What changed in this filing

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Item 9A. Controls and Procedures

2024-04-01 compared with 2023-03-27 · 595 added, 793 removed, 722 unchanged (66% of the section changed)

3 unchanged sentences

of December 31, 2023.

The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the

Securities Exchange Act of 1934, as amended, or the Exchange Act, means controls and other procedures of a company that are designed

to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded,

processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms.

Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance

of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible

controls and procedures.

Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that

information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated

to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely

decisions regarding required disclosure.

Based on that evaluation, our principal executive officer and principal financial officer concluded

that our disclosure controls and procedures were effective as of the end of the period covered by this Annual Report on Form 10-K.

The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under

the Securities Exchange Act of 1934, as amended, or the Exchange Act, means controls and other procedures of a company that are

designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange

Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange

Commission’s rules and forms.

Management recognizes that any controls and procedures, no matter how well designed and

operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in

evaluating the cost-benefit relationship of possible controls and procedures.

Disclosure controls and procedures include, without

limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it

files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal

executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.

Based on this

evaluation, management identified a material weakness in the Company’s internal control over financial reporting in the fourth

quarter of 2023 related to properly identifying the timing of when revenue should be recognized as stated in the revenue

recognition policy .

Based on that evaluation, our

principal executive officer and principal financial officer concluded that our disclosure controls and procedures were not effective

as of the end of the period covered by this Annual Report on Form 10-K as a result of the identified material control

Remediation Plan -

The Company plans to amend its control activities designed to mitigate the significant risk identified, including updating its

procedures regarding the testing of revenue recognition, specifically to review the procedures identifying the timing differences to ensure revenue is recorded in the period earned.

The Company believes implementation of these processes and appropriate testing of their effectiveness will remediate this material

control weakness.

Annual Report on Internal Control over Financial Reporting

12 unchanged sentences

Based on this assessment, our management concluded that, as of December 31, 2023, our internal control over financial reporting

was effective based on those criteria.

was not effective based on those criteria.

in Internal Control over Financial Reporting

has been no change in our internal control over financial reporting during the fourth quarter of the fiscal year ended December 31, 2023.

that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

March 29, 2024, the Company entered into a Third Amendment to Loan and Security Agreement with BroadOak.

The primary changes to the Second

Amendment to Loan and Security Agreement were as follows:

maturity date was extended to June 30, 2025.

April 1, 2024, the Company will make $500,000 monthly payments with the remaining loan balance due on the new maturity date.

REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

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and such information is incorporated by reference herein.

ACCOUNTING FEES AND SERVICES

ACCOUNTANT FEES AND SERVICES

relating to principal accounting fees and services of the registrant that is responsive to Item 14 of this Annual Report on Form

8 unchanged sentences

Asset Purchase Agreement, dated August 13, 2014, by and between Interpace Diagnostics, LLC and Asuragen, Inc., incorporated by reference to Exhibit 2.2 of the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2014, filed with the SEC on November 5, 2014.

Asset Purchase Agreement, dated as of October 30, 2015, by and between Publicis Touchpoint Solutions, Inc.

and PDI, Inc., incorporated by reference to Exhibit 2.1 of the Company’s Current Report on Form 8-K, filed with the SEC on November 2, 2015.

Asset Purchase Agreement by and among the Company and Diamir Biosciences Corp.

dated March 16, 2021, incorporated by reference to Exhibit 2.1 of the Company’s quarterly report on Form 10-Q for the quarter ended March 31, 2021, filed with the SEC on May 11, 2021.

Asset Purchase Agreement, dated August 31, 2022 by and among Interpace Biosciences, Inc., Interpace Pharma Solutions, Inc.

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Employee Stock Purchase Plan, incorporated by reference to Exhibit 4.2 of the Company’s quarterly report on Form 10-Q for the quarter ended September 30, 2019, filed with the SEC on November 14, 2019.

and Consulting Agreement and General Release, dated September 30, 2022, by and between Interpace Biosciences, Inc.

and Thomas Freeburg,

incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed with the SEC on October 4, 2022.

Incentive Stock Option Agreement between Interpace Diagnostics Group, Inc.

2 unchanged sentences

Burnell and Interpace Biosciences, Inc., incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K, filed with the SEC on November 25, 2020.

Employment Agreement, dated July 24, 2023, between Christopher McCarthy and Interpace Biosciences, Inc., incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K, filed with the SEC on August 2, 2023.

Form of Indemnification Agreement by and between Interpace Diagnostics Group, Inc.

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and Indemnitee, incorporated by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K, filed with the SEC on January 17, 2020.

Robert Gorman Letter Agreement dated April 16, 2020, by and between Interpace Biosciences, Inc.

and Robert Gorman, incorporated by reference to Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q, filed with the SEC on August 15, 2022.

Agreement, dated January 21, 2022, between Dr.

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Guaranty, dated August 13, 2014 by the Company in favor of Asuragen, Inc., incorporated by reference to Exhibit 10.34 of the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2014, filed with the SEC on November 5, 2014.

Morris Corporate Center Lease, incorporated by reference to Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2009, filed with the SEC on November 5, 2009.

First Amendment to Lease, dated May 24, 2017, by and between Brookwood MC Investors, LLC, Brookwood MC II, LLC, and the Company, incorporated by reference to Exhibit 10.52 of the Company’s Registration Statement on Form S-1 (333-218140), as amended, filed with the SEC on June 13, 2017.

Lease Agreement, dated March 31, 2017, by and between Saddle Lane Realty, LLC and the Company, incorporated by reference to Exhibit 10.53 of the Company’s Registration Statement on Form S-1 (333-218140), as amended on June 13, 2017.

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Form of Voting Agreement, incorporated by reference to Exhibit 10.4 of the Company’s Current Report on Form 8-K, filed with the SEC on July 19, 2019.

Equity Distribution Agreement, dated September 20, 2019, by and between Interpace Diagnostics Group, Inc.

and Oppenheimer & Co.

Inc., incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K, filed with the SEC on September 20, 2019.

Securities Purchase and Exchange Agreement, dated January 10, 2020, by and among Interpace Biosciences, Inc., 1315 Capital II, L.P.

2 unchanged sentences

and Ampersand 2018 Limited Partnership, incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K, filed with the SEC on January 17, 2020.

Support Agreement, dated April 7, 2020, by and between Ampersand 2018 Limited Partnership and Interpace Biosciences, Inc., incorporated by reference to Exhibit 10.1 of the Company’s quarterly report on Form 10-Q for the quarter ended June 30, 2020, filed with the SEC on October 19, 2020.

Termination Agreement, dated July 9, 2020, by and between Ampersand 2018 Limited Partnership and Interpace Biosciences, Inc., incorporated by reference to Exhibit 10.3 of the Company’s quarterly report on Form 10-Q for the quarter ended June 30, 2020, filed with the SEC on October 19, 2020.

Support Agreement, dated April 2, 2020, by and between 1315 Capital II, L.P.

4 unchanged sentences

Loan and Security Agreement by and between BroadOak Fund V, L.P., Interpace Biosciences, Inc., Interpace Diagnostics Corporation, Interpace Diagnostics, LLC and Interpace Pharma Solutions, Inc., dated October 29, 2021, incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K, filed with the SEC on November 3, 2021.

Second Amendment to Loan and Security Agreement by and between BroadOak Fund V, L.P., Interpace Biosciences, Inc., Interpace Diagnostics Corporation, Interpace Diagnostics, LLC and Interpace Pharma Solutions, Inc., dated October 24, 2023, incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K, filed with the SEC on October 27, 2023.

First Amendment to Loan and Security Agreement by and between Comerica Bank, Interpace Biosciences, Inc., Interpace Diagnostics Corporation, Interpace Diagnostics, LLC and Interpace Pharma Solutions, Inc., dated November 1, 2021, incorporated by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K, filed with the SEC on November 3, 2021.

Subordination and Intercreditor Agreement by and between Comerica Bank, BroadOak Fund V, L.P., Interpace Biosciences, Inc., Interpace Diagnostics Corporation, Interpace Diagnostics, LLC and Interpace Pharma Solutions, Inc., dated as of November 1, 2021, incorporated by reference to Exhibit 10.3 of the Company’s Current Report on Form 8-K, filed with the SEC on November 3, 2021.

Loan and Security Agreement, dated November 13, 2018, by and among Silicon Valley Bank, Interpace Diagnostics Group, Inc., Interpace Diagnostics Corporation, and Interpace Diagnostics, LLC, incorporated by reference to Exhibit 4.9 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, filed with the SEC on April 22, 2020, as amended from time to time.

Shared Services Agreement, dated August 31, 2022 by and among Interpace Biosciences, Inc., Interpace Pharma Solutions, Inc.

and Flagship Biosciences, Inc., incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed with the SEC on September 7, 2022.

Amendment to the Interpace Biosciences, Inc.

2 unchanged sentences

Employee Stock Purchase Plan, incorporated by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K, filed with the SEC on November 15, 2022.

Third Amendment to Loan and Security Agreement by and between BroadOak Fund V, L.P., Interpace Biosciences, Inc., Interpace Diagnostics Corporation, Interpace Diagnostics, LLC and Interpace Pharma Solutions, Inc., dated March 29, 2024.

Letter from BDO USA, LP dated April 13, 2022, incorporated by reference to Exhibit 16.1 of the Company’s Current Report on Form 8-K, filed with the SEC on April 14, 2022.

Subsidiaries of the Registrant, incorporated by reference to Exhibit 21.1 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, filed with the SEC on April 22, 2020, as amended from time to time.

Consent of BDO USA, LLP, filed herewith.

Consent of EisnerAmper, LLP, filed herewith.

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compensatory plan, compensation arrangement or management contract.

Filed herewith.

Company has opted to not provide a summary.

2 unchanged sentences

BIOSCIENCES, INC.

March 27, 2023

April 1, 2024

and Chief Executive Officer

2 unchanged sentences

Chief Executive Officer and Director

April 1, 2024

Executive Officer)

Thomas Freeburg

Christopher McCarthy

Financial Officer

April 1, 2024

Financial and Accounting Officer)

April 1, 2024

Joseph Keegan

April 1, 2024

Vijay Aggarwal

Robert Gorman

of the Board of Directors

April 1, 2024

Fortunato Ron Rocca

April 1, 2024

Biosciences, Inc.

1 unchanged sentence

Financial Statement Schedules

Report of Independent Registered Public Accounting Firm (EisnerAmper LLP;

Woodbridge, NJ;

PCAOB ID # 274 )

Report of Independent Registered Public Accounting Firm ( BDO USA, LLP ;

Woodbridge, NJ ;

of Independent Registered Public Accounting Firm (EisnerAmper LLP;

Philadelphia, PA;

PCAOB ID # 274 )

Consolidated Financial Statements

Consolidated Balance Sheets at December 31, 2022 and 2021

Consolidated Statements of Operations for the years ended December 31, 2022 and 2021

Consolidated Statements of Stockholders’ Deficit for the years ended December 31, 2022 and 2021

Consolidated Statements of Cash Flows for the years ended December 31, 2022 and 2021

Notes to Consolidated Financial Statements

Financial Statements

Balance Sheets at December 31, 2023 and 2022

Statements of Operations for the years ended December 31, 2023 and 2022

Statements of Stockholders’ Deficit for the years ended December 31, 2023 and 2022

Statements of Cash Flows for the years ended December 31, 2023 and 2022

to Consolidated Financial Statements

Valuation and Qualifying Accounts

2 unchanged sentences

Biosciences, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance

sheets of Interpace Biosciences, Inc.

and Subsidiaries (the “Company”) as of December 31, 2022, and the related consolidated

statements of operations, stockholders’ deficit, and cash flows for the year then ended, and the related notes and the financial

statement schedule identified in item 15 (collectively referred to as the “financial statements”).

In our opinion, the financial

statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022, and the results of

their operations and their cash flows for the year then ended, in conformity with accounting principles generally accepted in the United

States of America.

Basis for Opinion

These financial statements are the responsibility

of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”)

and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable

rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards

of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements

are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform,

an audit of its internal control over financial reporting.

As part of our audits, we are required to obtain an understanding of internal

control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal

control over financial reporting.

on the Financial Statements

have audited the accompanying consolidated balance sheets of Interpace Biosciences, Inc.

and Subsidiaries (the “Company”)

as of December 31, 2023 and 2022, and the related consolidated statements of operations, stockholders’ deficit, and cash flows

for each of the years then ended, and the related notes and the financial statement schedule identified in Item 15 (collectively referred

to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the

consolidated financial position of the Company as of December 31, 2023 and 2022, and the consolidated results of their operations and

their cash flows for each of the years then ended, in conformity with accounting principles generally accepted in the United States of

financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s

financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board

(United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S.

securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain

reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits,

we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion

on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

Our audits included performing procedures to assess

the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond

to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating

the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a

matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit

committee and that:

(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially

challenging, subjective, or complex judgments.

The communication of the critical audit matter does not alter in any way our opinion on

the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion

on the critical audit matter or on the accounts or disclosures to which it relates.

Variable Consideration in Revenue

As described in Note 1 to the consolidated financial

statements, the Company’s clinical services derive revenue from the performance of its proprietary assays or tests.

The Company’s

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

The Company subsequently

bills third-party payers or direct-bill payers for the tests performed.

Revenue is recognized based on the estimated transaction price

or net realizable value, which is determined based on historical collection rates by each payer category for each proprietary test offered

by the Company.

To the extent the transaction price includes variable consideration, the Company estimates the amount of variable consideration

that should be included in the transaction price using the expected value method based on historical experience.

We identified the estimation of the variable consideration

as a critical audit matter due to the significant judgement and estimation required by management in their assessment.

This led to a high

degree of auditor subjectivity and significant audit effort was required in performing our procedures and evaluating audit evidence relating

to estimates and assumptions made by management.

Addressing the matter involved performing procedures

and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

Our procedures

included, among other things, (i) obtaining an understanding of management’s process and evaluating the design of controls related

to revenue recognition;

(ii) assessing the reasonableness of management’s estimates of variable consideration utilizing the expected

value method based on its historical experience;

(iii) comparing the Company’s estimates of variable consideration to the history

of cash ultimately received from its payors;

and (iv) testing the historical accuracy of cash collections used in the Company’s

assumptions relating to variable consideration.

audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error

or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding

the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant

estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits

provide a reasonable basis for our opinion.

critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated

or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the financial

statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of the critical audit matter

does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit

matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Consideration in Revenue

described in Note 1 to the consolidated financial statements, the Company’s clinical services derive revenue from the performance

of its proprietary assays or tests.

The Company’s performance obligation is fulfilled upon the completion, review and release of

test results to the customer.

The Company subsequently bills third-party payers or direct-bill payers for the tests performed.

is recognized based on the estimated transaction price or net realizable value, which is determined based on historical collection rates

by each payer category for each proprietary test offered by the Company.

To the extent the transaction price includes variable consideration,

the Company estimates the amount of variable consideration that should be included in the transaction price using the expected value

method based on historical experience.

identified the estimation of the variable consideration as a critical audit matter due to the significant judgement and estimation required

by management in their assessment.

This led to a high degree of auditor subjectivity and significant audit effort was required in performing

our procedures and evaluating audit evidence relating to estimates and assumptions made by management.

the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated

financial statements.

Our procedures included, among other things, (i) obtaining an understanding of management’s process and evaluating

the design of controls related to revenue recognition;

(ii) assessing the reasonableness of management’s estimates of variable

consideration utilizing the expected value method based on its historical experience;

(iii) comparing the Company’s estimates of

variable consideration to the history of cash ultimately received from its payors;

and (iv) testing the historical accuracy of cash collections

used in the Company’s assumptions relating to variable consideration.

EisnerAmper LLP

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Philadelphia,

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Shareholders and Board of Directors

Interpace Biosciences, Inc.

Parsippany, New Jersey

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance

sheet of Interpace Biosciences, Inc.

and Subsidiaries (the “Company”) as of December 31, 2021 , the related consolidated statements

of operations, stockholders’ deficit, and cash flows for the year ended December 31, 2021, and the related notes and schedules (collectively

referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly,

in all material respects, the financial position of the Company at December 31, 2021, and the results of its operations and its cash flows

for the period ended December 31, 2021 , in conformity with accounting principles generally accepted in the United States of America.

Going Concern Uncertainty

The accompanying consolidated financial statements

have been prepared assuming that the Company will continue as a going concern.

As discussed in Note 3 to the consolidated financial statements,

the Company has suffered operating losses, has negative operating cash flows and is dependent upon its ability to generate profitable

operations in the future and/or obtain additional financing to meet its obligations and repay its liabilities arising from normal business

operations when they come due.

These conditions raise substantial doubt about its ability to continue as a going concern.

plans in regard to these matters are also described in Note 3.

The consolidated financial statements do not include any adjustments that

might result from the outcome of this uncertainty.

Basis for Opinion

These consolidated financial statements are the responsibility

of the Company’s management.

Our responsibility is to express an opinion on the Company’s consolidated financial statements

based on our audit.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”)

and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable

rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards

of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated

financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we

engaged to perform, an audit of its internal control over financial reporting.

As part of our audit we are required to obtain an understanding

of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s

internal control over financial reporting.

Accordingly, we express no such opinion.

Our audit included performing procedures to assess

the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures

that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the

consolidated financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by

management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audit provide

a reasonable basis for our opinion.

We have served as the Company’s auditor

from 2012 to 2022.

/s/ BDO USA, LLP

Woodbridge, New Jersey

March 31, 2022 Except for Note 4 as to which the date

is March 27, 2023

April 1, 2024

BIOSCIENCES, INC.

1 unchanged sentence

thousands, except share and per share data)

and cash equivalents

current assets

Cash and cash equivalents

Restricted cash

Accounts receivable

Other current assets

Current assets of discontinued operations

Total current assets

Property and equipment, net

Other intangible assets, net

Operating lease right of use assets

Other long-term assets

Long-term assets of discontinued operations

LIABILITIES AND STOCKHOLDERS’ DEFICIT

current assets

and equipment, net

intangible assets, net

lease right of use assets

long-term assets

AND STOCKHOLDERS’ DEFICIT

salary and bonus

accrued expenses

payable at fair value, current

of credit - current

liabilities of discontinued operations

current liabilities

Accounts payable

Accrued salary and bonus

Other accrued expenses

Line of credit - current

Current liabilities of discontinued operations

Total current liabilities

Contingent consideration

Operating lease liabilities, net of current portion

Line of credit

Note payable at fair value

Other long-term liabilities

Long-term liabilities of discontinued operations

Total liabilities

Commitments and contingencies (Note 11)

Redeemable preferred stock, $ .01 par value;

5,000,000 shares authorized, 47,000 shares Series B issued

and outstanding

Stockholders’ deficit:

Common stock, $ .01 par value;

consideration

lease liabilities, net of current portion

payable at fair value

long-term liabilities

and contingencies (Note 11)

preferred stock, $ .01 par value;

5,000,000 shares authorized, 47,000 shares Series B issued and outstanding

Stockholders’

stock, $ .01 par value;

100,000,000 shares authorized;

4,367,830 and 4,228,169 shares issued,

respectively;

4,296,710 and 4,195,412 shares outstanding, respectively

Additional paid-in capital

Accumulated deficit

Treasury stock, at cost ( 71,120 and 32,757 shares, respectively)

Total stockholders’ deficit

Total liabilities and stockholders’ deficit

Total liabilities, preferred stock and stockholders’ deficit

4,447,489 and 4,367,830 shares issued, respectively;

4,351,445 and 4,296,710

shares outstanding, respectively

paid-in capital

stock, at cost ( 96,044 and 71,120 shares, respectively)

stockholders’ deficit

liabilities and stockholders’ deficit

liabilities, preferred stock and stockholders’ deficit

accompanying notes are an integral part of these consolidated financial statements

2 unchanged sentences

thousands, except for per share data)

For The Years

Ended December 31,

Cost of revenue

and marketing

and development

and administrative

related amortization expense

in fair value of contingent consideration

operating expenses

Sales and marketing

Research and development

General and administrative

Transition expense

Loss on DiamiR transaction

Acquisition related amortization expense

Change in fair value of contingent consideration

Total operating expenses

Operating loss from continuing operations

Interest accretion expense

Related party interest

Note payable interest

Other expense, net

income (loss) from continuing operations

accretion expense

payable interest expense

(loss) from continuing operations before tax

Provision (benefit) for income taxes

for income taxes

(loss) from continuing operations

Loss from discontinued operations, net of tax

Basic and diluted loss per share of common stock:

From continuing operations

From discontinued operations

Net loss per basic and diluted share of common stock

Weighted average number of common shares and common share equivalents outstanding:

from discontinued operations, net of tax

income (loss)

net income (loss) per share of common stock:

continuing operations

discontinued operations

income (loss) per basic share of common stock

net income (loss) per share of common stock:

continuing operations

discontinued operations

income (loss) per diluted share of common stock

average number of common shares and common share equivalents outstanding:

accompanying notes are an integral part of these consolidated financial statements

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$ ( 249,017 )

balance value

$ ( 249,017 )

2 unchanged sentences

compensation expense

income (loss)

-December 31, 2023

$ ( 248,215 )

balance value

$ ( 248,215 )

2 unchanged sentences

STATEMENTS OF CASH FLOWS

For The Years Ended December 31,

Cash Flows From Operating Activities

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation and amortization

Interest accretion expense

Bad debt recovery

Goodwill impairment

Intangible asset impairment

Amortization of deferred financing fees

Interest - note payable

Note payable fees

Stock-based compensation

Change in fair value of note payable

Deferred income taxes

Change in fair value of contingent consideration

Other gains and expenses, net

Other changes in operating assets and liabilities:

Accounts receivable

Other current assets

Other long-term assets

Accounts payable

Accrued salaries and bonus

Accrued liabilities

Long-term liabilities

Net cash used in operating activities

Cash Flows From Investing Activity

Proceeds from sale of Interpace Pharma Solutions, net

Purchase of property and equipment

Sale of property and equipment

Net cash provided by (used in) investing activities

Cash Flows From Financing Activities

Issuance of common stock, net of expenses

Loan proceeds - related parties

Loan proceeds - BroadOak

Loan expenses - BroadOak

Payment of related party note and related interest

Financing fees - related party

Proceeds from convertible debt issuance

The Years Ended December 31,

Flows From Operating Activities

income (loss)

to reconcile net income (loss) to net cash provided by (used in) operating activities:

and amortization

accretion expense

asset impairment

of deferred financing fees

Amortization on operating lease right of use asset

in fair value of note payable

in fair value of contingent consideration

gains and expenses, net

changes in operating assets and liabilities:

current assets

long-term assets

salaries and bonus

lease liabilities

cash provided by (used in) operating activities

Flows From Investing Activity

from sale of Interpace Pharma Solutions, net

of property and equipment

cash (used in) provided by investing activities

Flows From Financing Activities

of common stock, net of expenses

of BroadOak terminal payment

from convertible debt issuance

Payments on line of credit

Borrowings on line of credit

Cash paid for repurchase of restricted shares

Net cash provided by financing activities

Net increase (decrease) in cash, cash equivalents and restricted cash

Cash, cash equivalents and restricted cash from continuing operations– beginning

Cash, cash equivalents and restricted cash from discontinued operations– beginning

Cash, cash equivalents and restricted cash – beginning

Cash, cash equivalents and restricted cash from continuing operations– ending

Cash, cash equivalents and restricted cash from discontinued operations– ending

Cash, cash equivalents and restricted cash – ending

paid for repurchase of restricted shares

cash (used in) provided by financing activities

(decrease) increase in cash and cash equivalents

and cash equivalents from continuing operations – beginning

and cash equivalents from discontinued operations – beginning

and cash equivalents – beginning

and cash equivalents from continuing operations – ending

and cash equivalents from discontinued operations – ending

and cash equivalents – ending

accompanying notes are an integral part of these consolidated financial statements

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decisions about the Company.

preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect

the amounts of assets and liabilities reported and disclosure of contingent assets and liabilities at the date of the financial statements

and the reported amounts of revenues and expenses during the reporting period.

Management’s estimates are based on historical experience,

facts and circumstances available at the time, and various other assumptions that are believed to be reasonable under the circumstances.

Significant estimates include accounting for valuation allowances related to deferred income taxes, contingent consideration, notes payable,

allowances for doubtful accounts and notes, revenue recognition, unrecognized tax benefits, and asset impairments involving other intangible

The Company periodically reviews these matters and reflects changes in estimates as appropriate.

Actual results could materially

differ from those estimates.

preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that

affect the amounts of assets and liabilities reported and disclosure of contingent assets and liabilities at the date of the

financial statements and the reported amounts of revenues and expenses during the reporting period.

Management’s estimates are

based on historical experience, facts and circumstances available at the time, and various other assumptions that are believed to be

reasonable under the circumstances.

Significant estimates include accounting for valuation allowances related to deferred income

taxes, contingent consideration, notes payable, allowances for doubtful accounts and notes, revenue recognition, and unrecognized

tax benefits.

The Company periodically reviews these matters and reflects

changes in estimates as appropriate.

Actual results could materially differ from those estimates.

and Cash Equivalents

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Company’s accounts receivables represent unconditional rights to consideration and are generated using its proprietary tests.

The Company’s clinical services are fulfilled upon completion of the test, review and release of the test results.

conjunction with fulfilling these services, the Company bills the third-party payer or direct-bill payer.

Contractual adjustments

represent the difference between the list prices and the reimbursement rates set by third party payers, including Medicare,

commercial payers, and amounts billed to direct-bill payers.

Specific accounts may be written off after several appeals, which in

some cases may take longer than twelve months.

The opening accounts receivable balance as of January 1, 2021 was $ 4.4 million.

Company’s clinical services are fulfilled upon completion of the test, review and release of the test results.

In conjunction with

fulfilling these services, the Company bills the third-party payer or direct-bill payer.

Contractual adjustments represent the difference

between the list prices and the reimbursement rates set by third party payers, including Medicare, commercial payers, and amounts billed

to direct-bill payers.

Specific accounts may be written off after several appeals, which in some cases may take longer than twelve months.

No allowance for credit losses has been recorded during the periods presented.

The opening accounts receivable balance as of January

1, 2022, was $ 4.7 million.

current assets

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of Other Current Assets

December 31, 2022

December 31, 2021

Prepaid expenses

Funds in escrow

Total other current assets

other current assets

and Equipment, net

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basis, using the estimated useful lives of:

seven to twelve years for furniture and fixtures;

five to twelve years for furniture and fixtures;

two to five years for office and computer

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charge should be recorded and the amount of such charge if an impairment loss is deemed to be necessary.

There were no asset impairment losses recorded in 2023 and the Company recorded an impairment charge of $ 3.8 million

for finite-lived intangible assets associated with the Company’s sale of its Pharma Solutions business in 2022.

Contingencies

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net revenue in the period such variances become known.

The Company recorded an NRV adjustment of $ 0.7 million as a reduction of revenue

during the second quarter of 2022 to record the impact on revenue recorded during the first quarter of 2022.

See Note 3, Going Concern ,

for more details.

non-Medicare claims, our payment terms vary by payer category.

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shares is equal to the closing stock price on the date of grant.

In 2020, the Company issued performance-based options and RSUs based

on achieving stock price or certain other financial metrics.

These require the Company to assess the likelihood of achieving certain

performance milestones on a quarterly basis.

In these instances, the Company was assisted in the initial valuation model by a third party

valuation professional.

Note 14, Stock-Based Compensation, for further information.

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unpaid), are participating securities and are included in the computation of earnings per share pursuant to the two-class method.

a result of the losses incurred in both 2022 and 2021, the potentially dilutive common shares have been excluded from the earnings per

share computation for these periods because its inclusion would have been anti-dilutive.

Additionally, preferred shares have been excluded

in the denominator of the earnings per share computation, on an if-converted basis, as such shares would have been anti-dilutive.

a result of the losses incurred in 2022, the potentially dilutive common shares have been excluded from the earnings per share computation

for this period because its inclusion would have been anti-dilutive.

Additionally, preferred shares have been excluded in the denominator

of the earnings per share computation, on an if-converted basis, as such shares would have been anti-dilutive.

Reclassifications

The Company reclassified certain prior period balances to conform to the current year presentation.

Recent Accounting Standards

Pronouncements Pending Adoption

February 2020, the FASB issued ASU 2020-02, Financial Instruments-Credit Losses (Topic 326) and Leases (Topic 842) - Amendments to SEC

Paragraphs Pursuant to SEC Staff Accounting Bulletin No.

119 and Update to SEC Section on Effective Date Related to Accounting Standards

2016-02, Leases (Topic 842) which amends the effective date of the original pronouncement for smaller reporting companies.

ASU 2016-13 and its amendments are effective for the Company beginning January 1, 2023.

The Company believes the adoption will modify

the way the Company analyzes financial instruments, but it does not anticipate a material impact on results of operations.

does not expect this will have a material impact on its consolidated financial statements.

Pronouncements Adopted

FASB issued new guidance under ASC Topic 326, Financial Instruments Credit Losses.

The guidance changes the allowance on accounts receivable

from an incurred method to an expected method.

The Company adopted ASC Topic 326 on January 1, 2023 which requires the Company to look at its history of write-offs to come up with an expected loss rate and apply that

to its current accounts receivable balance.

It had no material effect on

the consolidated financial statements.

Pronouncements Pending

August 2020, the FASB issued ASU 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging

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financial statements.

Going Concern

December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures.

This ASU requires public

entities, on an annual basis, to provide disclosure of specific categories in the rate reconciliation, as well as disclosure of income

taxes paid disaggregated by jurisdiction.

ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption

The Company is currently evaluating the impact the adoption of this standard on its financial statements.

October 2021, the Company entered into a $ 7.5 million revolving credit facility with Comerica Incorporated (“Comerica”) (the

“Comerica Loan Agreement”).

See Note 19, Revolving Line of Credit , for more details.

Also in October 2021, the Company

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

(“BroadOak”)(the “BroadOak Term Loan”), the

proceeds of which were used to repay in full at their maturity the existing secured promissory note with Ampersand Capital Partners (“Ampersand”)

(the “Ampersand Note”) and 1315 Capital II, L.P (“1315 Capital”)(the “1315 Capital Note”).

2022, the Company entered into a Subordinated Convertible Promissory Note agreement with BroadOak for an additional $ 2.0 million (the

“Convertible Note”), which was converted into a subordinated term loan and was added to the outstanding BroadOak Term Loan

See Note 13, Notes Payable , for more details.

January 2022, the Company’s registration statement for a rights offering filed with the Securities and Exchange Commission

(SEC) became effective;

however, the rights offering was subsequently terminated later in January 2022 when the Company announced

that the Centers for Medicare & Medicaid Services, or CMS, issued a new billing policy whereby CMS will no longer reimburse for

the use of the Company’s ThyGeNEXT ® and ThyraMIR ® tests when billed together by the same

provider/supplier for the same beneficiary on the same date of service.

However, on February 28, 2022, the Company announced that

the National Correct Coding Initiative (NCCI) program issued a response on behalf of CMS stating that the January 2022 billing

policy reimbursement change for ThyGeNEXT ® (0245U) and ThyraMIR ® (0018U) tests has been retroactively

reversed to January 1, 2022.

In May 2022, the Company was notified by CMS/NCCI that processing of claims for dates of service after

January 1, 2022 would be completed beginning July 1, 2022.

However, on June 9, 2022, the Company was notified that Novitas re-priced

ThyGeNEXT ® (0245U) from $ 2,919

retroactively effective to January 1, 2022.

On July 20, 2022 the Clinical Diagnostic Laboratory Tests (CDLT) Advisory Panel affirmed

a gapfill price for ThyGeNEXT ® of $ 806 .59.

As a result of the ThyGeNEXT ® pricing change, the Company reduced its net realizable value, or NRV rates, for

ThyGeNEXT ® Medicare billing to reflect the $ 806 .59

pricing for tests performed during the second quarter of 2022.

In addition, in order to reflect the retroactive pricing change to

January 1, 2022, the Company recorded an NRV adjustment of $ 0.7

million during the second quarter of 2022 to reduce revenue recorded during the first quarter of 2022.

Effective January 1, 2023, the gapfill price for ThyGeNEXT ® was set at $ 1,266 .07 .

along with many laboratories, the Company may be affected by the Proposed Local Coverage Determination (“LCD”) DL39365, which

was posted on June 9, 2022 and is currently under consideration by our local Medicare Administrative Contractor, Novitas.

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

molecular tests, PancraGEN ® .

If Novitas restricts coverage for PancraGEN ® , the Company’s liquidity could be negatively

impacted beginning in Fiscal 2023.

August 31, 2022, the Company closed on the sale of its Pharma Solutions business for a total purchase price of $ 6,560,000 after adjustments.

In addition, we received the earnout payment of $ 1,043,000 .

See Note 4, Discontinued Operations .

the year ended December 31, 2022, the Company had an operating loss from continuing operations of $ 3.6 million.

See Note 18, Revolving Line of Credit, and Note 20, Subsequent Events for more details and for

updates to the revolving credit facility.

Also in October 2021, the Company entered into an $ 8.0 million term loan with BroadOak Fund

(“BroadOak”) (the “BroadOak Loan Agreement”), the proceeds of which were used to repay in full at their

maturity the existing secured promissory note with Ampersand Capital Partners (“Ampersand”) (the “Ampersand Note”)

and 1315 Capital II, L.P (“1315 Capital”) (the “1315 Capital Note”).

In May 2022, the Company entered into a

Subordinated Convertible Promissory Note agreement with BroadOak for an additional $ 2.0 million (the “Convertible Note”),

which was converted into a subordinated term loan and was added to the outstanding BroadOak Loan Agreement balance.

See Note 13, Notes

Payable, for more details.

December 31, 2023, the Company has a $ 10 million principal balance of notes payable that required the principal to be paid on or before

the maturity date of October 31, 2024 .

In March 2024, the Company had the terms of the Loan Agreement updated.

See Note 20, Subsequent

Events , for more details.

with many laboratories, the Company may be affected by the Proposed Local Coverage Determination (“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 the Company announced

that Novitas issued the final LCD of Genetic Testing for Oncology (L39365) which if finalized, 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, the Company 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;

could potentially take a year or longer from issuance of the updated proposed LCD to reach a conclusion.

As a result, the Company is

able to continue offering PancraGEN ® and the related Point2 ® fluid chemistry tests for amylase, CEA, and

In the event Novitas ultimately restricts coverage for the PancraGEN ® test, the Company’s liquidity could

be negatively impacted.

the year ended December 31, 2023, the Company had operating income from continuing operations of $ 2.8 million.

As of December 31, 2023,

the Company had cash and cash equivalents of $ 3.5 million, total current assets of $ 10.3 million and current liabilities of $ 17.5 million.

As of March 17, 2023, the Company had approximately $ 5.7 million of cash on hand, excluding restricted cash.

Company may not generate positive cash flows from operations for the year ending December 31, 2023.

The Company intends to meet its ongoing

capital needs by using its available cash and availability under the Comerica Loan Agreement, as well as through targeted margin improvement;

collection of accounts receivable;

As of March 22, 2024, the Company had approximately $ 2.8 million of cash on hand.

Company intends to meet its ongoing capital needs by using its available cash, as well as through targeted margin improvement;

of accounts receivable;

containment of costs;

and the potential use of other financing options and other strategic alternatives.

However, if the Company is unable to meet the financial covenants under the Comerica Loan Agreement, the revolving line of credit and

notes payable will become due and payable immediately.

As of March 27, 2023, the Company had $ 1.5 million available under the Loan Agreement.

Company continues to explore various strategic alternatives, dilutive and non-dilutive sources of funding, including equity and debt

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There can be no assurance that the Company will be successful in obtaining such funding on terms acceptable

Company’s consolidated financial statements assumes the Company will continue as a going concern.

Its ability to continue as a

going concern depends on having working capital for vendor payments, meeting short-term obligations on other accrued liabilities, and

amongst other requirements, making interest payments on its debt obligations.

Without positive operating margins and sufficient working

capital and the ability to meet its debt obligations, our business will be jeopardized and we may not be able to continue in our current

structure, if at all.

Under these circumstances, the Company would likely have to consider other options, such as selling assets, raising

additional debt or equity capital, cutting costs or otherwise reducing our cash requirements, or negotiating with our creditors to restructure

our applicable obligations.

With the proceeds received from the sale of the Pharma Solutions business, as well as the expected improvement

in future operating cash flows associated with the disposition, as of the date of this filing, the Company anticipates that current cash

and cash equivalents and forecasted cash receipts will be sufficient to meet its anticipated cash requirements through the next twelve

the improvement in operating cash flows associated with the disposition of the Pharma Solutions business, and the Company’s improved

operating performance, as of the date of this filing, the Company anticipates that current cash and cash equivalents and forecasted

cash receipts will be sufficient to meet its anticipated cash requirements through the next twelve months from the date of issuance of the consolidated financial statements.

Discontinued Operations

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$ 1.0 million based on revenue for the period beginning September 1, 2021 and ending August 31, 2022.

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 Interpace not to compete with the Business, recruit or hire any former employees

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for all periods presented.

reconciliation of the accounting for the Company’s Pharma Solutions business is as follows:

reconciliation of the accounting for the Company’s Pharma Solutions business in 2023 and 2022 is as follows:

of Sale of Business

Purchase price

Earnout received

Working capital adjustment, net

(loss) on Sale

capital adjustment, net

transaction costs

Total net consideration

Assets and liabilities disposed of, net (1)

net consideration

and liabilities disposed of, net (1)

(loss) on sale

goodwill and intangible assets written down prior to the Transaction.

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the write-down of intangible assets was approximately $ 3.8 million.

components of assets and liabilities classified as discontinued operations consist of the following as of December 31, 2022 and

December 31, 2021:

components of assets and liabilities classified as discontinued operations consist of the following as of December 31, 2023 and December

of Components of Assets and Liabilities and Revenue Classified as Discontinued Operations

December 31, 2022

December 31, 2021

Accounts receivable, net

Current assets of discontinued operations

Property and equipment, net

Other intangible assets, net

Long-term assets of discontinued operations

Accounts payable

Accrued salary and bonus

Current liabilities of discontinued operations

Operating lease liabilities, net of current portion

Long-term liabilities of discontinued operations

Total liabilities

$ 766 of liabilities related to the former Commercial Services business unit.

table below presents the significant components of its former Pharma Solutions business unit’s results included within loss from

discontinued operations, net of tax in the consolidated statements of operations for the years ended December 31, 2022 and

For The Years Ended

Loss from discontinued operations

Gain (loss) on sale of Pharma Solutions

Income tax expense

Loss from discontinued operations, net of tax

salary and bonus

liabilities of discontinued operations

$ 660 and $ 766 of liabilities related to the former Commercial Services business unit for the periods ending December 31, 2023 and

December 31, 2022, respectively.

table below presents the significant components of its former Pharma Solutions and Commercial Services business units’ results

included within loss from discontinued operations, net of tax in the consolidated statements of operations for the years ended December

31, 2023 and 2022.

The Years Ended

from discontinued operations

from discontinued operations, net of tax

income tax expense for the years ended December 31, 2023 and December 31, 2022 primarily pertained to the interest accrued on uncertain

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cash provided by discontinued operations, investing activities, for the year ended December 31, 2023 of $ 0.4 million which pertained

to the net proceeds received from the Pharma Solutions sale.

Cash used from discontinued operations, operating activities, for the year

ended December 31, 2021 was approximately $ 4.9 million.

There was cash used from discontinued operations, investing activities, for the

year ended December 31, 2021 of $ 0.1 million.

Depreciation and amortization expense within discontinued operations for the years ended

December 31, 2022 and December 31, 2021 was $ 1.1 million and $ 1.8 million, respectively.

to the net proceeds released from escrow for the Pharma Solutions sale net of final working capital adjustments.

Cash used from discontinued

operations, operating activities, for the year ended December 31, 2022 was approximately $ 2.8 million.

There was cash provided by discontinued

operations, investing activities, for the year ended December 31, 2022 of $ 6.5 million which pertained to the net proceeds received from

the Pharma Solutions sale.

Depreciation and amortization expense within discontinued operations for the year ended December 31, 2022

was $ 1.1 million.

There was no depreciation and amortization expense within discontinued operations for the year ended December 31, 2023.

Fair Value Measurements

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The Company’s

financial liabilities reflected at fair value in the consolidated financial statements include contingent consideration, notes payable,

and warrant liability.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly

transaction between market participants at the measurement date.

In determining fair value, the Company uses various methods including

market, income and cost approaches.

Based on these approaches, the Company often utilizes certain assumptions that market participants

would use in pricing the asset or liability, including assumptions about risk and/or the risks inherent in the inputs to the valuation

These inputs can be readily observable, market-corroborated, or generally unobservable inputs.

The Company utilizes valuation

techniques that maximize the use of observable inputs and minimize the use of unobservable inputs.

Based upon observable inputs used

in the valuation techniques, the Company is required to provide information according to the fair value hierarchy.

The fair value hierarchy

ranks the quality and reliability of the information used to determine fair values into three broad levels as follows:

financial liabilities reflected at fair value in the consolidated financial statements include contingent consideration and notes payable.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market

participants at the measurement date.

In determining fair value, the Company uses various methods including market, income and cost approaches.

Based on these approaches, the Company often utilizes certain assumptions that market participants would use in pricing the asset or

liability, including assumptions about risk and/or the risks inherent in the inputs to the valuation technique.

These inputs can be readily

observable, market-corroborated, or generally unobservable inputs.

The Company utilizes valuation techniques that maximize the use of

observable inputs and minimize the use of unobservable inputs.

Based upon observable inputs used in the valuation techniques, the Company

is required to provide information according to the fair value hierarchy.

The fair value hierarchy ranks the quality and reliability

of the information used to determine fair values into three broad levels as follows:

for assets and liabilities traded in active markets from readily available pricing sources for market transactions involving identical

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of Financial Instrument Measured On Recurring Basis

Fair Value Measurements

As of December 31, 2022

Carrying Amount

Contingent consideration:

Other accrued expenses:

Warrant liability (2)

Note payable:

BroadOak loan

Fair Value Measurements

As of December 31, 2021

Carrying Amount

Contingent consideration:

Other accrued expenses:

Warrant liability

Note payable:

BroadOak loan

Note 10, Accrued Expenses and Long-Term Liabilities

Value Measurements

of December 31, 2023

consideration:

Value Measurements

of December 31, 2022

consideration:

Note 10, Accrued Expenses and Other Long-Term Liabilities

connection with the acquisition of certain assets from Asuragen, the Company recorded contingent consideration related to contingent

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of Fair Value, Assets Measured On Recurring Basis, Unobservable Input Reconciliation

to Fair Value/

December 31, 2021

Transferred to Accrued Expenses

Interest Accrued

Mark to Market

December 31, 2022

Underwriters Warrants

BroadOak loans

BroadOak Convertible Note

of the Company’s non-financial assets, such as other intangible assets are measured at fair value on a nonrecurring basis when

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of Property and Equipment

Furniture and fixtures

Lab and office equipment

Computer equipment

Internal-use software

Leasehold improvements

and office equipment

and equipment

accumulated depreciation and amortization

property and equipment

Less accumulated depreciation and amortization

Net property and equipment

and amortization expense from continuing operations was approximately $ 0.2 million and $ 0.3 million for the years ended December 31,

2022 and 2021, respectively.

There was zero internal-use software amortization expense included in depreciation and amortization expense

Goodwill and Other Intangible Assets

and amortization expense from continuing operations was approximately $ 0.2

million for the years ended December 31, 2023 and 2022, respectively.

There was zero

internal-use software amortization expense included in depreciation and amortization expense in 2023 and 2022, and $ 0.1

million of internal use unamortized software costs at December 31, 2023 and zero at December 31, 2022.

The costs were unamortized as they were not in use at December 31, 2023.

Intangible Assets

net carrying value of the identifiable intangible assets from all acquisitions within continuing operations as of December 31, 2023 and

December 31, 2022 are as follows:

of Identifiable Assets Carrying Value

As of December 31, 2022

As of December 31, 2021

Asuragen acquisition:

RedPath acquisition:

Pancreas test

Barrett’s test

Accumulated Amortization

Net Carrying Value

of Identifiable Intangible Assets Carrying Value

December 31, 2023

December 31, 2022

Carrying Value

expense from continuing operations was approximately $ 0.9 million and $ 1.3 million for the years ended December 31, 2023 and 2022, respectively.

The remaining amortization expense of $ 0.9 million will be amortized in 2023.

Company leases facilities and certain equipment under agreements classified as operating leases, which expire at various dates through

Substantially all of the property leases provide for increases based upon use of utilities and landlord’s operating

expenses as well as pre-defined rent escalations.

Total expense from continuing operations under these agreements for the years ended

December 31, 2022 and 2021 was approximately $ 0.9 million and $ 0.7 million, respectively.

The Company’s identifiable intangible assets were fully amortized as of December 31, 2023.

Company leases facilities and certain equipment under agreements classified as operating leases, which expire at various dates

through June 2028.

Substantially all of the property leases provide for increases based upon use of utilities and landlord’s

operating expenses as well as pre-defined rent escalations.

Total operating lease expense from continuing operations under these

agreements for the years ended December 31, 2023 and 2022 was approximately $ 0.8

million and $ 0.9

million, respectively.

Total cash paid under these agreements for the years ended December 31, 2023 and 2022 was approximately

million and $ 0.9

million, respectively.

table below presents the lease-related assets and liabilities recorded in the Consolidated Balance Sheet:

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Balance Sheet

Operating lease assets

Operating lease right of use assets

Total lease assets

Operating lease liabilities

Other accrued expenses

Operating lease liabilities

Other accrued expenses

Total current lease liabilities

Operating lease liabilities

Operating lease liabilities, net of current portion

Total long-term lease liabilities

Total lease liabilities

lease right of use assets

lease liabilities

accrued expenses

current lease liabilities

lease liabilities

lease liabilities, net of current portion

long-term lease liabilities

lease liabilities

weighted average remaining lease term for the Company’s operating leases was 4.3 years as of December 31, 2023 and 5.0 years as

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of Maturities of Operating Lease Liabilities

Operating Leases

Total minimum lease payments

minimum lease payments

amount of lease payments representing effects of discounting

Present value of future minimum lease payments

value of future minimum lease payments

current obligations under leases

Long-term lease obligations

lease obligations

Retirement Plans

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total contribution expense from continuing operations related to the 401(k) plan for the years ended December 31, 2023 and December 31,

2021 was approximately $ 0.3 million and $ 0.2 million, respectively.

2022 was approximately $ 0.3 million in both periods.

Accrued Expenses and Other Long-Term Liabilities

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of Other Accrued Expenses

December 31, 2022

December 31, 2021

Accrued royalties

Contingent consideration

Operating lease liability

Interest payable

Warrant liability

Accrued sales and marketing - diagnostics

Accrued lab costs - diagnostics

Accrued professional fees

Taxes payable

Unclaimed property

Total other accrued expenses

consideration

lease liability

sales and marketing - diagnostics

lab costs - diagnostics

professional fees

other accrued expenses

long-term liabilities consisted of uncertain tax positions as of December 31, 2023 and 2022.

Commitments and Contingencies

time to time, the Company may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business.

When the Company is aware of a claim or potential claim, it assesses the likelihood of any loss or exposure.

If it is probable that a

loss will result and the amount of the loss can be reasonably estimated, the Company will record a liability for the loss.

to the estimated loss, the recorded liability includes probable and estimable legal costs associated with the claim or potential claim.

Litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may

harm the Company’s business.

There is no pending litigation involving the Company at this time.

to the nature of the businesses in which the Company is engaged, it is subject to certain risks.

Such risks include, among others, risk

of liability for personal injury or death to persons using products the Company promotes or commercializes.

There can be no assurance

that substantial claims or liabilities will not arise in the future due to the nature of the Company’s business activities and

recent increases in litigation related to healthcare products.

of liability for personal injury or death to persons using products or services that the Company promotes or commercializes.

be no assurance that substantial claims or liabilities will not arise in the future due to the nature of the Company’s business

There is also the risk of employment related litigation and other litigation in the ordinary course of business.

Company could also be held liable for errors and omissions of its employees in connection with the services it performs that are outside

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sell to the Investors an aggregate of $ 20.0 million in Series B Preferred Stock of the Company, at an issuance price per share of $ 1,000

Pursuant to the Securities Purchase and Exchange Agreement, 1315 Capital agreed to purchase 19,000 shares of Series B Preferred Stock

at an aggregate purchase price of $ 19.0 million and Ampersand agreed to purchase 1,000 shares of Series B Preferred Stock at an aggregate

purchase price of $ 1.0 million.

(“New Investment Shares”).

Pursuant to the Securities Purchase and Exchange Agreement, 1315 Capital agreed to purchase 19,000

shares of Series B Preferred Stock at an aggregate purchase price of $ 19.0 million and Ampersand agreed to purchase 1,000 shares of Series

B Preferred Stock at an aggregate purchase price of $ 1.0 million.

addition, the Company agreed to exchange $ 27.0 million of the Company’s existing Series A convertible preferred stock, par value

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The Series B Preferred Stock has a conversion price of $ 6.00 .

On any matter presented

to the stockholders of the Company for their action or consideration at any meeting of stockholders of the Company (or by written consent

of stockholders in lieu of meeting), each holder of outstanding shares of Series B Preferred Stock will be entitled to cast the number

of votes equal to the number of whole shares of the Company’s Common Stock into which the shares of Series B Preferred Stock held

by such holder are convertible as of the record date for determining stockholders entitled to vote on such matter.

Except as provided

by law or by the Certificate of Designation of Preferences, Rights and Limitations of Series B Convertible Preferred Stock (the “Certificate of Designation”), holders of Series B Preferred Stock will vote together with the holders of Common Stock as

a single class and on an as-converted to Common Stock basis.

Director Designation

The Certificate of Designation also

provides each Investor with the following director designation rights:

for so long such Investor holds at least sixty percent (60%) of

the Series B Preferred Stock issued to it on the Issuance Date (as defined therein), such Investor will be entitled to elect two directors

to the Company’s Board of Directors (the “Board”), provided that one of the directors qualifies as an “independent

director” under Rule 5605(a)(2) of the listing rules of the Nasdaq Stock Market (or any successor rule or similar rule promulgated

by another exchange on which the Company’s securities are then listed or designated) (“Independent Director”).

if at any time such Investor holds less than sixty percent (60%), but at least forty percent (40%), of the Series B Preferred Stock issued

to them on the Issuance Date, such Investor would only be entitled to elect one director to the Board.

Any director elected pursuant

to the terms of the Certificate of Designation may be removed without cause by, and only by, the affirmative vote of the holders of Series

B Preferred Stock.

A vacancy in any directorship filled by the holders of Series B Preferred Stock may be filled only by vote or written

consent in lieu of a meeting of such holders of Series B Preferred Stock or by any remaining director or directors elected by such holders

of Series B Preferred Stock .

The Certificate of Designation provides

that from and after the Issuance Date and subject to the terms of the Certificate of Designation, each share of Series B Preferred Stock

is convertible, at any time and from time to time, at the option of the holder into a number of shares of Common Stock equal to dividing

the amount equal to the greater of the Stated Value of such Series B Preferred Stock, plus any dividends declared but unpaid thereon,

or such amount per share as would have been payable had each such share been converted into Common Stock immediately prior to a liquidation,

by six dollars ($ 6.00 ) (subject to

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

aggregate number of shares of Common Stock that may be issued through conversion of all of the New Investment Shares and Exchange Shares

shares (subject to appropriate adjustment in the event of any stock dividend, stock split,

any matter presented to the stockholders of the Company for their action or consideration at any meeting of stockholders of the Company

(or by written consent of stockholders in lieu of meeting), each holder of outstanding shares of Series B Preferred Stock will be entitled

to cast the number of votes equal to the number of whole shares of the Company’s common stock into which the shares of Series B

Preferred Stock held by such holder are convertible as of the record date for determining stockholders entitled to vote on such matter.

Except as provided by law or by the Certificate of Designation of Preferences, Rights and Limitations of Series B Convertible Preferred

Stock (the “Certificate of Designation”), holders of Series B Preferred Stock will vote together with the holders of common

stock as a single class and on an as-converted to common stock basis.

Designation Rights

Certificate of Designation also provides each Investor with the following director designation rights:

for so long such Investor holds

at least sixty percent (60%) of the Series B Preferred Stock issued to it on the Issuance Date (as defined therein), such Investor will

be entitled to elect two directors to the Company’s Board of Directors (the “Board”), provided that one of the directors

qualifies as an “independent director” under Rule 5605(a)(2) of the listing rules of the Nasdaq Stock Market (or any successor

rule or similar rule promulgated by another exchange on which the Company’s securities are then listed or designated) (“Independent

However, if at any time such Investor holds less than sixty percent (60%), but at least forty percent (40%), of the

Series B Preferred Stock issued to them on the Issuance Date, such Investor would only be entitled to elect one director to the Board.

Any director elected pursuant to the terms of the Certificate of Designation may be removed without cause by, and only by, the affirmative

vote of the holders of Series B Preferred Stock.

A vacancy in any directorship filled by the holders of Series B Preferred Stock may

be filled only by vote or written consent in lieu of a meeting of such holders of Series B Preferred Stock or by any remaining director

or directors elected by such holders of Series B Preferred Stock .

November 15, 2023, Edward Chan, a director designated by 1315 Capital to the Board, provided notice to the Company of his resignation

from the Board, effective immediately.

Further, on December 7, 2023, Robert Gorman, a director designated by Ampersand to the Board,

provided notice to the Company of his resignation as a director and as Chairman of the Board, effective immediately.

Certificate of Designation provides that from and after the Issuance Date and subject to the terms of the Certificate of Designation,

each share of Series B Preferred Stock is convertible, at any time and from time to time, at the option of the holder into a number of

shares of common stock equal to dividing the amount equal to the greater of the Stated Value of such Series B Preferred Stock, plus any

dividends declared but unpaid thereon, or such amount per share as would have been payable had each such share been converted into common

stock immediately prior to a liquidation, by six dollars ($ 6.00 ) (subject to adjustment in the event of any stock dividend, stock split,

combination, or other similar recapitalization affecting such shares).

Mandatory Conversion

If the Company consummates the sale

of shares of Common Stock to the public in a firm-commitment underwritten public offering pursuant to an effective registration statement

under the Securities Act pursuant to which the price of the Common Stock in such offering is at least equal to twelve dollars ($ 12.00 )

(subject to adjustment in the event of any stock dividend, stock split, combination, or other similar recapitalization

affecting such shares) and such offering does not include warrants (or any other convertible security) and results in at least $ 25,000,000.00

in proceeds, net of the underwriting discount and commissions, to the Company, and the Common Stock continues to be listed for

trading on the Nasdaq Capital Market or another exchange, all outstanding shares of Series B Preferred Stock will automatically be converted

into shares of Common Stock, at the then effective Series B Conversion Ratio (as defined in the Certificate of Designation).

The aggregate number of shares of common stock that may be issued

through conversion of all of the New Investment Shares and Exchange Shares is 7,833,334 shares (subject to appropriate adjustment in

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

the Company consummates the sale of shares of common stock to the public in a firm-commitment underwritten public offering pursuant to

an effective registration statement under the Securities Act pursuant to which the price of the common stock in such offering is at least

equal to twelve dollars ($ 12.00 ) (subject to adjustment in the event of any stock dividend, stock split, combination, or other similar

recapitalization affecting such shares) and such offering does not include warrants (or any other convertible security) and results in

at least $ 25,000,000.00 in proceeds, net of the underwriting discount and commissions, to the Company, and the common stock continues

to be listed for trading on the Nasdaq Capital Market or another exchange, all outstanding shares of Series B Preferred Stock will automatically

be converted into shares of common stock, at the then effective Series B Conversion Ratio (as defined in the Certificate of Designation).

any voluntary or involuntary liquidation, dissolution or winding up of the Company or Deemed Liquidation (as defined in the Certificate

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as would have been payable had each such share been converted into common stock immediately prior to such Liquidation.

of December 31, 2022 and December 31, 2021, there were 47,000

Series B issued and outstanding shares of preferred

stock which on an as converted basis are equal to 7,833,334 shares of common stock.

of December 31, 2023 and December 31, 2022, there were 47,000 Series B issued and outstanding shares of preferred stock, respectively.

Notes Payable

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The Term Loan

matures upon the earlier of (i) October 31, 2024 or (ii) the occurrence of a change in control, and bears interest at the rate of 9 %

was scheduled to mature upon the earlier of (i) October 31, 2024 or (ii) the occurrence of a change in control, and bears interest at the rate of 9 %

The Term Loan is secured by a security interest in substantially all of the Company’s and its subsidiaries’ assets

and is subordinate to the Company’s $ 7,500,000 revolving credit facility with Comerica Bank.

and was subordinate to the Company’s $ 7,500,000 revolving credit facility with Comerica Bank.

See Note 18, Revolving Line of Credit.

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Accordingly, the Company elected the fair value option for the Note.

Convertible Note

May 5, 2022, the Company issued a Convertible Note to BroadOak, pursuant to which BroadOak funded an aggregate principal amount of $ 2

million (the “Convertible Debt”).

Convertible Note was to be converted into shares of common stock of the Company in connection with, and upon the consummation of, a private

placement transaction pursuant to which the Company would issue common stock to certain investors, and such conversion would be subject

to the same terms and conditions (including purchase price per share) applicable to the purchase of common stock of the Company by such

Since the private placement transaction was not consummated by August 5, 2022 (the “Maturity Date”), the Convertible

Note was converted into an additional term loan advance under the Company’s existing BroadOak Loan Agreement on the Maturity Date.

The Convertible Debt bore interest at a fixed rate of 9.0 % per annum and was unsecured.

There were no scheduled amortization payments

prior to the Maturity Date.

The Convertible Note contained customary representations and warranties and customary events of default.

Company entered into a) a consent letter (the “Comerica Consent”) with Comerica, pursuant to which Comerica consented to

the issuance of the Convertible Note, the incurrence of the Convertible Debt and the conversion of the Convertible Debt into common stock

of the Company or an additional term loan advance under the BroadOak Loan Agreement.

Party Secured Promissory Note

January 7, 2021, the Company entered into secured promissory notes in the amount of $ 3 million and $ 2 million with Ampersand and 1315

Capital, respectively.

On May 10, 2021, the Company amended the Ampersand Note to increase the principal amount to $ 4.5 million and amended

the 1315 Capital Note to increase the principal amount to $ 3.0 million.

The maturity dates of the Notes were the earlier of (a) June

30, 2021 and (b) the date on which all amounts become due upon the occurrence of any event of default as defined in the Notes.

24, 2021, the Company and Ampersand amended the Ampersand Note to change its maturity date to the earlier of (a) August 31, 2021 and

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

2021, the Company and 1315 Capital amended the 1315 Capital Note to change its maturity date in a similar manner.

On August 31, 2021,

the Company and Ampersand amended the Ampersand Note to change its maturity date to the earlier of (a) September 30, 2021 and (b) the

date on which all amounts become due upon the occurrence of any event of default as defined in the Ampersand Note.

On August 31, 2021,

the Company and 1315 Capital amended the 1315 Capital Note to change its maturity date in a similar manner.

September 29, 2021, the Company and Ampersand amended the Ampersand Note to change its maturity date to the earlier of (a) October 31,

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

September 29, 2021, the Company and 1315 Capital amended the 1315 Capital Note to change its maturity date in a similar manner.

used the proceeds of the BroadOak Term Loan discussed above to repay in full all outstanding indebtedness under the promissory notes

with Ampersand, in the amount of $ 4.5 million, and 1315 Capital, in the amount of $ 3 million.

outstanding and warrant activity for the year ended December 31, 2022 are as follows:

of Warrants Outstanding and Warrants Activity

Classification

Exercise Price

Expiration Date

Warrants Issued

Warrants Exercised

Warrants Cancelled/ Expired

Private Placement Warrants, issued January 25, 2017

RedPath Warrants, issued March 22, 2017

September 2022

Underwriters Warrants, issued June 21, 2017

December 2022

Base & Overallotment Warrants, issued June 21, 2017

Warrants issued October 12, 2017

Underwriters Warrants, issued January 25, 2019

( 1,404,639 )

October 24, 2023, the Company entered into a Second Amendment to Loan and Security Agreement (“Amendment”) with BroadOak.

The primary changes to the original BroadOak Loan Agreement were as follows:

Company made a one-time payment in an aggregate amount equal to $ 2,500,000 , on October 30, 2023 and applied the payment in full satisfaction

of the $ 3,000,000 Terminal Payment (as defined in the BroadOak Loan Agreement).

See above regarding the Terminal Payment.

November 1, 2023, the interest rate under the BroadOak Loan Agreement was reduced from 9 % to 8 % through the maturity date of October

31, 2024 or earlier, upon the occurrence of a change in control (“Loan Maturity Date”).

Company has the option to request an extension of the Loan Maturity Date in writing no less than sixty days prior to the Loan Maturity

If BroadOak agrees to the extension, the Loan Maturity Date would automatically be extended.

The Second Amendment was treated as a debt

modification which is accounted for prospectively.

Since the BroadOak Loan is carried at fair value under the fair value option, the Second

Amendment did not result in any extinguishment gain or loss upon amendment, and the impact of the revised terms was incorporated into

the Company’s fourth quarter 2023 fair value calculation.

March 2024, the Company entered into a Third Amendment of the BroadOak Loan Agreement.

See Note 20, Subsequent Events , for more

Stock-Based Compensation

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basis over the vesting period of the grant.

Company began an employee stock purchase plan in 2020 and recognized approximately $ 46,000 and $ 0.1 million in expense related to that

plan for the years ended December 31, 2022 and 2021, respectively.

The Company suspended its plan in July 2022 as there were no shares

available in the original authorized shares pool.

In November 2022, the shareholders approved an increase to the pool of an additional

one million shares.

As of December 31, 2022, we have reserved

776,849 shares of our common stock for issuance under our 2019 Equity Incentive Plan and 1,000,007 shares of our common stock for issuance

under our Employee Stock Purchase Plan and 1,672,746 additional shares available for future grants of awards under our 2019 Equity Incentive

Company began an employee stock purchase plan in 2020 and recognized approximately $ 46,000 in expense related to that plan for the year

ended December 31, 2022.

The Company suspended its plan in July 2022 as there were no shares available in the original authorized shares

In November 2022, the shareholders approved an increase to the pool of an additional one million shares.

of December 31, 2023, we have reserved 692,688 shares of our common stock for issuance under our 2019 Equity Incentive Plan, 1,000,007

shares of our common stock for issuance under our Employee Stock Purchase Plan and 1,677,248 additional shares available for future grants

of awards under our 2019 Equity Incentive Plan.

estimated compensation cost associated with the granting of restricted stock and restricted stock units is based on the fair value of

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period from the grant date to the date when retirement eligibility is achieved.

following table provides the weighted average assumptions used in determining the fair value of the stock options granted during the

years ended December 31, 2022 and December 31, 2021:

were no stock options granted in 2023.

The following table provides the weighted average assumptions used in determining the fair value

of the stock options granted during the year ended December 31, 2022:

of Stock Options, Valuation Assumptions

December 31, 2022

December 31, 2021

Risk-free interest rate

Expected life

Expected volatility

Dividend yield

interest rate

weighted-average fair value of stock options granted during the year ended December 31, 2022 was estimated to be $ 4.50 .

The weighted-average

fair value of stock options granted during the year ended December 31, 2021 was estimated to be $ 4.64 .

There were no options exercised

There were 13,042 options exercised in 2021.

There were no

options exercised in 2023 or 2022.

compensation from continuing operations for the years ended December 31, 2023 and 2022 is as follows:

of Share-Based Compensation Arrangements by Share-Based Payment Award

RSUs and restricted stock

Performance-based awards

Total stock-based compensation expense

and restricted stock

Performance-based

stock-based compensation expense

summary of stock option activity for the year ended December 31, 2023, and changes during such year, is presented below:

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Weighted-Average

Period (in years)

Outstanding at January 1, 2022

Forfeited or expired

Outstanding at December 31, 2022

Exercisable at December 31, 2022

Vested and expected to vest

at January 1, 2023

at December 31, 2023

and expected to vest

summary of the change in of the Company’s non-vested options for the year ended December 31, 2023 is presented below:

of Non Vested Option Activity

Weighted- Average Grant Date Fair Value

Nonvested at January 1, 2022

Nonvested at December 31, 2022

Average Grant Date Fair Value

at January 1, 2023

at December 31, 2023

aggregate fair value of options vested during the years ended December 31, 2023 and 2022 was $ 0.6 million and $ 0.7 million, respectively.

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of Share-Based Compensation, Restricted Stock and Restricted Stock Units Activity

Period (in years)

Nonvested at January 1, 2022

Nonvested at December 31, 2022

at January 1, 2023

at December 31, 2023

aggregate fair value of restricted stock units vested during each of the years ended December 31, 2023 and 2022 was $ 0.3 million and

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of Revenue by Major Customers

Years Ended December 31,

Medicare Advantage

Commercial Payors

Client Billings

provision (benefit) from income taxes on continuing operations for the years ended December 31, 2022 and 2021 is comprised of the following:

Ended December 31,

provision for income taxes on continuing operations for the years ended December 31, 2023 and 2022 is comprised of the following:

of Components of Income Tax Expense (Benefit)

Total current

Total deferred

Provision (benefit) from income taxes

for income taxes

Company performs an analysis each year to determine whether the expected future income will more likely than not be sufficient to realize

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of Deferred Tax Assets and Liabilities

Deferred tax assets:

Federal net operating loss carryforwards

State net operating loss carryforwards

Allowances and reserves

Intangible assets

Credit carryforward

163(j) interest

Deferred revenue

Capitalized 174

Valuation allowance

net operating loss carryforwards

Gross deferred tax assets

Deferred tax liability:

Property and equipment

Deferred tax liability-net valuation allowance

tax liability:

and equipment

tax liability-net valuation allowance

Company’s deferred tax asset and deferred tax liabilities are included within Other long-term liabilities , within the consolidated

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$ 125.8 million of federal net operating losses.

the Company has approximately $ 59.1

million of state net operating losses carryforwards

post 382 ownership change.

The utilization of the federal carryforwards as an available offset to future taxable income is subject to

limitations under federal income tax laws.

current federal income tax law, federal NOLs incurred in tax years beginning after December 31, 2017 may be carried forward indefinitely,

but the deductibility of such federal NOLs is limited to 80% of Federal Taxable Income, and current state net operating losses not utilized

begin to expire this year.

In addition, the Company has approximately $ 60.8 million of state net operating losses

carryforwards post 382 ownership change.

The utilization of the federal carryforwards as an available offset to future taxable income

is subject to limitations under federal income tax laws.

Under current federal income tax law, federal NOLs incurred in tax years beginning

after December 31, 2017 may be carried forward indefinitely, but the deductibility of such federal NOLs is limited to 80% of Federal

Taxable Income, and current state net operating losses not utilized begin to expire this year.

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

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

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

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

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

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

Subsequent ownership changes may further affect

the limitation in future years.

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

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

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

The amount of the annual

limitation, if any, will be determined based on the value of our company immediately prior to an ownership change.

ownership changes may further affect the limitation in future years.

Additionally, U.S.

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

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

During 2021, the

Company completed a 382 assessment of the available NOLs under Section 382 and determined that the Company underwent an ownership change

on March 30, 2017 and July 15, 2019 and as a result, NOLs attributable to the pre-ownership change are subject to a substantial annual

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

The Company has adjusted their NOL carryforwards

to address the impact of the 382 ownership change.

Federal Net Operating Losses of $ 71.2 million are subject to annual limitation as

of the ownership changes for ownership changes.

The remaining $ 56.0 million of NOLs incurred post July 15, 2019 are not subject to any

annual limitation and can be carried forward indefinitely.

tax laws limit the time during which these

carry forwards may be applied against future taxes, therefore, we may not be able to take full advantage of these carry forwards for

federal income tax purposes.

During 2021, the Company completed a 382 assessment of the available NOLs under Section 382 and

determined that the Company underwent an ownership change on March 30, 2017 and July 15, 2019 and as a result, NOLs attributable to

the pre-ownership change are subject to a substantial annual limitation under Section 382 of the Internal Revenue Code due to the

multiple ownership changes.

The Company has adjusted their NOL carryforwards to address the impact of the 382 ownership change.

Federal Net Operating Losses of $ 71.2

million are subject to annual limitation for ownership changes and the Company is utilizing $ 1.0

million during the current year.

The remaining $ 55.6

million of NOLs incurred post July 15, 2019 are not subject to any annual limitation and can be carried forward

indefinitely.

reconciliation of the difference between the federal statutory tax rates and the Company’s effective tax rate from continuing operations

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of Effective Income Tax Rate Reconciliation

Federal statutory rate

State income tax rate, net of Federal tax benefit

Meals and entertainment

Valuation allowance

NJ NOL credit sale

Effective tax rate

statutory rate

income tax rate, net of Federal tax benefit

and entertainment

following table summarizes the change in uncertain tax benefit reserves for the two years ended December 31, 2023:

of Unrecognized Tax Benefits Reserves Roll Forward

Balance of unrecognized benefits as of January 1, 2021

Additions for tax positions of prior years

Balance as of January 1, 2022

Additions for tax positions of prior years

Balance as of December 31, 2022

of December 31, 2022 and 2021, the total amount of gross unrecognized tax benefits was $ 0.9 million and $ 0.9 million, respectively.

total amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate as of December 31, 2022 and 2021 was

$ 0.9 million and $ 0.9 million, respectively.

Company recognized interest and penalties of $ 0.2 million and $ 0.2 million, respectively, related to uncertain tax positions in income

tax expense during each of the years ended December 31, 2022 and 2021.

At December 31, 2022 and 2021, accrued interest and penalties,

net were $ 3.8 million and $ 3.6 million, respectively, and are included in the Other long-term liabilities in the consolidated

balance sheets.

of unrecognized benefits as of January 1, 2022

for tax positions of prior years

as of January 1, 2023

for tax positions of prior years

as of December 31, 2023

of both December 31, 2023 and 2022, the total amount of gross unrecognized tax benefits was $ 0.9 million.

The total amount of unrecognized

tax benefits that, if recognized, would affect the effective tax rate as of both December 31, 2023 and 2022 was $ 0.9 million.

Company recognized interest and penalties of $ 0.2 million related to uncertain tax positions in income tax expense during each of the

years ended December 31, 2023 and 2022.

At December 31, 2023 and 2022, accrued interest and penalties, net were $ 4.0 million and $ 3.8

million, respectively, and are included in the Other long-term liabilities in the consolidated balance sheets.

Company and its subsidiaries file a U.S.

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of Tax Years Subject to Examination

State and Local

the extent there was a failure to file a tax return in a previous year;

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There were no examinations in process by the Internal Revenue Service as of December 31, 2023.

Basic and Diluted Net Loss per Share

Basic and Diluted Net Income (Loss) per Share

reconciliation of the number of shares used in the calculation of basic and diluted earnings per share for the years ended December 31,

1 unchanged sentence

of Weighted Average Number of Shares

Years Ended December 31,

Basic weighted average number of common shares

Potential dilutive effect of stock-based awards

Diluted weighted average number of common shares

Ended December 31,

weighted average number of common shares

dilutive effect of stock-based awards

weighted average number of common shares

Company’s Series B Preferred Stock, on an as converted basis of 7,833,334 shares and the following outstanding stock-based awards

and warrants were excluded from the computation of the effect of dilutive securities on loss per share for the following periods as they

would have been anti-dilutive (rounded to thousands):

were excluded from the computation of the effect of dilutive securities on loss per share for the following periods as they would have

been anti-dilutive (rounded to thousands):

of Anti-dilutive Securities Excluded from Computation of Earnings Per Share

Years Ended December 31,

Restricted stock units (RSUs)

Ended December 31,

stock units (RSUs)

Revolving Line of Credit

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Line for such quarter.

Credit Facility matures on September 30, 2023, and is secured by a first priority lien on substantially all of the assets of the Company

and its subsidiaries.

As of December 31, 2022, the balance of the revolving line was $ 2.5 million.

April 2022, Comerica waived certain covenants specifically relating to the Company receiving financial statements with a going concern

comment or qualification.

In April 2022 and August 2022, Comerica waived certain covenants specifically relating to failure to maintain

bank accounts outside of Comerica in an aggregate amount not to exceed $ 0.5 million during the transition period.

Additionally, in August

2022, Comerica waived certain covenants relating to failure to segregate collections made from government account debtors from collections

made from all other account debtors and customers.

Comerica Loan Agreement contains affirmative and negative restrictive covenants that are applicable whether or not any amounts are outstanding

2 unchanged sentences

encumbrances, etc., could adversely affect our ability to conduct our business.

The Comerica Loan Agreement also contains financial covenants

requiring specified minimum liquidity and minimum revenue thresholds, which the Company was in compliance with as of December 31, 2022,

and also contains customary events of default.

In April 2022, Comerica waived certain covenants specifically relating to the Company

receiving financial statements with a going concern comment or qualification.

In April 2022 and August 2022, Comerica waived certain

covenants specifically relating to failure to maintain bank accounts outside of Comerica in an aggregate amount not to exceed $ 0.5 million

during the transition period.

Additionally, in August 2022, Comerica waived certain covenants relating to failure to segregate collections

made from government account debtors from collections made from all other account debtors and customers.

a condition for Comerica to extend the Credit Facility to the Company, the Company’s existing creditors, Ampersand and 1315 Capital

(the “Existing Creditors”), entered into a Subordination Agreement, dated as of October 13, 2021, pursuant to which each

Existing Creditor agreed to subordinate all of the indebtedness and obligations of the Company owing to such Existing Creditor to all

of the indebtedness and obligations of the Company owing to Comerica (the “Subordination Agreement”).

Each Existing Creditor

further agreed to subordinate all of its respective security interests in assets or property of the Company to Comerica’s security

interests in such assets or property.

The Subordination Agreement provides that it is solely for the benefit of Comerica and each of

the Existing Creditors and is not for the benefit of the Company or any of its subsidiaries.

The Comerica Loan Agreement also contained financial

covenants requiring specified minimum liquidity and minimum revenue thresholds, which the Company was in compliance with as of December

31, 2023, and also contained customary events of default.

As of December 31, 2023, the balance

of the revolving line was zero .

October 6, 2023, effective September 30, 2023, the Company entered into a Fifth Amendment to its Loan and Security Agreement (the “Fifth

Amendment to the Comerica Loan Agreement”) with Comerica Bank providing for a revolving credit facility of up to $ 5,000,000 .

agreement was originally scheduled to expire on September 30, 2024 but has since been terminated.

The Company could have used the proceeds of

the Credit Facility for working capital and other general corporate purposes.

The amount that could have been borrowed under the Credit Facility

was the lower of (i) the revolving limit of $ 5,000,000 and (ii) 80 % of the Company’s eligible accounts receivable plus up to but

not exceeding $ 1.5 million in the Company’s Medicare accounts (excluding Medicare Advantage thyroid accounts).

Borrowings on the

Revolving Line were subject to an interest rate equal to the Term Secured Overnight Financing Rate (“SOFR”) Screen Rate plus

one-tenth of one percent.

Fifth Amendment to the Comerica Loan Agreement contained affirmative and negative restrictive covenants that were applicable whether

or not any amounts are outstanding under the Comerica Loan Agreement.

These restrictive covenants, which included restrictions on

certain mergers, acquisitions, investments, encumbrances, etc., could have adversely affected our ability to conduct our business.

Comerica Loan Agreement also contained financial covenants requiring specified minimum liquidity and minimum adjusted EBITDA

Pursuant to the Fifth Amendment to the Comerica Loan Agreement, Comerica consented to waive a covenant constituting an

event of default under the Comerica Loan Agreement regarding a going concern qualification issued in connection with the

Company’s 2022 fiscal year audit.

Note 20, Subsequent Events, for updates on the current status of the Comerica line.

Supplemental Cash Flow Information

1 unchanged sentence

Cash Flow Information

Cash paid for taxes

Cash paid for interest

Supplemental Disclosures of Non Cash Activities

(in thousands)

Taxes accrued for repurchase of restricted shares

Investment in DiamiR

Conversion of convertible debt into notes payable

paid for taxes

paid for interest

Disclosures of Non Cash Activities

of property and equipment included in accounts payable

of convertible debt into notes payable

Subsequent Events

February 2024, the Company ended the Comerica Loan Agreement.

The Company did not owe anything outstanding on the Line at the time of

termination and does not owe anything further to Comerica Bank.

BroadOak Amendment

On March 29, 2024, the Company entered into a Third Amendment to Loan and Security Agreement with BroadOak.

changes to the Second Amendment to Loan and Security Agreement were as follows:

The maturity date was extended to June 30, 2025 .

Beginning April 1, 2024, the Company will make $ 500,000 monthly payments with the remaining loan balance due on the new maturity date.

BIOSCIENCES, INC.

2 unchanged sentences

in thousands)

Allowance for doubtful accounts

Allowance for doubtful notes

Tax valuation allowance

Allowance for doubtful accounts

Allowance for doubtful notes

Tax valuation allowance

for doubtful accounts

for doubtful notes

valuation allowance

for doubtful notes

valuation allowance

payments and actual write offs, as well as changes in estimates in the reserves.

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 9A. Controls and Procedures