This report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include all statements that are not historical facts. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “could,” “would,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “projects,” “predicts,” “potential,” or the negative of those terms, and similar expressions and comparable terminology intended to identify forward-looking statements. These statements reflect ourthe Company's current views with respect to future events and are based on assumptions and subject to risks and uncertainties including those set forth below and under Part I, Item 1A, “Risk Factors” in this annual report on Form 10-K. Given these uncertainties, you should not place undue reliance on these forward-looking statements. These forward-looking statements represent ourthe Company's estimates and assumptions only as of the date of this annual report on Form 10-K and, except as required by law, we undertakethe Company undertakes no obligation to update or review publicly any forward-looking statements, whether as a result of new information, future events or otherwise after the date of this annual report on Form 10-K. You should read this annual report on Form 10-K and the documents referenced in this annual report on Form 10-K and filed as exhibits completely and with the understanding that ourthe Company's actual future results may be materially different from what we expect. We qualifythe Company expects. The Company qualifies all of ourits forward-looking statements by these cautionary statements. Such statements may include, but are not limited to, statements concerning the following:

 

We areCancer Genetics, Inc. (the "Company") supports the efforts of the biotechnology and pharmaceutical industries to develop innovative new drug therapies. Until the closing of the Business Disposals (as defined below) in July 2019, the Company was an emerging leader in the field ofenabling precision medicine enablingin oncology by providing multi-disciplinary diagnostic and data solutions, facilitating individualized therapies inthrough the field of oncology through ourCompany's diagnostic products andtests, services and molecular markers. We develop, commercializeFollowing the Business Disposals, the Company currently has an extensive set of anti-tumor referenced data based on predictive xenograft and syngeneic tumor models from the acquisition of vivoPharm, Pty Ltd. (“vivoPharm”) in 2017, to provide molecular-Discovery Services such as contract research services, focused primarily on unique specialized studies to guide drug discovery and biomarker-based testsdevelopment programs in the oncology and services that enable physicians to personalize the clinical management of each individual patient by providing genomic information to better diagnose, monitor and inform cancer treatment and that enable biotech and pharmaceutical companies engaged in oncology trials to better select candidate populations and reduce adverse drug reactions by providing information regarding genomic factors influencing subject responses to therapeutics. We have a comprehensive, disease-focused oncology testing portfolio. Ourimmuno-oncology fields. The Company's tests and techniques target a wide range of cancers,indications, covering nineall ten of the top ten cancers in prevalence in the United States, with additional unique capabilities offered by ourits FDA-cleared Tissue of Origin® test for identifying difficult to diagnose tumor types or poorly differentiated metastatic disease.

Our visionThe Company offers preclinical services such as predictive tumor models, human orthotopic xenografts and syngeneic immuno-oncology relevant tumor models in its Hershey, PA facility, and is to become the oncology diagnostics partner for pharmaceutical and biotech companies and clinicians by participatinga leader in the entire care continuum from bench to bedside. We believefield of immuno-oncology preclinical services in the oncology industryUnited States. This service is undergoing a rapid evolutionsupplemented with GLP toxicology and extended bioanalytical services in its approach to diagnostic, prognosticthe Company's Australian-based facilities in Clayton, VIC, and treatment outcomes (theranostic) testing, embracing precision medicine and individualized testing as a means to drive higher standards of patient treatment and disease management. Similarly, pharmaceutical and biotech companies are increasingly working with precision diagnostic and molecular technology providers such as CGI to provide molecular profiles on clinical trial participants. These profiles may help identify biomarker and genomic variations that may be responsible for differing responses to oncology therapies, thereby increasing the efficiency of trials while lowering costs. We believe tailored and combination therapies can revolutionize oncology care through molecular- and biomarker-based testing services, enabling physicians and researchers to target the factors that make each patient and disease unique.Gilles Plains, SA (effective in February 2020).

Cancer is genetically-drivenThe Company was founded in 1999 to conduct critical research and constitutes a diverse classdevelopment of diseases with various causes, each characterized by uncontrollable cell growth. Many cancers are becoming increasingly understood at a molecular level and it is possible to attribute specific cancers to identifiable genetic changes in unhealthy cells. Cancer cells contain modified genetic material compared to normal human cells. Common genetic abnormalities correlated toinnovative diagnostic tests for the benefit of helping physicians treat complicated cancer include gains or losses of genetic material on specific chromosomal regions (loci) or changes in specific genes (mutations) that ultimately result in detrimental cellular changes followed by cancerous or pre-cancerous conditions. Understanding the differences in these molecular changes helps clinicians to identify and stratify different forms of cancer in order to optimize patient treatment and patient management. Therefore, understanding and analysis of cancer at the molecular level is not only useful for diagnostic purposes, but we also believe it can play an important role in prognosis and disease management. We believe technology that can apply predictive information has the potential to dramatically improve treatment outcomescases for patients living with cancer. Our molecular-blood-borne disease. Upon becoming a publicly-traded company through an initial public offering in 2013, the Company completed a series of acquisitions which expanded the footprint of the business globally, and biomarker-basedenlarged the Company's capabilities to offer unique diagnostic tests for cancer aimand services to remove subjectivity from the diagnostic phase, and add prognostic information, thus enabling personalized treatments based on cancer analysis at its most basic level.

The Company utilized relatively the same proprietary and disease-focusednonproprietary diagnostic tests, aim to provide actionable information that can guide patient management decisions, potentially resulting in decreased costs for care providerslaboratory developed tests (LDTs) and patients while streamlining therapy selection. Our services are also sought by biotechnology and pharmaceutical companies engaged in designing and running clinical trials to determine the value and efficacy of oncology treatments and therapeutics. We believe trial participants' likelihood of experiencing either favorable or adverse responses to the trial treatment may be influenced or dependent on genomic factors. Our testing services may increase trial efficiency, subject safety and trial success rates. Our services are also sought by researchers and research groups seeking to identify biomarkers and develop methods for diagnostic technologies and tests for disease. We aggressively pursue the strategy of trying to demonstrate increased value and efficacy with payors who are trying to contain costs and academic collaborators seeking to develop new insights and cures.

On April 26, 2018, the limitationsCompany sold its India subsidiary, BioServe Biotechnologies (India) Private Limited (“BioServe”) to Reprocell, Inc., for $1.8 million.

On July 5, 2019, the Company entered into an asset purchase agreement (the “Clinical Agreement”) by and among the Company and siParadigm, LLC (“siParadigm”), pursuant to which the Company sold to siParadigm certain assets associated with the Company’s clinical laboratory business (the “Clinical Business,” and such assets, the “Designated Assets”) and agreed to cease operating the Clinical Business. The Designated Assets include intellectual property, equipment and customer lists associated with the Clinical Business, and for a period the Company was providing certain transitional services to siParadigm pursuant to the Clinical Agreement. The cash consideration paid by siParadigm at closing was approximately $747 thousand, which includes approximately $45 thousand for certain equipment plus a $1.0 million advance payment of traditional cancer diagnostic approaches,the Earn-Out (as defined below), less approximately $177 thousand of supplier invoices paid directly by siParadigm, an adjustment of $11 thousand and transaction

On July 15, 2019, the Company entered into a secured creditor asset purchase agreement (the “BioPharma Agreement”) by and among the Company, Gentris, LLC, a wholly-owned subsidiary of the Company, Partners for Growth IV, L.P. (“PFG”), Interpace Biosciences, Inc. (formerly known as Interpace Diagnostics Group, Inc.) (“IDXG”) and a newly-formed subsidiary of IDXG, Interpace BioPharma, Inc. (“Buyer”). The BioPharma Agreement provided for a consensual private foreclosure sale by PFG of all assets relating to the Company’s BioPharma Business, including reliancethe lease agreements to its CLIA certified and CAP accredited laboratories in Rutherford, NJ and Raleigh, NC (as defined in the BioPharma Agreement) to Buyer (the “BioPharma Disposal”). The BioPharma Disposal was consummated on human inspectionJuly 15, 2019.

Pursuant to the BioPharma Agreement, Buyer purchased from PFG certain assets and assumed certain liabilities of specimensthe Company relating to the BioPharma Business, providing as gross consideration $23.5 million, less certain closing adjustments totaling $2.0 million, of which $7.7 million was paid in the form of a promissory note issued by Buyer to the Company (the “Excess Consideration Note”) and interpretationthe remainder was paid to PFG in cash. PFG utilized the cash proceeds to satisfy the outstanding balances of clinical measurements,the Silicon Valley Bank (“SVB”) asset-based revolving line of credit (“ABL”) and inter-institutional variability. Our suite of clinical and biopharma services aimthe $6.0 million term note to remove subjectivity from diagnoses and additionally provide information that may influence treatment selection that cannot be obtained from anatomic pathology and staining techniques alone. We believe the level of personalized treatment required to optimize a patient's treatment regimenPFG (“PFG Term Note”), and to maximize clinical trial success rates may be significantly improved throughsatisfy certain transaction expenses. The balance of approximately $2.3 million  was delivered to the useCompany along with the Excess Consideration Note. The Excess Consideration Note which required interest-only quarterly payments at a rate of molecular-6% per year, was settled on October 24, 2019 for $6.0 million, including interest of $24 thousand. The Buyer withheld from the settlement of the Excess Consideration Note approximately $775 thousand for a net worth adjustment (assets less liabilities) of the BioPharma business (“Net Worth”), $153 thousand to secure collection of certain older accounts receivable of the Company purchased by Buyer (“AR Holdback”) and biomarker-based cancer characterization.an additional $735 thousand as security for indemnification obligations of the Company for any breaches of certain limited warranties and covenants of the Company and other specified items, subject to agreed-upon caps, baskets and survival periods as set forth in the BioPharma Agreement (“Indemnification Holdback”). The Company received the full amounts of the AR Holdback and the Indemnification Holdback in April and May 2020, respectively.

The following table lists our market strategyCompany and Buyer also entered into a transition services agreement (the “TSA”) pursuant to which the Company and Buyer are providing certain services to each other to accommodate the transition of the BioPharma Business to Buyer. In particular, the Company agreed to provide to Buyer, among other things, certain personnel services, payroll processing, administration services and benefit administration services (collectively, the “Payroll and Benefits Services”), for a period not to exceed six months from July 15, 2019, subject to the terms and conditions of the TSA, in exchange for payment or reimbursement, as applicable, by customer category:Buyer for the costs related thereto, including salaries and benefits for certain of the Company’s BioPharma employees during the transition period. The Company continues to provide the Payroll and Benefits Services under the TSA with respect to a limited number of employees. In addition, the Buyer is reimbursing the Company, in part, for the salaries and benefits of John A. Roberts, the Company’s Chief Executive Officer, and Glenn Miles, the Company’s Chief Financial Officer.

With the acquisition of our revenue from BiopharmavivoPharm on August 15, 2017, the Company enhanced its Discovery Services approximately 39% from Clinical Servicescapabilities. The Company is currently executing a strategy of partnering with pharmaceutical and approximately 4% from Discovery Services. In 2015, we generated approximately 64%biotech companies, academic institutions and governmental research centers as oncology diagnostic specialists by supporting therapeutic discovery. The Company's customers are increasingly attracted to working with it on preclinical development of our revenue from Biopharma Services, approximately 31% from Clinical Servicesbiomarker detection methods, response to immuno-oncology directed novel treatments and approximately 5% from Discovery Services.early prediction of clinical outcomes which is supported by its extended portfolio of orthotopic, xenografts and syngeneic tumor test systems as a unique service offering in the immuno-oncology space.

failures, can be as high as $2.6 billion and the approval process from development to market may be as long as 15 years. According to the National Cancer Institute, since the 1990s, cancer death rates in the United States have declined 23%, and approximately 83% of life expectancy increases in cancer patients are due to new treatments and oncology medications.

While oncology drugs have the potential to be among the most personalized therapeutics, oncology clinical trials continuevery few successfully make it to have some of the poorest approval rates.market. The application of pharmacogenomics to oncology clinical trials enables researchers to better predict differences, initially driven by data derived in drug response, efficacy and toxicity among trial participants, as well as to optimize treatment regimens based on these differences. According to IMS Health, it is estimated that by 2020, half of all pharmaceutical sales in the United States will be from specialty drugs, a category of drugs including oncology treatments tailored to patients’ genomic profiles. A study by Grand Market Research places the oncology market at 34% of revenue for molecular diagnostics services in 2013, with the pharmacogenomics market following closely at 26.3%. Pharmacogenomics is the study of genetic analysis based on a patient's response to a particular therapy or drug. We believepreclinical research. The Company believes a growing demand for faster development of personalized medicines and more effective clinical trials are growth drivers of this market.

The Company has a particularly strong set of experiences working in the preclinical area of checkpoint inhibitors and specifically immunotherapies. Drug development is continuing to attract biotech companies transforming scientific innovation into practice-changing cancer drugs, thereby driving demand for the Company's services. When considering druggable targets within the different immuno-oncology drug classes, T cell immunomodulators and cell therapies had the largest increase in new targets in the past 2 years, which suggests that more innovation is going into these drug classes than the other IO drug classes. Overall, active drugs in development has grown from 2,030 to 3,876, a 91% increase in just 2 years, resulting in more than 3,400 active clinical trials evaluating such agents, 66% of all deathsactive immuno-oncology drugs in urban areas and 21% in rural areas. Over the past 30 years, the risk factors for cancer in China have been increasing, including an aging population, decreased environmental conditions and westernization of diet and lifestyle. Our Shanghai laboratory performs clinical trials services for biotech and pharmaceutical companies in China, where governmental regulations prevent human samples from being exported from the country.development.

We areWith the Business Disposal transactions completed in 2018 and 2019, the Company is now focused on delivering our comprehensive cancer profiling and state of the art molecular diagnostic capabilitiesits pre-clinical CRO services to a diverse group of oncology market participants, including:

The Company continues to own a portfolio of proprietary disease-focused tests, and laboratory services, to oncologists and pathologists at hospitals, cancer centers, and physician offices. Our proprietary tests target cancers thatwhich are difficult to prognose and predict treatment outcomes through currently available mainstream techniques. We utilize an expansive rangefor licensing to the biopharma industry and diagnostic companies. The Company currently has a U.S. based diagnostic laboratory company offering its FHACT test domestically and a Chinese laboratory company preparing to offer its Tissue of non-proprietaryOrigin test and technologies to provide a comprehensive profile for each patient we serve. Clinical testing is available through anatomic pathology, flow cytometry, karotype, FISH, liquid biopsy and molecular diagnostics (including next generation sequencing and gene expression panels).in China.

HPV-associated cancers, including cervical, anal, and head and neck cancers, are caused by infection with high-risk variants of human papillomavirus (HPV), and are responsible for approximately 4% of all cancer diagnoses worldwide. Cervical cancer is the third most common cancer among women. According to the National Institutes of Health, while there are utilizedmore than 100 types of HPV, approximately 15 types are considered to be cancer-causing, with only 2 strains being responsible for 70% of cervical cancer cases worldwide. Cervical cancer may be detected by traditional methods, including Pap smears and liquid cytology, where cervical cells obtained by Pap smear are observed by a pathologist, or by HPV typing, which identifies the strain of HPV virus presently infecting the patient. Neither of these techniques is able to identify the likelihood of the HPV-infection’s developing into cancerous or precancerous lesions. According to the National Cancer Institute, about 50 million Pap smear tests to detect HPV are performed in the diagnosis, prognosis and prediction of treatment outcomes (theranosis) of cancerUnited States each year. It is estimated that approximately 2 million patients have abnormal Pap smear test results and are growing rapidlyreferred for biopsy/colposcopy as clinicians demand more precisea result of such tests. However, only approximately 12,000 of these patients will develop cervical cancer. It is believed that early detection of HPV-associated cancers and more comprehensive diagnostic evaluation of their patients. We believe our abilitylesions most likely to rapidly translate research insights about the geneticsprogress to cancer could eliminate unnecessary biopsies/colposcopies and molecular mechanisms of cancer into the clinical setting will improve patient treatment and management and that this approach can become a key component in the standard ofthereby reduce health care for personalized cancer treatment. We utilize highly skilled scientists, pathologists and hematologists in our laboratories, with 46% of individuals holding advanced degrees. These individuals assist our customers in integrating and technically assessing the testing results for their patients.costs.

The term “solid tumors” encompasses abnormal masses of cells that do not include fluid areas (e.g. blood) or cysts. Solid tumors are composed of abnormal cell growths that originate in organs or soft tissue and are normally named after the types of cells that form them. Examples of solid tumors include breast cancer, lung cancer, ovarian cancer and melanoma. Solid tumors may be benign (not cancerous) or malignant (cancerous) and may spread from their primary tissue of origin to oncologists and pathologists at hospitals, cancer centers, and physician officesother locations in the United States,body (metastasis). There are over 200 individual chemotherapeutic drugs available for combating solid tumor cancers. Selection of an appropriate course of treatment for a patient may depend on identification of the gene mutation or mutations present in their particular cancer and expanding our relationshipson determining the cancer’s tissue of origin. Metastatic tumors with leading distributors and medical facilities in emerging markets. As partan uncertain primary site can be a difficult clinical problem. In tens of our market strategy for our clinical services, we offer the branded testing programs described below.thousands of oncology patients every year, no confident diagnosis is ever issued, making standard-of-care treatment impossible.

Biopharma Services

Until the Business Disposals, the Company's Biopharma services includeServices included laboratory and testing services performed for biotechnology and pharmaceutical companies engaged in clinical trials. Our biopharma servicesThe Company's focus was on providing pharmaceutical companiesthese clients with oncology specific and non-oncology genetic testing services for phase I-IV trials along with critical support of ancillary services. These services include:included: biorepository, clinical trial logistics, clinical trial design, bioinformatics analysis, customized assay development. DNA and RNA extraction and purification, genotyping, gene expression and biomarker analyses. We The Company

also seeksought to apply ourits expertise in LDTslaboratory developed tests (“LDTs”) to assist in developing and commercializing drug-specific companion diagnostics.

In addition to the tests and services the Company provided to biotech and pharmaceutical companies, we are developing NGSthe Company developed Next Generation Sequencing (NGS) panels focused on pharmacogenomics and oncology that will inform researchers of trial subjects' drug sensitivities.

Our discovery servicesThe Company's Discovery Services provide the tools and testing methods for companies and researchers seeking to identify new molecular- and biomarker-based indicators for disease.disease and to determine the pharmacogenomics, toxicity and efficacy of potential therapeutic candidate compounds. Discovery Services offered include development of both xenograft and syngeneic animal models,

toxicology and genetic toxicology services, we offer includepharmacology testing, pathology services, and validation of biomarkers for diseases including cancers, from which tests for diagnosis or prognosis may be established. Wecancers. The Company also provideprovides consulting, guidance and preparation of samples and clinical trial design. We believeThe Company believes the ability to analyze variations in biomarkers, tumor cells and compounds, and to interpret these changesresults into meaningful predictors of disease or indicators of diagnosistherapeutic success is essential to discovering new molecular markers for cancer, new therapeutics, and targets for therapies.

HPV-associated cancers, including cervical, anal, and head and neck cancers, are caused by infection with high-risk variants of human papillomavirus (HPV), and are responsible for approximately 4% of all cancer diagnoses worldwide. Cervical cancer is the third most common cancer among women. According to the National Institutes of Health, while there are more than 100 types of HPV, approximately 15 types are considered to be cancer-causing, with only 2 strains being responsible for 70% of cervical cancer cases worldwide. Cervical cancer may be detected by traditional methods, including Pap smears and liquid cytology, where cervical cells obtained by Pap smear are observed by a pathologist, or by HPV typing, which identifies the strain of HPV virus presently infecting the patient. Neither of these techniques is able to identify the likelihood of the HPV-infection’s developing into cancerous or precancerous lesions. According to the National Cancer Institute, about 50 million Pap smear tests to detect HPV are performed in the United States each year. It is estimated that approximately 2 million patients have abnormal Pap smear test results and are referred for biopsy/colposcopy as a result of such tests. However, only approximately 12,000 of these patients will develop cervical cancer. It is believed that early detection of HPV-associated cancers and lesions most likely to progress to cancer could eliminate unnecessary biopsies/colposcopies and thereby reduce health care costs.

Solid Tissue Cancers

The term “solid tumors” encompasses abnormal masses of cells that do not include fluid areas (e.g. blood) or cysts. Solid tumors are composed of abnormal cell growths that originate in organs or soft tissue and are normally named after the types of cells that form them. Examples of solid tumors include breast cancer, lung cancer, ovarian cancer and melanoma. Solid tumors may be benign (not cancerous) or malignant (cancerous) and may spread from their primary tissue of origin to other locations in the body (metastasis). There are over 200 individual chemotherapeutic drugs available for combattingcombating solid tumor cancers. Selection of an appropriate course of treatment for a patient may depend on identification of the gene mutation or mutations present in their particular cancer and on determining the cancer’s tissue of origin. Metastatic tumors with an uncertain primary site can be a difficult clinical problem. In tens of thousands of oncology patients every year, no confident diagnosis is ever issued, making standard-of-care treatment impossible.

We maintain control, validationThe Company currently relies on third-party suppliers for its specialized research and quality assurance over our NGS panels, DNA microarraysscientific instrumentation and probes. Our microarraysrelated supplies of reagents, tumor cell lines, and NGS panels are designed in our facility by our scientists and technicians using state ofother inventory for it to successfully perform its CRO services for its customers. In addition, the art genomic mapping and analysis software. The specifications for our NGS panels are sent to Thermo Fisher Scientific (Ion Torrent) and Illumina for final manufacturing. Our NGS panels are manufactured under strict quality control and compliance. Upon manufacturing our custom, proprietary NGS panels, they are shipped back to our Rutherford facility for testing and acceptance.

Our business developsThe Company has proprietary tests that enable oncologists and pathologists at hospitals, cancer centers, and physician offices to properly diagnose and inform cancer treatment. We relyThe Company relies on a combination of patents, patent applications, trademarks, trademark applications, trade secrets, industry know-how, as well as various contractual arrangements, in order to protect the proprietary aspects of ourits technology. The Company may also license its technology to others. The Company believes that no single patent, technology, trademark, intellectual property asset or license is material to its business as a whole.

OurUntil the Business Disposals, the Company's patent portfolio consistsconsisted of 4920 issued U.S. patents, several5 pending U.S. applications, and 175more than 40 foreign patents. We have a disease-focused portfolioMost of patents. Ourthis intellectual property was transferred to those parties the Company entered into to complete the Business Disposals. The Company's key remaining patents currently include:

In addition to patents, we hold sixteenUntil the Business Disposals, the Company held twenty-six U.S. registered trademarks, including a federal registration for the term “CGI” as well as three U.S. trademark applications and one foreign trademark registration for certain of ourits proprietary tests and services. Our strategic useThe Company transferred the ownership of distinctivethese trademarks has garnered increased name recognition and brand awareness for our tests and services withinto the industry.

Depending onUntil the billing arrangement and applicable law, we areBusiness Disposals, the Company was reimbursed for clinical services by:by third-party payors that provideprovided coverage to the patient, such as an insurance company, managed care organization or a governmental payor program;program or from physicians or other authorized parties (such as hospitals or independent laboratories) that orderordered testing serviceservices or otherwise refer the services to us;the Company or directly from the patient. For the year ended December 31, 2016, we derived approximately 20% of our total

ClinicalThe Company's Pennsylvania and Australia research laboratory facilities comply with Good Laboratory Improvement Amendments of 1988Practices (“GLP”) to the extent required by the FDA, Environmental Protection Agency, USDA, Organization for Economic Co-operation and State Regulation

The U.S. Food and Drug Administration (“FDA”) regulates the sale or distribution, in interstate commerce, of medical devices under the Federal Food, Drug, and Cosmetic Act (“FDCA”), including in vitro diagnostic test kits, reagents and instruments used to perform diagnostic testing. SuchCertain of such devices must undergo pre-marketpremarket review by FDA prior to commercialization unless the device is of a type exempted from such review by statute or pursuant to FDA’s exercise of enforcement discretion. FDA, to date, has not exercised its authority to actively regulate the development and use of LDTs, such as oursthe Company's, as medical devices and therefore we dothe Company does not believe that ourits LDTs currently require pre-marketpremarket clearance or approval.

In addition, FDA could publicly issue a safety notice related to ourthe Company's test or request updates to ourits product labeling, including the addition of warnings, precautions, or contraindications.

In addition to the administrative simplification regulations discussed above, HIPAA also created two new federal crimes: health care fraud and false statements relating to health care matters. The health care fraud statute prohibits knowingly and willfully executing a scheme to defraud any health care benefit program, including private payors. A violation of this statute is a felony and may result in fines, imprisonment or exclusion from governmental payor programs such as the Medicare and Medicaid programs. The false statements statute prohibits knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false, fictitious or fraudulent statement in connection with the delivery of or payment for health care benefits, items or services. A violation of this statute is a felony and may result in fines, imprisonment or exclusion from governmental payor programs.

Finally, another development affecting the health care industry is the increased enforcement of the federal False Claims Act and, in particular, actions brought pursuant to the False Claims Act’s “whistleblower” or “qui tam” provisions. The False Claims Act 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 by a federal governmental payor program. The qui tam provisions of the False Claims Act allow a private individual to bring actions on behalf of the federal government alleging that the defendant has defrauded the federal government by submitting a false claim to the federal government and permit such individuals to share in any amounts paid by the entity to the government in fines or settlement. In addition, various states have enacted false claim laws analogous to the federal False Claims Act, although many of these state laws apply where a claim is submitted to any third-party payor and not merely a governmental payor program. When an entity is determined to have violated the False Claims Act, it may be required to pay up to three times the actual damages sustained by the government, plus civil penalties ranging from $10,781approximately $11 thousand to $21,563$22 thousand for each false claim violation that occurred after November 2, 2015.January 15, 2018. (Those whose false claims violations that occurred before November 2, 2015January 15, 2018 could be liable for treble damages plus lower civil penalties ranging from $5,000 to $11,000 per violation.monetary penalties.)

Additionally, in Europe various countries have adopted anti-bribery laws providing for severe consequences, in the form of criminal penalties and/or significant fines, for individuals and/or companies committing a bribery offence.offense. Violations of these anti-bribery laws, or allegations of such violations, could have a negative impact on ourthe Company's business, results of operations and reputation. For instance, in the United Kingdom, under the new Bribery Act 2010, which went into effect in July 2011, a bribery occurs when a

NumerousApproximately thirty (30) states have enacted laws prohibiting business corporations, such as us,the Company, from practicing medicine and employing or engaging physicians to practice medicine, generally referred to as the prohibition against the corporate practice of medicine. These laws, which vary among the states that have enacted them, are designed to prevent interference in the medical decision-making process by anyone who is not a licensed physician. Violation of these laws may result in civil or criminal fines, as well as sanctions imposed against usthe Company and/or the professional through licensure proceedings.

OurThe Company's laboratory is subject to federal, state and local regulations relating to the handling and disposal of regulated medical waste, hazardous waste and biohazardous waste, including chemical, biological agents and compounds, blood and bone marrow samples and other human tissue. Typically, we usethe Company uses outside vendors who are contractually obligated to comply with applicable laws and regulations to dispose of such waste. These vendors are licensed or otherwise qualified to handle and dispose of such waste.

OSHA has established extensive requirements relating to workplace safety for health care employers, including requirements to develop and implement programs to protect workers from exposure to blood-borne pathogens by preventing or minimizing any exposure through needle stick or similar penetrating injuries.

As of December 31, 2016, we2019, the Company had a total of 142approximately 110 full-time employees, and 13 part-timeon January 1, 2020 approximately 75 employees were transferred to IDXG pursuant to the terms of the TSA. The Company therefore retained approximately 35 full time employees, with 133 employees in sales and marketing, 86business development, 27 employees in researchclinical services and development and laboratory operations, 29 employees in quality assurance, client project and data management and logistics and 275 employees in general and administrative. None of ourits employees are represented by a labor union, and we consider ourthe Company considers its employee relations to be good.

This report includes the following trademarks, service marks and trade names owned by us:the Company: MatBA®, UroGenRA®, FHACT®, FReCaD™, Expand Dx™, Summation™, Select One®, DLBCL Complete™, Cervixcyte™, Leuka™, CGI®, CLL Complete®, Focus::NGS™, Focus::Myeloid™, Focus::CLL™, Tissue of Origin®, TOO®, Powered by CGI™ and Empowering Personal Cancer Treatment®. These trademarks, service marks and trade names are the property of Cancer Genetics, Inc. and its affiliates.

We haveThe Company has historically incurred substantial net losses. WeThe Company incurred losses of $15.8$6.7 million and $20.2$20.4 million for fiscal years ended December 31, 20162019 and 2015,2018, respectively. From ourthe Company's inception in April 1999 through December 31, 2016, we2019, the Company had an accumulated deficit of $114.0$164.4 million. We expectThe Company expects losses to continue, principallyonly to the extent that the business does not outpace the public company-related expenses, such as a result oflegal and audit fees and director’s and officer’s liability insurance, and the potential for ongoing research and development expenses and increased sales and marketing costs.losses associated with operating the Discovery Services business. These losses have had, and will continue to have, an adverse effect on our working capital, total assets and stockholders'stockholders’ equity. Because of the numerous risks and uncertainties associated with our research, developmentthe Company's revenue growth and commercialization efforts, we arecosts associated with being a public company, the Company is unable to predict when wethe Company will become profitable, and wethe Company may never become profitable. Even if we dothe Company does achieve profitability, wethe Company may not be able to sustain or increase profitability on a quarterly or annual basis. OurThe Company's inability to achieve and then maintain profitability would negatively affect our business, financial condition, results of operations and cash flows.

At December 31, 2019, the Company's history of losses required management to assess its ability to continue operating as a going concern, according to ASC 205-40, Going Concern. Even after the Business Disposals, the Company does not project that cash at December 31, 2019 will be sufficient to fund normal operations for the twelve months from the issuance of these financial statements in the Annual Report on Form 10-K. The Company's ability to continue as a going concern is dependent on reduced losses and improved future cash flows. Alternatively, the Company may needbe required to raise additional equity or debt capital, or consummate other strategic transactions. These factors raise substantial doubt about the Company's ability to fund our existing operations, to develop, validate and commercialize new tests and technologies, to expand our operations and to repay indebtedness.

While in connection with the closing of the periodBioPharma Disposal, the SVB ABL and the PFG Term Note were terminated, and all related liens were released, the Company remains liable to various unsecured creditors, including in the amount of time through which our$100 thousand due to NovellusDx, Ltd. (“NDX”) as of the date of this Form 10-K, in connection with its October 2019 NDX Settlement Agreement, and the principal amount of $1.3 million, plus interest due to Atlas Sciences, LLC pursuant to its one-year October 2019 unsecured note. At December 31, 2019, other than those of discontinuing operations, the Company had an aggregate of $5.7 million of current financial resourcesliabilities and $6.3 million in total liabilities. This is compared to current assets other than those of discontinuing operations of $7.1 million, as of December 31, 2019. However, at December 31, 2019, the Company has an additional $1.2 million of liabilities associated with discontinuing operations that will be adequatefunded primarily from the Company's continuing operations. No assurances can be given that the Company will be able to support our operations andpay such unsecured creditors in full or that claims will not be asserted in addition to the costs to support our general and administrative, sales and marketing and research and development activitiesamounts which the Company believes it is liable for at this time.

The Company has three sources of potential cash receipts following the Business Disposals, with only the third, the proceeds from the Discovery Business, being material. First, as part of the sale of equity or convertible or other debt securitiesthe Clinical Business to siParadigm, the Company is receiving earn-out payments based on the revenues of siParadigm from the former customers of the Company’s Clinical Services business. Such earn-out payments are based on revenues generated in a public or private offering,the 12 months following the closing of the sale of the Clinical Services business, and are to be paid over 24 months following such sale. While the Company received net payments of approximately $156 thousand from an additional or new credit facility orsiParadigm in the July through December 2019 period, the monthly payments from a strategic partnership coupled with an investment in us or a combinationsiParadigm have decreased since the end of forms. We continue to evaluate our operationsthe third quarter of 2019, and take steps to improve our operating cash flow. We can provide no assurances can be given with respect to the amount and timing of any further payments. Second, the Company is attempting to collect on certain accounts receivable it owns that our current actions will be successfulwere not sold to siParadigm or that any additional sources of financing will be available to us on favorable terms, if at all, when needed. Furthermore, certain provisions of the securities purchase agreements we entered into in May 2016 and September 2016, may limit our ability to raise additional capital on favorable terms, or at all, including a prohibition on entering into variable rate transactions, such as an equity line, while the 5-year warrants issued in May and September 2016 remain outstanding, and rights of the investors to participate in future financings in anIDXG. The net amount of upsuch accounts receivable expected to 50%be collected as of such financing. Our failure to raise additional capital and in sufficient amounts when needed may significantly impact our ability to operate our business. For further discussion of our liquidity requirements, see the section titled “Liquidity and Capital Resources-Capital Resources and Expenditure Requirements.”December 31, 2019 was approximately $71 thousand.

We also may needThird, the Company continues to raise capitalown its Discovery Business through its vivoPharm subsidiary. For the twelve month period ended December 31, 2019, the Company had a net loss from continuing operations of $6.9 million, had cash used in continuing operations of $3.2 million and $7.3 million in revenues from the Discovery Business. No assurances can be given as to expand our business to meet our long-term business objectives, including to:

As a public company, the Company is required to maintain internal control over financial reporting and to report any material weaknesses in such researchinternal controls. Section 404 of the Sarbanes-Oxley Act ("Section 404"), requires that the Company evaluate and development activities;determine the effectiveness of internal controls over financial reporting and provide a management report on internal control over financial reporting. A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of annual or interim financial statements will not be prevented or detected and corrected on a timely basis.

During the fourth quarter of 2019, the Company identified a material weakness in internal control over financial reporting related to execute on our marketingcontrols over accounting for foreign currency exchange rate. As a result, a non-cash adjustment had to be recorded to correct the error identified during the 2019 audit procedures. In addition, the Company identified a material weakness in internal control over financial reporting related to controls over accounting for the fair value of an investment held by the Company. As a result, a non-cash adjustment had to be recorded to correct the error identified during the 2019 audit procedures. The Company has begun the process of implementing changes to its internal control over financial reporting to remediate the control deficiencies that gave rise to the material weakness, including further improvements in its processes and sales strategyanalyses that support the accounting for our tests and gain acceptanceforeign currency exchanges. The Company expects this deficiency to be corrected by the end of our teststhe second quarter of 2020.

During the fourth quarter of 2017, the Company identified a continued material weakness in internal control over financial reporting related to controls over accounting for uncollectible Clinical Services revenue. This material weakness in the market;

If the Company's steps are insufficient to successfully remediate the material weaknesses and otherwise establish and maintain an effective system of our diagnostic tests;

Moreover, the Company does not expect that disclosure controls or internal control over financial reporting will prevent all error and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. Failure of its control systems to prevent error or fraud could materially adversely impact the regulations relatingCompany.

As a public company, the Company has incurred and will continue to incur significant legal, accounting and other expenses. The Company is subject to the reporting requirements of March 22, 2017, we had issuedthe Securities Exchange Act of 1934, as amended, the other rules and regulations of the Securities and Exchange Commission, or SEC, and the rules and regulations of The Nasdaq Stock Market, or Nasdaq. Compliance with the various reporting and other requirements applicable to public companies requires considerable time and attention of management. For example, the Sarbanes-Oxley Act and the rules of the SEC and national securities exchanges have imposed various requirements on public companies, including requiring establishment and maintenance of effective disclosure and financial controls. Management and other personnel are devoting and will continue to need to devote a substantial amount of time and money to these compliance obligations. The board may view these costs to be disproportionately expensive when viewed in light of the Company's reduced revenues and overall operations following the Business Disposals.

As a result, the board of directors may elect to pursue a strategic transaction to attempt to expand the business and create additional value for shareholders, or in light of the time, costs and uncertainties inherent in seeking such a strategic transaction, and the costs in remaining as a public company, the Company's board may decide to pursue a dissolution and liquidation of the Company. If the Company's board of directors were to approve and recommend, and the Company's stockholders were to approve, a dissolution and liquidation of the Company, the Company would be required under Delaware corporate law to pay the Company's outstanding warrantsobligations, as well as to purchase 7,475,961 sharesmake reasonable provision for contingent and unknown obligations, prior to making any distributions in liquidation to the Company's stockholders. The Company's commitments and contingent liabilities may include severance obligations related to the recent asset sales. As a result of ourthis requirement, a portion of the Company's assets may need to be reserved pending the resolution of such obligations. If a dissolution and liquidation were pursued, the board of directors, in consultation with its advisors, would need to evaluate these matters and make a determination about a reasonable amount to reserve. Accordingly, holders of the Company's common stock atcould lose all or a weighted-average exercise pricesignificant portion of $4.61 per share,their investment in the event of a liquidation, dissolution or winding up of the company.

Current management of the Company, principally its Chief Executive Officer and Chief Financial Officer, are responsible for the day-to-day operations of the Company, including warrantsplanning for the future direction of the Company after the Business Disposals. Such officers may enter into consulting agreements with Buyer (and, in the case of the Chief Executive Officer, siParadigm) and have been assisting in the transition of the Clinical Business and BioPharma Business to purchase 2,869,801 sharessiParadigm and IDXG, as applicable. It is possible that the dual roles will create conflicts of our common stock at a price of $2.25 per share and warrants to purchase 443,262 shares of our common stock at a price of $2.82 per share. We also have outstanding options to purchase an aggregate of 2,532,734 shares of our common stock. The sale, or even the possibility of sale, and the uncertaintyinterest for such officers with respect to allocation of their time and otherwise. No assurance can be given that the timing of any sales,officers of the shares underlying these securities, particularlyCompany will have sufficient time and resources to properly direct the warrants, could have an adverse effect onfuture operations of the market priceCompany, or that other conflicts of our common stock and on our ability to obtain future financing at prices we deem satisfactory, or at all. If and to what extent these warrants and/or options are exercised, you may experience dilution to your holdings.interest in their dual roles will not arise.

WeThe Company currently derivederives substantially all of our revenues from ourtesting services, laboratory testing services. We have only recently begun offering our proprietary Focus::NGS® panels through our CLIA-certified, CAP-accreditedservices and state licensed laboratories. We are in varying stages of research and development for other diagnostic tests that we may offer.

If we arethe Company is unable to increase sales of our laboratory tests and services, or to successfully develop, validate and commercialize other diagnostic tests, wethe Company will not produce sufficient revenues to become profitable.

The recent outbreak of the novel coronavirus, COVID-19, which has been declared by the World Health Organization to be a pandemic, has spread across the globe and oncologists decideis impacting worldwide economic activity. A pandemic, including COVID-19 or other public health epidemic, poses the risk that the Company or its employees, contractors, suppliers, courier delivery services and other partners may be prevented from conducting business activities for an indefinite period of time, including due to spread of the disease within these groups or due to shutdowns that may be requested or mandated by governmental authorities. While it is not possible at this time to estimate the impact that COVID-19 could have on the Company's business, the COVID-19 pandemic and mitigation measures have had and may continue to have an adverse impact on global economic conditions which could have an adverse effect on the Company's business and financial condition, including impairing the ability to raise capital when needed.

In addition, the Company's corporate and accounting functions are located in New Jersey and are currently subject to a shelter-in-place mandate. The Company's U.S. based preclinical laboratory is located in Pennsylvania and is subject to a stay-at-home order, our diagnostic tests and/and many customers worldwide are similarly impacted. As a healthcare provider, the Company is allowed to remain open in compliance with the shelter-in-place and stay-at-home mandates and continue to provide critical services in the development of new therapies and the fight against cancer. The Company is still providing Discovery Services, and has yet to experience a slowdown in project work as a result of the COVID-19 pandemic; however, the future of many projects may be delayed. The global outbreak of COVID-19 continues to rapidly evolve, and the extent to which COVID-19 may impact business, results of operations and financial position will depend on future developments, which are highly uncertain and cannot be predicted with confidence, such as the ultimate geographic spread of the disease, the duration of the outbreak, travel restrictions and social distancing in the United States and other countries, business closures or business disruptions, and the effectiveness of actions taken in the United States and other countries to contain and treat the disease.

To generate demand for our Clinical Services, we will need to educate oncologists and pathologists on the clinical utility, benefits and value of each type of test we provide through published papers, presentations at scientific conferences and one-on-one education sessions by members of our sales force. In addition, we will need to assure oncologists and pathologists of our ability to obtain and maintain coverage and adequate reimbursement from third-party payors. To generate demand for our Biopharma Services andits Discovery Services, we needthe Company needs to educate pharmaceutical and biotech companies and clinical research organizations on the utility of ourthe Company's tests and services to improve the outcomes of clinical trials for new oncology drugs and more rapidly advance targeted therapies through the clinical development process through published papers, presentations at scientific conferences and one-on-one education sessions by members of ourthe Company's sales force. WeThe Company may need to hire additional commercial, scientific, technical and other personnel to support this process. If wethe Company cannot convince medical practitioners, pharmaceutical and biotech companies or clinical research organizations to order ourits diagnostic tests or other future tests we develop, wethe Company develops, the Company will likely be unable to create demand for our tests in sufficient volume for usit to achieve sustained profitability.

In recent years, we have been expanding our Biopharma Services business. The nature of these services is that they tend to come in relatively large projects but episodically, rather than providing steady sources of revenues. The timing, size and duration of ourthe Company's contracts with pharmaceutical and biotech companies and clinical research organizations depend on the size, pace and duration of such customer'scustomer’s clinical trial, over which we havethe Company has no control and sometimes limited visibility. In addition, our expense levels are based, in part, on expectation of future revenue levels. A shortfall in expected revenue could, therefore, result in a disproportionate decrease in ourthe Company's net income. As a result, our quarterly operating results may be subject to significant fluctuations and may be difficult to forecast.

WeThe Company cannot accurately predict the future growth rate or the size of the market for our tests andthe Company's services. The expansion of this market depends on a number of factors, such as:

In connection with the Discovery Services business, the Company contracts with biopharmaceutical companies to provide specialized services to assist them in planning and conducting unique, specialized studies to guide drug discovery and development programs with a concentration in oncology and immuno-oncology. The Company's services include monitoring clinical trials, data and laboratory analysis, electronic data capture and other related services. Such services are complex and subject to contractual requirements, regulatory standards and ethical considerations. If the Company fails to perform the services in accordance with these requirements, regulatory agencies may take action against the Company for failure to comply with applicable regulations governing clinical trials. Customers may also bring claims against the Company for breach of contractual obligations. Any such action could have a material adverse effect on results of operations, financial condition and reputation.

We intendThe Company intends to continue with our research and development activities, our sales and marketing programs and other activities as needed to meet future demand. Any significant expansion may strain our managerial, financial and other resources. If we arethe Company is unable to manage such growth, our business, operating results and financial condition could be adversely affected. WeThe Company will need to improve continually ourthe operations, financial and other internal systems to manage its growth effectively, and any failure to do so may lead to inefficiencies and redundancies, and result in reduced growth prospects and diminished operational results.

As part of ourthe Company's business strategy, wethe Company may pursue other mergers or acquisitions of businesses and assets. We also may pursue strategic alliances and joint ventures that leverage our core technology and industry experience to expand our offerings or distribution. For example, wethe Company acquired vivoPharm in 2017, Response Genetics, Inc. in 2015 and Gentris Corporation in 2014, and we entered into a joint venture in May 2013 with Mayo Foundation for Education and Research. We haveThe Company subsequently shut down Response Genetics operations in California and moved them to New Jersey and North Carolina and in February 2020 completed the commitments thereby ending the need for the Company's joint venture with Mayo. The Company also purchased a business in India in August 2014 which was sold in April 2018. The Company also sold the Clinical Business and BioPharma Business in two transactions in July 2019 (the “Business Disposals”). The Company has developed experience with acquiring other companies and forming strategic alliances and joint ventures. WeThe Company may not be able to find suitable partners or merger or acquisition candidates, and we may not be able to complete such transactions on favorable terms, if at all. If we makethe Company makes any acquisitions, we

the Company may not be able to integrate these acquisitions successfully into our existing business, and we could assume unknown or contingent liabilities. Any future acquisitions also could result in significant write-offs or the incurrence of debt and contingent liabilities, any of which could have a material adverse effect on ourthe Company's financial condition, results of operations and cash flows. Integration of an acquired company also may disrupt ongoing operations and require management resources that would otherwise focus on developing our existing business. WeThe Company may experience losses related to investments in other companies, which could have a material negative effect on ourthe results of operations. WeThe Company may not identify or complete these transactions in a timely manner, on a cost-effective basis, or at all, and we may not realize the anticipated benefits of any acquisition, technology license, strategic alliance or joint venture.

To finance any mergers or acquisitions, or joint ventures, wethe Company may choose to issue shares of our common stock as consideration, which would dilute the ownership of ourits stockholders. If the price of ourthe Company's common stock is low or volatile, wethe Company may not be able to acquire other companies or fund a joint venture project using our stock as consideration. Alternatively, it may be necessary for usthe Company to raise additional funds for acquisitions through public or private financings. Additional funds may not be available on terms that are favorable to us,the Company, or at all.

The specialized nature of ourthe Company's industry results in an inherent scarcity of experienced personnel in the field. OurThe Company's future success depends upon ourthe ability to attract and retain highly skilled personnel (including medical, scientific, technical, commercial, business, regulatory and administrative personnel) necessary to support our anticipated growth, develop our business and perform certain contractual obligations. Given the scarcity of professionals with the scientific knowledge that we requirethe Company requires and the competition for qualified personnel among life science businesses, wethe Company may not succeed in attracting or retaining the personnel we requirerequired to continue and grow our operations. The loss of a key employee, the failure of a key employee to perform in his or her current position or ourthe Company's inability to attract and retain skilled employees could result in ourthe inability to continue to grow ourthe Company's business or to implement our business strategy.

OurThe Company's success in selling our clinical laboratory services, biopharma services, discovery services, diagnostic tests and any other tests or products that we are able to develop willDiscovery Services could require usthe Company to expand ourthe sales force in the United States and internationally by recruiting additional sales representatives with extensive experience in oncology and close relationships with medical oncologists, surgeons, pathologists and other hospital personnel, as well as pharmaceutical and biotech companies and clinical research organizations.the Company's field. To achieve ourthe Company's marketing and sales goals, wethe Company will need to continue to expand our sales and commercial infrastructure. Sales professionals with the necessary technical and business qualifications are in high demand, and there is a risk that wethe Company may be unable to attract, hire and retain the number of sales professionals with the right qualifications, scientific backgrounds and relationships with decision-makers at potential customers needed to achieve our sales goals. WeThe Company may face competition from other companies in ourthe industry, some of whom are much larger than usthe Company and who can pay greater compensation and benefits than wethe Company can, in seeking to attract and retain qualified sales and marketing employees. If we arethe Company is unable to hire and retain qualified sales and marketing personnel, our business will suffer.

WeThe Company currently derivederives substantially all of our revenues from our laboratory testingpreclinical services. We do not have any clinical reference laboratory facilities outside of our facilities in Rutherford, New Jersey, Morrisville, North Carolina, Hyderabad, India and Los Angeles, California. OurThe Company's facilities and equipment could be harmed or rendered inoperable by natural or man-made disasters, including fire, flooding and power outages, which may render

it difficult or impossible for usthe Company to perform our tests or provide laboratory services for some period of time. The inability to perform our testsservices or the backlog of testsprojects that could develop if any of ourthe Company's facilities is inoperable for even a short period of time may result in the loss of customers or harm to ourthe Company's reputation or relationships with key researchers, collaborators, and wecustomers, and the Company may be unable to regain those customers or repair ourthe Company's reputation in the future. Furthermore, ourthe Company's facilities and the equipment we useused to perform our research and development work could be costly and time-consuming to repair or replace.

The Company's competitors may succeed in selling their products to profile genes, gene expression or protein biomarkers in various cancers. Precision medicine is a new area of science, and we cannot predict what tests others will develop that may compete with or provide results superior to the results we are able to achieve with the tests we develop. Our competitors include public companies such as Abbott Laboratories, Inc., bioTheranostics, Inc., Foundation Medicine, Inc., Genomic Health, Inc., Invitae Corp., Johnson & Johnson, Myriad Genetics Inc., Nant Health, NeoGenomics, Inc., Quest Diagnostics, Roche Molecular Systems, Inc., and many private companies. We expect that pharmaceutical and biotech companies will increasingly focus attentioncustomers more effectively than the Company sells products.  In addition, academic institutions, hospitals, governmental agencies, and resources on the personalized diagnostic sector as the potentialother public and prevalence increases for molecularly targeted oncology therapies approved by FDA along with companion diagnostics.

Due to the early stage nature of ourthe Company's business and ourthe limited sales and marketing activities to date, we havethe Company has historically derived a significant portion of our revenue from a limited number of test ordering sites,customers, although the test ordering sitescustomers that generate a significant portion of ourCompany revenue may change from period to period. Our test ordering sitesThe Company's customers are largely hospitals, cancer centers, reference laboratories and physician offices, as well as pharmaceutical and biotech companies as part of a clinical trial. Oncologists and pathologists at these sites order the tests on behalf of the needs of their oncology patients or as part of a clinical trial sponsored by a pharmaceutical and biotech company in which the patient is being enrolled. The top five test ordering clients during 2016 and 2015 accounted for 31% and 49%, respectively, of our testing volumes, with 6% and 18%, respectively, of the test volume coming from community hospitals. During the year ended December 31, 2016, one Biopharma client2019, three customers accounted for approximately 16%61% of our revenue.the Company's consolidated revenue from continuing operations. During the year ended December 31, 2015 one Biopharma client2018, three customers accounted for approximately 19%53% of our revenue.the Company's consolidated revenue from continuing operations. As a healthcare provider, the Company is still providing Discovery Services and has yet to experience a slowdown in its project work; however, the future of many projects may be delayed. The Company continues to vigilantly monitor the situation with its primary focus on the health and safety of its employees and clients.

OurThe Company's activities currently require the controlled use of potentially harmful biological materials and hazardous materials and chemicals. WeThe Company 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, wethe Company could be held liable for any resulting damages, and any liability could exceed ourthe Company's resources or any applicable insurance coverage wethe Company may have. Additionally, we arethe Company is subject to, on an ongoing basis, federal, state and local laws and regulations governing the use, storage, handling and disposal of these materials and specified waste products. The cost of compliance with these laws and regulations may become significant and could have a material adverse effect on ourthe financial condition, results of operations and cash flows. In the event of an accident or if wethe Company otherwise failfails to comply with applicable regulations, wethe Company could lose our permits or approvals or be held liable for damages or penalized with fines.

As our test volume grows, we will needThe Company's Discovery Services customers face increasing competition from lower cost generic products, which in turn may affect their ability to increase our testing capacity, implement increases in scalepursue research and related processing, customer service, billing, collectiondevelopment activities with the Company. In the United States, EU and systems process improvements and expand our internal quality assurance program and technologyJapan, political pressure to support testingreduce spending on a larger scale. We will also need additional certified laboratory scientistsprescription drugs has led to legislation and other scientificmeasures which encourages the use of generic products. In addition, proposals emerge from time to time in the United States and technical personnelother countries for legislation to process these additional tests. Any increasesfurther encourage the early and rapid approval of generic drugs. Loss of patent protection for a product typically is followed promptly by generic substitutes, reducing customers’ sales of that product and their overall profitability. Availability of generic substitutes for the Company's customers’ drugs may adversely affect their results of operations and cash flow, which in scale, related improvementsturn may mean that they would not have surplus capital to invest in research and quality assurancedevelopment and drug commercialization, including in the Company's

services. If competition from generic products impacts customers’ finances such that they decide to curtail the Company's services, revenues may not be successfully implementeddecline and appropriate personnel may not be available. As additional tests are commercialized, we will need to bring new equipment on line, implement new systems, technology, controls and procedures and hire personnel with different qualifications. Failure to implement necessary procedures or to hire the necessary personnelthis could result in a higher cost of processing or an inability to meet market demand. We cannot assure you that we will be able to perform tests on a timely basis at a level consistent with demand, that our efforts to scale our commercial operations will not negatively affect the quality of our test results or that we will respond successfully to the growing complexity of our testing operations. If we encounter difficulty meeting market demand or quality standards for our tests, our reputation could be harmed and our future prospects and business could suffer, which may have a material adverse effect on our financial condition, results of operations and cash flows.the Company's business.

We dependThe Company depends on information technology and telecommunications systems for significant aspects of our operations. In addition, our third-party billing and collections provider depends upon telecommunications and data systems provided by outside vendors and information we provide on a regular basis. These information technology and telecommunications systems support a variety of functions, including test processing, sample tracking, quality control, customer service and support, billing, and reimbursement, research and development activities and our general and administrative activities. Information technology and telecommunications systems are vulnerable to damage from a variety of sources, including telecommunications or network failures, malicious human acts and natural disasters. Moreover, despite network security and back-up measures, some of ourthe Company's servers are potentially vulnerable to physical or electronic break-ins, computer viruses and similar disruptive problems. Despite the precautionary measures we have taken to prevent unanticipated problems that could affect our information technology and telecommunications systems, failures or significant downtime of our information technology or telecommunications systems or those used by our third-party service providers could prevent us from processing tests, providing test results to pathologists, oncologists, billing payors, processing reimbursement appeals, handling patient or physician inquiries, conducting research and development activities and managing the administrative aspects of our business. Any disruption or loss of information technology or telecommunications systems on which critical aspects of ourthe Company's operations depend could have an adverse effect on our business.

In March 2010, U.S. President Barack Obama signedThe Company assesses the Patient Protectionrealizable condition of indefinite-lived intangible assets and Affordable Care Act, as amended by the Health Caregoodwill annually and Education Reconciliation Act (collectively, “PPACA”), which makes a number of substantialconducts an interim evaluation whenever events or changes in circumstances, such as operating losses or a significant decline in earnings associated with the way health care is financed by both governmental and private insurers. Among other things,acquired business or asset, indicate that these assets may be impaired. The Company's ability to realize the PPACA:

The Company's business is subject to federal, state, and local laws and regulations relating to the Medicare Physician Fee Schedule and, under the current statutory formula, the rates for these services are updated annually. For the past several years, the applicationprotection of the statutory formula would have resulted in substantial payment reductions if Congress failedenvironment, worker health and safety and the use, management, storage, and disposal of hazardous substances and wastes. Failure to intervene. In the past, Congress passed interim legislation to prevent the decreases. On April 16, 2015, President Obama signed the Medicarecomply with these laws and CHIP Reauthorization Act (“MACRA”), which had previously been passed by both houses of Congress. MACRA repealed the provisions related to the Medicare Sustainable Growth Rate (SGR) formula and implements a new physician payment system that is designed to reward the quality of care. In addition, it extends the current Medicare Physician Fee Schedule rates through June 2015, and then increases them by 0.5%t for the remainder of 2015. Beginning on January 1, 2016, the rates will be increased annually by 0.5%, through 2019. For 2020 through 2025 payments will be frozen, although payment will be adjusted to account for performance on certain quality metrics under the Merit-Based Incentive Payment Systems (“MIPS”) or to reflect physician participation in alternative payment models (“APMs”). For 2026 and subsequent years, qualified APM participants receive an annual 0.75% update on Medicare physician payment rates, while those not participating receive a 0.25% annual payment update, plus any applicable MIPS-based payment adjustments. At this time, it is too early to determine how these changes may impact our business beyond 2015. It is unclear what impact, if any, MACRA will have on our business and operating results, but any resulting decrease in paymentregulations may result in reduced demandsubstantial fines, penalties or other sanctions. In addition, environmental laws and regulations could require the Company to pay for our services, whichenvironmental remediation and response costs, or subject the Company to third party claims for personal injury, natural resource or property damage, relating to environmental contamination. Liability may be imposed whether or not the Company knew of, or were responsible for, such environmental contamination. The cost of defending against environmental claims, of compliance with environmental, health and safety regulatory requirements or of remediating contamination could materially adversely impact our revenues andaffect the Company's business, assets or results of operations.

OurThe Company's ability to market certain of our tests and services, domestically and/or internationally, is in part derived from licenses to intellectual property which is owned by third parties. As such, wethe Company may not be able to continue selling our tests and services if we lose ourthe Company loses existing licensed rights or sell new tests and services if wethe Company cannot obtain such licensed rights on reasonable terms. In particular, we currently in-license a biomarker from the National Cancer Institute used in our FHACT probe. Further, we may also need to license other technologies to commercialize future products. As may be expected, ourthe Company's business may suffer if (i) these licenses terminate; (ii) if the licensors fail to abide by the terms of the license, properly maintain the licensed intellectual property or fail to prevent infringement of such intellectual property by third parties; (iii) if the licensed patents or other intellectual property rights are found to be invalid or (iv) if we arethe Company is unable to enter into necessary licenses on reasonable terms or at all. In return for the use of a third-party'sthird-party’s technology, wethe Company may agree to pay the licensor royalties based on sales of our products as well as other fees. Such royalties and fees are a component of cost of product revenues and will impact the margins on ourthe Company's tests.

 

OurThe Company's ability to protect our proprietary discoveries and technologies affects ourthe Company's ability to compete and to achieve sustained profitability. Currently, we relythe Company relies on a combination of U.S. and foreign patents and patent applications, copyrights, trademarks and trademark applications,

confidentiality or non-disclosure agreements, material transfer agreements, licenses, work-for-hire agreements and invention assignment agreements to protect our intellectual property rights. WeThe Company also maintainmaintains as trade secrets certain company know-how and technological innovations designed to provide usthe Company with a competitive advantage in the

From time to time wethe Company may face intellectual property infringement (or misappropriation) claims from third parties. Some of these claims may lead to litigation. The outcome of any such litigation can never be guaranteed, and an adverse outcome could affect usthe Company negatively. For example, were a third-party to succeed on an infringement claim against us, wethe Company, the Company may be required to pay substantial damages (including up to treble damages if such infringement were found to be willful). In addition, wethe Company could face an injunction, barring usthe Company from conducting the allegedly infringing activity. The outcome of the litigation could require usthe Company to enter into a license agreement which may not be pursuant to acceptable or commercially reasonable or practical terms or which

Furthermore, wethe Company may initiate claims to assert or defend our own intellectual property against third parties. Any intellectual property litigation, irrespective of whether we arethe Company is the plaintiff or the defendant, and regardless of the outcome, is expensive and time-consuming, and could divert our management'smanagement’s attention from ourthe Company's business and negatively affect our operating results or financial condition. WeThe Company may not be able to prevent, alone or with ourthird-party collaborators or suppliers, misappropriation of ourthe Company's proprietary rights, particularly in countries where the laws may not protect those rights as fully as in the United States. In addition, interference proceedings brought by the USPTO may be necessary to determine the priority of inventions with respect to our patents and patent applications or those of ourthe Company's current or future collaborators.collaborators, suppliers or customers.

Finally, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of ourthe Company's confidential and proprietary information could be compromised by disclosure during this type of litigation. In addition, there could be public announcements of the results of hearings, motions or other interim proceedings or developments. If securities analysts or investors perceive these results to be negative, it could have a substantial adverse effect on ourthe Company's financial condition.

OurThe Company's business strategy incorporates international expansion, including our recent acquisitions which have provided us with facilities in India and China,Australia, and the possibility of establishing and maintaining clinician marketing and education capabilities in other locations outside of the United States and expanding our relationships with distributorsbiopharmaceutical, academic and manufacturers.governmental research organizations. Doing business internationally involves a number of risks, including:

Any of these risks, if encountered, could significantly harm our future international expansion and operations and, consequently, have a material adverse effect on ourthe Company's financial condition, results of operations and cash flows.

Although we report ourthe Company reports operating results in U.S. dollars, a portion of ourthe Company's revenues and expenses are or will be denominated in currencies other than the U.S. dollar.dollar, particularly in Australia and Europe. Fluctuations in foreign currency exchange rates can have a number of adverse effects on us.the Company. Because ourthe Company's consolidated financial statements are presented in U.S. dollars, wethe Company must translate revenues, expenses and income, as well as assets and liabilities, into U.S. dollars at exchange rates in effect during or at the end of each reporting period. Therefore, changes in the value of the U.S. dollar against other currencies will affect our revenues, income from operations, other income (expense), net and the value of balance sheet items originally denominated in other currencies. There is no guarantee that ourthe Company's financial results will not be adversely affected by currency exchange rate fluctuations. In addition, in some countries wethe Company could be subject to strict restrictions on the movement of cash and the exchange of foreign currencies, which could limit ourthe Company's ability to use these funds across ourits global operations.

The FCPA and anti-bribery laws in other jurisdictions generally prohibit companies and their intermediaries from making improper payments for the purpose of obtaining or retaining business or other commercial advantage. OurThe Company's policies mandate compliance with these anti-bribery laws, which often carry substantial penalties, including criminal and civil fines, potential loss of export licenses, possible suspension of the ability to do business with the federal government, denial of government reimbursement for products and exclusion from participation in government health care programs. WeThe Company may operate in jurisdictions such as India and China that have experienced governmental and private sector corruption to some degree, and, in certain circumstances, strict compliance with anti-bribery laws may conflict with certain local customs and practices. WeThe Company cannot assure that ourthe internal control policies and procedures always will protect usthe Company from reckless or other inappropriate acts committed by our affiliates, employees or agents. Violations of these laws, or allegations of such violations, could have a material adverse effect on ourthe Company's business, financial position and results of operations.

The market price of ourthe Company's common stock has historically experienced and may continue to experience significant volatility. From January 20142015 through December 31, 2016,March 27, 2020, the market price of ourthe Company's common stock has fluctuated from a high of $20.00$382.50 per share in the firstthird quarter of 2014,2015, to a low of $1.10$2.00 per share in the fourth quarter of 2016.2019. Market prices for securities of development-stage life sciences companies have historically been particularly volatile. The factors that may cause the market price of ourthe Company's common stock to fluctuate include, but are not limited to:

 

In addition, the equity markets have experienced significant price and volume fluctuations that have affected the market prices for the securities of newly public companies for a number of reasons, including reasons that may be unrelated to our business or operating performance. These broad market fluctuations may result in a material decline in the market price of ourthe Company's common stock and you may not be able to sell your shares at prices you deem acceptable. In the past, following periods of volatility in the equity markets, securities class action lawsuits have been instituted against public companies. Such litigation, if instituted against us,the Company, could result in substantial cost and the diversion of management attention.

Securities research analysts establish and publish their own periodic projections for ourthe Company's business. These projections may vary widely from one another and may not accurately predict the results wethe Company actually achieve. Ourachieves. The Company's stock price may decline if ourthe actual results do not match securities research analysts'analysts’ projections. Similarly, if one or more of the analysts who writes reports on usthe Company downgrades ourthe Company's stock or publishes inaccurate or unfavorable research about ourthe Company's business, our stock price could decline. If one or more of these analysts ceases coverage of our companythe Company or fails to publish reports on usthe Company regularly, ourthe Company's stock price or trading volume could decline. While we expectthe Company expects securities research analyst coverage, if no securities or industry analysts begin to cover us,the Company, the trading price for ourthe Company's stock and the trading volume could be adversely affected.

As a public company, and particularly after we cease to be an “emerging growth company,” we arethe Company is incurring significant legal, accounting and other expenses that we did not incur as a private company and which may increase after we are no longer an "emerging growth company."expenses. For example, in addition to being required to comply with certain requirements of the Sarbanes-Oxley Act of 2002, we will bethe Company is required to comply with certain requirements of the Dodd Frank Wall Street Reform and Consumer Protection Act, as well as rules and regulations subsequently implemented by the SEC, including the establishment and maintenance of effective disclosure and financial controls and changes in corporate governance practices. We expectThe Company expects that compliance with these requirements will continue to increase our legal and financial compliance costs and will make some activities more time consuming and costly. In addition, we expectthe Company expects that our management and other personnel will continue to need to divert attention from operational and other business matters to devote substantial time to these public company requirements.

The Sarbanes-Oxley Act requires, among other things, that we maintainthe Company maintains effective internal control over financial reporting and disclosure controls and procedures. In particular, wethe Company 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, after we are no longer an “emerging growth company,” provided that we are not then stillif the Company loses status as a “smaller reporting company,” wethe Company will be required to have ourthe Company's independent registered public accounting firm attest to the effectiveness of our internal control over financial reporting. OurThe Company's compliance with Section 404 of the Sarbanes-Oxley Act, as applicable, requires usthe Company to incur substantial accounting expense and expend significant management efforts. WeThe Company currently dodoes not have an internal audit group, and wethe Company will need to continue to hire additional accounting and financial staff with appropriate public company experience and technical accounting knowledge. If wethe Company or ourthe independent registered public accounting firm identify deficiencies in ourthe Company's internal control over financial reporting that are deemed to be material weaknesses, the market price of ourthe Company's stock could decline and wethe Company could be subject to sanctions or investigations by the NASDAQ, the SEC or other regulatory authorities, which would require additional financial and management resources.

OurThe Company's ability to successfully implement ourthe Company's business plan and maintain compliance with Section 404, as applicable, requires usthe Company to be able to prepare timely and accurate financial statements. We expectThe Company expects that wethe Company will need to continue to improve existing, and implement new operational and financial systems, procedures and controls

to manage ourthe Company's business effectively. Any delay in the implementation of, or disruption in the transition to, new or enhanced systems, procedures or controls, may cause our operations to suffer and wethe Company may be unable to conclude that our internal control over financial reporting is effective and to obtain an unqualified report on internal controls from ourthe Company's auditors as required under Section 404 of the Sarbanes-Oxley Act. If we failthe Company fails to maintain an effective system of internal control over financial reporting, wethe Company may not be able to accurately report our financial results, and current and potential stockholders may lose confidence in ourthe Company's financial reporting. This, in turn, could have an adverse impact on trading prices for ourthe Company's common stock, and could adversely affect ourthe Company's ability to access the capital markets.

Certain provisions of ourthe Company's amended and restated certificate of incorporation and bylaws could discourage, delay or prevent a merger, acquisition or other change of control that stockholders may consider favorable, including transactions in which you might otherwise receive a premium for your shares. Furthermore, these provisions could prevent or frustrate attempts by ourthe Company's stockholders to replace or remove members of ourthe board of directors. These provisions also could limit the price that investors might be willing to pay in the future for ourthe Company's common stock, thereby depressing the market price of ourthe Company's common stock. Stockholders who wish to participate in these transactions may not have the opportunity to do so. These provisions, among other things:

In addition, we arethe Company is governed by the provisions of Section 203 of the Delaware General Corporation Law, or DGCL, which may, unless certain criteria are met, prohibit large stockholders, in particular those owning 15% or more of the voting rights on ourthe Company's common stock, from merging or combining with usthe Company for a prescribed period of time.

We doThe Company does not intend to pay cash dividends on shares of our common stock for the foreseeable future. Any determination to pay dividends in the future will be at the discretion of ourthe board of directors and will depend upon results of operations, financial performance, contractual restrictions, restrictions imposed by applicable law and other factors ourthe board of directors deems relevant. Accordingly, you will have to rely on capital appreciation, if any, to earn a return on your investment in ourthe Company's common stock. Investors seeking cash dividends in the foreseeable future should not purchase ourthe Company's common stock.

As of December 31, 2016, we2019, the Company had a leaseleases for approximately 17,9005,800 square feet of officein Hershey, Pennsylvania and laboratory space1,959 square feet in Rutherford, New Jersey, 24,900Bundoora, Australia and a license to use 994 square feet of laboratory space locatedfacilities in Research Triangle Park (RTP) in Morrisville, North Carolina,

In 2020, the Company began leasing a laboratory in Gilles Plains, SA and an administrative office in Modbury, SA. These leases expire in January 2023 and February 2018 and May 2020,2023, respectively. We also have a lease agreement for our California space which expires on December 31, 2017.

The following table sets forth, for the periods indicated, the reported high and low sales prices of ourCompany's common stock trades on The NASDAQ Capital Market.

As of December 31, 2016, we2019, the Company had approximately 9535 holders of record of ourthe Company's common stock. The number of record holders was determined from the records of ourthe transfer agent and does not include beneficial owners of common stock whose shares are held in the names of various security brokers, dealers, and registered clearing agencies. The transfer agent of ourthe Company's common stock is Continental Stock Transfer & Trust, 17 Battery Place, 8th Floor, New York, New York, 10004.

We haveThe Company has never declared dividends on ourthe Company's equity securities, and currently do not plan to declare dividends on shares of ourthe Company's common stock in the foreseeable future. We expectThe Company expects to retain our future earnings, if any, for use in the operation and expansion of ourthe Company's business. OurThe Company's loan agreements prohibit usthe Company from paying cash dividends on ourthe Company's common stock and the terms of any future loan agreement we enteragreements the Company enters into or any debt securities wethe Company may issue are likely to contain similar restrictions on the payment of dividends. Subject to the foregoing, the payment of cash dividends in the future, if any, will be at the discretion of ourthe board of directors and will depend upon such factors as earnings levels, capital requirements, our overall financial condition and any other factors deemed relevant by ourthe board of directors.