INTERPACE BIOSCIENCES, INC. 10-K

ITEM 9A. CONTROLS AND PROCEDURES Disclosure Controls and Procedures Our principal executive officer and principal financial officer evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2022. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Based on that evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this Annual Report on Form 10-K. Management’s Annual Report on Internal Control over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting as such term is defined in Exchange Act Rule 13a-15(f). Internal control over financial reporting is a process designed under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. As of December 31, 2022, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, our management concluded that, as of December 31, 2022, our internal control over financial reporting was effective based on those criteria. Changes in Internal Control over Financial Reporting There has been no change in our internal control over financial reporting during the fourth quarter of the fiscal year ended December 31, 2022 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. ITEM 9B. OTHER INFORMATION None. ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS Not applicable. 74 PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE Information relating to directors and executive officers of the registrant that is responsive to Item 10 of this Annual Report on Form 10-K will be included in an amendment hereto or will be included in our Proxy Statement for our 2023 annual meeting of stockholders and such information is incorporated by reference herein. ITEM 11. EXECUTIVE COMPENSATION Information relating to executive compensation of the registrant that is responsive to Item 11 of this Annual Report on Form 10-K will be included in an amendment hereto or will be included in our Proxy Statement for our 2023 annual meeting of stockholders, and such information is incorporated by reference herein. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS Information relating to security ownership of certain beneficial owners and management of the registrant that is responsive to Item 12 of this Annual Report on Form 10-K will be included in an amendment hereto or will be included in our Proxy Statement for our 2023 annual meeting of stockholders and such information is incorporated by reference herein. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE Information relating to certain relationships and related transactions of the registrant that is responsive to Item 13 of this Annual Report on Form 10-K will be included in an amendment hereto or will be included in our Proxy Statement for our 2023 annual meeting of stockholders and such information is incorporated by reference herein. ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES Information relating to principal accounting fees and services of the registrant that is responsive to Item 14 of this Annual Report on Form 10-K will be included in an amendment hereto or will be included in our Proxy Statement for our 2023 annual meeting of stockholders and such information is incorporated by reference herein. 75 PART IV ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES (a) The following documents are filed as part of this Form 10-K: (1) Financial Statements – See Index to Financial Statements on page F-1 of this Form 10-K. (2) Financial Statement Schedule Schedule II: Valuation and Qualifying Accounts All other schedules are omitted because they are not applicable or the required information is shown in the financial statements or notes thereto. (3) Exhibits Exhibit No. Description 2.1 Asset Purchase Agreement, dated August 13, 2014, by and between Interpace Diagnostics, LLC and Asuragen, Inc., incorporated by reference to Exhibit 2.2 of the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2014, filed with the SEC on November 5, 2014. 2.2 Asset Purchase Agreement, dated as of October 30, 2015, by and between Publicis Touchpoint Solutions, Inc. and PDI, Inc., incorporated by reference to Exhibit 2.1 of the Company’s Current Report on Form 8-K, filed with the SEC on November 2, 2015. 2.3 Asset Purchase Agreement by and among the Company and Diamir Biosciences Corp. dated March 16, 2021, incorporated by reference to Exhibit 2.1 of the Company’s quarterly report on Form 10-Q for the quarter ended March 31, 2021, filed with the SEC on May 11, 2021. 2.4 Asset Purchase Agreement, dated August 31, 2022 by and among Interpace Biosciences, Inc., Interpace Pharma Solutions, Inc. and Flagship Biosciences, Inc., incorporated by reference to Exhibit 2.1 of the Company’s Current Report on Form 8-K filed with the SEC on September 7, 2022. 3.1+ Conformed version of Certificate of Incorporation of Interpace Biosciences, Inc., as amended by the Certificate of Amendment, effective January 15, 2020, and the Certificate of Designation of Preferences, Rights and Limitations of Series B Convertible Preferred Stock, filed January 17, 2020, incorporated by reference to Exhibit 3.1 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, filed with the SEC on April 22, 2020, as amended from time to time. 3.2 Amended and Restated Bylaws of Interpace Biosciences, Inc., incorporated by reference to Exhibit 3.2 of the Company’s Current Report on Form 8-K, filed with the SEC on November 14, 2019. 4.1 Description of Securities, incorporated by reference to Exhibit 4.1 of the Company’s Annual Report on Form 10-K, filed with the SEC on April 1, 2021. 4.2 Specimen Certificate Representing the Common Stock, incorporated by reference to Exhibit 4.1 of the Company’s Registration Statement on Form S-3 (File No. 333-227728), filed with the SEC on October 5, 2018. 10.1* Amended and Restated 2004 Stock Award and Incentive Plan, incorporated by reference to Annex A of the Company’s definitive proxy statement, filed with the SEC on August 14, 2017. 10.2* Form of Restricted Stock Unit Agreement for Employees, incorporated by reference to Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2018, filed with the SEC on May 15, 2018. 76 Exhibit No. Description 10.3* Form of Restricted Stock Unit Agreement for Directors, incorporated by reference to Exhibit 10.2 of the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2018, filed with the SEC on May 15, 2018. 10.4* Form of Non-Qualified Stock Option Agreement, incorporated by reference to Exhibit 10.3 of the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2018, filed with the SEC on May 15, 2018. 10.5* Form of Incentive Stock Option Agreement, incorporated by reference to Exhibit 10.4 of the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2018, filed with the SEC on May 15, 2018. 10.6* Interpace Diagnostics Group, Inc. 2019 Equity Incentive Plan, incorporated by reference to Exhibit 4.1 of the Company’s quarterly report on Form 10-Q for the quarter ended September 30, 2019, filed with the SEC on November 14, 2019. 10.7* Amendment to the Interpace Biosciences, Inc. 2019 Equity Incentive Plan, incorporated by reference to Exhibit 10.8 of the Company’s quarterly report on Form 10-Q for the quarter ended March 31, 2020, filed with the SEC on June 26, 2020. 10.8* Form of Restricted Stock Unit Grant Notice and Restricted Stock Unit Agreement under the 2019 Equity Incentive Plan, incorporated by reference to Exhibit 4.3 of the Company’s quarterly report on Form 10-Q for the quarter ended September 30, 2019, filed with the SEC on November 14, 2019. 10.9* Form of Interpace Biosciences, Inc. 2019 Equity Incentive Plan Restricted Stock Unit And Restricted Stock Unit Agreement, incorporated by reference to Exhibit 10.9 of the Company’s quarterly report on Form 10-Q for the quarter ended March 31, 2020, filed with the SEC on June 26, 2020. 10.10* Form of Stock Option Grant Notice and Stock Option Agreement under the 2019 Equity Incentive Plan, incorporated by reference to Exhibit 4.4 of the Company’s quarterly report on Form 10-Q for the quarter ended September 30, 2019, filed with the SEC on November 14, 2019. 10.11* Interpace Diagnostics Group, Inc. Employee Stock Purchase Plan, incorporated by reference to Exhibit 4.2 of the Company’s quarterly report on Form 10-Q for the quarter ended September 30, 2019, filed with the SEC on November 14, 2019. 10.12* Severance and Consulting Agreement and General Release, dated September 30, 2022, by and between Interpace Biosciences, Inc. and Thomas Freeburg, incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed with the SEC on October 4, 2022. 10.13* Incentive Stock Option Agreement between Interpace Diagnostics Group, Inc. and Jack E. Stover, incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K, filed with the SEC on October 20, 2016. 10.14* Employment Agreement, dated November 23, 2020, between Thomas W. Burnell and Interpace Biosciences, Inc., incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K, filed with the SEC on November 25, 2020. 10.15* Form of Indemnification Agreement by and between Interpace Diagnostics Group, Inc. and its directors and executive officers, incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K, filed with the SEC on August 8, 2016. 10.16* Form of Indemnification Agreement by and between Interpace Biosciences, Inc. and Indemnitee, incorporated by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K, filed with the SEC on January 17, 2020. 10.17* Robert Gorman Letter Agreement dated April 16, 2020, by and between Interpace Biosciences, Inc. and Robert Gorman, incorporated by reference to Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q, filed with the SEC on August 15, 2022. 10.18* Agreement, dated January 21, 2022, between Dr. Vijay Aggarwal and Interpace Biosciences, Inc., incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K, filed with the SEC on January 27, 2022. 10.19 License Agreement, dated August 13, 2014, by and between Interpace Diagnostics, LLC and Asuragen, Inc., incorporated by reference to Exhibit 10.31 of the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2014, filed with the SEC on November 5, 2014. 77 Exhibit No. Description 10.20 CPRIT License Agreement, dated August 13, 2014, by and between Interpace Diagnostics, LLC and Asuragen, Inc., incorporated by reference to Exhibit 10.32 of the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2014, filed with the SEC on November 5, 2014. 10.21 Supply Agreement, dated August 13, 2014, by and between Interpace Diagnostics, LLC and Asuragen, Inc., incorporated by reference to Exhibit 10.33 of the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2014, filed with the SEC on November 5, 2014. 10.22 Guaranty, dated August 13, 2014 by the Company in favor of Asuragen, Inc., incorporated by reference to Exhibit 10.34 of the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2014, filed with the SEC on November 5, 2014. 10.23 Morris Corporate Center Lease, incorporated by reference to Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2009, filed with the SEC on November 5, 2009. 10.24 First Amendment to Lease, dated May 24, 2017, by and between Brookwood MC Investors, LLC, Brookwood MC II, LLC, and the Company, incorporated by reference to Exhibit 10.52 of the Company’s Registration Statement on Form S-1 (333-218140), as amended, filed with the SEC on June 13, 2017. 10.25 Lease Agreement, dated March 31, 2017, by and between Saddle Lane Realty, LLC and the Company, incorporated by reference to Exhibit 10.53 of the Company’s Registration Statement on Form S-1 (333-218140), as amended on June 13, 2017. 10.26 First Amendment, dated September 26, 2017, by and between Saddle Lane Realty, LLC and Interpace Diagnostics Corporation, incorporated by reference to Exhibit 10.36 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, filed with the SEC on April 22, 2020, as amended from time to time. 10.27 Amendment No. 2 to Lease, dated March 15, 2018, between Saddle Lane Realty, LLC and Interpace Diagnostics Corporation, incorporated by reference to Exhibit 10.45 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2017, filed with the SEC on March 23, 2018. 10.28 Fourth Lease Amendment (the “Amendment”) by and between Interpace Biosciences, Inc. and Saddle Lane Realty, LLC, dated as of October 31, 2022, incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed with the SEC on November 4, 2022. 10.29 Securities Purchase Agreement, dated July 15, 2019, by and between Interpace Diagnostics Group, Inc. and Ampersand 2018 Limited Partnership, incorporated by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K, filed with the SEC on July 19, 2019. 10.30 Form of Voting Agreement, incorporated by reference to Exhibit 10.4 of the Company’s Current Report on Form 8-K, filed with the SEC on July 19, 2019. 10.31 Equity Distribution Agreement, dated September 20, 2019, by and between Interpace Diagnostics Group, Inc. and Oppenheimer & Co. Inc., incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K, filed with the SEC on September 20, 2019. 10.32 Securities Purchase and Exchange Agreement, dated January 10, 2020, by and among Interpace Biosciences, Inc., 1315 Capital II, L.P. and Ampersand 2018 Limited Partnership, incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K, filed with the SEC on January 14, 2020. 10.33 Amended and Restated Investor Rights Agreement, dated as of January 15, 2020, by and among Interpace Biosciences, Inc., 1315 Capital II, L.P. and Ampersand 2018 Limited Partnership, incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K, filed with the SEC on January 17, 2020. 10.34 Support Agreement, dated April 7, 2020, by and between Ampersand 2018 Limited Partnership and Interpace Biosciences, Inc., incorporated by reference to Exhibit 10.1 of the Company’s quarterly report on Form 10-Q for the quarter ended June 30, 2020, filed with the SEC on October 19, 2020. 10.35 Termination Agreement, dated July 9, 2020, by and between Ampersand 2018 Limited Partnership and Interpace Biosciences, Inc., incorporated by reference to Exhibit 10.3 of the Company’s quarterly report on Form 10-Q for the quarter ended June 30, 2020, filed with the SEC on October 19, 2020. 10.36 Support Agreement, dated April 2, 2020, by and between 1315 Capital II, L.P. and Interpace Biosciences, Inc., incorporated by reference to Exhibit 10.2 of the Company’s quarterly report on Form 10-Q for the quarter ended June 30, 2020, filed with the SEC on October 19, 2020. 78 Exhibit No. Description 10.37 Loan and Security Agreement by and between Comerica Bank, Interpace Biosciences, Inc., Interpace Diagnostics Corporation, Interpace Diagnostics, LLC and Interpace Pharma Solutions, Inc., dated October 13, 2021, incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K, filed with the SEC on October 19, 2021. 10.38 Subordination Agreement by and between Ampersand 2018 Limited Partnership, 1315 Capital II. L.P., Comerica Bank Interpace Biosciences, Inc., Interpace Diagnostics Corporation, Interpace Diagnostics, LLC and Interpace Pharma Solutions, Inc., dated October 13, 2021, incorporated by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K, filed with the SEC on October 19, 2021. 10.39 Loan and Security Agreement by and between BroadOak Fund V, L.P., Interpace Biosciences, Inc., Interpace Diagnostics Corporation, Interpace Diagnostics, LLC and Interpace Pharma Solutions, Inc., dated October 29, 2021, incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K, filed with the SEC on November 3, 2021. 10.40 First Amendment to Loan and Security Agreement by and between Comerica Bank, Interpace Biosciences, Inc., Interpace Diagnostics Corporation, Interpace Diagnostics, LLC and Interpace Pharma Solutions, Inc., dated November 1, 2021, incorporated by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K, filed with the SEC on November 3, 2021. 10.41 Subordination and Intercreditor Agreement by and between Comerica Bank, BroadOak Fund V, L.P., Interpace Biosciences, Inc., Interpace Diagnostics Corporation, Interpace Diagnostics, LLC and Interpace Pharma Solutions, Inc., dated as of November 1, 2021, incorporated by reference to Exhibit 10.3 of the Company’s Current Report on Form 8-K, filed with the SEC on November 3, 2021. 10.42 Loan and Security Agreement, dated November 13, 2018, by and among Silicon Valley Bank, Interpace Diagnostics Group, Inc., Interpace Diagnostics Corporation, and Interpace Diagnostics, LLC, incorporated by reference to Exhibit 4.9 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, filed with the SEC on April 22, 2020, as amended from time to time. 10.43 Shared Services Agreement, dated August 31, 2022 by and among Interpace Biosciences, Inc., Interpace Pharma Solutions, Inc. and Flagship Biosciences, Inc., incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed with the SEC on September 7, 2022. 10.44* Amendment to the Interpace Biosciences, Inc. 2019 Equity Incentive Plan, incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K, filed with the SEC on November 15, 2022. 10.45* Amendment to the Interpace Biosciences, Inc. Employee Stock Purchase Plan, incorporated by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K, filed with the SEC on November 15, 2022. 16.1 Letter from BDO USA, LP dated April 13, 2022, incorporated by reference to Exhibit 16.1 of the Company’s Current Report on Form 8-K, filed with the SEC on April 14, 2022. 21.1 Subsidiaries of the Registrant, incorporated by reference to Exhibit 21.1 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, filed with the SEC on April 22, 2020, as amended from time to time. 23.1 Consent of BDO USA, LLP, filed herewith. 23.2 Consent of EisnerAmper, LLP, filed herewith. 31.1 Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith. 31.2 Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith. 32.1 Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, furnished herewith. 32.2 Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, furnished herewith. 101 INS Inline XBRL Instance Document 101 SCH Inline XBRL Taxonomy Extension Schema Document 101 CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document 101 DEF Inline XBRL Taxonomy Extension ‌Definition Linkbase Document 101 LAB Inline XBRL Taxonomy Extension ‌Label Linkbase Document 101 PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document 104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibits 101) * Denotes compensatory plan, compensation arrangement or management contract. ITEM 16. Form 10-K Summary The Company has opted to not provide a summary. 79 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. INTERPACE BIOSCIENCES, INC. Date: March 27, 2023 /s/ Thomas W. Burnell Thomas W. Burnell President and Chief Executive Officer Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed by the following persons on behalf of the registrant and in the capacities indicated and on the dates indicated. Name Title Date /s/ Thomas W. Burnell President, Chief Executive Officer and Director March 27, 2023 Thomas W. Burnell (Principal Executive Officer) /s/ Thomas Freeburg Principal Financial Officer March 27, 2023 Thomas Freeburg (Principal Financial and Accounting Officer) /s/ Stephen J. Sullivan Director March 27, 2023 Stephen J. Sullivan /s/ Joseph Keegan Director March 27, 2023 Joseph Keegan /s/ Vijay Aggarwal Director March 27, 2023 Vijay Aggarwal /s/ Robert Gorman Chairman of the Board of Directors March 27, 2023 Robert Gorman /s/ Edward Chan Director March 27, 2023 Edward Chan /s/ Fortunato Ron Rocca Director March 27, 2023 Fortunato Ron Rocca 80 Interpace Biosciences, Inc. Index to Consolidated Financial Statements and Financial Statement Schedules Page Report of Independent Registered Public Accounting Firm (EisnerAmper LLP; Woodbridge, NJ; PCAOB ID # 274 ) F-2 Report of Independent Registered Public Accounting Firm ( BDO USA, LLP ; Woodbridge, NJ ; PCAOB ID # 243 ) F-3 Consolidated Financial Statements Consolidated Balance Sheets at December 31, 2022 and 2021 F-4 Consolidated Statements of Operations for the years ended December 31, 2022 and 2021 F-5 Consolidated Statements of Stockholders’ Deficit for the years ended December 31, 2022 and 2021 F-6 Consolidated Statements of Cash Flows for the years ended December 31, 2022 and 2021 F-7 Notes to Consolidated Financial Statements F-8 Schedule II. Valuation and Qualifying Accounts F-32 F- 1 Report of Independent Registered Public Accounting Firm To the Board of Directors and Stockholders of Interpace Biosciences, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Interpace Biosciences, Inc. and Subsidiaries (the “Company”) as of December 31, 2022, and the related consolidated statements of operations, stockholders’ deficit, and cash flows for the year then ended, and the related notes and the financial statement schedule identified in item 15 (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022, and the results of their operations and their cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Variable Consideration in Revenue As described in Note 1 to the consolidated financial statements, the Company’s clinical services derive revenue from the performance of its proprietary assays or tests. The Company’s performance obligation is fulfilled upon the completion, review and release of test results to the customer. The Company subsequently bills third-party payers or direct-bill payers for the tests performed. Revenue is recognized based on the estimated transaction price or net realizable value, which is determined based on historical collection rates by each payer category for each proprietary test offered by the Company. To the extent the transaction price includes variable consideration, the Company estimates the amount of variable consideration that should be included in the transaction price using the expected value method based on historical experience. We identified the estimation of the variable consideration as a critical audit matter due to the significant judgement and estimation required by management in their assessment. This led to a high degree of auditor subjectivity and significant audit effort was required in performing our procedures and evaluating audit evidence relating to estimates and assumptions made by management. Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. Our procedures included, among other things, (i) obtaining an understanding of management’s process and evaluating the design of controls related to revenue recognition; (ii) assessing the reasonableness of management’s estimates of variable consideration utilizing the expected value method based on its historical experience; (iii) comparing the Company’s estimates of variable consideration to the history of cash ultimately received from its payors; and (iv) testing the historical accuracy of cash collections used in the Company’s assumptions relating to variable consideration. /s/ EisnerAmper LLP We have served as the Company’s auditor since 2022. EISNERAMPER LLP Philadelphia, Pennsylvania March 27, 2023 F- 2 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Shareholders and Board of Directors Interpace Biosciences, Inc. Parsippany, New Jersey Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheet of Interpace Biosciences, Inc. and Subsidiaries (the “Company”) as of December 31, 2021 , the related consolidated statements of operations, stockholders’ deficit, and cash flows for the year ended December 31, 2021, and the related notes and schedules (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2021, and the results of its operations and its cash flows for the period ended December 31, 2021 , in conformity with accounting principles generally accepted in the United States of America. Going Concern Uncertainty The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the consolidated financial statements, the Company has suffered operating losses, has negative operating cash flows and is dependent upon its ability to generate profitable operations in the future and/or obtain additional financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. These conditions raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 3. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audit provide a reasonable basis for our opinion. We have served as the Company’s auditor from 2012 to 2022. /s/ BDO USA, LLP Woodbridge, New Jersey March 31, 2022 Except for Note 4 as to which the date is March 27, 2023 F- 3 INTERPACE BIOSCIENCES, INC. CONSOLIDATED BALANCE SHEETS (in thousands, except share and per share data) December 31, December 31, 2022 2021 ASSETS Current assets: Cash and cash equivalents $ 4,828 $ 2,672 Restricted cash - 250 Accounts receivable 5,032 4,672 Other current assets 2,294 1,479 Current assets of discontinued operations - 3,093 Total current assets 12,154 12,166 Property and equipment, net 480 317 Other intangible assets, net 861 2,132 Operating lease right of use assets 2,439 1,284 Other long-term assets 45 141 Long-term assets of discontinued operations - 22,387 Total assets $ 15,979 $ 38,427 LIABILITIES AND STOCKHOLDERS’ DEFICIT Current liabilities: Accounts payable $ 1,050 $ 1,374 Accrued salary and bonus 1,456 2,689 Other accrued expenses 8,419 8,462 Line of credit - current 2,500 - Current liabilities of discontinued operations 858 3,157 Total current liabilities 14,283 15,682 Contingent consideration 518 1,383 Operating lease liabilities, net of current portion 1,848 520 Line of credit - 1,500 Note payable at fair value 11,165 7,942 Other long-term liabilities 4,701 4,577 Long-term liabilities of discontinued operations - 2,705 Total liabilities 32,515 34,309 Commitments and contingencies (Note 11) - - Redeemable preferred stock, $ .01 par value; 5,000,000 shares authorized, 47,000 shares Series B issued and outstanding 46,536 46,536 Stockholders’ deficit: Common stock, $ .01 par value; 100,000,000 shares authorized; 4,367,830 and 4,228,169 shares issued, respectively; 4,296,710 and 4,195,412 shares outstanding, respectively 405 403 Additional paid-in capital 187,516 186,106 Accumulated deficit ( 249,017 ) ( 227,059 ) Treasury stock, at cost ( 71,120 and 32,757 shares, respectively) ( 1,976 ) ( 1,868 ) Total stockholders’ deficit ( 63,072 ) ( 42,418 ) Total liabilities and stockholders’ deficit ( 30,557 ) ( 8,109 ) Total liabilities, preferred stock and stockholders’ deficit $ 15,979 $ 38,427 The accompanying notes are an integral part of these consolidated financial statements F- 4 INTERPACE BIOSCIENCES, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except for per share data) 2022 2021 For The Years Ended December 31, 2022 2021 Revenue, net $ 31,838 $ 33,117 Cost of revenue 13,607 14,314 Gross profit 18,231 18,803 Operating expenses: Sales and marketing 9,125 9,177 Research and development 703 1,493 General and administrative 10,973 10,705 Transition expense - 897 Loss on DiamiR transaction - 13 Acquisition related amortization expense 1,270 3,192 Change in fair value of contingent consideration ( 223 ) ( 338 ) Total operating expenses 21,848 25,139 Operating loss from continuing operations ( 3,617 ) ( 6,336 ) Interest accretion expense ( 158 ) ( 496 ) Related party interest - ( 424 ) Note payable interest ( 850 ) ( 120 ) Other expense, net ( 1,211 ) ( 366 ) Loss from continuing operations before tax ( 5,836 ) ( 7,742 ) Provision (benefit) for income taxes 29 ( 705 ) Loss from continuing operations ( 5,865 ) ( 7,037 ) Loss from discontinued operations, net of tax ( 16,093 ) ( 7,906 ) Net loss $ ( 21,958 ) $ ( 14,943 ) Basic and diluted loss per share of common stock: From continuing operations $ ( 1.38 ) $ ( 1.70 ) From discontinued operations ( 3.80 ) ( 1.91 ) Net loss per basic and diluted share of common stock $ ( 5.18 ) $ ( 3.61 ) Weighted average number of common shares and common share equivalents outstanding: Basic 4,238 4,135 Diluted 4,238 4,135 The accompanying notes are an integral part of these consolidated financial statements F- 5 INTERPACE BIOSCIENCES, INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT (in thousands) Additional Common Stock Treasury Stock Paid in Accumulated Shares Amount Shares Amount Capital Deficit Total Balance -December 31, 2020 4,075,257 $ 402 19,664 $ ( 1,773 ) $ 184,404 $ ( 212,116 ) $ ( 29,083 ) Issuance of common stock 152,912 1 - - 334 - 335 Treasury stock purchased - - 13,093 ( 95 ) - - ( 95 ) Stock-based compensation expense - - - - 1,368 - 1,368 Net loss - - - - - ( 14,943 ) ( 14,943 ) Balance -December 31, 2021 4,228,169 $ 403 32,757 $ ( 1,868 ) $ 186,106 $ ( 227,059 ) $ ( 42,418 ) Beginning balance value 4,228,169 $ 403 32,757 $ ( 1,868 ) $ 186,106 $ ( 227,059 ) $ ( 42,418 ) Issuance of common stock 139,652 2 - - 106 - 108 Treasury stock purchased - - 38,363 ( 108 ) - - ( 108 ) Exercise of warrants 9 - - - - - - Stock-based compensation expense - - - - 1,304 - 1,304 Net loss - - - - - ( 21,958 ) ( 21,958 ) Balance -December 31, 2022 4,367,830 $ 405 71,120 $ ( 1,976 ) $ 187,516 $ ( 249,017 ) $ ( 63,072 ) Ending balance value 4,367,830 $ 405 71,120 $ ( 1,976 ) $ 187,516 $ ( 249,017 ) $ ( 63,072 ) The accompanying notes are an integral part of these consolidated financial statements F- 6 INTERPACE BIOSCIENCES, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) 2022 2021 For The Years Ended December 31, 2022 2021 Cash Flows From Operating Activities Net loss $ ( 21,958 ) $ ( 14,943 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 2,560 5,374 Interest accretion expense 158 496 Bad debt recovery - ( 140 ) Goodwill impairment 8,433 - Intangible asset impairment 3,964 - Amortization of deferred financing fees 60 122 Interest - note payable - 120 Note payable fees - 312 Stock-based compensation 1,258 1,255 ESPP expense 46 113 Change in fair value of note payable 1,223 ( 58 ) Deferred income taxes ( 93 ) 38 Change in fair value of contingent consideration ( 223 ) ( 338 ) Other gains and expenses, net ( 71 ) 61 Other changes in operating assets and liabilities: Accounts receivable ( 133 ) 2,148 Other current assets ( 216 ) 28 Other long-term assets 34 ( 118 ) Accounts payable ( 735 ) ( 1,817 ) Accrued salaries and bonus ( 1,421 ) ( 137 ) Accrued liabilities ( 749 ) ( 1,086 ) Long-term liabilities 171 ( 149 ) Net cash used in operating activities ( 7,692 ) ( 8,719 ) Cash Flows From Investing Activity Proceeds from sale of Interpace Pharma Solutions, net 6,528 - Purchase of property and equipment ( 322 ) ( 354 ) Sale of property and equipment - 39 Net cash provided by (used in) investing activities 6,206 ( 315 ) Cash Flows From Financing Activities Issuance of common stock, net of expenses 108 335 Loan proceeds - related parties - 7,500 Loan proceeds - BroadOak - 8,000 Loan expenses - BroadOak - ( 312 ) Payment of related party note and related interest - ( 7,924 ) Financing fees - related party - ( 123 ) Proceeds from convertible debt issuance 2,000 - Borrowings on line of credit 1,000 1,500 Cash paid for repurchase of restricted shares ( 108 ) - Net cash provided by financing activities 3,000 8,976 Net increase (decrease) in cash, cash equivalents and restricted cash 1,514 ( 58 ) Cash, cash equivalents and restricted cash from continuing operations– beginning 2,922 1,236 Cash, cash equivalents and restricted cash from discontinued operations– beginning 392 2,136 Cash, cash equivalents and restricted cash – beginning $ 3,314 $ 3,372 Cash, cash equivalents and restricted cash from continuing operations– ending $ 4,828 $ 2,922 Cash, cash equivalents and restricted cash from discontinued operations– ending - 392 Cash, cash equivalents and restricted cash – ending $ 4,828 $ 3,314 The accompanying notes are an integral part of these consolidated financial statements F- 7 1. Nature of Business and Significant Accounting Policies Nature of Business Interpace Biosciences, Inc. (“Interpace” or the “Company”) is 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. The Company develops and commercializes 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. Principles of Consolidation The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). The consolidated financial statements include the accounts of Interpace Biosciences, Inc. fka Interpace Diagnostics Group, Inc., Interpace Diagnostics Corporation, and Interpace Diagnostics, LLC. Discontinued operations include the Company’s wholly-owned subsidiaries: Group DCA, LLC (“Group DCA”), InServe Support Solutions (Pharmakon), TVG, Inc. (TVG, dissolved December 31, 2014) its Commercial Services (“CSO”) business unit and its Interpace Pharma Solutions business (“Pharma Solutions”) which was sold on August 31, 2022. All significant intercompany balances and transactions have been eliminated in consolidation. The Company has one reporting segment: the Company’s clinical services business. The Company’s current reporting segment structure is reflective of the way the Company’s management views the business, makes operating decisions and assesses performance. This structure allows investors to better understand Company performance, better assess prospects for future cash flows, and make more informed decisions about the Company. Accounting Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts of assets and liabilities reported and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management’s estimates are based on historical experience, facts and circumstances available at the time, and various other assumptions that are believed to be reasonable under the circumstances. Significant estimates include accounting for valuation allowances related to deferred income taxes, contingent consideration, notes payable, allowances for doubtful accounts and notes, revenue recognition, unrecognized tax benefits, and asset impairments involving other intangible assets. The Company periodically reviews these matters and reflects changes in estimates as appropriate. Actual results could materially differ from those estimates. Cash and Cash Equivalents Cash and cash equivalents include unrestricted cash accounts, money market investments and highly liquid investment instruments with original maturity of three months or less at the date of purchase. Accounts Receivable, Net The Company’s accounts receivables represent unconditional rights to consideration and are generated using its proprietary tests. The Company’s clinical services are fulfilled upon completion of the test, review and release of the test results. In conjunction with fulfilling these services, the Company bills the third-party payer or direct-bill payer. Contractual adjustments represent the difference between the list prices and the reimbursement rates set by third party payers, including Medicare, commercial payers, and amounts billed to direct-bill payers. Specific accounts may be written off after several appeals, which in some cases may take longer than twelve months. The opening accounts receivable balance as of January 1, 2021 was $ 4.4 million. F- 8 Other current assets Other current assets consisted of the following as of December 31, 2022 and 2021: Schedule of Other Current Assets December 31, 2022 December 31, 2021 Lab supplies $ 1,224 $ 825 Prepaid expenses 390 584 Funds in escrow 500 - Other 180 70 Total other current assets $ 2,294 $ 1,479 Property and Equipment, net Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization is recognized on a straight-line basis, using the estimated useful lives of: seven to twelve years for furniture and fixtures; two to five years for office and computer equipment; three to twelve years for lab equipment; and leasehold improvements are amortized over the shorter of the estimated service lives or the terms of the related leases which are currently one to five years . Repairs and maintenance are charged to expense as incurred. Upon disposition, the asset and related accumulated depreciation and amortization are removed from the related accounts and any gains or losses are reflected in operations. Software Costs Internal-Use Software - It is the Company’s policy to capitalize certain costs incurred in connection with developing or obtaining internal-use software. Capitalized software costs are included in property and equipment on the consolidated balance sheet and amortized over the software’s useful life, generally three to seven years. Software costs that do not meet capitalization criteria are expensed immediately. See Note 6, Property and Equipment , for further information. Long-Lived Assets, including Finite-Lived Intangible Assets Finite-lived intangible assets are stated at cost less accumulated amortization. Amortization of finite-lived acquired intangible assets is recognized on a straight-line basis, using the estimated useful lives of the assets of approximately two years to ten years in acquisition related amortization expense in the Consolidated Statements of Operations. The Company reviews the recoverability of long-lived assets and finite-lived intangible assets whenever events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. If the sum of the expected future undiscounted cash flows is less than the carrying amount of the related asset group, an impairment loss is recognized by reducing the recorded value of the asset group to its fair value. This analysis requires estimates of the amount and timing of projected cash flows and, where applicable, judgments associated with, among other factors, the appropriate discount rate. Such estimates are critical in determining whether any impairment charge should be recorded and the amount of such charge if an impairment loss is deemed to be necessary. F- 9 Contingencies In the normal course of business, the Company is subject to various contingencies. Contingencies are recorded in the consolidated financial statements when it is probable that a liability will be incurred and the amount of the loss is reasonably estimable, or otherwise disclosed, in accordance with ASC 450, Contingencies. Significant judgment is required in both the determination of probability and the determination as to whether a loss is reasonably estimable. In the event the Company determines that a loss is not probable, but is reasonably possible, and it becomes possible to develop what the Company believes to be a reasonable range of possible loss, then the Company will include disclosures related to such matter as appropriate and in compliance with ASC 450. To the extent there is a reasonable possibility that the losses could exceed the amounts already accrued, the Company will, when applicable, adjust the accrual in the period the determination is made, disclose an estimate of the additional loss or range of loss, indicate that the estimate is immaterial with respect to its financial statements as a whole or, if the amount of such adjustment cannot be reasonably estimated, disclose that an estimate cannot be made. The Company is not currently involved in any legal proceedings of a material nature and, accordingly, the Company has not accrued estimated costs related to any legal claims. Revenue Recognition We derive our revenues from the performance of proprietary assays or tests. The Company’s performance obligation is fulfilled upon the completion, review and release of test results to the customer. The Company subsequently bills third-party payers or direct-bill payers for the tests performed. Under Accounting Standards Codification 606, revenue is recognized based on the estimated transaction price or net realizable value, which is determined based on historical collection rates by each payer category for each proprietary test offered by the Company. To the extent the transaction price includes variable consideration, for all third party and direct-bill payers and proprietary tests, the Company estimates the amount of variable consideration that should be included in the transaction price using the expected value method based on historical experience. We regularly review the ultimate amounts received from the third-party and direct-bill payers and related estimated reimbursement rates and adjust the net realizable values (“NRV’s”) and related contractual allowances accordingly. If actual collections and related NRV’s vary significantly from our estimates, we will adjust the estimates of contractual allowances, which affects net revenue in the period such variances become known. The Company recorded an NRV adjustment of $ 0.7 million as a reduction of revenue during the second quarter of 2022 to record the impact on revenue recorded during the first quarter of 2022. See Note 3, Going Concern , for more details. Financing and Payment For non-Medicare claims, our payment terms vary by payer category. Payment terms for direct-payers in our clinical services are typically thirty days and in our pharma services, up to sixty days. Commercial third-party-payers are required to respond to a claim within a time period established by their respective state regulations, generally between thirty to sixty days. However, payment for commercial third-party claims may be subject to a denial and appeal process, which could take up to two years in some instances where multiple appeals are submitted. The Company generally appeals all denials from commercial third-party payers. We bill Medicare directly for tests performed for Medicare patients and must accept Medicare’s fee schedule for the covered tests as payment in full. Cost of revenue Cost of revenue consists primarily of the costs associated with operating our laboratories and other costs directly related to our tests. Personnel costs, which constitute the largest portion of cost of services, include all labor related costs, such as salaries, bonuses, fringe benefits and payroll taxes for laboratory personnel. Other direct costs include, but are not limited to, laboratory supplies, certain consulting expenses, royalty expenses, and facility expenses. F- 10 Stock-Based Compensation The compensation cost associated with the granting of stock-based awards is based on the grant date fair value of the stock award. The Company recognizes the compensation cost, net of estimated forfeitures, over the shorter of the vesting period or the period from the grant date to the date when retirement eligibility is achieved. Forfeitures are initially estimated based on historical information and subsequently updated over the life of the awards to ultimately reflect actual forfeitures. As a result, changes in forfeiture activity can influence the amount of stock compensation cost recognized from period to period. The Company primarily uses the Black-Scholes option-pricing model to determine the fair value of stock options. The determination of the fair value of stock-based payment awards is made on the date of grant and is affected by the Company’s stock price as well as assumptions made regarding a number of complex and subjective variables. These assumptions include: expected stock price volatility over the term of the awards; actual and projected employee stock option exercise behaviors; the risk-free interest rate; and expected dividend yield. The fair value of restricted stock units, or RSUs, and restricted shares is equal to the closing stock price on the date of grant. In 2020, the Company issued performance-based options and RSUs based on achieving stock price or certain other financial metrics. These require the Company to assess the likelihood of achieving certain performance milestones on a quarterly basis. In these instances, the Company was assisted in the initial valuation model by a third party valuation professional. See Note 15, Stock-Based Compensation, for further information. Treasury Stock Treasury stock purchases are accounted for under the cost method whereby the entire cost of the acquired stock is recorded as treasury stock. Upon reissuance of shares, the Company records any difference between the weighted-average cost of such shares and any proceeds received as an adjustment to additional paid-in capital. Leases The Company determines if an arrangement contains a lease in whole or in part at the inception of the contract. Right-of-use (“ROU”) assets represent the Company’s right to use an underlying asset for the lease term while lease liabilities represent our obligation to make lease payments arising from the lease. All leases with terms greater than twelve months result in the recognition of a ROU asset and a liability at the lease commencement date based on the present value of the lease payments over the lease term. Unless a lease provides all of the information required to determine the implicit interest rate, we use our incremental borrowing rate based on the information available at the commencement date in determining the present value of the lease payments. Our lease terms include all non-cancelable periods and may include options to extend (or to not terminate) the lease when it is reasonably certain that we will exercise that option. Leases with terms of twelve months or less at the commencement date are expensed on a straight-line basis over the lease term and do not result in the recognition of an asset or liability. See Note 8, Leases . Income taxes Income taxes are based on income for financial reporting purposes calculated using the Company’s annual tax rate and reflect a current tax liability or asset for the estimated taxes payable or recoverable on the current year tax return and expected annual changes in deferred taxes. Any interest or penalties on income tax are recognized as a component of income tax expense. The Company accounts for income taxes using the asset and liability method. This method requires recognition of deferred tax assets and liabilities for expected future tax consequences of temporary differences that currently exist between tax basis and financial reporting basis of the Company’s assets and liabilities based on enacted tax laws and rates. Deferred tax expense (benefit) is the result of changes in the deferred tax asset and liability. A valuation allowance is established, when necessary, to reduce the deferred income tax assets when it is more likely than not that all or a portion of a deferred tax asset will not be realized. F- 11 The Company operates in multiple tax jurisdictions and pays or provides for the payment of taxes in each jurisdiction where it conducts business and is subject to taxation. The breadth of the Company’s operations and the complexity of the tax law require assessments of uncertainties and judgments in estimating the ultimate taxes the Company will pay. The final taxes paid are dependent upon many factors, including negotiations with taxing authorities in various jurisdictions, outcomes of tax litigation and resolution of proposed assessments arising from federal and state audits. Uncertain tax positions are recognized in the financial statements when it is more likely than not (i.e., a likelihood of more than fifty percent) that a position taken or expected to be taken in a tax return would be sustained upon examination by tax authorities that have full knowledge of all relevant information. A recognized tax position is then measured as the largest amount of benefit that is greater than fifty percent likely to be realized upon ultimate settlement. The Company adjusts accruals for unrecognized tax benefits as facts and circumstances change, such as the progress of a tax audit. However, any adjustments made may be material to the Company’s consolidated results of operations or cash flows for a reporting period. Penalties and interest, if incurred, would be recorded as a component of current income tax expense. Significant judgment is also required in evaluating the need for and magnitude of appropriate valuation allowances against deferred tax assets. Deferred tax assets are regularly reviewed for recoverability. The Company currently has significant deferred tax assets resulting from net operating loss carryforwards and deductible temporary differences, which should reduce taxable income in future periods, if generated. The realization of these assets is dependent on generating future taxable income. Income (Loss) per Share Basic earnings per common share are computed by dividing net income by the weighted average number of shares outstanding during the year including any unvested share-based payment awards that contain nonforfeitable rights to dividends. Diluted earnings per common share are computed by dividing net income by the sum of the weighted average number of shares outstanding and dilutive common shares under the treasury method. Unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents (whether paid or unpaid), are participating securities and are included in the computation of earnings per share pursuant to the two-class method. As a result of the losses incurred in both 2022 and 2021, the potentially dilutive common shares have been excluded from the earnings per share computation for these periods because its inclusion would have been anti-dilutive. Additionally, preferred shares have been excluded in the denominator of the earnings per share computation, on an if-converted basis, as such shares would have been anti-dilutive. 2. Recent Accounting Standards Accounting Pronouncements Pending Adoption In February 2020, the FASB issued ASU 2020-02, Financial Instruments-Credit Losses (Topic 326) and Leases (Topic 842) - Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 119 and Update to SEC Section on Effective Date Related to Accounting Standards Update No. 2016-02, Leases (Topic 842) which amends the effective date of the original pronouncement for smaller reporting companies. ASU 2016-13 and its amendments are effective for the Company beginning January 1, 2023. The Company believes the adoption will modify the way the Company analyzes financial instruments, but it does not anticipate a material impact on results of operations. The Company does not expect this will have a material impact on its consolidated financial statements. In August 2020, the FASB issued ASU 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815 – 40), (“ASU 2020-06”). ASU 2020-06 simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. The ASU 2020-06 amendments are effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. Early adoption is permitted. The Company does not expect this will have any impact on its consolidated financial statements. F- 12 3. Going Concern In October 2021, the Company entered into a $ 7.5 million revolving credit facility with Comerica Incorporated (“Comerica”)(the “Comerica Loan Agreement”). See Note 19, Revolving Line of Credit , for more details. Also in October 2021, the Company entered into an $ 8.0 million term loan with BroadOak Fund V, L.P. (“BroadOak”)(the “BroadOak Term Loan”), the proceeds of which were used to repay in full at their maturity the existing secured promissory note with Ampersand Capital Partners (“Ampersand”) (the “Ampersand Note”) and 1315 Capital II, L.P (“1315 Capital”)(the “1315 Capital Note”). In May 2022, the Company entered into a Subordinated Convertible Promissory Note agreement with BroadOak for an additional $ 2.0 million (the “Convertible Note”), which was converted into a subordinated term loan and was added to the outstanding BroadOak Term Loan balance. See Note 13, Notes Payable , for more details. In January 2022, the Company’s registration statement for a rights offering filed with the Securities and Exchange Commission (SEC) became effective; however, the rights offering was subsequently terminated later in January 2022 when the Company announced that the Centers for Medicare & Medicaid Services, or 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. However, 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. In May 2022, the Company was notified by CMS/NCCI that processing of claims for dates of service after January 1, 2022 would be completed beginning July 1, 2022. However, on June 9, 2022, the Company was notified that Novitas re-priced ThyGeNEXT ® (0245U) from $ 2,919 to $ 806 .59 retroactively effective to January 1, 2022. On July 20, 2022 the Clinical Diagnostic Laboratory Tests (CDLT) Advisory Panel affirmed a gapfill price for ThyGeNEXT ® of $ 806 .59. As a result of the ThyGeNEXT ® pricing change, the Company reduced its net realizable value, or NRV rates, for ThyGeNEXT ® Medicare billing to reflect the $ 806 .59 pricing for tests performed during the second quarter of 2022. In addition, in order to reflect the retroactive pricing change to January 1, 2022, the Company recorded an NRV adjustment of $ 0.7 million during the second quarter of 2022 to reduce revenue recorded during the first quarter of 2022. Effective January 1, 2023, the gapfill price for ThyGeNEXT ® was set at $ 1,266 .07 . Further, along with many laboratories, the Company may be affected by the Proposed Local Coverage Determination (“LCD”) DL39365, which was posted on June 9, 2022 and is currently under consideration by our local Medicare Administrative Contractor, Novitas. If finalized, this Proposed LCD, which governs “Genetic Testing for Oncology,” could impact the existing LCD for one of our molecular tests, PancraGEN ® . If Novitas restricts coverage for PancraGEN ® , the Company’s liquidity could be negatively impacted beginning in Fiscal 2023. On August 31, 2022, the Company closed on the sale of its Pharma Solutions business for a total purchase price of $ 6,560,000 after adjustments. In addition, we received the earnout payment of $ 1,043,000 . See Note 4, Discontinued Operations . For the year ended December 31, 2022, the Company had an operating loss from continuing operations of $ 3.6 million. As of December 31, 2022, the Company had cash and cash equivalents of $ 4.8 million, total current assets of $ 12.2 million and current liabilities of $ 14.3 million. As of March 17, 2023, the Company had approximately $ 5.7 million of cash on hand, excluding restricted cash. The Company may not generate positive cash flows from operations for the year ending December 31, 2023. The Company intends to meet its ongoing capital needs by using its available cash and availability under the Comerica Loan Agreement, as well as through targeted margin improvement; collection of accounts receivable; containment of costs; and the potential use of other financing options and other strategic alternatives. However, if the Company is unable to meet the financial covenants under the Comerica Loan Agreement, the revolving line of credit and notes payable will become due and payable immediately. As of March 27, 2023, the Company had $ 1.5 million available under the Loan Agreement. F- 13 The Company continues to explore various strategic alternatives, dilutive and non-dilutive sources of funding, including equity and debt financings, strategic alliances, business development and other sources in order to provide additional liquidity. With the delisting of its common stock from Nasdaq in February 2021, the Company’s ability to raise additional capital on terms acceptable to it has been adversely impacted. There can be no assurance that the Company will be successful in obtaining such funding on terms acceptable to it. The Company’s consolidated financial statements assumes the Company will continue as a going concern. Its ability to continue as a going concern depends on having working capital for vendor payments, meeting short-term obligations on other accrued liabilities, and amongst other requirements, making interest payments on its debt obligations. Without positive operating margins and sufficient working capital and the ability to meet its debt obligations, our business will be jeopardized and we may not be able to continue in our current structure, if at all. Under these circumstances, the Company would likely have to consider other options, such as selling assets, raising additional debt or equity capital, cutting costs or otherwise reducing our cash requirements, or negotiating with our creditors to restructure our applicable obligations. With the proceeds received from the sale of the Pharma Solutions business, as well as the expected improvement in future operating cash flows associated with the disposition, as of the date of this filing, the Company anticipates that current cash and cash equivalents and forecasted cash receipts will be sufficient to meet its anticipated cash requirements through the next twelve months. 4. Discontinued Operations On August 31, 2022, the Company 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 Interpace Pharma Solutions, Inc. used in its 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 (collectively, the “Transaction”). The Transaction closed on August 31, 2022. As consideration for the Transaction, Interpace received a total sale price of approximately $ 6.2 million after working capital and other adjustments ($ 0.5 million of which has been deposited into escrow). In addition, the Purchaser paid the Company an earnout of approximately $ 1.0 million based on revenue for the period beginning September 1, 2021 and ending August 31, 2022. The Purchase Agreement includes a one-year commitment of Interpace 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. The Purchase 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. In connection with the Transaction, on August 31, 2022, Interpace and 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 Interpace, Purchaser will pay Interpace 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. F- 14 The Purchaser is identified as a related party as an affiliate of Ampersand and an affiliate of BroadOak and have each provided equity financing to the Purchaser. Collectively, they own a majority of the Purchaser’s outstanding equity securities and are represented on its Board of Directors. The Company intends to use the remaining net proceeds to fund its future business activities and for general working capital purposes. As a result of the sale, the gain on sale and all operations from Interpace Pharma Solutions have been classified as discontinued operations for all periods presented. A reconciliation of the accounting for the Company’s Pharma Solutions business is as follows: Schedule of Sale of Business Gain on Sale Purchase price $ 7,000 Earnout received 1,043 Working capital adjustment, net ( 766 ) Less: transaction costs ( 307 ) Total net consideration $ 6,970 Assets and liabilities disposed of, net (1) ( 6,970 ) Gain on sale $ - (1) includes goodwill and intangible assets written down prior to the Transaction. The goodwill write-down was approximately $ 8.4 million and the write-down of intangible assets was approximately $ 3.8 million. The components of assets and liabilities classified as discontinued operations consist of the following as of December 31, 2022 and December 31, 2021: Schedule of Components of Assets and Liabilities and Revenue Classified as Discontinued Operations December 31, 2022 December 31, 2021 Accounts receivable, net $ - $ 1,486 Other - 1,607 Current assets of discontinued operations - 3,093 Property and equipment, net - 6,032 Other intangible assets, net - 5,155 Goodwill - 8,433 Other - 2,767 Long-term assets of discontinued operations - 22,387 Total assets $ - $ 25,480 Accounts payable - 1,320 Accrued salary and bonus 92 335 Other (1) 766 1,502 Current liabilities of discontinued operations 858 3,157 Operating lease liabilities, net of current portion - 2,634 Other - 71 Long-term liabilities of discontinued operations - 2,705 Total liabilities $ 858 $ 5,862 (1) Includes $ 766 of liabilities related to the former Commercial Services business unit. F- 15 The table below presents the significant components of its former Pharma Solutions business unit’s results included within loss from discontinued operations, net of tax in the consolidated statements of operations for the years ended December 31, 2022 and 2021. For The Years Ended December 31, 2022 2021 Revenue, net $ 5,678 $ 8,197 Loss from discontinued operations ( 15,968 ) ( 7,671 ) Gain (loss) on sale of Pharma Solutions - - Income tax expense 125 235 Loss from discontinued operations, net of tax $ ( 16,093 ) $ ( 7,906 ) The income tax expense for the years ended December 31, 2022 and December 31, 2021 primarily pertained to the interest accrued on uncertain tax position liabilities. Cash used from discontinued operations, operating activities, for the year ended December 31, 2022 was approximately $ 2.8 million. There was cash provided by discontinued operations, investing activities, for the year ended December 31, 2022 of $ 6.5 million which pertained to the net proceeds received from the Pharma Solutions sale. Cash used from discontinued operations, operating activities, for the year ended December 31, 2021 was approximately $ 4.9 million. There was cash used from discontinued operations, investing activities, for the year ended December 31, 2021 of $ 0.1 million. Depreciation and amortization expense within discontinued operations for the years ended December 31, 2022 and December 31, 2021 was $ 1.1 million and $ 1.8 million, respectively. 5. Fair Value Measurements Cash and cash equivalents, accounts receivable, and accounts payable approximate fair value due to their relative short-term nature. The Company’s financial liabilities reflected at fair value in the consolidated financial statements include contingent consideration, notes payable, and warrant liability. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In determining fair value, the Company uses various methods including market, income and cost approaches. Based on these approaches, the Company often utilizes certain assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and/or the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market-corroborated, or generally unobservable inputs. The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. Based upon observable inputs used in the valuation techniques, the Company is required to provide information according to the fair value hierarchy. The fair value hierarchy ranks the quality and reliability of the information used to determine fair values into three broad levels as follows: Level 1: Valuations for assets and liabilities traded in active markets from readily available pricing sources for market transactions involving identical assets or liabilities. Level 2: Valuations for assets and liabilities traded in less active dealer or broker markets. Valuations are obtained from third-party pricing services for identical or similar assets or liabilities. Level 3: Valuations for assets and liabilities include certain unobservable inputs in the assumptions and projections used in determining the fair value assigned to such assets or liabilities. F- 16 In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. The valuation methodologies used for the Company’s financial instruments measured on a recurring basis at fair value, including the general classification of such instruments pursuant to the valuation hierarchy, is set forth in the tables below. Schedule of Financial Instrument Measured On Recurring Basis Fair Value Measurements As of December 31, 2022 As of December 31, 2022 Carrying Amount Fair Value Level 1 Level 2 Level 3 (unaudited) Liabilities: Contingent consideration: Asuragen (1) $ 1,088 $ 1,088 $ - $ - $ 1,088 Other accrued expenses: Warrant liability (2) - - - - - Note payable: BroadOak loan 10,000 11,165 - - 11,165 $ 11,088 $ 12,253 $ - $ - $ 12,253 Fair Value Measurements As of December 31, 2021 As of December 31, 2021 Carrying Amount Fair Value Level 1 Level 2 Level 3 Liabilities: Contingent consideration: Asuragen $ 1,871 $ 1,871 $   - $ - $ 1,871 Other accrued expenses: Warrant liability 71 71 - - 71 Note payable: BroadOak loan 8,000 7,942 - - 7,942 $ 9,942 $ 9,884 $ - $ - $ 9,884 (1)(2) See Note 10, Accrued Expenses and Long-Term Liabilities In connection with the acquisition of certain assets from Asuragen, the Company recorded contingent consideration related to contingent payments and other revenue-based payments. The Company determined the fair value of the contingent consideration based on a probability-weighted income approach derived from revenue estimates. The fair value measurement is based on significant inputs not observable in the market and thus represents a Level 3 measurement. The Company records the BroadOak loan at fair value. The fair value of the loan is determined by a probability-weighted approach regarding the loan’s change in control feature. See Note 13, Notes Payable, for more details. The fair value measurement is based on the estimated probability of a change in control and thus represents a Level 3 measurement. F- 17 Schedule of Fair Value, Assets Measured On Recurring Basis, Unobservable Input Reconciliation Adjustment Accretion/ to Fair Value/ December 31, 2021 Issued Reclassified Transferred to Accrued Expenses Interest Accrued Mark to Market December 31, 2022 Asuragen $ 1,871 $ - $ - $ ( 718 ) $ 158 $ ( 223 ) $ 1,088   Underwriters Warrants 71 - - - - ( 71 ) - BroadOak loans 7,942 - 2,000 - - 1,223 11,165 1,223 BroadOak Convertible Note - 2,000 ( 2,000 ) - - - - $ 9,884 $ 2,000 $ - $ ( 718 ) $ 158 $ 929 $ 12,253 Certain of the Company’s non-financial assets, such as other intangible assets are measured at fair value on a nonrecurring basis when there is an indicator of impairment and recorded at fair value only when an impairment charge is recognized. 6. Property and Equipment Property and equipment consisted of the following as of December 31, 2022 and 2021: Schedule of Property and Equipment 2022 2021 December 31, 2022 2021 Furniture and fixtures $ 69 $ 62 Lab and office equipment 2,243 1,944 Computer equipment 233 217 Internal-use software 139 139 Leasehold improvements 175 175 Property and equipment 2,859 2,537 Less accumulated depreciation and amortization ( 2,379 ) ( 2,220 ) Net property and equipment $ 480 $ 317 Depreciation and amortization expense from continuing operations was approximately $ 0.2 million and $ 0.3 million for the years ended December 31, 2022 and 2021, respectively. There was zero internal-use software amortization expense included in depreciation and amortization expense in 2022. F- 18 7. Goodwill and Other Intangible Assets The net carrying value of the identifiable intangible assets from all acquisitions within continuing operations as of December 31, 2022 and December 31, 2021 are as follows: Schedule of Identifiable Assets Carrying Value As of December 31, 2022 As of December 31, 2021 Life Carrying Carrying (Years) Amount Amount Asuragen acquisition: Thyroid 9 $ 8,519 $ 8,519 RedPath acquisition: Pancreas test 7 16,141 16,141 Barrett’s test 9 6,682 6,682 CLIA Lab 2.3 609 609 Total $ 31,951 $ 31,951 Accumulated Amortization ( 31,090 ) ( 29,819 ) Net Carrying Value $ 861 $ 2,132 Amortization expense from continuing operations was approximately $ 1.3 million and $ 3.2 million for the years ended December 31, 2022 and 2021, respectively. The remaining amortization expense of $ 0.9 million will be amortized in 2023. 8. Leases The Company leases facilities and certain equipment under agreements classified as operating leases, which expire at various dates through June 2028. Substantially all of the property leases provide for increases based upon use of utilities and landlord’s operating expenses as well as pre-defined rent escalations. Total expense from continuing operations under these agreements for the years ended December 31, 2022 and 2021 was approximately $ 0.9 million and $ 0.7 million, respectively. The table below presents the lease-related assets and liabilities recorded in the Consolidated Balance Sheet: Schedule of Lease related Assets and Liabilities Classification on the Balance Sheet December 31, 2022 December 31, 2021 Assets Operating lease assets Operating lease right of use assets 2,439 1,284 Total lease assets $ 2,439 $ 1,284 Liabilities Current Operating lease liabilities Other accrued expenses 578 762 Operating lease liabilities Other accrued expenses 578 762 Total current lease liabilities $ 578 $ 762 Noncurrent Operating lease liabilities Operating lease liabilities, net of current portion 1,848 520 Total long-term lease liabilities 1,848 520 Total lease liabilities $ 2,426 $ 1,282 F- 19 The weighted average remaining lease term for the Company’s operating leases was 5.0 years as of December 31, 2022 and 6.4 years as of December 31, 2021 and the weighted average discount rate for those leases was 11.7 % and 6.5 % as of December 31, 2022 and December 31, 2021, respectively. The Company’s operating lease expenses are recorded within “Cost of revenue” and “General and administrative expenses.” The table below reconciles the undiscounted cash flows to the lease liabilities recorded on the Company’s Consolidated Balance Sheet as of December 31, 2022: Schedule of Maturities of Operating Lease Liabilities Operating Leases 2023 $ 832 2024 575 2025 450 2026 550 2027-2028 825 Total minimum lease payments 3,232 Less: amount of lease payments representing effects of discounting 806 Present value of future minimum lease payments 2,426 Less: current obligations under leases 578 Long-term lease obligations $ 1,848 9. Retirement Plans The Company offers an employee 401(k) saving plan. Under the Interpace Biosciences, Inc. 401(k) Plan, employees may contribute up to 50 % of their pre- or post-tax base compensation. The Company currently offers a safe harbor matching contribution equal to 100 % of the first 3 % of the participant’s contributed base salary plus 50 % of the participant’s base salary contributed exceeding 3 % but not more than 5 % . Participants are not allowed to invest any of their 401(k) funds in the Company’s common stock. The Company’s total contribution expense from continuing operations related to the 401(k) plan for the years ended December 31, 2022 and December 31, 2021 was approximately $ 0.3 million and $ 0.2 million, respectively. 10. Accrued Expenses and Other Long-Term Liabilities Other accrued expenses consisted of the following as of December 31, 2022 and 2021: Schedule of Other Accrued Expenses December 31, 2022 December 31, 2021 Accrued royalties $ 4,909 $ 3,890 Contingent consideration 569 488 Operating lease liability 578 762 Interest payable - 120 Warrant liability - 71 Accrued sales and marketing - diagnostics 40 47 Accrued lab costs - diagnostics 167 228 Accrued professional fees 641 932 Taxes payable 262 222 Unclaimed property 565 565 All others 688 1,137 Total other accrued expenses $ 8,419 $ 8,462 Other long-term liabilities consisted of uncertain tax positions as of December 31, 2022 and 2021. F- 20 11. Commitments and Contingencies Litigation Due to the nature of the businesses in which the Company is engaged it is subject to certain risks. Such risks include, among others, risk of liability for personal injury or death to persons using products the Company promotes or commercializes. There can be no assurance that substantial claims or liabilities will not arise in the future due to the nature of the Company’s business activities and recent increases in litigation related to healthcare products. The Company could also be held liable for errors and omissions of its employees in connection with the services it performs that are outside the scope of any indemnity or insurance policy. The Company could be materially adversely affected if it were required to pay damages or incur defense costs in connection with a claim that is outside the scope of an indemnification agreement; if the indemnity, although applicable, is not performed in accordance with its terms; or if the Company’s liability exceeds the amount of applicable insurance or indemnity. 12. Mezzanine Equity Redeemable Preferred Stock On January 10, 2020, the Company entered into a Securities Purchase and Exchange Agreement (the “Securities Purchase and Exchange Agreement”) with 1315 Capital and Ampersand (collectively, the “Investors”) pursuant to which the Company agreed to sell to the Investors an aggregate of $ 20.0 million in Series B Preferred Stock of the Company, at an issuance price per share of $ 1,000 . Pursuant to the Securities Purchase and Exchange Agreement, 1315 Capital agreed to purchase 19,000 shares of Series B Preferred Stock at an aggregate purchase price of $ 19.0 million and Ampersand agreed to purchase 1,000 shares of Series B Preferred Stock at an aggregate purchase price of $ 1.0 million. In addition, the Company agreed to exchange $ 27.0 million of the Company’s existing Series A convertible preferred stock, par value $ 0.01 per share, held by Ampersand (the “Series A Preferred Stock”), represented by 270 shares of Series A Preferred Stock with a stated value of $ 100,000 per share, which represents all of the Company’s issued and outstanding Series A Preferred Stock, for 27,000 newly issued shares of Series B Preferred Stock (such shares of Series B Preferred Stock, the “Exchange Shares” and such transaction, the “Exchange”). Following the Exchange, no shares of Series A Preferred Stock remained designated, authorized, issued or outstanding. The Series B Preferred Stock has a conversion price of $ 6.00 . Voting On any matter presented to the stockholders of the Company for their action or consideration at any meeting of stockholders of the Company (or by written consent of stockholders in lieu of meeting), each holder of outstanding shares of Series B Preferred Stock will be entitled to cast the number of votes equal to the number of whole shares of the Company’s Common Stock into which the shares of Series B Preferred Stock held by such holder are convertible as of the record date for determining stockholders entitled to vote on such matter. Except as provided by law or by the Certificate of Designation of Preferences, Rights and Limitations of Series B Convertible Preferred Stock (the “Certificate of Designation”), holders of Series B Preferred Stock will vote together with the holders of Common Stock as a single class and on an as-converted to Common Stock basis. Director Designation Rights The Certificate of Designation also provides each Investor with the following director designation rights: for so long such Investor holds at least sixty percent (60%) of the Series B Preferred Stock issued to it on the Issuance Date (as defined therein), such Investor will be entitled to elect two directors to the Company’s Board of Directors (the “Board”), provided that one of the directors qualifies as an “independent director” under Rule 5605(a)(2) of the listing rules of the Nasdaq Stock Market (or any successor rule or similar rule promulgated by another exchange on which the Company’s securities are then listed or designated) (“Independent Director”). However, if at any time such Investor holds less than sixty percent (60%), but at least forty percent (40%), of the Series B Preferred Stock issued to them on the Issuance Date, such Investor would only be entitled to elect one director to the Board. Any director elected pursuant to the terms of the Certificate of Designation may be removed without cause by, and only by, the affirmative vote of the holders of Series B Preferred Stock. A vacancy in any directorship filled by the holders of Series B Preferred Stock may be filled only by vote or written consent in lieu of a meeting of such holders of Series B Preferred Stock or by any remaining director or directors elected by such holders of Series B Preferred Stock . F- 21 Conversion The Certificate of Designation provides that from and after the Issuance Date and subject to the terms of the Certificate of Designation, each share of Series B Preferred Stock is convertible, at any time and from time to time, at the option of the holder into a number of shares of Common Stock equal to dividing the amount equal to the greater of the Stated Value 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 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 Common Stock that may be issued through conversion of all of the New Investment Shares and Exchange Shares 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). Mandatory Conversion If the Company consummates the sale of shares of Common Stock to the public in a firm-commitment underwritten public offering pursuant to an effective registration statement under the Securities Act pursuant to which the price of the Common Stock in such offering is at least equal to twelve dollars ($ 12.00 ) (subject to adjustment in the event of any stock dividend, stock split, combination, or other similar recapitalization affecting such shares) and such offering does not include warrants (or any other convertible security) and results in at least $ 25,000,000.00 in proceeds, net of the underwriting discount and commissions, to the Company, and the Common Stock continues to be listed for trading on the Nasdaq Capital Market or another exchange, all outstanding shares of Series B Preferred Stock will automatically be converted into shares of Common Stock, at the then effective Series B Conversion Ratio (as defined in the Certificate of Designation). Liquidation Upon any voluntary or involuntary liquidation, dissolution or winding up of the Company or Deemed Liquidation (as defined in the Certificate of Designation) (a “Liquidation”), the holders of shares of Series B Preferred Stock then outstanding will be entitled to be paid out of the assets of the Company available for distribution to its stockholders (on a pari passu basis with the holders of any class or series of preferred stock ranking on liquidation on a parity with the Series B Preferred Stock), and before any payment will be made to the holders of Common Stock or any other class or series of preferred stock ranking on liquidation junior to the Series B Preferred Stock by reason of their ownership thereof, an amount per share of Series B Preferred Stock equal to the greater of (i) the Stated Value of such share of Series B Preferred Stock, plus any dividends declared but unpaid thereon, or (ii) such amount per share as would have been payable had each such share been converted into Common Stock immediately prior to such Liquidation . As of December 31, 2022 and December 31, 2021, there were 47,000 Series B issued and outstanding shares of preferred stock which on an as converted basis are equal to 7,833,334 shares of common stock. 13. Notes Payable BroadOak Loan On October 29, 2021, the Company and its subsidiaries entered into the BroadOak Loan Agreement, providing for a term loan in the aggregate principal amount of $ 8,000,000 (the “Term Loan”). Funding of the Term Loan took place on November 1, 2021. The Term Loan matures upon the earlier of (i) October 31, 2024 or (ii) the occurrence of a change in control, and bears interest at the rate of 9 % per annum. The Term Loan is secured by a security interest in substantially all of the Company’s and its subsidiaries’ assets and is subordinate to the Company’s $ 7,500,000 revolving credit facility with Comerica Bank. See Note 18 Revolving Line of Credit . The Term Loan had an origination fee of 3 % of the Term Loan amount, and a terminal payment equal to (i) 15% of the original principal amount of the Term Loan if the change of control occurs on or prior to the first anniversary of the funding of the Term Loan, (ii) 20% of the original principal amount of the Term Loan if the change of control occurs after the first anniversary but on or prior to the second anniversary of the funding of the Term Loan and (iii) 30% of the original principal amount of the Term Loan if the change of control occurs after the second anniversary of the funding of the Term Loan, or if the Term Loan is repaid on its maturity date. The BroadOak Loan Agreement contains affirmative and negative restrictive covenants that are applicable from and after the date of the Term Loan advance. These restrictive covenants, which include restrictions on certain mergers, acquisitions, investments, encumbrances, etc., could adversely affect our ability to conduct our business. The BroadOak Loan Agreement also contains customary events of default. In connection with the BroadOak Loan Agreement, the Company and its subsidiaries entered into that certain First Amendment to Loan and Security Agreement and Consent with Comerica, dated as of November 1, 2021 (the “Comerica Amendment”), pursuant to which Comerica consented to the Company’s and its subsidiaries’ entry into the BroadOak Loan Agreement, and amended that certain Loan and Security Agreement among Comerica, the Company and its subsidiaries (the “Comerica Loan Agreement”) to, among other things, permit the indebtedness, liens and encumbrances contemplated by the BroadOak Loan Agreement. As a condition for BroadOak to extend the Term Loan to the Company and its subsidiaries, the Company’s existing creditor, Comerica, and BroadOak entered into that certain Subordination and Intercreditor Agreement, dated as of November 1, 2021, pursuant to which BroadOak agreed to subordinate all of the indebtedness and obligations of the Company and its subsidiaries owing to BroadOak to all of the indebtedness and obligations of the Company and its subsidiaries owing to Comerica (the “Intercreditor Agreement”). BroadOak further agreed to subordinate all of its respective security interests in assets or property of the Company and its subsidiaries to Comerica’s security interests in such assets or property. The Intercreditor Agreement provides that it is solely for the benefit of BroadOak and Comerica and is not for the benefit of the Company or any of its subsidiaries. The Company concluded that the Note met the definition of a “recognized financial liability” which is an acceptable financial instrument eligible for the fair value option under ASC 825-10-15-4, and did not meet the definition of any of the financial instruments listed within ASC 825-10-15-5 that are not eligible for the fair value option. The Note is not convertible and does not have any component recorded to shareholders’ equity. Accordingly, the Company elected the fair value option for the Note. F- 22 BroadOak Convertible Note On May 5, 2022, the Company issued a Convertible Note to BroadOak, pursuant to which BroadOak funded an aggregate principal amount of $ 2 million (the “Convertible Debt”). The Convertible Note was to be converted into shares of common stock of the Company in connection with, and upon the consummation of, a private placement transaction pursuant to which the Company would issue common stock to certain investors, and such conversion would be subject to the same terms and conditions (including purchase price per share) applicable to the purchase of common stock of the Company by such investors. Since the private placement transaction was not consummated by August 5, 2022 (the “Maturity Date”), the Convertible Note was converted into an additional term loan advance under the Company’s existing BroadOak Loan Agreement on the Maturity Date. The Convertible Debt bore interest at a fixed rate of 9.0 % per annum and was unsecured. There were no scheduled amortization payments prior to the Maturity Date. The Convertible Note contained customary representations and warranties and customary events of default. The Company entered into a) a consent letter (the “Comerica Consent”) with Comerica, pursuant to which Comerica consented to the issuance of the Convertible Note, the incurrence of the Convertible Debt and the conversion of the Convertible Debt into common stock of the Company or an additional term loan advance under the BroadOak Loan Agreement. Related Party Secured Promissory Note On January 7, 2021, the Company entered into secured promissory notes in the amount of $ 3 million and $ 2 million with Ampersand and 1315 Capital, respectively. On May 10, 2021, the Company amended the Ampersand Note to increase the principal amount to $ 4.5 million and amended the 1315 Capital Note to increase the principal amount to $ 3.0 million. The maturity dates of the Notes were the earlier of (a) June 30, 2021 and (b) the date on which all amounts become due upon the occurrence of any event of default as defined in the Notes. On June 24, 2021, the Company and Ampersand amended the Ampersand Note to change its maturity date to the earlier of (a) August 31, 2021 and (b) the date on which all amounts become due upon the occurrence of any event of default as defined in the Ampersand Note. On June 25, 2021, the Company and 1315 Capital amended the 1315 Capital Note to change its maturity date in a similar manner. On August 31, 2021, the Company and Ampersand amended the Ampersand Note to change its maturity date to the earlier of (a) September 30, 2021 and (b) the date on which all amounts become due upon the occurrence of any event of default as defined in the Ampersand Note. On August 31, 2021, the Company and 1315 Capital amended the 1315 Capital Note to change its maturity date in a similar manner. On September 29, 2021, the Company and Ampersand amended the Ampersand Note to change its maturity date to the earlier of (a) October 31, 2021 and (b) the date on which all amounts become due upon the occurrence of any event of default as defined in the Ampersand Note. On September 29, 2021, the Company and 1315 Capital amended the 1315 Capital Note to change its maturity date in a similar manner. The Company used the proceeds of the BroadOak Term Loan discussed above to repay in full all outstanding indebtedness under the promissory notes with Ampersand, in the amount of $ 4.5 million, and 1315 Capital, in the amount of $ 3 million. F- 23 14. Warrants Warrants outstanding and warrant activity for the year ended December 31, 2022 are as follows: Schedule of Warrants Outstanding and Warrants Activity Description Classification Exercise Price Expiration Date Warrants Issued Balance December 31, 2021 Warrants Exercised Warrants Cancelled/ Expired Balance December 31, 2022 Private Placement Warrants, issued January 25, 2017 Equity $ 46.90 June 2022 85,500 85,500 - ( 85,500 ) - RedPath Warrants, issued March 22, 2017 Equity $ 46.90 September 2022 10,000 10,000 - ( 10,000 ) - Underwriters Warrants, issued June 21, 2017 Liability $ 13.20 December 2022 57,500 53,500 - ( 53,500 ) - Base & Overallotment Warrants, issued June 21, 2017 Equity $ 12.50 June 2022 1,437,500 870,214 ( 9 ) ( 870,205 ) - Warrants issued October 12, 2017 Equity $ 18.00 April 2022 320,000 320,000 - ( 320,000 ) - Underwriters Warrants, issued January 25, 2019 Equity $ 9.40 January 2022 65,434 65,434 - ( 65,434 ) - 1,975,934 1,404,648 ( 9 ) ( 1,404,639 ) - 15. Stock-Based Compensation The Company’s stock-incentive program is a long-term retention program that is intended to attract, retain and provide incentives for talented employees, officers and directors, and to align stockholder and employee interests. Currently, the Company is able to grant options, stock appreciation rights (“SARs”) and restricted shares from the Interpace Biosciences, Inc. 2019 Equity Incentive Plan. No new grants may be made under the Company’s prior stock incentive plan, the Interpace Diagnostics Group, Inc. (now known as Interpace Biosciences, Inc.) Amended and Restated 2004 Stock Award and Incentive Plan (the “2004 Plan”). Unless earlier terminated by action of the Company’s board of directors, the 2004 Plan will remain in effect until such time as no stock remains available for delivery and the Company has no further rights or obligations under the 2004 Plan with respect to outstanding awards thereunder. Historically, stock options have been granted with an exercise price equal to the market value of the common stock on the date of grant, expire 10 years from the date they are granted, and generally vested over a one to three-year period for employees and members of the Board. Upon exercise, new shares will be issued by the Company. The restricted shares and restricted stock units (“RSUs”) granted to employees generally have a three-year graded vesting period and are subject to accelerated vesting and forfeiture under certain circumstances. Restricted shares and RSUs granted to Board members generally have a three-year graded vesting period and are subject to accelerated vesting and forfeiture under certain circumstances. F- 24 The Company primarily uses the Black-Scholes option-pricing model to determine the fair value of stock options. The determination of the fair value of stock-based payment awards on the date of grant using an option-pricing model is affected by the Company’s stock price as well as assumptions regarding a number of complex and subjective variables. These variables include the Company’s expected stock price volatility over the term of the awards, actual and projected employee stock option exercise behaviors, risk-free interest rate and expected dividends. Expected volatility is based on historical volatility. As there is no trading volume for the Company’s options, implied volatility is not representative of the Company’s current volatility so the historical volatility of the Company’s common stock is determined to be more indicative of the Company’s expected future stock performance. The expected life is determined using the safe-harbor method. The Company expects to use this simplified method for valuing employee options until more detailed information about exercise behavior becomes available over time. The Company bases the risk-free interest rate on U.S. Treasury zero-coupon issues with remaining terms similar to the expected term on the options. The Company does not anticipate paying any cash dividends in the foreseeable future and therefore uses an expected dividend yield of zero in the option valuation model. The Company estimates forfeitures at the time of grant and revise those estimates in subsequent periods if actual forfeitures differ from those estimates. The Company uses historical data to estimate pre-vesting option forfeitures and records stock-based compensation expense only for those awards that are expected to vest. The Company recognizes compensation cost, net of estimated forfeitures, arising from the issuance of stock options on a straight-line basis over the vesting period of the grant. The Company began an employee stock purchase plan in 2020 and recognized approximately $ 46,000 and $ 0.1 million in expense related to that plan for the years ended December 31, 2022 and 2021, respectively. The Company suspended its plan in July 2022 as there were no shares available in the original authorized shares pool. In November 2022, the shareholders approved an increase to the pool of an additional one million shares. As of December 31, 2022, we have reserved 776,849 shares of our common stock for issuance under our 2019 Equity Incentive Plan and 1,000,007 shares of our common stock for issuance under our Employee Stock Purchase Plan and 1,672,746 additional shares available for future grants of awards under our 2019 Equity Incentive Plan. The estimated compensation cost associated with the granting of restricted stock and restricted stock units is based on the fair value of the Company’s common stock on the date of grant. The Company recognizes the compensation cost, net of estimated forfeitures, arising from the issuance of restricted stock and restricted stock units on a straight-line basis over the shorter of the vesting period or the period from the grant date to the date when retirement eligibility is achieved. The following table provides the weighted average assumptions used in determining the fair value of the stock options granted during the years ended December 31, 2022 and December 31, 2021: Schedule of Stock Options, Valuation Assumptions December 31, 2022 December 31, 2021 Risk-free interest rate 1.75 % 0.79 % Expected life 6 .0 years 6 .0 years Expected volatility 129.88 % 134.73 % Dividend yield - - The weighted-average fair value of stock options granted during the year ended December 31, 2022 was estimated to be $ 4.50 . The weighted-average fair value of stock options granted during the year ended December 31, 2021 was estimated to be $ 4.64 . There were no options exercised in 2022. There were 13,042 options exercised in 2021. Stock-based compensation from continuing operations for the years ended December 31, 2022 and 2021 is as follows: Schedule of Share-Based Compensation Arrangements by Share-Based Payment Award 2022 2021 RSUs and restricted stock $ 498 $ 370 Performance-based awards 71 107 Options 622 555 Total stock-based compensation expense $ 1,191 $ 1,032 F- 25 A summary of stock option activity for the year ended December 31, 2022, and changes during such year, is presented below: Schedule of Stock Option Activity Weighted- Weighted-Average Average Remaining Aggregate Grant Contractual Intrinsic Shares Price Period (in years) Value Outstanding at January 1, 2022 632,511 $ 6.89 8.40 $ - Granted 41,000 5.03 9.01 - Forfeited or expired ( 145,667 ) 7.91 - - Outstanding at December 31, 2022 527,844 6.46 7.57 - Exercisable at December 31, 2022 270,080 7.39 7.16 - Vested and expected to vest 518,511 6.47 7.55 - A summary of the change in of the Company’s non-vested options for the year ended December 31, 2022 is presented below: Schedule of Non Vested Option Activity Shares Weighted- Average Grant Date Fair Value Nonvested at January 1, 2022 422,476 $ 4.78 Granted 41,000 4.50 Vested ( 142,709 ) 5.02 Forfeited ( 63,003 ) 4.69 Nonvested at December 31, 2022 257,764 $ 4.63 The aggregate fair value of options vested during the years ended December 31, 2022 and 2021 was $ 0.7 million and $ 0.8 million, respectively. The weighted-average grant date fair value of options vested during the year ended December 31, 2021 was $ 6.54 . A summary of the Company’s non-vested shares of restricted stock and restricted stock units for the year ended December 31, 2022, and changes during such year, is presented below: Schedule of Share-Based Compensation, Restricted Stock and Restricted Stock Units Activity Weighted- Average Average Remaining Aggregate Grant Date Vesting Intrinsic Shares Fair Value Period (in years) Value Nonvested at January 1, 2022 328,939 $ 3.67 1.34 $ 2,467,043 Granted 74,000 6.18 - - Vested ( 113,932 ) 4.88 - - Forfeited ( 40,002 ) 6.15 - - Nonvested at December 31, 2022 249,005 $ 3.47 0.98 $ 258,965 The aggregate fair value of restricted stock units vested during each of the years ended December 31, 2022 and 2021 was $ 0.6 million and $ 0.3 million, respectively. F- 26 As of December 31, 2022, there was approximately $ 0.9 million of total unrecognized compensation cost, net of estimated forfeitures, related to unvested stock options and restricted stock units which will be expensed over the next three years. 16. Revenue Sources The Company’s clinical services customers consist primarily of physicians, hospitals and clinics. Its revenue channels include Medicare, Medicare Advantage, Medicaid, Client Billings (hospitals, etc.), and commercial payers. The following sets forth the net revenue generated by revenue channel accounting for more than 10% of the Company’s revenue from continuing operations during the years ended December 31, 2022 and 2021, respectively. For the years ended December 31, 2022 and December 31, 2021, revenue from Medicare was approximately 45 % and 54 % of total revenue, respectively. Schedule of Revenue by Major Customers Years Ended December 31, Customer 2022 2021 Medicare $ 14,413 $ 17,778 Medicare Advantage $ 4,384 $ 5,859 Commercial Payors $ 7,154 $ 5,555 Client Billings $ 5,679 $ 3,752 17. Income Taxes The provision (benefit) from income taxes on continuing operations for the years ended December 31, 2022 and 2021 is comprised of the following: Schedule of Components of Income Tax Expense (Benefit) 2022 2021 Current: Federal $ - $ - State 29 ( 705 ) Total current 29 ( 705 ) Deferred: Federal - - State - - Total deferred - - Provision (benefit) from income taxes $ 29 $ ( 705 ) The Company performs an analysis each year to determine whether the expected future income will more likely than not be sufficient to realize the deferred tax assets. The Company’s recent operating results and projections of future income weighed heavily in the Company’s overall assessment. As a result of this analysis, the Company continues to maintain a full valuation allowance against its federal and state net deferred tax assets at December 31, 2022 as the Company believes that it is more likely than not that these assets will not be realized. F- 27 The tax effects of significant items comprising the Company’s deferred tax assets and (liabilities) as of December 31, 2022 and 2021 are as follows: Schedule of Deferred Tax Assets and Liabilities 2022 2021 Deferred tax assets: Federal net operating loss carryforwards $ 26,713 $ 24,923 State net operating loss carryforwards 3,639 3,498 Compensation 2,059 1,844 Allowances and reserves 395 585 Intangible assets 3,584 571 State taxes 987 942 Credit carryforward 1 2 163(j) interest 1,279 1,047 Leases ( 3 ) 41 Deferred revenue 94 95 Capitalized 174 158 - Valuation allowance ( 38,256 ) ( 33,170 ) Gross deferred tax assets 650 378 Deferred tax liability: Property and equipment ( 650 ) ( 471 ) Deferred tax liability-net valuation allowance $ - $ ( 93 ) The Company’s deferred tax asset and deferred tax liabilities are included within Other long-term liabilities , within the consolidated balance sheet as of December 31, 2022 and 2021. Federal tax attribute carryforwards at December 31, 2022, consist primarily of approximately $ 127.2 million of federal net operating losses. In addition, the Company has approximately $ 59.1 million of state net operating losses carryforwards post 382 ownership change. The utilization of the federal carryforwards as an available offset to future taxable income is subject to limitations under federal income tax laws. Under current federal income tax law, federal NOLs incurred in tax years beginning after December 31, 2017 may be carried forward indefinitely, but the deductibility of such federal NOLs is limited to 80% of Federal Taxable Income, and current state net operating losses not utilized begin to expire this year. The NOL carry forwards are subject to review and possible adjustment by the Internal Revenue Service and state tax authorities. NOL, and tax credit carry forwards may become subject to an annual limitation in the event of certain cumulative changes in the ownership interest of significant stockholders over a three year period in excess of 50%, as defined under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, or the Code, as well as similar state tax provisions. The amount of the annual limitation, if any, will be determined based on the value of our company immediately prior to an ownership change. Subsequent ownership changes may further affect the limitation in future years. Additionally, U.S. tax laws limit the time during which these carry forwards may be applied against future taxes, therefore, we may not be able to take full advantage of these carry forwards for federal income tax purposes. During 2021, the Company completed a 382 assessment of the available NOLs under Section 382 and determined that the Company underwent an ownership change on March 30, 2017 and July 15, 2019 and as a result, NOLs attributable to the pre-ownership change are subject to a substantial annual limitation under Section 382 of the Internal Revenue Code due to the multiple ownership changes. The Company has adjusted their NOL carryforwards to address the impact of the 382 ownership change. Federal Net Operating Losses of $ 71.2 million are subject to annual limitation as of the ownership changes for ownership changes. The remaining $ 56.0 million of NOLs incurred post July 15, 2019 are not subject to any annual limitation and can be carried forward indefinitely. F- 28 A reconciliation of the difference between the federal statutory tax rates and the Company’s effective tax rate from continuing operations is as follows: Schedule of Effective Income Tax Rate Reconciliation 2022 2021 Federal statutory rate 21.0 % 21.0 % State income tax rate, net of Federal tax benefit 3.6 % 4.3 % Meals and entertainment ( 0.4 )% ( 0.2 )% Valuation allowance ( 24.7 )% ( 25.4 )% NJ NOL credit sale 0.0 % 9.4 % Effective tax rate ( 0.5 )% 9.1 % The following table summarizes the change in uncertain tax benefit reserves for the two years ended December 31, 2022: Schedule of Unrecognized Tax Benefits Reserves Roll Forward Unrecognized Tax Benefits Balance of unrecognized benefits as of January 1, 2021 $ 877 Additions for tax positions of prior years - Balance as of January 1, 2022 $ 877 Additions for tax positions of prior years - Balance as of December 31, 2022 $ 877 As of December 31, 2022 and 2021, the total amount of gross unrecognized tax benefits was $ 0.9 million and $ 0.9 million, respectively. The total amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate as of December 31, 2022 and 2021 was $ 0.9 million and $ 0.9 million, respectively. The Company recognized interest and penalties of $ 0.2 million and $ 0.2 million, respectively, related to uncertain tax positions in income tax expense during each of the years ended December 31, 2022 and 2021. At December 31, 2022 and 2021, accrued interest and penalties, net were $ 3.8 million and $ 3.6 million, respectively, and are included in the Other long-term liabilities in the consolidated balance sheets. The Company and its subsidiaries file a U.S. Federal consolidated income tax return and consolidated and separate income tax returns in numerous states and local tax jurisdictions. The following tax years remain subject to examination as of December 31, 2022: Schedule of Tax Years Subject to Examination Jurisdiction Tax Years Federal 2019 – 2022 State and Local 2018 – 2022 To the extent there was a failure to file a tax return in a previous year; the statute of limitation will not begin until the return is filed. There were no examinations in process by the Internal Revenue Service as of December 31, 2022. F- 29 18. Basic and Diluted Net Loss per Share A reconciliation of the number of shares used in the calculation of basic and diluted earnings per share for the years ended December 31, 2022 and 2021 are as follows (rounded to thousands): Schedule of Weighted Average Number of Shares Years Ended December 31, 2022 2021 Basic weighted average number of common shares 4,238 4,135 Potential dilutive effect of stock-based awards - - Diluted weighted average number of common shares 4,238 4,135 The Company’s Series B Preferred Stock, on an as converted basis of 7,833,334 shares and the following outstanding stock-based awards and warrants were excluded from the computation of the effect of dilutive securities on loss per share for the following periods as they would have been anti-dilutive (rounded to thousands): Schedule of Anti-dilutive Securities Excluded from Computation of Earnings Per Share Years Ended December 31, 2022 2021 Options 528 632 Restricted stock units (RSUs) 249 329 Warrants - 1,405 777 2,366 19. Revolving Line of Credit On October 13, 2021, the Company and its subsidiaries entered into the Comerica Loan Agreement with Comerica, providing for a revolving credit facility of up to $ 7,500,000 (the “Credit Facility”). The Company may use the proceeds of the Credit Facility for working capital and other general corporate purposes. The amount that may be borrowed under the Credit Facility is the lower of (i) the revolving limit of $ 7,500,000 (the “Revolving Line”) and (ii) 80 % of the Company’s eligible accounts receivable plus an applicable non-formula amount consisting of $ 2,000,000 of additional availability at close not based upon the Company’s eligible accounts receivable, with such additional availability reducing by $ 250,000 per quarter beginning with the quarter ending June 30, 2022. Borrowings on the Credit Facility are limited to $ 5,000,000 until 80 % of the Company’s and its subsidiaries’ customers are paying into a collection account or segregated governmental account with Comerica. The Revolving Line can also include, at the Company’s option, credit card services with a sublimit of $ 300,000 . Borrowings on the Revolving Line are subject to an interest rate equal to prime plus 0.50 %, with prime being the greater of (x) Comerica’s stated prime rate or (y) the sum of (A) the daily adjusting LIBOR rate plus (B) 2.5 % per annum. The Company is also required to pay an unused facility fee quarterly in arrears in an amount equal to 0.25 % per annum on the average unused but available portion of the Revolving Line for such quarter. The Credit Facility matures on September 30, 2023, and is secured by a first priority lien on substantially all of the assets of the Company and its subsidiaries. As of December 31, 2022, the balance of the revolving line was $ 2.5 million. The Comerica Loan Agreement contains affirmative and negative restrictive covenants that are applicable whether or not any amounts are outstanding under the Comerica Loan Agreement. These restrictive covenants, which include restrictions on certain mergers, acquisitions, investments, encumbrances, etc., could adversely affect our ability to conduct our business. The Comerica Loan Agreement also contains financial covenants requiring specified minimum liquidity and minimum revenue thresholds, which the Company was in compliance with as of December 31, 2022, and also contains customary events of default. In April 2022, Comerica waived certain covenants specifically relating to the Company receiving financial statements with a going concern comment or qualification. In April 2022 and August 2022, Comerica waived certain covenants specifically relating to failure to maintain bank accounts outside of Comerica in an aggregate amount not to exceed $ 0.5 million during the transition period. Additionally, in August 2022, Comerica waived certain covenants relating to failure to segregate collections made from government account debtors from collections made from all other account debtors and customers. F- 30 As a condition for Comerica to extend the Credit Facility to the Company, the Company’s existing creditors, Ampersand and 1315 Capital (the “Existing Creditors”), entered into a Subordination Agreement, dated as of October 13, 2021, pursuant to which each Existing Creditor agreed to subordinate all of the indebtedness and obligations of the Company owing to such Existing Creditor to all of the indebtedness and obligations of the Company owing to Comerica (the “Subordination Agreement”). Each Existing Creditor further agreed to subordinate all of its respective security interests in assets or property of the Company to Comerica’s security interests in such assets or property. The Subordination Agreement provides that it is solely for the benefit of Comerica and each of the Existing Creditors and is not for the benefit of the Company or any of its subsidiaries. 20. Supplemental Cash Flow Information Supplemental Disclosure of Other Cash Flow Information (in thousands) Supplemental Cash Flow Information Cash paid for taxes $ 251 $ 369 Cash paid for interest $ 971 $ 424 Supplemental Disclosures of Non Cash Activities (in thousands) Years Ended December 31, 2022 2021 Taxes accrued for repurchase of restricted shares $ - $ 95 Investment in DiamiR - 248 Conversion of convertible debt into notes payable 2,000 - F- 31 INTERPACE BIOSCIENCES, INC. VALUATION AND QUALIFYING ACCOUNTS YEARS ENDED DECEMBER 31, 2022 AND 2021 ($ in thousands) Additions Balance at (Reductions) (1) Balance at Beginning Charged to Deductions end Description of Period Operations Other of Period 2021 Allowance for doubtful accounts $ 72 - - $ 72 Allowance for doubtful notes $ 869 - - $ 869 Tax valuation allowance $ 23,684 - 9,486 $ 33,170 2022 Allowance for doubtful accounts $ 72 - ( 72 ) $ - Allowance for doubtful notes $ 869 - - $ 869 Tax valuation allowance $ 33,170 - 5,086 $ 38,256 (1) Includes payments and actual write offs, as well as changes in estimates in the reserves. F- 32