What changed in this filing

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Item 1. Business

2024-04-01 compared with 2023-03-27 · 498 added, 476 removed, 669 unchanged (59% of the section changed)

are a company that provides molecular diagnostics, bioinformatics and pathology services for evaluation of risk of cancer by leveraging

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

We develop and commercialize genomic tests

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

using the latest technology.

are a company that provides esoteric molecular diagnostic testing, and pathology services to aid physicians in their evaluation of cancer

risk in patients with indeterminate biopsies and a perceived high risk of cancer from clinical features.

Utilizing the latest technology

in personalized medicine, we develop and commercialize genomic tests and related first-line assays that can help improve patient diagnosis

and management.

● Cancer Centers

services provide information on diagnosis, prognosis and predicting treatment outcomes of cancers to guide patient management.

services that help guide patient management decisions by providing information on the diagnosis and prognosis of indeterminate specimens.

Guidance on genetic marker-related pharmaceutical treatment options, when available, is also provided.

Commercial laboratories

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The Transaction closed on August 31, 2022.

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

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

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

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

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

further earnout payments in the future.

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

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

of certain specified liabilities.

In addition, subject to the terms and conditions set forth in the Purchase Agreement, Purchaser was

obligated to pay the Company an earnout of up to $2.0 million based on revenue for the period beginning September 1, 2021, and ending

August 31, 2022.

The Company received an earnout payment of approximately $1.0 million in September 2022 which is the fully settled amount

and there will be no further earnout payments in the future.

In the third quarter of 2023, the $0.5 million funds in escrow were released

to the Company.

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

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securities and are represented on its Board of Directors.

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

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

for all periods presented.

Impact of COVID-19 Pandemic

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

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

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

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

We have also previously been affected by temporary

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

The level and nature of the

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

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

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

and general global economic conditions.

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

and cannot be fully predicted at this time.

While we believe we have generally recovered from the adverse impact that the COVID-19 pandemic

had on our business during 2020, we believe that the COVID-19 pandemic could continue to adversely impact our results of operations,

cash flows and financial condition in the future.

continue to monitor the COVID-19 pandemic and the guidance that is being provided by relevant federal, state and local public health

authorities and may take additional actions based upon their recommendations.

At this time, the Biden Administration does not plan to

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

were established in 2020.

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

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

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

policy may need be adjusted.

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

to developments that are beyond our control.

of the ongoing military conflict between Russia and Ukraine.

Company used the remaining net proceeds of the Transaction 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 the Subsidiary have been classified as discontinued operations for

all periods presented.

of the ongoing military conflict between Russia and Ukraine and the war between Israel and Hamas.

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

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

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

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

unknown period of time.

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

of operations.

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

on October 7, 2023, Hamas, a U.S.

designated Foreign Terrorist Organization, launched terrorist attacks against Israel.

Israel then declared

war on Hamas and there is currently an armed conflict in Israel and the Gaza Strip.

The extent and duration of the wars in Ukraine and

Israel/Gaza expanding geopolitical tensions and any resulting market disruptions could be significant and could potentially have a substantial

impact on the global economy and our business for an unknown period of time.

Any of the above-mentioned factors could materially adversely

affect our business, financial condition, and results of operations.

are also monitoring other macro-economic and geopolitical developments such as inflation and cybersecurity risks so that the Company

can be prepared to react to new developments as they arise.

Molecular Diagnostic Market

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

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

Market report (Report Code:

MD 2521, published May 2022).

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

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

We believe that the specialty molecular diagnostics

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

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

global esoteric molecular diagnostics market is estimated to be $25.9 billion (USD) in 2023 and is expected to grow to $54.9 billion

(USD) by 2030 with a Compound Annual Growth rate or CAGR of 11.3% between 2023 and 2030, according to Coherent Market Insights (Report

CMI6261, published November 2023).

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

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

We are keenly focused on growing our test volumes;

securing additional insurance coverage and reimbursement;

maintaining and growing our current reimbursement;

supporting revenue growth

for our molecular diagnostic tests;

introducing related first-line product and service extensions;

and expanding our business by developing

and promoting synergistic products in our markets.

We also believe that BarreGEN ® is a potentially significant pipeline

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

maintaining and growing

our current reimbursement;

supporting revenue growth for our molecular diagnostic tests;

introducing related first-line product and service

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

We also believe that BarreGEN ®

is a potentially significant pipeline product, and we are continuing to support the development process.

States Clinical Oncology Market

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only by heart disease.

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

or about 1,670 deaths each day.

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

the third leading cause of cancer death.

2024, it is expected that there will be 2.0 million new cancer cases and almost 612,000 cancer-related deaths, or more than 1,600 deaths

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

of cancer death.

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

Cancer-attributed medical

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

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

May 10, 2022) shows estimated

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

Cancer-attributed medical care costs in the

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

The following table

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

March 7,2023) shows estimated new cases

and deaths in 2023 in the United States for selected major cancer types:

(Female – Male)

297,790-2,800

and Rectal (Combined)

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

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

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

We expect to not only continue

to further develop our existing gastrointestinal and endocrine assays but to also expand our presence in other markets where we have

expertise and access.

Our existing customer base and broad-based capabilities provide us a unique window not only into our current customers’

needs but also permit us to anticipate their future needs.

is to grow our business organically and by selectively partnering—which could potentially include licensing, acquisitions or mergers,

to generate positive returns for our shareholders.

We expect to not only continue to further develop our existing gastrointestinal and

endocrine assays but to also expand our presence in other markets where we have expertise and access.

Our existing customer base and

broad-based capabilities provide us a unique window not only into our current customers’ needs but also permit us to anticipate

their future needs.

key tactics to achieve our goals include:

our existing commercial products, especially PancraGEN ® , ThyGeNEXT ® and ThyraMIR ® , focusing

on personalized medicine and early intervention related to cancer risk;

awareness and use of our existing commercial products, especially PancraGEN ® , ThyGeNEXT ® and ThyraMIR ® v2

through omnichannel marketing programs;

the clinical development and commercialization of BarreGEN ® , our esophageal cancer risk classifier for Barrett’s

Esophagus, working with our recently developed Key Opinion Leaders (“KOL’s”) and expanding clinical studies to

seek key reimbursement support while seeking partners to collaborate with us;

Esophagus, and accelerating and further expanding clinical studies for our inline assays;

Implementation

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coverage and reimbursement for our clinical tests including:

and expanding studies to demonstrate that our tests are effective;

standards necessary to be consistent with leading clinical guidelines;

by our internal managed care team;

Collaborating

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

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

a DNA only version of PancraGEN ® , and markers for aggressive thyroid cancer;

Continuing support of an internal managed care team;

Key Opinion Leaders to educate on the validity and utility of our testing services;

Establishing payer relationship and in-network contracts serving our diagnostic

our commercial sales staff rationally, while supporting our products with high quality data and studies;

partnering opportunities to acquire new technologies;

our bioinformatics data collected (currently from over 60,000 patients), utilizing registries to improve our assays and leveraging

our data with potential collaborators.

understanding and utilization of our bioinformatics data to improve our assays and elevate scientific understanding of the genetic

drivers of cancer progression and aggressiveness.

Service Offerings

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

clinical services for

physicians, hospitals and clinics.

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

accurate cancer diagnostic information than traditional analytical methods.

Our proprietary and unique disease-focused or esoteric tests

aim to provide actionable information that can guide patient management decisions, potentially resulting in decreased costs.

business is based on the increasing clinician demand for molecular- and biomarker-based characterization of cancers to help inform patient

management decisions.

Molecular-based

testing often produces higher value and more accurate cancer diagnostic information than traditional clinical assessments and non-genetic

diagnostic methods.

Our proprietary and unique disease-focused esoteric tests aim to provide actionable information that can guide patient

management decisions, potentially resulting in decreased costs.

continue to pursue the strategy of trying to demonstrate increased value and efficacy with payers who wish to contain costs and academic

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

that would benefit from surgical intervention.

that would benefit from increased surveillance or surgical intervention.

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

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currently have five commercialized molecular diagnostic tests in the marketplace:

PancraGEN ® , a pancreatic cyst and

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

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

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

provided within PancraGEN;

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

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

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

expression assay;

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

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

PancraGEN ® , a pancreatic cyst and pancreaticobiliary

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

platform and full integration of clinical factors; PanDNA ® , an alternate reporting option of the PathFinderTG

platform, that provides physicians the “molecular only” information provided within PancraGEN;

ThyGeNEXT ® ,

an expanded oncogenic mutation panel that helps “rule-in” and “rule-out” malignancy in thyroid nodules;

ThyraMIR ® v2, used in combination with ThyGeNEXT ® , which further stratifies thyroid nodules for malignancy

risk utilizing a proprietary microRNA gene expression classifier;

and RespriDx ® a genomic test that also utilizes our

PathFinderTG ® platform, to help physicians differentiate metastatic or recurrent lung cancer from the presence of newly

formed primary lung cancer.

Gastrointestinal

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(estimated) with an average five-year survival rate of 13%.

PancraGEN ® and PanDNA ® are designed

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

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

risk of pancreaticobiliary malignancy.

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

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

population and reimbursement rates.

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

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

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

is reserved for the most appropriate patients.

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

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

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

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

PancraGEN ® and PanDNA ® assess the

risk of malignancy in pancreatic cysts and pancreaticobiliary solid lesions, which have potential for developing into cancer.

that PancraGEN ® is the leader in the market for integrated molecular diagnostic tests for determining risk of pancreaticobiliary

We currently estimate that the immediate addressable market for PancraGEN ® is approximately 124,000 indeterminate

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

To date, PancraGEN ® testing has been used in almost 70,000 clinical cases.

The National Pancreatic Cyst Registry

study published in Endoscopy in 2015 demonstrated that PancraGEN ® more accurately determined the malignancy potential

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

This is important because pancreatic surgery is high-risk surgery with over 40% postoperative morbidity rates and 0%–15%

postoperative mortality rates.

(Ahola, et al, March 2020, doi.org/10.1177/1457496919900411 ) When molecular analysis is not performed,

the vast majority of all pancreatic cyst surgeries are performed on cystic lesions that do not harbor malignancy.

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

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for patient treatment.

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

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

recently, the International Association of Pancreatology (IAP) reviewed and revised their guidelines with a main objective being to update

their patient management algorithm.

These revised guidelines indicate that molecular markers can be used when the diagnosis of a pancreatic

cyst is unclear and will alter surveillance.

Additionally, the guidelines further indicate that molecular markers, such as the ones found

within PancraGEN ® , can be useful in identifying the presence of high-grade dysplasia and invasive carcinoma.

( Pancreatology .

S1424-3903(23)01883-5.

10.1016/j.pan.2023.12.009).

Accordingly, we believe that PancraGEN ® provides

a highly reliable diagnostic and prognostic option that can accurately stratify cancer risk in circumstances where risk of cancer is

otherwise uncertain.

Cancer Products

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

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

works with our unique microRNA-based endocrine cancer diagnostic test, ThyraMIR ® v2.

This assay measures the expression

of eleven distinct microRNAs.

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

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

very narrow malignancy risk ranges to help guide patient management decision-making.

estimate the total market for our endocrine (thyroid) cancer assays is approximately $300 million (USD) annually based on the current

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Certified and CAP Accredited Laboratory

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

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

in Pittsburgh, Pennsylvania.

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and Marketing

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

have collaborative arrangements with other laboratory services companies.

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

lung cancers.

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

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

In addition, we employ medical science liaisons

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

to leading physicians.

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

publications, and trade show exhibits.

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

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

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

We support the value

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

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

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

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

We also have collaborative arrangements with other laboratory services companies.

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

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

commercial sales teams of approximately 41 representatives and managers.

In addition, we employ medical science liaisons (MSLs)—therapeutic

specialists with advanced scientific training to aid in communicating complex scientific and medical information to leading physicians.

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

show exhibits.

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

care and lowering healthcare costs through avoidance of unnecessary surgeries, reducing the morbidity associated with unnecessary surgeries

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

We support the value propositions of our tests through

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

We believe our repository

of bioinformatics data accumulated from our testing is a valuable tool in developing and refining our analytics while also potentially

being an even more valuable tool in the future.

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

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phone calls, digital communications and advisory boards.

We develop health economic analyses and budget impact models and incorporate

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

to this distinct and important constituency.

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

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financial condition and results of operations.

also compete with physicians and the medical community who use traditional methods to diagnose gastrointestinal and endocrine cancers.

In many cases, practice guidelines in the United States have recommended therapies, surveillance or surgery to determine if a patient’s

condition is malignant or benign.

As a result, we believe that we will need to continue to educate physicians and the medical community

on the value and benefits of our molecular diagnostic tests in order to change clinical practices and continue to support the use of

molecular diagnostic tests in clinical guidelines.

also compete with physicians and the medical community who use traditional methods or local institution-created tests to diagnose gastrointestinal

and endocrine cancers.

We believe that we will need to continue to educate physicians and the medical community on the value and benefits

of our molecular diagnostic tests in order to change clinical practices and continue to support the use of molecular diagnostic tests

in clinical guidelines.

Specifically,

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

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

Quest Diagnostics

Incorporated, or Quest, currently offers a diagnostic test similar to the earlier version of our ThyGeNEXT ® test and announced

an agreement to distribute the Afirma test in partnership with Veracyte.

CBLPath, Inc., or CBL, offers ThyroSeq ® , a diagnostic

test that analyzes genetic alterations using next-generation sequencing.

In addition, other thyroid based endocrine competitors include

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

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

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

and surveillance interval length.

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

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

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

Some of these

related genomic regions are included in PancraGEN ® .

This laboratory test however does not integrate any additional information

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

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

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

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

Additionally,

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

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

(Afirma) that is the current market leader and competes with our ThyGeNEXT ® and ThyraMIR ® v2 tests.

Quest Diagnostics Incorporated, or Quest, currently offers a diagnostic test similar to the earlier version of our

ThyGeNEXT ® test and distributes the Afirma test in partnership with Veracyte.

CBLPath, Inc., or CBL, offers

ThyroSeq ® , a diagnostic test that analyzes genetic alterations using next-generation sequencing.

In addition, other

thyroid based endocrine competitors include Qualisure Diagnostics/Protean Biodiagnostics., or other companies we are not aware

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

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

surgery or surveillance and surveillance interval length.

The University of Pittsburgh Medical Center now offers

PancreaSeq ® , a Next Generation Sequencing “gene only” panel that focuses on the analysis of mutations in

oncogenes and tumor suppressor genes, most of which may help establish the type of pancreatic cyst present and some of which may

help establish the presence of malignancy.

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

competitive laboratory test also does not follow current physician patient management decision-making which includes the integration

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

Importantly, there has been no long-term

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

PancraGEN ® .

PancraGEN ® has been validated in multiple studies and peer reviewed publications and has

been used in almost 70,000 patients with up to approximately 8 years of patient follow-up information.

the size of the Barrett’s Esophogus market, there are companies who are either in the process of developing assays and LDTs to

identify the condition or who have started to commercialize diagnostic tests, such as the methylated biomarker test currently being marketed

by Lucid Diagnostics.

We anticipate that this space will become increasingly competitive as new diagnostic tests come to market in the

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

such as Quest and other diagnostic companies developing new tests or technologies.

Furthermore, we may be subject to competition as a

result of new, unforeseen technologies that may be developed by our competitors in the gastrointestinal and endocrine cancer molecular

diagnostic tests space.

are aware of companies that are in the process of developing assays and LDTs for Barrett’s esophagus, such as Cernostics Inc.

addition, NeoGenomics Laboratories, Inc., or NeoGenomics, is marketing a Barrett’s assay, so it appears likely that this space

will also be more competitive in the future.

or by other diagnostic companies utilizing new, unforeseen technologies in the gastrointestinal and endocrine cancer molecular diagnostic

and Development

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

and PancraGEN ® .

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

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Additionally, our research and development activities provide product line extension of our existing products as well

as new product opportunities utilizing our proprietary platforms and extensive bioinformatics repositories and data bases.

we use reagents for cross site validations and validations of new assays to be used in clinical trials.

We may enter into collaborative

relationships with research and academic institutions for the development of additional or enhanced tests to further increase the depth

and breadth of our test offerings.

Where appropriate, we may also enter into licensing agreements with our collaborative partners to

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

as new product opportunities utilizing our proprietary platforms and extensive bioinformatics repositories and databases.

part of our growth strategy, we may enter into collaborative relationships with research and academic institutions for the development

of additional or enhanced tests to further increase the depth and breadth of our test offerings.

Where appropriate, we may also enter

into licensing agreements with our collaborative partners to both license intellectual property for use in our test panels as well as

licensing such intellectual property out.

research and development costs are primarily clinical costs and were approximately $0.6 million and $0.7 million in 2023 and 2022, respectively.

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

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

first manuscript reporting the clinical performance of ThyGeNEXT ® and ThyraMIR ® tests was accepted

in July 2020 in the Diagnostic Cytopathology (Lupo M et al.

Diagnostic Cytopathology.

10.10001/dc.24564.)

trademarks and other proprietary rights are important to us.

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and patent applications covering our existing and future products and technologies.

As of December 31, 2022, we owned seven issued United

As of December 31, 2023, we owned nine issued United

States Patents.

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

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

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

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

in the United States.

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

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

absent any disclaimers, adjustments or extensions.

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

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

As of December 31, 2023, we owned four issued patents

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

As of December 31, 2023, we owned two pending patent

applications in the United States.

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

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

2027 and 2038, absent any disclaimers, adjustments or extensions.

Our patents are directed to certain of the technologies relating to

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

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

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

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

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

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

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except for adverse event and malfunction reporting.

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

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

Since many LDTs currently on the

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

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

In addition, tests introduced after the

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

Since many LDTs currently on the market would be grandfathered in, pre-market review

of new and significantly modified LDTs could be phased-in over a four-year period, as opposed to the nine years proposed in the Framework

for Regulatory Oversight draft guidance.

In addition, tests introduced after the effective date, but before their phase-in date, could

continue to be offered during pre-market review.

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

The FDA anticipates

laboratories that already conduct proper validation should not be expected to experience new costs for validating their tests to support

marketing authorization and laboratories that conduct appropriate evaluations would not have to collect additional data to demonstrate

analytical validity for FDA clearance or approval.

The evidence of the analytical and clinical validity of all LDTs would be made publicly

Laboratories developing LDTs would be encouraged to submit prospective change protocols in their pre-market submission that

outline specific types of anticipated changes, the procedures that will be followed to implement them and the criteria that will be met

prior to implementation.

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

of the analytical and clinical validity of all LDTs would be made publicly available.

Laboratories developing LDTs would be encouraged

to submit prospective change protocols in their pre-market submission that outline specific types of anticipated changes, the procedures

that will be followed to implement them and the criteria that will be met prior to implementation.

September 29, 2023, the FDA published a proposed rule on LDTs, in which FDA proposes to end enforcement discretion for virtually all

LDTs in five stages over a four-year period from the date FDA publishes a final rule.

In Phase 1 (effective one year post-finalization),

laboratories would be required to comply with medical device (adverse event) reporting and correction/removal reporting requirements.

In Phase 2 (effective two years post-finalization), laboratories would be required to comply with all other device requirements ( e.g.

registration/listing, labeling, investigational use), except for quality systems and premarket review.

In Phase 3 (effective three years

post-finalization), laboratories would be required to comply with quality systems requirements.

In Phase 4 (effective three and a half

years post-finalization, but not before October 1, 2027), laboratories would be required to comply with premarket review requirements

for high-risk tests ( i.e.

, tests subject to premarket approval (PMA) requirement).

Finally, in Phase 5 (effective four years post-finalization,

but not before April 1, 2028), laboratories would be required comply with premarket review requirements for moderate- and low-risk tests

, tests subject to de novo or 510(k) requirement).

Unlike previous proposals, the proposed rule does not “grandfather”

existing tests.

The content and timing of any final rule on LDTs is uncertain at this time.

the regulatory approaches proposed over the past decade, FDA currently exercises enforcement discretion over most LDTs.

If FDA ceases

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

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

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

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

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

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

This bill was re-introduced in substantially similar forms over the years, and, most recently in March 2023.

Under the most recent version

of the VALID Act, a risk-based approach would be used to regulate IVCTs while grandfathering many existing IVCTs.

Each test will be classified

as high-risk, moderate-risk, or low-risk.

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

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

clinical validity for the intended use must be established.

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

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

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

The new regulatory

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

The FDA will have the authority to withdraw from the market

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

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

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

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

it may be re-introduced in the future.

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

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

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

effect of such proposals on our business.

To market a high-risk IVCT, reasonable

assurance of analytical and clinical validity for the intended use must be established.

Under VALID, a precertification process would

be established which will allow a laboratory to establish that the facilities, methods, and controls used in the development of certain

IVCTs meet quality system requirements.

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

to pre-market review.

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

have the authority to withdraw from the market IVCTs if there is a reasonable likelihood that such tests will cause death or serious

adverse health consequences (among other criteria).

Failure to comply with applicable regulatory requirements can result in enforcement

action by the FDA, such as fines, product suspensions, warning letters, recalls, injunctions and other civil and criminal sanctions.

via statute, regulation, or sub-regulatory action, any FDA effort to end enforcement discretion for LDTs is likely to continue to be

met with resistance by certain sections of industry.

We cannot predict if September 2023 proposed rule, VALID (or any other bill or proposal)

will be finalized in its current (or any other) form and cannot quantify the effect of such proposals on our business.

Fraud, Abuse and Anti-Kickback Laws

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or receive remuneration, directly or indirectly, in order to induce business that is reimbursable under any Federal healthcare program.

A violation of the Anti-Kickback Statute may result in imprisonment of up to five years and fines of up to $250,000 for each offense

in the case of individuals and $500,000 for each offense in the case of organizations.

Convictions under the Anti-Kickback Statute result

in mandatory exclusion from federal healthcare programs for a minimum of five years.

In addition, HHS has the authority to impose civil

assessments and fines and to exclude healthcare providers and others engaged in prohibited activities from Medicare, Medicaid and other

federal healthcare programs.

Actions, which violate the Anti-Kickback Statute, also incur liability under the Federal False Claims Act,

discussed in more detail below, which prohibits knowingly presenting, or causing to be presented, a false or fraudulent claim for payment

the Anti-Kickback Statute applies only to federal healthcare programs, a number of states have passed statutes substantially similar

to the Anti-Kickback Statute, which prohibits similar conduct toward all other health plans and third-party payers.

Federal and state

law enforcement authorities scrutinize arrangements between healthcare providers and potential referral sources to ensure that the arrangements

are not designed as a mechanism to induce patient care referrals or induce the purchase or prescribing of particular products or services.

The law enforcement authorities, the courts and Congress have also demonstrated a willingness to look behind the formalities of a transaction

to determine the underlying purpose of payments between healthcare providers and actual or potential referral sources.

Generally, courts

have taken a broad interpretation of the scope of the Anti-Kickback Statute, holding that the statute may be violated if merely one purpose

of a payment arrangement is to induce referrals or purchases.

A violation of the Anti-Kickback Statute may result in imprisonment of up to 10 years and fines of up to $100,000 for each violation,

Convictions under the Anti-Kickback Statute result in mandatory exclusion from federal health care programs, generally for a

minimum of five years.

In addition, HHS has the authority to impose civil assessments and fines and to exclude healthcare providers and

others engaged in prohibited activities from Medicare, Medicaid and other federal healthcare programs.

Actions, which violate the Anti-Kickback

Statute, also incur liability under the Federal False Claims Act, discussed in more detail below, which prohibits, among other things,

knowingly presenting, or causing to be presented, a false or fraudulent claim for payment to the U.S.

the Anti-Kickback Statute applies only to federal health care programs, a number of states have passed statutes substantially similar

to the Anti-Kickback Statute, which prohibits similar conduct toward other payers, including some that apply to all other health plans

and third-party payers.

Federal and state law enforcement authorities scrutinize arrangements between healthcare providers and potential

referral sources to ensure that the arrangements are not designed as a mechanism to improperly induce patient care referrals or induce

the purchase or prescribing of particular products or services.

The law enforcement authorities, the courts and Congress have also demonstrated

a willingness to look behind the formalities of a transaction to determine the underlying purpose of payments between healthcare providers

and actual or potential referral sources.

Several courts have taken a broad interpretation of the scope of the Anti-Kickback Statute,

holding that the statute may be violated if merely one purpose of a payment arrangement is to induce referrals for or purchases of items

or services reimbursable by federal health care programs.

addition to the Anti-Kickback Statute, the U.S.

enacted the Eliminating Kickbacks in Recovery Act of 2018, or EKRA, as part of the Substance

Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act (SUPPORT Act).

EKRA is an all-payer

anti-kickback law that makes it a criminal offense to pay any remuneration to induce referrals to, or in exchange for, patients using

the services of a recovery home, a substance use clinical treatment facility, or laboratory.

Although it appears that EKRA was intended

to reach patient brokering and similar arrangements to induce patronage of substance use recovery and treatment, the language in EKRA

is broadly written.

The term “laboratory” is defined broadly and without reference to any connection to substance use disorder

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

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

The government

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

enacted the Eliminating Kickbacks in Recovery Act of 2018, or EKRA, as part of the

Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act (SUPPORT Act).

is an all-payer anti-kickback law that makes it a criminal offense to, among other things, pay any remuneration to induce referrals

to, or in exchange for an individual using the services of a recovery home, a substance use clinical treatment facility, or

Although it appears that EKRA was intended to reach patient brokering and similar arrangements to induce patronage of

substance use recovery and treatment, the language in EKRA is broadly written.

The term “laboratory” is defined broadly

and without reference to any connection to substance use disorder treatment.

EKRA is a criminal statute and violations can result in

fines of up to $200,000, up to 10 years in prison, or both, per violation.

As drafted, EKRA does not clearly protect incentive

compensation to sales employees, a practice that is common in the industry.

The government has not issued or proposed regulations or

other guidance interpreting EKRA.

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

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interpretations.

Further, the Federal False Claims Act, discussed in more detail below, prohibits a person from knowingly submitting

a claim, making a false record or statement in order to secure payment or retaining an overpayment by the federal government.

to actions initiated by the government itself, the statute authorizes actions to be brought on behalf of the federal government by a

private party having knowledge of the alleged fraud.

Because the complaint is initially filed under seal, the action may be pending for

some time before the defendant is even aware of the action.

If the government is ultimately successful in obtaining redress in the matter

or if the plaintiff succeeds in obtaining redress without the government’s involvement, then the plaintiff will receive a percentage

of the recovery.

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

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

Further, numerous

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

Finally, the Social Security Act includes its own

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

Violation of these provisions

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

Further, the Federal False Claims Act, discussed in more detail below, prohibits, among other things, a person from

knowingly submitting a claim, making a false record or statement in order to secure payment or retaining an overpayment by the federal

In addition to actions initiated by the government itself, the statute authorizes actions to be brought on behalf of the

federal government by a private party, known as a relator, having knowledge of the alleged fraud.

Because the complaint is initially

filed under seal, the action may be pending for some time before the defendant is even aware of the action.

If the government is ultimately

successful in obtaining redress in the matter or if the relator succeeds in obtaining redress without the government’s involvement,

then the relator will receive a percentage of the recovery.

Penalties under the federal False Claims Act can include up to three times

the damages sustained by the federal program and up to almost $14,000 and $28,000 per claim (these per-claim penalties are adjusted for

inflation from time to time).

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

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

in order to obtain payment.

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

or Medicaid programs.

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

These restrictions

generally prohibit us from billing a patient or Medicare for any diagnostic services when the physician ordering the service, or any

member of such physician’s immediate family, has an investment interest in or compensation arrangement with us, unless the arrangement

meets an exception to the prohibition.

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

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

generally prohibit us from billing a patient or Medicare for any clinical laboratory services and certain other “designated health

services,” when the physician ordering the service, or any member of such physician’s immediate family, has an investment

interest in or compensation arrangement with us, unless the arrangement meets an exception to the prohibition.

The government has also

claimed in FCA litigation that the Stark Law applies to Medicaid claims.

Some states have also enacted state Stark Law equivalents that

can apply, for example, to that state’s Medicaid plan and/or commercial payors.

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

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These arrangements,

as any arrangement that includes compensation to a healthcare provider may trigger Federal or State anti-kickback and Stark Law liability.

Our arrangements with healthcare providers are designed to meet available safe harbors and exceptions provided in the anti-kickback laws

and Stark laws, respectively.

There is no guarantee that the government will find that these arrangements are designed properly or that

they do not trigger liability.

Under existing laws, all arrangements must have a legitimate purpose and compensation must be fair market

These terms require some subjective analysis and there is limited available case law or guidance for the application of these

laws to the CLIA Laboratory industry.

Safe harbors in the anti-kickback laws do not necessarily equate to exceptions in the Stark Law;

and there is no guarantee that the government will not have issue with the relationships between the laboratories and the healthcare

as any arrangement that includes compensation to a healthcare provider may trigger Federal or State anti-kickback, Stark Law, and other

fraud and abuse liability.

Our arrangements with healthcare providers are designed to meet available safe harbors and exceptions provided

in the anti-kickback laws and Stark laws and other relevant laws or otherwise comply with such laws.

There is no guarantee that the government

will find that these arrangements are designed properly or that they do not trigger liability.

Under existing laws, all arrangements

must have a legitimate purpose and compensation must be fair market value.

These terms require some subjective analysis.

in the anti-kickback laws do not necessarily equate to exceptions in the Stark Law;

and there is no guarantee that the government will

not have issue with the relationships between the laboratories and the healthcare providers.

Fraud and Privacy Regulations

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

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

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

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

7 unchanged sentences

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

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

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

The regulations promulgated under HIPAA governing

covered entities and business associates include the following subparts:

“Privacy of Individually Identifiable Health Information”,

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

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

which are referred to as “covered entities,” as well as individuals or entities to the extent they use such individually

identifiable health information perform functions as a “business associate” for or on behalf of a covered entity.

identifiable health information maintained by covered entities and business associates is referred to as “protected health information”

or “PHI.” The regulations promulgated under HIPAA governing covered entities and business associates include the following

“Privacy of Individually Identifiable Health Information”, which establishes conditions for the permissible use

and disclosure of protected health information by covered entities and establishes certain rights of individuals who are the subject

of such information (45 C.F.R.

§§ 164.500, et seq.);

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

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

“Administrative Requirements”, which establishes electronic

standards for common healthcare transactions, such as claims information, plan eligibility, payment information and the use of electronic

signatures (45 C.F.R.

§§ 162.100, et seq.);

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

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

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

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

“Security Standards for the Protection of Electronic Protected Health Information”,

which requires covered entities and their business associates to implement and maintain certain security measures to safeguard certain

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

§§ 164.302, et seq.);

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

are subject to these standards.

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

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

While the government intended this legislation to reduce

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

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

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

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

Such enforcement actions

could have an adverse effect on our business.

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

statutes or regulations that, in some cases, are more stringent than those issued under HIPAA.

In those cases, it may be necessary to

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

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

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

If we fail to comply with applicable

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

and regulations.

and “Notification in the Case of Breach of Unsecured

Protected Health Information”, which requires business associates to provide certain notifications to covered entities and covered

entities to provide certain notifications to affected individuals, HHS and, in some cases, relevant media outlets following a breach

of unsecured protected health information (45 C.F.R.

§§ 164.400, et seq.).

As a covered entity, and also in our capacity as

a business associate to certain of our customers, we are subject to these standards.

We may also be liable for violations of HIPAA by

any individual or entity, which may include a business associate, that is acting as our agent under the federal common law of agency.

While the government intended this legislation to reduce administrative expenses and burdens for the healthcare industry, our compliance

with certain provisions of these standards entails significant costs for us and requires us to follow specific policies and procedures

when we use and disclose protected health information.

If we are found to be in violation of HIPAA, HITECH, or their respective implementing

regulations, we may be subject to potentially significant penalties, including civil and criminal penalties, damages and fines, and may

incur damage to our reputation.

Such enforcement actions could have an adverse effect on our business.

addition to Federal regulations issued under HIPAA and HITECH, many states have enacted privacy and security statutes or regulations

regarding individually identifiable health information that, in some cases, are more stringent than those issued under HIPAA and HITECH.

In those cases, it may be necessary to modify our planned operations and procedures to comply with the more stringent laws as HIPAA and

HITECH do not preempt state laws to the extent such state laws are broader in scope, impose more stringent requirements for individually

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

If we fail to comply with applicable state laws, rules, or regulations, we could be subject to additional sanctions or other liabilities

under those laws, rules, and regulations.

and State Consumer Protection Laws

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private rights of action, and are enforced by the states’ Attorneys General.

Virginia, and Colorado have adopted comprehensive consumer privacy laws that are in effect or will take effect within the next 12 to

18 months, and regulate how certain for-profit businesses collect, use, and disclose the personal information of consumers who reside

in those respective states.

Among other things, these laws confer to their consumers the right to:

receive notice of information collection

and use practices;

access, delete, correct, or transfer personal information and opt out of the “sale” of their personal

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

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

for which these state laws have designated special protection.

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

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

de-identified data as defined under HIPAA.

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

testing and patient information we collect and process.

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

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

These laws are generally enforced

by the respective state Attorney General.

California’s law also includes a private right of action for certain data breaches.

than a dozen states have adopted comprehensive consumer privacy laws that are in effect or will take effect within the next 12 to 24

months, and regulate how certain for-profit businesses collect, use, and disclose the personal information of consumers who reside in

each respective state.

While the specific consumer rights vary from state-to-state, generally these laws confer to consumers in the state

the right to:

receive notice of information collection and use practices;

access, delete, correct, or transfer personal information and

opt out of the “sale” of their personal information or the use of their information for targeted advertising.

also require companies to adopt reasonable measures to safeguard the personal information that is collected and regulate categories of

“sensitive” data such as information associated with minors, citizenship, and other personal data for which these state laws

have designated special protection.

These laws do not, however, apply to personal information that constitutes PHI under HIPAA, de-identified

data as defined under HIPAA or in some instances, HIPAA-regulated entities.

As a result, we do not or likely will not have compliance

obligations with respect to most testing and patient information we collect and process.

However, we are required to comply with these

consumer privacy laws insofar as we collect other categories of consumers’ personal information, for example from website visitors.

These state consumer privacy laws are generally enforced by the respective state Attorney General.

California’s law also includes

a private right of action for certain data breaches.

State has passed the My Health My Data Act or MHMDA, which comes into effect on March 31, 2024.

MHMDA regulates consumer health data

that is not otherwise subject to HIPAA.

The definition of “consumer health data” is broad and applies to a variety of health-related

information including non-health information that is used to infer some aspect of current or future medical conditions.

MHMDA requires

additional transparency requirements related to how companies handle non-HIPAA covered health data as well as additional technical safeguards

for “consumer health data.” MHMDA also requires that companies obtain the consent of individuals for certain uses of their

“consumer health data.” MHMDA also gives Washington residents a variety of rights, similar to those in the state consumer

privacy laws discussed above, and related to the resident’s “consumer health data.” Unlike the consumer state laws,

MHMDA includes a private right of action.

Should the company become subject to an action brought under MHMDA, it could have an impact

on our operations.

Nevada and Connecticut has passed substantially similar consumer privacy health laws that have or will come into effect

However, the Nevada and Connecticut laws do not include a private right of action.

of other states in the United States are currently considering similar, consumer data privacy laws, which could impact our operations

15 unchanged sentences

however, the U.S.

Supreme Court upheld the law in 2021.

Supreme Court most recently upheld the surviving elements

of the law in 2021.

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

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specific rate for our tests.

We did previously announce a new national agreement with Aetna through which the Company is now an in-network

provider for Aetna’s members.

We are subject to applicable state laws regarding who should be billed, how they should be billed,

how business should be conducted, and how patient obligations regarding cost sharing should be handled.

In addition, if we become an

“in-network” provider for certain payers in the future, we will also be subject to the terms of contracts (which could include

reduced reimbursement rates) and may be subject to discipline, breach of contract actions, non-renewal or other contractually provided

remedies for non-compliance with the contract’s requirements and/or applicable laws.

We are subject to applicable state laws regarding who should be billed, how they should be billed, how business

should be conducted, and how patient obligations regarding cost sharing should be handled.

In addition, if we become an “in-network”

provider for certain payers in the future, we will also be subject to the terms of contracts (which could include reduced reimbursement

rates) and may be subject to discipline, breach of contract actions, non-renewal or other contractually provided remedies for non-compliance

with the contract’s requirements and/or applicable laws.

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

Third-party payers include

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

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

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

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

Missing and incorrect information on

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

We must bill Medicare

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

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

Through February 2021, we

were contracted with XIFIN, Inc.

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

staff and help manage our third-party billing.

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

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

During January 2022, the

Company became aware that CMS issued a new billing policy whereby CMS would no longer reimburse for the use of the Company’s

ThyGeNEXT ® and ThyraMIR ® tests when billed together by the same provider/supplier for the same

beneficiary on the same date of service.

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

been changed retroactively to January 1, 2022.

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

originally set by Novitas.

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

Third-party payers include Medicare,

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

Medicare reimbursement

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

Our ability to receive timely reimbursements

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

and incorrect billing information.

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

increases the aging of accounts receivable.

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

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

State Medicaid programs are generally prohibited from paying

more than the Medicare fee schedule.

Since 2021, we have been contracted with XIFIN, Inc.

(“XIFIN”), a healthcare billing

services management company, to help manage our third-party billing.

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

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and incomplete or inaccurate billing information provided by ordering

Since 2018 several private payers implemented pre-authorization requirements for molecular and genetic testing, including

Anthem Blue Cross Blue Shield and United Healthcare, as well as various lab benefit companies such as American Imaging Management, Inc.,

or AIM, and Beacon Lab Benefits Solutions, or Beacon.

In addition, more commercial payers are contracting with and delegating risk for

lab services costs to lab benefits management companies (e.g.

Several private payers have implemented pre-authorization requirements for molecular and genetic testing, including Anthem

Blue Cross Blue Shield and United Healthcare, as well as various lab benefit companies such as American Imaging Management, Inc., or

AIM, and Beacon Lab Benefits Solutions, or Beacon.

In addition, more commercial payers are contracting with and delegating risk for lab

services costs to lab benefits management companies (e.g.

eviCore healthcare, AIM, and Beacon).

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Certain Medicaid programs require Medicaid recipients to pay co-payment amounts for diagnostic information services.

Medicare Part B program contains fee schedule payment methodologies for clinical testing services performed for covered patients, including

a national ceiling on the amount that carriers could pay under their local Medicare clinical testing fee schedules.

Historically, the

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

In April 2014, President Obama signed

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

under the CLFS.

Medicare Part B program contains fee schedule payment methodologies for clinical testing services performed for covered patients.

Historically,

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

In April 2014, President Obama

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

tests under the CLFS.

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

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There can be no assurances that our request will be successful and that the rate will be escalated.

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

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

that are not ADLTs.

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

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

Any reductions to payment rates resulting from the new methodology

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

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

as amended by the Protecting Medicare and American Farmers from Sequester Cuts Act, among other laws, revised payment reductions and

the data reporting schedule for approved Clinical Diagnostic Laboratory Tests (“CDLTs”) that are not ADLTs.

Under these laws,

the next data reporting period is January 1, 2025 through March 31, 2025, and will be based upon the data collected during the January

1, 2019 to June 30, 2019 period.

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

in each of the years 2018 through 2020 and to 15% per test per year in each of the years 2025 through 2027.

Payments will not be reduced

for 2021-2024 for CDLTs.

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

2019, and 2020.

PAMA calls for further revisions of the Medicare Clinical Laboratory Fee Schedule for years after 2021, based on future

surveys of market rates.

PAMA (as amended) calls for further revisions of the Medicare Clinical Laboratory Fee Schedule for years after 2024,

based on surveys of market rates.

for violations of laws relating to billing government healthcare programs and for violations of federal and state fraud and abuse laws

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most Medicare and Medicaid beneficiaries were covered under the traditional Medicare and Medicaid programs administered by the federal

Reimbursement from traditional Medicare and Medicaid programs represented approximately 45% of our consolidated net revenues

Over the last several years, the federal government has continued to expand its contracts with private health insurance

plans for Medicare beneficiaries and has encouraged such beneficiaries to switch from the traditional programs to the private programs,

called “Medicare Advantage” programs.

There has been growth of health insurance providers offering Medicare Advantage programs

and of beneficiary enrollment in these programs.

Commercial health plans that might not cover one or all of our tests for their commercially

insured members are required to follow the Novitas LCD coverage policy for their Medicare Advantage members.

To the extent we maintain

the LCD coverage policies with Novitas for our products, any shift of members from traditional Medicare to Medicare Advantage plans doesn’t

represent a risk of lost revenue.

In recent years, in an effort to control costs, states also have mandated that Medicaid beneficiaries

enroll in private managed care arrangements.

Reimbursement from traditional Medicare and Medicaid programs represented approximately 51% and 45% of our consolidated net

revenues during 2023 and 2022, respectively.

Over the last several years, the federal government has continued to expand its contracts

with private health insurance plans for Medicare beneficiaries and has encouraged such beneficiaries to switch from the traditional programs

to the private programs, called “Medicare Advantage” programs.

There has been growth of health insurance providers offering

Medicare Advantage programs and of beneficiary enrollment in these programs.

Commercial health plans that might not cover one or all

of our tests for their commercially insured members are required to follow the Novitas LCD coverage policy for their Medicare Advantage

To the extent we maintain the LCD coverage policies with Novitas for our products, any shift of members from traditional Medicare

to Medicare Advantage plans doesn’t represent a risk of lost revenue.

In recent years, in an effort to control costs, states also

have mandated that Medicaid beneficiaries enroll in private managed care arrangements.

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

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

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

However, as new regulations

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This increase in reimbursement

rates reflects the expansion of the ThyGeNEXT ® panel to aid in identifying the appropriate patients for surgery.

approval is expected during the first half of 2020.

Additionally, in February 2020, the CMS modified the reimbursement for ThyraMIR ®

retroactively to January 1, 2020.

This determination increases the Medicare reimbursement for ThyraMIR ® from approximately

$1,800 to $3,000 reflecting a re-evaluation of the technical and clinical performance of the test relative to other molecular tests in

the market and their respective prices.

January 2022, the Company announced that CMS issued a new billing policy whereby CMS will no longer reimburse for the use of the Company’s

rates reflected the expansion of the ThyGeNEXT ® panel to aid in identifying the appropriate patients for surgery.

January 2022, the Company announced that CMS issued a new billing policy whereby CMS would no longer reimburse for the use of the Company’s

ThyGeNEXT ® and ThyraMIR ® tests when billed together by the same provider/supplier for the same beneficiary

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ThyraMIR ® (0018U) tests has been retroactively reversed to January 1, 2022.

CMS is currently reimbursing the Company for

one of its two thyroid tests, and has agreed to retroactively reimburse for the second test once they have completed their internal administrative

We have been notified by CMS/NCCI that processing of claims for dates of service after January 1, 2022 will be completed

beginning July 1, 2022.

As of the date of this filing, the Company has no remaining outstanding collections regarding this matter and is fully

up to date with CMS.

CMS was previously reimbursing the Company

for one of its two thyroid tests, and had agreed to retroactively reimburse for the second test once they had completed their internal

administrative adjustments.

We were notified by CMS/NCCI that processing of claims for dates of service after January 1, 2022 would be

completed beginning July 1, 2022.

As of the date of this filing, the Company has no remaining outstanding collections regarding this

matter and is fully up to date with CMS.

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

along with many laboratories, we may be affected by the Proposed LCD DL39365, which is currently under consideration by Novitas.

If finalized,

this Proposed LCD, which governs “Genetic Testing for Oncology,” could impact the existing Medicare coverage for one of our

molecular tests, PancraGEN ® .

On June 5, 2023 we announced that Novitas issued the final LCD of Genetic Testing for Oncology

(L39365) which if implemented, would have established non-coverage for the Company’s widely used PancraGEN ® test

effective July 17, 2023.

On July 6, 2023, Novitas announced that it would not be implementing the final Genetic Testing for Oncology

LCD (L39365) as scheduled on July 17, 2023.

Novitas then issued a new, virtually identical proposed LCD affecting the same companies

and tests and reaching the same conclusions as noted in the previously rescinded LCD on July 27, 2023.

In response, we participated in

a public meeting presentation and submitted detailed written comments supporting the use of PancraGEN ® .

The timing and

content of any final, implemented LCD is uncertain at this time;

the process could potentially take a year or longer from issuance the

updated proposed LCD to reach a conclusion.

As a result, we are able to continue offering PancraGEN ® and the related Point2 ®

fluid chemistry tests for amylase, CEA, and glucose.

In the event Novitas ultimately restricts coverage for the PancraGEN ®

test, our liquidity could be negatively impacted.

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

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

We are not party to a collective bargaining

agreement with any labor union.

of February 29, 2024, we had 108 full time employees and 108 total employees.

We are not party to a collective bargaining agreement with

any labor union.

were originally incorporated in New Jersey in 1986 and began commercial operations as PDI, Inc., a contract sales organization or CSO

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to Interpace Biosciences, Inc.

Our executive offices are located at Morris Corporate Center

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

Our executive offices are located at Waterview Plaza, Suite

310, 2001 Route 46, Parsippany, New Jersey 07054.

Our telephone number is (855) 776-6419.

B Investment by 1315 Capital and Ampersand

B Preferred Stock Investment by 1315 Capital and Ampersand

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

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of Series B Preferred Stock.

As previously disclosed in Current Reports on Form 8-K filed with the SEC on November 16, 2023 and December

12, 2023, Edward Chan, a director designated by 1315 Capital, and Robert Gorman, a director designated by Ampersand, resigned from the

Board on November 15, 2023 and December 7, 2023, respectively.

Following these resignations, 1315 Capital and Ampersand have two designated

directors out of the five directors currently serving on the Board.

Certificate of Designation of Preferences, Rights and Limitations of Series B Convertible Preferred Stock (the “Certificate of

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of such Series B Preferred Stock, plus any dividends declared but unpaid thereon, or such amount per share as would have been payable

had each such share been converted into our common stock immediately prior to a liquidation, by six dollars ($6.00) (subject to adjustment in the event of any stock dividend,

stock split, combination, or other similar recapitalization affecting such shares).

The aggregate number of shares of our common stock

that may be issued through conversion of the currently outstanding Series B Preferred Stock is 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).

On any matter presented to our stockholders 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

our 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, 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.

had each such share been converted into our common stock immediately prior to a liquidation, by six dollars ($6.00) (subject to adjustment

in the event of any stock dividend, stock split, combination, or other similar recapitalization affecting such shares).

The aggregate

number of shares of our common stock that may be issued through conversion of the currently outstanding Series B Preferred Stock is 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).

On any matter presented to our stockholders 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 our 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, 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.

Series B Preferred Stock entitles the holders thereof to certain protective provisions.

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common stock would not receive any payment.

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

April 2020, the Company applied for various federal stimulus loans, grants and advances made available under Title 1 of the Coronavirus

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

What changed 10-K

Item 1. Business