What changed in this filing

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Item 7. Management’s Discussion and Analysis

2025-03-31 compared with 2024-04-01 · 211 added, 258 removed, 295 unchanged (61% of the section changed)

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See Forward-Looking Statement Information at the beginning of this

are a fully integrated commercial company that provides molecular diagnostics, bioinformatics and pathology services for evaluation of

risk of cancer by leveraging the latest technology in personalized medicine for improved patient diagnosis and management.

and commercialize genomic tests and related first line assays principally focused on early detection of patients with indeterminate biopsies

and at high risk of cancer using the latest technology.

Disposition of Pharma Business

August 31, 2022, the Company and Interpace Pharma Solutions, Inc.

(the “Subsidiary”) entered into an Asset Purchase Agreement

(the “Purchase Agreement”) with Flagship Biosciences, Inc.

(the “Purchaser”) pursuant to which the Purchaser

agreed to (i) acquire substantially all of the assets of the Subsidiary used in Subsidiary’s business of complex molecular analysis

for the early diagnosis and treatment of cancer and supporting the development of targeted therapeutics (the “Business”)

and (ii) assume and pay certain liabilities related to the purchased assets as set forth in the Purchase Agreement (collectively, the

“Transaction”).

The Transaction closed on August 31, 2022.

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

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

of certain specified liabilities.

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

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

August 31, 2022.

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

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

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

to the Company.

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

of the Subsidiary who accept employment with the Purchaser in connection with the Transaction, or divert or attempt to divert from Purchaser

any business to be performed from any of the contracts or agreements with customers as set forth in the Purchase Agreement.

Agreement also contains customary representations and warranties, post-closing covenants and mutual indemnification obligations for,

among other things, any inaccuracy or breach of any representation or warranty and any breach or non-fulfillment of any covenant.

connection with the Transaction, on August 31, 2022, the Company, the Subsidiary and the Purchaser entered into a Shared Services Agreement

(the “Shared Services Agreement”) pursuant to which the Company agreed to provide, or cause its affiliates to provide, to

the Purchaser certain services set forth in the Shared Services Agreement on a transitional basis and subject to the terms and conditions

set forth in the Shared Services Agreement (the “Services”).

As consideration for the Services provided by the Company, the

Purchaser is paying the Company the amounts specified for each Service as set forth in the Shared Services Agreement.

The Company’s

obligations to provide the Services will terminate with respect to each Service as set forth in the Shared Services Agreement.

Purchaser is identified as a related party of the Company and is as an affiliate of both Ampersand, a private equity investor in the

Company, and BroadOak, a secured lender to the Company.

Ampersand and BroadOak have each provided equity financing to the Purchaser,

collectively own a majority of the Purchaser’s outstanding equity securities and are represented on its Board of Directors.

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

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

for all periods presented.

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

December 31, 2023.

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

considerations, and other information.

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

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

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

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

with the appropriate restated amounts.

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

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

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

See also Note 22 to our Consolidated Financial Statements

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

statements for 2023 and 2024.

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

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

reporting, as referenced in Item 9A.

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

periods affected by the restatement.

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

by the information in this Form 10-K.

Accordingly, the consolidated financial statements and related financial information contained

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

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

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

We develop and commercialize

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

of Our Reliance on CMS and Novitas

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

along with many laboratories, we may be affected by the Proposed LCD DL39365, which is currently under consideration by our local Medicare

Administrative Contractor, Novitas.

If finalized, this Proposed LCD, which governs “Genetic Testing for Oncology,” could

impact the existing Medicare coverage for one of our molecular tests, PancraGEN ® .

On June 5, 2023 we announced that Novitas

issued the final LCD of Genetic Testing for Oncology (L39365) which, if finalized, would have established non-coverage for the Company’s

widely used PancraGEN ® test effective July 17, 2023.

On July 6, 2023, Novitas announced that it would not be implementing

the final Genetic Testing for Oncology LCD (L39365) as scheduled on July 17, 2023.

Novitas then issued a new virtually identical proposed

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

In response, the Company participated in a public meeting presentation and submitted detailed written comments supporting the use of

PancraGEN ® .

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.

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

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

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 and elsewhere in the Middle East.

The extent and duration

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

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

Any of the above-mentioned

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

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

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

June 5, 2023 the Company announced that Novitas issued the final LCD of Genetic Testing for Oncology (L39365) which, if finalized, would

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

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

Novitas then issued a new virtually identical proposed LCD affecting the same companies and tests and reaching the same conclusions

as noted in the previously rescinded LCD on July 27, 2023.

In response, the Company participated in a public meeting presentation and

submitted detailed written comments supporting the use of PancraGEN ® .

On July 29, 2024, the Company announced that CMS

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

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

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

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

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

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

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

(the “Restructuring Plan”).

For more information, please see Potential Restructuring below.

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

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

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

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

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

Restructuring

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

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

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

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

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

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

The Company expects that the

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

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

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

The cost that the Company expects to incur in connection with

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

The Company may also incur additional

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

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

will not be implemented in its current form.

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

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

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

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formed primary lung cancer.

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

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

CMI6261, published November 2023).

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

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

published June 2024).

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

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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.

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this Annual Report on Form 10-K.

and Cost of Revenue

Company’s revenue is primarily generated from the performance of its proprietary molecular diagnostic tests for its clinical customers.

Prior to the disposition of our Pharma business in August 2022, we also generated revenue from DNA-based testing services in support

of clinical trials for its pharma services customers.

The Company’s performance obligation is fulfilled upon completion, review

and release of test results and subsequent billing to the third-party payer, hospital or service provider.

606 Revenue Recognition

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such variances become known.

Company determines if an arrangement contains a lease in whole or in part at the inception of the contract.

Right-of-use (“ROU”)

assets represent the Company’s right to use an underlying asset for the lease term while lease liabilities represent our obligation

to make lease payments arising from the lease.

All leases with terms greater than twelve months result in the recognition of a ROU asset

and a liability at the lease commencement date based on the present value of the lease payments over the lease term.

Unless a lease provides

all of the information required to determine the implicit interest rate, we use our incremental borrowing rate based on the information

available at the commencement date in determining the present value of the lease payments.

We use the implicit interest rate in the lease

when readily determinable.

lease terms include all non-cancelable periods and may include options to extend (or to not terminate) the lease when it is reasonably

certain that we will exercise that option.

Leases with terms of twelve months or less at the commencement date are expensed on a straight-line

basis over the lease term and do not result in the recognition of an asset or liability.

See Note 8, Leases .

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

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Years Ended December 31,

(as restated)

Cost of revenue

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General and administrative

related amortization expense

in fair value of contingent consideration

Acquisition related amortization expense

Change in fair value of contingent consideration

Total operating expenses

Operating income (loss)

Operating income

Interest accretion expense

1 unchanged sentence

Other expense, net

Income (loss) from continuing operations before tax

Income from continuing operations before tax

Provision for income taxes

Income (loss) from continuing operations

Income from continuing operations

Loss from discontinued operations, net of tax

Net income (loss)

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

ended December 31, 2023.

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

as improved collections.

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

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

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

a percentage of revenue, sales and marketing expense decreased to 25% from 29% in the comparable prior year period due to the higher

revenue for the year ended December 31, 2023.

The increase was primarily due to increased employee costs.

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

25% in both periods.

and development

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

As a percentage of revenue, research and development expense decreased to 1.6% from 2.2% in the prior year period.

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

in revenue discussed above.

and administrative

and administrative expense for the year ended December 31, 2023 was $9.4 million as compared to $11.0 million for the year ended December

The decrease can be primarily attributed to a decrease in employee compensation costs compared to the prior year.

As a percentage

of net revenue, general and administrative expense was 23% for the year ended December 31, 2023 as compared to 34% for the year ended

December 31, 2022.

General and administrative expense was approximately $9.5 million for the

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

As a percentage of net revenue, general and administrative

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

related amortization expense

the years ended December 31, 2023 and December 31, 2022, we recorded amortization expense of approximately $0.9 million and $1.3 million,

respectively, which is related to intangible assets associated with our acquisitions.

in fair value of contingent consideration

the year ended December 31, 2023, there was a $7,000 increase in the contingent consideration liability.

During the year ended December

31, 2022, there was a $0.2 million decrease in the contingent consideration liability.

income (loss)

income from continuing operations was $2.8 million for the year ended December 31, 2023 as compared to an operating loss of $3.6 million

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

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

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

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

for the year ended December 31, 2023.

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

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

profit discussed above.

payable interest expense

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

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

The interest expense was from the BroadOak loan.

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

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from discontinued operations, net of tax

had a loss from discontinued operations of $0.3 million for the year ended December 31, 2023 as compared to a loss from discontinued

operations of $16.1 million for the year ended December 31, 2022.

The loss for the year ended December 31, 2022 was primarily attributed

to the impairment of goodwill and intangible assets associated with the disposition of the Pharma business in August 2022 as well as

eight months of Pharma operating losses before the disposition.

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

31, 2023, respectively.

Financial Measures

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

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

The table below

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

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

The table below includes a reconciliation

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

Reconciliation

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in thousands)

Income (loss) from continuing operations (GAAP Basis)

(as restated)

Income from continuing operations (GAAP Basis)

Depreciation and amortization

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Interest income

Mark to market on warrant liability

Change in fair value of note payable

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AND CAPITAL RESOURCES

October 2021, the Company entered into a Loan and Security Agreement with BroadOak, providing for a term loan in the aggregate principal

amount of $8,000,000 (the “Term Loan” or “BroadOak Loan Agreement”).

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

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

The Term Loan was scheduled to mature upon the earlier of (i) October 31, 2024 or (ii) the occurrence of a change in control, and bears interest

at the rate of 9% per annum.

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

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

The Term Loan has an origination

fee of 3% of the Term Loan amount, and a terminal payment equal to (i) 15% of the original principal amount of the Term Loan if the change

of control occurs on or prior to the first anniversary of the funding of the Term Loan, (ii) 20% of the original principal amount of

the Term Loan if the change of control occurs after the first anniversary but on or prior to the second anniversary of the funding of

the Term Loan and (iii) 30% of the original principal amount of the Term Loan if the change of control occurs after the second anniversary

of the funding of the Term Loan, or if the Term Loan is repaid on its maturity date.

Upon receipt of the term loan, the proceeds were

used to repay in full at their maturity the notes extended by Ampersand and 1315 Capital discussed above.

The Term Loan was scheduled to mature upon the earlier of (i) October 31, 2024

or (ii) the occurrence of a change in control, and bears interest at the rate of 9% per annum.

The Term Loan is secured by a security

interest in substantially all the Company’s and its subsidiaries’ assets and was subordinate to the Company’s former

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

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

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

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

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

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

repaid on its maturity date.

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

by Ampersand and 1315 Capital discussed above.

See Note 13, Notes Payable, for more details.

In May 2022, the Company issued a

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

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

See Note 13, Notes Payable ,

for more details.

In May 2022, the Company issued a Convertible Note to BroadOak, pursuant to which BroadOak funded a term loan in

the aggregate principal amount of $2.0 million.

See Note 13, Notes Payable , for more details.

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

The primary changes

to the original agreement were as follows:

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

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

See Note 13, Notes Payable , regarding

the Terminal Payment.

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

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

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

The primary changes to the Term Loan were as follows:

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

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

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

November 1, 2023, the interest rate under the Term Loan was reduced from 9% to 8% through the maturity date of October 31, 2024 or

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

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

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

On March 29, 2024, the Company

entered into a Third Amendment to the Loan and Security Agreement with BroadOak, extending the loan maturity date to June 30, 2025.

See Note 20, Subsequent Events , for more details.

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.

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

became effective;

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

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

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

the same beneficiary on the same date of service.

On February 28, 2022, the Company announced that the National Correct Coding Initiative

(NCCI) program issued a response on behalf of CMS stating that the January 2022 billing policy reimbursement change for ThyGeNEXT ®

(0245U) and ThyraMIR ® (0018U) tests has been retroactively reversed to January 1, 2022.

In May 2022, the Company

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

However, on June 9, 2022, the Company was notified that Novitas re-priced ThyGeNEXT ® (0245U) from $2,919 to $806.59 retroactively

effective to January 1, 2022.

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

for ThyGeNEXT ® of $806.59.

As a result of the ThyGeNEXT ® pricing change, the Company reduced its net realizable

value, or NRV rates for ThyGeNEXT ® Medicare billing to reflect the $806.59 pricing for tests performed during the second

quarter of 2022.

In addition, in order to reflect the retroactive pricing change to January 1, 2022, the Company recorded an NRV adjustment

of $0.7 million during the second quarter of 2022 to reduce revenue recorded during the first quarter of 2022.

Effective January 1, 2023,

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

October 2021, we entered into the Comerica Loan Agreement with Comerica, providing for a revolving credit facility of up to $7,500,000

(the “Credit Facility”).

The Company is using the proceeds of the Credit Facility for working capital and other general corporate

amount that could be borrowed under the Credit Facility was the lower of (i) the revolving limit of $7,500,000 (the “Revolving

Line”) and (ii) 80% of the Company’s eligible accounts receivable plus an applicable non-formula amount consisting of $2,000,000

of additional availability at close not based upon the Company’s eligible accounts receivable, with such additional availability

reducing by $250,000 per quarter beginning with the quarter ending June 30, 2022.

Borrowings on the Credit Facility were limited to $5,000,000

until 80% of the Company’s and its subsidiaries’ customers are paying into a collection account or segregated governmental

account with Comerica.

The Revolving Line also included, at the Company’s option, credit card services with a sublimit of $300,000.

Borrowings on the Revolving Line were subject to an interest rate equal to prime plus 0.50%, with prime being the greater of (x) Comerica’s

stated prime rate or (y) the sum of (A) the daily adjusting LIBOR rate plus (B) 2.5% per annum.

The Company was also required to pay

an unused facility fee quarterly in arrears in an amount equal to 0.25% per annum on the average unused but available portion of the

Revolving Line for such quarter.

See Note 18, Revolving Line of Credit , for more details.

Comerica had a first priority security

interest in substantially all of the Company’s and its subsidiaries’ assets.

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

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

agreement was terminated in February 2024.

Fifth Amendment to the Comerica Loan Agreement contained affirmative and negative restrictive covenants that are 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.

The Comerica Loan Agreement also contained financial covenants requiring specified

minimum liquidity and minimum adjusted EBITDA thresholds.

As of December 31, 2023 the Company had a zero balance on the line of credit.

August 31, 2022, the Company closed on the sale of its Pharma Solutions business for a total sale price of $6.2 million after a post-closing

working capital adjustment.

See Note 4, Discontinued Operations .

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

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

extending the loan maturity date to June 30, 2025.

The primary changes to the Second Amendment were as follows:

maturity date was extended to June 30, 2025.

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

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

extending the loan maturity date to December 31, 2025.

The primary changes to the Third Amendment were as follows:

maturity date was extended to December 31, 2025.

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

balance due on the new maturity date.

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

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

The Term Loan also contains customary events of default.

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

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

As of the year ended December 31,

2023, we had cash and cash equivalents of $3.5 million, total current assets of $10.3 million, net of restricted cash, and current liabilities

of $17.5 million.

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

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

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The main component of cash provided by

operating activities was net income of $0.8 million, and non-cash expenses of $2.5 million.

During the year ended December 31, 2022,

net cash used in operating activities was $7.7 million.

The main component of cash used in operating activities was our net loss of $22.0

million, partially offset by depreciation and amortization expense of $2.6 million and non-cash impairment charges of $12.4 million.

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

During the year ended December 31,

2022, net cash provided from investing activities was $6.2 million, which primarily pertained to the net proceeds received from the sale

of our Pharma Solutions business unit.

the year ended December 31, 2023, cash used in financing activities was $5.0 million, of which $2.5 million was from the repayment on

the Revolving Line and $2.5 million was the terminal payment made to BroadOak.

operating activities was net income of $6.7 million.

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

was $3.8 million.

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

$2.5 million.

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

expenditures associated with the lab.

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

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

of the BroadOak loan.

See Note 13, Notes Payable, for more details.

the year ended December 31, 2022, cash provided from financing activities was $3.0 million, of which $1.0 million was from the drawdown

on the Revolving Line and $2.0 million was the Convertible Debt agreement entered into with BroadOak.

See Note 13, Notes Payable,

for more details.

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

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

made to BroadOak.

See Note 13, Notes Payable, for more details.

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

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to the Company.

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

will be achieved.

along with many laboratories, we may be affected by the Proposed LCD DL39365, which is currently under consideration by our local Medicare

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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.

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

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

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

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

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

February 7, 2025.

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

we announced that our board of directors

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

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

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

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

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

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

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

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

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

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

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Operating lease obligations

GOVERNANCE OF THE COMPANY

Corporate Governance;

Code of Ethics;

Trading Policy

Our Board has adopted a written

Code of Business Conduct that applies to our directors, officers, and employees, as well as Corporate Governance Guidelines applicable

specifically to our Board.

You can find links to these documents in the “Investor Relations-Corporate Governance” section

of our website page at www.interpace.com.

The content contained in, or that can be accessed through, our website is not incorporated into

this Annual Report on Form 10-K.

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

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

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

our website (www.interpace.com).

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

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

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

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

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

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

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

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

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

Our Insider Trading Policy also provides that the Company

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

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

AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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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 7. Management’s Discussion and Analysis