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Item 7. Management’s Discussion and Analysis

2026-03-30 compared with 2025-03-31 · 420 added, 453 removed, 53 unchanged (94% of the section changed)

DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

following Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with

our consolidated financial statements and the related notes appearing elsewhere in this Annual Report on Form 10-K.

This discussion

and analysis includes certain forward-looking statements that involve risks, uncertainties and assumptions.

You should review the Risk

Factors sections of this Form 10-K for a discussion of important factors that could cause actual results to differ materially from the

results described in or implied by such forward-looking statements.

See Forward-Looking Statement Information at the beginning of this

this Annual Report on Form 10-K, we have restated our previously issued consolidated financial statements as of and for the year ended

December 31, 2023.

“Explanatory Note” preceding Forward Looking Statements for background on the restatement, the fiscal periods impacted, control

considerations, and other information.

As a result, we have also restated our previously issued financial information as of and for the

year ended December 31, 2023 and the relevant unaudited interim financial information for the quarterly periods in 2023 and 2024 in this

Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, including

but not limited to information within the Results of Operations to conform the discussion

with the appropriate restated amounts.

See Note 2 to our Consolidated Financial Statements included within Part II, Item 8 contained

in this Annual Report on Form 10-K for additional information related to the 2023 Consolidated Financial Statements restatement including

descriptions of the errors and the impact to our consolidated financial statements.

See also Note 22 to our Consolidated Financial Statements

included within Part II, Item 8 contained in this Annual Report for our restatement of unaudited interim condensed consolidated financial

statements for 2023 and 2024.

As a result of the restatement, it was determined that the Company’s disclosure controls and procedures

were not effective as of December 31, 2024, and that the Company had identified material weaknesses in its internal controls over financial

reporting, as referenced in Item 9A.

have not amended and do not plan to amend our previously filed Annual Reports on Form 10-K or Quarterly Reports on Form 10-Q for the

periods affected by the restatement.

The information that has been previously filed or otherwise reported for these periods is superseded

by the information in this Form 10-K.

Accordingly, the consolidated financial statements and related financial information contained

in such previously filed or furnished reports should no longer be relied upon.

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

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

We develop and commercialize

genomic tests and related first-line assays that can personalize medicine to help improve patient diagnosis and management.

of Our Reliance on CMS and Novitas

January 2022, CMS stated they would no longer reimburse for the use of the Company’s ThyGeNEXT ® and ThyraMIR ®

tests when billed together by the same provider/supplier for the same beneficiary on the same date of service.

However, on February

28, 2022, the Company announced that the National Correct Coding Initiative (NCCI) program issued a response on behalf of CMS stating

that the January 2022 billing policy reimbursement change for ThyGeNEXT ® (0245U) and ThyraMIR ® (0018U)

tests has been retroactively reversed to January 1, 2022.

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

for dates of service after January 1, 2022 would be completed beginning July 1, 2022.

However, on June 9, 2022, the Company was notified

that Novitas re-priced ThyGeNEXT ® (0245U) from $2,919 to $806.59 retroactively effective to January 1, 2022.

2022, the Clinical Diagnostic Laboratory Tests (CDLT) Advisory Panel affirmed a gapfill price of $806.59.

As a result of the ThyGeNEXT ®

pricing change, the Company reduced its 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.

During July 2022, the Company began implementing cost-savings initiatives including a reduction in headcount and

incidental expenses and a freeze on all non-essential travel and hiring.

In August 2022, the Company sold its Pharma Solutions business.

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

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.

2023, Novitas announced that it would not be implementing the final Genetic Testing for Oncology LCD (L39365) as scheduled on July 17,

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 ® .

On July 29, 2024, the Company announced that CMS

granted Novitas an undefined extension to the final decision for the LCD.

As a result, the Company was able to continue offering PancraGEN ®

and the related Point2 ® fluid chemistry tests for amylase, CEA, and glucose for all of 2024.

January 9, 2025, the Company announced the new LCD established non-coverage for its PancraGEN ® test, and it would stop

offering the test and would not accept specimens for first-line fluid chemistry and PancraGEN ® testing after February

As a result of the established non-coverage for PancraGEN ® , the Company announced that its board of directors

had approved a restructuring and cost-savings plan to reduce operating costs and better align its workforce with the loss of PancraGEN ®

(the “Restructuring Plan”).

For more information, please see Potential Restructuring below.

January 27, 2025, the Company announced that CMS had directed its Medicare Administrative Contractors, Novitas and First Coast Service

Options, Inc., to delay implementation of the Genetic Testing for Oncology LCD (L39365), from February 23, 2025 until April 24, 2025.

The Company stated that this change of effective date will allow the Trump administration time to fully review the proposed policy changes,

re-evaluate for themselves the supporting clinical evidence for the PancraGEN ® assay, and fully assess the negative impact

on patient care if the currently proposed LCD comes into effect.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following Management’s

Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with our consolidated financial

statements and the related notes appearing elsewhere in this Annual Report on Form 10-K.

This discussion and analysis includes certain

forward-looking statements that involve risks, uncertainties and assumptions.

You should review the Risk Factors sections of this Form

10-K for a discussion of important factors that could cause actual results to differ materially from the results described in or implied

by such forward-looking statements.

See Forward-Looking Statement Information at the beginning of this Form 10-K.

Company Overview

We are a company that provides

esoteric molecular diagnostic testing and pathology services to aid physicians in their evaluation of cancer risk in patients with indeterminate

biopsies and a perceived risk of cancer from clinical features.

We develop and commercialize genomic tests that can personalize medicine

to help improve patient diagnosis and management.

Due to the decision of CMS to cease reimbursement coverage of our PancraGEN ®

test for assessing the risk of pancreatic cyst progression to cancer on April 24, 2025 which resulted in specimens for first-line fluid

chemistry and PancraGEN ® testing not being accepted by the Company after May 2, 2025, we are currently concentrating our

efforts on our molecular diagnostic tests for thyroid cancer, ThyGeNEXT ® and ThyraMIR ® v2.

Impact of Our Reliance on CMS and Novitas

Along with many laboratories,

we have been negatively impacted by LCD L39365, which was finalized on April 24, 2025, by our local Medicare Administrative Contractor,

This LCD, which governs “Genetic Testing for Oncology,” resulted in the loss of existing coverage for one of our

molecular tests, PancraGEN ® .

On January 9, 2025, the Company

announced the new LCD established non-coverage for its PancraGEN ® test, and that it would stop offering the test and would

not accept specimens for first-line fluid chemistry and PancraGEN ® testing after February 7, 2025.

As a result of the established

non-coverage for PancraGEN ® , the Company announced in January 2025 that its board of directors had approved a restructuring

and cost-savings plan to reduce operating costs and better align its workforce with the loss of PancraGEN ® (the “Restructuring

On January 27, 2025, the

Company announced that CMS had directed its Medicare Administrative Contractors, Novitas and First Coast Service Options, Inc., to delay

implementation of the Genetic Testing for Oncology LCD (L39365), from February 23, 2025, until April 24, 2025.

On April 24, 2025, the

Company announced that the LCD would take effect immediately.

Because PancraGEN ® is primarily ordered for Medicare patients,

the decision to end reimbursement coverage meant that the Company was no longer able to continue offering this test.

Specimens for first-line

fluid chemistry and PancraGEN ® testing were not accepted by the Company after May 2, 2025.

As a result of the loss of

PancraGEN ® , on April 25, 2025, the Company announced implementation of its previously approved Restructuring Plan whereby

it reduced its workforce and impacted employees received severance benefits.

For more information, please see “Restructuring”

Restructuring

discussed above in “Impact of Our Reliance on CMS and Novitas,” on January 14, 2025, the Board of Directors approved a Restructuring

Plan and cost-savings to reduce and better align its workforce with the anticipated loss of PancraGEN ® coverage by CMS.

However, due to the delay in the implementation of the new LCD from February 23, 2025 until April 24, 2025, the Company is re-evaluating

certain parts of the Restructuring Plan and will determine what parts will or will not be postponed or cancelled.

the Restructuring Plan, if implemented, the Company would reduce its workforce and impacted employees would be eligible to receive severance

The Company expects to incur severance costs in in the range of $0.8 million to $1.0 million.

The Company expects that the

loss of PancraGEN ® coverage, if it were to occur, and related restructuring activities would reduce its annual cost of

revenue and operating expenses by approximately $12.5 million to $14.5 million which is expected to substantially offset the expected

loss of its revenues from the sale of PancraGEN ® tests.

The cost that the Company expects to incur in connection with

the Restructuring Plan is subject to several assumptions, and actual results may differ materially.

The Company may also incur additional

costs not currently contemplated due to events that may occur as a result of, or that are associated with, the Restructuring Plan.

the event that CMS/Novitas does not remove coverage for PancraGEN ® , the Company anticipates that the Restructuring Plan

will not be implemented in its current form.

In the meantime, the Company is re-evaluating certain parts of the Restructuring Plan and

will determine what parts will or will not be postponed, or cancelled.

clinical services business commercializes clinically useful molecular diagnostic tests and molecular pathology services.

We commercialize

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

personalize medicine and improve patient diagnosis and management.

Our tests and services provide mutational analysis of genomic material

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

patients suspected of thyroid, pancreatic, and other cancers.

The molecular diagnostic tests we offer enable healthcare providers to

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

that would benefit from increased surveillance or surgical intervention.

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

Our laboratory

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

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

We are leveraging our laboratory

to refine and commercialize our assays and products.

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

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

Our customers consist

primarily of physicians, hospitals, and clinics.

currently have five commercialized molecular diagnostic tests in the marketplace:

PancraGEN ® , a pancreatic cyst and pancreaticobiliary

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

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

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

ThyGeNEXT ® ,

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

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

risk utilizing a proprietary microRNA gene expression classifier;

and RespriDx ® a genomic test that also utilizes our

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

formed primary lung cancer.

global esoteric molecular diagnostics market, valued at $29.9 billion (USD) in 2023 and is expected to grow to $48.3 billion (USD) by

2029 with a Compound Annual Growth rate or CAGR of 8.5% between 2023 and 2029, according to MarketsandMarkets™ (Report Code:

published June 2024).

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

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

are keenly focused on growing our test volumes, securing additional insurance coverage and reimbursement, maintaining and growing our

current reimbursement and supporting revenue growth for our molecular diagnostic tests, introducing related first line product and service

extensions, as well as expanding our business by developing and promoting synergistic products in our markets.

February 24, 2021, the Company was approved to have its common stock quoted on the OTCQX ® Best Market tier of the OTC

Markets Group Inc.

(the “OTCQX”), an electronic quotation service operated by OTC Markets Group Inc.

The trading of the Company’s

common stock commenced on OTCQX at the open of business on February 25, 2021 under the trading symbol IDXG.

December 28, 2023, we received notice from the OTCQX indicating that the Company’s market capitalization has stayed below the required

$5 million for 30 consecutive calendar days preceding the date of such notice, and that the Company no longer meets the standards for

continued qualification for the OTCQX U.S.

As discussed above in “Impact

of Our Reliance on CMS and Novitas,” on January 14, 2025, the Board of Directors approved a Restructuring Plan and cost-savings

to reduce and better align its workforce with the anticipated loss of PancraGEN ® coverage by CMS.

Under the Restructuring Plan

which was announced on April 25, 2025, the Company reduced its workforce and impacted employees were eligible to receive severance benefits.

The Company recorded severance and related costs of approximately $0.7 million in 2025.

The expenses were paid in the quarter that they

were incurred, and the Company has no restructuring liability accrued for as of December 31, 2025.

For the year ended December 31, 2025,

the Company recorded $0.5 million in severance costs that were charged to sales and marketing and $0.2 million that were charged to general

and administrative expenses in the Company’s consolidated statement of operations.

Clinical services

Our clinical services business

commercializes clinically useful molecular diagnostic tests and molecular pathology services.

We commercialize genomic tests and related

first-line assays principally focused on risk-stratification of cancer using the latest technology to help personalize medicine and improve

patient diagnosis and management.

Our tests and services provide mutational analysis of genomic material contained in suspicious cysts,

nodules, and lesions with the goal of better informing surgery or surveillance treatment decisions in patients suspected of thyroid cancer.

The molecular diagnostic tests we offer enable healthcare providers to stratify cancer risk, helping to avoid unnecessary surgical treatment

in patients at low risk, while also helping to identify patients that would benefit from increased surveillance or surgical intervention.

Our mission is to assist

healthcare providers in the diagnosis, triage, and treatment of patients through advanced diagnostics.

Our laboratory is licensed pursuant

to federal law under Clinical Laboratory Improvement Amendments of 1988 (“CLIA”) and are accredited by the College of American

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

We are leveraging our laboratory to refine and commercialize

our assays and products.

We aim to provide physicians and patients with diagnostic options for detecting genomic and other molecular alterations

that are associated with gastrointestinal, endocrine, and other cancers.

Our customers consist primarily of physicians, hospitals, and

We currently have two commercialized

molecular diagnostic tests in the marketplace:

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

and “rule-out” malignancy in thyroid nodules; and ThyraMIR ® v2, used in combination with ThyGeNEXT ® ,

which further stratifies thyroid nodules for malignancy risk utilizing a proprietary microRNA gene expression classifier.

The global esoteric molecular

diagnostics market, valued at $29.6 billion (USD) in 2025, is projected to grow to $32.6 billion (USD) in 2026 and to $75.9 billion (USD)

by 2034, exhibiting a Compound Annual Growth rate, or CAGR, of 11.12% during the forecast period, according to Fortune Business Insights™

FBI108868, Updated January, 2026).

We believe that the molecular

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

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

We are keenly focused on growing

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

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

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

Effective February 25, 2021, our common stock was delisted from The

Nasdaq Capital Market and began trading on the OTCQX Best Market under the symbol “IDXG.”

On May 20, 2025, we received

notice from the OTCQX indicating that the Company’s market capitalization has stayed below the required $5 million for 30 consecutive

calendar days preceding the date of such notice, and that the Company no longer meets the standards for continued qualification for the

tier under the OTCQX Rules for U.S.

Companies section 3.2.b.2.

On March 20, 2024 we received

notice from the OTCQX indicating that the Company’s market capitalization has stayed above the required $5 million for ten consecutive

trading days preceding the date of such notice, and that the Company currently satisfies the standards for continued qualification for

the OTCQX U.S.

tier under the OTCQX Rules for U.S.

OF REPORTING SEGMENTS

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

ACCOUNTING POLICIES

prepare our consolidated financial statements in accordance with U.S.

The Company’s common stock was removed from quotation

on the OTCQX on August 18, 2025.

The Company’s common stock is currently quoted on the OTCID ®

tier of the OTC Markets Group Inc.

(the “OTCIDQX”), an electronic quotation service operated by OTC Markets Group Inc.

DESCRIPTION OF REPORTING SEGMENTS

We operate under one segment

which is the business of developing and selling diagnostic clinical services.

CRITICAL ACCOUNTING POLICIES

We prepare our consolidated

financial statements in accordance with U.S.

generally accepted accounting principles, or (“GAAP”).

The preparation of financial statements and related disclosures in conformity with GAAP requires management to make judgments, estimates

and assumptions at a specific point in time that affect the amounts reported in our consolidated financial statements and disclosed in

the accompanying notes.

These assumptions and estimates are inherently uncertain.

Outlined below are accounting policies, which are important

to our financial position and results of operations and require our management to make significant judgments in their application.

of those judgments can be subjective and complex.

Management’s estimates are based on historical experience, information from third-party

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

results could differ from those estimates.

Additionally, changes in estimates could have a material impact on our consolidated results

of operations in any one period.

For a summary of all of our significant accounting policies, including the accounting policies discussed

below, see Note 1, Nature of Business and Significant Accounting Policies , to our consolidated financial statements included in

this Annual Report on Form 10-K.

The preparation of financial

statements and related disclosures in conformity with GAAP requires management to make judgments, estimates and assumptions at a specific

point in time that affect the amounts reported in our consolidated financial statements and disclosed in the accompanying notes.

assumptions and estimates are inherently uncertain.

Outlined below are accounting policies, which are important to our financial position

and results of operations and require our management to make significant judgments in their application.

Some of those judgments can be

subjective and complex.

Management’s estimates are based on historical experience, information from third-party professionals, facts

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

Actual results could differ

from those estimates.

Additionally, changes in estimates could have a material impact on our consolidated results of operations in any

For a summary of all of our significant accounting policies, including the accounting policies discussed below, see Note 1,

Nature of Business and Significant Accounting Policies , to our consolidated financial statements included in this Annual Report

on Form 10-K.

Revenue Recognition

services derive their revenues from the performance of their proprietary assays or tests.

The Company’s performance obligation

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

The Company subsequently bills third-party payers or

direct-bill payers for the tests performed.

Revenue is recognized based on the estimated transaction price or net realizable value (“NRV”),

which is determined based on historical collection rates by each payer category for each proprietary test offered by the Company.

the extent the transaction price includes variable consideration, for all third party and direct-bill payers and proprietary tests, the

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

based on historical experience.

our clinical services, we regularly review the ultimate amounts received from the third-party and direct-bill payers and related estimated

reimbursement rates and adjust the NRV’s and related contractual allowances accordingly.

If actual collections and related NRV’s

vary significantly from our estimates, we adjust the estimates of contractual allowances, which would affect net revenue in the period

such variances become known.

taxes are based on income for financial reporting purposes calculated using our expected annual effective rate and reflect a current

tax liability or asset for the estimated taxes payable or recoverable on the current year tax return and expected annual changes in deferred

account for income taxes using the asset and liability method.

This method requires recognition of deferred tax assets and liabilities

for expected future tax consequences of temporary differences that currently exist between tax bases and financial reporting bases of

our assets and liabilities based on enacted tax laws and rates.

Deferred tax expense (benefit) is the result of changes in the deferred

tax asset and liability.

A valuation allowance is established, when necessary, to reduce the deferred income tax assets when it is more

likely than not that all or a portion of a deferred tax asset will not be realized.

operate in multiple tax jurisdictions and provide taxes in each jurisdiction where we conduct business and are subject to taxation.

breadth of our operations and the complexity of the various tax laws require assessments of uncertainties and judgments in estimating

the ultimate taxes we will pay.

The final taxes paid are dependent upon many factors, including negotiations with taxing authorities

in various jurisdictions, outcomes of tax litigation and resolution of proposed assessments arising from federal and state audits.

have established estimated liabilities for uncertain federal and state income tax positions.

Uncertain tax positions are recognized in

the financial statements when it is more likely than not (for example, a likelihood of more than fifty percent) that a position taken

or expected to be taken in a tax return would be sustained upon examination by tax authorities that have full knowledge of all relevant

A recognized tax position is then measured as the largest amount of benefit that is greater than fifty percent likely to

be realized upon ultimate settlement.

We adjust our accruals for unrecognized tax benefits as facts and circumstances change, such as

the progress of a tax audit.

We believe that any potential audit adjustments will not have a material adverse effect on our financial

condition or liquidity.

However, any adjustments made may be material to our consolidated results of operations or cash flows for a reporting

Penalties and interest, if incurred, would be recorded as a component of current income tax expense.

judgment is also required in evaluating the need for and magnitude of appropriate valuation allowances against deferred tax assets.

currently have significant deferred tax assets resulting from net operating loss carryforwards and deductible temporary differences.

The realization of these assets is dependent on generating future taxable income.

We perform an analysis quarterly to determine whether

the expected future income will more likely than not be sufficient to realize the deferred tax assets.

Our recent operating results and

projections of future income weighed heavily in our overall assessment.

The existing and forecasted levels of pretax earnings for financial

reporting purposes are not sufficient to generate future taxable income and realize our deferred tax assets and, as a result, we established

a full federal and state valuation allowance for the net deferred tax assets at December 31, 2024 and 2023, as we determined that it

was more likely than not that these assets would not be realized.

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 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.

ASC 606 Revenue Recognition

Clinical services derive

their revenues from the performance of their proprietary assays or tests.

The Company’s performance obligation is fulfilled upon

completion, review and release of test results to the customer.

The Company subsequently bills third-party payers or direct-bill payers

for the tests performed.

Revenue is recognized based on the estimated transaction price or net realizable value (“NRV”), which

is determined based on historical collection rates by each payer category for each proprietary test offered by the Company.

To the extent

the transaction price includes variable consideration, for all third party and direct-bill payers and proprietary tests, the Company estimates

the amount of variable consideration that should be included in the transaction price using the expected value method based on historical

For our clinical services,

we regularly review the ultimate amounts received from the third-party and direct-bill payers and related estimated reimbursement rates

and adjust the NRVs and related contractual allowances accordingly.

If actual collections and related NRVs vary significantly from our

estimates, we adjust the estimates of contractual allowances, which would affect net revenue in the period such variances become known.

Income taxes are based on

income for financial reporting purposes calculated using our expected annual effective rate and reflect a current tax liability or asset

for the estimated taxes payable or recoverable on the current year tax return and expected annual changes in deferred taxes.

We account for income taxes

using the asset and liability method.

This method requires recognition of deferred tax assets and liabilities for expected future tax

consequences of temporary differences that currently exist between tax bases and financial reporting bases of our assets and liabilities

based on enacted tax laws and rates.

Deferred tax expense (benefit) is the result of changes in the deferred tax asset and liability.

A valuation allowance is established, when necessary, to reduce the deferred income tax assets when it is more likely than not that all

or a portion of a deferred tax asset will not be realized.

We operate in multiple tax

jurisdictions and provide taxes in each jurisdiction where we conduct business and are subject to taxation.

The breadth of our operations

and the complexity of the various tax laws require assessments of uncertainties and judgments in estimating the ultimate taxes we will

The final taxes paid are dependent upon many factors, including negotiations with taxing authorities in various jurisdictions, outcomes

of tax litigation and resolution of proposed assessments arising from federal and state audits.

We have established estimated liabilities

for uncertain federal and state income tax positions.

Uncertain tax positions are recognized in the financial statements when it is more

likely than not (for example, a likelihood of more than fifty percent) that a position taken or expected to be taken in a tax return would

be sustained upon examination by tax authorities that have full knowledge of all relevant information.

A recognized tax position is then

measured as the largest amount of benefit that is greater than fifty percent likely to be realized upon ultimate settlement.

our accruals for unrecognized tax benefits as facts and circumstances change, such as the progress of a tax audit.

We believe that any

potential audit adjustments will not have a material adverse effect on our financial condition or liquidity.

However, any adjustments

made may be material to our consolidated results of operations or cash flows for a reporting period.

Penalties and interest, if incurred,

would be recorded as a component of current income tax expense.

Significant judgment is also

required in evaluating the need for and magnitude of appropriate valuation allowances against deferred tax assets.

We currently have significant

deferred tax assets resulting from net operating loss carryforwards and deductible temporary differences.

The realization of these assets

is dependent on generating future taxable income.

We perform an analysis each year to determine whether the expected future income will

more likely than not be sufficient to realize the deferred tax assets.

Our recent operating results and projections of future income weighed

heavily in our overall assessment.

As of December 31, 2025, we are in a cumulative income position for the current year and prior two years.

we have sufficient positive evidence to project future taxable income.

Accordingly, we have released a significant portion of the valuation

allowance against our deferred tax assets as of December 31, 2025 that we determined were more likely than not to

be realized based upon those future projections of taxable income.

The NOL carry forwards are

subject to review and possible adjustment by the Internal Revenue Service and state tax authorities.

NOL, and tax credit carry forwards

may become subject to an annual limitation in the event of certain cumulative changes in the ownership interest of significant stockholders

over a three-year period in excess of 50%, as defined under Sections 382 and 383 of the Code as well as similar state tax provisions.

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

Subsequent ownership changes may further affect the limitation in future years.

Additionally, U.S.

tax laws limit

the time during which these carry forwards may be applied against future taxes, therefore, we may not be able to take full advantage

of these carry forwards for federal income tax purposes.

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

Section 382 and determined that the Company underwent an ownership change on September 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 Code due to the multiple

ownership changes.

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

Compensation Costs

compensation cost associated with the granting of stock-based awards is based on the grant date fair value of the stock award.

the compensation cost, net of estimated forfeitures, over the shorter of the vesting period or the period from the grant date to the

date when retirement eligibility is achieved.

Forfeitures are initially estimated based on historical information and subsequently updated

over the life of the awards to ultimately reflect actual forfeitures.

As a result, changes in forfeiture activity can influence the amount

of stock compensation cost recognized from period-to-period.

primarily use the Black-Scholes option pricing model to determine the fair value of stock options.

The determination of the fair value

of stock-based payment awards is made on the date of grant and is affected by our stock price as well as assumptions made regarding a

number of complex and subjective variables.

These assumptions include:

our expected stock price volatility over the term of the awards;

actual and projected employee stock option exercise behaviors;

the risk-free interest rate;

and expected dividend yield.

in the valuation assumptions could result in a significant change to the cost of an individual award.

However, the total cost of an award

is also a function of the number of awards granted, and as result, we have the ability to manage the cost and value of our equity awards

by adjusting the number of awards granted.

RESULTS OF OPERATIONS

following table sets forth the selected statements of operations data ($ in thousands) as a percentage of revenue for the periods indicated.

The trends illustrated in this table may not be indicative of future operating results.

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 September 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 Code due to the multiple ownership changes.

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

CONSOLIDATED RESULTS OF OPERATIONS

The following table sets

forth the selected statements of operations data ($ in thousands) as a percentage of revenue for the periods indicated.

The trends illustrated

in this table may not be indicative of future operating results.

Years Ended December 31,

(as restated)

Cost of revenue

3 unchanged sentences

General and administrative

Acquisition related amortization expense

Change in fair value of contingent consideration

Total operating expenses

4 unchanged sentences

Income from continuing operations before tax

Provision for income taxes

(Benefit) provision for income taxes

Income from continuing operations

Loss from discontinued operations, net of tax

revenue for the year ended December 31, 2024 increased by $6.9 million, or 17%, to $46.9 million, compared to $40.0 million for the year

ended December 31, 2023.

The increase in net revenue was largely driven by increased test volumes as compared to the prior year.

cost of revenue for the year ended December 31, 2024 increased by $2.0 million, or 14%, to $17.0 million, compared to $15.0 million for

the year ended December 31, 2023.

This increase was primarily driven by the increased test volumes discussed above.

gross profit for the year ended December 31, 2024 increased $4.8 million, or 19%, to $29.9 million, compared to $25.1 million for the

year ended December 31, 2023.

The increase can be attributed to the increase in revenue.

and marketing expense

and marketing expense was $11.7 million for the year ended December 31, 2024 and $10.2 million for the year ended December 31, 2023.

The increase was primarily due to increased employee costs.

Consolidated revenue for

the year ended December 31, 2025 decreased by $8.2 million, or 18%, to $38.7 million, compared to $46.9 million for the year ended December

The decrease in net revenue was primarily driven by the loss of reimbursement for PancraGEN ® in April 2025, which

resulted in specimens for PancraGEN ® testing no longer being accepted by the Company after May 2, 2025.

Cost of revenue

Consolidated cost of revenue

for the year ended December 31, 2025 decreased by $2.4 million, or 14%, to $14.6 million, compared to $17.0 million for the year ended

December 31, 2024.

This decrease was primarily driven by the discontinuance of our PancraGEN ® test resulting from the loss

of reimbursement discussed above.

As a percentage of revenue, cost of revenue increased to approximately 38% for the year ended December

31, 2025 as compared to approximately 36% for the year ended December 31, 2024.

This increase can be attributed to the decline in revenue

mentioned above and costs decreasing at a lower rate overall.

Consolidated gross profit

for the year ended December 31, 2025 decreased $5.8 million, or 19%, to $24.1 million, compared to $29.9 million for the year ended December

The decrease can be attributed to the decrease in revenue resulting from the discontinuance of our PancraGEN ®

test as a result of the loss of reimbursement.

Sales and marketing expense

was $9.9 million for the year ended December 31, 2025 and $11.7 million for the year ended December 31, 2024.

The decrease can be attributed

to the reduction in salesforce size as a result of the discontinuance of our PancraGEN ® test resulting from the loss of

PancraGEN ® reimbursement discussed previously.

As a percentage of revenue, sales and marketing expense was approximately

25% in both periods.

and development

and development expense was $0.7 million for the year ended December 31, 2024 and $0.6 million for the year ended December 31, 2023.

As a percentage of revenue, research and development expense decreased to 1.4% from 1.6% in the prior year period due to the increase

in revenue discussed above.

and administrative

General and administrative expense was approximately $9.5 million for the

year ended December 31, 2024 and $9.4 million for the year ended December 31, 2023.

As a percentage of net revenue, general and administrative

expense was 20% for the year ended December 31, 2024 as compared to 23% for the year ended December 31, 2023.

related amortization expense

was no amortization expense for the year ended December 31, 2024.

During the year ended December 31, 2023, we recorded amortization expense

of approximately $0.9 million which was related to intangible assets associated with our acquisitions.

income from continuing operations was $8.1 million for the year ended December 31, 2024 as compared to operating income of $4.0 million

for the year ended December 31, 2023.

The increase in operating income was primarily attributable to the increases in revenue and gross

26% for the year ended December 31, 2025 and 25% for the year ended December 31, 2024.

Research and development

expense was $0.6 million for the year ended December 31, 2025 and $0.7 million for the year ended December 31, 2024.

As a percentage of

revenue, research and development expense increased to 1.7% from 1.4% in the prior year period due to the decrease in revenue discussed

General and administrative

expense was approximately $9.5 million for both the years ended December 31, 2025 and December 31, 2024, respectively.

As a percentage

of net revenue, general and administrative expense was 25% for the year ended December 31, 2025 as compared to 20% for the year ended

December 31, 2024.

This percentage increase can be attributed to the decline in revenue mentioned above.

Operating income

Operating income from

continuing operations was $4.1 million for the year ended December 31, 2025 as compared to operating income of $8.1 million for the

year ended December 31, 2024.

The decrease in operating income was primarily attributable to the decreases in revenue and gross

profit discussed above.

payable interest expense

Note payable interest expense was $0.6 million for the year ended December

31, 2024 and $0.9 million for the year ended December 31, 2023.

The interest expense was from the BroadOak loan.

the years ended December 31, 2024 and December 31, 2023, there were other expenses, net of approximately $0.5 million and $0.7 million,

respectively.

The amounts are primarily related to the fair value adjustments recorded on the note payable.

for income taxes

tax expense was approximately $4,000 for the year ended December 31, 2024 and $17,000 for the year ended December 31, 2023.

expense for both periods was primarily driven by Texas Gross Receipts Tax.

from discontinued operations, net of tax

had a loss from discontinued operations of approximately $0.2 million and $0.3 million for the years ended December 31, 2024 and December

31, 2023, respectively.

Financial Measures

addition to the United States generally accepted accounting principles, or GAAP, results provided throughout this document, we have provided

certain non-GAAP financial measures to help evaluate the results of our performance.

We believe that these non-GAAP financial measures,

when presented in conjunction with comparable GAAP financial measures, are useful to both management and investors in analyzing our ongoing

business and operating performance.

We believe that providing the non-GAAP information to investors, in addition to the GAAP presentation,

allows investors to view our financial results in the way that management views financial results.

this 10-K, we discuss Adjusted EBITDA, a non-GAAP financial measure.

Adjusted EBITDA is a metric used by management to measure cash flow

of the ongoing business.

Adjusted EBITDA is defined as income or loss from continuing operations, plus depreciation and amortization,

acquisition related expenses, non-cash stock-based compensation, interest and taxes, and other non-cash expenses including asset impairment

costs, change in fair value of contingent consideration, and change in fair value of notes payable.

The table below includes a reconciliation

of this non-GAAP financial measure to the most directly comparable GAAP financial measure.

Reconciliation

of Adjusted EBITDA (Unaudited)

Note payable interest expense

was $0.2 million for the year ended December 31, 2025 and $0.6 million for the year ended December 31, 2024.

The reduction in interest

expense was attributable to a lower principal balance on the BroadOak loan in 2025.

Other expense, net

During the years ended December

31, 2025 and December 31, 2024, there were other expenses, net of approximately $0.1 million and $0.5 million, respectively.

are primarily related to the fair value adjustments recorded on the note payable to BroadOak.

(Benefit) provision for income taxes

The income tax benefit was

approximately $21.2 million for the year ended December 31, 2025 and a provision of $4,000 for the year ended December 31, 2024.

The benefit was related

to the Company’s partial release of its valuation allowance.

See Note 16, Income Taxes , for more details.

Loss from discontinued operations, net of

We had a loss from discontinued

operations of approximately $0.4 million and $0.2 million for the years ended December 31, 2025 and December 31, 2024, respectively.

loss in both periods pertained to the interest accrued on uncertain tax position liabilities.

had net income of $24.6 million for the year ended December 31, 2025 as compared to net income of $6.7 million for the year ended

December 31, 2024.

The increase pertained in large part to our income tax benefit of $21.2 million due to the partial release of our

valuation allowance.

Non-GAAP Financial Measures

In addition to the United

States generally accepted accounting principles, or GAAP, results provided throughout this document, we have provided certain non-GAAP

financial measures to help evaluate the results of our performance.

We believe that these non-GAAP financial measures, when presented

in conjunction with comparable GAAP financial measures, are useful to both management and investors in analyzing our ongoing business

and operating performance.

We believe that providing the non-GAAP information to investors, in addition to the GAAP presentation, allows

investors to view our financial results in the way that management views financial results.

In this 10-K, we discuss

Adjusted EBITDA, a non-GAAP financial measure.

Adjusted EBITDA is a metric used by management to measure cash flow of the ongoing business.

Adjusted EBITDA is defined as income or loss from continuing operations, plus depreciation and amortization, non-cash stock-based compensation,

severance and related expense, interest and taxes, and other non-cash expenses including asset impairment costs, and change in fair value

of notes payable.

The table below includes a reconciliation of this non-GAAP financial measure to the most directly comparable GAAP financial

Reconciliation of Adjusted EBITDA (Unaudited)

($ in thousands)

(as restated)

Income from continuing operations (GAAP Basis)

1 unchanged sentence

Stock-based compensation

Severance & related expense

Asset impairment - lab supplies

Tax (benefit) expense

Interest accretion expense

Financing interest and related costs

Interest income

Note payable interest

Other expense/income, net

Change in fair value of note payable

Change in fair value of contingent consideration

Adjusted EBITDA

AND CAPITAL RESOURCES

October 2021, the Company entered into the Term Loan with BroadOak, providing for a term loan in the aggregate principal amount of $8,000,000.

LIQUIDITY AND CAPITAL RESOURCES

In October 2021, the Company

and its subsidiaries entered into the Term Loan with BroadOak, providing for a term loan in the aggregate principal amount of $8,000,000.

Funding of the Term Loan took place on November 1, 2021.

4 unchanged sentences

$7,500,000 revolving credit facility with Comerica Bank.

The Term Loan has an origination fee of 3% of the Term Loan amount, and a terminal

payment equal to (i) 15% of the original principal amount of the Term Loan if the change of control occurs on or prior to the first anniversary

of the funding of the Term Loan, (ii) 20% of the original principal amount of the Term Loan if the change of control occurs after the

first anniversary but on or prior to the second anniversary of the funding of the Term Loan and (iii) 30% of the original principal amount

of the Term Loan if the change of control occurs after the second anniversary of the funding of the Term Loan, or if the Term Loan is

repaid on its maturity date.

Upon receipt of the term loan, the proceeds were used to repay in full at their maturity the notes extended

by Ampersand and 1315 Capital discussed above.

The Term Loan had an origination fee of 3% of the Term Loan amount, and a terminal

payment equal to (i) 15% of the original principal amount of the Term Loan if the change of control occurred on or prior to the first

anniversary of the funding of the Term Loan, (ii) 20% of the original principal amount of the Term Loan if the change of control occurred

after the first anniversary but on or prior to the second anniversary of the funding of the Term Loan and (iii) 30% of the original principal

amount of the Term Loan if the change of control occurred after the second anniversary of the funding of the Term Loan, or if the Term

Loan is repaid on its maturity date.

Upon receipt of the Term Loan, the proceeds were used to repay in full at their maturity certain

notes extended by Ampersand and 1315 Capital.

See Note 12, Notes Payable, for more details.

In May 2022, the Company issued a

Convertible Note to BroadOak, pursuant to which BroadOak funded a term loan in the aggregate principal amount of $2.0 million which was

converted into a subordinated term loan and was added to the outstanding balance of the Term Loan.

In May 2022, the Company issued a Convertible

Note to BroadOak, pursuant to which BroadOak funded a term loan in the aggregate principal amount of $2.0 million which was converted

into a subordinated term loan and was added to the outstanding balance of the Term Loan.

See Note 12, Notes Payable , in the Company’s

Consolidated Financial Statements for more details.

On October 24, 2023, the

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

changes to the Term Loan were as follows:

The 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 Term Loan).

See Note 12, Notes Payable , in the Company’s Consolidated Financial Statements regarding the Terminal Payment.

Effective November 1, 2023, the interest rate under the Term Loan 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”).

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

If BroadOak agreed to the extension, the Loan Maturity Date would automatically have been extended.

On March 29, 2024, the Company

entered into a Third Amendment to the Loan and Security Agreement with BroadOak (the “Third Amendment”).

The primary changes

to the Second Amendment were as follows:

The maturity date was extended to June 30, 2025.

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

On January 14, 2025, the

Company entered into a Fourth Amendment to the Loan and Security Agreement with BroadOak (the “Fourth Amendment”).

changes to the Third Amendment were as follows:

The maturity date was extended to December 31, 2025.

Beginning July 1, 2025, and continuing through December 1, 2025, the Company made monthly interest-only payments with the remaining loan balance due on the new maturity date.

The Term Loan contained affirmative

and negative restrictive covenants, including restrictions on certain mergers, acquisitions, investments and encumbrances which could

have adversely affected our ability to conduct our business.

The Term Loan also contained customary events of default.

The balance of

the Term Loan was paid in full in November 2025.

For the year ended

December 31, 2025, we had operating income from continuing operations of $4.1 million.

As of the year ended December 31, 2025, we

had cash and cash equivalents of $2.5 million, total current assets of $9.9 million and current liabilities of $5.1 million.

March 20, 2026, we had approximately $2.4 million of cash on hand, net of restricted cash.

During the year ended December

31, 2025, net cash provided by operating activities was $5.8 million.

The main components of cash provided by operating activities were

net income of $24.6 million, offset by a change in deferred taxes of $21.3 million, and a decrease in accounts receivable of $2.9 million.

During the year ended December 31, 2024, net cash provided

by operating activities was $4.6 million.

The main component of cash provided by operating activities was net income of $6.7 million.

During the year ended December

31, 2025, there was net cash used in investing activities of $0.4 million which primarily pertained to capital expenditures associated

with the lab.

During the year ended December 31, 2024, there was net cash used in investing activities of $0.9 million which primarily

pertained to capital expenditures associated with the lab.

For the year ended December

31, 2025, cash used in financing activities was $4.4 million which was for principal repayments of the Term Loan.

See Note 12, Notes

Payable, of the Company’s Consolidated Financial Statements for more details.

For the year ended December 31, 2024, cash used

in financing activities was $5.8 million, of which $5.6 million was for principal repayments of the Term Loan.

See Note 12, Notes Payable,

for more details.

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

The primary changes to the Term Loan 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 Term Loan).

See Note 13, Notes Payable , regarding the Terminal Payment.

November 1, 2023, the interest rate under the Term Loan 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 agreed to the extension, the Loan Maturity Date would automatically be extended.

March 29, 2024, the Company entered into a Third Amendment to the Loan and Security Agreement with BroadOak (the “Third Amendment”),

extending the loan maturity date to June 30, 2025.

The primary changes to the Second Amendment 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.

January 14, 2025, the Company entered into a Fourth Amendment to the Loan and Security Agreement with BroadOak (the “Fourth Amendment”),

extending the loan maturity date to December 31, 2025.

The primary changes to the Third Amendment were as follows:

maturity date was extended to December 31, 2025.

July 1, 2025, and continuing through December 1, 2025, the Company will make monthly interest-only payments with the remaining loan

balance due on the new maturity date.

Term Loan contains affirmative and negative restrictive covenants, including restrictions on certain mergers, acquisitions, investments

and encumbrances which could adversely affect our ability to conduct our business.

The Term Loan also contains customary events of default.

The balance of the loan at December 31, 2024 was $4.4 million.

the year ended December 31, 2024, we had operating income from continuing operations of $8.1 million.

As of the year ended December 31,

2024, we had cash and cash equivalents of $1.5 million, total current assets of $11.8 million and current liabilities of $10.6 million.

As of March 21, 2025, we had approximately $1.3 million of cash on hand, net of restricted cash.

the year ended December 31, 2024, net cash provided by operating activities was $4.6 million.

The main component of cash provided by

operating activities was net income of $6.7 million.

During the year ended December 31, 2023, net cash provided by operating activities

was $3.8 million.

The main component of cash provided by operating activities was net income of $2.0 million, and non-cash expenses of

$2.5 million.

the year ended December 31, 2024, there was net cash used in investing activities of $0.9 million which primarily pertained to capital

expenditures associated with the lab.

During the year ended December 31, 2023, there was net cash used in investing activities of $0.1

the year ended December 31, 2024, cash used in financing activities was $5.8 million, of which $5.6 million was for principal repayments

of the BroadOak loan.

See Note 13, Notes Payable, for more details.

For the year ended December 31, 2023, cash used in financing

activities was $5.0 million, of which $2.5 million was from the repayment on the Revolving Line and $2.5 million was the terminal payment

made to BroadOak.

See Note 13, Notes Payable, for more details.

generated positive cash flows from operations for the year ending December 31, 2024.

We intend to meet our ongoing capital needs by using

our available cash as well as through targeted margin improvement;

of the Company’s Consolidated Financial Statements for more details.

We generated positive cash

flows from operations for the year ending December 31, 2025.

We intend to meet our ongoing capital needs by using our available cash as

well as through targeted margin improvement;

collection of accounts receivable;

containment of costs;

and the potential

use of other financing options and other strategic alternatives.

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

financings, strategic alliances, business development and other sources in order to provide additional liquidity.

With the Company’s

delisting of its common stock from Nasdaq in February 2021, our ability to raise additional capital on terms acceptable to the Company

has been adversely impacted.

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

to the Company.

The Company may seek an uplisting of its common stock to Nasdaq, but no assurances can be given that a Nasdaq listing

will be achieved.

along with many laboratories, we may be affected by the Proposed LCD DL39365, which 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 Medicare coverage for one of our molecular tests, PancraGEN ® .

On June 5, 2023 we announced that Novitas

issued the final LCD of Genetic Testing for Oncology (L39365) which, if 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 ® .

On July 29, 2024, the Company announced that CMS granted Novitas an undefined extension to the final decision

As a result, we were able to continue offering PancraGEN ® and the related Point2 ® fluid chemistry

tests for amylase, CEA, and glucose for all of 2024.

January 9, 2025, we announced that the new LCD established non-coverage for the Company’s PancraGEN ® test, and we

would stop offering the test and would not accept specimens for first-line fluid chemistry and PancraGEN ® testing after

February 7, 2025.

As a result of the established non-coverage for PancraGEN ® .

we announced that our board of directors

had approved the Restructuring Plan to reduce operating costs and better align our workforce with the loss of PancraGEN ® .

January 27, 2025, the Company announced that CMS had directed its Medicare Administrative Contractors, Novitas and First Coast Service

Options, Inc., to delay implementation of the Genetic Testing for Oncology LCD (L39365), from February 23, 2025 until April 24, 2025.

The Company stated that this change of effective date will allow the Trump administration time to fully review the proposed policy changes,

re-evaluate for themselves the supporting clinical evidence for the PancraGEN ® assay, and fully assess the negative impact

on patient care if the currently proposed LCD comes into effect.

a result of CMS’ determination to delay implementation of the Genetic Testing for Oncology LCD (L39365), the Company is re-evaluating

certain parts of the Restructuring Plan and will determine what parts will or will not be postponed or cancelled.

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

of December 31, 2024, contractual obligations with terms exceeding one year and estimated minimum future rental payments required by

non-cancelable operating leases with initial or remaining lease terms exceeding one year are as follows:

and the potential use of other financing

options and other strategic alternatives.

The Company continues to

explore various strategic alternatives, dilutive and non-dilutive sources of funding, including equity and debt financings, strategic

alliances, business development and other sources in order to provide additional liquidity.

With the Company’s delisting of its

common stock from Nasdaq in February 2021, our ability to raise additional capital on terms acceptable to the Company has been adversely

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

The Company may seek an uplisting of its common stock to Nasdaq, but no assurances can be given that a Nasdaq listing will be achieved.

Further, along with many

laboratories, we have been negatively impacted by the LCD L39365, which was finalized on April 24, 2025 by our local Medicare Administrative

Contractor, Novitas.

This LCD, which governs “Genetic Testing for Oncology,” resulted in the loss of existing Medicare coverage

for one of our molecular tests, PancraGEN ® .

On January 9, 2025, we announced

that the new LCD established non-coverage for the Company’s PancraGEN ® test, and that we would stop offering the

test and would not accept specimens for first-line fluid chemistry and PancraGEN ® testing after February 7, 2025.

result of the established non-coverage for PancraGEN ® , we announced, in January 2025, that our board of directors had approved

the Restructuring Plan to reduce operating costs and better align our workforce with the loss of PancraGEN ® .

See “Restructuring.”

On January 27, 2025, the

Company announced that CMS had directed its Medicare Administrative Contractors, Novitas and First Coast Service Options, Inc., to delay

implementation of the Genetic Testing for Oncology LCD (L39365), from February 23, 2025 until April 24, 2025.

On April 24, 2025, the Company

announced that the LCD would take effect immediately and that specimens for first-line fluid chemistry and PancraGEN ® testing

will not be accepted by the Company after May 2, 2025.

On April 25, 2025, the Company announced implementation of its previously approved

Restructuring Plan.

The Company has incurred approximately $0.7 million in severance and related costs as a result of this plan.

Even with the discontinuance

of the PancraGEN ® test resulting from the loss of reimbursement coverage 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 the filing of this report.

As of December 31, 2025,

contractual obligations with terms exceeding one year and estimated minimum future rental payments required by non-cancelable operating

leases with initial or remaining lease terms exceeding one year are as follows:

Operating lease obligations

11 unchanged sentences

Disclosure regarding any amendments to, or any waivers from, a provision of our Code of Business Conduct

that applies to one or more of our directors, our principal executive officer, our principal financial or our principal accounting officer

will be included in a Current Report on Form 8-K within four business days following the date of the amendment or waiver, or posted on

our website (www.interpace.com).

Our Insider Trading Policy, adopted in March 2025, expressly prohibits

our, and our direct and indirect subsidiaries’, employees, directors, officers and designated contractors and consultants, who know

or have access to material information regarding the Company that has not been fully disclosed to the public from (i) trading in Company

securities or engaging in transactions in securities of another company with which the Company conducts business, such as a customer,

partner, distributor or supplier, if they are in possession of or otherwise aware of material information relating to such other company

obtained in course of employment with, or services performed on behalf of, the Company, (ii) pledging Company securities as collateral

for a loan, (iii) engaging in hedging or monetization transactions with respect to Company securities, including through the use of financial

instruments such as prepaid variable forwards, equity swaps, collars, and exchange funds, and (iv) trading in derivative securities related

to our Company securities, which includes publicly traded call and put options.

Our Insider Trading Policy also provides that the Company

will not effect transactions in respect of its securities, or adopt any securities repurchase plans, when it is in possession of material

nonpublic information concerning the Company, other than in compliance with applicable law.

AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

are a “smaller reporting company” for purposes of the disclosure requirements of Item 305 of Regulation S-K and, therefore,

we are not required to provide this information.

that applies to one or more of our directors, our principal executive officer or our principal financial officer will be included in a

Current Report on Form 8-K within four business days following the date of the amendment or waiver, or posted on our website (www.interpace.com).

Our Insider Trading Policy,

adopted in March 2025, expressly prohibits our, and our direct and indirect subsidiaries’, employees, directors, officers and designated

contractors and consultants, who know or have access to material information regarding the Company that has not been fully disclosed to

the public from (i) trading in Company securities or engaging in transactions in securities of another company with which the Company

conducts business, such as a customer, partner, distributor or supplier, if they are in possession of or otherwise aware of material information

relating to such other company obtained in course of employment with, or services performed on behalf of, the Company, (ii) pledging Company

securities as collateral for a loan, (iii) engaging in hedging or monetization transactions with respect to Company securities, including

through the use of financial instruments such as prepaid variable forwards, equity swaps, collars, and exchange funds, and (iv) trading

in derivative securities related to our Company securities, which includes publicly traded call and put options.

Our Insider Trading Policy

also provides that the Company will not effect transactions in respect of its securities, or adopt any securities repurchase plans, when

it is in possession of material nonpublic information concerning the Company, other than in compliance with applicable law.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are a “smaller reporting

company” for purposes of the disclosure requirements of Item 305 of Regulation S-K and, therefore, we are not required to provide

this information.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Financial statements and

the financial statement schedule specified by this Item 8, together with the report thereon of EisnerAmper LLP are presented following

Item 15 of this Annual Report on Form 10-K.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES

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 7. Management’s Discussion and Analysis