What changed in this filing

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Item 1A. Risk Factors

2025-03-31 compared with 2024-04-01 · 1425 added, 1384 removed, 309 unchanged (90% of the section changed)

addition to the other information provided in this Annual Report on Form 10-K, including our financial statements and the related notes

in Part II - Item 8, you should carefully consider the following factors in evaluating our business, operations and financial condition.

Additional risks and uncertainties not presently known to us, which we currently deem immaterial or that are similar to those faced by

other companies in our industry or businesses in general, such as competitive conditions, may also impair our business operations.

occurrence of any of the following risks could have a material adverse effect on our business, financial condition, results of operations

or cash flows.

of Risk Factors

business is subject to numerous risks and uncertainties, discussed in more detail in the following section.

These risks include, among

others, the following key risks:

have a history of operating losses;

expectations of future revenues, expenditures, capital or other funding requirements;

reliance on Medicare reimbursement for our clinical services and our being subject to decisions of the Center for Medicare and Medicaid

Services (“CMS”) regarding reimbursement and pricing of our clinical services which could have a material adverse effect

on our business and financial results;

ability to continue to perform, bill and receive reimbursement for our PancraGEN ® molecular test long-term under the

existing local coverage determination (“LCD”), given that such LCD is currently under review by Novitas, the Company’s

Medicare administrative contractor (“Novitas”);

secured lenders have the right to foreclose on substantially all of our assets if we are unable to timely repay our outstanding obligations;

dependence on sales and reimbursements from our clinical services for all of our revenue;

ability to continue to generate sufficient revenue from our clinical service products and other products and/or solutions that we

develop in the future is important for our ability to meet our financial and other targets;

ability to finance our business on acceptable terms in the future, which may limit the ability to grow our business, develop and

commercialize products and services, develop and commercialize new molecular clinical service solutions and technologies;

obligations to make royalty and milestone payments to our licensors;

dependence on third parties for the supply of some of the materials used in our clinical services tests;

potential adverse impact of current and future laws, licensing requirements and governmental regulations upon our business operations,

including but not limited to the evolving U.S.

regulatory environment related to laboratory developed tests (“LDTs”),

pricing of our tests and services and patient access limitations;

reliance on our sales and marketing activities for future business growth and our ability to continue to expand our sales and marketing

being subject to the controlling interests of our two private equity investors who control, on an as-converted basis, an aggregate

of 64.2% of our outstanding shares of common stock through their holdings of our Series B Preferred Stock, and this concentration

of ownership along with their authority for designation rights for a majority of our directors and their right to approve certain

of our actions has a substantial influence on our decisions;

delisting of our common stock from Nasdaq has adversely affected and may continue to adversely affect our common stock and business and

financial condition;

and other economic and political conditions or events (such as the wars in Ukraine and Israel/Gaza);

ability to implement our business strategy;

potential impact of existing and future contingent liabilities on our financial condition.

Related to our Business

face substantial risks due to our operating history of net losses, negative working capital and insufficient cash flows, and lack of

liquidity to pay our current obligations and if we are unable to continue our business, our shares may have little or no value.

ability to maintain being a profitable operating company is dependent upon our ability to continue to generate revenues and/or obtain

financing adequate to support our cost structure.

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

As of December 31, 2023,

we had cash and cash equivalents of $3.5 million and current liabilities of $17.5 million.

We may need to attempt to raise additional

equity capital by selling shares of common stock or other dilutive or non-dilutive means, if necessary.

However, investing in our securities

may be an unattractive investment for potential investors.

These factors, among others, may make it difficult to raise any additional

depend on a few payers for a significant portion of our revenue for our clinical services, and if one or more significant payers, including

CMS, stops providing reimbursement or decreases the amount of reimbursement for our tests, or if we are unable to successfully negotiate

additional reimbursement contracts for our clinical services tests, our revenue could decline and our commercial success could be compromised.

for clinical services tests performed on patients covered by Medicare was approximately 51% of our revenue for the fiscal year ended

In addition to the other information provided

in this Annual Report on Form 10-K, including our financial statements and the related notes in Part II - Item 8, you should carefully

consider the following factors in evaluating our business, operations and financial condition.

Additional risks and uncertainties not

presently known to us, which we currently deem immaterial or that are similar to those faced by other companies in our industry or businesses

in general, such as competitive conditions, may also impair our business operations.

The occurrence of any of the following risks could

have a material adverse effect on our business, financial condition, results of operations or cash flows.

Summary of Risk Factors

Our business is subject to

numerous risks and uncertainties, discussed in more detail in the following section.

These risks include, among others, the following

We face substantial risks

due to our operating history of net losses, negative working capital and insufficient cash flows, and lack of liquidity to pay our current

obligations and if we are unable to continue our business, our shares may have little or no value.

We depend on a few payers for a significant portion of our revenue for our clinical services, and if one or more significant payers, including CMS, stops providing reimbursement, particularly with respect to our PancraGEN test which is being reviewed by CMS, or decreases the amount of reimbursement for our tests, or if we are unable to successfully negotiate additional reimbursement contracts for our clinical services tests, our revenue could decline and our commercial success could be compromised.

We depend on sales and reimbursements from our clinical services for all of our revenue, and we will need to generate sufficient revenue from these and other products and/or solutions that we develop or acquire to grow our business.

We have issued and may issue additional preferred stock in the future, and the terms of the preferred stock may reduce the value of our common stock.

Two private equity firms and their affiliate’s control, on an as-converted basis, an aggregate of 84% of our outstanding shares of common stock through their holdings of our Series C Preferred Stock, and this concentration of ownership may have a substantial influence on our decisions.

If payers do not provide reimbursement, rescind or modify their reimbursement policies or delay payments for clinical services, or if we are unable to successfully negotiate additional reimbursement contracts for our clinical services tests, our commercial success could be compromised.

Clinical utility studies are important in demonstrating to both customers and payers a molecular diagnostic test’s clinical relevance and value.

If we are unable to identify collaborators willing to work with us to conduct clinical utility studies, or the results of those studies do not demonstrate that a molecular diagnostic test provides clinically meaningful information and value, commercial adoption of such test may be slow, which would negatively impact our business.

Developing new tests and related services and solutions involves a lengthy and complex process, and we may not be able to commercialize on a timely basis, or at all, other tests, assays, services and solutions under development.

If we are unable to develop or acquire tests, services and solutions to keep pace with rapid technological, medical and scientific change, our operating results and competitive position in the market could be affected.

FDA implementation of the LDT final rule would have a material adverse effect on our clinical services and/or cause us to incur substantial costs and delays associated with trying to obtain pre-market clearance or approval and comply with applicable pre- and post-market requirements.

We may not be able to successfully implement future restructuring activities or other significant organizational changes.

The loss of members of our senior management team or our inability to attract and retain key personnel could adversely affect our business.

If we fail to comply with federal, state and foreign laboratory licensing requirements, we could lose the ability to perform our tests or experience disruptions to our business.

Legislation reforming the U.S.

healthcare system may have a material adverse effect on our financial condition and operations.

Our ability to use our net operating loss carryforwards may be limited and may result in increased future tax liability to us.

We may acquire businesses or assets or make investments in other companies or testing, service or solution technologies that could harm our operating results, dilute our stockholders’ ownership, increase our debt or cause us to incur significant expense.

The price and trading volume of our common stock may be highly volatile and could be further affected by events not within our control, and an investment in our common stock could suffer a decline in value.

The delisting of our common stock from Nasdaq and potential delisting from OTCQX ® has adversely affected our common stock and business and financial condition.

The restatement of prior period financial statements may affect investor confidence and raise reputational issues.

If we do not effectively

remediate the material weakness in our internal control existing as of December 31, 2024 ,

or if we otherwise fail to maintain and implement effective internal controls over financial reporting, investors may lose

confidence in the accuracy and completeness of our reported financial information and the market price of our common stock may be

negatively affected.

Any weakness in our disclosure controls and procedures and our internal controls could have a material adverse effect on us.

We have anti-takeover defenses that could delay or prevent an acquisition and could adversely affect the price of our common stock.

Risks Related to our Business

We face substantial

risks due to our operating history of net losses, negative working capital and insufficient cash flows, and lack of liquidity to pay our

current obligations and if we are unable to continue our business, our shares may have little or no value.

Our ability to maintain being

a profitable operating company is dependent upon our ability to continue to generate revenues and/or obtain financing adequate to support

our cost structure.

For the fiscal year ended

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

As of December 31, 2024, we had cash and cash equivalents

of $1.5 million and current liabilities of $10.6 million.

We may need to attempt to raise additional equity capital by selling shares

of common stock or other dilutive or non-dilutive means, if necessary.

However, investing in our securities may be an unattractive investment

for potential investors.

These factors, among others, may make it difficult to raise any additional capital.

a few payers for a significant portion of our revenue for our clinical services, and if one or more significant payers, including CMS,

stops providing reimbursement or decreases the amount of reimbursement for our tests, or if we are unable to successfully negotiate additional

reimbursement contracts for our clinical services tests, our revenue could decline and our commercial success could be compromised.

Revenue for clinical services

tests performed on patients covered by Medicare and Medicare Advantage was approximately 53% of our revenue for the fiscal year ended

December 31, 2024.

The percentage of our revenue derived from significant payers for our clinical services tests is expected to fluctuate

from period to period as our revenue increases, as additional payers provide reimbursement for such tests, and in the event that one

or more payers were to stop reimbursing for our clinical services tests or change their reimbursement amounts.

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

ThyGeNEXT ® and ThyraMIR ® v2 tests when billed together by the same provider/supplier for the same beneficiary

on the same date of service.

On February 28, 2022, the Company announced that the National Correct Coding Initiative (NCCI) program issued

a response on behalf of CMS stating that the January 2022 billing policy reimbursement change for ThyGeNEXT ® (0245U) and

ThyraMIR ® v2 (0018U) tests has been retroactively reversed to January 1, 2022.

CMS was reimbursing the Company for one

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

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

July 1, 2022.

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

to date with CMS.

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

has been and is the current regional MAC that handles claims processing for Medicare services with jurisdiction for PancraGEN ® ,

ThyGeNEXT ® , ThyraMIR ® v2, and RespriDx ® .

On a five-year rotational basis, Medicare requests

bids for its regional MAC services.

Any future changes in the MAC processing or coding for Medicare claims for our molecular diagnostic

tests could result in a change in the coverage or reimbursement rates for such molecular diagnostic tests, or the loss of coverage.

Further, along with many laboratories,

we may be affected by the Proposed LCD DL39365, which is currently under consideration by our local Medicare Administrative Contractor,

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 ® .

The timing and

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

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

updated proposed LCD to reach a conclusion.

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

fluid chemistry tests for amylase, CEA, and glucose.

In the event Novitas ultimately restricts coverage for the PancraGEN ®

test, the Company’s liquidity could be negatively impacted.

PancraGEN ® , ThyraMIR ® v2 and ThyGeNEXT ® tests are reimbursed by Medicare based on applicable

RespriDx ® is currently only covered by the Medicare Advantage program and our BarreGEN ® assay

is not reimbursed at all.

Any future reductions from the current reimbursement rates for our clinical services tests would have a material

adverse effect on business and results of operations.

we have entered into contracts with certain third-party payers which establish allowable rates of reimbursement for our clinical services

tests, payers may suspend or discontinue reimbursement at any time, may require or increase co-payments from patients, or may reduce

the reimbursement rates paid to us.

from period to period as our revenue increases, as additional payers provide reimbursement for such tests, and in the event that one or

more payers were to stop reimbursing for our clinical services tests or change their reimbursement amounts.

In January 2022, the Company

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

and ThyraMIR ® v2 tests when billed together by the same provider/supplier for the same beneficiary on the same date

On February 28, 2022, the Company announced that the National Correct Coding Initiative (NCCI) program issued a response on

behalf of CMS stating that the January 2022 billing policy reimbursement change for ThyGeNEXT ® (0245U) and ThyraMIR ® v2

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

CMS was reimbursing the Company for one of its two thyroid tests, and

had agreed to retroactively reimburse for the second test once they had completed their internal administrative adjustments.

We were notified

by CMS/NCCI that processing of claims for dates of service after January 1, 2022 would be completed beginning July 1, 2022.

date of this filing the Company has no remaining outstanding collections regarding this matter and is fully up to date with CMS.

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

Novitas has been and is the

current regional MAC that handles claims processing for Medicare services with jurisdiction for PancraGEN ® , ThyGeNEXT ® ,

ThyraMIR ® v2, and RespriDx ® .

On a five-year rotational basis, Medicare requests bids for its regional MAC

Any future changes in the MAC processing or coding for Medicare claims for our molecular diagnostic tests could result in a

change in the coverage or reimbursement rates for such molecular diagnostic tests, or the loss of coverage.

On June 5, 2023

we announced that Novitas issued the final LCD of Genetic Testing for Oncology (L39365) which if implemented, would have established

non-coverage for the Company’s widely used PancraGEN ® test effective July 17, 2023.

On July 6, 2023, Novitas announced

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

Novitas then issued

a new, virtually identical proposed LCD affecting the same companies and tests and reaching the same conclusions as noted in the previously

rescinded LCD on July 27, 2023.

In response, we participated in a public meeting presentation and submitted detailed written comments

supporting the use of PancraGEN ® .

The timing and content of any final, implemented LCD was uncertain at that time.

a result, we are able to continue offering PancraGEN ® and the related Point2 ® fluid chemistry tests for

amylase, CEA, and glucose throughout 2024.

On 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 7, 2025.

On January 27, 2025, the Company announced that CMS had directed Novitas 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.

In the event Novitas ultimately restricts coverage for the PancraGEN ® test, our liquidity could be

negatively impacted.

Our ThyraMIR ® v2

and ThyGeNEXT ® tests are and, until April 24, 2025 our PancraGEN ® test is reimbursed by Medicare based on

applicable CPT codes.

RespriDx ® is currently only covered by the Medicare Advantage program and our BarreGEN ®

assay is not reimbursed at all.

Any future reductions from the current reimbursement rates for our clinical services tests would have

a material adverse effect on business and results of operations.

Although we have entered into

contracts with certain third-party payers which establish allowable rates of reimbursement for our clinical services tests, payers may

suspend or discontinue reimbursement at any time, may require or increase co-payments from patients, or may reduce the reimbursement rates

Any such actions could have a negative effect on our revenue for our clinical services tests.

war between Russia and Ukraine or the war between Israel and Hamas could materially adversely affect our business, results of operations,

and financial condition.

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

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

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

theft, and espionage.

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

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

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

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

designated Foreign Terrorist Organization, launched terrorist attacks against Israel.

Israel then declared

war on Hamas and there is currently an armed conflict in Israel and the Gaza Strip as well as elsewhere in the Middle East.

and duration of the wars in Ukraine and Israel/Gaza expanding geopolitical tensions and any resulting market disruptions could be significant

and could potentially have a substantial impact on the global economy and our business for an unknown period of time.

Any of the above-mentioned

factors could materially adversely affect our business, financial condition, and results of operations.

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

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

developments affecting financial institutions, companies in the financial services industry or the financial services industry generally,

including those we do business with, could adversely affect our operations and liquidity.

events involving limited liquidity, defaults, non-performance or other adverse developments that affect financial institutions or other

companies in the financial services industry or the financial services industry generally, or concerns or rumors about any events of

these kinds, have in the past and may in the future lead to market-wide liquidity problems.

For example, on March 10, 2023, Silicon Valley

Bank was closed by the California Department of Financial Protection and Innovation, which appointed the Federal Deposit Insurance Corporation,

or the FDIC, as receiver.

access to our cash and cash equivalents and our ability to access bank financing in amounts adequate to finance our operations could

be significantly impaired by the financial institutions with which we have arrangements directly facing liquidity constraints or failures.

In addition, investor concerns regarding the U.S.

or international financial systems could result in less favorable commercial financing

terms, including higher interest rates or costs and tighter financial and operating covenants, or systemic limitations on access to credit

and liquidity sources, thereby making it more difficult for us to acquire or take down financing on acceptable terms or at all.

decline in available funding or our ability to access our cash and cash equivalents or our ability to access bank financing could adversely

impact our ability to meet our operating expenses and result in breaches of our contractual obligations which could have material adverse

impacts on our operations and liquidity.

have a history of operating losses, and our clinical services have generated limited revenue.

We may continue to incur net losses for

the foreseeable future and may never sustain profitability.

we expect our revenue to grow in the future, there can be no assurance that we will continue to achieve revenue sufficient to offset

Over the next several years, we expect to continue to devote resources to increase adoption of, and reimbursement for, our

clinical services tests and assays and to use our bioinformatics data to develop and enhance our clinical services products and services,

and (ii) develop and acquire additional products and services.

However, although we achieved profitability in 2023, our business may

not sustain profitability, and our failure to sustain profitability in the future could have a material adverse effect on our business,

financial condition and results of operations, as well as cause the market price of our common stock to decline.

quarterly and annual revenues and operating results may vary which may cause the price of our common stock to fluctuate.

quarterly and annual operating results may vary as a result of a number of factors, including:

of cash collections which could impact or affect net realizable values of sales of our tests and services;

of our laboratory to perform tests;

or lack of progress in developing and commercializing tests and services;

or unfavorable decisions about our tests or services or reimbursement rates from government regulators, insurances companies, customers,

or other third party payers;

commencement, delay, cancellation or completion of sales and marketing programs;

and amount of expenses for implementing new programs and accuracy of estimates of resources required for ongoing programs;

of and coverage and reimbursement for our tests;

in our relationships with key collaborators, suppliers, customers and third parties;

in net revenue due to changes in the valuation of our patient accounts;

stock-based compensation and awards;

in R&D, business development and spending for clinical trials;

and integration of any acquisitions;

in regulations related to diagnostics, pharmaceutical, biotechnology and healthcare companies.

believe that quarterly, and in certain instances annual, comparisons of our financial results are not necessarily meaningful and should

not be relied upon as an indication of future performance.

Fluctuations in quarterly and annual results could materially and adversely

affect the market price of our common stock in a manner unrelated to our long-term operating performance.

depend on sales and reimbursements from our clinical services for all of our revenue, and we will need to generate sufficient revenue

from these and other products and/or solutions that we develop or acquire to grow our business.

of our revenue is derived from our clinical services business.

We have molecular diagnostics tests and complimentary service extensions

that are in development, but there can be no assurance that we will be able to successfully commercialize or sufficiently increase revenues

from those tests.

If we are unable to increase sales of our molecular diagnostic tests, expand reimbursement for these tests, or successfully

develop and commercialize other molecular diagnostic tests, our revenue and our ability to achieve and sustain profitability would be

impaired, and this could have a material adverse effect on our business, financial condition and results of operations, and the market

price of our common stock could decline.

rely on third-parties to process and transmit claims to payers for our clinical services, and any delay in processing or transmitting

could have an adverse effect on our revenue and financial condition.

rely on third-parties to provide overall processing of claims and to transmit actual claims to payers based on specific payer billing

If claims for our clinical services are not submitted to payers on a timely basis, or if we are again required to switch to

a different third-party processor to handle claim submissions, we may experience delays in our ability to process claims and receive

payment from payers, which could have a material adverse effect on our business, financial condition and results of operations.

to how we recognize revenue, our quarterly revenue and operating results are likely to fluctuate.

adopted Financial Accounting Standards Board (“FASB”) ASC 606 2014-09, “Revenue from Contracts with Customers (Topic

606)” (or “ASC 606”) effective January 1, 2018.

As of this date, all revenue is recognized on the accrual basis, based

upon actual collection histories for tests and services and respective payers or payer groups.

Due to this change in accounting and the

estimations required under ASC 606, our quarterly revenue and operating results are likely to fluctuate.

As we recognize revenue from

payers under ASC 606, we may subsequently determine that certain judgments underlying estimated reimbursement change, or that the estimates

we used at the time we accrued such revenue vary materially from the actual reimbursements subsequently realized, and our financial results

could be negatively impacted in future quarters.

a result, comparing our operating results on a period-to-period basis may be difficult due to fluctuations resulting from the estimation

process under ASC 606 and such comparisons may not be meaningful.

You should not rely on our past results as an indication of our future

In addition, these fluctuations in revenue may make it difficult in the near term for us, research analysts and investors

to accurately forecast our revenue and operating results.

If our revenue or operating results fall below consensus expectations, the

price of our common stock would likely decline.

deterioration in the collectability of our accounts receivable could have a material adverse effect on our business, financial condition

and results of operations.

of accounts receivable from third-party payers and clients is critical to our operating performance.

Our primary collection risks are

(i) the risk of overestimating our net revenue at the time of billing, which may result in us receiving less than the recorded receivable,

(ii) the risk of non-payment as a result of denied claims, (iii) in certain states, the risk that clients will fail to remit insurance

payments to us when the commercial insurance company pays out-of-network claims directly to the client and (iv) resource and capacity

constraints that may prevent us from handling the volume of billing and collection issues in a timely manner.

Additionally, our ability

to hire and retain experienced personnel affects our ability to bill and collect accounts in a timely manner.

We routinely review accounts

receivable balances in conjunction with these factors and other economic conditions that might ultimately affect the collectability of

the client accounts and factor them into our estimation of collectability as warranted.

Significant changes in business operations, payer

mix or economic conditions, including changes resulting from legislation or other health reform efforts (including to repeal or significantly

change the Affordable Care Act), could affect our collection of accounts receivable, cash flows and results of operations.

increased client concentration in states that permit commercial insurance companies to pay out-of-network claims directly to the client

instead of the provider, could adversely affect our collection of receivables.

Unexpected changes in reimbursement rates by third-party

payers could have a material adverse effect on our business, financial condition and results of operations.

business is substantially dependent on third-party reimbursement.

Any change in the overall health care reimbursement system may adversely

impact our business.

revenues are substantially dependent on third-party reimbursement.

We are paid directly by private insurers and governmental agencies,

often on a fixed fee basis.

If the average fees allowable by private insurers or governmental agencies were reduced, the negative impact

on revenues could have a material effect on our business, financial condition, results of operations and cash flows.

Also, if amounts

owed to us by payors are reduced or not paid on a timely basis, we may be required to increase our concessions and/or decrease our revenues.

Changes to the health care reimbursement system that favor other technologies or treatment regimens and reduce our reimbursements may

adversely affect our ability to market our services profitably.

Overall, such dependency and potential changes could materially and adversely

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

inability to finance our business on acceptable terms in the future may limit our ability to develop and commercialize products and services

and grow our business.

may need to finance our business in the future through collaborations, equity offerings, debt financings, licensing arrangements or other

dilutive or non-dilutive means.

On January 7, 2021, we entered into promissory notes (“Notes”) with our two private equity

investors in the aggregate amount of $5 million with a maturity date of June 30, 2021 which were secured by all of our assets.

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

In addition, also

in October 2021, the Company entered into an $8.0 million term loan with BroadOak, the proceeds of which were used to repay in full at

their maturity the Notes extended by our two private equity investors.

The BroadOak loan agreement 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 BroadOak loan agreement also contains customary events of default.

The Comerica agreement was

repaid in full in 2023 and the agreement was terminated in February 2024.

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.

The Comerica loan agreement also contained financial covenants requiring specified minimum liquidity

and minimum revenue thresholds and also contains customary events of default.

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 million.

In August 2022, the Convertible Note was

converted into a subordinated term loan and was added to the outstanding BroadOak loan balance discussed above.

may need additional funding to repay the BroadOak loan, which has a maturity date of June 30, 2025, as well as to continue operations.

Additional funding may not be available to us on acceptable terms, or at all.

If we seek to raise funds by issuing additional equity

securities, dilution to our stockholders could result.

Any public offering of equity securities must be approved by the holders of our

Series B Preferred Stock who are our private equity investors.

In addition, we are currently ineligible to use a Form S-3 shelf registration

If we are unable to timely repay the Comerica and BroadOak borrowings when due, Comerica and BroadOak will have the right

to foreclose on our assets (BroadOak being subordinated to Comerica).

The incurrence of additional indebtedness or the issuance of certain

equity securities could result in increased fixed payment obligations and could also result in restrictive covenants, such as limitations

on our ability to incur additional debt or issue additional equity, limitations on our ability to acquire or license intellectual property

rights, limitations on our ability to enter into mergers or acquisition of assets, and other operating restrictions that could adversely

affect our ability to conduct our business.

we are unable to timely repay our outstanding obligations, our secured lender will have the right to foreclose on our assets.

October 2021, the Company entered into an $8.0 million term loan with BroadOak, which is secured by all of our assets and has a maturity

date of June 30, 2025.

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 million.

In August 2022, the Convertible Note was converted into a subordinated term loan and was

added to the outstanding BroadOak loan balance discussed above.

We may need additional funding to repay these outstanding obligations

as well as to continue operations.

Additional funding may not be available to us on acceptable terms, or at all.

Adverse developments

affecting financial institutions, companies in the financial services industry or the financial services industry generally, including

those we do business with, could adversely affect our operations and liquidity.

Actual events involving limited

liquidity, defaults, non-performance or other adverse developments that affect financial institutions or other companies in the financial

services industry or the financial services industry generally, or concerns or rumors about any events of these kinds, have in the past

and may in the future lead to market-wide liquidity problems.

For example, on March 10, 2023, Silicon Valley Bank was closed by the California

Department of Financial Protection and Innovation, which appointed the Federal Deposit Insurance Corporation, or the FDIC, as receiver.

Our access to our cash and

cash equivalents and our ability to access bank financing in amounts adequate to finance our operations could be significantly impaired

by the financial institutions with which we have arrangements directly facing liquidity constraints or failures.

In addition, investor

concerns regarding the U.S.

or international financial systems could result in less favorable commercial financing terms, including higher

interest rates or costs and tighter financial and operating covenants, or systemic limitations on access to credit and liquidity sources,

thereby making it more difficult for us to acquire or take down financing on acceptable terms or at all.

Any material decline in available

funding or our ability to access our cash and cash equivalents or our ability to access bank financing could adversely impact our ability

to meet our operating expenses and result in breaches of our contractual obligations which could have material adverse impacts on our

operations and liquidity.

Our quarterly and annual

revenues and operating results may vary which may cause the price of our common stock to fluctuate.

Our quarterly and annual operating

results may vary as a result of a number of factors, including:

uncertainty of cash collections which could impact or affect net realizable values of sales of our tests and services;

inability of our laboratory to perform tests;

progress or lack of progress in developing and commercializing tests and services;

favorable or unfavorable decisions about our tests or services or reimbursement rates from government regulators, insurances companies, customers, or other third party payers;

the commencement, delay, cancellation or completion of sales and marketing programs;

timing and amount of expenses for implementing new programs and accuracy of estimates of resources required for ongoing programs;

adoption of and coverage and reimbursement for our tests;

changes in our relationships with key collaborators, suppliers, customers and third parties;

fluctuations in net revenue due to changes in the valuation of our patient accounts;

fluctuations in R&D, business development and spending for clinical trials;

timing and integration of any acquisitions;

changes in regulations related to diagnostics, pharmaceutical, biotechnology and healthcare companies.

We believe that quarterly,

and in certain instances annual, comparisons of our financial results are not necessarily meaningful and should not be relied upon as

an indication of future performance.

Fluctuations in quarterly and annual results could materially and adversely affect the market price

of our common stock in a manner unrelated to our long-term operating performance.

We depend on sales and

reimbursements from our clinical services for all of our revenue, and we will need to generate sufficient revenue from these and other

products and/or solutions that we develop or acquire to grow our business.

All of our revenue is derived

from our clinical services business.

We have molecular diagnostics tests and complimentary service extensions that are in development,

but there can be no assurance that we will be able to successfully commercialize or sufficiently increase revenues from those tests.

we are unable to increase sales of our molecular diagnostic tests, expand reimbursement for these tests, or successfully develop and commercialize

other molecular diagnostic tests, our revenue and our ability to achieve and sustain profitability would be impaired, and this could have

a material adverse effect on our business, financial condition and results of operations, and the market price of our common stock could

We rely on third-parties

to process and transmit claims to payers for our clinical services, and any delay in processing or transmitting could have an adverse

effect on our revenue and financial condition.

We rely on third-parties to

provide overall processing of claims and to transmit actual claims to payers based on specific payer billing formats.

If claims for our

clinical services are not submitted to payers on a timely basis, or if we are again required to switch to a different third-party processor

to handle claim submissions, we may experience delays in our ability to process claims and receive payment from payers, which could have

a material adverse effect on our business, financial condition and results of operations.

Due to how we recognize

revenue, our quarterly revenue and operating results are likely to fluctuate.

We adopted Financial Accounting

Standards Board (“FASB”) ASC 606 2014-09, “Revenue from Contracts with Customers (Topic 606)” (or “ASC 606”)

effective January 1, 2018.

As of this date, all revenue is recognized on the accrual basis, based upon actual collection histories for

tests and services and respective payers or payer groups.

Due to this change in accounting and the estimations required under ASC 606,

our quarterly revenue and operating results are likely to fluctuate.

As we recognize revenue from payers under ASC 606, we may subsequently

determine that certain judgments underlying estimated reimbursement change, or that the estimates we used at the time we accrued such

revenue vary materially from the actual reimbursements subsequently realized, and our financial results could be negatively impacted in

future quarters.

As a result, comparing our

operating results on a period-to-period basis may be difficult due to fluctuations resulting from the estimation process under ASC 606

and such comparisons may not be meaningful.

You should not rely on our past results as an indication of our future performance.

these fluctuations in revenue may make it difficult in the near term for us, research analysts and investors to accurately forecast our

revenue and operating results.

If our revenue or operating results fall below consensus expectations, the price of our common stock would

likely decline.

A deterioration in the

collectability of our accounts receivable could have a material adverse effect on our business, financial condition and results of operations.

Collection of accounts receivable

from third-party payers and clients is critical to our operating performance.

Our primary collection risks are (i) the risk of overestimating

our net revenue at the time of billing, which may result in us receiving less than the recorded receivable, (ii) the risk of non-payment

as a result of denied claims, (iii) in certain states, the risk that clients will fail to remit insurance payments to us when the commercial

insurance company pays out-of-network claims directly to the client and (iv) resource and capacity constraints that may prevent us from

handling the volume of billing and collection issues in a timely manner.

Additionally, our ability to hire and retain experienced personnel

affects our ability to bill and collect accounts in a timely manner.

We routinely review accounts receivable balances in conjunction with

these factors and other economic conditions that might ultimately affect the collectability of the client accounts and factor them into

our estimation of collectability as warranted.

Significant changes in business operations, payer mix or economic conditions, including

changes resulting from legislation or other health reform efforts (including to repeal or significantly change the Affordable Care Act),

could affect our collection of accounts receivable, cash flows and results of operations.

In addition, increased client concentration

in states that permit commercial insurance companies to pay out-of-network claims directly to the client instead of the provider, could

adversely affect our collection of receivables.

Unexpected changes in reimbursement rates by third-party payers could have a material

adverse effect on our business, financial condition and results of operations.

Our business is substantially

dependent on third-party reimbursement.

Any change in the overall health care reimbursement system may adversely impact our business.

Our revenues are substantially

dependent on third-party reimbursement.

We are paid directly by private insurers and governmental agencies, often on a fixed fee basis.

If the average fees allowable by private insurers or governmental agencies were reduced, the negative impact on revenues could have a

material effect on our business, financial condition, results of operations and cash flows.

Also, if amounts owed to us by payors are

reduced or not paid on a timely basis, we may be required to increase our concessions and/or decrease our revenues.

Changes to the health

care reimbursement system that favor other technologies or treatment regimens and reduce our reimbursements may adversely affect our ability

to market our services profitably.

Overall, such dependency and potential changes could materially and adversely affect our business,

financial condition, results of operations and cash flows.

Our inability to finance

our business on acceptable terms in the future may limit our ability to develop and commercialize products and services and grow our business.

We may need to finance our

business in the future through collaborations, equity offerings, debt financings, licensing arrangements or other dilutive or non-dilutive

On January 7, 2021, we entered into promissory notes (“Notes”) with our two private equity investors in the aggregate

amount of $5 million with a maturity date of June 30, 2021 which were secured by all of our assets.

In October 2021, the Company entered

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

In addition, also in October 2021, the Company

entered into an $8.0 million term loan with BroadOak, the proceeds of which were used to repay in full at their maturity the Notes extended

by our two private equity investors (the “Term Loan”).

The 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 Comerica agreement was repaid in full in 2023 and the agreement

was terminated in February 2024.

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.

The Comerica loan agreement also contained financial covenants requiring specified minimum liquidity and minimum revenue thresholds as

well as customary events of default.

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 million.

In August 2022, the Convertible Note was converted into a subordinated term

loan and was added to the outstanding BroadOak loan balance discussed above.

The term loan has been subsequently amended several times.

See Note 13, Notes Payable to Notes to Consolidated Financial Statements.

Additional funding may not

be available to us on acceptable terms, or at all.

If we seek to raise funds by issuing additional equity securities, dilution to our

stockholders could result.

In addition, we are currently ineligible to use a Form S-3 shelf registration statement.

If we are unable to

timely repay these outstanding obligations, our secured lenders will have the right to foreclose on substantially all of our assets.

Related to our Preferred Stock

have issued and may issue additional preferred stock in the future, and the terms of the preferred stock may reduce the value of our

common stock.

are authorized to issue up to five million shares of preferred stock in one or more series.

Our Board may determine the terms of future

preferred stock offerings without further action by our stockholders.

If we issue additional preferred stock, it could affect stockholder

rights or reduce the market value of our outstanding common stock.

In particular, specific rights granted to future holders of preferred

stock may include voting rights, preferences as to dividends and liquidation, conversion and redemption rights, sinking fund provisions,

and restrictions on our ability to merge with or sell our assets to a third party.

We have designated, issued and sold an aggregate of

47,000 outstanding shares of Series B Preferred Stock.

private equity firms and their affiliate’s control, on an as-converted basis, an aggregate of 64.2% of our outstanding shares of

common stock through their holdings of our Series B Preferred Stock, and this concentration of ownership along with their authority for

designation rights for a majority of our directors and their right to approve certain of our actions has a substantial influence on our

holds 28,000 shares of our Series B Preferred Stock and 1315 Capital holds 19,000 shares of our Series B Preferred Stock.

on an as converted basis, Ampersand and its affiliates beneficially own 38.2% of the Company’s outstanding common stock of 4,376,398

shares and 1315 Capital and its affiliates beneficially own 26.0%.

The conversion and sale by such holders of one or more large blocks

of our common stock could have a negative impact on the market price of our common stock.

stockholders, acting together, have control over the outcome of matters submitted to our stockholders for approval, including the election

of directors and any merger, consolidation or sale of all or substantially all of our assets.

Holders of Series B Preferred Stock were

granted director designation rights over a majority of our Board.

As previously disclosed in Current Reports on Form 8-K filed with the

SEC on November 16, 2023 and December 12, 2023, Edward Chan, a director designated by 1315 Capital, and Robert Gorman, a director designated

by Ampersand, resigned from the Board on November 15, 2023 and December 7, 2023, respectively.

Following these resignations, 1315 Capital

and Ampersand have two designated directors out of the five directors currently serving on the Board.

Accordingly, these stockholders,

acting together, have significant influence over our management and affairs.

This concentration of ownership might harm the market price

of our common stock by delaying, deterring or preventing a change in control, making some transactions more difficult or impossible to

complete without the support of these shareholders, regardless of the impact of this transaction on our other shareholders.

Such ownership

interests could effectively deter a third party from making an offer to buy us, which might involve a premium over our current stock

price or other benefits for our stockholders, or otherwise prevent changes in the control or management.

For example, this concentration

of ownership may have the effect of impeding a merger, consolidation, takeover or other business combination involving us or discouraging

a potential acquirer from making a tender offer or otherwise attempting to obtain control of us.

holders of our Series B Preferred Stock have preferential rights that may be adverse to holders of our common stock.

holders of our Series B Preferred Stock have preferential rights with respect to distributions upon a liquidation or sale of the Company,

including certain business combinations or sales of assets deemed to be a liquidation.

Accordingly, no distributions upon liquidation

may be made to the holders of common stock until the holders of the Series B Preferred Stock have been paid their liquidation preference.

As a result, it is possible that, on a liquidation event (including a sale of the Company) and depending on the price thereof, all amounts

available for the holders of equity of the Company would be paid to the holders of Series B Preferred Stock, and that the holders of

common stock would not receive any payment.

In addition, the holders of Series B Preferred Stock have the right to approve certain actions

of the Company.

April 2020, 1315 Capital consented to, and agreed to vote (by proxy or otherwise) their Series B Preferred Stock in favor of any “Fundamental

Action” taken by the Company as determined by the Company’s Board of Directors.

“Fundamental Actions” include

the Company’s ability to a) authorize, create or issue any debt securities for borrowed money or funded debt;

b) merge with or

acquire all or substantially all of the assets of one or more other companies or entities with a value in excess of $20 million;

by sale, exclusive license or otherwise, material intellectual property rights of the Company or any of its direct or indirect subsidiaries,

other than those accomplished in the ordinary course of business;

d) declare or pay any cash dividend or make any cash distribution on

any equity interests of the Company other than the Series B Shares;

e) incur any additional individual debt, indebtedness for borrowed

money or other additional liabilities;

and f) change any accounting methods or practices of the Company, except for those changes required

by GAAP or applicable regulatory agencies or authorities.

Related to our Clinical Services

for our clinical services tests is complex, and we must dedicate substantial time and resources to the billing process to be paid for

our clinical services tests.

for clinical services is complex, time consuming and expensive.

Depending on the billing arrangement and applicable law, we bill various

payers, including Medicare, insurance companies and patients, all of which have different billing requirements.

To the extent laws or

contracts require us to bill patient co-payments or co-insurance;

timely repay the BroadOak borrowing when due, BroadOak will have the right to foreclose on our assets.

The incurrence of additional indebtedness

or the issuance of certain equity securities could result in increased fixed payment obligations and could also result in restrictive

covenants, such as limitations on our ability to incur additional debt or issue additional equity, limitations on our ability to acquire

or license intellectual property rights, limitations on our ability to enter into mergers or acquisition of assets, and other operating

restrictions that could adversely affect our ability to conduct our business.

If we are unable to

timely repay our outstanding obligations, our secured lender will have the right to foreclose on our assets.

In October 2021, the Company

entered into an $8.0 million term loan with BroadOak, which is secured by all of our assets and has a maturity date of December 31, 2025.

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 million.

In August 2022, the Convertible Note was converted into a subordinated term loan and was added to the outstanding

BroadOak loan balance discussed above.

The term loan has been subsequently amended several times.

See Note 13, Notes Payable to

Notes to Consolidated Financial Statements.

We may need additional funding to repay these outstanding obligations as well as to continue

Additional funding may not be available to us on acceptable terms, or at all.

If we are unable to timely repay these outstanding

obligations, our secured lender will have the right to foreclose on substantially all of our assets.

Risks Related to our Preferred Stock

We have issued and may

issue additional preferred stock in the future, and the terms of the preferred stock may reduce the value of our common stock.

We are authorized to issue

up to five million shares of preferred stock in one or more series.

Our Board may determine the terms of future preferred stock offerings

without further action by our stockholders.

If we issue additional preferred stock, it could affect stockholder rights or reduce the market

value of our outstanding common stock.

In particular, specific rights granted to future holders of preferred stock may include voting

rights, preferences as to dividends and liquidation, conversion and redemption rights, sinking fund provisions, and restrictions on our

ability to merge with or sell our assets to a third party.

We have designated, issued and sold an aggregate of 47,000 outstanding shares

of Series C Preferred Stock.

Two private equity firms

and their affiliate’s control, on an as-converted basis, an aggregate of 84% of our outstanding shares of common stock through their

holdings of our Series C Preferred Stock, and this concentration of ownership may have a substantial influence on our decisions.

Ampersand holds 28,000 shares

of our Series C Preferred Stock and 1315 Capital holds 19,000 shares of our Series C Preferred Stock.

Accordingly, on an as converted

basis, Ampersand and its affiliates beneficially own 50% of the Company’s outstanding common stock of 4,423,093 shares and 1315

Capital and its affiliates beneficially own 34%.

The conversion and sale by such holders of one or more large blocks of our common stock

could have a negative impact on the market price of our common stock.

These stockholders, acting

together, have control over the outcome of matters submitted to our stockholders for approval, including the election of directors and

any merger, consolidation or sale of all or substantially all of our assets.

The Series C Preferred Stock issuance removed the director

designation rights that Ampersand and 1315 Capital had as holders of Series B Preferred Stock, now exchanged for Series C Preferred Stock.

This concentration of ownership of Ampersand and 1315 Capital might harm the market price of our common stock by delaying, deterring or

preventing a change in control, making some transactions more difficult or impossible to complete without the support of these shareholders,

regardless of the impact of this transaction on our other shareholders.

Such ownership interests could effectively deter a third party

from making an offer to buy us, which might involve a premium over our current stock price or other benefits for our stockholders, or

otherwise prevent changes in the control or management.

For example, this concentration of ownership may have the effect of impeding a

merger, consolidation, takeover or other business combination involving us or discouraging a potential acquirer from making a tender offer

or otherwise attempting to obtain control of us.

Risks Related to our Clinical Services

Billing for our clinical

services tests is complex, and we must dedicate substantial time and resources to the billing process to be paid for our clinical services

Billing for clinical services

is complex, time consuming and expensive.

Depending on the billing arrangement and applicable law, we bill various payers, including Medicare,

insurance companies and patients, all of which have different billing requirements.

To the extent laws or contracts require us to bill

patient co-payments or co-insurance;

we must also comply with these requirements.

We may also face increased

risk in our collection efforts, including write-offs of doubtful accounts and long collection cycles, which could have a material adverse

effect on our clinical services, results of operations and financial condition.

Among others, the following factors make the billing

process complex:

between the list price for our molecular diagnostic tests and the reimbursement rates of payers;

with complex federal and state regulations related to billing Medicare;

in billing policy reimbursement by CMS;

among payers as to which party is responsible for payment;

in coverage among payers and the effect of patient co-payments or co-insurance;

in information and billing requirements among payers;

or missing billing information;

resources required to manage the billing and claims appeals process including those of our billing service providers;

inability to bill timely and accurate requisitions and process denials efficiently may result in delayed collections and reduced

reimbursement rates;

overall performance and effectiveness of our billing service providers.

we grow and introduce new clinical services tests and other services, we will likely need to add new codes to our billing process as

well as our financial reporting systems.

Failure or delays in effecting these changes in external billing and internal systems and processes

could negatively affect our revenue and cash flow from our clinical services.

Additionally, our billing activities require us to implement

compliance procedures and oversight, train and monitor our employees or contractors, challenge coverage and payment denials, assist patients

in appealing claims, and undertake internal audits to evaluate compliance with applicable laws and regulations as well as internal compliance

policies and procedures.

We may also face increased risk in our collection efforts,

including write-offs of doubtful accounts and long collection cycles, which could have a material adverse effect on our clinical services,

results of operations and financial condition.

Among others, the following factors make the billing process complex:

differences between the list price for our molecular diagnostic tests and the reimbursement rates of payers;

compliance with complex federal and state regulations related to billing Medicare;

changes in billing policy reimbursement by CMS, particularly with respect to PancraGEN;

disputes among payers as to which party is responsible for payment;

differences in coverage among payers and the effect of patient co-payments or co-insurance;

differences in information and billing requirements among payers;

incorrect or missing billing information;

the resources required to manage the billing and claims appeals process including those of our billing service providers;

our inability to bill timely and accurate requisitions and process denials efficiently may result in delayed collections and reduced reimbursement rates;

the overall performance and effectiveness of our billing service providers.

As we grow and introduce new

clinical services tests and other services, we will likely need to add new codes to our billing process as well as our financial reporting

Failure or delays in effecting these changes in external billing and internal systems and processes could negatively affect our

revenue and cash flow from our clinical services.

Additionally, our billing activities require us to implement compliance procedures and

oversight, train and monitor our employees or contractors, challenge coverage and payment denials, assist patients in appealing claims,

and undertake internal audits to evaluate compliance with applicable laws and regulations as well as internal compliance policies and

Payers also conduct external audits to evaluate payments, which add further complexity to the billing process.

These billing complexities, and the related uncertainty in obtaining payment for our diagnostic solutions, could negatively affect our

revenue and cash flow, our ability to achieve profitability, and the consistency and comparability of our results of operations.

payers do not provide reimbursement, rescind or modify their reimbursement policies or delay payments for clinical services, or if we

are unable to successfully negotiate additional reimbursement contracts for our clinical services tests, our commercial success could

be compromised.

may generally not order our clinical services tests unless payers reimburse a substantial portion of the test price.

There is uncertainty

concerning third-party reimbursement of any test incorporating new molecular diagnostic technology.

Reimbursement by a payer may depend

on a number of factors, including a payer’s determination that tests such as our molecular diagnostic tests are:

(a) not experimental

or investigational;

These billing

complexities, and the related uncertainty in obtaining payment for our diagnostic solutions, could negatively affect our revenue and cash

flow, our ability to achieve profitability, and the consistency and comparability of our results of operations.

If payers do not provide

reimbursement, rescind or modify their reimbursement policies or delay payments for clinical services, or if we are unable to successfully

negotiate additional reimbursement contracts for our clinical services tests, our commercial success could be compromised.

Physicians may generally not

order our clinical services tests unless payers reimburse a substantial portion of the test price.

There is uncertainty concerning third-party

reimbursement of any test incorporating new molecular diagnostic technology.

Reimbursement by a payer may depend on a number of factors,

including a payer’s determination that tests such as our molecular diagnostic tests are:

(a) not experimental or investigational;

(b) pre-authorized and appropriate for the patient;

1 unchanged sentence

(d) supported by peer-reviewed publications;

and (e) included in clinical practice guidelines.

Since each payer generally makes its own decision as to whether to establish a policy

or enter into a contract to reimburse our clinical services tests, seeking these approvals is a time-consuming and costly process.

we have contracted rates of reimbursement with certain payers, which establishes allowable rates of reimbursement for our PancraGEN ® ,

ThyGeNEXT ® , ThyraMIR ® v2 and RespriDx ® assays, payers may suspend or discontinue reimbursement

at any time, may require or increase co-payments from patients, may impose pre-authorization requirements or may reduce the reimbursement

rates paid to us.

and (e) included

in clinical practice guidelines.

Since each payer generally makes its own decision as to whether to establish a policy or enter into a

contract to reimburse our clinical services tests, seeking these approvals is a time-consuming and costly process.

Although we have contracted

rates of reimbursement with certain payers, which establishes allowable rates of reimbursement for our PancraGEN ® , ThyGeNEXT ® ,

ThyraMIR ® v2 and RespriDx ® assays, payers may suspend or discontinue reimbursement at any time, may require

or increase co-payments from patients, may impose pre-authorization requirements, may establish non-coverage for our tests, or may reduce

the reimbursement rates paid to us.

Any such actions could have a negative effect on our revenue for our clinical services tests.

have contracted rates of reimbursement with select payers for PancraGEN ® , ThyGeNEXT ® and ThyraMIR ® v2

and to a limited extent, RespriDx ® .

Without a contracted rate for reimbursement, claims may be denied upon submission,

and we may need to appeal the claims.

Part I – Item 1 – “Business – Government Regulations and Industry Guidelines - Third Party Coverage

and Reimbursement for our Clinical Services – Novitas LCD for PancraGEN ® .

We have contracted rates of

reimbursement with select payers for PancraGEN ® , ThyGeNEXT ® and ThyraMIR ® v2 and to a limited

extent, RespriDx ® .

Without a contracted rate for reimbursement, claims may be denied upon submission, and we may need to

appeal the claims.

The appeals process is time consuming and expensive, and may not result in payment.

continue to focus resources on increasing adoption of and coverage and reimbursement for our molecular diagnostic tests.

We cannot, however,

predict whether, under what circumstances, or at what payment levels payers will reimburse us for our molecular diagnostic tests, if

In addition to our current commercial products on the market and in our pipeline, the launch of any new molecular diagnostic

tests in the future may require that we expend substantial time and resources in order to obtain and retain reimbursement.

consolidation can create uncertainty as to whether coverage and contracts with existing payers will even remain in effect.

Finally, commercial

payers may tie their allowable rates to Medicare rates, and should Medicare reduce their rates, we may be negatively impacted.

fail to establish broad adoption of and reimbursement for our assays, or if we are unable to maintain existing reimbursement from payers,

our ability to generate revenue for our clinical services tests could be harmed and this could have a material adverse effect on our

business, financial condition and results of operations.

may experience a reduction in revenue if physicians decide not to order our clinical services tests.

we are unable to create or maintain sufficient demand for our clinical services tests or if we are unable to expand our product offerings,

we may not maintain profitability.

To generate demand, we will need to continue to educate physicians and the medical community on the

value and benefits of our clinical services tests in order to change clinical practices through clinical trials, published papers, presentations

at scientific conferences and one-on-one education by our commercial sales force, which are costly and time-consuming.

In addition, our

ability to obtain and maintain adequate reimbursement from third-party payers for our clinical services tests will be critical to generating

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

is malignant or benign.

Accordingly, physicians may be reluctant to order a diagnostic test that may suggest surgery is unnecessary.

In addition, our assays are performed at our laboratory rather than by a pathologist in a local laboratory, so pathologists may be reluctant

to support our tests.

Moreover, guidelines for the diagnosis and treatment of thyroid nodules may change to recommend another type of

treatment protocol, and these changes may result in medical practitioners deciding not to use our molecular diagnostic tests.

may make physicians reluctant to use our assays, which could limit our ability to generate revenue from our clinical services tests and

achieve profitability, which could have a material adverse effect on our business, financial condition and results of operations.

may experience a reduction in revenue if patients decide not to use our clinical services tests.

patients may decide not to use our clinical services tests due to price, all or part of which may be payable directly by the patient

if the patient’s insurer denies reimbursement in full or in part.

Many insurers seek to shift more of the cost of healthcare to

patients in the form of higher deductibles, co-payments, or premiums.

In addition, the economic environment in the United States may

result in the loss of healthcare coverage.

Implementation of provisions of PPACA provided coverage for many patients, particularly in

the individual market, who were previously either uninsured or faced high premiums.

However, premiums for many of the plans participating

in the exchanges established as part of this legislation have increased and some health plans have chosen to drop out of these networks

in specific markets or the program altogether.

In 2018, Congress passed legislation revising certain provisions of PPACA and federal

agencies also have issued final rules to repeal or revise regulations governing the implementation of certain provisions of PPACA which

may negatively impact our revenues.

Overall, the scope and timing of any further legislation, judicial action or federal regulations

to limit, revise, or replace PPACA or regulations governing its implementation is uncertain, but if enacted could have a significant

impact on the U.S.

We expect to continue to focus

resources on increasing adoption of and coverage and reimbursement for our molecular diagnostic tests.

We cannot, however, predict whether,

under what circumstances, or at what payment levels payers will reimburse us for our molecular diagnostic tests, if at all.

to our current commercial products on the market and in our pipeline, the launch of any new molecular diagnostic tests in the future may

require that we expend substantial time and resources in order to obtain and retain reimbursement.

Also, payer consolidation can create

uncertainty as to whether coverage and contracts with existing payers will even remain in effect.

Finally, commercial payers may tie their

allowable rates to Medicare rates, and should Medicare reduce their rates, we may be negatively impacted.

If we fail to establish broad

adoption of and reimbursement for our assays, or if we are unable to maintain existing reimbursement from payers, our ability to generate

revenue for our clinical services tests could be harmed and this could have a material adverse effect on our business, financial condition

and results of operations.

We may experience a

reduction in revenue if physicians decide not to order our clinical services tests.

If we are unable to create

or maintain sufficient demand for our clinical services tests or if we are unable to expand our product offerings, we may not maintain

profitability.

To generate demand, we will need to continue to educate physicians and the medical community on the value and benefits

of our clinical services tests in order to change clinical practices through clinical trials, published papers, presentations at scientific

conferences and one-on-one education by our commercial sales force, which are costly and time-consuming.

In addition, our ability to obtain

and maintain adequate reimbursement from third-party payers for our clinical services tests will be critical to generating revenue.

In many cases, practice guidelines

in the United States have recommended therapies or surgery to determine if a patient’s condition is malignant or benign.

physicians may be reluctant to order a diagnostic test that may suggest surgery is unnecessary.

In addition, our assays are performed

at our laboratory rather than by a pathologist in a local laboratory, so pathologists may be reluctant to support our tests.

guidelines for the diagnosis and treatment of thyroid nodules may change to recommend another type of treatment protocol, and these changes

may result in medical practitioners deciding not to use our molecular diagnostic tests.

These facts may make physicians reluctant to use

our assays, which could limit our ability to generate revenue from our clinical services tests and achieve profitability, which could

have a material adverse effect on our business, financial condition and results of operations.

We may experience a

reduction in revenue if patients decide not to use our clinical services tests.

Some patients may decide not

to use our clinical services tests due to price, all or part of which may be payable directly by the patient if the patient’s insurer

denies reimbursement in full or in part.

Many insurers seek to shift more of the cost of healthcare to patients in the form of higher

deductibles, co-payments, or premiums.

In addition, the economic environment in the United States may result in the loss of healthcare

Implementation of provisions of PPACA provided coverage for many patients, particularly in the individual market, who were previously

either uninsured or faced high premiums.

However, premiums for many of the plans participating in the exchanges established as part of

this legislation have increased and some health plans have chosen to drop out of these networks in specific markets or the program altogether.

In 2018, Congress passed legislation revising certain provisions of PPACA and federal agencies also have issued final rules to repeal

or revise regulations governing the implementation of certain provisions of PPACA which may negatively impact our revenues.

scope and timing of any further legislation, judicial action or federal regulations to limit, revise, or replace PPACA or regulations

governing its implementation is uncertain, but if enacted could have a significant impact on the U.S.

healthcare system and our revenues.

These events may result in an increase of uninsured patients, increases in premiums,

and reductions in coverage for some patients.

Patients may therefore delay or forego medical checkups or treatment due to their inability

to pay for our clinical services tests, which could have a negative effect on our revenues.

We do have a Patient Assistance Program that

allows eligible patients to apply for assistance in covering a portion of their out of pocket obligation or all costs for claims denied

as non-covered for our clinical services tests if they meet the criteria for participation.

our clinical services tests do not perform as expected, we may not be able to achieve widespread market adoption among physicians, which

would cause our operating results, reputation, and business to suffer.

success depends in part on the market’s confidence that we can provide reliable, high-quality molecular information products.

is no guarantee that the accuracy and reproducibility we have demonstrated to date will continue, particularly for clinical samples,

as our test volume increases.

We believe that our customers are likely to be particularly sensitive to product defects and errors, including

if our products fail to detect genomic alterations with high accuracy from clinical specimens or if we fail to list, or inaccurately

include, certain treatment options and available clinical trials in our product reports.

As a result, the failure of our products to

perform as expected would significantly impair our operating results and our reputation.

We may be subject to legal claims arising from

any defects or errors in our clinical services tests.

profitability will be impaired by our obligations to make royalty and milestone payments to our licensors for our clinical services tests.

connection with our acquisition of certain assets of Asuragen in 2014, we currently license certain patents and know-how from Asuragen

relating to (i) miR Inform ® thyroid and pancreas cancer diagnostic tests and other tests in development for thyroid

cancer (the “Asuragen License Agreement”), and (ii) the sale of diagnostic devices and the performance of certain services

relating to thyroid cancer (the “CPRIT License Agreement”).

Pursuant to the Asuragen License Agreement and the CPRIT License

Agreement, we are obligated to make certain royalty and milestone payments to Asuragen and the Cancer Prevention & Research Institute

of Texas, or CPRIT.

Under the Asuragen License Agreement, we are obligated to pay royalties on the future net sales of tests utilizing

the miR Inform ® thyroid platform (i.e., ThyGeNEXT ® ), potentially on certain other thyroid diagnostics

tests and potentially on other tests in development for thyroid cancer.

A similar obligation exists if we elect to launch any molecular

tests utilizing the miR Inform ® pancreas platform.

We are also required by the CPRIT License Agreement with Asuragen

to make certain related royalty payments to CPRIT.

The Asuragen obligation regarding royalty payments expires in August 2024.

performing the ThyraMIR ® v2 test, we use products supplied by Exiqon A/S (now a part of Qiagen), subject to a license agreement

with Exiqon A/S.

The license agreement obligates us to pay royalties on the future net sales of our assays that utilize licensed patents

and know-how obtained from Exiqon A/S.

Our profitability will be impaired by our obligations to make royalty payments to our licensors.

Although we believe, under such circumstances, that the increase in revenue will exceed the corresponding royalty payments, our obligations

to our licensors could have a material adverse effect on our business, financial condition, and results of operations if we are unable

to manage our operating costs and expenses at profitable levels.

we breach certain agreements with Asuragen, it could have a material adverse effect on our sales and commercialization efforts for our

thyroid cancer diagnostic tests as well as any potential tests in development for thyroid cancer utilizing their technology and the sale

of diagnostic devices and the performance of certain services relating to thyroid cancer.

the CPRIT License Agreement, we are obligated to pay 5% of net sales on sales of certain diagnostic devices and the performance of services

relating to thyroid cancer that incorporate technology developed and funded under an agreement between Asuragen and the Cancer Prevention

and Research Institute of Texas, subject to a maximum deduction of 3.5% for royalties paid to third parties.

Both of the Asuragen License

Agreement and the CPRIT License Agreement continue until terminated by (i) mutual agreement of the parties or (ii) either party in the

event of a material breach of the respective agreement by the other party.

The Asuragen royalty obligation expires in August 2024.

we materially breach or fail to perform any provision under the CPRIT License Agreement, Asuragen will have the right to terminate our

license from CPRIT, and upon the effective date of such termination, our right to practice the licensed technology would end.

extent such licensed technology rights relate to our molecular diagnostic tests currently on the market, we would expect to exercise

all rights and remedies available to us, including attempting to cure any breach by us, and otherwise seek to preserve our rights under

the technology licensed to us, but we may not be able to do so in a timely manner, at an acceptable cost to us or at all.

material breach under these license agreements could result in our loss of rights to practice the technology licensed to us under these

license agreements, and to the extent such rights and other technology relate to our molecular diagnostic tests currently on the market,

it could have a material adverse effect on our sales and commercialization efforts for NGS-based thyroid and pancreatic cancer molecular

diagnostic tests and other tests in development for thyroid cancer, and the sale of molecular diagnostic tests and the performance of

certain services relating to thyroid cancer.

the agreement, neither party will be held responsible for a default or breach for failure or delay in performing its obligations when

such failure or delay is caused by or results from events beyond reasonable control of the non-performing party, including fires, floods,

earthquakes, hurricanes, embargoes, shortages, epidemics or pandemics, quarantines war, acts of war, etc.

utility studies are important in demonstrating to both customers and payers a molecular diagnostic test’s clinical relevance and

If we are unable to identify collaborators willing to work with us to conduct clinical utility studies, or the results of those

studies do not demonstrate that a molecular diagnostic test provides clinically meaningful information and value, commercial adoption

of such test may be slow, which would negatively impact our business.

utility studies show when and how to use a molecular diagnostic clinical test and describe the particular clinical situations or settings

in which it can be applied and the expected results.

Clinical utility studies also show the impact of the molecular diagnostic test results

on patient care and management.

Clinical utility studies are typically performed with collaborating oncologists or other physicians at

medical centers and hospitals, analogous to a clinical trial, and generally result in peer-reviewed publications.

Sales and marketing

representatives use these publications to demonstrate to customers how to use a molecular diagnostic clinical test, as well as why they

should use it.

These publications are also used with payers to obtain coverage for a molecular diagnostic test, helping to assure there

is appropriate reimbursement.

We will need to conduct additional studies for our molecular diagnostic tests and other diagnostic tests

we plan to introduce, to increase the market adoption and obtain coverage and adequate reimbursement.

Should we not be able to perform

these studies, should the costs or length of time required for these studies exceed their value, or should their results not provide

clinically meaningful data and value for oncologists and other physicians, adoption of our molecular diagnostic tests could be impaired,

and we may not be able to obtain coverage and adequate reimbursement for them.

rely on sole suppliers for some of the materials used in our tests and services, and we may not be able to find replacements or transition

to alternative suppliers in a timely manner.

rely on sole suppliers for certain materials that we use to perform our tests and services for our endocrine cancer diagnostic tests.

We also purchase reagents used in our tests and services from sole-source suppliers.

While we have developed alternate sourcing strategies

for these materials and vendors, we cannot be certain whether these strategies will be effective or the alternative sources will be available

These events may result in an increase of uninsured patients, increases in premiums, and reductions in coverage for some patients.

may therefore delay or forego medical checkups or treatment due to their inability to pay for our clinical services tests, which could

have a negative effect on our revenues.

We do have a Patient Assistance Program that allows eligible patients to apply for assistance

in covering a portion of their out of pocket obligation or all costs for claims denied as non-covered for our clinical services tests

if they meet the criteria for participation.

If our clinical services

tests do not perform as expected, we may not be able to achieve widespread market adoption among physicians, which would cause our operating

results, reputation, and business to suffer.

Our success depends in part

on the market’s confidence that we can provide reliable, high-quality molecular information products.

There is no guarantee that

the accuracy and reproducibility we have demonstrated to date will continue, particularly for clinical samples, as our test volume increases.

We believe that our customers are likely to be particularly sensitive to product defects and errors, including if our products fail to

detect genomic alterations with high accuracy from clinical specimens or if we fail to list, or inaccurately include, certain treatment

options and available clinical trials in our product reports.

As a result, the failure of our products to perform as expected would significantly

impair our operating results and our reputation.

We may be subject to legal claims arising from any defects or errors in our clinical

services tests.

Clinical utility studies

are important in demonstrating to both customers and payers a molecular diagnostic test’s clinical relevance and value.

unable to identify collaborators willing to work with us to conduct clinical utility studies, or the results of those studies do not demonstrate

that a molecular diagnostic test provides clinically meaningful information and value, commercial adoption of such test may be slow, which

would negatively impact our business.

Clinical utility studies show

when and how to use a molecular diagnostic clinical test and describe the particular clinical situations or settings in which it can be

applied and the expected results.

Clinical utility studies also show the impact of the molecular diagnostic test results on patient care

and management.

Clinical utility studies are typically performed with collaborating oncologists or other physicians at medical centers

and hospitals, analogous to a clinical trial, and generally result in peer-reviewed publications.

Sales and marketing representatives

use these publications to demonstrate to customers how to use a molecular diagnostic clinical test, as well as why they should use it.

These publications are also used with payers to obtain coverage for a molecular diagnostic test, helping to assure there is appropriate

reimbursement.

We will need to conduct additional studies for our molecular diagnostic tests and other diagnostic tests we plan to introduce,

to increase the market adoption and obtain coverage and adequate reimbursement.

Should we not be able to perform these studies, should

the costs or length of time required for these studies exceed their value, or should their results not provide clinically meaningful data

and value for oncologists and other physicians, adoption of our molecular diagnostic tests could be impaired, and we may not be able to

obtain coverage and adequate reimbursement for them.

For more information, on how reimbursement has been affected for our PancraGEN test,

please see Part I – Item 1 – “Business – Government Regulations and Industry Guidelines - Third Party Coverage

and Reimbursement for our Clinical Services – Novitas LCD for PancraGEN .”

We rely on sole suppliers

for some of the materials used in our tests and services, and we may not be able to find replacements or transition to alternative suppliers

in a timely manner.

If these suppliers can no longer provide us with the materials we need to perform our tests and services, if the

materials do not meet our quality specifications, or if we cannot obtain acceptable substitute materials, an interruption in test processing

and services could occur.

We rely on sole suppliers

for certain materials that we use to perform our tests and services for our endocrine cancer diagnostic tests.

We also purchase reagents

used in our tests and services from sole-source suppliers.

While we have developed alternate sourcing strategies for these materials and

vendors, we cannot be certain whether these strategies will be effective or the alternative sources will be available in a timely manner.

If these suppliers can no longer provide us with the materials we need to perform our tests and services, if the materials do not meet

our quality specifications, or if we cannot obtain acceptable substitute materials, an interruption in test processing and services could

Any such interruption may directly impact our revenue and cause us to incur higher costs.

In particular, the

continued spread of the coronavirus globally could materially and adversely impact our operations including without limitation our supply

chain, which may have a material and adverse effect on our business, financial condition and results of operations.

may experience problems in scaling our operations, or delays or reagent and supply shortages for our tests and services that could limit

the growth of our revenue.

we encounter difficulties in scaling our operations as a result of, among other things, quality control and quality assurance issues

and availability of reagents and raw material supplies, we will likely experience reduced sales of our tests and services, increased

repair or re-engineering costs, and defects and increased expenses due to switching to alternate suppliers, any of which would reduce

our revenues and gross margins.

Although we attempt to match our capabilities to estimates of marketplace demand, to the extent demand

materially varies from our estimates, we may experience constraints in our operations and delivery capacity, which could adversely impact

revenue in a given fiscal period.

Should our need for raw materials and reagents used in our tests and services fluctuate, we could incur

additional costs associated with either expediting or postponing delivery of those materials or reagents.

we are unable to support demand for our tests and services, or any of our future tests, services or solutions, our business could suffer.

demand for our tests and services grow, we will also need to continue to scale up our testing capacity and processing technology, expand

customer service, billing and systems processes and enhance our internal quality assurance program.

We will also need additional certified

laboratory scientists and other scientific and technical personnel to process higher volumes of our tests and services.

We cannot assure

you that increases in scale, related improvements and quality assurance will be implemented successfully or that appropriate personnel

will be available.

Failure to implement necessary procedures, transition to new processes or hire the necessary personnel could result

in higher costs of processing tests or inability to meet demand.

There can be no assurance that we will be able to perform our testing

and services on a timely basis at a level consistent with demand, or that our efforts to scale our operations will not negatively affect

the quality of test results.

If we encounter difficulty meeting market demand or quality standards, our reputation could be harmed and

our future prospects and our business could suffer, causing a material adverse effect on our business, financial condition and results

of operations.

new tests and related services and solutions involves a lengthy and complex process, and we may not be able to commercialize on a timely

basis, or at all, other tests, assays, services and solutions under development.

new tests, services and solutions will require us to devote considerable resources to research and development, which we may not be in

a position to do.

We may face challenges obtaining sufficient numbers of samples to validate a newly acquired or developed test or service.

In order to develop and commercialize new tests and services, we need to:

significant funds to conduct substantial research and development;

successful analytical and clinical studies;

our laboratory processes to accommodate new tests and services;

and maintain the commercial infrastructure to market and sell new tests and services.

few research and development projects result in commercial products, and success in early clinical studies often is not replicated in

later studies.

At any point, we may abandon development of a test, service or solutions or we may be required to expend considerable

resources repeating clinical studies, which would adversely affect the timing for generating revenue from such test, service or solution.

If a clinical validation study fails to demonstrate the prospectively defined endpoints of the study or if we fail to sufficiently demonstrate

analytical validity, we might choose to abandon the development of the test, service or solution which could harm our business.

competitors may develop and commercialize new competing tests, services and solutions faster than us or at a lower cost, which could

have a material adverse effect on our business, financial condition and results of operations.

we are unable to develop or acquire tests, services and solutions to keep pace with rapid technological, medical and scientific change,

our operating results and competitive position in the market could be affected.

there have been numerous advances in technologies relating to diagnostics, particularly diagnostics that are based on genomic information.

These advances require us to continuously develop our technology and to work to develop new solutions to keep pace with evolving standards

Our services could become obsolete unless we continually innovate and expand our product offerings to include new clinical applications.

If we are unable to develop or acquire new tests, services and solutions or to demonstrate the applicability of our tests and services

for other diseases, our sales could decline and our competitive position could be harmed.

we cannot enter into new clinical study collaborations, our product development and subsequent commercialization could be delayed.

the past, we have entered into clinical study collaborations related to our tests and services, and our success in the future depends

in part on our ability to enter into additional collaborations with highly regarded institutions.

This can be difficult due to internal

and external constraints placed on these organizations.

Some organizations may limit the number of collaborations they have with any

one company so as to not be perceived as biased or conflicted.

Organizations may also have insufficient administrative and related infrastructure

to enable collaboration with many companies at once, which can extend the time it takes to develop, negotiate and implement a collaboration.

Moreover, it may take longer to obtain the samples we need which could delay our trials, publications, and product launches and reimbursement.

Additionally, organizations often insist on retaining the rights to publish the clinical data resulting from the collaboration.

The publication

of clinical data in peer-reviewed journals is a crucial step in commercializing and obtaining reimbursement for our diagnostic tests,

and our inability to control when and if results are published may delay or limit our ability to derive sufficient revenue from them.

the FDA changes its enforcement policy as to LDTs or disagrees with our position that our clinical services tests are LDTs covered by

the FDA’s current enforcement discretion policy, we could be subject to a number of enforcement actions, any of which could have

a material adverse effect on our clinical services and/or incur substantial costs and delays associated with trying to obtain pre-market

clearance or approval and comply with applicable pre- and post-market requirements.

laboratory tests like our clinical services tests are regulated under CLIA as well as by applicable state laws and may also be subject

to FDA regulation, depending on how the test is classified.

For example, the FDA regulates in vitro diagnostic tests (also called

in vitro diagnostics or “IVDs”), specimen collection kits, analyte specific reagents (ASRs), and instruments used

in conducting diagnostic testing as medical devices.

Most tests offered as LDTs are currently subject to enforcement discretion by the

LDTs are defined by FDA as IVDs that are intended for clinical use and are designed, manufactured, and used within a single CLIA-certified,

high-complexity clinical laboratory.

the history of attempts by FDA and Congress to regulate LDTs, there is substantial uncertainty concerning whether FDA’s enforcement

discretion policy will continue.

Most recently, on September 29, 2023, the FDA published a proposed rule on LDTs, in which FDA proposes

to end enforcement discretion for virtually all LDTs in five stages over a four-year period from the date FDA publishes a final rule.

In Phase 1 (effective one year post-finalization), laboratories would be required to comply with medical device (adverse event) reporting

and correction/removal reporting requirements.

In Phase 2 (effective two years post-finalization), laboratories would be required to

comply with all other device requirements ( e.g.

, registration/listing, labeling, investigational use), except for quality systems

In particular, the continued spread of

the coronavirus globally could materially and adversely impact our operations including without limitation our supply chain, which may

have a material and adverse effect on our business, financial condition and results of operations.

We may experience problems

in scaling our operations, or delays or reagent and supply shortages for our tests and services that could limit the growth of our revenue.

If we encounter difficulties

in scaling our operations as a result of, among other things, quality control and quality assurance issues and availability of reagents

and raw material supplies, we will likely experience reduced sales of our tests and services, increased repair or re-engineering costs,

and defects and increased expenses due to switching to alternate suppliers, any of which would reduce our revenues and gross margins.

Although we attempt to match our capabilities to estimates of marketplace demand, to the extent demand materially varies from our estimates,

we may experience constraints in our operations and delivery capacity, which could adversely impact revenue in a given fiscal period.

Should our need for raw materials and reagents used in our tests and services fluctuate, we could incur additional costs associated with

either expediting or postponing delivery of those materials or reagents.

If we are unable to

support demand for our tests and services, or any of our future tests, services or solutions, our business could suffer.

As demand for our tests and

services grow, we will also need to continue to scale up our testing capacity and processing technology, expand customer service, billing

and systems processes and enhance our internal quality assurance program.

We will also need additional certified laboratory scientists

and other scientific and technical personnel to process higher volumes of our tests and services.

We cannot assure you that increases

in scale, related improvements and quality assurance will be implemented successfully or that appropriate personnel will be available.

Failure to implement necessary procedures, transition to new processes or hire the necessary personnel could result in higher costs of

processing tests or inability to meet demand.

There can be no assurance that we will be able to perform our testing and services on a

timely basis at a level consistent with demand, or that our efforts to scale our operations will not negatively affect the quality of

test results.

If we encounter difficulty meeting market demand or quality standards, our reputation could be harmed and our future prospects

and our business could suffer, causing a material adverse effect on our business, financial condition and results of operations.

Developing new tests

and related services and solutions involves a lengthy and complex process, and we may not be able to commercialize on a timely basis,

or at all, other tests, assays, services and solutions under development.

Developing new tests, services

and solutions will require us to devote considerable resources to research and development, which we may not be in a position to do.

may face challenges obtaining sufficient numbers of samples to validate a newly acquired or developed test or service.

In order to develop

and commercialize new tests and services, we need to:

expend significant funds to conduct substantial research and development;

conduct successful analytical and clinical studies;

scale our laboratory processes to accommodate new tests and services;

build and maintain the commercial infrastructure to market and sell new tests and services.

Typically, few research and

development projects result in commercial products, and success in early clinical studies often is not replicated in later studies.

any point, we may abandon development of a test, service or solutions or we may be required to expend considerable resources repeating

clinical studies, which would adversely affect the timing for generating revenue from such test, service or solution.

If a clinical validation

study fails to demonstrate the prospectively defined endpoints of the study or if we fail to sufficiently demonstrate analytical validity,

we might choose to abandon the development of the test, service or solution which could harm our business.

In addition, competitors may

develop and commercialize new competing tests, services and solutions faster than us or at a lower cost, which could have a material adverse

effect on our business, financial condition and results of operations.

If we are unable to

develop or acquire tests, services and solutions to keep pace with rapid technological, medical and scientific change, our operating results

and competitive position in the market could be affected.

Recently, there have been

numerous advances in technologies relating to diagnostics, particularly diagnostics that are based on genomic information.

These advances

require us to continuously develop our technology and to work to develop new solutions to keep pace with evolving standards of care.

services could become obsolete unless we continually innovate and expand our product offerings to include new clinical applications.

we are unable to develop or acquire new tests, services and solutions or to demonstrate the applicability of our tests and services for

other diseases, our sales could decline and our competitive position could be harmed.

If we cannot enter into

new clinical study collaborations, our product development and subsequent commercialization could be delayed.

In the past, we have entered

into clinical study collaborations related to our tests and services, and our success in the future depends in part on our ability to

enter into additional collaborations with highly regarded institutions.

This can be difficult due to internal and external constraints

placed on these organizations.

Some organizations may limit the number of collaborations they have with any one company so as to not be

perceived as biased or conflicted.

Organizations may also have insufficient administrative and related infrastructure to enable collaboration

with many companies at once, which can extend the time it takes to develop, negotiate and implement a collaboration.

Moreover, it may

take longer to obtain the samples we need which could delay our trials, publications, and product launches and reimbursement.

Additionally,

organizations often insist on retaining the rights to publish the clinical data resulting from the collaboration.

The publication of clinical

data in peer-reviewed journals is a crucial step in commercializing and obtaining reimbursement for our diagnostic tests, and our inability

to control when and if results are published may delay or limit our ability to derive sufficient revenue from them.

FDA implementation of

the LDT final rule would have a material adverse effect on our clinical services and/or cause us to incur substantial costs and delays

associated with trying to obtain pre-market clearance or approval and comply with applicable pre- and post-market requirements.

Clinical laboratory tests

like our clinical services tests are regulated under CLIA as well as by applicable state laws and may also be subject to FDA regulation,

depending on how the test is classified.

For example, the FDA regulates in vitro diagnostic tests (also called in vitro diagnostics

or “IVDs”), specimen collection kits, analyte specific reagents (ASRs), and instruments used in conducting diagnostic testing

as medical devices.

Most tests offered as LDTs have historically been subject to enforcement discretion by the FDA.

LDTs are defined by

FDA as IVDs that are intended for clinical use and are designed, manufactured, and used within a single CLIA-certified, high-complexity

clinical laboratory.

On April 29, 2024, however,

the FDA published a final rule on LDTs, in which the FDA outlines its plans to end enforcement discretion for many LDTs in five stages

over a four-year period.

In Phase 1 (effective May 6, 2025), clinical laboratories running LDTs will be required to comply with medical

device (adverse event) reporting and correction/removal reporting requirements, as well as requirements for maintenance of complaint files

under the FDA’s quality systems regulation (QSR).

In Phase 2 (effective May 6, 2026), clinical laboratories will be required to

comply with all other device requirements (e.g., registration/listing, labeling, investigational use), except for the remaining QSR requirements

and premarket review.

In Phase 3 (effective three years post-finalization), laboratories would be required to comply with quality systems

requirements.

In Phase 4 (effective three and a half years post-finalization, but not before October 1, 2027), laboratories would be

required to comply with premarket review requirements for high-risk tests ( i.e.

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

Finally, in Phase 5 (effective four years post-finalization, but not before April 1, 2028), laboratories would be required comply with

premarket review requirements for moderate- and low-risk tests ( i.e.

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

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

The content and timing of any final rule

on LDTs is uncertain at this time.

we are required to submit applications to FDA for our currently-marketed clinical tests and any tests that we may develop in the future,

we may be required to conduct additional studies, which may be time-consuming and costly and could result in our currently-marketed tests

being withdrawn from the market.

Continued compliance with the FDA’s regulations would increase the cost of conducting our clinical

services, and subject us to heightened regulation by the FDA and penalties for failure to comply with these requirements.

comply with applicable regulatory requirements can result in enforcement action by the FDA, such as warning letters, civil monetary penalties,

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

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

regulatory or legislative proposals that would increase general FDA oversight of clinical laboratories or LDTs could negatively impact

our business if additional requirements are imposed.

We are monitoring developments and anticipate that our clinical services products

will be able to comply with requirements that are ultimately imposed by the FDA.

In the meantime, we maintain our CLIA accreditation

and state licenses, which permit the use of LDTs for diagnostic purposes.

notwithstanding any change in existing enforcement policies, if the FDA seeks to enforce the applicable medical device regulations against

our clinical services tests, we could be subject to a wide range of penalties and would likely be prohibited from continuing to offer

the applicable tests in interstate commerce until we have obtained FDA approval, authorization or clearance through the Premarket Approval

(PMA) , de novo or 510(k) process, respectively, as applicable.

Additionally, we could be subject to enforcement for noncompliance

with the FDA’s regulations on marketing and promotional communications, manufacturing, quality and safety standards, labeling,

storage, registration and listing, recordkeeping, adverse event reporting, and any other regulations applicable to IVDs.

enforcement action against us may have a material adverse effect on our clinical services and results of operations.

we are sued for product liability or errors and omissions liability related to our tests and services, we could face substantial liabilities

that exceed our resources.

marketing, sale and use of our tests and services could lead to product liability claims if someone were to allege that the test or service

failed to perform as it was designed.

We may also be subject to liability for errors in the results we provide to physicians or for a

misunderstanding of, or inappropriate reliance upon, the information we provide.

A product liability or errors and omissions liability

claim could result in substantial damages and be costly and time consuming for us to defend.

Although we maintain product liability and

errors and omissions insurance, we cannot be certain that our insurance would fully protect us from the financial impact of defending

against these types of claims or any judgments, fines or settlement costs arising out of such claims.

Any product liability or errors

and omissions liability claim brought against us, with or without merit, could increase our insurance rates or prevent us from securing

insurance coverage in the future.

Additionally, any product liability lawsuit could cause injury to our reputation or cause us to suspend

sales of our products and solutions.

The occurrence of any of these events could have a material adverse effect on our business, financial

condition and results of operations.

failure to comply with fraud and abuse laws or payer regulations could result in our being excluded from participation in Medicare, Medicaid,

or other governmental payer programs, subject to fines, penalties, and repayment obligations, decrease our revenues and adversely affect

our results of operations and financial condition for our clinical services.

Medicare program is administered by CMS, which, like the states that administer their respective state Medicaid programs, imposes extensive

and detailed requirements on diagnostic services providers, including, but not limited to, rules that govern how we structure our relationships

with physicians, how and when we submit reimbursement claims and how we provide our specialized diagnostic services.

In addition, federal

and state laws prohibit fraudulent billing and provide for the recovery of overpayments.

In particular, if we fail to comply with federal

and state documentation, coding and billing rules, we could be subject to liability under the federal False Claims Act, including criminal

and/or civil penalties, loss of licenses and exclusion from the Medicare and Medicaid programs.

The False Claims Act prohibits individuals

and companies from knowingly submitting false claims for payments to, or improperly retaining overpayments from, the government.

payers also have complex documentation, coding, and billing rules, and can bring civil actions against laboratories.

In Phase 3 (effective May 6, 2027), clinical laboratories will be required to comply with all remaining applicable

QSR requirements.

In Phase 4 (effective November 6, 2027), clinical laboratories will be required to comply with premarket review requirements

for high-risk tests (i.e., tests subject to the premarket approval (PMA) requirement).

Finally, in Phase 5 (effective May 6, 2028), clinical

laboratories will be required to comply with premarket review requirements for moderate- and low-risk tests (i.e., tests subject to the

de novo or 510(k) requirement).

Under the final rule, several

types of tests will be eligible for some degree of continued enforcement discretion.

For example, LDTs approved by the New York State

Department of Health will be exempt from premarket review requirements but will remain subject to the requirements of Phases 1 through

Similarly, LDTs first marketed prior to May 6, 2024 that are not subsequently modified, or are modified only in certain limited ways,

will be exempt from the premarket review and most quality systems requirements, but will remain subject to the requirements of Phases

The FDA notes, however, that it retains discretion to pursue enforcement action for violations of the Federal Food, Drug and

Cosmetic Act at any time and intends to do so when appropriate.

The FDA further explains that it may update any of the enforcement discretion

policies set forth in the final rule as circumstances warrant or if the circumstances that inform those policies change, consistent with

the FDA’s good guidance practices.

If we are required to submit

applications to FDA for our currently-marketed clinical tests and any tests that we may develop in the future, we may be required to conduct

additional studies, which may be time-consuming and costly and could result in our currently-marketed tests being withdrawn from the market.

Continued compliance with the FDA’s regulations would increase the cost of conducting our clinical services, and subject us to heightened

regulation by the FDA and penalties for failure to comply with these requirements.

Failure to comply with applicable regulatory requirements

can result in enforcement action by the FDA, such as warning letters, civil monetary penalties, injunctions, criminal prosecution, recall

or seizure, operating restrictions, partial suspension or total shutdown of operations, and denial of or challenges to applications for

clearance, authorization or approval, as well as significant adverse publicity.

Any other regulatory or legislative framework that would

increase general FDA oversight of clinical laboratories or LDTs could negatively impact our business if additional requirements are imposed.

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

imposed by the FDA.

In the meantime, we maintain our CLIA accreditation and state licenses, which permit the use of LDTs for diagnostic

If the FDA seeks to enforce

the applicable medical device regulations against our clinical services tests, we could also be subject enforcement for noncompliance

with the FDA’s regulations on marketing and promotional communications, manufacturing, quality and safety standards, labeling, storage,

registration and listing, recordkeeping, adverse event reporting, and any other regulations applicable to IVDs.

Any adverse enforcement

action against us may have a material adverse effect on our clinical services and results of operations.

If we are sued for product

liability or errors and omissions liability related to our tests and services, we could face substantial liabilities that exceed our resources.

The marketing, sale and use

of our tests and services could lead to product liability claims if someone were to allege that the test or service failed to perform

as it was designed.

We may also be subject to liability for errors in the results we provide to physicians or for a misunderstanding of,

or inappropriate reliance upon, the information we provide.

A product liability or errors and omissions liability claim could result in

substantial damages and be costly and time consuming for us to defend.

Although we maintain product liability and errors and omissions

insurance, we cannot be certain that our insurance would fully protect us from the financial impact of defending against these types of

claims or any judgments, fines or settlement costs arising out of such claims.

Any product liability or errors and omissions liability

claim brought against us, with or without merit, could increase our insurance rates or prevent us from securing insurance coverage in

Additionally, any product liability lawsuit could cause injury to our reputation or cause us to suspend sales of our products

and solutions.

The occurrence of any of these events could have a material adverse effect on our business, financial condition and results

of operations.

Our failure to comply

with applicable Medicare, Medicaid and other third-party payer rules could result in liability under the False Claims Act, our inability

to participate in a governmental payer program, recoupment or returning funds already paid to us, civil monetary penalties, criminal

penalties and/or limitations on the operational function of our laboratory, all of which could adversely affect our results of operations

and financial condition.

Related to our Operations

loss of members of our senior management team or our inability to attract and retain key personnel could adversely affect our business .

a small company with approximately 110 employees, the success of our business depends largely on the skills, experience and performance of

members of our senior management team, including our chief executive officer, and others in key management positions The efforts of these

persons will be critical to us as we continue to grow our clinical services and develop and/or acquire additional molecular diagnostic

If we were to lose one or more of these key employees, we may experience difficulties in competing effectively, developing our

technologies and implementing our business strategy.

In addition, our commercial laboratory operations depend on our ability to attract

and retain highly skilled scientists, including licensed clinical laboratory scientists.

We may not be able to attract or retain qualified

scientists and technicians in the future due to the competition for qualified personnel, and we may have to pay higher salaries to attract

and retain qualified personnel.

We may also be at a disadvantage in recruiting and retaining key personnel as our small size, limited

resources, and limited liquidity may be viewed as providing a less stable environment, with fewer opportunities than would be the case

at one of our larger competitors.

If we are not able to attract and retain the necessary personnel to accomplish our business objectives,

we may experience constraints that could adversely affect our ability to support our clinical laboratory and commercialization.

we lose the support of key opinion leaders or KOL’s, it may limit our revenue growth from our tests or services and our ability

to achieve profitability.

have established relationships with leading oncology opinion leaders at premier cancer institutions and oncology networks.

opinion leaders determine that our existing products and services or other products and services that we develop are not clinically effective,

that alternative technologies are more effective, or if they elect to use internally developed products, we would encounter significant

difficulty validating our testing platform, driving adoption, or establishing our tests as a standard of care, which would limit our

revenue growth and our ability to achieve profitability.

have limited experience in marketing and selling our products, and if we are unable to expand our direct sales and marketing force to

adequately address our customer’s needs, our business may be adversely affected.

we have been selling commercial products since 2014, genomic diagnostics is a relatively new area of science, and we continue to focus

and refine our efforts to sell, market and receive reimbursement for our clinical service products and to leverage our bioinformatics

We may not be able to market, sell, or distribute our existing products or services or other products or services we may develop

effectively enough to support our planned growth.

future sales will depend in large part on our ability to develop, and substantially expand, our sales force and to increase the scope

of our marketing efforts.

with fraud and abuse laws or payer regulations could result in our being excluded from participation in Medicare, Medicaid, or other governmental

payer programs, subject to fines, penalties, and repayment obligations, decrease our revenues and adversely affect our results of operations

and financial condition for our clinical services.

The Medicare program is administered

by CMS, which, like the states that administer their respective state Medicaid programs, imposes extensive and detailed requirements on

diagnostic services providers, including, but not limited to, rules that govern how we structure our relationships with physicians, how

and when we submit reimbursement claims and how we provide our specialized diagnostic services.

In addition, federal and state laws prohibit

fraudulent billing and provide for the recovery of overpayments.

In particular, if we fail to comply with federal and state documentation,

coding and billing rules, we could be subject to liability under the federal False Claims Act, including criminal and/or civil penalties,

loss of licenses and exclusion from the Medicare and Medicaid programs.

The False Claims Act prohibits individuals and companies from

knowingly submitting false claims for payments to, or improperly retaining overpayments from, the government.

Private payers also have

complex documentation, coding, and billing rules, and can bring civil actions against laboratories.

Our failure to comply with applicable

Medicare, Medicaid and other third-party payer rules could result in liability under the False Claims Act, our inability to participate

in a governmental payer program, recoupment or returning funds already paid to us, civil monetary penalties, criminal penalties and/or

limitations on the operational function of our laboratory, all of which could adversely affect our results of operations and financial

Risks Related to our Operations

We may not be able to

successfully implement future restructuring activities or other significant organizational changes.

We have, from time to time,

restructured or made other adjustments to our workforce and manufacturing footprint.

For example, in response to the new LCD which established

non-coverage for our PancraGEN ® test as discussed elsewhere in this Annual Report, we announced that our board of directors

had approved the Restructuring Plan (as defined below) to reduce operating costs and better align its workforce with the loss of PancraGEN ® .

As a result of CMS’ determination to delay implementation of the Genetic Testing for Oncology LCD (L39365) 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.

For more information on the Restructuring Plan, please see Part II – Item 7 – “Management’s Discussion and

Analysis of Financial Condition and Results of Operations – Potential Restructuring .

In the event we proceed with

some or all parts of the Restructuring Plan, there are significant costs involved with the execution of restructuring programs or other

significant organizational changes, including expenses related to severance, asset impairments and other potential charges.

also significant risks involved with such changes, including the potential for significant business disruption, diversion of management’s

time and attention from ongoing operations, loss of human capital talent, temporarily reduced productivity and the risk of failing to

achieve some or all of the anticipated benefits of the restructuring or organizational changes.

We may need to implement additional restructuring

plans or other strategic initiatives in the future in response to market or product changes, performance issues, changes in strategy,

acquisitions and/or other internal or external considerations.

If we are unable to successfully manage and implement any future restructuring

plan, we may not achieve or sustain the expected growth or cost savings benefits of these activities, or do so within the expected timeframe,

and in such instance, our financial condition and results of operations could be materially adversely impacted.

The loss of members

of our senior management team or our inability to attract and retain key personnel could adversely affect our business .

As a small company with approximately

111 employees, the success of our business depends largely on the skills, experience and performance of members of our senior management

team, including our chief executive officer, and others in key management positions The efforts of these persons will be critical to us

as we continue to grow our clinical services and develop and/or acquire additional molecular diagnostic tests.

If we were to lose one

or more of these key employees, we may experience difficulties in competing effectively, developing our technologies and implementing

our business strategy.

In addition, our commercial laboratory operations depend on our ability to attract and retain highly skilled scientists,

including licensed clinical laboratory scientists.

We may not be able to attract or retain qualified scientists and technicians in the

future due to the competition for qualified personnel, and we may have to pay higher salaries to attract and retain qualified personnel.

We may also be at a disadvantage in recruiting and retaining key personnel as our small size, limited resources, and limited liquidity

may be viewed as providing a less stable environment, with fewer opportunities than would be the case at one of our larger competitors.

If we are not able to attract and retain the necessary personnel to accomplish our business objectives, we may experience constraints

that could adversely affect our ability to support our clinical laboratory and commercialization.

If we lose the support

of key opinion leaders or KOL’s, it may limit our revenue growth from our tests or services and our ability to achieve profitability.

We have established relationships

with leading oncology opinion leaders at premier cancer institutions and oncology networks.

If these key opinion leaders determine that

our existing products and services or other products and services that we develop are not clinically effective, that alternative technologies

are more effective, or if they elect to use internally developed products, we would encounter significant difficulty validating our testing

platform, driving adoption, or establishing our tests as a standard of care, which would limit our revenue growth and our ability to achieve

profitability.

We have limited experience

in marketing and selling our products, and if we are unable to expand our direct sales and marketing force to adequately address our customer’s

needs, our business may be adversely affected.

Although we have been selling

commercial products since 2014, genomic diagnostics is a relatively new area of science, and we continue to focus and refine our efforts

to sell, market and receive reimbursement for our clinical service products and to leverage our bioinformatics data.

We may not be able

to market, sell, or distribute our existing products or services or other products or services we may develop effectively enough to support

our planned growth.

Our future sales will depend

in large part on our ability to develop, and substantially expand, our sales force and to increase the scope of our marketing efforts.

Our target market of physicians is a large and diverse market.

As a result, we believe it is necessary to develop

a sales force that includes sales representatives with specific technical backgrounds.

We will also need to attract and develop marketing

personnel with industry expertise.

As a result, we believe it is necessary to develop a sales force that includes

sales representatives with specific technical backgrounds.

We will also need to attract and develop marketing personnel with industry

Competition for such employees is intense.

We may not be able to attract and retain personnel or be

able to build an efficient and effective sales and marketing force, which could negatively impact sales and market acceptance of our

products and services and limit our revenue growth and potential profitability.

expected future growth will impose significant added responsibilities on members of management, including the need to identify, recruit,

maintain, and integrate additional employees.

Our future financial performance and our ability to commercialize our products and leverage

our data and to compete effectively will depend in part on our ability to manage this potential future growth effectively, without compromising

our sales force is less successful than anticipated, our business expansion plans could suffer and our ability to generate revenues could

be diminished.

In addition, we have limited history selling our clinical services tests on a direct basis, and leveraging our bioinformatics

data and our limited history makes forecasting difficult.

our sales force is not successful, or new additions to our sales team fail to gain traction among our customers, we may not be able to

increase market awareness and sales of our molecular diagnostic tests.

If we fail to establish our clinical services tests in the marketplace,

it could have a negative effect on our ability to sell subsequent products or services and hinder the desired expansion of our business.

We have growing, however limited, historical experience forecasting the direct sales of our clinical services products.

Our ability to

produce product quantities that meet customer demand is dependent upon our ability to forecast accurately and plan production accordingly.

we are unable to compete successfully in the markets our clinical services operate in, we may be unable to increase or sustain our revenue

or achieve profitability.

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

and to conduct clinical trials.

In many cases, practice guidelines in the United States have recommended non-molecular testing like cytology

or diagnostic surgery to determine if a patient’s condition is malignant or benign.

As a result, we believe that we will need to

continue to educate physicians and the medical community on the value and benefits of our clinical services tests in order to impact

clinical practices.

In addition, we face competition from other companies that offer diagnostic tests.

Specifically, in regard to our

thyroid diagnostic tests, Veracyte, Inc.

(“Veracyte”) has thyroid nodule cancer diagnostic tests which are currently on the

market that compete with our ThyGeNEXT ® and ThyraMIR ® v2 tests.

We may not be able to attract and retain personnel or be able to build an efficient

and effective sales and marketing force, which could negatively impact sales and market acceptance of our products and services and limit

our revenue growth and potential profitability.

Our expected future growth

will impose significant added responsibilities on members of management, including the need to identify, recruit, maintain, and integrate

additional employees.

Our future financial performance and our ability to commercialize our products and leverage our data and to compete

effectively will depend in part on our ability to manage this potential future growth effectively, without compromising quality.

If our sales force is

less successful than anticipated, our business expansion plans could suffer and our ability to generate revenues could be diminished.

In addition, we have limited history selling our clinical services tests on a direct basis, and leveraging our bioinformatics data and

our limited history makes forecasting difficult.

If our sales force is not

successful, or new additions to our sales team fail to gain traction among our customers, we may not be able to increase market awareness

and sales of our molecular diagnostic tests.

If we fail to establish our clinical services tests in the marketplace, it could have a negative

effect on our ability to sell subsequent products or services and hinder the desired expansion of our business.

We have growing, however

limited, historical experience forecasting the direct sales of our clinical services products.

Our ability to produce product quantities

that meet customer demand is dependent upon our ability to forecast accurately and plan production accordingly.

If we are unable to

compete successfully in the markets our clinical services operate in, we may be unable to increase or sustain our revenue or achieve profitability.

We compete with physicians

and the medical community who use traditional methods to diagnose gastrointestinal, endocrine and lung cancers and to conduct clinical

In many cases, practice guidelines in the United States have recommended non-molecular testing like cytology or diagnostic surgery

to determine if a patient’s condition is malignant or benign.

As a result, we believe that we will need to continue to educate physicians

and the medical community on the value and benefits of our clinical services tests in order to impact clinical practices.

we face competition from other companies that offer diagnostic tests.

Specifically, in regard to our thyroid diagnostic tests, Veracyte,

(“Veracyte”) has thyroid nodule cancer diagnostic tests which are currently on the market that compete with our ThyGeNEXT ®

and ThyraMIR ® v2 tests.

Quest Diagnostics Inc.

currently offers

Veracyte’s tests via a co-marketing agreement, and CBLPath, Inc.

is offering a diagnostic test performed via the University of

Pittsburgh Medical Center (UPMC) that analyzes genetic alterations using next-generation sequencing mutation panel for pancreatic cysts.

While we do not believe we currently have significant direct competition for PancraGEN ® in the gastrointestinal market,

technology such as a next-generation sequencing mutation panel could in the future lead to increased competition.

is also possible that we face future competition from laboratory developed tests, or LDTs, developed by commercial laboratories such

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

Furthermore, we may be subject

to competition as a result of the new, unforeseen technologies that can be developed by our competitors in the gastrointestinal and endocrine

cancer molecular diagnostic testing space.

To compete successfully, we must be able to demonstrate, among other things, that our test

results are accurate and cost effective, and we must secure a meaningful level of reimbursement for our tests.

Since our clinical services

began in 2014, many of our potential competitors have stronger brand recognition and greater financial capabilities than we do.

may develop a test with a lower price than ours that could be viewed by physicians and payers as functionally equivalent to our molecular

diagnostic tests or offer a test at prices designed to promote market penetration, which could force us to lower the price of our clinical

services tests and affect our ability to achieve and maintain profitability.

If we are unable to compete successfully against current

and future competitors, we may be unable to increase market acceptance of our clinical services tests and overall sales, which could

prevent us from increasing our revenue or achieving profitability and cause the market price of our common stock to decline.

new clinical services tests and other products and services, we will likely face many of these same competitive risks that we do currently.

we cannot license rights to use third-party technologies on reasonable terms, we may not be able to commercialize new products or services

in the future.

the future, we may license third-party technology to develop or commercialize new products or offer new services.

In return for the use

of a third-party’s technology, we may agree to pay the licensor royalties based on sales of our solutions.

Royalties are a component

of cost of revenue and affect the margins on our solutions.

We may also need to negotiate licenses to patents and patent applications

after introducing a commercial product.

Our business may suffer if we are unable to enter into the necessary licenses on acceptable terms,

or at all, if any necessary licenses are subsequently terminated, if the licensors fail to abide by the terms of the license or fail

to prevent infringement by third parties, or if the licensed patents or other rights are found to be invalid or unenforceable.

results of legal proceedings could have a material adverse effect on our business, financial condition and results of operations.

are subject to various legal proceedings and claims that arise in or outside the ordinary course of business.

The results of legal proceedings

cannot be predicted with certainty.

Regardless of merit, litigation may be both time-consuming and disruptive to our operations and cause

significant expense and diversion of management attention.

If we do not prevail in the legal proceedings, we may be faced with significant

monetary damages or injunctive relief against us that could have a material adverse effect on our business, financial condition and results

of operations.

a catastrophe strikes our laboratory or if it becomes inoperable for any other reason, we will be unable to perform our testing and our

business will be harmed.

laboratory and equipment we use to perform our tests and services would be costly to replace and could require substantial lead time

to replace and qualify for use if they became inoperable.

Our facilities may be harmed or rendered inoperable by natural or man-made

disasters, including earthquakes, flooding, power outages, and health epidemics or pandemics, which may render it difficult or impossible

for us to perform our testing or services for some period of time or to receive and store samples.

The inability to perform our tests

or services for even a short period of time, including due to disruption in staffing, supplies, distribution, or transport or temporary

closures may result in the loss of customers or harm our reputation, and we may be unable to regain those customers in the future.

we maintain insurance for damage to our property and the disruption of our business, this insurance may not be sufficient to cover all

of our potential losses and may not continue to be available to us on acceptable terms, if at all.

we use hazardous materials in a manner that causes contamination or injury, we could be liable for resulting damages.

are subject to federal, state and local laws, rules and regulations governing the use, discharge, storage, handling and disposal of biological

material, chemicals and waste.

We cannot eliminate the risk of accidental contamination or injury to employees or third parties from

the use, storage, handling or disposal of these materials.

In the event of contamination or injury, we could be held liable for any resulting

damages, remediation costs and any related penalties or fines, and any liability could exceed our resources or any applicable insurance

coverage we may have.

The cost of compliance with these laws and regulations may become significant, and our failure to comply may result

in substantial fines or other consequences, and either could have a significant impact on our operating results.

breaches, loss of data and other disruptions to us or our third-party service providers could compromise sensitive information related

to our business or prevent us from accessing critical information and expose us to liability, which could adversely affect our business

and our reputation.

business requires that we and our third-party service providers collect and store sensitive data, including PHI, personally identifiable

information such as genetic information or credit card information about patients or other individuals, and our proprietary business

and financial information.

We must comply with the HIPAA and HITECH privacy, security, and breach notification regulations with respect

to PHI in our capacity as a covered entity and business associate, and with consumer protection and consumer privacy laws that apply

to our processing of this sensitive data, which may increase our operational costs.

Furthermore, the privacy, security, and breach notification

regulations implemented under HIPAA and HITECH as well as other federal and state consumer protection and consumer privacy laws and regulations

that may apply to us provide for significant fines and other penalties, including potential civil and criminal fines and penalties, for

non-compliance.

We face a number of risks relative to our protection of, and our service providers’ protection of, this critical

information, other personally identifiable information, and our proprietary business and financial information, including loss of access,

fraudulent modifications, inappropriate disclosure and inappropriate access, as well as risks associated with our ability to identify

and audit such events.

The secure processing, storage, maintenance and transmission of this critical information is vital to our operations

and business strategy, and we devote significant resources to protecting such information.

Although we take measures to protect sensitive

information from unauthorized access or disclosure, our information technology and infrastructure may be vulnerable to attacks by hackers

or viruses or otherwise breached due to employee error, malfeasance or other activities.

If such event would occur and cause interruptions

in our operations, our networks would be compromised and the information we store on those networks could be accessed by unauthorized

parties, publicly disclosed, modified without our knowledge, lost or stolen.

In 2017, we discovered malware installed on certain servers.

After an internal investigation, we do not believe that any PHI or other sensitive data on the affected servers was accessed or compromised.

We removed the malware and enhanced our cybersecurity procedures.

Additionally,

we engage third-party contractors who, insofar as they are our business associates, are contractually and legally obligated to safeguard

and maintain the confidentiality of any PHI that they create, receive, maintain, transmit, use, or disclose on our behalf.

persons may be able to gain access to PHI stored by such third-party contractors, including in their computer networks.

use or disclosure of PHI by us or our third-party contractors, including disclosure due to data theft or unauthorized access to our or

our third-party contractors’ computer networks, could subject us to fines or penalties that could adversely affect our business

and results of operations.

Although HIPAA and HITECH and their implementing regulations do not expressly provide for a private right

of damages, they permit state attorneys general to bring civil actions and obtain damages on behalf of state residents for violations,

and enjoin further violations, of the privacy and security regulations implemented under HIPAA.

We also could incur damages under state

laws to private parties for the wrongful use or disclosure of confidential health information or other private personal information by

us or our third-party contractors.

Unauthorized access, loss, modification or dissemination could disrupt our operations, including our

ability to process tests, provide test results, bill payers or patients, process claims, provide customer assistance services, conduct

research and development activities, collect, process and prepare company financial information, provide information about our solution

and other patient and physician education and outreach efforts through our website, or manage the administrative aspects of our business

and damage our reputation, any of which could adversely affect our business.

In addition, the interpretation and application of consumer,

health-related or other data protection laws in the United States are often uncertain, contradictory and in flux, particularly as more

states enact comprehensive consumer privacy laws.

It is possible that these various laws may be interpreted and applied in a manner that

is inconsistent with our practices.

Complying with these various laws could cause us to incur substantial costs or require us to change

our business practices, systems, and compliance procedures in a manner adverse to our business.

may need to increase the size of our organization, and we may experience difficulties in managing this growth.

are a small company with approximately 110 employees.

We may increase the number of employees in the future depending on the progress

and growth of our business.

Future growth will impose significant added responsibilities on members of management, including the need

to identify, attract, retain, motivate and integrate additional employees with the necessary skills to support the growing complexities

of our business.

Rapid and significant growth may place strain on our administrative, financial and operational infrastructure.

financial performance and our ability to sell or promote our existing tests and services and develop and commercialize new tests and

services and to compete effectively will depend, in part, on our ability to manage any future growth effectively.

To that end, we must

our clinical studies effectively;

additional management, administrative, manufacturing and regulatory personnel;

sufficient administrative, accounting and management information systems and controls;

and train additional qualified personnel.

may not be able to accomplish these tasks, and our failure to accomplish any of them could harm our financial results.

We may need to

reduce the size of our organization in order to maintain profitability and we may experience difficulties in managing these reductions.

Related to Regulation within our Markets

we fail to comply with federal, state and foreign laboratory licensing requirements, we could lose the ability to perform our tests or

experience disruptions to our business.

are subject to CLIA regulations, a Federal law that regulates clinical laboratories that perform testing on specimens derived from humans

for the purpose of providing information for the diagnosis, prevention or treatment of any disease, or impairment of, or the assessment

of the health of, human beings.

CLIA regulations mandate specific personnel qualifications, facilities administration, quality systems,

inspections and proficiency testing.

CLIA certification is also required in order for us to be eligible to bill federal and state healthcare

programs, as well as many private third-party payers, for our molecular diagnostic tests.

To renew these certifications, we are subject

to survey and inspection every two years.

currently offers Veracyte’s tests via a co-marketing agreement,

and CBLPath, Inc.

is offering a diagnostic test performed via the University of Pittsburgh Medical Center (UPMC) that analyzes genetic

alterations using next-generation sequencing mutation panel for pancreatic cysts.

While we do not believe we currently have significant

direct competition for PancraGEN ® in the gastrointestinal market, technology such as a next-generation sequencing mutation

panel could in the future lead to increased competition.

It is also possible that we

face future competition from laboratory developed tests, or LDTs, developed by commercial laboratories such as Quest and/or other diagnostic

companies developing new molecular diagnostic tests or technologies.

Furthermore, we may be subject to competition as a result of the

new, unforeseen technologies that can be developed by our competitors in the gastrointestinal and endocrine cancer molecular diagnostic

testing space.

To compete successfully, we must be able to demonstrate, among other things, that our test results are accurate and cost

effective, and we must secure a meaningful level of reimbursement for our tests.

Since our clinical services began in 2014, many of our

potential competitors have stronger brand recognition and greater financial capabilities than we do.

Others may develop a test with a

lower price than ours that could be viewed by physicians and payers as functionally equivalent to our molecular diagnostic tests or offer

a test at prices designed to promote market penetration, which could force us to lower the price of our clinical services tests and affect

our ability to achieve and maintain profitability.

If we are unable to compete successfully against current and future competitors, we

may be unable to increase market acceptance of our clinical services tests and overall sales, which could prevent us from increasing our

revenue or achieving profitability and cause the market price of our common stock to decline.

As we add new clinical services tests and

other products and services, we will likely face many of these same competitive risks that we do currently.

If we cannot license

rights to use third-party technologies on reasonable terms, we may not be able to commercialize new products or services in the future.

In the future, we may license

third-party technology to develop or commercialize new products or offer new services.

In return for the use of a third-party’s

technology, we may agree to pay the licensor royalties based on sales of our solutions.

Royalties are a component of cost of revenue and

affect the margins on our solutions.

We may also need to negotiate licenses to patents and patent applications after introducing a commercial

Our business may suffer if we are unable to enter into the necessary licenses on acceptable terms, or at all, if any necessary

licenses are subsequently terminated, if the licensors fail to abide by the terms of the license or fail to prevent infringement by third

parties, or if the licensed patents or other rights are found to be invalid or unenforceable.

Unfavorable results

of legal proceedings could have a material adverse effect on our business, financial condition and results of operations.

We are subject to various

legal proceedings and claims that arise in or outside the ordinary course of business.

The results of legal proceedings cannot be predicted

with certainty.

Regardless of merit, litigation may be both time-consuming and disruptive to our operations and cause significant expense

and diversion of management attention.

If we do not prevail in the legal proceedings, we may be faced with significant monetary damages

or injunctive relief against us that could have a material adverse effect on our business, financial condition and results of operations.

If a catastrophe strikes

our laboratory or if it becomes inoperable for any other reason, we will be unable to perform our testing and our business will be harmed.

The laboratory and equipment

we use to perform our tests and services would be costly to replace and could require substantial lead time to replace and qualify for

use if they became inoperable.

Our facilities may be harmed or rendered inoperable by natural or man-made disasters, including earthquakes,

flooding, power outages, and health epidemics or pandemics, which may render it difficult or impossible for us to perform our testing

or services for some period of time or to receive and store samples.

The inability to perform our tests or services for even a short period

of time, including due to disruption in staffing, supplies, distribution, or transport or temporary closures may result in the loss of

customers or harm our reputation, and we may be unable to regain those customers in the future.

Although we maintain insurance for damage

to our property and the disruption of our business, this insurance may not be sufficient to cover all of our potential losses and may

not continue to be available to us on acceptable terms, if at all.

If we use hazardous

materials in a manner that causes contamination or injury, we could be liable for resulting damages.

We are subject to federal,

state and local laws, rules and regulations governing the use, discharge, storage, handling and disposal of biological material, chemicals

We cannot eliminate the risk of accidental contamination or injury to employees or third parties from the use, storage, handling

or disposal of these materials.

In the event of contamination or injury, we could be held liable for any resulting damages, remediation

costs and any related penalties or fines, and any liability could exceed our resources or any applicable insurance coverage we may have.

The cost of compliance with these laws and regulations may become significant, and our failure to comply may result in substantial fines

or other consequences, and either could have a significant impact on our operating results.

Security breaches, loss

of data and other disruptions to us or our third-party service providers could compromise sensitive information related to our business

or prevent us from accessing critical information and expose us to liability, which could adversely affect our business and our reputation.

Our business requires that

we and our third-party service providers collect and store sensitive data, including PHI, personally identifiable information such as

genetic information or credit card information about patients or other individuals, and our proprietary business and financial information.

We must comply with the HIPAA and HITECH privacy, security, and breach notification regulations with respect to PHI in our capacity as

a covered entity and business associate, and with consumer protection and consumer privacy laws that apply to our processing of this sensitive

data, which may increase our operational costs.

Furthermore, the privacy, security, and breach notification regulations implemented under

HIPAA and HITECH as well as other federal and state consumer protection and consumer privacy laws and regulations that may apply to us

provide for significant fines and other penalties, including potential civil and criminal fines and penalties, for non-compliance.

face a number of risks relative to our protection of, and our service providers’ protection of, this critical information, other

personally identifiable information, and our proprietary business and financial information, including loss of access, fraudulent modifications,

inappropriate disclosure and inappropriate access, as well as risks associated with our ability to identify and audit such events.

secure processing, storage, maintenance and transmission of this critical information is vital to our operations and business strategy,

and we devote significant resources to protecting such information.

Although we take measures to protect sensitive information from unauthorized

access or disclosure, our information technology and infrastructure may be vulnerable to attacks by hackers or viruses or otherwise breached

due to employee error, malfeasance or other activities.

If such event would occur and cause interruptions in our operations, our networks

would be compromised and the information we store on those networks could be accessed by unauthorized parties, publicly disclosed, modified

without our knowledge, lost or stolen.

Additionally, we engage third-party

contractors who, insofar as they are our business associates, are contractually and legally obligated to safeguard and maintain the confidentiality

of any PHI that they create, receive, maintain, transmit, use, or disclose on our behalf.

Unauthorized persons may be able to gain access

to PHI stored by such third-party contractors, including in their computer networks.

Any wrongful use or disclosure of PHI by us or our

third-party contractors, including disclosure due to data theft or unauthorized access to our or our third-party contractors’ computer

networks, could subject us to fines or penalties that could adversely affect our business and results of operations.

Although HIPAA and

HITECH and their implementing regulations do not expressly provide for a private right of damages, they permit state attorneys general

to bring civil actions and obtain damages on behalf of state residents for violations, and enjoin further violations, of the privacy and

security regulations implemented under HIPAA.

We also could incur damages under state laws to private parties for the wrongful use or

disclosure of confidential health information or other private personal information by us or our third-party contractors.

access, loss, modification or dissemination could disrupt our operations, including our ability to process tests, provide test results,

bill payers or patients, process claims, provide customer assistance services, conduct research and development activities, collect, process

and prepare company financial information, provide information about our solution and other patient and physician education and outreach

efforts through our website, or manage the administrative aspects of our business and damage our reputation, any of which could adversely

affect our business.

In addition, the interpretation

and application of consumer, health-related or other data protection laws in the United States are often uncertain, contradictory and

in flux, particularly as more states enact comprehensive consumer privacy laws.

Recently, in certain states, there has been an increase

in private litigation alleging that the use of cookies and similar tracking technologies without consent violates state laws governing

“wiretapping,” “trap and trace,” “pen registers,” and similar laws.

Outside the United States, an

increasing number of laws, regulations, and industry standards may govern data privacy and security.

For example, our processing of personal

data may become subject to the European Union’s General Data Protection Regulation or the United Kingdom’s General Data Protection

Each of these regulations requires stringent standards of data privacy and security concerning personal data and potentially

significant sanctions.

It is possible that these various laws may be interpreted and applied in a manner that is inconsistent with our

Complying with these various laws could cause us to incur substantial costs or require us to change our business practices,

systems, and compliance procedures in a manner adverse to our business.

We may need to increase

the size of our organization, and we may experience difficulties in managing this growth.

We are a small company with

approximately 111 employees.

We may increase the number of employees in the future depending on the progress and growth of our business.

Future growth will impose significant added responsibilities on members of management, including the need to identify, attract, retain,

motivate and integrate additional employees with the necessary skills to support the growing complexities of our business.

Rapid and significant

growth may place strain on our administrative, financial and operational infrastructure.

Our future financial performance and our ability

to sell or promote our existing tests and services and develop and commercialize new tests and services and to compete effectively will

depend, in part, on our ability to manage any future growth effectively.

To that end, we must be able to:

manage our clinical studies effectively;

integrate additional management, administrative, manufacturing and regulatory personnel;

maintain sufficient administrative, accounting and management information systems and controls;

hire and train additional qualified personnel.

We may not be able to accomplish

these tasks, and our failure to accomplish any of them could harm our financial results.

We may need to reduce the size of our organization

in order to maintain profitability and we may experience difficulties in managing these reductions.

Risks Related to Regulation within our Markets

If we fail to comply

with federal, state and foreign laboratory licensing requirements, we could lose the ability to perform our tests or experience disruptions

to our business.

We are subject to CLIA regulations,

a Federal law that regulates clinical laboratories that perform testing on specimens derived from humans for the purpose of providing

information for the diagnosis, prevention or treatment of any disease, or impairment of, or the assessment of the health of, human beings.

CLIA regulations mandate specific personnel qualifications, facilities administration, quality systems, inspections and proficiency testing.

CLIA certification is also required in order for us to be eligible to bill federal and state healthcare programs, as well as many private

third-party payers, for our molecular diagnostic tests.

To renew these certifications, we are subject to survey and inspection every two

Moreover, CLIA inspectors may make random inspections of our clinical reference laboratory.

We are also required to maintain State licenses to conduct testing in our Pittsburgh, Pennsylvania laboratory.

Pennsylvania law requires

that we maintain a license and establish standards for the day-to-day operation of our clinical reference laboratory in Pittsburgh,

Pennsylvania.

In addition, our Pittsburgh laboratory is required to be licensed by certain states, including California, Maryland, New

York and Rhode Island.

New York law requires us to obtain test-specific approval before offering our tests as LDT.

California, Maryland,

New York and Rhode Island laws also mandate proficiency testing for laboratories licensed under the laws of each respective State regardless

of whether such laboratories are located in California, Maryland, New York or Rhode Island.

If we were unable to obtain or maintain our

CLIA certificate for our laboratory, whether as a result of revocation, suspension or limitation, we would no longer be able to perform

our current clinical services, which could have a material adverse effect on our business, financial condition and results of operations.

If we were to lose our licenses issued by States where we are required to hold licenses, if such licenses expired or were not renewed,

or if we failed to obtain and maintain a State license that we are required to hold, we may be subject to significant fines, penalties

and liability, and may be forced to cease testing (if Pennsylvania) or cease testing specimens from those States (if California, New

York, Maryland, or Rhode Island), which could have a material adverse effect on our business, financial condition and results of operations.

New molecular diagnostic tests we may develop may be subject to new requirements by governmental bodies, including state governments,

and we may not be able to offer our new molecular diagnostic tests in such jurisdictions until such requirements are met.

reforming the U.S.

We are also required to maintain State

licenses to conduct testing in our Pittsburgh, Pennsylvania laboratory.

Pennsylvania law requires that we maintain a license and establish

standards for the day-to-day operation of our clinical reference laboratory in Pittsburgh, Pennsylvania.

In addition, our Pittsburgh laboratory

is required to be licensed by certain states, including California, Maryland, New York and Rhode Island.

New York law requires us to obtain

test-specific approval before offering our tests as LDT.

California, Maryland, New York and Rhode Island laws also mandate proficiency

testing for laboratories licensed under the laws of each respective State regardless of whether such laboratories are located in California,

Maryland, New York or Rhode Island.

If we were unable to obtain or maintain our CLIA certificate for our laboratory, whether as a result

of revocation, suspension or limitation, we would no longer be able to perform our current clinical services, which could have a material

adverse effect on our business, financial condition and results of operations.

If we were to lose our licenses issued by States where

we are required to hold licenses, if such licenses expired or were not renewed, or if we failed to obtain and maintain a State license

that we are required to hold, we may be subject to significant fines, penalties and liability, and may be forced to cease testing (if

Pennsylvania) or cease testing specimens from those States (if California, New York, Maryland, or Rhode Island), which could have a material

adverse effect on our business, financial condition and results of operations.

New molecular diagnostic tests we may develop may be subject

to new requirements by governmental bodies, including state governments, and we may not be able to offer our new molecular diagnostic

tests in such jurisdictions until such requirements are met.

Legislation reforming

healthcare system may have a material adverse effect on our financial condition and operations.

made changes that significantly affected the pharmaceutical, medical device and clinical laboratory industries.

For example, PPACA includes

coordination and promotion of research on comparative clinical effectiveness of different technologies and procedures, initiatives to

revise Medicare payment methodologies, such as bundling of payments across the continuum of care by providers and physicians, and initiatives

to promote quality indicators in payment methodologies.

PPACA also includes significant new fraud and abuse measures, including required

disclosures of financial arrangements with physicians, lower thresholds for violations and increasing potential penalties for such violations.

The effect of PPACA and any potential changes that may be necessitated by the legislation is uncertain, any of which may potentially

affect our business.

current position is that we do not meet the definition of an “Applicable Manufacturer” under the Physician Payments Sunshine

Act of the PPACA and are therefore not subject to the disclosure requirements contained in PPACA.

If the government were to reach a different

conclusion, our failure to disclose could result in significant monetary penalties and potential claims from certain third parties.

as well as other healthcare reform measures that have been and may be adopted in the future, may result in more rigorous coverage criteria,

new payment methodologies and in additional downward pressure on the price that we receive for any approved product or service, and could

seriously harm our future revenues.

Any reduction in reimbursement from Medicare or other government programs may result in a similar

reduction in payments from private payers.

The implementation of cost containment measures or other healthcare reforms may compromise

our ability to generate revenue, attain profitability or commercialize our products.

At the same time, there have been significant ongoing

efforts to repeal, revise, or replace PPACA;

PPACA made changes that significantly

affected the pharmaceutical, medical device and clinical laboratory industries.

For example, PPACA includes coordination and promotion

of research on comparative clinical effectiveness of different technologies and procedures, initiatives to revise Medicare payment methodologies,

such as bundling of payments across the continuum of care by providers and physicians, and initiatives to promote quality indicators in

payment methodologies.

PPACA also includes significant new fraud and abuse measures, including required disclosures of financial arrangements

with physicians, lower thresholds for violations and increasing potential penalties for such violations.

The effect of PPACA and any potential

changes that may be necessitated by the legislation is uncertain, any of which may potentially affect our business.

Our current position is that

we do not meet the definition of an “Applicable Manufacturer” under the Physician Payments Sunshine Act of the PPACA and are

therefore not subject to the disclosure requirements contained in PPACA.

If the government were to reach a different conclusion, our failure

to disclose could result in significant monetary penalties and potential claims from certain third parties.

PPACA, as well as other healthcare

reform measures that have been and may be adopted in the future, may result in more rigorous coverage criteria, new payment methodologies

and in additional downward pressure on the price that we receive for any approved product or service, and could seriously harm our future

Any reduction in reimbursement from Medicare or other government programs may result in a similar reduction in payments from

private payers.

The implementation of cost containment measures or other healthcare reforms may compromise our ability to generate revenue,

attain profitability or commercialize our products.

At the same time, there have been significant ongoing efforts to repeal, revise, or

replace PPACA;

however, the U.S.

Supreme Court upheld the surviving portions of the law in 2021.

Biden has used executive orders to undo certain changes to the PPACA made by the Trump administration and has indicated it will advocate

for legislation to build on the PPACA.

It is unknown what form any such changes or any law would take, and how or whether it may affect

our business in the future.

We expect that changes or additions to the PPACA, the Medicare and Medicaid programs, and changes stemming

from other healthcare reform measures, especially with regard to healthcare access, financing or other legislation in individual states,

could have a material adverse effect on the healthcare industry.

example, Medicare payment rates have been – and in the future, will continue to be, to varying extents, subject to sequestration.

Reductions resulting from the Congressional sequester are applied to total claim payments made;

however, they do not currently result

in a rebasing of the negotiated or established Medicare or Medicaid reimbursement rates.

legislation on reimbursement applies to Medicaid reimbursement and Managed Medicaid reimbursement rates within that state.

have passed or proposed legislation that would revise reimbursement methodology for clinical laboratory payment rates under those Medicaid

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

clinical laboratory tests under the CLFS.

Under PAMA, CLFS payment rates are based upon the weighted median of private payor rates for

each type of laboratory test.

To calculate these rates, PAMA requires CLIA-certified laboratories that receive a majority of their Medicare

revenue from payments made under the CLFS and the Physician Fee Schedule, and receive at least $12,500 in CLFS revenue, within the 6-month

reporting period, to report private payor rates and volumes for their tests with specific CPT codes based on final payments made during

a 6-month period of data collection (from January 1 through June 30 of the applicable year).

For most laboratory tests, the CLFS is updated

every three years, but rates are updated annually for Advanced Diagnostic Laboratory Tests, or ADLTs.

The first private payor rate-based

CLFS was based on data collected from January 1 through June 30, 2016, and became effective on January 1, 2018.

CMS published final rules

implementing these changes in 2016 and 2018.

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

President Biden has used executive

orders to undo certain changes to the PPACA made by the Trump administration and has indicated it will advocate for legislation to build

on the PPACA.

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

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

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

effect on the healthcare industry.

For example, Medicare payment

rates have been – and in the future, will continue to be, to varying extents, subject to sequestration.

Reductions resulting from

the Congressional sequester are applied to total claim payments made;

however, they do not currently result in a rebasing of the negotiated

or established Medicare or Medicaid reimbursement rates.

State legislation on reimbursement

applies to Medicaid reimbursement and Managed Medicaid reimbursement rates within that state.

Some states have passed or proposed legislation

that would revise reimbursement methodology for clinical laboratory payment rates under those Medicaid programs.

In April 2014, President Obama

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

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

calculate these rates, PAMA requires CLIA-certified laboratories that receive a majority of their Medicare revenue from payments made

under the CLFS and the Physician Fee Schedule, and receive at least $12,500 in CLFS revenue, within the 6-month reporting period, to report

private payor rates and volumes for their tests with specific CPT codes based on final payments made during a 6-month period of data collection

(from January 1 through June 30 of the applicable year).

For most laboratory tests, the CLFS is updated every three years, but rates are

updated annually for Advanced Diagnostic Laboratory Tests, or ADLTs.

The first private payor rate-based CLFS was based on data collected

from January 1 through June 30, 2016, and became effective on January 1, 2018.

CMS published final rules implementing these changes in

2016 and 2018.

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

based on surveys of market rates.

Under the revised Medicare

Clinical Laboratory Fee Schedule, reimbursement for clinical laboratory testing was reduced for most tests in 2018, 2019, and 2020.

(as revised) calls for further revisions of the Medicare Clinical Laboratory Fee Schedule for years after 2024, based on surveys of market

Further reductions in reimbursement may result from such revisions.

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

the data reporting schedule for CDLTs that are not ADLTs.

Under these laws, the next data reporting period is January 1, 2025 through

March 31, 2025, and will be based upon the data collected during the January 1, 2019 to June 30, 2019 period.

Any reductions to payment

rates resulting from the new methodology are limited to 10% per test per year in each of the years 2018 through 2020 and to 15% per test

per year in each of the years 2025 through 2027.

PAMA, as amended by the Protecting

Medicare and American Farmers from Sequester Cuts Act, among other laws, revised payment reductions and the data reporting schedule for

CDLTs that are not ADLTs.

Under these laws, the next data reporting period is January 1, 2025 through March 31, 2025, and will be based

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

Any reductions to payment rates resulting from the new methodology

are limited to 10% per test per year in each of the years 2018 through 2020 and to 15% per test per year in each of the years 2025 through

Payments will not be reduced for 2021 through 2024 for CDLTs.

cannot predict whether future healthcare initiatives will be implemented at the federal or state level or in countries outside of the

United States in which we may do business, or the effect any future legislation or regulation will have on us.

There is additional uncertainty

in light of the current Presidential administration.

The taxes imposed by federal legislation, cost reduction measures and the expansion

in the role of the U.S.

government in the healthcare industry may result in decreased revenue, lower reimbursement by payers for our

tests or reduced medical procedure volumes, all of which may adversely affect our business, financial condition and results of operations.

with numerous statutes and regulations pertaining to our services is an expensive and time-consuming process, and any failure to comply

could result in substantial penalties.

are subject to regulation by both the federal government and the governments of the states in which we conduct our operations.

and state laws which may apply to us include, but are not limited to:

Food, Drug and Cosmetic Act, as supplemented by various other statutes;

and state licensing requirements;

Manufacturing

and promotion laws;

and Medicaid billing and payment regulations applicable to clinical laboratories;

Eliminating Kickbacks in Recovery Act of 2018 (EKRA), which, among other things, prohibits the solicitation, receipt, payment or

offer of any remuneration (including any kickback, bribe, or rebate) directly or indirectly, overtly or covertly, in cash or in kind,

in return for referring a patient or patronage to a recovery home, clinical treatment facility, or laboratory for services covered

by both government and private payers;

Federal Anti-Kickback Statute (and state equivalents), which, among other things, prohibits knowingly and willfully offering, paying,

soliciting, or receiving remuneration, directly or indirectly, in exchange for or to induce either the referral of an individual,

or the furnishing, arranging for, or recommending of an item or service that is reimbursable, in whole or in part, by a federal health

care program;

Federal physician self-referral law, commonly referred to as the “Stark Law,” (and state equivalents), which prohibits

a physician from making a referral for, and an entity receiving the referral from billing for, certain designated health services

covered by the Medicare program, including clinical laboratory services, if the physician or an immediate family member has a financial

relationship with the entity providing the designated health services, unless the financial relationship falls within an applicable

exception to the prohibition;

which establishes comprehensive federal standards with respect to the privacy and security of PHI and requirements for the use of

certain standardized electronic transactions, and amendments made in 2013 to HIPAA under the Health Information Technology for Economic

and Clinical Health Act, which strengthen and expand HIPAA privacy and security compliance requirements, increase penalties for violators,

extend enforcement authority to state attorneys general, and impose requirements for breach notification;

FTC Act and various state consumer privacy laws, which require regulated entities to take reasonable steps to safeguard the personal

information of consumers, make certain disclosures about our data privacy and security practices to the public and certain state

or federal regulators, minimize our use of personal information of consumers, and provide consumers with certain rights as to their

personal data such as the right to correct or delete their personal information;

Federal Civil Monetary Penalties Law, which prohibits, among other things, the offering or transfer of remuneration to a Medicare

or state healthcare program beneficiary if the person knows or should know it is likely to influence the beneficiary’s selection

of a particular provider, practitioner, or supplier of services reimbursable by Medicare or a state healthcare program, unless an

exception applies;

Federal False Claims Act (and state equivalents), which imposes liability on any person or entity that, among other things, knowingly

presents, or causes to be presented, a false or fraudulent claim for payment to the federal government;

federal transparency requirements under the PPACA, including the provisions commonly referred to as the Physician Payments Sunshine

Act, and similar state laws that require certain manufacturers of drugs, devices, biologics and medical supplies that are reimbursable

under Medicare, Medicaid or Children’s Health Insurance Program to report annually to CMS information related to certain payments

and other transfers of value, directly or indirectly, to physicians (defined to include doctors of medicine, osteopathy, dentists,

optometrists, podiatrists and chiropractors), physician assistants, nurse practitioners, clinical nurse specialists, certified registered

nurse anesthetists, anesthesiologist assistants, and certified nurse midwives, and teaching hospitals, and ownership and investment

interests held by physicians and their immediate family members;

21st Century Cures Act information blocking provision prohibiting certain covered actors (including laboratories) from engaging in

certain practices that are likely to interfere with the access, exchange, or use of electronic health information;

federal and state fraud and abuse laws, prohibitions on self-referral and kickbacks, fee-splitting restrictions, prohibitions on

the provision of products at no or discounted cost to induce physician or patient adoption, and false claims acts, transparency,

reporting, and disclosure requirements, which may extend to services reimbursable by any third-party payer, including private insurers;

prohibition on reassignment of Medicare claims, which, subject to certain exceptions, precludes the reassignment of Medicare claims

to any other party;

Protecting Access to Medicare Act of 2014, as amended, which requires us to report private payer rates and test volumes for specific

CPT codes on a triennial basis and imposes penalties for failures to report, omissions, or misrepresentations;

rules regarding billing for diagnostic tests reimbursable by the Medicare program, which among other requirements, prohibit a physician

or other supplier from marking up the price of the technical component or professional component of a diagnostic test ordered by

the physician or other supplier if the test is performed by a physician who does not “share a practice” with the billing

physician or other supplier;

laws that prohibit other specified practices related to billing such as billing physicians for testing that they order, waiving coinsurance,

co-payments, deductibles, and other amounts owed by patients, and billing a State Medicaid program at a price that is higher than

what is charged to other payers.

recent years U.S.

Attorneys’ Offices have increased scrutiny of the healthcare industry, as have Congress, the Department of Justice,

the Department of Health and Human Services’ Office of the Inspector General and the Department of Defense.

Many of these bodies

have all issued subpoenas and other requests for information to conduct investigations of, and commenced civil or criminal litigation

against, healthcare companies based on financial arrangements with health care providers, regulatory compliance, product promotional

practices and documentation, and coding and billing practices.

Whistleblowers have filed numerous qui tam lawsuits against healthcare

companies under the federal and state False Claims Acts in recent years, in part because the whistleblower can receive a portion of the

government’s recovery under such suits.

growth of our business may increase the potential of violating these laws, regulations or our internal policies and procedures.

of our being found in violation of these or other laws and regulations is further increased by the fact that many have not been fully

interpreted by the regulatory authorities or the courts, and their provisions are open to a variety of interpretations.

Violations of

federal or state regulations may incur investigation or enforcement action by the FDA, Department of Justice, State agencies, or other

legal authorities, and may result in substantial civil, criminal, or other sanctions.

Any action brought against us for violation of

these or other laws or regulations, even if we successfully defend against it, could cause us to incur significant legal expenses and

divert our management’s attention from the operation of our business.

If our operations are found to be in violation of any of

these laws and regulations, we may be subject to civil and criminal penalties, damages and fines, we could be required to refund payments

received by us, we could face possible exclusion from Medicare, Medicaid and other federal or state healthcare programs and we could

even be required to cease our operations.

Any of the foregoing consequences could have a material adverse effect on our business, financial

condition and results of operations.

failure to comply with federal and state laws and regulations pertaining to our payment practices could result in substantial penalties.

retain healthcare practitioners as key opinion leaders providing consultation in various aspects of our business, maintain a sales force,

and contract for marketing services.

These arrangements, like any arrangement that includes compensation to a healthcare provider or

potential referral source, may trigger federal or state anti-kickback, Stark Law liability, and False Claims Act liability.

no guarantees that the federal or state governments will find that these arrangements are designed properly or that they do not trigger

liability under federal and state laws.

Under existing laws, arrangements generally must be commercially reasonable and often compensation

must be fair market value.

These terms require some subjective analysis.

Safe harbors in the anti-kickback laws do not necessarily equate

to exceptions in the Stark Law, and there is no guarantee that the government will agree with our payment practices with respect to the

relationships between our laboratory and the healthcare providers, sales force members, or other parties.

A failure to comply with Federal

and State laws and regulations pertaining to our payment practices could result in substantial penalties and adversely affect our business,

financial condition and results of operations.

addition, federal law prohibits any entity from offering or transferring to a Medicare or Medicaid beneficiary any remuneration that

the entity knows or should know is likely to influence the beneficiary’s selection of a particular provider, practitioner or supplier

of Medicare or Medicaid payable items or services, including waivers of copayments and deductible amounts (or any part thereof) and transfers

of items or services for free or for other than fair market value, unless an exception applies.

Entities found in violation may be liable

for civil monetary penalties of up to $24,164 for each wrongful act, adjusted for inflation.

Further, federal and state anti-kickback

statutes or similar laws may be implicated by arrangements with patients to waive, reduce, or limit copays or other payment amounts,

such as our Patient Assistance Program.

Third-party payers, including commercial payers and government payers, may prohibit, limit, or

restrict certain financial arrangements with patients.

Violation of these laws or payment policies could result in significant fines,

penalties, liability, recoupment, and exclusion from Medicare and Medicaid, which could have a material adverse effect on our business,

results of operations, financial condition and cash flows.

2018, the U.S.

enacted the Eliminating Kickbacks in Recovery Act, or EKRA, as part of the Substance Use-Disorder Prevention that Promotes

Opioid Recovery and Treatment for Patients and Communities Act (SUPPORT Act).

EKRA is an all-payer anti-kickback law that makes it a

criminal offense to, among other things, pay any remuneration to induce referrals to, or in exchange for, an individual using the services

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

Although it appears that EKRA was intended to reach patient

brokering and similar arrangements to induce patronage of substance use recovery and treatment, the language in EKRA is broadly written.

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

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

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

We cannot predict whether

future healthcare initiatives will be implemented at the federal or state level or in countries outside of the United States in which

we may do business, or the effect any future legislation or regulation will have on us.

There is additional uncertainty in light of the

current Presidential administration.

The taxes imposed by federal legislation, cost reduction measures and the expansion in the role of

government in the healthcare industry may result in decreased revenue, lower reimbursement by payers for our tests or reduced

medical procedure volumes, all of which may adversely affect our business, financial condition and results of operations.

Complying with numerous

statutes and regulations pertaining to our services is an expensive and time-consuming process, and any failure to comply could result

in substantial penalties.

We are subject to regulation

by both the federal government and the governments of the states in which we conduct our operations.

The federal and state laws which

may apply to us include, but are not limited to:

The Food, Drug and Cosmetic Act, as supplemented by various other statutes;

CLIA and state licensing requirements;

Manufacturing and promotion laws;

Medicare and Medicaid billing and payment regulations applicable to clinical laboratories;

The Eliminating Kickbacks in Recovery Act of 2018 (EKRA), which, among other things, prohibits the solicitation, receipt, payment or offer of any remuneration (including any kickback, bribe, or rebate) directly or indirectly, overtly or covertly, in cash or in kind, in return for referring a patient or patronage to a recovery home, clinical treatment facility, or laboratory for services covered by both government and private payers;

The Federal Anti-Kickback Statute (and state equivalents), which, among other things, prohibits knowingly and willfully offering, paying, soliciting, or receiving remuneration, directly or indirectly, in exchange for or to induce either the referral of an individual, or the furnishing, arranging for, or recommending of an item or service that is reimbursable, in whole or in part, by a federal health care program;

The Federal physician self-referral law, commonly referred to as the “Stark Law,” (and state equivalents), which prohibits a physician from making a referral for, and an entity receiving the referral from billing for, certain designated health services covered by the Medicare program, including clinical laboratory services, if the physician or an immediate family member has a financial relationship with the entity providing the designated health services, unless the financial relationship falls within an applicable exception to the prohibition;

HIPAA, which establishes comprehensive federal standards with respect to the privacy and security of PHI and requirements for the use of certain standardized electronic transactions, and amendments made in 2013 to HIPAA under the Health Information Technology for Economic and Clinical Health Act, which strengthen and expand HIPAA privacy and security compliance requirements, increase penalties for violators, extend enforcement authority to state attorneys general, and impose requirements for breach notification;

The FTC Act and various state consumer privacy laws, which require regulated entities to take reasonable steps to safeguard the personal information of consumers, make certain disclosures about our data privacy and security practices to the public and certain state or federal regulators, minimize our use of personal information of consumers, and provide consumers with certain rights as to their personal data such as the right to correct or delete their personal information;

The Federal Civil Monetary Penalties Law, which prohibits, among other things, the offering or transfer of remuneration to a Medicare or state healthcare program beneficiary if the person knows or should know it is likely to influence the beneficiary’s selection of a particular provider, practitioner, or supplier of services reimbursable by Medicare or a state healthcare program, unless an exception applies;

The Federal False Claims Act (and state equivalents), which imposes liability on any person or entity that, among other things, knowingly presents, or causes to be presented, a false or fraudulent claim for payment to the federal government;

The federal transparency requirements under the PPACA, including the provisions commonly referred to as the Physician Payments Sunshine Act, and similar state laws that require certain manufacturers of drugs, devices, biologics and medical supplies that are reimbursable under Medicare, Medicaid or Children’s Health Insurance Program to report annually to CMS information related to certain payments and other transfers of value, directly or indirectly, to physicians (defined to include doctors of medicine, osteopathy, dentists, optometrists, podiatrists and chiropractors), physician assistants, nurse practitioners, clinical nurse specialists, certified registered nurse anesthetists, anesthesiologist assistants, and certified nurse midwives, and teaching hospitals, and ownership and investment interests held by physicians and their immediate family members;

The 21st Century Cures Act information blocking provision prohibiting certain covered actors (including laboratories) from engaging in certain practices that are likely to interfere with the access, exchange, or use of electronic health information;

Other federal and state fraud and abuse laws, prohibitions on self-referral and kickbacks, fee-splitting restrictions, prohibitions on the provision of products at no or discounted cost to induce physician or patient adoption, and false claims acts, transparency, reporting, and disclosure requirements, which may extend to services reimbursable by any third-party payer, including private insurers;

The prohibition on reassignment of Medicare claims, which, subject to certain exceptions, precludes the reassignment of Medicare claims to any other party;

The Protecting Access to Medicare Act of 2014, as amended, which requires us to report private payer rates and test volumes for specific CPT codes on a triennial basis and imposes penalties for failures to report, omissions, or misrepresentations;

The rules regarding billing for diagnostic tests reimbursable by the Medicare program, which among other requirements, prohibit a physician or other supplier from marking up the price of the technical component or professional component of a diagnostic test ordered by the physician or other supplier if the test is performed by a physician who does not “share a practice” with the billing physician or other supplier;

State laws that prohibit other specified practices related to billing such as billing physicians for testing that they order, waiving coinsurance, co-payments, deductibles, and other amounts owed by patients, and billing a State Medicaid program at a price that is higher than what is charged to other payers.

In recent years U.S.

Offices have increased scrutiny of the healthcare industry, as have Congress, the Department of Justice, the Department of Health and

Human Services’ Office of the Inspector General and the Department of Defense.

Many of these bodies have all issued subpoenas and

other requests for information to conduct investigations of, and commenced civil or criminal litigation against, healthcare companies

based on financial arrangements with health care providers, regulatory compliance, product promotional practices and documentation, and

coding and billing practices.

Whistleblowers have filed numerous qui tam lawsuits against healthcare companies under the federal and state

False Claims Acts in recent years, in part because the whistleblower can receive a portion of the government’s recovery under such

The growth of our business

may increase the potential of violating these laws, regulations or our internal policies and procedures.

The risk of our being found in

violation of these or other laws and regulations is further increased by the fact that many have not been fully interpreted by the regulatory

authorities or the courts, and their provisions are open to a variety of interpretations.

Violations of federal or state regulations may

incur investigation or enforcement action by the FDA, Department of Justice, State agencies, or other legal authorities, and may result

in substantial civil, criminal, or other sanctions.

Any action brought against us for violation of these or other laws or regulations,

even if we successfully defend against it, could cause us to incur significant legal expenses and divert our management’s attention

from the operation of our business.

If our operations are found to be in violation of any of these laws and regulations, we may be subject

to civil and criminal penalties, damages and fines, we could be required to refund payments received by us, we could face possible exclusion

from Medicare, Medicaid and other federal or state healthcare programs and we could even be required to cease our operations.

foregoing consequences could have a material adverse effect on our business, financial condition and results of operations.

A failure to comply

with EKRA could result in substantial penalties and other adverse consequences that adversely affect our business, financial condition

and results of operations.

business activities may be subject to the Foreign Corrupt Practices Act, or FCPA, and similar anti-bribery and anti-corruption laws.

business activities may be subject to the FCPA and similar anti-bribery or anti-corruption laws, regulations or rules of other countries

in which we operate, including the U.K.

The FCPA generally prohibits offering, promising, giving, or authorizing others

to give anything of value, either directly or indirectly, to a non-U.S.

government official in order to influence official action, or

otherwise obtain or retain business.

The FCPA also requires public companies to make and keep books and records that accurately and fairly

reflect the transactions of the corporation and to devise and maintain an adequate system of internal accounting controls.

is heavily regulated and therefore involves significant interaction with public officials, potentially including officials of non-U.S.

Additionally, in many other countries, the health care providers who prescribe pharmaceuticals are employed by their government,

and the purchasers of pharmaceuticals are government entities;

therefore, our dealings with these prescribers and purchasers are subject

to regulation under the FCPA.

Recently, the SEC and Department of Justice have increased their FCPA enforcement activities with respect

to pharmaceutical companies.

There is no certainty that all of our employees, agents, contractors, or collaborators, or those of our

affiliates, will comply with all applicable laws and regulations, particularly given the high level of complexity of these laws.

of these laws and regulations could result in fines, criminal sanctions against us, our officers, or our employees, the closing down

of our facilities, requirements to obtain export licenses, cessation of business activities in sanctioned countries, implementation of

compliance programs, and prohibitions on the conduct of our business.

Any such violations could include prohibitions on our ability to

offer our products in one or more countries and could materially damage our reputation, our brand, our international expansion efforts,

our ability to attract and retain employees, and our business, prospects, operating results, and financial condition.

in governmental regulation could negatively impact our business operations and increase our costs.

pharmaceutical, biotechnology and healthcare industries are subject to a high degree of governmental regulation.

Significant changes

in these regulations affecting our business could result in the imposition of additional restrictions on our business, additional costs

to us in providing our tests or services to our customers or otherwise negatively impact our business operations.

with federal and state laws and regulations pertaining to our payment practices could result in substantial penalties.

We retain healthcare practitioners

as key opinion leaders providing consultation in various aspects of our business, maintain a sales force, and contract for marketing services.

These arrangements, like any arrangement that includes compensation to a healthcare provider or potential referral source, may trigger

federal or state anti-kickback, Stark Law liability, and False Claims Act liability.

There are no guarantees that the federal or state

governments will find that these arrangements are designed properly or that they do not trigger liability under federal and state laws.

Under existing laws, arrangements generally must be commercially reasonable and often compensation must be fair market value.

require some subjective analysis.

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

there is no guarantee that the government will agree with our payment practices with respect to the relationships between our laboratory

and the healthcare providers, sales force members, or other parties.

A failure to comply with Federal and State laws and regulations pertaining

to our payment practices could result in substantial penalties and adversely affect our business, financial condition and results of operations.

In addition, federal law prohibits

any entity from offering or transferring to a Medicare or Medicaid beneficiary any remuneration that the entity knows or should know is

likely to influence the beneficiary’s selection of a particular provider, practitioner or supplier of Medicare or Medicaid payable

items or services, including waivers of copayments and deductible amounts (or any part thereof) and transfers of items or services for

free or for other than fair market value, unless an exception applies.

Entities found in violation may be liable for civil monetary penalties

of up to $24,164 for each wrongful act, adjusted for inflation.

Further, federal and state anti-kickback statutes or similar laws may

be implicated by arrangements with patients to waive, reduce, or limit copays or other payment amounts, such as our Patient Assistance

Third-party payers, including commercial payers and government payers, may prohibit, limit, or restrict certain financial arrangements

with patients.

Violation of these laws or payment policies could result in significant fines, penalties, liability, recoupment, and exclusion

from Medicare and Medicaid, which could have a material adverse effect on our business, results of operations, financial condition and

In 2018, the U.S.

the Eliminating Kickbacks in Recovery Act, or EKRA, as part of the Substance Use-Disorder Prevention that Promotes Opioid Recovery and

Treatment for Patients and Communities Act (SUPPORT Act).

EKRA is an all-payer anti-kickback law that makes it a criminal offense to,

among other things, pay any remuneration to induce referrals to, or in exchange for, an individual using the services of a recovery home,

a substance use clinical treatment facility, or laboratory.

Although it appears that EKRA was intended to reach patient brokering and

similar arrangements to induce patronage of substance use recovery and treatment, the language in EKRA is broadly written.

The term “laboratory”

is defined broadly and without reference to any connection to substance use disorder treatment.

EKRA is a criminal statute and violations

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

As drafted, EKRA does not clearly protect incentive

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

A failure to comply with EKRA could result in substantial

penalties and other adverse consequences that adversely affect our business, financial condition and results of operations.

Our business activities

may be subject to the Foreign Corrupt Practices Act, or FCPA, and similar anti-bribery and anti-corruption laws.

Our business activities may

be subject to the FCPA and similar anti-bribery or anti-corruption laws, regulations or rules of other countries in which we operate,

including the U.K.

The FCPA generally prohibits offering, promising, giving, or authorizing others to give anything of value,

either directly or indirectly, to a non-U.S.

government official in order to influence official action, or otherwise obtain or retain

The FCPA also requires public companies to make and keep books and records that accurately and fairly reflect the transactions

of the corporation and to devise and maintain an adequate system of internal accounting controls.

Our business is heavily regulated and

therefore involves significant interaction with public officials, potentially including officials of non-U.S.

Additionally,

in many other countries, the health care providers who prescribe pharmaceuticals are employed by their government, and the purchasers

of pharmaceuticals are government entities;

therefore, our dealings with these prescribers and purchasers are subject to regulation under

Recently, the SEC and Department of Justice have increased their FCPA enforcement activities with respect to pharmaceutical

There is no certainty that all of our employees, agents, contractors, or collaborators, or those of our affiliates, will comply

with all applicable laws and regulations, particularly given the high level of complexity of these laws.

Violations of these laws and

regulations could result in fines, criminal sanctions against us, our officers, or our employees, the closing down of our facilities,

requirements to obtain export licenses, cessation of business activities in sanctioned countries, implementation of compliance programs,

and prohibitions on the conduct of our business.

Any such violations could include prohibitions on our ability to offer our products in

one or more countries and could materially damage our reputation, our brand, our international expansion efforts, our ability to attract

and retain employees, and our business, prospects, operating results, and financial condition.

Changes in governmental

regulations mandating price controls and limitations on patient access to our products could also reduce, eliminate or otherwise negatively

impact our sales.

Additional changes may be forthcoming in light of the current Presidential administration.

Relating To Our Intellectual Property

we are unable to protect our intellectual property effectively, our business would be harmed.

rely on patent protection as well as trademark, trade secret and other intellectual property rights protection and contractual restrictions

to protect our proprietary technology.

If we fail to protect our intellectual property, third parties may be able to compete more effectively

against us and we may incur substantial litigation costs in our attempts to recover or restrict use of our intellectual property.

we apply for patents covering our products and technologies and uses thereof, we may fail to apply for patents on important products

and technologies in a timely fashion or at all, or we may fail to apply for patents in relevant jurisdictions.

Others could seek to design

around our current or future patented technologies.

We may not be successful in defending any challenges made against our patents or

patent applications.

Any successful third-party challenge to our patents could result in the unenforceability or invalidity of such patents

and increased competition to our business.

The outcome of patent litigation, such as oppositions or post-grant reviews can be uncertain

and any attempt by us to enforce our patent rights against others may not be successful, or, if successful, may take substantial time

and result in substantial cost, and may divert our efforts and attention from other aspects of our business.

unauthorized disclosure is difficult, and we do not know whether the steps we have taken to prevent such disclosure are, or will be,

If we were to enforce a claim that a third-party had illegally obtained and was using our trade secrets, it would be expensive

and time consuming, and the outcome would be unpredictable.

Further, competitors could willfully infringe our intellectual property rights,

design around our protected technology or develop their own competitive technologies that arguably fall outside of our intellectual property

Others may independently develop similar or alternative products and technologies or replicate any of our products and technologies.

If our intellectual property does not adequately protect us against competitors’ products and methods, our competitive position

could be adversely affected, as could our business and the results of our operations.

To the extent our intellectual property offers

inadequate protection, or is found to be invalid or unenforceable, we would be exposed to a greater risk of competition.

If our intellectual

property does not provide adequate coverage of our competitors’ products, our competitive position could be adversely affected,

as could our overall business.

Both the patent application process and the process of managing patent disputes can be time consuming

and expensive.

patent law could diminish the value of patents in general, thereby impairing our ability to protect our molecular diagnostic

is the case with other companies operating in our industry, our success is somewhat dependent on intellectual property, particularly

on obtaining and enforcing patents.

Obtaining and enforcing patents of molecular diagnostics tests, like our molecular diagnostic tests

in our PancraGEN ® and miR Inform ® platforms (including ThyGeNEXT ® ), involves both

technological and legal complexity, and is therefore costly, time-consuming and inherently uncertain.

regulation could negatively impact our business operations and increase our costs.

The pharmaceutical, biotechnology

and healthcare industries are subject to a high degree of governmental regulation.

Significant changes in these regulations affecting

our business could result in the imposition of additional restrictions on our business, additional costs to us in providing our tests

or services to our customers or otherwise negatively impact our business operations.

Changes in governmental regulations mandating price

controls and limitations on patient access to our products could also reduce, eliminate or otherwise negatively impact our sales.

changes may be forthcoming in light of the current Presidential administration.

Risks Relating To Our Intellectual Property

If we are unable to

protect our intellectual property effectively, our business would be harmed.

We rely on patent protection

as well as trademark, trade secret and other intellectual property rights protection and contractual restrictions to protect our proprietary

If we fail to protect our intellectual property, third parties may be able to compete more effectively against us and we may

incur substantial litigation costs in our attempts to recover or restrict use of our intellectual property.

While we apply for patents

covering our products and technologies and uses thereof, we may fail to apply for patents on important products and technologies in a

timely fashion or at all, or we may fail to apply for patents in relevant jurisdictions.

Others could seek to design around our current

or future patented technologies.

We may not be successful in defending any challenges made against our patents or patent applications.

Any successful third-party challenge to our patents could result in the unenforceability or invalidity of such patents and increased competition

to our business.

The outcome of patent litigation, such as oppositions or post-grant reviews can be uncertain and any attempt by us to

enforce our patent rights against others may not be successful, or, if successful, may take substantial time and result in substantial

cost, and may divert our efforts and attention from other aspects of our business.

Monitoring unauthorized disclosure

is difficult, and we do not know whether the steps we have taken to prevent such disclosure are, or will be, adequate.

If we were to enforce

a claim that a third-party had illegally obtained and was using our trade secrets, it would be expensive and time consuming, and the outcome

would be unpredictable.

Further, competitors could willfully infringe our intellectual property rights, design around our protected technology

or develop their own competitive technologies that arguably fall outside of our intellectual property rights.

Others may independently

develop similar or alternative products and technologies or replicate any of our products and technologies.

If our intellectual property

does not adequately protect us against competitors’ products and methods, our competitive position could be adversely affected,

as could our business and the results of our operations.

To the extent our intellectual property offers inadequate protection, or is found

to be invalid or unenforceable, we would be exposed to a greater risk of competition.

If our intellectual property does not provide adequate

coverage of our competitors’ products, our competitive position could be adversely affected, as could our overall business.

the patent application process and the process of managing patent disputes can be time consuming and expensive.

Changes in U.S.

law could diminish the value of patents in general, thereby impairing our ability to protect our molecular diagnostic tests.

As is the case with other

companies operating in our industry, our success is somewhat dependent on intellectual property, particularly on obtaining and enforcing

Obtaining and enforcing patents of molecular diagnostics tests, like our molecular diagnostic tests in our PancraGEN ®

and miR Inform ® platforms (including ThyGeNEXT ® ), involves both technological and legal complexity,

and is therefore costly, time-consuming and inherently uncertain.

From time-to-time the U.S.

Court, other Federal courts, the U.S.

Congress or the United States Patent and Trademark Office, or the USPTO, may change the standards

of patentability and any such changes could have a negative impact on our business.

For instance, on October 30, 2008, the Court of Appeals

for the Federal Circuit issued a decision that methods or processes cannot be patented unless they are tied to a machine or involve a

physical transformation.

Supreme Court later reversed that decision in Bilski v.

Kappos , finding that the “machine-or-transformation”

test is not the only test for determining patent eligibility.

Supreme Court, other Federal courts, the

Congress or the United States Patent and Trademark Office, or the USPTO, may change the standards of patentability and any such changes

could have a negative impact on our business.

For instance, on October 30, 2008, the Court of Appeals for the Federal Circuit issued a

decision that methods or processes cannot be patented unless they are tied to a machine or involve a physical transformation.

Supreme Court later

reversed that decision in Bilski v.

Kappos , finding that the “machine-or-transformation” test is not the only test

for determining patent eligibility.

The Court, however, declined to specify how and when processes are patentable.

On March 30, 2012, in the case Mayo Collaborative Services v.

On March 30, 2012,

in the case Mayo Collaborative Services v.

Prometheus Laboratories, Inc.

Supreme Court reversed the

Federal Circuit’s application of Bilski and invalidated a patent focused on a process for identifying a proper dosage for an existing

therapeutic because the patent claim embodied a law of nature.

On July 3, 2012, the USPTO released a memorandum entitled “2012

Interim Procedure for Subject Matter Eligibility Analysis of Process Claims Involving Laws of Nature,” with guidelines for determining

patentability of diagnostic or other processes in line with the Mayo decision.

On June 13, 2013, in Association for Molecular Pathology

Myriad Genetics , the Supreme Court held that a naturally occurring DNA segment is a product of nature and not patent eligible

merely because it has been isolated.

The Supreme Court did not address the patentability of any innovative method claims involving the

manipulation of isolated genes.

On March 4, 2014, the USPTO released a memorandum entitled “2014 Procedure for Subject Matter Eligibility

Analysis Of Claims Reciting Or Involving Laws Of Nature/Natural Principles, Natural Phenomena, And/Or Natural Products.” This memorandum

provides guidelines for the USPTO’s new examination procedure for subject matter eligibility under 35 U.S.C.

§ 101 for claims

embracing natural products or natural principles.

June 12, 2015, the Federal Circuit issued a decision in Ariosa v.

Sequenom holding that a method for detecting a paternally inherited

nucleic acid of fetal origin performed on a maternal serum or plasma sample from a pregnant female were unpatentable as directed to a

naturally occurring phenomenon.

On July 30, 2015, the USPTO released a Federal Register Notice entitled, “July 2015 Update on Subject

Matter Eligibility,” This Notice updated the USPTO guidelines for the USPTO’s procedure for subject matter eligibility under

§ 101 for claims embracing natural products or natural principles phenomenon.

On May 4, 2016, the USPTO released life

science examples that were intended to be used in conjunction with the USPTO guidance on subject matter eligibility.

Although the guidelines

and examples do not have the force of law, patent examiners have been instructed to follow them.

On February 6, 2019, the Federal Circuit

for Court of Appeals issued a decision in Athena Diagnostics, Inc.

Mayo Collaborative Servs., LLC , which relied on the decisions

from Mayo and Ariosa, to find a claim directed to a method for diagnosing neurotransmission or developmental disorders related to muscle

specific tyrosine kinase not eligible for patenting under 35 U.S.C.

What constitutes a law of nature and a sufficient inventive

concept continues to remain uncertain, and it is possible that certain aspects of diagnostic tests will continue to be considered natural

laws and, therefore, ineligible for patent protection.

aspects of our technology involve processes that may be subject to this evolving standard and we cannot guarantee that any of our pending

or issued claims will be patentable or upheld as valid as a result of such evolving standards.

In addition, patents we own or license

that issued before these recent cases may be subject to challenge in court or before the USPTO in view of these current legal standards.

Accordingly, the evolving interpretation and application of patent laws in the United States governing the eligibility of diagnostics

for patent protection may adversely affect our ability to obtain patents and may facilitate third-party challenges to any owned and licensed

Changes in either the patent laws or in interpretations and application of patent laws may also diminish the value of our existing

intellectual property or intellectual property that we continue to develop.

We cannot predict the breadth of claims that may be allowed

or enforceable in our patents or in third-party patents.

Supreme Court reversed the Federal Circuit’s

application of Bilski and invalidated a patent focused on a process for identifying a proper dosage for an existing therapeutic because

the patent claim embodied a law of nature.

On July 3, 2012, the USPTO released a memorandum entitled “2012 Interim Procedure for

Subject Matter Eligibility Analysis of Process Claims Involving Laws of Nature,” with guidelines for determining patentability of

diagnostic or other processes in line with the Mayo decision.

On June 13, 2013, in Association for Molecular Pathology v.

Myriad Genetics ,

the Supreme Court held that a naturally occurring DNA segment is a product of nature and not patent eligible merely because it has been

The Supreme Court did not address the patentability of any innovative method claims involving the manipulation of isolated genes.

On March 4, 2014, the USPTO released a memorandum entitled “2014 Procedure for Subject Matter Eligibility Analysis Of Claims Reciting

Or Involving Laws Of Nature/Natural Principles, Natural Phenomena, And/Or Natural Products.” This memorandum provides guidelines

for the USPTO’s new examination procedure for subject matter eligibility under 35 U.S.C.

§ 101 for claims embracing natural

products or natural principles.

On June 12, 2015, the Federal

Circuit issued a decision in Ariosa v.

Sequenom holding that a method for detecting a paternally inherited nucleic acid of fetal

origin performed on a maternal serum or plasma sample from a pregnant female were unpatentable as directed to a naturally occurring phenomenon.

On July 30, 2015, the USPTO released a Federal Register Notice entitled, “July 2015 Update on Subject Matter Eligibility,”

This Notice updated the USPTO guidelines for the USPTO’s procedure for subject matter eligibility under 35 U.S.C.

claims embracing natural products or natural principles phenomenon.

On May 4, 2016, the USPTO released life science examples that were

intended to be used in conjunction with the USPTO guidance on subject matter eligibility.

Although the guidelines and examples do not

have the force of law, patent examiners have been instructed to follow them.

On February 6, 2019, the Federal Circuit for Court of Appeals

issued a decision in Athena Diagnostics, Inc.

Mayo Collaborative Servs., LLC , which relied on the decisions from Mayo and Ariosa,

to find a claim directed to a method for diagnosing neurotransmission or developmental disorders related to muscle specific tyrosine kinase

not eligible for patenting under 35 U.S.C.

What constitutes a law of nature and a sufficient inventive concept continues to

remain uncertain, and it is possible that certain aspects of diagnostic tests will continue to be considered natural laws and, therefore,

ineligible for patent protection.

Some aspects of our technology

involve processes that may be subject to this evolving standard and we cannot guarantee that any of our pending or issued claims will

be patentable or upheld as valid as a result of such evolving standards.

In addition, patents we own or license that issued before these

recent cases may be subject to challenge in court or before the USPTO in view of these current legal standards.

Accordingly, the evolving

interpretation and application of patent laws in the United States governing the eligibility of diagnostics for patent protection may

adversely affect our ability to obtain patents and may facilitate third-party challenges to any owned and licensed patents.

either the patent laws or in interpretations and application of patent laws may also diminish the value of our existing intellectual property

or intellectual property that we continue to develop.

We cannot predict the breadth of claims that may be allowed or enforceable in our

patents or in third-party patents.

may be involved in litigation related to intellectual property, which could be time-intensive and costly and may adversely affect our

49 unchanged sentences

may be limited in the portion of NOL and tax credit carryforwards that we can use in the future to offset taxable income for U.S.

federal and state income tax purposes.

Sections 382 and 383 of Internal Revenue Code of 1986, or the Code, limit the use of NOLs and

tax credits after a cumulative change in corporate ownership of more than 50% occurs within a three-year period.

The limitation

could prevent us from using some or all of our NOLs and tax credits, as it places a formula limit of how much of our NOL and tax

credit carryforwards we would be permitted to use in a tax year.

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

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

During the periods 2017 through 2019, the company

experienced greater than 50% changes in ownership 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 ownership changes.

The Company has adjusted their NOL

carryforwards to address the impact of the Section 382 ownership changes.

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.

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

In the event we have undergone or will undergo an

ownership change under Section 382 of the Code, if we earn net taxable income, our ability to use our pre-change NOL carryforwards

to offset U.S.

federal taxable income may become subject to these limitations, which could potentially result in increased future

tax liability to us.

and state income tax purposes.

Sections 382 and 383 of Internal Revenue Code of 1986, or the Code, limit the use of NOLs and tax credits

after a cumulative change in corporate ownership of more than 50% occurs within a three-year period.

The limitation could prevent us

from using some or all of our NOLs and tax credits, as it places a formula limit of how much of our NOL and tax credit carryforwards

we would be permitted to use in a tax year.

The amount of the annual limitation, if any, will be determined based on the value of our

company immediately prior to an ownership change.

During the periods 2017 through 2019, the company experienced greater than 50% changes

in ownership 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 ownership changes.

The Company has adjusted their NOL carryforwards to address the impact of the Section 382

ownership changes.

Federal Net Operating Losses of $66.5 million are subject to annual limitation for ownership changes and the Company

is utilizing $4.0 million during the current year.

The remaining $52.5 million of NOLs incurred post July 15, 2019 are not subject to

any annual limitation and can be carried forward indefinitely.

Subsequent ownership changes may further affect the limitation in future

In the event we have undergone or will undergo an ownership change under Section 382 of the Code, if we earn net taxable income,

our ability to use our pre-change NOL carryforwards to offset U.S.

federal taxable income may become subject to these limitations, which

could potentially result in increased future tax liability to us.

Comprehensive

7 unchanged sentences

our compliance, operating and other costs, as well as the costs of our products.

For example, the Tax Cuts and Jobs Act of 2017 enacted

many significant changes to the U.S.

tax laws, some of which were further modified by the Coronavirus Aid, Relief, and Economic Security

Act, and may be modified in the future by the current or a future presidential administration.

In addition, it is uncertain if and to

what extent various states will conform to current federal law, or any newly enacted federal tax legislation.

Changes in corporate tax

rates, the realization of net operating losses, and other deferred tax assets relating to our operations, the taxation of foreign earnings,

and the deductibility of expenses could have a material impact on the value of our deferred tax assets and could increase our future

Changes in corporate tax rates, the realization of net

operating losses, and other deferred tax assets relating to our operations, the taxation of foreign earnings, and the deductibility of

expenses could have a material impact on the value of our deferred tax assets and could increase our future tax expense.

We urge investors

to consult with their legal and tax advisers regarding the implications of potential changes in tax laws or regulations on an investment

in our common stock.

economic and political instability and geopolitical events could adversely affect our business, financial condition or results of operations.

business could be adversely affected by unstable economic and political conditions within the United States and foreign jurisdictions,

including as a result of an economic downturn and geopolitical events, such as changes in U.S.

federal policy that affect the geopolitical

Changes to policy implemented by the U.S.

Congress, the Trump administration or any new administration have impacted and may

in the future impact, among other things, the U.S.

and global economy, international trade relations, unemployment, immigration, healthcare,

taxation, the U.S.

regulatory environment, inflation and other areas.

For example, during the prior Trump administration, increased tariffs

were implemented on goods imported into the U.S., particularly from China, Canada, and Mexico.

On February 1, 2025, the U.S.

a 25% tariff on imports from Canada and Mexico, which were subsequently suspended for a period of one month, and a 10% additional tariff

on imports from China.

Historically, tariffs have led to increased trade and political tensions, between not only the U.S.

but also between the U.S.

and other countries in the international community.

In response to tariffs, other countries have implemented

retaliatory tariffs on U.S.

Political tensions as a result of trade policies could reduce trade volume, investment, technological

exchange and other economic activities between major international economies, resulting in a material adverse effect on global economic

conditions and the stability of global financial markets.

Any changes in political, trade, regulatory, and economic conditions, including

trade policies, could have a material adverse effect on our financial condition or results of operations.

Until we know what policy

changes are made, whether those policy changes are challenged and subsequently upheld by the court system and how those changes impact

our business and the business of our competitors over the long term, we will not know if, overall, we will benefit from them or be negatively

affected by them.

The global credit and financial markets have also generally experienced severe volatility and disruptions in the past

several years.

A severe or prolonged economic downturn, such as the global financial crisis, could result in a variety of risks to our

business, including our ability to raise additional capital when needed on acceptable terms, if at all.

There can be No assurance that

further deterioration in credit and financial markets and confidence in economic conditions will not occur.

weak or declining economy could also result in supply chain disruptions, volatile demand for our products, abrupt changes in our customers’

buying patterns, limitations on our customers’ access to financial resources and ability to satisfy obligations to us, or other

adverse impacts to our ability to place our Growth Direct systems.

Furthermore, although we do not have any customer or direct supplier

relationships in Ukraine, Russia or the Middle East at this time, the ongoing military conflicts in those regions and related sanctions,

as well as export controls or actions that may be initiated by nations including the United States, the European Union, Russia or other

jurisdictions, and other potential uncertainties could adversely affect our business and/or our supply chain, business partners or customers.

In the event geopolitical tensions fail to abate or deteriorate further, additional governmental sanctions may be enacted adversely impacting

the global economy, its banking and monetary systems, markets or customers for our products.

may acquire businesses or assets or make investments in other companies or testing, service or solution technologies that could harm

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sale of equity or convertible debt securities, dilution to our stockholders could result.

The holders of our Series B Preferred Stock

have the right to approve any public offering.

Consummating an acquisition poses a number of risks including:

Consummating an acquisition poses a number

of risks including:

may not be able to accurately estimate the financial impact of an acquisition on our overall business;

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viruses or hackers, power loss, failure of computer systems, Internet, telecommunications or data networks.

In 2017, we discovered malware

installed on certain clinical services servers.

We do not believe that any data on the affected servers was accessed or compromised.

We removed the malware, and enhanced our cybersecurity procedures.

Additionally, our services are largely dependent on our partially

internally developed and partially purchased Laboratory Information Management Systems or LIMS, which is our automated basis of managing

operations and storing data and customer information.

If these systems or services become unavailable or suffer a security breach, or

are uneconomical or impossible to update and modify, we may expend significant resources to address these problems, and our reputation,

business and results of operations could be materially and adversely affected.

Additionally, our services

are largely dependent on our partially internally developed and partially purchased Laboratory Information Management Systems or LIMS,

which is our automated basis of managing operations and storing data and customer information.

If these systems or services become unavailable

or suffer a security breach, or are uneconomical or impossible to update and modify, we may expend significant resources to address these

problems, and our reputation, business and results of operations could be materially and adversely affected.

Related To Our Common Stock Price

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or trading volume, include, among others:

general volatility in the trading markets;

the impact of the delisting of our common stock from Nasdaq;

adverse research and development results;

significant fluctuations in our quarterly operating results;

significant changes in our cash and cash equivalent reserves;

our liquidity and ability to obtain additional capital, including the market’s reaction to any announced capital-raising transactions;

market assessments of any announced strategic transaction, including the likelihood that it would be completed and the timing for completion;

potential negative market reaction to the terms or volume of any issuance of shares of our common stock, preferred stock or other securities to new investors, pursuant to strategic or capital-raising transactions or to employees, directors or other service providers;

sales of substantial amounts of our common stock, or the perception that substantial amounts of our common stock may be sold, by stockholders in the public market;

announcements regarding our business or the business of our competitors;

announcements regarding our equity offerings;

strategic actions by us or our competitors, such as acquisitions or restructurings;

industry and/or regulatory developments;

changes in revenue mix;

changes in revenue and revenue growth rates for us and for the industries in which we operate;

changes in accounting standards, policies, guidance, interpretations or principles;

statements or changes in opinions, ratings or earnings estimates made, or the failure to make, by brokerage firms or industry analysts relating to the markets in which we operate or expect to operate;

general market and economic conditions.

volatility in the trading markets;

impact of the delisting of our common stock from Nasdaq;

research and development results;

fluctuations in our quarterly operating results;

changes in our cash and cash equivalent reserves;

liquidity and ability to obtain additional capital, including the market’s reaction to any announced capital-raising transactions;

assessments of any announced strategic transaction, including the likelihood that it would be completed and the timing for completion;

negative market reaction to the terms or volume of any issuance of shares of our common stock, preferred stock or other securities

to new investors, pursuant to strategic or capital-raising transactions or to employees, directors or other service providers;

of substantial amounts of our common stock, or the perception that substantial amounts of our common stock may be sold, by stockholders

in the public market;

announcements

regarding our business or the business of our competitors;

Announcements

regarding CMS/Novitas reimbursement decisions of our PancraGEN product;

announcements

regarding our equity offerings;

actions by us or our competitors, such as acquisitions or restructurings;

and/or regulatory developments;

in revenue mix;

in revenue and revenue growth rates for us and for the industries in which we operate;

in accounting standards, policies, guidance, interpretations or principles;

or changes in opinions, ratings or earnings estimates made, or the failure to make, by brokerage firms or industry analysts relating

to the markets in which we operate or expect to operate;

market and economic conditions.

issuance of additional shares of our common stock in any future offerings could be dilutive to stockholders.

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Moreover, to the extent that we issue options or warrants to purchase, or securities convertible

into or exchangeable for, shares of our common stock in the future (including our Series B Preferred Stock), and those options, warrants

into or exchangeable for, shares of our common stock in the future (including our Series C Preferred Stock), and those options, warrants

or other securities are exercised, converted or exchanged, stockholders may experience further dilution.

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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.

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.

from the OTCQX could adversely affect our ability to raise additional financing through public or private sales of equity securities,

would significantly affect the ability of investors to trade our securities and would negatively affect the value and liquidity of our

Common Stock.

Delisting could also have other negative results, including the potential loss of confidence by employees and customers,

the loss of institutional investor interest and fewer business development opportunities.

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.

risks associated with penny stock classification could affect the marketability of the Company’s common stock and stockholders

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in Item 9A of our Report on Form 10-K for the fiscal year 2021.

the Sarbanes-Oxley Act requires, among other things, that we maintain effective internal control over financial reporting and

disclosure controls and procedures.

In particular, we must perform system and process evaluation and testing of our internal control

over financial reporting to allow management to report on the effectiveness of our internal control over financial reporting, as

required by Section 404 of the Sarbanes-Oxley Act.

In addition, if we lose our status as a “smaller reporting company,”

we will be required to have our independent registered public accounting firm attest to the effectiveness of our internal control

over financial reporting.

Our compliance with Section 404 of the Sarbanes-Oxley Act, as applicable, requires us to incur substantial

accounting expense and expend significant management efforts.

We currently do not have an internal audit group, and we will need to

continue to hire additional accounting and financial staff with appropriate public company experience and technical accounting

If we or our independent registered public accounting firm identify deficiencies in our internal control over financial

reporting that are deemed to be material weaknesses, such as the material weakness described in Item 9A of this report, the market

price of our stock could decline and we could be subject to sanctions or investigations by the SEC or other regulatory authorities,

which would require additional financial and management resources.

the Sarbanes-Oxley Act requires, among other things, that we maintain effective internal control over financial reporting and disclosure

controls and procedures.

In particular, we must perform system and process evaluation and testing of our internal control over financial

reporting to allow management to report on the effectiveness of our internal control over financial reporting, as required by Section

404 of the Sarbanes-Oxley Act.

In addition, if we lose our status as a “smaller reporting company,” we will be required to

have our independent registered public accounting firm attest to the effectiveness of our internal control over financial reporting.

Our compliance with Section 404 of the Sarbanes-Oxley Act, as applicable, requires us to incur substantial accounting expense and expend

significant management efforts.

We currently do not have an internal audit group, and we will need to continue to hire additional accounting

and financial staff with appropriate public company experience and technical accounting knowledge.

If we or our independent registered

public accounting firm identify deficiencies in our internal control over financial reporting that are deemed to be material weaknesses,

such as the material weakness described in Item 9A of this report, the market price of our stock could decline and we could be subject

to sanctions or investigations by the SEC or other regulatory authorities, which would require additional financial and management resources.

we are unable to maintain and implement effective internal controls over financial reporting, investors may lose confidence in the accuracy

and completeness of our reported financial information and the market price of our common stock may be negatively affected.

a public company, we are required to maintain internal control over financial reporting and to report any material weaknesses in

such internal control.

a public company, we are required to maintain internal control over financial reporting and to report any material weaknesses in such

internal control.

See the material weakness described in Item 9A.

Section 404 of the Sarbanes-Oxley Act of 2002 requires that

we evaluate and determine the effectiveness of our internal control over financial reporting and provide a management report on our

internal controls on an annual basis.

If we have material weaknesses in our internal control over financial reporting, we may not

detect errors on a timely basis and our financial statements may be materially misstated.

We will need to maintain and enhance these

processes and controls as we grow, and we will require additional management and staff resources to do so.

Additionally, even if we

conclude our internal controls are effective for a given period, we may in the future identify one or more material weaknesses in

our internal controls, in which case our management will be unable to conclude that our internal control over financial reporting is

Even if our management concludes that our internal control over financial reporting is effective, our independent

registered public accounting firm may conclude that there are material weaknesses with respect to our internal controls or the level

at which our internal controls are documented, designed, implemented or reviewed.

Section 404 of the Sarbanes-Oxley Act of 2002 requires that we evaluate

and determine the effectiveness of our internal control over financial reporting and provide a management report on our internal controls

on an annual basis.

If we have material weaknesses in our internal control over financial reporting, we may not detect errors on a timely

basis and our financial statements may be materially misstated.

We will need to maintain and enhance these processes and controls as

we grow, and we will require additional management and staff resources to do so.

Additionally, even if we conclude our internal controls

are effective for a given period, we may in the future identify one or more material weaknesses in our internal controls, in which case

our management will be unable to conclude that our internal control over financial reporting is effective.

Even if our management concludes

that our internal control over financial reporting is effective, our independent registered public accounting firm may conclude that

there are material weaknesses with respect to our internal controls or the level at which our internal controls are documented, designed,

implemented or reviewed.

we are unable to conclude that our internal control over financial reporting is effective, investors could lose confidence in the accuracy

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Internal control deficiencies could also result in a restatement of our financial results.

reached a determination to restate certain of our previously issued consolidated financial statements as a result of the identification

of errors in previously issued consolidated financial statements, which resulted in unanticipated costs and may affect investor confidence

and raise reputational issues.

discussed in the Explanatory Note, in Note 2 of our consolidated financial statements, Restatement of Previously Issued Consolidated

Financial Statements , and in Note 22, Restatement of Unaudited Quarterly Results , in this Annual Report on Form 10-K for the

year ended December 31, 2024, we reached a determination to restate certain of our historical consolidated financial statements and related

disclosures for the periods disclosed in those notes after identifying errors in our accounting treatment of accrued royalty expenses.

The restatement also included corrections for previously identified immaterial errors in the impacted periods.

As a result, we have incurred

unanticipated costs for accounting and legal fees in connection with or related to the restatement, and have become subject to

a number of additional risks and uncertainties, which may affect investor confidence in the accuracy of our financial disclosures and

may raise reputational risks for our business, both of which could harm our business and financial results.

Relating to Our Corporate Structure and Our Common Stock

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As of December 31, 2024,

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

we have reserved 481,494 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 1,796,268 additional shares available for future grants of awards under

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As of December 31, 2024, the aggregate number of shares of common stock that may be issued through conversion

of all of the outstanding Series B Preferred Stock is 7,833,334.

Provided that we have a sufficient number of unreserved authorized capital

stock available, we may seek financing that could result in the issuance of additional shares of our capital stock and/or rights to acquire

additional shares of our capital stock.

We may also make acquisitions that result in issuances of additional shares of our capital stock.

of all of the outstanding Series C Preferred Stock is 23,267,326.

Provided that we have a sufficient number of unreserved authorized

capital stock available, we may seek financing that could result in the issuance of additional shares of our capital stock and/or rights

to acquire additional shares of our capital stock.

We may also make acquisitions that result in issuances of additional shares of our

capital stock.

Those additional issuances of capital stock could result in substantial dilution of our existing stockholders.

Furthermore, the book

value per share of our common stock may be reduced.

This reduction would occur if the exercise price of any issued warrants, the conversion

price of any convertible notes or the conversion ratio of any issued preferred stock is lower than the book value per share of our common

stock at the time of such exercise or conversion.

Additionally, new investors in any subsequent issuances of our securities could gain

rights, preferences and privileges senior to those of holders of common stock.

the book value per share of our common stock may be reduced.

This reduction would occur if the exercise price of any issued warrants,

the conversion price of any convertible notes or the conversion ratio of any issued preferred stock is lower than the book value per

share of our common stock at the time of such exercise or conversion.

Additionally, new investors in any subsequent issuances of our

securities could gain rights, preferences and privileges senior to those of holders of common stock.

addition of a substantial number of shares of our common stock into the market or the registration of any of our other securities under

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accurate basis, which could have other material effects on our business, reputation, results of operations, financial condition or liquidity.

Material weaknesses in internal controls over financial reporting or disclosure controls and procedures could also cause investors to

lose confidence in our reported financial information which could have an adverse effect on the trading price of our securities.

If we do not effectively remediate the material weakness or if we otherwise fail to maintain effective internal control over financial

reporting, our ability to report our financial results on a timely and on an accurate basis could be impaired, which may cause investors

to lose confidence in our reported financial information which could adversely affect the market price of our common stock.

have anti-takeover defenses that could delay or prevent an acquisition and could adversely affect the price of our common stock.

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In addition, the

rights of our common stockholders are subject to, and may be adversely affected by, the rights of holders of our Series B Preferred Stock

as well as any class or series of preferred stock that may be issued in the future and by the rights of holders of warrants issued in

rights of our common stockholders are subject to, and may be adversely affected by, the rights of holders of any class or series of preferred

stock that may be issued in the future and by the rights of holders of warrants issued in the future.

may be subject to securities litigation, which is expensive and could divert our management’s attention.

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

What changed 10-K

Item 1A. Risk Factors