UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~June 30, 2021~~March 31, 2022

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______________ to _______________

Commission File Number: 000-24249

Interpace Biosciences, Inc.

(Exact name of registrant as specified in its charter)

Delaware

22-2919486

(State or other jurisdiction of

Incorporation or organization)

(I.R.S. Employer

Identification No.)

Morris Corporate Center 1, Building C

300 Interpace Parkway, Parsippany, NJ 07054

(Address of principal executive offices and zip code)

(855) 776-6419

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
None		N//A		N/A

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐		Accelerated filer ☐
Non-accelerated filer ☒		Smaller reporting company ☒
		Emerging Growth Company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:

Class		Shares Outstanding ~~August~~May 6, ~~2021~~2022
Common Stock, par value $0.01 per share		~~4,161,405~~4,229,939

INTERPACE BIOSICENCES, INC.

FORM 10-Q FOR PERIOD ENDED ~~JUNE 30, 2021~~MARCH 31, 2022

TABLE OF CONTENTS

		Page No.

	PART I - FINANCIAL INFORMATION

Item 1.	Unaudited Interim Condensed Consolidated Financial Statements

	~~Condensed Consolidated Balance Sheets at June 30, 2021 (unaudited) and December 31, 2020~~	3

	Condensed Consolidated Balance Sheets at March 31, 2022 (unaudited) and December 31, 2021	3

	Condensed Consolidated Statements of Operations for the three- ~~and six-month~~month periods ended ~~June 30,~~March 31, 2022 and 2021 ~~and 2020~~ (unaudited)	4

	Condensed Consolidated Statements of Stockholders’ Deficit for the three- ~~and six-month~~month periods ended ~~June 30,~~March 31, 2022 and 2021 ~~and 2020~~ (unaudited)	5

	Condensed Consolidated Statements of Cash Flows for the ~~six-~~three- month periods ended ~~June 30,~~March 31, 2022 and 2021 ~~and 2020~~ (unaudited)	6

	Notes to Unaudited Condensed Consolidated Financial Statements	7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2224

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	3132

Item 4.	Controls and Procedures	3132

	PART II - OTHER INFORMATION

Item 1.	Legal Proceedings	32

Item 1A.	Risk Factors	32

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	32

Item 3.	Defaults Upon Senior Securities	3233

Item 4.	Mine Safety Disclosures	3233

Item 5.	Other Information	3233

Item 6.	Exhibits	3233

Signatures		3334

PART I. FINANCIAL INFORMATION

INTERPACE BIOSCIENCES, INC.

~~CONDENSED~~ CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share data)

	June 30,			December 31,			March 31,			December 31,
	2021			2020			2022			2021
	(unaudited)						(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	3,791		$	2,772		$	2,850		$	3,064
Restricted cash		250			600			250			250
Accounts receivable, net of allowance for doubtful accounts of $135 and $275, respectively		7,327			8,028
Accounts receivable, net of allowance for doubtful accounts of $72 and $72, respectively								7,241			6,158
Other current assets		3,270			2,722			2,777			2,694
Total current assets		14,638			14,122			13,118			12,166
Property and equipment, net		6,930			7,349			6,145			6,349
Other intangible assets, net		9,126			11,351			6,751			7,287
Goodwill		8,433			8,433			8,433			8,433
Operating lease right of use assets, net		3,768			4,384
Operating lease right of use assets								3,760			4,032
Other long-term assets		290			42			151			160
Total assets	$	43,185		$	45,681		$	38,358		$	38,427

LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable	$	2,479		$	4,511		$	3,951		$	2,694
Accrued salary and bonus		2,442			3,161			3,461			3,024
Notes payable - related parties		7,720			-
Other accrued expenses		9,407			9,795			8,692			9,198
Current liabilities from discontinued operations		766			766			766			766
Total current liabilities		22,814			18,233			16,870			15,682
Contingent consideration, net of current portion		1,716			1,818
Contingent consideration								1,345			1,383
Operating lease liabilities, net of current portion		3,109			3,540			2,928			3,154
Line of credit								2,500			1,500
Note payable at fair value								7,835			7,942
Other long-term liabilities		4,801			4,637			4,685			4,648
Total liabilities		32,440			28,228			36,163			34,309

Commitments and contingencies (Note 12)		-			-
Commitments and contingencies (Note 8)								-			-

Preferred stock, $.01 par value; 5,000,000 shares authorized, 47,000 Series B issued and outstanding		46,536			46,536
Preferred stock, $.01 par value; 5,000,000 shares authorized, 47,000 shares Series B issued and outstanding								46,536			46,536

Stockholders’ deficit:
Common stock, $.01 par value; 100,000,000 shares authorized; 4,142,507 and 4,075,257 shares issued, respectively; 4,122,843 and 4,055,593 shares outstanding, respectively		402			402
Common stock, $.01 par value; 100,000,000 shares authorized; 4,272,308 and 4,228,169 shares issued, respectively; 4,226,422 and 4,195,412 shares outstanding, respectively								404			403
Additional paid-in capital		185,349			184,404			186,489			186,106
Accumulated deficit		(219,769	)		(212,116	)		(229,306	)		(227,059	)
Treasury stock, at cost (19,664 and 19,664 shares, respectively)		(1,773	)		(1,773	)
Treasury stock, at cost (45,886 and 32,757 shares, respectively)								(1,928	)		(1,868	)
Total stockholders’ deficit		(35,791	)		(29,083	)		(44,341	)		(42,418	)
Total liabilities and stockholders’ deficit	$	(3,351	)	$	(855	)	$	(8,178	)	$	(8,109	)

Total liabilities, preferred stock and stockholders’ deficit	$	43,185		$	45,681		$	38,358		$	38,427

The accompanying notes are an integral part of these condensed consolidated financial ~~statements.~~statements

INTERPACE BIOSCIENCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited, in thousands, except for per share data)

	2021			2020			2021			2020			2022			2021
	Three Months Ended June 30,						Six Months Ended June 30,						Three Months Ended March 31,
	2021			2020			2021			2020			2022			2021

Revenue, net	$	11,155		$	5,446		$	20,989		$	14,504		$	10,377		$	9,833
Cost of revenue (excluding amortization of $1,112 and $1,115 for the three months and $2,224 and $2,230 for the six months, respectively)		5,800			3,850			11,116			9,963
Cost of revenue (excluding amortization of $536 and $1,112, respectively)														5,384			5,316
Gross profit		5,355			1,596			9,873			4,541			4,993			4,517
Operating expenses:
Sales and marketing		2,776			1,596			5,128			4,077			2,416			2,351
Research and development		424			550			1,060			1,360			299			637
General and administrative		3,326			3,983			6,305			8,819			3,690			2,979
Transition expenses		858			124			2,111			180
Gain on DiamiR transaction		(235	)		-			(235	)		-
Transition expense														85			1,253
Acquisition related amortization expense		1,112			1,115			2,224			2,230			536			1,112
Total operating expenses		8,261			7,368			16,593			16,666			7,026			8,332

Operating loss		(2,906	)		(5,772	)		(6,720	)		(12,125	)		(2,033	)		(3,815	)
Interest accretion expense		(135	)		(167	)		(270	)		(276	)		(121	)		(135	)
Other (expense) income , net		(331	)		438			(520	)		485
Related party interest														-			(92	)
Note payable interest														(180	)		-
Other income (expense), net														159			(96	)
Loss from continuing operations before tax		(3,372	)		(5,501	)		(7,510	)		(11,916	)		(2,175	)		(4,138	)
Provision for income taxes		16			13			31			28			18			15
Loss from continuing operations		(3,388	)		(5,514	)		(7,541	)		(11,944	)		(2,193	)		(4,153	)

Loss from discontinued operations, net of tax		(58	)		(66	)		(112	)		(130	)		(54	)		(54	)

Net loss		(3,446	)		(5,580	)		(7,653	)		(12,074	)	$	(2,247	)	$	(4,207	)

Less adjustment for preferred stock deemed dividend		-			-			-			(3,033	)

Net loss attributable to common stockholders	$	(3,446	)	$	(5,580	)	$	(7,653	)	$	(15,107	)

Basic and diluted loss per share of common stock:
From continuing operations	$	(0.83	)	$	(1.37	)	$	(1.84	)	$	(3.73	)	$	(0.52	)	$	(1.02	)
From discontinued operations		(0.01	)		(0.01	)		(0.03	)		(0.03	)		(0.01	)		(0.01	)
Net loss per basic and diluted share of common stock	$	(0.84	)	$	(1.38	)	$	(1.87	)	$	(3.76	)	$	(0.53	)	$	(1.03	)
Weighted average number of common shares and common share equivalents outstanding:
Basic		4,102			4,033			4,095			4,018			4,208			4,089
Diluted		4,102			4,033			4,095			4,018			4,208			4,089

The accompanying notes are an integral part of these condensed consolidated financial ~~statements.~~statements

INTERPACE BIOSCIENCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT

(unaudited, in thousands)

											Shares		Amount			Shares		Amount
	For The Three and Six Months Ended					For The Three and Six Months Ended					For The Three Months Ended					For The Three Months Ended
	June 30, 2021					June 30, 2020					March 31, 2022					March 31, 2021
	Shares		Amount			Shares		Amount			Shares		Amount			Shares		Amount
Common stock:
Balance at January 1		4,075	$	402			3,932	$	393			4,228	$	403			4,075	$	402
Balance at January 1												4,228	$	403			4,075	$	402
Common stock issued												35		1			9		-
Common stock issued		9		-			37		1			35		1			9		-
Restricted stock issued		12		-			6		-			-		-			12		-
Common stock issued through market sales		-		-			80		8
Restricted stock issued												-		-			12		-
Common stock issued through ESPP		36		-			-		-			9		-			36		-
Treasury stock purchased, shares
Treasury stock purchased
Extinguishment of Series A Shares
Beneficial Conversion Feature in connection with Series B Issuance
Amortization of Beneficial Conversion Feature
Stock-based compensation expense
Net loss
Common stock issued through ESPP												9		-			36		-
Balance at March 31		4,132		402			4,055		402			4,272		404			4,132		402
Common stock issued		10		-			-		-
Balance at June 30		4,142		402			4,055		402
Balance at March 31												4,272		404			4,132		402
Treasury stock:
Balance at January 1		20		(1,773	)		12		(1,721	)		33		(1,868	)		20		(1,773	)
Treasury stock purchased		-		-			-		-			13		(60	)		-		-
Treasury stock purchased												13		(60	)		-		-
Balance at March 31		20		(1,773	)		12		(1,721	)		46		(1,928	)		20		(1,773	)
Treasury stock purchased		-		-			7		(49	)
Balance at June 30		20		(1,773	)		19		(1,770	)
Additional paid-in capital:
Balance at January 1				184,404					182,514					186,106					184,404
Extinguishment of Series A Shares				-					(828	)
Beneficial Conversion Feature in connection with Series B Issuance				-					2,205
Amortization of Beneficial Conversion Feature				-					(2,205	)
Common stock issued				108					-					58					108
Common stock issued through market sales				-					476
Stock-based compensation expense				286					418					325					286
Balance at March 31				184,798					182,580					186,489					184,798
Stock-based compensation expense				551					400
Balance at June 30				185,349					182,980
Accumulated deficit:
Balance at January 1				(212,116	)				(185,665	)				(227,059	)				(212,116	)
Net loss				(4,207	)				(6,494	)				(2,247	)				(4,207	)
Balance at March 31				(216,323	)				(192,159	)				(229,306	)				(216,323	)

Beginning balance														-					-
Net loss				(3,446	)				(5,580	)				-					-
Balance at June 30				(219,769	)				(197,739	)

Balance at January 1				(29,083	)				-
Stock-based compensation expense				-					-
Balance at March 31				-					-
Stock-based compensation expense				-					-
Total stockholders’ deficit			$	(35,791	)			$	(16,127	)			$	(44,341	)			$	(32,896	)
Ending balance													$	(44,341	)			$	(32,896	)

The accompanying notes are an integral part of these condensed consolidated financial statements.

INTERPACE BIOSCIENCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited, in thousands)

	2021			2020			2022			2021
`	For The Six Months Ended June 30,						For The Three Months Ended March 31,
	2021			2020			2022			2021

Cash Flows From Operating Activities
Net loss	$	(7,653	)	$	(12,074	)	$	(2,247	)	$	(4,207	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		2,943			2,708			781			1,532
Interest accretion expense		270			276			121			135
Bad debt (recovery) expense		(140	)		250			-			(140	)
Mark to market on warrants		209			(49	)		(63	)		41
Amortization of deferred financing fees								10			-
Amortization of loan costs								-			52
Interest - note payable								-			92
Stock-based compensation		777			818			302			259
Amortization of deferred financing fees		88			-
Accrued interest		220			-
ESPP expense		60			-			23			27
Change in fair value of note payable								(107	)		-
Change in fair value of contingent consideration		(57	)		-			-			(57	)
Gain on DiamiR transaction		(235	)		-
Other gains and expenses, net		(2	)		-			-			(3	)
Other changes in operating assets and liabilities:
Decrease in accounts receivable		841			2,849
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable								(1,083	)		317
Increase in other current assets		(548	)		(788	)		(83	)		(253	)
Decrease in accounts payable		(2,032	)		(1,361	)
Decrease in accrued salaries and bonus		(719	)		(94	)
(Decrease) increase in accrued liabilities		(802	)		759
(Decrease) increase in long-term liabilities		(45	)		33
Increase in other long-term assets								(1	)		-
Increase (decrease) in accounts payable								1,235			(1,534	)
Increase (decrease) in accrued salaries and bonus								377			(988	)
Decrease in accrued liabilities								(556	)		(293	)
Increase in long-term liabilities								37			14
Net cash used in operating activities		(6,825	)		(6,673	)		(1,254	)		(5,006	)

Cash Flows From Investing Activities
Cash Flows From Investing Activity
Purchase of property and equipment		(48	)		(913	)		(19	)		-
Sale of property and equipment		39			-			-			39
Net cash used in investing activities		(9	)		(913	)
Net cash (used in) provided by investing activities								(19	)		39

Cash Flows From Financing Activities
Issuance of common stock, net of expenses		108			434			59			108
Issuance of Series B preferred stock, net of expenses		-			19,537
Loan proceeds - related parties		7,500			-			-			5,000
Deferred financing fees		(105	)		-
Borrowings on Line of Credit		-			400
Financing fees - related party								-			(74	)
Borrowings on line of credit								1,000			-
Net cash provided by financing activities		7,503			20,371			1,059			5,034

Net increase in cash, cash equivalents and restricted cash		669			12,785
Net (decrease) increase in cash, cash equivalents and restricted cash								(214	)		67
Cash, cash equivalents and restricted cash – beginning		3,372			2,321			3,314			3,372
Cash, cash equivalents and restricted cash – ending	$	4,041		$	15,106		$	3,100		$	3,439

The accompanying notes are an integral part of these condensed consolidated financial statements.

INTERPACE BIOSCIENCES, INC.

1. ~~OVERVIEW~~NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Tabular information in thousands, except per share amounts)

1.	OVERVIEW

Nature of Business

Interpace Biosciences, Inc. (“Interpace” or the “Company”) enables personalized medicine, offering specialized services along the therapeutic value chain from early diagnosis and prognostic planning to targeted therapeutic applications and pharma services. The Company provides molecular diagnostics, bioinformatics and pathology services for evaluation of risk of cancer by leveraging the latest technology in personalized medicine for improved patient diagnosis and management. The Company also provides pharmacogenomics testing, genotyping, biorepository and other specialized services to the pharmaceutical and biotech industries. The Company advances personalized medicine by partnering with pharmaceutical, academic, and technology leaders to effectively integrate pharmacogenomics into their drug development and clinical trial programs.

COVID-19 pandemic

The ~~outbreak of the~~ COVID-19 pandemic, together with related precautionary measures, continues to impact ~~a significant portion~~portions of the regions in which we operate. These regions are attempting to address the COVID-19 pandemic in varying ways, including stay-at-home orders, temporarily closing businesses, restricting gatherings, restricting travel, and mandating social distancing and face coverings. The level and nature of the disruption caused by COVID-19 is unpredictable, may be cyclical and long-lasting and may vary from location to location.

The continuing impact that the COVID-19 pandemic will have on our operations, including duration, severity and scope, remains highly uncertain and cannot be fully predicted at this time. While we believe we have generally recovered from the adverse impact that the COVID-19 pandemic had on our business during 2020, we believe that the COVID-19 pandemic could continue to adversely impact our results of operations, cash flows and financial condition in the future.

~~As our business operations continue to be impacted by the pandemic, we~~We continue to monitor the ~~situation~~COVID-19 pandemic and the guidance that is being provided by relevant federal, state and local public health ~~authorities. We~~authorities and may take additional actions based upon their recommendations. ~~However, it~~It is possible that we may have to make ~~further~~ adjustments to our operating plans in reaction to developments that are beyond our control.

~~While we do not anticipate any lab~~Lab closures ~~at this time beyond~~experienced thus far by the Company have consisted of periodic, temporary work stoppages to clean and disinfect the ~~labs,~~labs. However, this could change in the future based upon conditions caused by the pandemic. ~~It is also possible that we could experience~~Inflation and supply chain ~~shortages if~~disruptions, whether caused by restrictions or slowdowns in shipping or logistics, increases in demand for certain goods used in our operations, or otherwise, could impact our operations in the ~~pandemic worsens and if one or more suppliers is unable to continue to provide us with supplies.~~near term. For the foreseeable future, however, we do not anticipate supply chain shortages of critical supplies.

We have ~~developed~~contingency plans in place and will continue to monitor and update ~~our contingency plans~~them in order to mitigate pandemic-related, adverse financial impacts upon our business.

Transition costs

Transition expenses are primarily related to the Rutherford, New Jersey lab closing and subsequent move to Morrisville, North Carolina, which was completed during the first half of Fiscal 2021, as well as other cost-saving initiatives consisting primarily of reductions in headcount and the implementation of a new laboratory information system. To optimize the operations of laboratory operations within our pharma services, we transitioned activities from the Rutherford NJ facility to our Morrisville NC facility. ~~We invested several million dollars to facilitate this relocation, including but not limited to~~The transition included the transfer of personnel, expansion of the Morrisville facility and validation of transferred processes. We believe that this investment will result in a reduction in future operating costs; however, it is not certain whether we will fully realize the anticipated savings. We have also undergone several other cost-cutting initiatives and those costs are categorized as transition expenses as well.

2.	BASIS OF PRESENTATION

2. ~~BASIS OF PRESENTATION~~

The accompanying unaudited interim condensed consolidated financial statements and related notes (the “Interim Financial Statements”) should be read in conjunction with the consolidated financial statements of the Company and its wholly-owned subsidiaries (Interpace Diagnostics Lab Inc., Interpace Diagnostics Corporation, Interpace Pharma Solutions, Inc. and Interpace Diagnostics, LLC), and related notes as included in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2020,~~2021, as filed with the Securities & Exchange Commission (“SEC”) on ~~April 1, 2021~~March 31, 2022 and as amended on April 29, ~~2021.~~2022.

The condensed Interim Financial Statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) for interim financial reporting and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. The condensed Interim Financial Statements include all normal recurring adjustments that, in the judgment of management, are necessary for a fair presentation of such interim financial statements. Discontinued operations include the Company’s wholly owned subsidiaries: Group DCA, LLC, InServe Support Solutions; and TVG, Inc. and its Commercial Services business unit which was sold on December 22, 2015. All significant intercompany balances and transactions have been eliminated in consolidation. Operating results for the ~~six-month~~three-month period ended ~~June 30, 2021~~March 31, 2022 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, ~~2021.~~2022.

3. ~~GOING CONCERN~~

3.	GOING CONCERN

The accompanying consolidated financial statements have been prepared on a basis that assumes that the Company will continue as a going concern and that contemplates the continuity of operations, the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. Accordingly, the accompanying consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts of liabilities that might result from the outcome of this uncertainty.

For the three months ended March 31, 2022, we had an operating loss of $2.0 million. As of ~~June 30, 2021, the Company~~March 31, 2022, we had cash, ~~and~~ cash equivalents ~~net of~~and restricted cash of $~~3.8~~ ~~million, net accounts receivable of $7.3~~3.1 million, total current assets ~~net of restricted cash~~ of $~~14.4~~13.1 million and ~~total~~ current liabilities of $~~22.8million. For the six month period ended June 30, 2021, the Company had a net loss of $7.7million and cash used in operating activities was $6.8~~16.9 million. As of ~~August 5, 2021~~May 6, 2022, we had approximately $~~3.8~~3.7 million of cash on hand, ~~net~~excluding restricted cash.

In January 2022, the Company announced that the Centers for Medicare & Medicaid Services, or CMS, issued a new billing policy whereby CMS will no longer reimburse for the use of ~~restricted cash.~~the Company’s ThyGeNEXT^® and ThyraMIR^® tests when billed together by the same provider/supplier for the same beneficiary on the same date of service. On February 28, 2022, the Company announced that the National Correct Coding Initiative (NCCI) program issued a response on behalf of CMS stating that the January 2022 billing policy reimbursement change for ThyGeNEXT^® (0245U) and ThyraMIR^® (0018U) tests has been retroactively reversed to January 1, 2022. CMS is currently reimbursing the Company for one of its two thyroid tests, and has agreed to retroactively reimburse for the second test once they have completed their internal administrative adjustments. We have been notified by CMS/NCCI that processing of claims for dates of service after January 1, 2022 will be completed beginning July 1, 2022. As of the date of this filing, the Company has not yet realized the full cash collection benefit of current and retroactive Thyroid testing and such cash collections may be temporarily reduced or delayed until we resolved the matter with CMS. As of the date of this filing, the Company currently anticipates that current cash and cash equivalents will be insufficient to meet its anticipated cash requirements through the next twelve months. These factors raise substantial doubt about the Company’s ability to continue as a going concern.

On January 7, 2021, the Company entered into secured promissory notes in the amount of $3 million and $2 million with Ampersand (“Ampersand Note”) and 1315 Capital (“1315 Capital Note”), respectively. See Note 14, Notes Payable, of the notes to the financial statements. On May 10, 2021, the Company amended the Ampersand Note to increase the principal amount to $4.5 million and amended the 1315 Capital Note to increase the principal amount to $3.0 million. The maturity dates of the Notes were the earlier of (a) June 30, 2021 and (b) the date on which all amounts become due upon the occurrence of any event of default as defined in the Notes. On June 24, 2021, the Company ~~has~~ and ~~may continue~~Ampersand amended the Ampersand Note to ~~delay, scale-back, or eliminate certain~~change its maturity date to the earlier of (a) August 31, 2021 and (b) the date on which all amounts become due upon the occurrence of any event of default as defined in the Ampersand Note. On June 25, 2021, the Company and 1315 Capital amended the 1315 Capital Note to change its ~~activities~~maturity date in a similar manner. On August 31, 2021, the Company and ~~other aspects~~Ampersand amended the Ampersand Note to change its maturity date to the earlier of (a) September 30, 2021 and (b) the date on which all amounts become due upon the occurrence of any event of default as defined in the Ampersand Note. On August 31, 2021, the Company and 1315 Capital amended the 1315 Capital Note to change its ~~operations until such time~~maturity date in a similar manner.

On September 29, 2021, the Company and Ampersand amended the Ampersand Note to change its maturity date to the earlier of (a) October 31, 2021 and (b) the date on which all amounts become due upon the occurrence of any event of default as defined in the Ampersand Note. On September 29, 2021, the Company and 1315 Capital amended the 1315 Capital Note to change its maturity date in a similar manner.

In October 2021, the Company entered into a $7.5 million revolving credit facility with Comerica. See Note 18, Revolving Line of Credit, for more details. In addition, also in October 2021, the Company entered into the $8.0 million BroadOak Term Loan, the proceeds of which were used to repay in full at their maturity the notes extended by Ampersand and 1315 Capital discussed above. See Note 14, Notes Payable, for more details. In May 2022, the Company entered into a term loan with BroadOak for an additional $2.0 million. See Note 20, Subsequent Events, for more details.

Although the Company is ~~successful~~targeting to achieve Adjusted EBITDA and cash flow breakeven during Fiscal 2022, we may not generate positive cash flows from operations for the year ending December 31, 2022. We intend to meet our ongoing capital needs by using our available cash and availability under the Comerica Loan Agreement, as well as through revenue growth and margin improvement; collection of accounts receivable; containment of costs; and the potential use of other financing options. However, if we are unable to meet the financial covenants under the Comerica Loan Agreement, the revolving line of credit and notes payable will become due and payable immediately.

In January 2022, the Company’s registration statement for a rights offering filed with the Securities and Exchange Commission (SEC) became effective; however, the rights offering was subsequently terminated in ~~securing additional funding.~~January 2022. The Company is currently exploring various dilutive and non-dilutive sources of funding, including equity and debt financings, strategic alliances, business development and other ~~sources.~~

~~The~~sources in order to provide additional liquidity and expand the business through acquisitions or other strategic transactions. With the Company’s delisting from Nasdaq ~~of our common stock which is now quoted for trading on OTCQX and the Company’s resulting inability to use Form S-3 for offerings by it may each have an adverse impact on our~~in February 2021, its ability to raise additional ~~capital. The quotation of our common stock~~capital on OTCQX may provide significantly less liquidity than when our stock was listed on Nasdaq and we may experience greater difficulty in raising capital through the public or private sale of equity securities. In addition, the Company’s announcement on April 22, 2021 that it is considering strategic, financial and operational alternatives may have an impact on our abilityterms acceptable to ~~raise additional capital. The future success of~~ the Company ~~is dependent upon its ability to obtain additional funding.~~has been adversely impacted. There can be no assurance ~~however,~~ that the Company will be successful in obtaining such funding ~~in sufficient amounts,~~ on terms acceptable to the Company, or at all. As of the date of this Report, the Company currently anticipates that current cash and cash equivalents will be sufficient to meet its anticipated operating cash requirements through the end of the third quarter of 2021. However, the Company’s secured promissory notes totaling $~~7.5~~ million are due August 31, 2021 and the Company does not currently have the cash balance necessary to repay the notes. The Company intends to address this deficiency by seeking an additional extension of the maturity date which may not be forthcoming and/or utilizing the debt or equity markets to raise sufficient funds to repay the notes. These factors raise substantial doubt about the Company’s ability to continue as a going concern.Company.

4.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Accounting Estimates

The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts of assets and liabilities reported and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management’s estimates are based on historical experience, facts and circumstances available at the time, and various other assumptions that are believed to be reasonable under the circumstances. Significant estimates include accounting for valuation allowances related to deferred income taxes, contingent consideration, allowances for doubtful accounts, revenue recognition, unrecognized tax benefits, and asset impairments involving other intangible assets. The Company periodically reviews these matters and reflects changes in estimates in earnings as appropriate. Actual results could materially differ from those estimates.

Revenue Recognition

Our clinical services derive its revenues from the performance of its proprietary assays or tests. The Company’s performance obligation is fulfilled upon the completion, review and release of test results to the customer. The Company subsequently bills third-party payers or direct-bill payers for the tests performed. Under Accounting Standards Codification 606, revenue is recognized based on the estimated transaction price or net realizable value (“NRV”), which is determined based on historical collection rates by each payer category for each proprietary test offered by the Company. To the extent the transaction price includes variable consideration, for all third party and direct-bill payers and proprietary tests, the Company estimates the amount of variable consideration that should be included in the transaction price using the expected value method based on historical experience.

For our clinical services, we regularly review the ultimate amounts received from the third-party and direct-bill payers and related estimated reimbursement rates and adjust the NRV’s and related contractual allowances accordingly. If actual collections and related NRV’s vary significantly from our estimates, we will adjust the estimates of contractual allowances, which affects net revenue in the period such variances become known.

For our pharma services, project level activities, including study setup and project management, are satisfied over the life of the contract while performance-related obligations are satisfied at a point in time as the Company processes samples delivered by the customer. Revenues are recognized at a point in time when the test results or other deliverables are reported to the customer.

~~Deferred Revenue~~

For our pharma services, project level fee revenue is recognized as deferred revenue and recorded at fair value. It represents payments received in advance of services rendered and is recognized ratably over the life of the contract.

Financing and Payment

For non-Medicare claims, our payment terms vary by payer category. Payment terms for direct-payers in our clinical services are typically thirty days and in our pharma services, up to sixty days. Commercial third-party-payers are required to respond to a claim within a time period established by their respective state regulations, generally between thirty to sixty days. However, payment for commercial third-party claims may be subject to a denial and appeal process, which could take up to two years in some instances where multiple appeals are submitted. The Company generally appeals all denials from commercial third-party payers. We bill Medicare directly for tests performed for Medicare patients and must accept Medicare’s fee schedule for the covered tests as payment in full.

Costs to Obtain or Fulfill a Customer Contract

Sales commissions are expensed in the period in which they have been earned. These costs are recorded in sales and marketing expense in the condensed consolidated statements of operations.

Accounts Receivable

The Company’s accounts ~~receivables~~receivable represent unconditional rights to consideration and are generated using its clinical services and pharma services. The Company’s clinical services are fulfilled upon completion of the test, review and release of the test results. In conjunction with fulfilling these services, the Company bills the third-party payer or direct-bill payer. Contractual adjustments represent the difference between the list prices and the reimbursement rates set by third-party payers, including Medicare, commercial payers, and amounts billed to direct-bill payers. Specific accounts may be written off after several appeals, which in some cases may take longer than twelve months. Pharma services represent, primarily, the performance of laboratory tests in support of clinical trials for pharma services customers. The Company bills these services directly to the customer.

Leases

The Company determines if an arrangement contains a lease in whole or in part at the inception of the contract. Right-of-use (“ROU”) assets represent the Company’s right to use an underlying asset for the lease term while lease liabilities represent our obligation to make lease payments arising from the lease. All leases with terms greater than twelve months result in the recognition of a ROU asset and a liability at the lease commencement date based on the present value of the lease payments over the lease term. Unless a lease provides all of the information required to determine the implicit interest rate, we use our incremental borrowing rate based on the information available at the commencement date in determining the present value of the lease payments. We use the implicit interest rate in the lease when readily determinable.

Our lease terms include all non-cancelable periods and may include options to extend (or to not terminate) the lease when it is reasonably certain that we will exercise that option. Leases with terms of twelve months or less at the commencement date are expensed on a straight-line basis over the lease term and do not result in the recognition of an asset or liability. See Note 7, Leases.

Other Current Assets

Other current assets consisted of the following as of ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020:~~2021:

SCHEDULE OF OTHER CURRENT ASSETS

	June 30, 2021		December 31, 2020		March 31, 2022		December 31, 2021
		(unaudited)			(unaudited)
Lab supply inventory	$	2,261	$	2,052	$	2,059	$	1,786
Prepaid expenses		783		625		610		800
Other		226		45		108		108
Total other current assets	$	3,270	$	2,722	$	2,777	$	2,694

Long-Lived Assets, including Finite-Lived Intangible Assets

Finite-lived intangible assets are stated at cost less accumulated amortization. Amortization of finite-lived acquired intangible assets is recognized on a straight-line basis, using the estimated useful lives of the assets of approximately two years to ten years in acquisition-related amortization expense in the condensed consolidated statements of operations.

The Company reviews the recoverability of long-lived assets and finite-lived intangible assets whenever events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. If the sum of the expected future undiscounted cash flows is less than the carrying amount of the asset, an impairment loss is recognized by reducing the recorded value of the asset to its fair value measured by future discounted cash flows. This analysis requires estimates of the amount and timing of projected cash flows and, where applicable, judgments associated with, among other factors, the appropriate discount rate. Such estimates are critical in determining whether any impairment charge should be recorded and the amount of such charge if an impairment loss is deemed to be necessary.

Basic and Diluted Net Loss per Share

A reconciliation of the number of shares of common stock, par value $0.01 per share, used in the calculation of basic and diluted loss per share for the ~~three- and six-month~~three-month periods ended ~~June 30,~~March 31, 2022 and 2021 ~~and 2020~~ is as follows:

SCHEDULE OF BASIC AND DILUTED NET LOSS PER SHARE

									2022		2021
	Three Months Ended				Six Months Ended				Three Months
	June 30,				June 30,				Ended March 31,
	2021		2020		2021		2020		2022		2021
	(unaudited)				(unaudited)				(unaudited)
Basic weighted average number of common shares		4,102		4,033		4,095		4,018		4,208		4,089
Potential dilutive effect of stock-based awards		-		-		-		-		-		-
Diluted weighted average number of common shares		4,102		4,033		4,095		4,018		4,208		4,089

The Company’s Series B Preferred Stock, on an as converted basis into common stock of 7,833,334 shares for the three- ~~and six-months~~months ended ~~June 30, 2021,~~March 31, 2022, and the following outstanding stock-based awards and warrants, were excluded from the computation of the effect of dilutive securities on loss per share for the following periods as they would have been anti-dilutive (rounded to thousands):

SCHEDULE OF ANTI-DILUTIVE SECURITIES EXCLUDED FROM COMPUTATION OF EARNINGS PER SHARE

Three Months Ended Six Months Ended
June 30, June 30,
2021 2020 2021 2020
(unaudited) (unaudited)
Options 747 638 747 638
Restricted stock and restricted stock units (RSUs) 373 42 373 42
Warrants 1,405 1,420 1,405 1,420
2,525 2,100 2,525 2,100

~~Reclassifications~~

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

	Three Months
	Ended March 31,
	2022		2021
	(unaudited)
Options		641		1,061
Restricted stock units (RSUs)		319		395
Warrants		1,339		1,405
		2,299		2,861

5.	GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill is attributable to the acquisition of our pharma services in July 2019. The carrying value of the intangible assets acquired was $15.6million, with goodwill of approximately $8.3million and identifiable intangible assets of approximately $7.3~~million. In 2019, there was an adjustment to goodwill of $0.1~~ million. The goodwill balance at ~~June 30, 2021~~March 31, 2022 was $8.4million. The net carrying value of the identifiable intangible assets from all acquisitions as of ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020~~2021 are as follows:

SCHEDULE OF IDENTIFIABLE INTANGIBLE ASSETS CARRYING VALUE

									(Years)		Amount			Amount
			As of June 30, 2021			As of December 31, 2020					As of March 31, 2022			As of December 31, 2021
	Life		Carrying			Carrying			Life		Carrying			Carrying
	(Years)		Amount			Amount			(Years)		Amount			Amount
				(unaudited)							(unaudited)
Asuragen acquisition:
Thyroid		9	$	8,519		$	8,519			9	$	8,519		$	8,519
RedPath acquisition:
Pancreas test		7		16,141			16,141			7		16,141			16,141
Barrett’s test		9		6,682			6,682			9		6,682			6,682
BioPharma acquisition:
Trademarks		10		1,600			1,600			10		1,600			1,600
Customer relationships		8		5,700			5,700			8		5,700			5,700

CLIA Lab		2.3	$	609		$	609			2.3		609			609

Total			$	39,251		$	39,251				$	39,251		$	39,251

Accumulated Amortization			$	(30,125	)	$	(27,900	)				(32,500	)		(31,964	)

Net Carrying Value			$	9,126		$	11,351				$	6,751		$	7,287

Amortization expense was approximately $0.5 million and $1.1 million for ~~both~~ the three-month periods ended ~~June 30,~~March 31, 2022 and 2021, ~~and 2020, respectively and approximately $2.2~~ ~~million for both the six-month periods ended June 30, 2021 and 2020,~~ respectively. Estimated amortization expense for the remainder of 2022 and the next ~~five~~four years is as follows:

SCHEDULE OF FUTURE ESTIMATED AMORTIZATION EXPENSE

2022		2023		2024		2025		2026

$	1,607	$	1,734	$	873	$	873	$	873

2021 2022 2023 2024 2025

$ 4,078 $ 2,155 $ 2,099 $ 873 $ 873

The following table displays a roll forward of the carrying amount of goodwill from December 31, ~~2020~~2021 to ~~June 30, 2021:~~March 31, 2022:

SCHEDULE OF GOODWILL CARRYING VALUE

Carrying
Amount
Balance as of December 31, 2020 $ 8,433
Adjustments -
Balance as of June 30, 2021 $ 8,433

	Carrying
	Amount
Balance as of December 31, 2021	$	8,433
Adjustments		-
Balance as of March 31, 2022	$	8,433

6.	FAIR VALUE MEASUREMENTS

Cash and cash equivalents, accounts receivable and accounts payable approximate fair value due to their relative short-term nature. The Company’s financial liabilities reflected at fair value in the condensed consolidated financial statements include contingent consideration, warrant liability and ~~warrant liability.~~note payable. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In determining fair value, the Company uses various methods including market, income and cost approaches. Based on these approaches, the Company often utilizes certain assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and/or the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market-corroborated, or generally unobservable inputs. The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. Based upon observable inputs used in the valuation techniques, the Company is required to provide information according to the fair value hierarchy. The fair value hierarchy ranks the quality and reliability of the information used to determine fair values into three broad levels as follows:

	Level 1:	Valuations for assets and liabilities traded in active markets from readily available pricing sources for market transactions involving identical assets or liabilities.

	Level 2:	Valuations for assets and liabilities traded in less active dealer or broker markets. Valuations are obtained from third-party pricing services for identical or similar assets or liabilities.

	Level 3:	Valuations incorporate certain assumptions and projections in determining the fair value assigned to such assets or liabilities.

In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. The valuation methodologies used for the Company’s financial instruments measured on a recurring basis at fair value, including the general classification of such instruments pursuant to the valuation hierarchy, is set forth in the tables below:

SCHEDULE OF FINANCIAL INSTRUMENT MEASURED ON RECURRING BASIS

											Amount		Value		Level 1		Level 2		Level 3
	As of June 30, 2021				Fair Value Measurements						As of March 31, 2022				Fair Value Measurements
	Carrying		Fair		As of June 30, 2021						Carrying		Fair		As of March 31, 2022
	Amount		Value		Level 1		Level 2		Level 3		Amount		Value		Level 1		Level 2		Level 3
					(unaudited)										(unaudited)
Liabilities:
Contingent consideration:
Asuragen ⁽¹⁾	$	2,175	$	2,175	$	-	$	-	$	2,175	$	1,833	$	1,833	$	-	$	-	$	1,833
Other long-term liabilities:
Asuragen ⁽¹⁾⁽²⁾											$	1,833	$	1,833	$	-	$	-	$	1,833
Other accrued expenses:
Warrant liability ⁽²⁾		230		230		-		-		230		8		8		-		-		8
	$	2,405	$	2,405	$	-	$	-	$	2,405
Warrant liability ⁽¹⁾⁽²⁾												8		8		-		-		8
Note payable:
BroadOak loan												7,835		7,835		-		-		7,835
Fair value of liabilities											$	9,676	$	9,676	$	-	$	-	$	9,676

	Amount		Value		Level 1		Level 2		Level 3
	As of December 31, 2021				Fair Value Measurements
	Carrying		Fair		As of December 31, 2021
	Amount		Value		Level 1		Level 2		Level 3
Liabilities:
Contingent consideration:
Asuragen ⁽¹⁾	$	1,871	$	1,871	$	-	$	-	$	1,871
Contingent consideration⁽¹⁾⁽²⁾	$	1,871	$	1,871	$	-	$	-	$	1,871
Other accrued expenses:
Warrant liability ⁽²⁾		71		71		-		-		71
Warrant liability ⁽¹⁾⁽²⁾		71		71		-		-		71
Note payable:
BroadOak loan		7,942		7,942		-		-		7,942
Notes payable		7,942		7,942		-		-		7,942
Fair value of liabilities	$	9,884	$	9,884	$	-	$	-	$	9,884

As of December 31, 2020 Fair Value Measurements
Carrying Fair As of December 31, 2020
Amount Value Level 1 Level 2 Level 3

Liabilities:
Contingent consideration:
Asuragen ⁽¹⁾ $ 2,216 $ 2,216 $ - $ - $ 2,216
Other long-term liabilities:
Warrant liability ⁽²⁾ 21 21 - - 21
$ 2,237 $ 2,237 $ - $ - $ 2,237

⁽¹⁾⁽²⁾~~See Note 9,~~ ~~Accrued Expenses and Long-Term Liabilities~~

⁽¹⁾		~~See Note 9,~~ ~~Accrued Expenses and Long-Term Liabilities~~
(2)		See Note 9, Accrued Expenses and Long-Term Liabilities

In connection with the acquisition of certain assets from Asuragen, Inc., the Company recorded contingent consideration related to contingent payments and other revenue-based payments. The Company determined the fair value of the contingent consideration based on a probability-weighted income approach derived from revenue estimates. The fair value measurement is based on significant inputs not observable in the market and thus represents a Level 3 measurement.

In connection with the BroadOak loan, the Company records the loan at fair value. The fair value of the loan is determined by a probability-weighted approach regarding the loan’s change in control feature. See Note 14, Notes Payable, for more details. The fair value measurement is based on the estimated probability of a change in control and thus represents a Level 3 measurement.

A roll forward of the carrying value of the Contingent Consideration Liability, ~~and the~~ 2017 Underwriters’ Warrants and BroadOak Loan to ~~June 30, 2021~~March 31, 2022 is as follows:

SCHEDULE OF FAIR VALUE, ASSETS MEASURED ON RECURRING BASIS, UNOBSERVABLE INPUT RECONCILIATION

								Adjustment
						Accretion/		to Fair Value/
	December 31, 2021		Earned			Interest Accrued		Mark to Market			March 31, 2022
	(unaudited)
Asuragen	$	1,871	$	(159	)	$	121	$	-		$	1,833

Underwriters Warrants		71		-			-		(63	)		8

BroadOak Loan		7,942		-			-		(107	)		7,835
	$	9,884	$	(159	)	$	121	$	(170	)	$	9,676

Certain of the Company’s non-financial assets, such as other intangible assets and goodwill, are measured at fair value on a nonrecurring basis when there is an indicator of impairment and recorded at fair value only when an impairment charge is recognized.

~~SCHEDULE OF FAIR VALUE, ASSETS MEASURED ON RECURRING BASIS, UNOBSERVABLE INPUT RECONCILIATION~~

Cancellation Adjustment to Fair
of Obligation/ Value/
December 31, 2020 Payments Accretion Conversions Exercises Mark to Market June 30, 2021
(unaudited)
Asuragen $ 2,216 $ (254 ) $ 270 $ - $ (57 ) $ 2,175

Underwriters Warrants 21 - - - 209 230
$ 2,237 $ (254 ) $ 270 $ - $ 152 $ 2,405

7.	LEASES

Finance lease assets are included in fixed assets, net of accumulated depreciation.

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

SCHEDULE OF FINANCING AND OPERATING LEASES

	Classification on the Balance Sheet	June 30, 2021		December 31, 2020		Classification on the Balance Sheet	March 31, 2022
			(unaudited)				(unaudited)
Assets
Financing lease assets	Property and equipment, net	$	670	$	597	Property and equipment, net	$	620
Operating lease assets	Operating lease right of use assets		3,768		4,384	Operating lease right of use assets		3,760
Total lease assets		$	4,438	$	4,981		$	4,380

Liabilities
Current
Financing lease liabilities	Other accrued expenses	$	117	$	177	Other accrued expenses	$	70
Operating lease liabilities	Other accrued expenses		898		1,027	Other accrued expenses		999
Total current lease liabilities		$	1,015	$	1,204		$	1,069
Noncurrent
Financing lease liabilities	Other long-term liabilities		92		138	Other long-term liabilities		41
Operating lease liabilities	Operating lease liabilities, net of current portion		3,109		3,540	Operating lease liabilities, net of current portion		2,928
Total long-term lease liabilities			3,201		3,678			2,969
Total lease liabilities		$	4,216	$	4,882		$	4,038

The weighted average remaining lease term for the Company’s operating leases was ~~7.1~~ ~~years as of June 30, 2021 and~~ ~~7.1~~6.3 years as of ~~December~~March 31, ~~2020~~2022 and the weighted average discount rate for those leases was ~~6.0%~~6.5 ~~as of June 30, 2021 and December 31, 2020, respectively~~%. The Company’s operating lease expenses are recorded within “Cost of revenue” and “General and administrative expenses.”

The table below reconciles the cash flows to the lease liabilities recorded on the Company’s Condensed Consolidated Balance Sheet as of ~~June 30, 2021:~~March 31, 2022:

SCHEDULE OF MATURITIES OF OPERATING AND FINANCING LEASE LIABILITIES

	Operating Leases		Financing Leases		Operating Leases		Financing Leases
2021 (remaining through December 31)	$	548	$	82
2022		1,028		78	$	961	$	58
2023		629		65		897		60
2024		390		-		567		-
2025		402		-		402		-
2026		414		-
Thereafter		1,510		-
2026-2030						1,924
Total minimum lease payments		4,921		225		4,751		118
Less: amount of lease payments representing effects of discounting		914		16		824		7
Present value of future minimum lease payments		4,007		209		3,927		111
Less: current obligations under leases		898		117		999		70
Long-term lease obligations	$	3,109	$	92	$	2,928	$	41

As of ~~June 30, 2021,~~March 31, 2022, contractual obligations with terms exceeding one year and estimated minimum future rental payments required by non-cancelable operating leases with initial or remaining lease terms exceeding one year were as follows:

SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS UNDER NON-CANCELABLE LEASES

Less than 1 to 3 3 to 5 After
Total 1 Year Years Years 5 Years
Operating lease obligations $ 4,921 $ 548 $ 1,657 $ 792 $ 1,924
Total $ 4,921 $ 548 $ 1,657 $ 792 $ 1,924

			Less than		1 to 3		3 to 5		After
	Total		1 Year		Years		Years		5 Years
Operating lease obligations	$	4,751	$	961	$	1,464	$	816	$	1,510
Total	$	4,751	$	961	$	1,464	$	816	$	1,510

8.	COMMITMENTS AND CONTINGENCIES

Litigation

From time to time, the Company may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. When the Company is aware of a claim or potential claim, it assesses the likelihood of any loss or exposure. If it is probable that a loss will result and the amount of the loss can be reasonably estimated, the Company will record a liability for the loss. In addition to the estimated loss, the recorded liability includes probable and estimable legal costs associated with the claim or potential claim. Litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm the Company’s business. There is no pending litigation involving the Company at this time.

Due to the nature of the businesses in which the Company is engaged, it is subject to certain risks. Such risks include, among others, risk of liability for personal injury or death to persons using products or services that the Company promotes or commercializes. There can be no assurance that substantial claims or liabilities will not arise in the future due to the nature of the Company’s business activities. There is also the risk of employment related litigation and other litigation in the ordinary course of business.

The Company could also be held liable for errors and omissions of its employees in connection with the services it performs that are outside the scope of any indemnity or insurance policy. The Company could be materially adversely affected if it were required to pay damages or incur defense costs in connection with a claim that is outside the scope of an indemnification agreement; if the indemnity, although applicable, is not performed in accordance with its terms; or if the Company’s liability exceeds the amount of applicable insurance or indemnity.

9.	ACCRUED EXPENSES AND LONG-TERM LIABILITIES

Other accrued expenses consisted of the following as of ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020:~~2021:

SCHEDULE OF OTHER ACCRUED EXPENSES

June 30, 2021 December 31, 2020
(unaudited)
Accrued royalties $ 3,320 $ 2,710
Upfront Medicare payment 1,174 2,066
Operating lease liability 898 1,027
All others 897 1,182
Accrued professional fees 719 854
Unclaimed property 565 565
Contingent consideration 459 398
Accrued capital expenditures
295 -
Accrued pharma services invoices
293 108
Taxes payable 289 334
Accrued lab costs - diagnostics 172 161
Financing lease liability 117 177
ESPP payable
88 108
Accrued sales and marketing - diagnostics 78 51
Deferred revenue 43 54
Total other accrued expenses $ 9,407 $ 9,795

	March 31, 2022		December 31, 2021
	(unaudited)
Accrued royalties	$	4,116	$	3,890
Contingent consideration		488		488
Operating lease liability		999		1,041
Financing lease liability		70		79
Deferred revenue		31		40
Interest payable		62		120
Warrant liability		8		71
Accrued sales and marketing - diagnostics		63		47
Accrued lab costs - diagnostics		185		228
Accrued professional fees		707		932
Taxes payable		269		245
Unclaimed property		565		565
All others		1,129		1,452
Total other accrued expenses	$	8,692	$	9,198

Long-term liabilities consisted of the following as of ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020:~~2021:

SCHEDULE OF LONG TERM LIABILITIES

	June 30, 2021		December 31, 2020		March 31, 2022		December 31, 2021
		(unaudited)			(unaudited)
Uncertain tax positions	$	4,454	$	4,342	$	4,631	$	4,577
Warrant liability		230		21
Deferred revenue						13		13
Other		92		138		41		58
Deferred revenue		25		136
Total other long-term liabilities	$	4,801	$	4,637	$	4,685	$	4,648

10.

STOCK-BASED COMPENSATION

Historically, stock options have been granted with an exercise price equal to the market value of the common stock on the date of grant, with expiration 10 years from the date they are granted, and generally vest over a one to three-year period for employees and members of the Board. Upon exercise, new shares will be issued by the Company. The restricted shares and restricted stock units (“RSUs”) granted to Board members and employees generally have a three-year graded vesting period and are subject to accelerated vesting and forfeiture under certain circumstances.

The following table provides the weighted average assumptions used in determining the fair value of the stock option awards granted during the ~~six-month~~three-month periods ended ~~June 30, 2021~~March 31, 2022 and ~~2020.~~2021.

SCHEDULE OF ~~FAIR VALUE ASSUMPTIONS OF~~ STOCK OPTIONS, VALUATION ASSUMPTIONS

	June 30, 2021			June 30, 2020			March 31, 2022			March 31, 2021
	(unaudited)							(unaudited)
Risk-free interest rate		0.78	%		1.20	%		1.76	%		0.78	%
Expected life		6.0 years			5.9 years			6.0 years			6.0 years
Expected volatility		134.79	%		124.16	%		129.93	%		134.79	%
Dividend yield		-			-			-			-

During March 2021, the Company granted 312,500stock options with an exercise price of $6.00and 152,500RSUs. The market value of the Company’s common stock was $5.00at the grant date of these awards. The Company recognized approximately $~~0.6~~ 0.3million and $~~0.4~~ 0.3million of stock-based compensation expense during the three-month periods ended ~~June 30,~~March 31, 2022 and 2021, ~~and 2020, respectively and approximately $0.8~~ ~~million and $0.8~~ ~~million of stock-based compensation expense during the six-month periods ended June 30, 2021 and 2020,~~ respectively. The following table has a breakout of stock-based compensation expense by line item.

SCHEDULE OF ~~STOCK-BASED~~SHARE-BASED COMPENSATION ~~EXPENSE~~ARRANGEMENTS BY SHARE-BASED PAYMENT AWARD

	Three Months Ended
	March 31,
	2022		2021
		(unaudited)
Cost of revenue	$	27	$	48
Sales and marketing		44		47
Research and development		-		35
General and administrative*		254		156
Total stock compensation expense	$	325	$	286

Three Months Ended Six Months Ended
June 30, June 30,
2021 2020 2021 2020
(unaudited) (unaudited)
Cost of revenue $ 52 $ 55 $ 102 $ 127
Sales and marketing 78 37 125 97
Research and development 24 30 59 69
General and administrative 397 278 551 525
Total stock compensation expense $ 551 $ 400 $ 837 $ 818

17*

Includes ESPP expense

11.

INCOME TAXES

Generally, accounting standards require companies to provide for income taxes each quarter based on their estimate of the effective tax rate for the full year. The authoritative guidance for accounting for income taxes allows use of the discrete method when it provides a better estimate of income tax expense. Due to the Company’s valuation allowance position, it is the Company’s position that the discrete method provides a more accurate estimate of income tax expense and therefore income tax expense for the current quarter has been presented using the discrete method. As the year progresses, the Company refines its estimate based on the facts and circumstances by each tax jurisdiction. The following table summarizes income tax expense on loss from continuing operations and the effective tax rate for ~~three- and six-month~~the three-month periods ended ~~June 30, 2021~~March 31, 2022 and ~~2020:~~2021:

SCHEDULE OF EFFECTIVE INCOME TAX RATE ~~RECONCILIATION~~

													2022			2021
	Three Months Ended						Six Months Ended						Three Months Ended
	June 30,						June 30,						March 31,
	2021			2020			2021			2020			2022			2021
	(unaudited)						(unaudited)						(unaudited)

Provision for income tax	$	16		$	13		$	31		$	28		$	18		$	15
Effective income tax rate		(0.5	)%		(0.2	)%		(0.4	)%		(0.2	)%		(0.8	%)		(0.4	%)

Income tax expense for both the ~~three- and six-month~~three-month periods ended ~~June 30,~~March 31, 2022 and 2021 ~~and 2020~~ was primarily due to minimum state and local taxes.

12.

SEGMENT INFORMATION

We operate under 1 segment which is the business of developing and selling clinical and pharma services.

13.

DISCONTINUED OPERATIONS

The components of liabilities classified as discontinued operations consist of the following as of ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020:~~2021:

SCHEDULE OF DISCONTINUED OPERATIONS

	June 30, 2021		December 31, 2020		March 31, 2022		December 31, 2021
		(unaudited)			(unaudited)

Accrued liabilities		766		766		766		766
Current liabilities from discontinued operations		766		766		766		766
Total liabilities	$	766	$	766	$	766	$	766

The table below presents the significant components of ~~CSO, Group DCA’s, Pharmakon’s and TVG’s~~CSO’s results included within loss from discontinued operations, net of tax in the condensed consolidated statements of operations for the ~~three-~~three-months ended March 31, 2022 and ~~six-months ended June 30, 2021 and 2020.~~2021.

													2022			2021
	Three Months Ended						Six Months Ended						Three Months Ended
	June 30,						June 30,						March 31,
	2021			2020			2021			2020			2022			2021
	(unaudited)						(unaudited)						(unaudited)
Income from discontinued operations, before tax	$	-		$	-		$	-		$	-		$	-		$	-
Income tax expense		58			66			112			130			54			54
Loss from discontinued operations, net of tax	$	(58	)	$	(66	)	$	(112	)	$	(130	)	$	(54	)	$	(54	)

14.

NOTES PAYABLE ~~– RELATED PARTIES~~

BroadOak Loan

On October 29, 2021, the Company and its subsidiaries entered into a Loan and Security Agreement (the “BroadOak Loan Agreement”) with BroadOak, providing for a term loan in the aggregate principal amount of $8,000,000 (the “Term Loan”). Funding of the Term Loan took place on November 1, 2021. The Term Loan matures upon the earlier of (i) October 31, 2024 or (ii) the occurrence of a change in control, and bears interest at the rate of 9% per annum. The Term Loan is secured by a security interest in substantially all of the Company’s and its subsidiaries’ assets and is subordinate to the Company’s $7,500,000 revolving credit facility with Comerica Bank. The Term Loan had an origination fee of 3% of the Term Loan amount, and a terminal payment equal to (i) 15% of the original principal amount of the Term Loan if the change of control occurs on or prior to the first anniversary of the funding of the Term Loan, (ii) 20% of the original principal amount of the Term Loan if the change of control occurs after the first anniversary but on or prior to the second anniversary of the funding of the Term Loan and (iii) 30% of the original principal amount of the Term Loan if the change of control occurs after the second anniversary of the funding of the Term Loan, or if the Term Loan is repaid on its maturity date.

The BroadOak Loan Agreement contains affirmative and negative restrictive covenants that are applicable from and after the date of the Term Loan advance. These restrictive covenants, which include restrictions on certain mergers, acquisitions, investments, encumbrances, etc., could adversely affect our ability to conduct our business. The BroadOak Loan Agreement also contains customary events of default.

In connection with the BroadOak Loan Agreement, the Company and its subsidiaries entered into that certain First Amendment to Loan and Security Agreement and Consent with Comerica, dated as of November 1, 2021 (the “Comerica Amendment”), pursuant to which Comerica consented to the Company’s and its subsidiaries’ entry into the BroadOak Loan Agreement, and amended that certain Loan and Security Agreement among Comerica, the Company and its subsidiaries (the “Comerica Loan Agreement”) to, among other things, permit the indebtedness, liens and encumbrances contemplated by the BroadOak Loan Agreement.

As a condition for BroadOak to extend the Term Loan to the Company and its subsidiaries, the Company’s existing creditor, Comerica, and BroadOak entered into that certain Subordination and Intercreditor Agreement, dated as of November 1, 2021, pursuant to which BroadOak agreed to subordinate all of the indebtedness and obligations of the Company and its subsidiaries owing to BroadOak to all of the indebtedness and obligations of the Company and its subsidiaries owing to Comerica (the “Intercreditor Agreement”). BroadOak further agreed to subordinate all of its respective security interests in assets or property of the Company and its subsidiaries to Comerica’s security interests in such assets or property. The Intercreditor Agreement provides that it is solely for the benefit of BroadOak and Comerica and is not for the benefit of the Company or any of its subsidiaries.

The Company concluded that the Note met the definition of a “recognized financial liability” which is an acceptable financial instrument eligible for the fair value option under ASC 825-10-15-4, and did not meet the definition of any of the financial instruments listed within ASC 825-10-15-5 that are not eligible for the fair value option. The Note is not convertible and does not have any component recorded to shareholders’ equity. Accordingly, the Company elected the fair value option for the Note.

Related Party Secured Promissory ~~Notes~~Note

On January 7, 2021, the Company entered into secured promissory notes ~~with Ampersand,~~ in the amount of $3 million and ~~1315 Capital, in the amount of~~ $2 million ~~respectively (together, the “Notes”) and a related security agreement (the “Security Agreement”).~~

~~Ampersand holds~~ ~~28,000~~ ~~shares of the Company’s Series B Convertible Preferred Stock, which are convertible from time to time into an aggregate of~~ ~~4,666,666~~ ~~shares of our Common Stock, and 1315 Capital holds~~ ~~19,000~~ ~~shares of the Company Series B Convertible Preferred Stock, which are convertible from time to time into an aggregate of~~ ~~3,166,668~~ ~~shares of our Common Stock. On an as-converted basis, such shares would represent approximately~~ ~~39.1%~~ ~~and~~ ~~26.5%~~ ~~of our fully-diluted shares of Common Stock, respectively.~~ ~~In addition, pursuant to the terms of the Series B Convertible Preferred Stock certificate of designation and an amended and restated investor rights agreement among the Company and~~with Ampersand and 1315 Capital, ~~they each have~~respectively. On May 10, 2021, the ~~right~~Company amended the Ampersand Note to ~~(1) approve certain of our actions, including our borrowing of money~~increase the principal amount to $4.5 million and ~~(2) designate two directors to our Board of Directors; provided, that certain of such rights held by~~amended the 1315 Capital ~~have been delegated pursuant~~Note to increase the ~~related Support Agreement (See Note 16). As a result, the Company considers~~principal amount to $3.0 million. The maturity dates of the Notes ~~and Security Agreement to be a related party transaction.~~

~~The rate of interest on the Notes is equal to eight percent (8.0%) per annum and their maturity date is~~were the earlier of (a) June 30, 2021 and (b) the date on which all amounts become due upon the occurrence of any event of default as defined in the Notes. ~~No interest payments are due on the Notes until their maturity date. All payments on the Notes are pari passu.~~

~~On May 10, 2021, (i) the Company and Ampersand amended the Ampersand Note to increase its principal amount to $4.5~~ ~~million, (ii) the Company and 1315 Capital amended the 1315 Capital Note to increase its principal amount to $3.0~~ ~~million and (iii) the Company and Ampersand amended the Security Agreement to include the new total principal amount of the Notes of $7.5~~ ~~million. The maturity date of the Notes remained the earlier of~~ ~~June 30, 2021and the date on which all amounts become due upon the occurrence of any event of default and the interest rate remained~~ 8%~~, and except with respect to their respective principal amounts, the terms of the Notes and the Security Agreement were otherwise unchanged. Through June 30, 2021, approximately $0.1~~ ~~million in financing fees have been paid.~~

On June 24, 2021, the Company and Ampersand amended the Ampersand Note to change its maturity date to the earlier of (a) August 31, 2021 and (b) the date on which all amounts become due upon the occurrence of any event of default as defined in the Ampersand Note. On June 25, 2021, the Company and 1315 Capital amended the 1315 Capital Note to change its maturity date in a similar manner. Except with respect to their respective maturity dates, the terms of the Notes are otherwise unchanged. The Security Agreement remains in full force and effect, and was not amended in connection with the amendments to the Notes.

~~In the case of both amendments, the Company reviewed the changes in accordance with ASC 470 and determined they should be treated as modifications. As of June 30,~~On August 31, 2021, the Company ~~has incurred approximately $~~18~~,000~~and Ampersand amended the Ampersand Note to change its maturity date to the earlier of (a) September 30, 2021 and (b) the date on which all amounts become due upon the occurrence of any event of default as defined in ~~additional deferred financing expenses associated with~~ the ~~amendments.~~

Ampersand Note. On August 31, 2021, the Company and 1315 Capital amended the 1315 Capital Note to change its maturity date in a similar manner.

In connection with the Security Agreement, the Notes are secured by a first priority lien and security interest on substantially all of the assets of the Company. Additionally, if a change of control ofOn September 29, 2021, the Company ~~occurs (as~~and Ampersand amended the Ampersand Note to change its maturity date to the earlier of (a) October 31, 2021 and (b) the date on which all amounts become due upon the occurrence of any event of default as defined in the ~~Notes)~~Ampersand Note. On September 29, 2021, the Company ~~is required~~and 1315 Capital amended the 1315 Capital Note to ~~make~~change its maturity date in a ~~prepayment~~similar manner.

The Company used the proceeds of the ~~Notes~~BroadOak Term Loan discussed above to repay in ~~an amount equal to the unpaid principal amount,~~full at their maturity all ~~accrued and unpaid interest, and all other amounts payable~~outstanding indebtedness under the ~~Notes out~~promissory notes with Ampersand, dated January 7, 2021 and as last amended on September 29, 2021, in the amount of $4.5 million, and 1315 Capital, dated January 7, 2021 and as last amended on September 29, 2021, in the ~~net cash proceeds received by the Company from the consummation~~amount of the transactions related to such change of control. The Company may prepay the Notes in whole or in part at any time or from time to time without penalty or premium by paying the principal amount to be prepaid together with accrued interest thereon to the date of prepayment. No prepaid amount may be re-borrowed.$3 million, respectively.

1920

The Notes contain certain negative covenants which prevent the Company from issuing any debt securities pursuant to which the Company issues shares, warrants or any other convertible security in the same transaction or a series of related transactions, except that Company may incur or enter into any capitalized and operating leases in the ordinary course of business consistent with past practice, or borrowed money or funded debt in an amount not to exceed $4.5 million (the “Debt Threshold”) that is subordinated to the Notes on terms acceptable to Ampersand and 1315 Capital; provided, that if the aggregate consolidated revenue recognized by the Company as reported on Form 10-K as filed with the SEC for any fiscal year ending after January 10, 2020 exceeds $45 million, the Debt Threshold for the following fiscal year shall increase to an amount equal to: (x) ten percent (10%); multiplied by (y) the consolidated revenue as reported by the Company on Form 10-K as filed with the SEC for the previous fiscal year.

15.

SUPPLEMENTAL CASH FLOW INFORMATION

Supplemental Disclosures of Non Cash Activities

(in thousands)

~~SCHEDULE OF~~ SUPPLEMENTAL ~~DISCLOSURE OF~~ CASH FLOW INFORMATION

					2022		2021
	Six Months Ended				Three Months Ended
	June 30,				March 31,
	2021		2020		2022		2021
	(unaudited)
Operating
Taxes accrued for repurchase of restricted shares	$	-	$	49	$	60	$	-

Investing
Preferred Stock Deemed Dividend	$	-	$	3,033
Investment in DiamiR		248		-
Accrued capital expenditures		295		-	$	22	$	-

Financing

Accrued financing costs	$	238	$	314	$	-	$	123

16.

EQUITY

Preferred Stock Issuance: Securities Purchase and Exchange Agreement

On January 10, 2020, the Company entered into a Securities Purchase and Exchange Agreement (the “Securities Purchase and Exchange Agreement”) with 1315 Capital and Ampersand (collectively, the “Investors”) pursuant to which the Company agreed to sell to the Investors an aggregate of $20.0 million in Series B Preferred Stock of the Company, at an issuance price per share of $1,000. Pursuant to the Securities Purchase and Exchange Agreement, 1315 Capital agreed to purchase 19,000 shares of Series B Preferred Stock at an aggregate purchase price of $19.0 million and Ampersand agreed to purchase 1,000 shares of Series B Preferred Stock at an aggregate purchase price of $1.0 million.

In addition, the Company agreed to exchange $27.0 million of the Company’s existing Series A convertible preferred stock, par value $0.01 per share, held by Ampersand (the “Series A Preferred Stock”), represented by 270 shares of Series A Preferred Stock with a stated value of $100,000 per share, which represents all of the Company’s issued and outstanding Series A Preferred Stock, for 27,000 newly issued shares of Series B Preferred Stock (such shares of Series B Preferred Stock, the “Exchange Shares” and such transaction, the “Exchange”). Following the Exchange, no shares of Series A Preferred Stock remained designated, authorized, issued or outstanding. The Series B Preferred Stock has a conversion price of $6.00 ~~as compared to a conversion price of $8.00~~ ~~on the Series A Preferred Stock, but did not include certain rights applicable to the Series A Preferred Stock, including a six-percent (~~6%~~) dividend and a conversion price adjustment for any failure by the Company to achieve a revenue target of $34.0~~ million in 2020 related to its clinical services or a weighted-average anti-dilution adjustment. Under the terms of the Securities Purchase and Exchange Agreement, Ampersand also agreed to waive all dividends and weighted-average anti-dilution adjustments accrued to date on the Series A Preferred Stock.

A convertible financial instrument includes a beneficial conversion feature if its conversion price is lower than the Company’s stock price at the commitment date. The Company determined that the sale of the Series B Preferred resulted in a beneficial conversion feature with an intrinsic value of $~~2.2~~ million, which the Company recorded as a reduction to additional paid-in capital upon the sale of the Series B Preferred stock. The Company calculated the intrinsic value of the beneficial conversion feature as the difference between the estimated fair value of the Common Stock on January 15, 2020 of $~~6.79~~ ~~per share and the effective conversion price per share of $6.00~~ multiplied by the number of shares of common stock issuable upon conversion. The Company fully amortized the beneficial conversion feature during the three months ended March 31, 2020 in accordance with GAAP. The beneficial conversion feature resulted in an increase in the loss attributable to common shareholders for the three months ended March 31, 2020 in the Condensed Consolidated Statement of Operations, as it represented a deemed dividend to the preferred shareholders..

In April 2020, the Company entered into support agreements with each of the Series B Investors, pursuant to which Ampersand and 1315 Capital, respectively, consented to, and agreed to vote (by proxy or otherwise), all shares of Series B Preferred Stock registered in its name or beneficially owned by it and/or over which it exercises voting control as of the date of the Support Agreement and any other shares of Series B Preferred Stock legally or beneficially held or acquired by such Series B Investor after the date of the Support Agreement or over which it exercises voting control, in favor of any Fundamental Action desired to be taken by the Company as determined by the Board. For purposes of each Support Agreement, “Fundamental Action” means any action proposed to be taken by the Company and set forth in Section 4(d)(i), 4(d)(ii), 4(d)(v), 4(d)(vi), 4(d)(viii) or 4(d)(ix) of the Certificate of Designation of Series B Preferred Stock or Section 8.5.1.1, 8.5.1.2, 8.5.1.5, 8.5.1.6, 8.5.1.8 or 8.5.1.9 of the Amended and Restated Investor Rights Agreement. The support agreement between the Company and Ampersand was terminated by mutual agreement on July 9, 2020; however, the support agreement entered into with 1315 Capital remains in effect. During October 2021, Ampersand and 1315 Capital provided consent to the Company to enter into the Comerica Loan Agreement and the BroadOak Term Loan.

As of March 31, 2022 and December 31, 2021, there were 47,000 Series B issued and outstanding shares of preferred stock, respectively.

17.

WARRANTS

Warrants outstanding and warrant activity for the ~~six-months~~three-months ended ~~June 30, 2021~~March 31, 2022 are as follows:

SCHEDULE OF WARRANTS OUTSTANDING AND WARRANTS ACTIVITY

Description	Classification	Exercise Price		Expiration Date	Warrants Issued		Balance December 31, 2020		Warrants Cancelled/ Expired		Balance June 30, 2021		Classification	Exercise Price		Expiration Date	Warrants Issued		Balance December 31, 2021		Warrants Cancelled/ Expired			Balance March 31, 2022

Private Placement Warrants, issued January 25, 2017	Equity	$	46.90	June 2022		85,500		85,500				85,500	Equity	$	46.90	June 2022		85,500		85,500		-			85,500
RedPath Warrants, issued March 22, 2017	Equity	$	46.90	September 2022		10,000		10,000				10,000	Equity	$	46.90	September 2022		10,000		10,000		-			10,000
Underwriters Warrants, issued June 21, 2017	Liability	$	13.20	December 2022		57,500		53,500				53,500	Liability	$	13.20	December 2022		57,500		53,500		-			53,500
Base & Overallotment Warrants, issued June 21, 2017	Equity	$	12.50	June 2022		1,437,500		870,214				870,214	Equity	$	12.50	June 2022		1,437,500		870,214		-			870,214
Warrants issued October 12, 2017	Equity	$	18.00	April 2022		320,000		320,000				320,000	Equity	$	18.00	April 2022		320,000		320,000		-			320,000
Underwriters Warrants, issued January 25, 2019	Equity	$	9.40	January 2022		65,434		65,434				65,434	Equity	$	9.40	January 2022		65,434		65,434		(65,434	)		-

						1,975,934		1,404,648		-		1,404,648						1,975,934		1,404,648		(65,434	)		1,339,214

The weighted average exercise price of the warrants is $~~15.97~~16.30 and the weighted average remaining contractual life is approximately ~~0.9~~0.2 years.

18.

REVOLVING LINE OF CREDIT

On October 13, 2021, the Company and its subsidiaries entered into a Loan and Security Agreement (the “Comerica Loan Agreement”) with Comerica Bank (“Comerica”), providing for a revolving credit facility of up to $7,500,000 (the “Credit Facility”). The Company may use the proceeds of the Credit Facility for working capital and other general corporate purposes.

The amount that may be borrowed under the Credit Facility is the lower of (i) the revolving limit of $7,500,000 (the “Revolving Line”) and (ii) 80% of the Company’s eligible accounts receivable plus an applicable non-formula amount consisting of $2,000,000 of additional availability at close not based upon the Company’s eligible accounts receivable, with such additional availability reducing by $250,000 per quarter beginning with the quarter ending June 30, 2022. Borrowings on the Credit Facility are limited to $5,000,000 until 80% of the Company’s and its subsidiaries’ customers are paying into a collection account or segregated governmental account with Comerica. The Revolving Line can also include, at the Company’s option, credit card services with a sublimit of $300,000. Borrowings on the Revolving Line are subject to an interest rate equal to prime plus 0.50%, with prime being the greater of (x) Comerica’s stated prime rate or (y) the sum of (A) the daily adjusting LIBOR rate plus (B) 2.5% per annum. The Company is also required to pay an unused facility fee quarterly in arrears in an amount equal to 0.25% per annum on the average unused but available portion of the Revolving Line for such quarter.

The Credit Facility matures on September 30, 2023, and is secured by a first priority lien on substantially all of the assets of the Company and its subsidiaries. As of March 31, 2022, the balance of the revolving line was $2.5 million.

The Comerica Loan Agreement contains affirmative and negative restrictive covenants that are applicable whether or not any amounts are outstanding under the Comerica Loan Agreement. These restrictive covenants, which include restrictions on certain mergers, acquisitions, investments, encumbrances, etc., could adversely affect our ability to conduct our business. The Comerica Loan Agreement also contains financial covenants requiring specified minimum liquidity and minimum revenue thresholds and also contains customary events of default. In April 2022, Comerica waived certain covenants specifically relating to the Company receiving financial statements with a going concern comment or qualification, and failure to maintain bank accounts outside of Comerica in an aggregate amount not to exceed $0.5 million during the transition period.

As a condition for Comerica to extend the Credit Facility to the Company and its subsidiaries, the Company’s existing creditors, Ampersand and 1315 Capital (the “Existing Creditors”), entered into that certain Subordination Agreement, dated as of October 13, 2021, pursuant to which each Existing Creditor agreed to subordinate all of the indebtedness and obligations of the Company and its subsidiaries owing to such Existing Creditor to all of the indebtedness and obligations of the Company and its subsidiaries owing to Comerica (the “Subordination Agreement”). Each Existing Creditor further agreed to subordinate all of its respective security interests in assets or property of the Company and its subsidiaries to Comerica’s security interests in such assets or property. The Subordination Agreement provides that it is solely for the benefit of Comerica and each of the Existing Creditors and is not for the benefit of the Company or any of its subsidiaries.

19.

RECENT ACCOUNTING ~~PRONOUNCEMENTS~~STANDARDS

~~Recently Adopted~~ Accounting ~~Guidance~~Pronouncements Pending Adoption

In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”). ASU 2019-12 will simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The amendments also improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. The amendment was effective for annual periods beginning after December 15, 2020.

~~The Company adopted this pronouncement on January 1, 2021 and the impact was not material to the Company’s Consolidated Financial Statements.~~

In February 2020, the FASB issued ASU 2020-02, Financial Instruments-Credit Losses (Topic 326) and Leases (Topic 842) - Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 119 and Update to SEC Section on Effective Date Related to Accounting Standards Update No. 2016-02, Leases (Topic 842) which amends the effective date of the original pronouncement for smaller reporting companies. ASU 2016-13 and its amendments will be effective for the Company for interim and annual periods in fiscal years beginning after December 15, 2022. The Company believes the adoption will modify the way the Company analyzes financial instruments, but it does not anticipate a material impact on results of operations. The Company is in the process of determining the effects adoption will have on its consolidated financial statements.

In August 2020, the FASB issued ASU 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815 – 40), (“ASU 2020-06”). ASU 2020-06 simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. The ASU2020-06 amendments are effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Company does not expect this will have any impact on its ~~unaudited~~ consolidated financial statements.

~~19.~~20.

SUBSEQUENT EVENTS

BroadOak Convertible Note

On May 5, 2022, the Company issued a Subordinated Convertible Promissory Note (the “Convertible Note”) to BroadOak, pursuant to which BroadOak funded a term loan in the aggregate principal amount of $2 million (the “Convertible Debt”). The Company will use the proceeds of the Convertible Debt for general corporate purposes and working capital.

The Convertible Note will be converted into shares of common stock of the Company in connection with, and upon the consummation of, a private placement transaction pursuant to which the Company will issue common stock to certain investors, and such conversion will be subject to the same terms and conditions (including purchase price per share) applicable to the purchase of common stock of the Company by such investors. If such private placement transaction is not consummated on or prior to August 5, 2022 (the “Maturity Date”), then the Convertible Note will be converted into an additional term loan advance under the Company’s existing BroadOak Loan Agreement on the Maturity Date and will thereafter be subject to the terms of the definitive financing agreements for the BroadOak Loan Agreement until repaid in accordance with the terms thereof. The Convertible Debt bears interest at a fixed rate of interest equal to 9.0% per annum and is unsecured. There are no scheduled amortization payments prior to the Maturity Date. The Convertible Note contains customary representations and warranties and customary events of default.

In connection with the issuance of the Convertible Note, on May 5, 2022, the Company and its subsidiaries entered into a) a consent letter (the “Comerica Consent”) with Comerica, pursuant to which Comerica consented to the issuance of the Convertible Note, the incurrence of the Convertible Debt and the conversion of the Convertible Debt into common stock of the Company or an additional term loan advance under the BroadOak Loan Agreement in accordance with the terms of the Convertible Note, and b) a First Amendment to Loan and Security Agreement and Consent (the “BroadOak Amendment”) with BroadOak, pursuant to which, among other things, BroadOak consented to the issuance of the Convertible Note, the incurrence of the Convertible Debt and the conversion of the Convertible Debt into common stock of the Company or an additional term loan advance under the BroadOak Loan Agreement in accordance with the terms of the Convertible Note.

The Convertible Debt is subordinated in right of payment to all of the indebtedness and obligations of the Company owing to Comerica under the Company’s existing senior secured credit facility with Comerica. In connection with the issuance of the Convertible Note, on May 5, 2022, the Company, BroadOak and Comerica entered into a First Amendment to Subordination and Intercreditor Agreement (the “Intercreditor Amendment”), pursuant to which, among other things, BroadOak agreed that the Convertible Debt is subordinated to all of the indebtedness and obligations of the Company owing to Comerica on the same terms and conditions applicable to the indebtedness and obligations of the Company under the BroadOak Loan Agreement.

~~Sale of net operating losses (NOLs)~~

~~In July 2021, the Company received approximately $0.7~~ ~~million in cash through the sale of approximately $8.7~~ ~~million of its NOLs as part of the state of New Jersey’s technology business tax certificate transfer (NOL) program.~~

~~Strategic Review~~

In April 2021, we announced that we initiated a full review of a broad range of alternatives to enhance shareholder value. As part of this process, we are considering strategic, financial and operational alternatives involving the Company. Guggenheim Securities, LLC is serving as a strategic advisor in this process.

2123

INTERPACE BIOSCIENCES, INC

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

FORWARD-LOOKING STATEMENTS

This quarterly report on Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Statements that are not historical facts, including statements about our plans, objectives, beliefs and expectations, are forward-looking statements. Forward-looking statements include statements preceded by, followed by or that include the words “believes,” “expects,” “anticipates,” “plans,” “estimates,” “intends,” “projects,” “should,” “could,” “may,” “will” or similar words and expressions. These forward-looking statements are contained throughout this Form 10-Q.

Forward-looking statements are only predictions and are not guarantees of future performance. These statements are based on current expectations and assumptions involving judgments about, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond our control. These predictions are also affected by known and unknown risks, uncertainties and other factors that may cause our actual results to be materially different from those expressed or implied by any forward-looking statement. Many of these factors are beyond our ability to control or predict. Our actual results could differ materially from the results contemplated by these forward-looking statements due to a number of factors. Such factors include, but are not limited to, the following:

	●	~~potential future material adverse impact of Coronavirus (COVID-19) pandemic;~~

	●	the substantial doubt about our ability to continue as a going concern due to our history of operating losses, declining cash position and other liquidity factors, which in the absence of additional short term financing may cause us to cease or scale back operations;

	●	~~the quotation of our common stock on the OTCQX and our inability to use Form S-3 for offerings by the Company may adversely affect our ability to raise additional capital;~~

	●	the effect of the Coronavirus (COVID-19) pandemic which has materially and adversely affected our ~~ability~~business and financial results, particularly during portions of 2020, due to ~~timely repay~~the slowdown in demand for our ~~private equity investors the $7.5 million~~clinical services and pharma services, a reduction in ~~outstanding secured promissory notes due August 31, 2021, the failure of~~samples received and testing volume and delayed third party collections and other factors and which ~~could result in the right~~may continue to ~~foreclose~~have an adverse effect on our ~~assets;~~future business;

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

	●	our reliance on Medicare reimbursement for our clinical services and our being subject to decisions of the Centers for Medicare and Medicaid Services (“CMS”) regarding reimbursement and pricing of our clinical services which could have a material adverse effect on our business and financial results;

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

	●	our dependence on sales and reimbursements from our clinical services for more than 50% of our revenue; the ability to continue to generate sufficient revenue from these and other products and/or solutions that we develop in the future is important for our ability to meet our financial and other targets;

	●	our revenue recognition is based, in part, on our estimates for future collections and such estimates may prove to be incorrect;

	●	our ability to finance our business on acceptable terms in the future, which may limit the ability to grow our business, develop and commercialize products and services, develop and commercialize new molecular clinical service solutions and technologies and expand our pharma services offerings;

●

our obligations to make royalty and milestone payments to our licensors;


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

	●	the potential adverse impact of current and future laws, licensing requirements and governmental regulations upon our business operations, including but not limited to the evolving U.S. regulatory environment related to laboratory developed tests (“LDTs”), pricing of our tests and services and patient access limitations;

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

	●	our ability to implement our business ~~and restructuring~~ strategy; and

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

Please see Part I – Item 1A – “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2020~~2021 filed with the SEC on ~~April 1, 2021,~~March 31, 2022, as well as other documents we file with the SEC from time-to-time, for other important factors that could cause our actual results to differ materially from our current expectations as expressed in the forward-looking statements discussed in this Form 10-Q. Because of these and other risks, uncertainties and assumptions, you should not place undue reliance on these forward-looking statements. In addition, these statements speak only as of the date of the report in which they are set forth and, except as may be required by law, we undertake no obligation to revise or update publicly any forward-looking statements for any reason.

OVERVIEW

We are an emerging leader in enabling precision medicine principally in oncology by offering specialized services along the therapeutic value chain from early diagnosis and prognostic planning to targeted therapeutic applications through our clinical and pharma services. Through our clinical services, we enable physicians to personalize the clinical management of each individual patient by providing genomic information to better diagnose, monitor and inform cancer treatment. Our clinical services provide clinically useful molecular diagnostic tests, bioinformatics and pathology services for evaluating risk of cancer by leveraging the latest technology in personalized medicine for improved patient diagnosis and management. Through our pharma services, we develop, commercialize and provide molecular- and biomarker-based tests and services and provide companies with customized solutions for patient stratification and treatment selection through an extensive suite of molecular and biomarker-based testing services, ~~DNA-~~DNA and ~~RNA-~~RNA extraction and customized assay development and trial design consultation. Our pharma services provide pharmacogenomics testing, genotyping, biorepository and other specialized services to the pharmaceutical and biotech industries and advance personalized medicine by partnering with pharmaceutical, academic and technology leaders to effectively integrate pharmacogenomics into drug development and clinical trial programs with the goals of delivering safer, more effective drugs to market more quickly, and improving patient care.

Impact of Our Reliance on CMS

In January 2022, CMS stated they would no longer reimburse for the use of the Company’s ThyGeNEXT® and ThyraMIR^® tests when billed together by the same provider/supplier for the same beneficiary on the same date of service. However, on February 28, 2022, the Company announced that the National Correct Coding Initiative (NCCI) program issued a response on behalf of CMS stating that the January 2022 billing policy reimbursement change for ThyGeNEXT^® (0245U) and ThyraMIR^® (0018U) tests has been retroactively reversed to January 1, 2022. CMS is currently reimbursing the Company for one of its two thyroid tests, and has agreed to retroactively reimburse for the second test once they have completed their internal administrative adjustments. We have been notified by CMS/NCCI that processing of claims for dates of service after January 1, 2022 will be completed beginning July 1, 2022. As a result, the Company will continue billing for both tests according to its LCD as originally set by Novitas. As of the date of this filing, the Company has not yet realized the full cash collection benefit of current and retroactive Thyroid testing and such cash collections may be temporarily reduced or delayed until we resolve the matter with CMS.

Further, in May 2022, CMS published its preliminary gap-fill fee pricing rates which are scheduled to go into effect in January 2023 and are likely to affect the rates we are allowed to bill payers for ThyGeNEXT^®. This determination decreases the Medicare reimbursement for ThyGeNext™ (0245U). However, the reimbursement rate for other payer groups may be increased. The overall impact of the CMS determination may have an adverse impact on the Company’s business and financial results beginning in Fiscal 2023.

Impact of COVID-19 ~~pandemic~~Pandemic

~~While we do not anticipate any lab~~Lab closures ~~at this time beyond~~experienced thus far by the Company have consisted of periodic, temporary work stoppages to clean and disinfect the ~~labs,~~labs; however, this could change in the future based upon conditions caused by the pandemic. ~~It is also possible that we could experience~~Inflation and supply chain ~~shortages if~~disruptions, whether caused by restrictions or slowdowns in shipping or logistics, increases in demand for certain goods used in our operations, or otherwise, could impact our operations in the ~~pandemic worsens and if one or more suppliers is unable to continue to provide us with supplies.~~near term. For the foreseeable future, however, we do not anticipate supply chain shortages of critical supplies.

Impact of the ongoing military conflict between Russia and Ukraine.

~~Transition costs~~

In late February 2022, Russia invaded Ukraine, significantly amplifying already existing geopolitical tensions among Russia and other countries in the region and in the west, including the U.S. Russia’s invasion, the responses of countries and political bodies to Russia’s actions, the larger overarching tensions, and Ukraine’s military response and the potential for wider conflict have resulted in financial market volatility and capital markets disruption, potentially increasing in magnitude, and could have severe adverse effects on regional and global economic markets and international relations. The extent and duration of the military action, sanctions and resulting market disruptions are impossible to predict, but could be substantial.

~~To optimize~~Following Russia’s actions, various countries, including the ~~operations of laboratory operations within our pharma services, we transitioned activities~~U.S., Canada and the United Kingdom, as well as the European Union, issued broad-ranging economic sanctions against Russia. Such sanctions included, among other things, a prohibition on doing business with certain Russian companies, officials and oligarchs; a commitment by certain countries and the European Union to remove selected Russian banks from the ~~Rutherford, NJ facility to our Morrisville, NC facility. We invested several million dollars to facilitate this relocation, including but not limited~~Society for Worldwide Interbank Financial Telecommunications (SWIFT) electronic banking network that connects banks globally; a ban on Russian oil and gas imports to the ~~transfer of personnel, expansion~~U.S.; and restrictive measures to prevent the Russian Central Bank from undermining the impact of the ~~Morrisville facility~~sanctions. The current sanctions (and potential further sanctions in response to continued Russian military activity) and ~~validation~~other actions may have adverse effects on regional and global economic markets and lead to instability and lack of ~~transferred processes. We believe that this investment will result~~liquidity in ~~a reduction in future operating costs; however,~~capital markets, potentially making it ~~is not certain whether we will fully realize~~more difficult for us to obtain additional funds and increasing the ~~anticipated savings. We have also undergone several other cost-cutting initiatives, primarily reductions in headcount, and those costs are categorized as transition expenses as well.~~

~~Nasdaq delisting~~

~~On February 16, 2021, the Company received a delisting determination letter (the “Letter”) from the Listing Qualifications Department (the “Staff”)~~volatility of ~~The Nasdaq Stock Market LLC (“Nasdaq”) stating that the Staff had determined to delist the Company’s common~~our stock from Nasdaq due to the Company’s failure to regain compliance with the Nasdaq Capital Market’s minimum $2,500,000 stockholders’ equity requirement for continued listing as set forth in Nasdaq Listing Rule 5550(b) (the “Rule”) and the Company’s failure to timely execute its plan to regain compliance under the Rule.

Nasdaq commenced with delisting the Company’s common stock from the Nasdaq Capital Market and, suspended trading in the Company’s common stock effective at the open of business on February 25, 2021.

~~On February 24, 2021, the Company was approved to have its common stock quoted on the OTCQX~~^® ~~Best Market tier~~price. Any of the ~~OTC Markets Group Inc. (the “OTCQX”), an electronic quotation service operated by OTC Markets Group Inc. The trading of the Company’s common stock commenced on OTCQX at the open of~~abovementioned factors could affect our business, ~~on February 25, 2021 under the trading symbol IDXG.~~prospects, financial condition, and operating results.

~~Additional Reimbursement Coverage and Price Increase During 2021~~

Reimbursement progress is key for us. We have been successful to date in expanding both the scope and amount of product reimbursement for our clinical services in 2021. Examples of our progress include:

●	~~In January 2021, we announced an agreement with Blue Cross Blue Shield of Florida under which ThyGeNEXT~~^®~~and ThyraMIR~~^®~~tests are now covered in-network services for their 5 million members.~~

●	~~In February 2021, we announced an agreement with Blue Cross Blue Shield of Illinois that makes ThyGeNEXT~~^® ~~and ThyraMIR~~^®~~tests covered in-network services for their more than 8 million members in Illinois.~~

●	~~In April 2021, we announced that Novitas, our Medicare Administrative Contractor, has agreed to recognize the new Proprietary Laboratory Analysis (PLA) code that specifically identifies ThyGeNEXT~~^® ~~as a distinct test from any other test or service. The new PLA code for ThyGeNEXT~~^® ~~is 0245U and the reimbursement for this code remains $2,919, representing a significant price increase over the prior reimbursement level of $560.~~

●

~~In May 2021, we announced that eviCore Healthcare (“eviCore”), a wholly owned subsidiary of Cigna, has updated their laboratory management guidelines to include positive coverage for ThyGeNEXT~~^® ~~and ThyraMIR~~^®. This update, which impacts approximately 27 health plans nationwide covering 100 million lives, is effective on July 1, 2021. This means that after the effective date, claims for ThyGeNEXT and ThyraMIR which meet eviCore’s criteria for coverage will be considered medically necessary and processed as a covered service.

Revenue Recognition

Clinical services derive its revenues from the performance of its proprietary assays or tests. Our performance obligation is fulfilled upon completion, review and release of test results to the customer, at which time we bill third-party payers or direct-bill payers for the tests performed. Under Accounting Standards Codification 606, revenue is recognized based upon the estimated transaction price or net realizable value (“NRV”), which is determined based on historical collection rates by each payer category for each proprietary test offered. To the extent that the transaction price includes variable consideration, for all third party and direct-bill payers and proprietary tests, we estimate the amount of variable consideration that should be included in the transaction price using the expected value method based on historical experience.

The ultimate amounts received from the third-party and direct-bill payers and related estimated reimbursement rates are regularly reviewed and we adjust the NRV’s and related contractual allowances accordingly. If actual collections and related NRV’s vary significantly from our estimates, we adjust the estimates of contractual allowances, which affects net revenue in the period such variances become known.

With respect to our pharma services, customer performance obligations are satisfied at a point in time as the Company processes samples delivered by the customer. Project level activities, including study setup and project management, are satisfied over the life of the contract. Revenues are recognized at a point in time when the test results or other deliverables are reported to the customer.

Cost of Revenue

Cost of revenue consists primarily of the costs associated with operating our laboratories and other costs directly related to our tests. Personnel costs, which constitute the largest portion of cost of services, include all labor-related costs, such as salaries, bonuses, fringe benefits and payroll taxes for laboratory personnel. Other direct costs include, but are not limited to, laboratory supplies, certain consulting expenses, royalty expenses, and facility expenses.

Transition costs

CONDENSED CONSOLIDATED RESULTS OF OPERATIONS

The following table sets forth, for the periods indicated, certain statements of operations data. The trends illustrated in this table may not be indicative of future results.

Condensed Consolidated Results of Continuing Operations for the Quarter Ended ~~June 30, 2021~~March 31, 2022 Compared to the Quarter Ended ~~June 30, 2020~~March 31, 2021 (unaudited, in thousands)

													Three Months Ended March 31,
													2022			2022			2021			2021
	Three Months Ended June 30,															% to						% to
	2021			2021			2020			2020						revenue						revenue

Revenue, net	$	11,155			100.0	%	$	5,446			100.0	%	$	10,377			100.0	%	$	9,833			100.0	%
Cost of revenue		5,800			52.0	%		3,850			70.7	%		5,384			51.9	%		5,316			54.1	%
Gross profit		5,355			48.0	%		1,596			29.3	%		4,993			48.1	%		4,517			45.9	%
Operating expenses:
Sales and marketing		2,776			24.9	%		1,596			29.3	%		2,416			23.3	%		2,351			23.9	%
Research and development		424			3.8	%		550			10.1	%		299			2.9	%		637			6.5	%
General and administrative		3,326			29.8	%		3,983			73.1	%		3,690			35.6	%		2,979			30.3	%
Transition expenses		858			7.7	%		124			2.3	%
Gain on DiamiR transaction		(235	)		-2.1	%		-			0.0	%
Transition expense														85			0.8	%		1,253			12.7	%
Acquisition related amortization expense		1,112			10.0	%		1,115			20.5	%		536			5.2	%		1,112			11.3	%
Total operating expenses		8,261			74.1	%		7,368			135.3	%		7,026			67.7	%		8,332			84.7	%

Operating loss		(2,906	)		-26.1	%		(5,772	)		-106.0	%		(2,033	)		-19.6	%		(3,815	)		-38.8	%
Interest accretion expense		(135	)		-1.2	%		(167	)		-3.1	%		(121	)		-1.2	%		(135	)		-1.4	%
Other (expense) income, net		(331	)		-3.0	%		438			8.0	%
Related party interest														-			0.0	%		(92	)		-0.9	%
Note payable interest														(180	)		-1.7	%		-			0.0	%
Other income (expense), net														159			1.5	%		(96	)		-1.0	%
Loss from continuing operations before tax		(3,372	)		-30.2	%		(5,501	)		-101.0	%		(2,175	)		-21.0	%		(4,138	)		-42.1	%
Provision for income taxes		16			0.1	%		13			0.2	%		18			0.2	%		15			0.2	%
Loss from continuing operations		(3,388	)		-30.4	%		(5,514	)		-101.2	%		(2,193	)		-21.1	%		(4,153	)		-42.2	%

Loss from discontinued operations, net of tax		(58	)		-0.5	%		(66	)		-1.2	%		(54	)		-0.5	%		(54	)		-0.5	%

Net loss	$	(3,446	)		-30.9	%	$	(5,580	)		-102.5	%	$	(2,247	)		-21.7	%	$	(4,207	)		-42.8	%

Revenue, net

Consolidated revenue, net for the three months ended ~~June 30, 2021~~March 31, 2022 increased by ~~$5.7~~$0.5 million, or ~~105%~~6%, to ~~$11.2~~$10.4 million, compared to ~~$5.4~~$9.8 million for the three months ended ~~June 30, 2020.~~March 31, 2021. The increase in net revenue was largely driven by increased ~~reimbursement rates and increased~~volume for our clinical ~~services volume as the three months ended June 30, 2020 was impacted by the pandemic. This increase was partially offset by a decrease in volume within pharma~~ services.

Cost of revenue

Consolidated cost of revenue for the three months ended ~~June 30, 2021~~March 31, 2022 was ~~$5.8~~$5.4 million, as compared to ~~$3.9~~$5.3 million for the three months ended ~~June 30, 2020. This increase is primarily attributed to the increased volume associated with the clinical services business.~~March 31, 2021. As a percentage of revenue, cost of revenue was approximately 52% for the three months ended ~~June 30, 2021~~March 31, 2022 and ~~71%~~54% for the three months ended ~~June 30, 2020.~~March 31, 2021, the percentage decrease was due to the increase in revenue discussed above.

Gross profit

Consolidated gross profit was approximately ~~$5.4~~$5.0 million for the three months ended ~~June 30, 2021~~March 31, 2022 and ~~$1.6~~$4.5 million for the three months ended ~~June 30, 2020.~~March 31, 2021. The gross profit percentage was approximately 48% for the three months ended ~~June 30, 3021~~March 31, 3022 and ~~29%~~46% for the three months ended ~~June 30, 2020. The increase can be attributed to increased reimbursement rates as well as the change in the gross profit mix.~~March 31, 2021.

2628

Sales and marketing expense

Sales and marketing expense was approximately ~~$2.8~~$2.4 million for the three months ended ~~June 30, 2021~~March 31, 2022 and ~~$1.6~~$2.4 million for the three months ended ~~June 30, 2020.~~March 31, 2021. As a percentage of revenue, sales and marketing expense decreased to ~~25%~~23% from ~~29%~~24% in the comparable prior year ~~period due to the higher revenue for the three months ended June 30, 2021.~~period.

Research and development

Research and development expense was ~~$0.4~~$0.3 million for the three months ended ~~June 30, 2021~~March 31, 2022 and $0.6 million for the three months ended ~~June 30, 2020~~March 31, 2021 due to ~~lower professional services costs~~a delay in ~~the quarter.~~research and development projects in 2022. As a percentage of revenue, research and development expense decreased to 4%3% from ~~10%~~7% in the comparable prior year period.

General and administrative

General and administrative expense was approximately ~~$3.3~~$3.7 million for the three months ended ~~June 30, 2021~~March 31, 2022 and ~~$4.0~~$3.0 million for the three months ended ~~June 30, 2020.~~March 31, 2021. The ~~decrease~~increase can be primarily attributed to ~~the closing of the Rutherford, NJ office~~an increase in employee compensation costs and ~~the employee and consulting costs associated with it.~~an increase in professional fees.

Transition expense

Transition expense was approximately ~~$0.9 million for the three months ended June 30, 2021 and~~ $0.1 million for the three months ended ~~June 30, 2020. These~~March 31, 2022 and $1.3 million for the three months ended March 31, 2021. In 2021, these expenses ~~are~~were related to the Rutherford, NJ lab closing and subsequent move to North Carolina as well as other cost-saving ~~initiatives, primarily reductions in headcount.~~initiatives. In 2022, these expenses were related to laboratory information management system implementation costs.

Acquisition amortization expense

During the three months ended ~~June 30,~~March 31, 2022 and March 31, 2021, ~~and June 30, 2020,~~ we recorded amortization expense of approximately $0.5 million and $1.1 million, respectively, ~~in both periods,~~ which is related to intangible assets associated with prior acquisitions.

Operating loss

Operating loss from continuing operations was ~~$2.9~~$2.0 million for the three months ended ~~June 30, 2021~~March 31, 2022 as compared to ~~$5.8~~$3.8 million for the three months ended ~~June 30, 2020.~~March 31, 2021. The lower operating loss was primarily attributable to the ~~increase~~reduction in ~~gross profit~~transition expenses discussed above.

Provision for income taxes

Income tax expense was approximately ~~$16,000~~$18,000 for the three months ended ~~June 30, 2021~~March 31, 2022 and ~~$13,000~~$15,000 for the three months ended ~~June 30, 2020.~~March 31, 2021. Income tax expense for both periods was primarily driven by minimum state and local taxes.

Loss from discontinued operations, net of tax

We had a loss from discontinued operations of approximately $0.1 million for the three months ended ~~June 30, 2021~~March 31, 2022 and a loss from discontinued operations of approximately $0.1 million for the three months ended ~~June 30, 2020. In both periods, the loss represents income tax expense associated with our discontinued operations.~~

March 31, 2021.

~~Condensed Consolidated Results of Continuing Operations for the Six Months Ended June 30, 2021 Compared to the Six Months Ended June 30, 2020 (unaudited, in thousands)~~

Six Months Ended June 30,
2021 2021 2020 2020

Revenue, net $ 20,989 100.0 % $ 14,504 100.0 %
Cost of revenue 11,116 53.0 % 9,963 68.7 %
Gross profit 9,873 47.0 % 4,541 31.3 %
Operating expenses:
Sales and marketing 5,128 24.4 % 4,077 28.1 %
Research and development 1,060 5.1 % 1,360 9.4 %
General and administrative 6,305 30.0 % 8,819 60.8 %
Transition expenses 2,111 10.1 % 180 1.2 %
Gain on DiamiR transaction (235 ) -1.1 % - 0.0 %
Acquisition related amortization expense 2,224 10.6 % 2,230 15.4 %
Total operating expenses 16,593 79.1 % 16,666 114.9 %

Operating loss (6,720 ) -32.0 % (12,125 ) -83.6 %
Interest accretion expense (270 ) -1.3 % (276 ) -1.9 %
Other (expense) income, net (520 ) -2.5 % 485 3.3 %
Loss from continuing operations before tax (7,510 ) -35.8 % (11,916 ) -82.2 %
Provision for income taxes 31 0.1 % 28 0.2 %
Loss from continuing operations (7,541 ) -35.9 % (11,944 ) -82.3 %

Loss from discontinued operations, net of tax (112 ) -0.5 % (130 ) -0.9 %

Net loss $ (7,653 ) -36.5 % $ (12,074 ) -83.2 %

~~Revenue, net~~

Consolidated revenue, net for the six months ended June 30, 2021 increased by $6.5 million, or 45%, to $21.0 million, compared to $14.5 million for the six months ended June 30, 2020. The increase in net revenue was driven by increased reimbursement rates and increased clinical services volume as the six months ended June 30, 2020 was impacted by the pandemic. This increase was partially offset by a decrease in volume within pharma services.

~~Cost of revenue~~

Consolidated cost of revenue for the six months ended June 30, 2021 was $11.1 million, as compared to $10.0 million for the six months ended June 30, 2020. This increase is primarily attributed to the increased volume associated with the clinical services business. As a percentage of revenue, cost of revenue was approximately 53% for the six months ended June 30, 2021 and 69% for the six months ended June 30, 2020.

~~Gross profit~~

Consolidated gross profit was approximately $9.9 million for the six months ended June 30, 2021 and $4.5 million for the six months ended June 30, 2020. The gross profit percentage was approximately 47% for the six months ended June 30, 3021 and 31% for the six months ended June 30, 2020. The increase can be attributed to increased reimbursement rates as well as the change in the gross profit mix.

~~Sales and marketing expense~~

Sales and marketing expense was approximately $5.1 million for the six months ended June 30, 2021 and $4.1 million for the six months ended June 30, 2020. As a percentage of revenue, sales and marketing expense decreased to 24% from 28% in the comparable prior year period due to the higher revenue for the six months ended June 30, 2021.

~~Research and development~~

Research and development expense was $1.1 million for the six months ended June 30, 2021 and $1.4 million for the six months ended June 30, 2020 due to lower professional services and employee costs. As a percentage of revenue, research and development expense decreased to 5% from 9% in the comparable prior year period.

~~General and administrative~~

General and administrative expense was approximately $6.3 million for the six months ended June 30, 2021 and $8.8 million for the six months ended June 30, 2020. The decrease can be primarily attributed to the closing of the Rutherford, NJ office and the employee and consulting costs associated with it.

~~Transition expense~~

Transition expense was approximately $2.1 million for the six months ended June 30, 2021 and $0.2 million for the six months ended June 30, 2020. These expenses are related to the Rutherford, NJ lab closing and subsequent move to North Carolina, as well as other cost-saving initiatives, primarily reductions in headcount.

~~Acquisition amortization expense~~

During the six months ended June 30, 2021 and June 30, 2020, we recorded amortization expense of approximately $2.2 million, respectively in both periods, which is related to intangible assets associated with prior acquisitions.

~~Operating loss~~

Operating loss from continuing operations was $6.7 million for the six months ended June 30, 2021 as compared to $12.1 million for the six months ended June 30, 2020. The lower operating loss was primarily attributable to the increase in gross profit discussed above.

~~Provision for income taxes~~

Income tax expense was approximately $31,000 for the six months ended June 30, 2021 and $28,000 for the six months ended June 30, 2020. Income tax expense for both periods was primarily driven by minimum state and local taxes.

~~Loss from discontinued operations, net of tax~~

We had a loss from discontinued operations of approximately $0.1 million for the six months ended June 30, 2021 and a loss from discontinued operations of approximately $0.1 million for the six months ended June 30, 2020. In both periods, the loss represents income tax expense associated with our discontinued operations.

Non-GAAP Financial Measures

In addition to the United States generally accepted accounting principles, or GAAP, results provided throughout this document, we have provided certain non-GAAP financial measures to help evaluate the results of our performance. We believe that these non-GAAP financial measures, when presented in conjunction with comparable GAAP financial measures, are useful to both management and investors in analyzing our ongoing business and operating performance. We believe that providing the non-GAAP information to investors, in addition to the GAAP presentation, allows investors to view our financial results in the way that management views financial results.

In this 10-Q, we discuss Adjusted EBITDA, a non-GAAP financial measure. Adjusted EBITDA is a metric used by management to measure cash flow of the ongoing business. Adjusted EBITDA is defined as income or loss from continuing operations, plus depreciation and amortization, acquisition related expenses, transition expenses, noncash stock based compensation, interest and taxes, and other non-cash expenses including asset impairment costs, bad debt expense, loss on extinguishment of debt, goodwill impairment and change in fair value of contingent consideration, and warrant liability. The table below includes a reconciliation of this non-GAAP financial measure to the most directly comparable GAAP financial measure.

Reconciliation of Adjusted EBITDA (Unaudited)

($ in thousands)

	Three Months Ended						Six Months Ended						Three Months Ended
	June 30,						June 30,						March 31,
	2021			2020			2021			2020			2022			2021
Loss from continuing operations (GAAP Basis)	$	(3,388	)	$	(5,514	)	$	(7,541	)	$	(11,944	)	$	(2,193	)	$	(4,153	)
Bad debt (recovery) expense		-			-			(140	)		250			-			(140	)
Receipt of HHS stimulus grant		-			(650	)		-			(650	)
Transition expenses		858			124			2,111			180			85			1,253
Depreciation and amortization		1,411			1,321			2,943			2,640			781			1,532
Stock-based compensation		551			400			837			818			325			286
Taxes		16			13			31			28
Tax expense														18			15
Interest accretion expense														121			135
Financing interest and related costs		163			-			308			-			180			144
Interest accretion expense		135			167			270			276
Gain on DiamiR transaction		(235	)		-			(235	)		-
Mark to market on warrant liability		168			(23	)		209			(49	)		(63	)		41
Change in fair value of note payable														(107	)		-
Change in fair value of contingent consideration		-			-			(57	)		-			-			(57	)
Adjusted EBITDA	$	(321	)	$	(4,162	)	$	(1,264	)	$	(8,451	)	$	(853	)	$	(944	)

LIQUIDITY AND CAPITAL RESOURCES

For the ~~six~~three months ended ~~June 30, 2021,~~March 31, 2022, we had an operating loss of ~~$6.7~~$2.0 million. As of ~~June 30, 2021,~~March 31, 2022, we had cash and cash equivalents of ~~$3.8~~$2.9 million, net of restricted cash, total current assets of ~~$14.4~~$12.9 million, net of restricted cash, and current liabilities of ~~$22.8~~$16.9 million. As of ~~August 5, 2021,~~May 6, 2022, we had approximately ~~$3.8~~$3.7 million of cash on hand, net of restricted cash.

During the ~~six~~three months ended ~~June 30, 2021,~~March 31, 2022, net cash used in operating activities was ~~$6.8~~$1.3 million. The main component of cash used in operating activities was our net loss of ~~$7.7~~$2.2 million, partially offset by an increase in accounts payable of $1.2 million. During the ~~six~~three months ended ~~June 30, 2020,~~March 31, 2021, net cash used in operating activities was ~~$6.7~~$5.0 million. The main component of cash used in operating activities was our net loss of ~~$12.1 million which was partially offset by a decrease in accounts receivable of $2.7~~$4.2 million.

During the six months ended June 30, 2021, net cash used in investing activities was $9,000. During the six months ended June 30, 2020, net cash used in investing activities was $0.9 million. This was primarily related to capital expenditures associated with the expansion of our North Carolina lab.

For the ~~six~~three months ended ~~June 30,~~March 31, 2022, cash provided from financing activities was $1.1 million, of which $1.0 million was from the drawdown on the revolving line of credit. See Note 14, Notes Payable, of the notes to the financial statements. For the three months ended March 31, 2021, cash provided from financing activities was ~~$7.5~~$5.0 million, of which ~~$7.4~~$4.9 million were the net proceeds from the Company’s secured promissory notes with Ampersand and 1315. See Note 14, Notes Payable, ~~- Related Parties~~ of the notes to the financial statements. For the six months ended June 30, 2020, there was cash provided from financing activities of $20.4 million, $19.5 million which resulted from the issuance of Preferred Stock in January 2020, $0.4 million from sales of common stock, and $0.4 million of borrowed funds under our Revolving Line of Credit with SVB.

In ~~September 2020, we repaid approximately $3.4 million to SVB under our former secured revolving line of credit facility (the “Revolver”), which was part of our~~October 2021, the Company and its subsidiaries entered into a Loan and Security Agreement ~~with SVB dated November 13, 2018, as amended March 18, 2019 (as so amended, the “SVB~~(the “Comerica Loan Agreement”) with Comerica Bank (“Comerica”), providing for a revolving credit facility of up to $7,500,000 (the “Credit Facility”). ~~On January 5, 2021,~~The Company may use the ~~Company terminated~~proceeds of the ~~SVB Loan Agreement.~~Credit Facility for working capital and other general corporate purposes.

~~On January 7,~~The amount that may be borrowed under the Credit Facility is the lower of (i) the revolving limit of $7,500,000 (the “Revolving Line”) and (ii) 80% of the Company’s eligible accounts receivable plus an applicable non-formula amount consisting of $2,000,000 of additional availability at close not based upon the Company’s eligible accounts receivable, with such additional availability reducing by $250,000 per quarter beginning with the quarter ending June 30, 2022. Borrowings on the Credit Facility are limited to $5,000,000 until 80% of the Company’s and its subsidiaries’ customers are paying into a collection account or segregated governmental account with Comerica. The Revolving Line can also include, at the Company’s option, credit card services with a sublimit of $300,000. Borrowings on the Revolving Line are subject to an interest rate equal to prime plus 0.50%, with prime being the greater of (x) Comerica’s stated prime rate or (y) the sum of (A) the daily adjusting LIBOR rate plus (B) 2.5% per annum. The Company is also required to pay an unused facility fee quarterly in arrears in an amount equal to 0.25% per annum on the average unused but available portion of the Revolving Line for such quarter. See Note 18, Revolving Line of Credit, for more details. Comerica has a first priority security interest in substantially all of the Company’s and its subsidiaries’ assets.

In addition, also in October 2021, the Company entered into ~~secured promissory notes~~a Loan and Security Agreement (the “BroadOak Loan Agreement”) with BroadOak, providing for a term loan in the aggregate principal amount of ~~$3 million~~$8,000,000 (the “Term Loan”). Funding of the Term Loan took place on November 1, 2021. The Term Loan matures upon the earlier of (i) October 31, 2024 or (ii) the occurrence of a change in control, and ~~$2 million~~bears interest at the rate of 9% per annum. The Term Loan is secured by a security interest in substantially all of the Company’s and its subsidiaries’ assets and is subordinate to the Company’s recently established $7,500,000 revolving credit facility with Comerica Bank. The Term Loan has an origination fee of 3% of the Term Loan amount, and a terminal payment equal to (i) 15% of the original principal amount of the Term Loan if the change of control occurs on or prior to the first anniversary of the funding of the Term Loan, (ii) 20% of the original principal amount of the Term Loan if the change of control occurs after the first anniversary but on or prior to the second anniversary of the funding of the Term Loan and (iii) 30% of the original principal amount of the Term Loan if the change of control occurs after the second anniversary of the funding of the Term Loan, or if the Term Loan is repaid on its maturity date. Upon receipt of the term loan, the proceeds were used to repay in full at their maturity the notes extended by Ampersand and 1315 Capital ~~respectively.~~discussed above. See Note 14, Notes Payable, ~~– Related Parties~~ for more details. In May 2022, the Company issued a Convertible Note to BroadOak, pursuant to which BroadOak funded a term loan in the aggregate principal amount of $2.0 million. See Note 20, Subsequent Events, for more details. The Company will use the proceeds of the ~~notes~~Convertible Debt for general corporate purposes and working capital.

The BroadOak Loan Agreement contains affirmative and negative restrictive covenants, including restrictions on certain mergers, acquisitions, investments and encumbrances which could adversely affect our ability to conduct our business. The BroadOak Loan Agreement also contains customary events of default. The Comerica Loan Agreement contains affirmative and negative restrictive covenants that are applicable whether or not any amounts are outstanding under the Comerica loan agreement. These restrictive covenants, which include restrictions on certain mergers, acquisitions, investments, encumbrances, etc., could adversely affect our ability to conduct our business. The Comerica Loan Agreement also contains financial covenants requiring specified minimum liquidity and minimum revenue thresholds and also contains customary events of default. However, if we are unable to meet the financial ~~statements~~. ~~On May 10, 2021,~~covenants under the Comerica Loan Agreement, the revolving line of credit and notes payable will become due and payable immediately.

Although the Company ~~amended~~is targeting to achieve Adjusted EBITDA and cash flow breakeven during Fiscal 2022, we may not generate positive cash flows from operations for the ~~Ampersand Note~~year ending December 31, 2022. We intend to ~~increase~~meet our ongoing capital needs by using our available cash and availability under the ~~principal amount to $4.5 million~~Comerica Loan Agreement, as well as through revenue growth and ~~amended~~margin improvement; collection of accounts receivable; containment of costs; and the ~~1315 Capital Note to increase the principal amount to $3.0 million. The maturity dates~~potential use of the Notes were the earlier of (a) June 30, 2021 and (b) the date on which all amounts become due upon the occurrence of any event of default as defined in the Notes. On June 24, 2021, the Company and Ampersand amended the Ampersand Note to change its maturity date to the earlier of (a) August 31, 2021 and (b) the date on which all amounts become due upon the occurrence of any event of default as defined in the Ampersand Note. On June 25, 2021, the Company and 1315 Capital amended the 1315 Capital Note to change its maturity date in a similar manner.other financing options.

In January ~~2020, we sold 20,000 preferred shares to investors, led by 1315 Capital,~~2022, the Company’s registration statement for ~~net proceeds of approximately $19.2 million; see Note 16,~~ ~~Equity~~ ofa rights offering filed with the ~~notes to~~Securities and Exchange Commission become effective; however, the ~~financial statements for more detail.~~

~~See Note 1,~~ ~~Overview~~, of the notes to the financial statements, regarding the potential adverse impact of the COVID-19 pandemic on our results of operations, cash flows and financial condition for fiscal 2021 and possibly beyond.

During Fiscal 2020, the Company applied for various federal stimulus grants and advances made available under Title 1 of the Coronavirus Aid, Relief, and Economic Security (CARES) Act (the “CARES Act”) and received $2.1 millionrights offering was subsequently terminated in advances under the Centers for Medicare & Medicaid Services (“CMS”) accelerated and advance payment program. The advance began to be offset against future Medicare billings of the Company in the second quarter of 2021 with approximately $0.9 million being applied against it through June 30, 2021.

The Company has and may continue to delay, scale-back, or eliminate certain of its activities and other aspects of its operations until such time as the Company is successful in securing additional funding.January 2022. The Company is currently exploring various dilutive and non-dilutive sources of funding, including equity and debt financings, strategic alliances, business development and other ~~sources. The future success of~~sources in order to provide additional liquidity and expand the ~~Company is dependent upon~~business through acquisitions or other strategic transactions. With the Company’s delisting from Nasdaq in February 2021, its ability to obtain additional funding. However, the quotation of our common stock on OTCQX may provide significantly less liquidity than when our stock was listed on Nasdaq and we may experience greater difficulty in raising capital through the public or private sale of equity securities. In addition, our inability to use Form S-3 for offerings by the Company may negatively impact our ability to raise additional ~~capital.~~capital on terms acceptable to the Company was adversely impacted. There can be no assurance ~~therefore~~ that the Company will be successful in obtaining such funding ~~in sufficient amounts,~~ on terms acceptable to the Company or at all.

As of the date of this Report, the Company currently anticipates that current cash and cash equivalents will be insufficient to meet its anticipated cash requirements through the next twelve months. These factors raise substantial doubt about the Company’s ability to continue as a going concern.

We will not generate positive cash flows from operations for the year ending December 31, 2021. The Company’s secured promissory notes totaling $7.5 million are due August 31, 2021 and the Company does not currently have the cash balance necessary to repay the notes. The Company intends to address this deficiency by seeking an additional extension of the maturity date which may not be forthcoming and/or utilizing the debt or equity markets to raise sufficient funds to repay the notes. We intend to meet our ongoing capital needs by using our available cash, including the Ampersand and 1315 Capital loans, as well as revenue growth and margin improvement; collection of accounts receivable; containment of costs; and the potential use of other financing options.

Inflation

We do not believe that inflation had a significant impact on our results of operations for the periods presented. ~~On an ongoing basis, we attempt to minimize any effects of~~However, inflation ~~on our operating results~~and supply chain disruptions, whether caused by ~~controlling operating costs and whenever possible, seeking to ensure that billing rates reflect~~restrictions or slowdowns in shipping or logistics, increases in ~~costs due to inflation.~~demand for certain goods used in our operations, or otherwise, could impact our operations in the near term.

Off-Balance Sheet Arrangements

None.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

As a smaller reporting company, we are electing scaled disclosure reporting obligations and therefore are not required to provide the information requested by this Item.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures pursuant to Rule 13a-15 under the Exchange Act as of the end of the period covered by this Form 10-Q. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives including that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In addition, management is required to apply its judgment in evaluating the benefits of possible disclosure controls and procedures relative to their costs to implement and maintain.

Based on the evaluation of the Company’s disclosure controls and procedures, as that term is defined in Rule 13a-15(e) under the Exchange Act the Chief Executive Officer of the Company and the Chief Financial Officer of the Company have concluded that the Company’s disclosure controls and procedures were ~~not~~ effective as of ~~June 30, 2021.~~March 31, 2022.

Reference should be made to our Form 10-K for the year ended December 31, 2021 filed with the SEC on ~~April 1, 2021~~March 31, 2022 for additional information regarding discussion of the effectiveness of the Company’s controls and procedures.

Changes in Internal Controls

There has been no change in our internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the quarter covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

None.

Item 1A. Risk Factors

Not applicable as we are a smaller reporting company.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

None.

Item 5. Other Information

None.

Item 6. Exhibits

Exhibit No.		Description

~~10.1~~3.1		Conformed version of Certificate of Incorporation of Interpace Biosciences, Inc., as amended by the Certificate of Amendment, effective January 15, 2020, and the Certificate of Designation of Preferences, Rights and Limitations of Series B Convertible Preferred Stock, filed January 17, 2020, incorporated by reference to ~~Secured Promissory Note dated May 10, 2021~~Exhibit 3.1 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, filed with ~~Ampersand 2018 Limited Partnership, filed herewith.~~the SEC on April 22, 2020, as amended from time to time.

~~10.2~~3.2		~~Amendment to Secured Promissory Note dated May 10, 2021 with1315 Capital II, L.P., filed herewith.~~

~~10.3~~		~~Amendment to Security Agreement dated May 10, 2021 by~~Amended and ~~between Ampersand 2018 Limited Partnership and~~Restated Bylaws of Interpace Biosciences, Inc., ~~filed herewith.~~

~~10.4~~		~~Second Amendment to Secured Promissory Note dated June 24, 2021 with Ampersand 2018 Limited Partnership,~~ incorporated by reference to Exhibit ~~99.1~~3.2 of the Company’s Current Report on Form 8-K, filed with the SEC on ~~June 29, 2021.~~November 14, 2019.

~~10.5~~10.1*		~~Second Amendment to Secured Promissory Note~~Agreement, dated ~~June 25, 2021 with 1315 Capital II, L.P.~~January 21, 2022, between Dr. Vijay Aggarwal and Interpace Biosciences, Inc., incorporated by reference to Exhibit ~~99.2~~10.1 of the Company’s Current Report on Form 8-K, filed with the SEC on ~~June 29, 2021.~~January 27, 2022.

31.1		Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith.

31.2		Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith.

32.1+		Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, furnished herewith.

32.2+		Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, furnished herewith.

101		The following financial information from this Quarterly Report on Form 10-Q for the fiscal quarter ended ~~June 30, 2021~~March 31, 2022 formatted in ~~iXBRL (Inline eXtensible~~XBRL (Extensible Business Reporting Language) and furnished electronically herewith: (i) the Condensed Consolidated Balance Sheets; (ii) the Condensed Consolidated Statements of Operations; (iii) the Condensed Consolidated Statements of Stockholders’ ~~Equity;~~Deficit; (iv) the Condensed Consolidated Statements of Cash Flows; and (v) the Notes to Condensed Consolidated Financial Statements.

~~104~~		~~The cover page of Interpace Biosciences, Inc.’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2021, formatted in iXBRL (included within Exhibit 101 attachments).~~

	+	Exhibits 32.1 and 32.2 are being furnished herewith and shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liability of that section, nor shall such exhibits be deemed to be incorporated by reference to any registration statement or other document filed under the Securities Act or the Exchange Act, except as otherwise stated in any such filing.

	*	Denotes compensatory plan, compensation arrangement or management contract.

3233

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: ~~August 10, 2021~~May 16, 2022	Interpace Biosciences, Inc.
	(Registrant)

	/s/ Thomas W. Burnell
	Thomas W. Burnell
	President and Chief Executive Officer
	(Principal Executive Officer)

Date: ~~August 10, 2021~~May 16, 2022	/s/ Thomas Freeburg
	Thomas Freeburg
	Chief Financial Officer
	(Principal Financial Officer)

3334

	Carrying
	Amount
Balance as of December 31, 2020	$	8,433
Adjustments		-
Balance as of June 30, 2021	$	8,433

								Cancellation		Adjustment to Fair
								of Obligation/		Value/
	December 31, 2020		Payments			Accretion		Conversions Exercises		Mark to Market			June 30, 2021
	(unaudited)
Asuragen	$	2,216	$	(254	)	$	270	$	-	$	(57	)	$	2,175

Underwriters Warrants		21		-			-		-		209			230
	$	2,237	$	(254	)	$	270	$	-	$	152		$	2,405