperative mortality rates.

(Ahola, et al, March 2020, doi.org/10.1177/1457496919900411 ) When

molecular analysis is not performed, the vast majority of all pancreatic cyst surgeries are performed on cystic lesions that do not harbor

American Gastroenterological Association 2015 Guidelines have cautioned that many pancreatic surgeries have been performed unnecessarily

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Accordingly, we believe that PancraGEN ® provides a highly reliable diagnostic and prognostic option

that identifies cancer risk in circumstances where risk of cancer is otherwise uncertain.

that can accurately stratify cancer risk in circumstances where risk of cancer is otherwise uncertain.

Cancer Products

currently market and sell a dual platform endocrine cancer risk diagnostic assay.

The incidence of thyroid nodules is on the rise.

is a next generation DNA and RNA sequencing oncogene and mRNA fusion panel that is used to evaluate indeterminate thyroid biopsies.

ThyGeNEXT ® works synergistically with our second endocrine cancer diagnostic test ThyraMIR ® , which is based

on measuring the relative expression of ten distinct microRNAs.

The combination of ThyGeNEXT ® and ThyraMIR ®

is designed to provide a highly sensitive “rule-in” and “rule-out” test to accurately risk stratify indeterminate

thyroid nodules.

estimate the total market for our endocrine cancer assays is approximately $230 million annually based on the current size of the patient

population, estimated numbers of indeterminate biopsies and reimbursement rates.

ThyGeNEXT ® plus ThyraMIR ®

is a combination testing platform.

The mutational analysis provided by ThyGeNEXT can help inform treatment alone when strong BRAF V600E-like

mutations are found.

However, reflex to ThyraMIR occurs approximately 85% of the time to provide a greater understanding of malignancy

risk and is especially helpful when weaker drivers of malignancy, such as RAS-like mutations, are found.

currently market and sell a combination testing platform that can inform cancer risk in indeterminate thyroid nodules—those that

are not clearly malignant or benign by cytology.

ThyGeNEXT ® is a next generation DNA and RNA sequencing oncogene and mRNA

fusion panel.

The markers within the ThyGeNEXT ® oncogene panel provide clinical utility by informing diagnosis, prognosis,

and targeted treatment guidance aligned to FDA-approved therapies for RET, NTRK , and other markers found within the panel.

works with our second endocrine cancer diagnostic test, ThyraMIR ® v2, an assay that measures the relative expression

of eleven distinct microRNAs.

The combined analysis of the ThyGeNEXT ® and ThyraMIR ® v2 test results provides

highly accurate “rule-in” and “rule-out” malignancy risk guidance.

estimate the total market for our endocrine (thyroid) cancer assays is approximately $221 million (USD) annually based on the current

size of the patient population, estimated numbers of indeterminate biopsies and reimbursement rates.

The mutational analysis provided

by ThyGeNEXT ® can help inform treatment alone when strong driver BRAF V600E-like mutations are found.

reflex to ThyraMIR ® v2 occurs approximately 85% of the time to provide a greater understanding of malignancy risk and is

especially helpful when weaker drivers of malignancy, such as RAS -like mutations, are found.

Endocrinologists,

and ear, nose and throat (“ENT”) specialists evaluate most thyroid nodules for possible cancer by collecting cells through

ear, nose and throat (“ENT”), and other specialists evaluate thyroid nodules for possible cancer by collecting cells through

Fine Needle Aspiration (“FNA”) that are then analyzed by cytopathologists to determine whether or not a thyroid nodule is

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the thyroid nodule proved to be benign.

Current National Comprehensive Cancer Network (“NCCN”) and American Thyroid Association

(“ATA”) guidelines support use of molecular analysis for nodules with indeterminate cytology results as this testing can

prove beneficial to further characterize these lesions and support optimal patient management.

Current practice and guidelines, such as those from the National Comprehensive Cancer Network

(“NCCN”) and American Thyroid Association (“ATA”), support use of molecular analysis for nodules with indeterminate

cytology results as this testing can prove beneficial to further characterize these lesions and help support optimal patient management.

Cancer Product — RespriDx ® Test and Metastatic versus Primary Platform

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RespriDx ® assists in determining the most appropriate course of treatment, whether chemotherapy, surgery, or other modalities.

Certified and CAP Accredited Laboratories

testing is performed in our state of the art Clinical Laboratory Improvement Amendments (“CLIA”) certified College of American

Pathologists (“CAP”) accredited laboratory in Pittsburgh, Pennsylvania.

CLIA is a federal law regulating clinical laboratories

that perform testing on specimens derived from humans for the purpose of providing information for the diagnosis, prevention or treatment

Clinical laboratories must be certified under CLIA in order to perform testing on human specimens, unless they fall within

an exception to CLIA certification, such as research laboratories that test human specimens but do not report patient-specific results

for the diagnosis, prevention or treatment of any disease or impairment of, or the assessment of the health of individual patients.

certification is also required to be eligible to bill Federal and State healthcare programs, as well as many private third-party payers,

for diagnostic testing and services.

In addition, proprietary tests must also be recognized as part of an accredited program under CLIA

so that they can be offered in a CLIA-certified laboratory.

CLIA is intended to ensure the quality and reliability of clinical laboratories

in the United States by mandating specific standards in the areas of personnel qualifications, administration, and participation in proficiency

testing, patient test management, quality control, quality assurance and inspections.

For renewal of CLIA certification, clinical laboratories

are subject to survey and inspection every two years.

Moreover, CLIA inspectors may make random inspections of clinical laboratories

outside of the renewal process.

provide data driven solutions for pharmaceutical and biotech companies engaged in clinical trials and focus on providing these clients

with oncology specific and non-oncology genetic testing services for phase I-IV clinical trials along with critical support of ancillary

These ancillary services include:

biorepository, clinical trial logistics, clinical trial design, bioinformatics analysis,

customized assay development.

DNA and RNA extraction and purification, genotyping, gene expression, flow cytometry, cytogenetic and FISH

and biomarker analyses.

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

drug-specific companion diagnostics.

We have established business relationships with key instrument manufacturers to provide a multi-omic

approach, and to drive acceptance among biopharmaceutical sponsors developing innovative immuno-oncology therapies.

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

the efficiency and economic viability of clinical trials.

Our clinical trials services leverage our knowledge of clinical oncology and

molecular diagnostics and our laboratories’ fully integrated capabilities.

We believe our pharma services operates one of only

a few laboratories with the capability to combine somatic and germline mutational analyses in clinical trials.

pharma services laboratory located in Morrisville, North Carolina has current certificates under CLIA to perform high complexity

testing and are accredited by CAP, one of seven CLIA-approved accreditation organizations.

research has shown many promising drugs have produced disappointing results in clinical trials.

For example, a 2016 article by the University

of Michigan reported that only 1 in 50 cancer drug candidates make it to the clinical market.

Given such a high failure rate of oncology

drugs, combined with constrained budgets for biotech and pharmaceutical companies, there is a significant need for drug developers to

utilize molecular diagnostics to decrease these failure rates.

For specific molecular-targeted therapeutics, the identification of appropriate

biomarkers indicative of disease type or prognosis may help to optimize clinical trial patient selection and increase trial success rates

by helping clinicians identify patients that are most likely to benefit from a therapy based on their individual genomic profile.

a laboratory infrastructure standpoint, we possess capabilities in histology, immunohistochemistry (“IHC”), flow cytometry,

cytogenetics and fluorescent in-situ hybridization (“FISH”), as well as sophisticated molecular analysis techniques, including

next generation sequencing.

This allows for comprehensive esoteric testing within one lab enterprise, with our CLIA-certified, CAP-accredited

laboratory serving as a central hub for specimen tracking.

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

requiring multiple assays and techniques aimed at capturing data on multiple biomarkers.

Our suite of available testing platforms allows

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

this combination of a variety of testing platforms powered by a team of experienced scientists, we offer a comprehensive approach to

clinical trial support.

As trial design becomes increasingly complex to cater to more specific drug targets and patient populations,

we believe that clinical result generation and reporting through a single-source solution for testing is becoming more valuable than

Examples of clinical trial services offered by our pharma services include:

of individual antibodies in multiple myeloma, leukemia, lymphomas, and therapy response.

detection of aberrations at low resolution that have a diagnostic or prognostic significance.

in-situ hybridization (FISH) probe library for the detection of gene abnormalities in chromosomes indicated in hematological and

solid tumors.

IHC library with over 180 antibodies available.

of the protein-encoding genes in a genome.

and RNA sequencing

to determine the presence and quantity of RNA or DNA in a specimen.

Generation sequencing

and custom-designed panels to deep sequence genomic material to identify genetic mutations, substitutions, insertions and deletions,

and rearrangements of genetic material.

next generation sequencing panel for lung cancer to detect tumor-derived cell-free DNA obtained from a blood draw.

and RNA microarray

select genomic information for large number of genes simultaneously.

sequencing for validation of next generation sequencing results, and for smaller scale sequencing projects.

size analysis

technique where DNA fragments are separated by size and used for mutation detection.

and RNA extraction and purification

and isolation of DNA and RNA from a wide variety of sample types for immediate testing or for storage.

Biostatistics

and Bioinformatics

and review of client assays and analysis of datasets.

March of 2022, ClinicalTrials.gov reported over 80,000 clinical trials that are either preparing or recruiting patients.

Molecular- and

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

information about trial subjects’ genetic profiles that may be able to inform researchers whether or not a subject will benefit

from the trial drug or will experience adverse effects.

We believe that streamlined subject selection and stratification and tailored

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

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

According to the United States

Food and Drug Administration (“FDA”), 2021 produced over 50 new drug approvals and 20% of these drugs were oncology-focused,

highlighting the potential value of incorporating genomic information into oncology clinical trial design.

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

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

We believe pharmacogenomics drug metabolism

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

in patients’ genomic profiles.

Certified and CAP Accredited Laboratory

testing is performed in our state of the art CLIA certified College of American Pathologists (“CAP”) accredited laboratory

in Pittsburgh, Pennsylvania.

CLIA is a federal law regulating clinical laboratories that perform testing on specimens derived from humans

for the purpose of providing information for the diagnosis, prevention or treatment of disease.

Clinical laboratories must be certified

under CLIA in order to perform testing on human specimens, unless they fall within an exception to CLIA certification, such as research

laboratories that test human specimens but do not report patient-specific results for the diagnosis, prevention or treatment of any disease

or impairment of, or the assessment of the health of individual patients.

CLIA certification is also required to be eligible to bill

Federal and State healthcare programs, as well as many private third-party payers, for diagnostic testing and services.

proprietary tests must also be recognized as part of an accredited program under CLIA so that they can be offered in a CLIA-certified

CLIA is intended to ensure the quality and reliability of clinical laboratories in the United States by mandating specific

standards in the areas of personnel qualifications, administration, and participation in proficiency testing, patient test management,

quality control, quality assurance and inspections.

For renewal of CLIA certification, clinical laboratories are subject to survey and

inspection every two years.

Moreover, CLIA inspectors may make random inspections of clinical laboratories outside of the renewal process.

and Marketing

sales and marketing efforts consist of both direct and indirect sales channels with the majority of efforts focused on direct sales in

the United States as well as a collaborative arrangement with another laboratory services company.

In the US, pharma services also execute

an indirect channel partner strategy by partnering with clinical research organizations (“CROs”) to support demand for unique

or esoteric testing, customized data management and individual development of unique biomarkers.

commercialization efforts for our clinical services are currently focused on endocrinology, gastroenterology and lung cancers.

Communication

of our marketing messaging and value proposition is done principally through our two field-based commercial sales teams of approximately

26 representatives and managers.

In addition, we employ medical science liaisons or MSLs to respond to clinician inquiries.

Additionally,

we communicate through print, digital advertising, a web presence, peer-reviewed publications, and trade show exhibits.

We believe that

our molecular diagnostic tests provide value to payers, physicians and patients by improving patient care and lowering healthcare costs

through avoidance of unnecessary surgeries, reducing the morbidity associated with unnecessary surgeries for patients, and providing

better diagnostic and prognostic insights to physicians.

We support the value propositions of our tests through rigorous science and

the accumulation of bioinformatics data that demonstrate clinical and analytical validity as well as clinical utility, and how they actually

impact physicians’ decisions.

We believe our repository of bioinformatics data accumulated in over 37,000 cases using PancraGEN

and over 30,000 cases using our thyroid assays is a valuable tool in developing our analytics and potentially an even more valuable tool

in the future.

communicate to payers, integrated delivery systems and hospital systems about our molecular diagnostic tests’ value through highly

trained professionals who are experienced in reimbursement and business to business selling and through face to face meetings, phone

calls, digital communications and advisory boards.

We develop health economic analyses and budget impact models and incorporate these

along with our clinical validation studies, and clinical utility studies to demonstrate our molecular diagnostic tests’ value to

this distinct and important constituency.

pharma services business development and sales professionals have scientific backgrounds in hematology, pathology, and laboratory

services, with many years of experience in biopharmaceutical and clinical oncology sales, esoteric laboratory sales from leading biopharmaceutical,

pharmaceutical or specialty reference laboratory companies.

We currently have a team of 4 business development and sales professionals

in the United States.

We support our sales force with scientific experts who bring deep domain knowledge in the design and use of our

technologies and services.

pharma services team also executes an indirect channel partner strategy.

As a result of this strategy, the pharma services team conducts

project support for sponsors as a partner of such central labs as Covance, ICON Laboratories Inc.

and Parexel International Corp.

addition to both direct and indirect sales channels, the pharma services team has formed a partnership with the China-based lab partner

Genecast Biotechnology Co., Ltd.

or, Genecast.

Through our partnership with Genecast, we believe we are able to support our global pharmaceutical

and biotechnology clients with their testing needs in the Chinese market.

also promote our tests and services through marketing channels commonly used by the biopharma and pharmaceutical industries, such as

internet, industry meetings and broad-based publication of our scientific and economic data.

In addition, we provide easy to access information

to our customers over the internet through dedicated websites.

Our customers value easily accessible information in order to quickly

review patient or study information.

We do not, however, market our tests directly to individual patients or consumers.

Services Reimbursement Coverage

Reimbursement Coverage During 2021

Reimbursement

progress is key for our clinical services.

We continued to expand the reimbursement of our products in 2021.

Specifically, the most significant

progress we have made regarding payers in 2021 is as follows:

January 2021, we announced an agreement with Blue Cross Blue Shield of Florida under which ThyGeNEXT ® and ThyraMIR ®

tests are now covered in-network services for their 5 million members.

February 2021, we announced an agreement with Blue Cross Blue Shield of Illinois that makes ThyGeNEXT ® and ThyraMIR ®

tests covered in-network services for their more than 8 million members in Illinois.

April 2021, we announced that Novitas, our Medicare Administrative Contractor, has agreed to recognize the new Proprietary Laboratory

Analysis (“ PLA ”) code that specifically identifies ThyGeNEXT ® as a distinct test from any other

test or service.

The new PLA code for ThyGeNEXT ® is 0245U and the reimbursement for this code remains $2,919, representing

a significant price increase over the prior reimbursement level of $560.

May 2021, we announced that eviCore Healthcare (“ eviCore ”), a wholly owned subsidiary of Cigna, has updated their

laboratory management guidelines to include positive coverage for ThyGeNEXT ® and ThyraMIR ® .

which impacts approximately 27 health plans nationwide covering 100 million lives, is effective on July 1, 2021.

This means that

after the effective date, claims for ThyGeNEXT and ThyraMIR which meet eviCore’s criteria for coverage will be considered medically

necessary and processed as a covered service.

November 2021, CMS announced that it had assigned 0245U for Medicare rate-setting via the gapfill process.

Under gapfill, the Medicare

payment rate for 0245U will be established by Novitas during CY 2022.

Effective January 1, 2023, the Medicare payment rate will be

established as the median of the payment amounts established by all Medicare contractors.

sales and marketing efforts consist of both direct and indirect sales channels with the efforts focused in the United States.

have collaborative arrangements with other laboratory services companies.

commercialization efforts for our clinical services are currently focused on endocrine (thyroid), gastroenterologic (pancreatic) and

lung cancers.

Communication of our marketing messaging and value propositions is accomplished through multiple channels, including two

field-based commercial sales teams of approximately 32 representatives and managers.

In addition, we employ medical science liaisons

(MSLs)—therapeutic specialists with advanced scientific training to aid in communicating complex scientific and medical information

to leading physicians.

Other channels of communication include print, digital advertising, social media, a web presence, peer-reviewed

publications, and trade show exhibits.

We believe that our molecular diagnostic tests provide value to payers, physicians, and patients

by improving patient care and lowering healthcare costs through avoidance of unnecessary surgeries, reducing the morbidity associated

with unnecessary surgeries for patients, and providing better diagnostic and prognostic insights to physicians.

We support the value

propositions of our tests through rigorous science that supports the analytical and clinical validity as well as clinical utility of

We believe our repository of bioinformatics data accumulated from our testing is a valuable tool in developing and refining

our analytics while also potentially being an even more valuable tool in the future.

also communicate to payers, integrated delivery systems and hospital systems about our molecular diagnostic tests’ value through

highly trained professionals who are experienced in reimbursement and business-to-business selling and through face-to-face meetings,

phone calls, digital communications and advisory boards.

We develop health economic analyses and budget impact models and incorporate

these along with our clinical validation studies, and clinical utility studies to demonstrate our molecular diagnostic tests’ value

to this distinct and important constituency.

compete on the basis of factors such as reputation, scientific expertise, service quality, management experience, performance record,

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in regard to our thyroid diagnostic tests, Veracyte, Inc., or Veracyte, has a molecular thyroid nodule cancer diagnostic test (Afirma)

that is the current market leader and competes with our ThyGeNEXT ® and ThyraMir ® tests.

that is the current market leader and competes with our ThyGeNEXT ® and ThyraMir ® v2 tests.

Quest Diagnostics

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Accelerate Diagnostics, Inc., or other companies we are not aware of.

Additionally, in February 2020, we entered into an arrangement

to co-market our thyroid test for an additional two years with LabCorp on a reference laboratory basis.

We are in the process of negotiating

a renewal of the LabCorp contract.

are currently not aware of any direct competitors to PancraGEN ® that integrate clinical, imaging, cytology, and molecular

information to stratify patients’ risk for malignancy and inform physicians on the best course of action, i.e., surgery

or surveillance and surveillance interval length.

The University of Pittsburgh Medical Center now offers PancreaSeq ® ,

a Next Generation Sequencing “gene only” panel that focuses on the analysis of mutations in oncogenes and tumor suppressor

genes, most of which may help establish the type of pancreatic cyst present and some of which may help establish the presence of malignancy.

Some of these related genomic regions are included in PancraGEN ® .

This laboratory test however does not integrate any

additional information to fully characterize a patient’s risk for pancreatic cancer.

Importantly, there has been no long-term clinical

validation or utility studies completed on any gene panel for pancreatic cyst fluid other than that associated with PancraGEN ® .

PancraGEN ® has been validated in multiple studies and peer reviewed publications and has been used in over 45,000 patients.

Additionally, we validated and launched a DNA only version of PancraGEN ® , known as PanDNA ® .

information to stratify patients’ risk for malignancy and inform physicians on the best course of action, i.e., surgery or surveillance

and surveillance interval length.

The University of Pittsburgh Medical Center now offers PancreaSeq ® , a Next Generation

Sequencing “gene only” panel that focuses on the analysis of mutations in oncogenes and tumor suppressor genes, most of which

may help establish the type of pancreatic cyst present and some of which may help establish the presence of malignancy.

Some of these

related genomic regions are included in PancraGEN ® .

This laboratory test however does not integrate any additional information

to fully characterize a patient’s risk for pancreatic cancer.

Importantly, there has been no long-term clinical validation or utility

studies completed on any gene panel for pancreatic cyst fluid other than that associated with PancraGEN ® .

has been validated in multiple studies and peer reviewed publications and has been used in over 45,000 patients.

Additionally,

we validated and launched a DNA only version of PancraGEN ® , known as PanDNA ® .

is also possible that we face future competition from other laboratory-developed tests (LDT’s), developed by commercial laboratories

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will also be more competitive in the future.

respect to pharma services, we also face competition from companies that currently offer or are developing products to profile genes,

gene expression or protein biomarkers in various cancers.

Precision medicine is a new area of science, and we cannot predict what tests

others will develop that may compete with or provide results superior to the results we are able to achieve with the tests we develop.

Our competitors include public companies such as NeoGenomics, and many private companies.

and Development

conduct most of our research and development activities at our CLIA certified and CAP accredited laboratory in Pittsburgh, Pennsylvania.

Our research and development efforts primarily focus on providing data and analyses necessary to support and improve our existing products

conduct our research and development activities at our CLIA-certified and CAP-accredited laboratory in Pittsburgh, Pennsylvania.

research and development efforts primarily focus on providing data and analyses necessary to support and improve our existing products

on the market.

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both license intellectual property for use in our test panels as well as licensing such intellectual property out.

research and development costs are primarily clinical costs and were approximately $1.9 million and $2.8 million in 2021 and 2020,

respectively.

continue to generate and publish clinical evidence related to our key products, including ThyGeNEXT ® and ThyraMIR ®

research and development costs are primarily clinical costs and were approximately $0.7 million and $1.5 million in 2022 and 2021, respectively.

continue to generate and publish clinical evidence related to our key products, including ThyGeNEXT ® and ThyraMIR ® v2

and PancraGEN ® as well as our pipeline product, BarreGEN ® .

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and methods of treating a subject identified with a papillary thyroid carcinoma.

As of December 31, 2021, we owned four issued patents

outside of the United States, one each in Australia, Europe (validated in certain European countries), Japan, and Israel.

As of December

31, 2021, we owned five pending patent applications in the United States.

Provided all maintenance fees and annuities are paid, our issued

United States patents expire from 2031 through 2034 and our foreign patents expire in 2027 or 2031, and our pending patent applications,

if issued, are expected to expire between 2027 and 2038, absent any disclaimers, adjustments or extensions.

On March 29, 2017 we were

notified by the European Patent Office that our EP patent # 2772550 for diagnosing thyroid cancer from a sample based upon at least MIR-375

was issued (validated in Spain, France, United Kingdom, Ireland, Italy, Belgium, Switzerland, Germany, and the Netherlands) and, provided

all maintenance fees and annuities are paid, expires in 2031.

On January 16, 2018, we were notified that an Opposition had been filed

against EP patent # 2772550 alleging that the patent is invalid.

On February 25, 2019, the European Patent Office Opposition Division

issued a decision revoking the patent on grounds that the claims were not supported by a valid basis.

On April 25, 2019, we filed

a Notice of Appeal challenging the European Patent Office Opposition Division and we are waiting for the appeal to be decided.

to believe that the patent is valid.

Our patents are directed to certain of the technologies relating to detecting, diagnosing, and classifying

thyroid tumors, pancreatic cysts and other forms of gastrointestinal disorders, such as Barrett’s esophagus.

April 9, 2019 the United States Patent and Trademark Office (USPTO) issued U.S.

10,255,410, supporting BarreGEN ® .

Additionally, United States Patent No.

10,444,239 issued on October 15, 2019, for methods measuring carcinoembryonic antigen in a biological

As of December 31, 2022, we owned three issued patents

outside of the United States, one each in Australia, Japan, and Israel.

As of December 31, 2022, we owned two pending patent applications

in the United States.

Provided all maintenance fees and annuities are paid, our issued United States patents expire from 2031 through

2034, our foreign patents expire in 2031, and our pending patent applications, if issued, are expected to expire between 2027 and 2038,

absent any disclaimers, adjustments or extensions.

Our patents are directed to certain of the technologies relating to detecting, diagnosing,

and classifying thyroid tumors, pancreatic cysts and other forms of gastrointestinal disorders, such as Barrett’s esophagus.

addition to our own molecular diagnostic test development efforts, we are currently using, and intend to use in the future, certain tests

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While a significant amount of

intellectual property in the field of molecular diagnostic tests is already in the public domain, ThyraMIR ® , ThyGeNEXT ® ,

intellectual property in the field of molecular diagnostic tests is already in the public domain, ThyraMIR ® v2, ThyGeNEXT ® ,

and some of the future tests developed by us, or by third parties on our behalf for use in our tests, may require, that we license the

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(i.e., ThyGeNEXT ® ) and potentially on certain other thyroid diagnostics tests.

We rely on Asuragen as our sole supplier

for certain components of our endocrine cancer diagnostic tests pursuant to our supply agreement with them.

October 2014, we acquired RedPath Integrated Pathology Inc.

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and miR Inform ® with the World Intellectual Property Organization.

In July 2019, in connection with the acquisition

of the pharma services business of Cancer Genetics we acquired certain know-how.

clinical and our pharma services rely on a combination of trade secrets and proprietary processes to protect our intellectual property.

We enter into non-disclosure agreements with certain vendors and suppliers to attempt to ensure the confidentiality of our intellectual

We also enter into non-disclosure agreements with our customers.

In addition, we require that all our employees sign confidentiality

and intellectual property assignment agreements.

rely on a combination of trade secrets and proprietary processes to protect our intellectual property.

We enter into non-disclosure agreements

with certain vendors and suppliers to attempt to ensure the confidentiality of our intellectual property.

We also enter into non-disclosure

agreements with our customers.

In addition, we require that all our employees sign confidentiality and intellectual property assignment

Material and Suppliers

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Our most significant

suppliers for reagents and supplies include Thermo Fisher Scientific, Illumina, Inc., Qiagen, Asuragen, and F.

suppliers for reagents and supplies include Thermo Fisher Scientific Inc., Illumina, Inc., Qiagen N.V., and F.

Hoffmann-La Roche AG.

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of supply were available.

If our test volume decreases or we switch suppliers, we may hold excess inventory with expiration dates that

occur before use which would adversely affect our losses and cash flow position.

As we introduce any new test, we may experience supply

issues as we ramp test volume.

If our test volume decreases or we switch suppliers, we may hold excess lab supplies with expiration dates

that occur before use which would adversely affect our losses and cash flow position.

As we introduce any new test, we may experience

supply issues as we ramp test volume.

Regulations and Industry Guidelines

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in enforcement actions.

over Our Clinical Laboratories

conduct and provision of our clinical services and pharma services are regulated under the Clinical Laboratory Improvements Amendments

over Our Clinical Laboratory

conduct and provision of our services are regulated under the CLIA.

CLIA requires us to maintain Federal certification.

CLIA imposes requirements relating to test processes, personnel

qualifications, facilities and equipment, recordkeeping, quality assurance and participation in proficiency testing.

CLIA compliance

and certification are also a condition for participation by clinical laboratories in the Medicare Program and for eligibility to bill

for services provided to governmental healthcare program beneficiaries.

As a condition of CLIA certification, our laboratories are subject

to survey and inspection every other year, in addition to being subject to additional random inspections.

The biennial survey is typically

conducted by a State agency, or, if the laboratory is accredited, a CMS-approved accreditation organization.

Sanctions for failure to

meet these certification, accreditation and licensure requirements include suspension, revocation or limitation of a laboratory’s

CLIA certification, accreditation or license, which is necessary to conduct business, cancellation or suspension of the laboratory’s

ability to receive Medicare or Medicaid reimbursement, as well as imposition of plans to correct deficiencies, injunctive actions and

civil monetary and criminal penalties.

The loss or suspension of a CLIA certification, imposition of a fine or other penalties, or future

changes in the CLIA law or regulations (or interpretation of the law or regulations) could harm our business.

In addition to CLIA requirements,

we participate in the accreditation program of the College of American Pathologists (“CAP”).

Under CMS requirements, accreditation

by CAP is sufficient to satisfy the requirements of CLIA.

requirements relating to test processes, personnel qualifications, facilities and equipment, recordkeeping, quality assurance and participation

in proficiency testing.

CLIA compliance and certification are also a condition for participation by clinical laboratories in the Medicare

Program and for eligibility to bill for services provided to governmental healthcare program beneficiaries.

As a condition of CLIA certification,

our laboratory is subject to survey and inspection every other year, in addition to being subject to additional random inspections.

The biennial survey is typically conducted by a State agency, or, if the laboratory is accredited, a CMS-approved accreditation organization.

Potential sanctions for failure to meet these certification, accreditation and licensure requirements include suspension, revocation

or limitation of a laboratory’s CLIA certification, accreditation or license, which is necessary to conduct business, cancellation

or suspension of the laboratory’s ability to receive Medicare or Medicaid reimbursement, as well as imposition of plans to correct

deficiencies, injunctive actions and civil monetary and criminal penalties.

The loss or suspension of a CLIA certification, imposition

of a fine or other penalties, or future changes in the CLIA law or regulations (or interpretation of the law or regulations) could harm

our business.

addition to CLIA requirements, we participate in the accreditation program of the College of American Pathologists (“CAP”).

Under CMS requirements, accreditation by CAP is sufficient to satisfy the requirements of CLIA.

Failure to maintain CAP accreditation

could have a material adverse effect on the sales of our tests and the results of our operations.

addition to CLIA certification, we are required to hold state licenses in certain states.

Some state licensing requirements differ from

federal regulation and may be stricter.

federal regulation and may impose additional or different requirements.

CLIA does not preempt state laws that are more stringent.

If we were to lose our CLIA certification,

CAP Accreditation, or required state licenses for our laboratories, whether as a result of revocation, suspension or limitation, we would

no longer be able to provide our services, which would have a material adverse effect on our business, financial condition and results

of operations.

laboratories are also subject to licensing and regulation under Federal, State and local laws relating to hazard communication and employee

we were to lose our CLIA certification, CAP Accreditation, or required state licenses for our laboratory, whether as a result of revocation,

suspension or limitation, we would no longer be able to provide our services, which would have a material adverse effect on our business,

financial condition and results of operations.

laboratory is also subject to licensing and regulation under Federal, State and local laws relating to hazard communication and employee

right-to-know regulations, and the safety and health of laboratory employees.

Additionally, our laboratories are subject to applicable

Federal and State laws and regulations and licensing requirements relating to the handling, storage and disposal of hazardous waste and

laboratory specimens, including the regulations of the Environmental Protection Agency, the Department of Transportation, and the National

Fire Protection Agency.

Additionally, our laboratory is subject to applicable Federal

and State laws and regulations and licensing requirements relating to the handling, storage and disposal of hazardous waste and laboratory

specimens, including the regulations of the Environmental Protection Agency, the Department of Transportation, and the National Fire

Protection Agency.

The regulations of the United States Department of Transportation, Public Health Service and Postal Service apply

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Food and Drug Administration Regulation of Laboratory Developed Tests (“LDTs”)

United States Federal and State governmental agencies continue to subject the healthcare industry to intense regulatory scrutiny, including

heightened civil and criminal enforcement efforts.

As indicated by work plans and reports issued by these agencies, the Federal government

will continue to scrutinize, among other things, the marketing, labeling, promotion, and manufacturing of LDTs.

While subject to oversight

by CMS through its enforcement of CLIA, the FDA has claimed regulatory authority over all laboratories that produce LDTs, a type of in

vitro diagnostic test that is designed, manufactured and used within a single laboratory.

The FDA has regulatory responsibility over,

among other areas, instruments, test kits, reagents and other devices used in clinical laboratories to perform diagnostic testing in

the United States.

subject to oversight by CMS through its enforcement of CLIA, the FDA has claimed regulatory authority over all laboratories that produce

LDTs, a type of in vitro diagnostic test that is designed, manufactured and used within a single laboratory.

The FDA has regulatory responsibility

over, among other areas, instruments, test kits, reagents and other devices used in clinical laboratories to perform diagnostic testing

in the United States.

Historically,

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for Regulatory Oversight of Laboratory Developed Tests,” which provided an overview of how the FDA would regulate LDTs through

a risk-based approach, and “FDA Notification and Medical Device Reporting for Laboratory Developed Tests,” which provided

guidance on how the FDA intends to collect information on existing LDTs, including adverse event reports.

Pursuant to the Framework for

Regulatory Oversight draft guidance, LDT manufacturers would be subject to medical device registration, listing, and adverse event reporting

requirements.

LDT manufacturers would be required to either submit a pre-market application and receive the FDA’s approval before

an LDT may be marketed, or submit a pre-market notification in advance of marketing, unless subject to continued enforcement discretion.

The Framework for Regulatory Oversight draft guidance states that within six months after the guidance documents are finalized, all laboratories

will be required to give notice to the FDA and provide basic information concerning the nature of the LDTs offered.

If the FDA were to

regulate LDTs as proposed under the 2014 draft guidance documents, then it would classify LDTs into one of three classes according to

the current system used to regulate medical devices.

Class I devices are those for which reasonable assurance of the safety and effectiveness

can be provided by adherence to the FDA’s general regulatory controls for medical devices.

Class II devices are subject to the

FDA’s general controls, and any other special controls as deemed necessary by the FDA to provide reasonable assurance of the safety

and effectiveness of the devices.

Class III devices are those devices which are deemed by the FDA to pose the greatest risk, such as

life-sustaining, life-supporting or implantable devices, have a new intended use, or use advanced technology that is not substantially

equivalent to that of a legally marketed device.

Under the guidance documents, LDTs would also be subject to significant post-market

requirements as well.

January 13, 2017, the FDA released a discussion paper on LDTs outlining a possible, substantially-revised risk-based approach for FDA

and CMS oversight of LDTs.

According to the 2017 discussion paper, previously marketed LDTs would not be expected to comply with most

or all FDA oversight requirements (grandfathering), except for adverse event and malfunction reporting.

In addition, certain new and

significantly modified LDTs would not be expected to comply with pre-market review unless the agency determines certain tests could lead

to patient harm.

Since many LDTs currently on the market would be grandfathered in, pre-market review of new and significantly modified

LDTs could be phased-in over a four-year period, as opposed to the nine years proposed in the Framework for Regulatory Oversight draft

In addition, tests introduced after the effective date, but before their phase-in date, could continue to be offered during

pre-market review.

a risk-based framework, and “FDA Notification and Medical Device Reporting for Laboratory Developed Tests,” which described

how FDA would implement a proposed notification process applicable to LDT manufacturers, including adverse event reporting.

January 13, 2017, the FDA released a discussion paper on LDTs which outlined a substantially-revised approach for regulating LDTs.

to the 2017 discussion paper, previously marketed LDTs would not be expected to comply with most or all FDA oversight requirements (grandfathering),

except for adverse event and malfunction reporting.

In addition, certain new and significantly modified LDTs would not be expected to

comply with pre-market review unless the agency determines certain tests could lead to patient harm.

Since many LDTs currently on the

market would be grandfathered in, pre-market review of new and significantly modified LDTs could be phased-in over a four-year period,

as opposed to the nine years proposed in the Framework for Regulatory Oversight draft guidance.

In addition, tests introduced after the

effective date, but before their phase-in date, could continue to be offered during pre-market review.

discussion paper notes that FDA will focus on analytical and clinical validity as the basis for marketing authorization.

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prior to implementation.

the FDA decision to not release the final guidance at this time, it can choose to regulate LDTs at any time.

Failure to comply with applicable

regulatory requirements could result in enforcement action by the FDA, such as fines, product suspensions, warning letters, recalls,

injunctions and other civil and criminal sanctions.

There are other regulatory and legislative proposals that would increase general

FDA oversight of clinical laboratories and LDTs.

The outcome and ultimate impact of such proposals on the business is difficult to predict

at this time.

We are monitoring developments and anticipate that our products will be able to comply with requirements if ultimately

imposed by the FDA.

In the meantime, we maintain our CLIA certification of accreditation, which permits the use of LDTs for diagnostic

March 2017, members of Congress posted a discussion draft of “The Diagnostics Accuracy and Innovation Act” (DAIA).

The discussion

draft included language that, if enacted, would have established a new regulatory framework for the oversight of in vitro clinical tests

(“IVCTs”) which include LDTs.

In March 2020, members of Congress introduced “The Verifying Accurate, Leading-edge IVCT

Development (VALID) Act”;

this bill was re-introduced in substantially similar form in June 2021.

Pursuant to VALID, a risk-based

the regulatory approaches proposed over the past decade, FDA continues to exercise enforcement discretion over most LDTs.

If FDA ceases

to exercise enforcement discretion over LDTs, failure to comply with applicable requirements could result in warning letters, civil monetary

penalties, injunctions, criminal prosecution, recall or seizure, operating restrictions, partial suspension or total shutdown of operations,

and denial of or challenges to applications for clearance or approval, as well as significant adverse publicity.

and legislative proposals have been introduced alongside FDA’s regulatory proposals.

In March 2017, members of Congress posted

a discussion draft of “The Diagnostics Accuracy and Innovation Act” (DAIA).

The discussion draft included language that,

if enacted, would have established a new regulatory framework for the oversight of in vitro clinical tests (“IVCTs”) which

include LDTs.

In March 2020, members of Congress introduced “The Verifying Accurate, Leading-edge IVCT Development (VALID) Act.”

This bill was re-introduced in substantially similar forms over the years, and, most recently in December 2022, as part of the as part

of the Food and Drug Omnibus Reform Act of 2022 (“FDORA”).

Under the most recent version of the VALID Act, a risk-based

approach would be used to regulate IVCTs while grandfathering many existing IVCTs.

Each test will be classified as high-risk or low-risk.

Each test will be classified as high-risk, moderate-risk,

Pre-market review will be required for high-risk tests.

To market a high-risk IVCT, reasonable assurance of analytical and clinical validity

for the intended use must be established.

Under VALID, a precertification process would be established which will allow a laboratory

to establish that the facilities, methods, and controls used in the development of certain IVCTs meet quality system requirements.

pre-certified, low-risk IVCTs it develops will not be subject to pre-market review.

The new regulatory framework will include quality

control and post-market reporting requirements.

The FDA will have the authority to withdraw from the market IVCTs if it is reasonable

possible that such tests will cause serious adverse health consequences (among other criteria).

Failure to comply with applicable regulatory

requirements can result in enforcement action by the FDA, such as fines, product suspensions, warning letters, recalls, injunctions and

other civil and criminal sanctions.

It is unclear when, or if, the VALID Act will become law.

To market a high-risk IVCT, reasonable assurance of analytical and

clinical validity for the intended use must be established.

Under VALID, a precertification process would be established which will allow

a laboratory to establish that the facilities, methods, and controls used in the development of certain IVCTs meet quality system requirements.

If pre-certified, IVCTs falling within the scope of a certification order will not be subject to pre-market review.

The new regulatory

framework will include quality control and post-market reporting requirements.

The FDA will have the authority to withdraw from the market

IVCTs if it is reasonable possible that such tests will cause serious adverse health consequences (among other criteria).

comply with applicable regulatory requirements can result in enforcement action by the FDA, such as fines, product suspensions, warning

letters, recalls, injunctions and other civil and criminal sanctions.

the VALID Act was not ultimately included in the version of FDORA that was incorporated into the Consolidated Appropriations Act, 2023,

it may be re-introduced in the future.

In the absence of legislative action, some have speculated that the FDA may attempt to regulate

LDTs on their own (e.g., via notice and comment rulemaking), which is likely to continue to be met with resistance by certain sections

We cannot predict if this (or any other bill) will be enacted in its current (or any other) form and cannot quantify the

effect of such proposals on our business.

Fraud, Abuse and Anti-Kickback Laws

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EKRA is a criminal statute and violations can result in fines of up to $200,000, up to 10 years in prison, or both, per violation.

As drafted, EKRA prohibits incentive compensation to sales employees, a practice that is common in the industry.

As drafted, EKRA does not clearly protect incentive compensation to sales employees, a practice that is common in the industry.

The government

has not issued or proposed regulations or other guidance interpreting EKRA.

other healthcare fraud and abuse laws could have an effect on our business.

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of the recovery.

Finally, the Social Security Act includes its own provisions that prohibit the filing of false claims or submitting

false statements in order to obtain payment.

Violation of these provisions may result in fines, imprisonment or both, and possible exclusion

from Medicare or Medicaid programs.

Penalties under the federal False Claims Act can include up to three times the damages sustained by the federal program

and up to about $12,000 and $26,000 per claim (these per-claim penalties are adjusted for inflation from time to time).

Further, numerous

states have enacted state false claims acts that apply to state government programs.

Finally, the Social Security Act includes its own

provisions that prohibit the filing of false claims or submitting false statements in order to obtain payment.

Violation of these provisions

may result in fines, imprisonment or both, and possible exclusion from Medicare or Medicaid programs.

are also subject to the federal physician self-referral prohibitions, commonly known as the Stark Law, and state equivalents.

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meets an exception to the prohibition.

The government has also claimed in FCA litigation that the Stark Law applies to Medicaid

Some states have also enacted state Stark Law equivalents that can apply to that state’s Medicaid plan and/or commercial

The government has also claimed in FCA litigation that the Stark Law applies to Medicaid claims.

Some states have also enacted state Stark Law equivalents that can apply to that state’s Medicaid plan and/or commercial payors.

or entities found to violate the Stark Law are required to refund any payments received pursuant to a referral prohibited by these laws

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No finding of intent to violate the Stark Law is required for a violation.

In addition, violations of the Stark

Law may also serve as the basis for liability under the Federal False Claims Act.

In addition, violations of the Stark Law

may also serve as the basis for liability under the Federal False Claims Act.

Additionally,

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the Health Insurance Portability and Accountability Act of 1996, or HIPAA.

HIPAA established a comprehensive program to combat fraud

committed against all health plans, both public and private by, among other things creating two new Federal offenses:

healthcare fraud

Code § 1347) and false statements relating to healthcare matters (18 U.S.

HIPAA aimed to combat fraud committed against all health plans,

both public and private by, among other things creating two new Federal offenses:

healthcare fraud (18 U.S.

Code § 1347) and false

statements relating to healthcare matters (18 U.S.

Code § 1035).

These provisions prohibit:

(1) the knowing and willful execution, or attempted execution, of a scheme or artifice (a) to defraud any healthcare benefit program

(including private payers), or (b) to obtain, by means of false or fraudulent pretenses, representations, or promises, any of the money

or property owned by, or under the custody or control of, any healthcare benefit program, in connection with the delivery of or payment

for healthcare benefits, items, or services;

and (2) the knowing and willful (a) falsification, concealment or covering up of a material

fact by any trick, scheme or device, or (b) making of any materially false, fictitious or fraudulent statement or representation, or

making or using any materially false writing or document knowing the same to contain any materially false, fictitious, or fraudulent

statement or entry, in connection with the delivery of or payment for healthcare benefits, items or services.

A violation of these provisions

is a felony and may result in fines, imprisonment and/or exclusion from government-sponsored programs.

(1) the knowing and willful execution,

or attempted execution, of a scheme or artifice (a) to defraud any healthcare benefit program (including private payers), or (b) to obtain,

by means of false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody

or control of, any healthcare benefit program, in connection with the delivery of or payment for healthcare benefits, items, or services;

and (2) the knowing and willful (a) falsification, concealment or covering up of a material fact by any trick, scheme or device, or (b)

making of any materially false, fictitious or fraudulent statement or representation, or making or using any materially false writing

or document knowing the same to contain any materially false, fictitious, or fraudulent statement or entry, in connection with the delivery

of or payment for healthcare benefits, items or services.

A violation of these provisions is a felony and may result in fines, imprisonment

and/or exclusion from government-sponsored programs.

along with the Health Information Technology for Economic and Clinical Health Act (HITECH) and the various regulations promulgated thereunder,

also establish uniform standards governing the conduct of certain electronic healthcare transactions and protecting the security and

privacy of individually identifiable health information maintained or transmitted by certain healthcare providers, health plans and healthcare

clearinghouses, which are referred to as “covered entities,” as well as individuals or entities to the extent they function

as a business associate of a covered entity.

The regulations promulgated under HIPAA govern:

the Privacy of Individually Identifiable

Health Information, restricting the use and disclosure of certain individually identifiable health information and establishing certain

rights of individuals who are the subject of such information (45 C.F.R.

§§ 164.500, et seq.);

Administrative Requirements

for electronic transactions, establishing standards for common healthcare transactions, such as claims information, plan eligibility,

payment information and the use of electronic signatures (45 C.F.R.

also establish uniform standards governing the conduct of certain electronic healthcare transactions and the security and privacy of

individually identifiable health information maintained or transmitted by certain healthcare providers, health plans and healthcare clearinghouses,

which are referred to as “covered entities,” as well as individuals or entities to the extent they perform health care operations

functions as a “business associate” for or on behalf of a covered entity.

The regulations promulgated under HIPAA governing

covered entities and business associates include the following subparts:

“Privacy of Individually Identifiable Health Information”,

which establishes conditions for the permissible use and disclosure of certain individually identifiable health information by covered

entities and establishes certain rights of individuals who are the subject of such information (45 C.F.R.

§§ 164.500, et seq.);

Security Standards for the Protection

of Electronic Protected Health Information, requiring covered entities to implement and maintain certain security measures to safeguard

certain electronic health information (45 C.F.R.

“Administrative Requirements”, which establishes electronic standards for common healthcare transactions, such as claims

information, plan eligibility, payment information and the use of electronic signatures (45 C.F.R.

§§ 162.100, et seq.);

and Breach Notification, requiring covered entities

and their business associates to provide certain notifications following a breach of unsecured protected health information (PHI)

Standards for the Protection of Electronic Protected Health Information”, which requires covered entities and their business associates

to implement and maintain certain security measures to safeguard certain electronic health information (45 C.F.R.

and “Breach Notification”, which requires covered entities and their business associates to provide certain notifications

to affected individuals, HHS and relevant media outlets following a breach of unsecured protected health information (PHI) (45 C.F.R.

§§ 164.400, et seq.).

As a covered entity, and also in our capacity as a business associate to certain of our

customers, we are subject to these standards.

We may also be liable for violations of HIPAA by any individual or entity, which may include

a business associate, that is acting as our agent under the federal common law of agency.

While the government intended this legislation

to reduce administrative expenses and burdens for the healthcare industry, our compliance with certain provisions of these standards

entails significant costs for us and limits our performance of functions or activities that involve collecting, receiving, maintaining,

transmitting, using, or disclosing PHI.

Our failure to comply with HIPAA, HITECH, and their implementing regulations could lead

to enforcement action that could have an adverse effect on our business.

If we or our operations are found to be in violation of HIPAA,

HITECH, or their respective implementing regulations, we may be subject to potentially significant penalties, including civil and criminal

penalties, damages and fines, and may incur damage to our reputation.

As a covered entity, and also in our capacity as a business associate to certain of our customers, we

are subject to these standards.

We may also be liable for violations of HIPAA by any individual or entity, which may include a business

associate that is acting as our agent under the federal common law of agency.

While the government intended this legislation to reduce

administrative expenses and burdens for the healthcare industry, our compliance with certain provisions of these standards entails significant

costs for us and requires us to follow specific policies and procedures when we use and disclose individually identifiable health information.

If we are found to be in violation of HIPAA, HITECH, or their respective implementing regulations, we may be subject to potentially significant

penalties, including civil and criminal penalties, damages and fines, and may incur damage to our reputation.

Such enforcement actions

could have an adverse effect on our business.

addition to Federal regulations issued under HIPAA and HITECH, many States and foreign jurisdictions have enacted privacy and security

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modify our planned operations and procedures to comply with the more stringent laws as HIPAA and HITECH do not supersede State laws to

the extent such State laws are broader in scope, impose more stringent requirements for PHI, or give individuals more rights with

respect to their PHI.

If we fail to comply with applicable State or foreign laws, rules, or regulations, we could be subject to

additional sanctions or other liabilities under those laws, rules, and regulations.

the extent such State laws are broader in scope, impose more stringent requirements for individually identifiable health information,

or give individuals more rights with respect to their individually identifiable health information.

If we fail to comply with applicable

State or foreign laws, rules, or regulations, we could be subject to additional sanctions or other liabilities under those laws, rules,

and regulations.

and State Consumer Protection Laws

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These laws also require companies to adopt reasonable measures to safeguard the personal information that we collect and

regulate categories of “sensitive” data such as information associated with minors, citizenship, and other personal

data for which these state laws have designated special protection.

regulate categories of “sensitive” data such as information associated with minors, citizenship, and other personal data

for which these state laws have designated special protection.

These laws do not, however, apply to personal information that constitutes

PHI under HIPAA, HIPAA-regulated entities to the extent that the entity maintains patient information in the same manner as PHI,

and de-identified data as defined under HIPAA.

As a result, we do not or likely will not have compliance obligations with respect to

most testing and patient information we collect and process.

However, we are required to comply with these consumer privacy laws insofar

as we collect other categories of California, Virginia and Colorado consumers’ personal information.

PHI under HIPAA, HIPAA-regulated entities to the extent that the entity maintains patient information in the same manner as PHI, and

de-identified data as defined under HIPAA.

As a result, we do not or likely will not have compliance obligations with respect to most

testing and patient information we collect and process.

However, we are required to comply with these consumer privacy laws insofar as

we collect other categories of California, Virginia and Colorado consumers’ personal information.

These laws are generally enforced

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changes to PPACA, including repeal and replacement of certain provisions.

PPACA has also been subject to challenges in the courts however, the U.S.

PPACA has also been subject to challenges in the courts;

however, the U.S.

Supreme Court upheld the law in 2021.

changes to the PPACA remain possible, although the new Administration under President Biden has signaled that it plans to build on the

Affordable Care Act and expand the number of people who are eligible for subsidies under it.

President Biden has used executive orders

to undo changes to the PPACA made by the Trump administration and indicated he would advocate for legislation to build on the PPACA.

It is unknown what form any such changes or any law would take, and how or whether it may affect our business in the future.

that changes or additions to the PPACA, the Medicare and Medicaid programs, and changes stemming from other healthcare reform measures,

especially with regard to healthcare access, financing or other legislation in individual states, could have a material adverse effect

on the healthcare industry.

changes to the PPACA remain possible, although the Biden Administration has signaled that it plans to build on the Affordable Care Act

and expand the number of people who are eligible for subsidies under it.

President Biden has used executive orders to undo changes to

the PPACA made by the Trump administration and indicated he would advocate for legislation to build on the PPACA.

It is unknown what

form any such changes or any law would take, and how or whether it may affect our business in the future.

We expect that changes or additions

to the PPACA, the Medicare and Medicaid programs, and changes stemming from other healthcare reform measures, especially with regard

to healthcare access, financing or other legislation in individual states, could have a material adverse effect on the healthcare industry.

expect that additional federal, state and foreign healthcare reform measures will be adopted in the future, any of which could limit

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generally bill third-party payers and individual patients for testing services on a test-by-test basis.

Third-party payers include Medicare,

private insurance companies, institutional direct clients and Medicaid, each of which has different billing requirements.

Medicare reimbursement

programs are complex and often ambiguous, and are continuously being evaluated and modified by CMS.

Our ability to receive timely reimbursements

from third-party payers is dependent on our ability to submit accurate and complete billing statements, and/or correct and complete missing

and incorrect billing information.

Missing and incorrect information on reimbursement submissions slows down the billing process and

increases the aging of accounts receivable.

We must bill Medicare directly for tests performed for Medicare patients and must accept

Medicare’s fee schedule for the covered tests as payment in full.

State Medicaid programs are generally prohibited from paying

more than the Medicare fee schedule.

Through February 2021, we were contracted with XIFIN, Inc.

(“XIFIN”), a healthcare billing

services management company, to work with our in-house staff and help manage our third-party billing.

In early March 2021, we expanded

our relationship with XIFIN to deploy XIFIN’s revenue cycle management solution enterprise-wide to support all of our diagnostics

testing services.

During January 2022, the Company became aware that 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.

In February 2022, the Company announced that this billing policy determination

by CMS had been changed retroactively to January 1, 2022.

As a result, the Company will continue billing for both tests according to

its LCD as originally set by Novitas.

Third-party payers include

Medicare, private insurance companies, institutional direct clients and Medicaid, each of which has different billing requirements.

Medicare reimbursement programs are complex and often ambiguous, and are continuously being evaluated and modified by CMS.

ability to receive timely reimbursements from third-party payers is dependent on our ability to submit accurate and complete billing

statements, and/or correct and complete missing and incorrect billing information.

Missing and incorrect information on

reimbursement submissions slows down the billing process and increases the aging of accounts receivable.

We must bill Medicare

directly for tests performed for Medicare patients and must accept Medicare’s fee schedule for the covered tests as payment in

State Medicaid programs are generally prohibited from paying more than the Medicare fee schedule.

Through February 2021, we

were contracted with XIFIN, Inc.

(“XIFIN”), a healthcare billing services management company, to work with our in-house

staff and help manage our third-party billing.

In early March 2021, we expanded our relationship with XIFIN to deploy XIFIN’s

revenue cycle management solution enterprise-wide to support all of our diagnostics testing services.

During January 2022, the

Company became aware that 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.

In February 2022, the Company announced that this billing policy determination by CMS had

been changed retroactively to January 1, 2022.

As a result, the Company will continue billing for both tests according to its LCD as

originally set by Novitas.

Effective January 1, 2023, the gapfill price for ThyGeNEXT ® was set at $1,266.07.

billing arrangements require us to bill multiple payers, and there are several other factors that complicate billing (e.g., disparity

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Medicare Clinical Laboratory Fee Schedule, or CLFS, has been subject to local variations in pricing.

In April 2014, President

Obama signed the Protecting Access to Medicare Act of 2014, or PAMA, which included a substantial new payment system for clinical laboratory

tests under the CLFS.

In April 2014, President Obama signed

the Protecting Access to Medicare Act of 2014, or PAMA, which included a substantial new payment system for clinical laboratory tests

under the CLFS.

Under PAMA, CLFS rates are based upon the weighted median of private payor rates reported for each type of laboratory

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Coronavirus Aid, Relief, and Economic Security (CARES) Act, as amended by the Protecting Medicare and American Farmers from Sequester

Cuts Act, revised payment reductions and the data reporting schedule for CDLTs that are not ADLTs.

Under these laws, the next data reporting

period is January 1, 2023 through March 31, 2023, and will be based upon the data collected during the January 1, 2019 to June 30, 2019

Any reductions to payment rates resulting from the new methodology are limited to 10% per test per year in each of the years

2018 through 2020 and to 15% per test per year in each of the years 2023 through 2025.

Payments will not be reduced for 2021 or 2022

Cuts Act, revised payment reductions and the data reporting schedule for approved Clinical Diagnostic Laboratory Tests (“CDLTs”)

that are not ADLTs.

Under these laws, the next data reporting period is January 1, 2023 through March 31, 2023, and will be based upon

the data collected during the January 1, 2019 to June 30, 2019 period.

Any reductions to payment rates resulting from the new methodology

are limited to 10% per test per year in each of the years 2018 through 2020 and to 15% per test per year in each of the years 2023 through

Payments will not be reduced for 2021 or 2022 for CDLTs.

the revised Medicare Clinical Laboratory Fee Schedule, reimbursement for clinical laboratory testing was reduced for most tests in 2018,

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enroll in private managed care arrangements.

current position of our laboratories is that they do not meet the definition of an “Applicable Manufacturer” under the “Sunshine

Act” section of PPACA and therefore are not subject to the disclosure or tax requirements contained in PPACA.

current position of our laboratory is that it does not meet the definition of an “Applicable Manufacturer” under the “Sunshine

Act” section of PPACA and therefore is not subject to the disclosure or tax requirements contained in PPACA.

However, as new regulations

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the market and their respective prices.

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

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.

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

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

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 no remaining outstanding collections regarding this matter and is fully

up to date with CMS.

Effective January 1, 2023, the gapfill price for ThyGeNEXT ® was set at $1,266.07.

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

of February 28, 2023, we had approximately 94 full time employees and 94 total employees.

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and assets were sold, and we operated our molecular diagnostics business as Interpace Diagnostics Group, Inc.

On July 15, 2019,

we acquired the pharma services business from the secured creditors of CGI and Gentris, LLC, a wholly owned subsidiary of CGI and conduct

that business as Interpace Pharma Solutions, Inc.

We conduct our business through our wholly-owned subsidiaries, Interpace Diagnostics,

LLC, which was formed in Delaware in 2013, Interpace Diagnostics Corporation (formerly known as RedPath Integrated Pathology, Inc.),

which was formed in Delaware in 2007, and Interpace Pharma Solutions Inc.

(formerly known as Interpace BioPharma, Inc.), which was formed

in Delaware in 2019.

On November 12, 2019, we changed the name of Interpace Diagnostics Group, Inc.

to Interpace Biosciences,

and that of our newly-formed subsidiary, Interpace BioPharma, Inc.

to Interpace Pharma Solutions, Inc.

Our executive offices are

located at Morris Corporate Center 1, Building C, 300 Interpace Parkway, Parsippany, New Jersey 07054.

We conduct our

business through our wholly-owned subsidiaries, Interpace Diagnostics, LLC, which was formed in Delaware in 2013 and Interpace Diagnostics

Corporation (formerly known as RedPath Integrated Pathology, Inc.), which was formed in Delaware in 2007, On November 12, 2019, we changed

the name of Interpace Diagnostics Group, Inc.

to Interpace Biosciences, Inc.

Our executive offices are located at Morris Corporate Center

1, Building C, 300 Interpace Parkway, Parsippany, New Jersey 07054.

Our telephone number is (855) 776-6419.

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January 10, 2020, we entered into a Securities Purchase and Exchange Agreement (the “Securities Purchase and Exchange Agreement”)

with 1315 Capital II, L.P., a Delaware limited partnership (“1315 Capital”), and Ampersand 2018 Limited Partnership (“Ampersand”

and together with 1315 Capital, the “Investors”) pursuant to which we sold to the Investors, in a private placement pursuant

to Regulation D and Section 4(a)(2) under the Securities Act, an aggregate of $20,000,000 in Series B Preferred Stock, at an issuance

price per share of $1,000.

Pursuant to the Securities Purchase and Exchange Agreement, 1315 Capital purchased 19,000 shares of Series

B Preferred Stock at an aggregate purchase price of $19,000,000 and Ampersand purchased 1,000 shares of Series B Preferred Stock at an

aggregate purchase price of $1,000,000.

with 1315 Capital II, L.P., a Delaware limited partnership (“1315 Capital”), and Ampersand (together with 1315 Capital, the

“Investors”) pursuant to which we sold to the Investors, in a private placement pursuant to Regulation D and Section 4(a)(2)

under the Securities Act, an aggregate of $20,000,000 in Series B Preferred Stock, at an issuance price per share of $1,000.

to the Securities Purchase and Exchange Agreement, 1315 Capital purchased 19,000 shares of Series B Preferred Stock at an aggregate purchase

price of $19,000,000 and Ampersand purchased 1,000 shares of Series B Preferred Stock at an aggregate purchase price of $1,000,000.

addition, we exchanged $27,000,000 of the Company’s existing Series A Preferred Stock held by Ampersand, represented by 270 shares

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of such Series B Preferred Stock, plus any dividends declared but unpaid thereon, or such amount per share as would have been payable

had each such share been converted into our common stock immediately prior to a liquidation, by sixty cents ($0.60) (as adjusted to $6.00

following effectuation of the Reverse Stock Split in January 2020 and subject to further adjustment in the event of any stock dividend,

had each such share been converted into our common stock immediately prior to a liquidation, by six dollars ($6.00) (subject to adjustment in the event of any stock dividend,

stock split, combination, or other similar recapitalization affecting such shares).

The aggregate number of shares of our common stock

that may be issued through conversion of the currently outstanding Series B Preferred Stock is 78,333,334 shares (as adjusted to 7,833,334

shares following effectuation of the Reverse Stock Split and subject to appropriate adjustment in the event of any stock dividend, stock

that may be issued through conversion of the currently outstanding Series B Preferred Stock is 7,833,334

shares (subject to appropriate adjustment in the event of any stock dividend, stock

split, combination or other similar recapitalization affecting such shares).

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of common stock registered with the SEC, including any at-the-market offering of our common stock.

holders of our Series B Preferred Stock have preferential rights with respect to distributions upon a liquidation or sale of the Company,

including certain business combinations or sales of assets deemed to be a liquidation.

Accordingly, no distributions upon liquidation

may be made to the holders of common stock until the holders of the Series B Preferred Stock have been paid their liquidation preference.

As a result, it is possible that, on a liquidation event (including a sale of the Company) and depending on the price thereof, all amounts

available for the holders of equity of the Company would be paid to the holders of Series B Preferred Stock, and that the holders of

common stock would not receive any payment.

April 2020, the Company applied for various federal stimulus loans, grants and advances made available under Title 1 of the Coronavirus

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Stock in favor of any “Fundamental Action” taken by the Company as determined by the Company’s Board of Directors.

a Special Meeting of Stockholders held on December 13, 2019, our stockholders authorized our Board, in its discretion, to amend our certificate

of incorporation, as amended, to effect a reverse split of our outstanding common stock at a ratio between one-for-five (1:5) and one-for-fifteen

(1:15), with such final ratio to be determined by the Board following the special meeting (the “ Reverse Stock Split ”).

On January 14, 2020, the Board determined to set the Reverse Stock Split ratio at one-for-ten (1:10) and approved the final form of the

certificate of amendment to our certificate of incorporation to effectuate the Reverse Stock Split, which was filed with the Secretary

of State of the State of Delaware on January 14, 2020.

The Reverse Stock Split became effective in accordance with the terms of the certificate

of amendment at 12:01a.m.

Eastern Time on Wednesday, January 15, 2020, at which time every ten (10) shares of common stock issued and

outstanding automatically combined into one (1) share of issued and outstanding common stock, without any change in the par value per

Fractional shares were not issued as a result of the Reverse Stock Split.

Instead, any fractional shares of our common stock that

would have otherwise resulted from the Reverse Stock Split were rounded up to the nearest whole share.

Reverse Stock Split resulted in a proportionate adjustment to the per share exercise price and the number of shares of common stock issuable

upon the exercise of our outstanding stock options and warrants, as well as the number of shares of common stock eligible for issuance

under the Interpace Biosciences, Inc.

2019 Equity Incentive Plan and the Interpace Biosciences, Inc.

Employee Stock Purchase Plan.

as otherwise indicated, all share and per share information herein gives effect to the Reverse Stock Split.

maintain an internet website at www.interpace.com.

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

What changed 10-K

Item 1. Business