UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM ~~10-Q/A~~

~~(Amendment No. 1)~~10-Q

(Mark One)

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

For the quarterly period ended March 31, ~~2020~~2021

[ ]	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:

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

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
~~Common Stock, $0.01 par value per share~~None	~~IDXG~~N//A	~~The Nasdaq Stock Market LLC~~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 [X] 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 [X] 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 [X]		Smaller reporting company [X]
		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 [X]

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 ~~June 12, 2020~~April 30, 2021
	Common Stock, par value $0.01 per share		~~4,036,595~~		4,112,843

INTERPACE BIOSICENCES, INC.

FORM ~~10-Q/A~~10-Q FOR PERIOD ENDED MARCH 31, ~~2020~~2021

TABLE OF CONTENTS

		Page No.
	~~EXPLANATORY NOTE~~

	PART I - FINANCIAL INFORMATION

Item 1.	Unaudited Interim Condensed Consolidated Financial Statements	3

	Condensed Consolidated Balance Sheets at March 31, ~~2020~~2021 (unaudited) and December 31, ~~2019~~2020	43

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

	Condensed Consolidated Statements of Stockholders’ Deficit for the three- month periods ended March 31, 2021 and ~~2019~~2020 (unaudited)	5

	Condensed Consolidated Statements of ~~Stockholders’ Equity~~Cash Flows for the three- month periods ended ~~March31,~~March 31, 2021 and 2020 ~~and 2019~~ (unaudited)	6

	~~Condensed Consolidated Statements of Cash Flows for the three-month periods ended March 31, 2020 and 2019 (unaudited)~~	7

	Notes to Unaudited Condensed Consolidated Financial Statements	87

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3322

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	4329

Item 4.	Controls and Procedures	4329

	PART II - OTHER INFORMATION

Item 1.	Legal Proceedings	4330

Item 1A.	Risk Factors	4430

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	4430

Item 3.	Defaults Upon Senior Securities	4430

Item 4.	Mine Safety Disclosures	4430

Item 5.	Other Information	4430

Item 6.	Exhibits	4532

Signatures		4633

~~EXPLANATORY NOTE~~

On March 25, 2020, the U.S. Securities and Exchange Commission (the “SEC”) issued an order Release No. 34-88465 (the “Order”) pursuant to its authority under Section 36 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) granting exemptions from certain provisions of that Act and the rules thereunder related to the reporting and proxy delivery requirements for certain public companies. Interpace Biosciences, Inc. (the “Company”) is filing this Quarterly Report on Form 10-Q for the quarter ended March 31, 2020 in reliance on the Order, permitting a delay in filing due to circumstances related to COVID-19. The Company filed, on May 15, 2020, a Current Report on Form 8-K (the “May 15^th ~~8-K”) indicating its intention to rely on the Order. As stated in the May 15~~^th 8-K, the Company required additional time to finalize this report due to circumstances related to COVID-19, the disease caused by the coronavirus. The effects of COVID-19 have limited the abilities of the Company’s employees to conduct normal business activities. This, in turn, delayed the Company’s ability to prepare this report.

This Amendment No. 1 on Form 10-Q/A (this Amendment) amends the Company’s Report on Form 10-Q for the quarter ended March 31, 2020, as amended, (the “Original Filing”) and is being filed to show the impact in such quarter of intangible asset amortization and impairment expense for its Barrett’s and Thyroid assets which began in 2014. Subsequent to the issuance of its consolidated financial statements for the year ended December 31, 2019 and the quarters ended March 31, 2020 and June 30, 2020, the Company determined that amortization should have commenced upon acquisition of those assets as opposed to the Company’s previously disclosed policy of beginning asset amortization when the product was launched and generating revenue. The impact of the additional amortization expense for each of the quarters ended March 31, 2020 and March 31, 2019 was approximately $0.1 million. The impact of the other immaterial adjustments for the quarters ended March 31, 2020 and March 31, 2019 was $0.1 million in expense and $0.2 million in a credit to expense, respectively

A description of these adjustments and a summary showing their effect on the restated consolidated statements of operations is provided in Note 1 to the consolidated financial statements. In addition to the errors described above, the restated financial statements also include adjustments to correct certain other immaterial errors, including previously unrecorded immaterial adjustments identified in audits of prior years’ financial statements.

The Company is filing this report in order to amend certain information in Items 1, 2 and 4 of Part I to reflect the restatement of the March 31, 2020 and 2019 unaudited interim consolidated statements of operations and Notes 1,3,5 and 9 to the consolidated financial statements attached hereto solely to the extent necessary to reflect the adjustments described herein; and the principal executive officer and principal financial officer certifications pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002. Except for the foregoing items, no other information in the Original Filing is revised by this Amendment.

PART I. FINANCIAL INFORMATION

INTERPACE BIOSCIENCES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share data)

	As Restated			As Restated
	March 31,			December 31,
	2020			2019			March 31, 2021			December 31, 2020
		(unaudited)					(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	13,370		$	2,321		$	2,839		$	2,772
Accounts receivable, net of allowance for doubtful accounts of $275 and $25, respectively		9,799			10,338
Restricted cash								600			600
Accounts receivable, net of allowance for doubtful accounts of $135 and $275, respectively								7,851			8,028
Other current assets		4,976			3,851			2,975			2,722
Total current assets		28,145			16,510			14,265			14,122
Property and equipment, net		6,610			6,814			6,900			7,349
Other intangible assets, net		14,734			15,849			10,238			11,351
Goodwill		8,433			8,433			8,433			8,433
Operating lease right of use assets		2,811			3,892			3,980			4,384
Other long-term assets		42			42			42			42
Total assets	$	60,775		$	51,540		$	43,858		$	45,681

LIABILITIES AND STOCKHOLDERS’ EQUITY
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable	$	4,456		$	4,709		$	3,008		$	4,511
Accrued salary and bonus		1,865			2,341			2,173			3,161
Loan payable - related parties								5,092			-
Other accrued expenses		8,639			9,476			9,422			9,795
Current liabilities from discontinued operations		766			766			766			766
Total current liabilities		15,726			17,292			20,461			18,233
Contingent consideration		2,264			2,391			1,739			1,818
Operating lease liabilities, net of current portion		1,384			2,591			3,326			3,540
Line of credit		1,200			3,000
Other long-term liabilities		4,563			4,573			4,692			4,637
Total liabilities		25,137			29,847			30,218			28,228

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

Preferred stock, $.01 par value; 5,000,000 shares authorized, 270 Series A shares issued and outstanding		-			26,172
47,000 Series B shares issued and outstanding		46,536			-
Preferred stock, $.01 par value; 5,000,000 shares authorized, 47,000 Series B issued and outstanding								46,536			46,536

Stockholders’ equity:
Common stock, $.01 par value; 100,000,000 shares authorized; 4,055,454 and 3,932,370 shares issued, respectively; 4,043,673 and 3,920,589 shares outstanding, respectively		402			393
Stockholders’ deficit:
Common stock, $.01 par value; 100,000,000 shares authorized; 4,132,507 and 4,075,257 shares issued, respectively; 4,112,843 and 4,055,593 shares outstanding, respectively								402			402
Additional paid-in capital		182,580			182,514			184,798			184,404
Accumulated deficit		(192,159	)		(185,665	)		(216,323	)		(212,116	)
Treasury stock, at cost (11,781 and 11,781 shares, respectively)		(1,721	)		(1,721	)
Total stockholders’ equity		(10,898	)		(4,479	)
Total liabilities and stockholders’ equity	$	14,239		$	25,368
Treasury stock, at cost (19,664 and 19,664 shares, respectively)								(1,773	)		(1,773	)
Total stockholders’ deficit								(32,896	)		(29,083	)
Total liabilities and stockholders’ deficit							$	(2,678	)	$	(855	)

Total liabilities, preferred stock and stockholders’ equity	$	60,775		$	51,540
Total liabilities, preferred stock and stockholders’ deficit							$	43,858		$	45,681

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

INTERPACE BIOSCIENCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

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

	As Restated
	Three Months Ended March 31,
	2020			2019			Three Months Ended March 31,
							2021			2020

Revenue, net	$	9,059		$	6,010		$	9,833		$	9,059
Cost of revenue (excluding amortization of $1,115 and $897, respectively)		6,113			2,622
Cost of revenue (excluding amortization of $1,112 and $1,115, respectively)								5,316			6,113
Gross profit		2,946			3,388			4,517			2,946
Operating expenses:
Sales and marketing		2,481			2,411			2,351			2,481
Research and development		809			528			637			809
General and administrative		4,893			2,735			2,979			4,837
Transition expenses								1,253			56
Acquisition related amortization expense		1,115			897			1,112			1,115
Total operating expenses		9,298			6,571			8,332			9,298

Operating loss		(6,352	)		(3,183	)		(3,815	)		(6,352	)
Interest accretion		(109	)		(129	)
Other income (expense), net		47			48
Interest accretion expense								(135	)		(109	)
Other (expense) income, net								(188	)		47
Loss from continuing operations before tax		(6,414	)		(3,264	)		(4,138	)		(6,414	)
Provision for income taxes		15			5			15			15
Loss from continuing operations, net of tax		(6,429	)		(3,269	)
Loss from continuing operations								(4,153	)		(6,429	)

Loss from discontinued operations, net of tax		(65	)		(57	)		(54	)		(65	)

Net loss		(6,494	)		(3,326	)		(4,207	)		(6,494	)

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

Net loss attributable to common stockholders	$	(9,527	)	$	(3,326	)	$	(4,207	)	$	(9,527	)

Basic and diluted loss per share of common stock:
From continuing operations	$	(2.37	)	$	(0.93	)	$	(1.02	)	$	(2.37	)
From discontinued operations		(0.01	)		(0.01	)		(0.01	)		(0.01	)
Net loss per basic and diluted share of common stock	$	(2.38	)	$	(0.94	)	$	(1.03	)	$	(2.38	)
Weighted average number of common shares and common share equivalents outstanding:
Basic		4,004			3,515			4,089			4,004
Diluted		4,004			3,515			4,089			4,004

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

INTERPACE BIOSCIENCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ ~~EQUITY~~DEFICIT

(unaudited, in thousands)

As Restated As Restated
For The Three Months Ended For The Three Months Ended
March 31, 2020 March 31, 2019
Shares Amount Shares Amount
Common stock:
Balance at January 1 3,932 $ 393 2,877 $ 287
Common stock issued 37 1 9 1
Restricted stock issued 6 - - -
Common stock issued through market sales 80 8 - -
Common stock issued through offerings - - 933 94
Balance at March 31 4,055 402 3,819 382
Treasury stock:
Balance at January 1 12 (1,721 ) 7 (1,680 )
Treasury stock purchased - - 3 (32 )
Balance at March 31 12 (1,721 ) 10 (1,712 )
Additional paid-in capital:
Balance at January 1 182,514 175,820
Common stock issued through offerings, net of expenses - 5,868
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 through market sales 476 -
Stock-based compensation expense 418 266
Balance at March 31 182,580 181,954
Accumulated deficit:
Balance at January 1 (185,665 ) (158,981 )
Net loss (6,494 ) (3,326 )
Adoption of ASC 842 - 55
Balance at March 31 (192,159 ) (162,252 )

Total stockholders’ equity $ (10,898 ) $ 18,372

	For The Three Months Ended					For The Three Months Ended
	March 31, 2021					March 31, 2020
	Shares		Amount			Shares		Amount
Common stock:
Balance at January 1		4,075	$	402			3,932	$	393
Common stock issued		9		-			37		1
Restricted stock issued		12		-			6		-
Common stock issued through market sales		-		-			80		8
Common stock issued through ESPP		36		-			-		-
Balance at March 31		4,132		402			4,055		402
Treasury stock:
Balance at January 1		20		(1,773	)		12		(1,721	)
Treasury stock purchased		-		-			-		-
Balance at March 31		20		(1,773	)		12		(1,721	)
Additional paid-in capital:
Balance at January 1				184,404					182,514
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					-
Common stock issued through market sales				-					476
Stock-based compensation expense				286					418
Balance at March 31				184,798					182,580
Accumulated deficit:
Balance at January 1				(212,116	)				(185,665	)
Net loss				(4,207	)				(6,494	)
Balance at March 31				(216,323	)				(192,159	)

Total stockholders’ deficit			$	(32,896	)			$	(10,898	)

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)

	As Restated
	For The Three Months Ended March 31,
`							For The Three Months Ended
	2020			2019			2021			2020

Cash Flows From Operating Activities
Net loss	$	(6,494	)	$	(3,326	)	$	(4,207	)	$	(6,494	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		1,319			957			1,532			1,319
Interest accretion		109			129
Interest accretion expense								135			109
Bad debt (recovery) expense								(140	)		250
Mark to market on warrants		(26	)		(3	)		41			(26	)
Stock-based compensation		418			538			259			418
Bad debt expense		250			-
Amortization of loan costs								52			-
Accrued interest								92			-
ESPP expense								27			-
Change in fair value of contingent consideration								(57	)		-
Other gains and expenses, net		-			18			(3	)		-
Other changes in operating assets and liabilities:
Decrease (increase) in accounts receivable		289			(1,738	)
(Increase) decrease in other current assets		(1,125	)		11
(Decrease) increase in accounts payable		(253	)		93
(Decrease) increase in accrued salaries and bonus		(476	)		205
(Decrease) increase in accrued liabilities		(1,149	)		99
Decrease in accounts receivable								317			289
Increase in other current assets								(253	)		(1,125	)
Decrease in accounts payable								(1,534	)		(253	)
Decrease in accrued salaries and bonus								(988	)		(476	)
Decrease in accrued liabilities								(293	)		(1,149	)
Increase in long-term liabilities		16			57			14			16
Net cash used in operating activities		(7,122	)		(2,960	)		(5,006	)		(7,122	)

Cash Flows From Investing Activity
Purchase of property and equipment		-			(12	)
Sale of property and equipment		-			13			39			-
Net cash provided by investing activity		-			1
Net cash provided by investing activities								39			-

Cash Flows From Financing Activities
Issuance of common stock, net of expenses		434			6,015			108			434
Issuance of Series B preferred stock, net of expenses								-			19,537
Loan proceeds								5,000			-
Loan expenses								(74	)		-
Payments on Line of Credit		(1,800	)		-			-			(1,800	)
Issuance of Series B preferred stock, net of expenses		19,537			-
Net cash provided by financing activities		18,171			6,015			5,034			18,171

Net increase in cash and cash equivalents		11,049			3,056
Cash and cash equivalents – beginning		2,321			6,068
Cash and cash equivalents – ending	$	13,370		$	9,124
Net increase (decrease) in cash, cash equivalents and restricted cash								67			11,049
Cash, cash equivalents and restricted cash – beginning								3,372			2,321
Cash, cash equivalents and restricted cash – ending							$	3,439		$	13,370

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

OVERVIEW

Nature of Business

~~The Company~~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 with the goals of delivering safer, more effective drugs to market more quickly, and improving patient care.~~programs.

~~Impact of~~ COVID-19 pandemic

We have taken what we believe are all necessary precautions to safeguard our employees from the Coronavirus (COVID-19) pandemic. We are following the Centers for Disease Control and Prevention’s (“CDC”) guidance and local restrictions. The ~~majority~~outbreak of our employees who do not work in a lab are currently on a telecommunication work arrangement and have generally been able to successfully work remotely. Our labs require in-person staffing and as of the date of this report, we have been able to successfully operate our labs through a combination of social distancing and protective equipment. Our employees in the lab are wearing what we believe is appropriate protective gear. There can be no assurance that key employees will not become ill or that we will able to continue to operate our labs. We have furloughed a number of employees as a result of reductions in customer demand.

~~The extent to which~~ the COVID-19 pandemic ~~impacts~~continues to impact a significant portion of the regions in which we operate. The continuing impact that the COVID-19 pandemic will have on our operations, ~~is dependent on future developments, which are still~~including duration, severity and scope, remains highly uncertain and cannot be fully predicted at this ~~time, and include~~time. While we believe we have generally recovered from the ~~duration, severity and scope of~~adverse impact that the outbreak and the actions taken to contain or treat the coronavirus outbreak. In particular, the spread of the coronavirus globally is adversely affecting global economies and financial markets which could materially and adversely impactCOVID-19 pandemic had on our operations including, without limitation, the functioning of our laboratories, the availability of supplies including reagents, the progress and data collection of our pharma services, customer demand and travel and employee health and availability.

Webusiness during 2020, we believe that the COVID-19 pandemic ~~will~~could continue to adversely impact our results of operations, cash flows and financial condition ~~for~~in the ~~second quarter of fiscal 2020 and possibly beyond. Our fiscal 2020 first quarter revenue was~~future.

As our business operations continue to be impacted by ~~lower than expected clinical service volume throughout March 2020, which~~the pandemic, we believe has resulted from the temporary reduction in non-essential testing procedures in connection with the COVID-19 pandemic. Our pharma services first quarter revenue increased throughout the first quarter and average daily accessions improved in March 2020 as compared to January and February 2020. However, as of the date of this Report, our overall business is still down approximately 30% from our run rate before the pandemic.

We continue to monitor the ~~rapidly evolving~~ situation and the guidance ~~from authorities, including~~that is being provided by relevant federal, state and local public health ~~authorities and~~authorities. We may take additional actions based onupon their recommendations. ~~In these dynamic circumstances, there~~However, it is possible that we may ~~be developments outside our control requiring us~~have to ~~adjust~~make further adjustments to our operating ~~plan.~~plans in reaction to developments that are beyond our control.

~~At this time,~~

While we do not anticipate any lab closures at this time beyond periodic, temporary work stoppages ~~from time to time~~ to clean and disinfect the ~~labs. Lab supplies including reagents have been secured to mitigate any potential~~labs, this could change in the future based upon conditions caused by the pandemic. It is also possible that we could experience supply chain ~~issues for~~shortages if the pandemic worsens and if one or more suppliers is unable to continue to provide us with supplies. For the foreseeable future, ~~and~~however, we ~~are~~do not ~~observing any shortages due to~~anticipate supply chain ~~issues. Our third party clinical services billing and collections company has taken steps to continue operations remotely.~~

~~We are monitoring the situation on a daily basis and have developed contingency plans to potentially mitigate the anticipated adverse financial impact~~shortages of the COVID-19 pandemic. These contingency plans include significant cost saving actions to offset any volume shortfall and additional action plans to react to further potential declines. While we are continuing to make progress on a regular basis in returning to volumes prior to the pandemic there is, however, no guarantee in the future we will recover the business which has been lost or inactive.

~~Restatement~~critical supplies.

We have ~~restated herein~~developed and will continue to update our unaudited consolidated financial statements as of March 31, 2020 for the three months ended March 31, 2020 and March 31, 2020. We have also restated impacted amounts within the accompanying footnotes to the consolidated financial statements which have been noted as such.

As a result of overall economic conditions related to the coronavirus pandemic, the impact of the coronavirus pandemic on the Company’s financial results, and the decrease in the price of the Company’s common stock noted during the third quarter of fiscal 2020, the Company performed an internal review of its long-lived assets. Due to an extended delay in the launch of the Company’s Barrett’s test, the Company believes there was a triggering event in Fiscal 2016. The Company applied the required procedures under ASC 360 and assessed the estimated future cash flows related to the Barrett’s intangible asset on an undiscounted basis. It was determined that the carrying value of the asset was in excess of the undiscounted cash flows as of December 31, 2016. As a result, the Company performed a formal valuation of the asset on a discounted basiscontingency plans in order to ~~measure~~mitigate pandemic-related, adverse financial impacts upon our business.

Transition costs

To optimize the ~~related impairment. Additionally,~~operations of laboratory operations within our pharma services, we transitioned activities from the ~~Company concluded that amortization~~Rutherford, NJ facility to our Morrisville, NC facility. We invested several million dollars to facilitate this relocation, including but not limited to the transfer of both the Barrett’s intangible asset and its Thyroid intangible assets should have begun at the point in which the asset was ready for use. The Company’s policy had been to amortize such assets upon launchpersonnel, expansion of the ~~test.~~

~~On December 7, 2020,~~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 Company’s management conferred with the Audit Committee of the Company’s Board of Directors and concluded that (1) a non-cash impairment charge for an intangible asset of approximately $12 million should have been recorded during the Company’s 2016 fiscal year; (2) the Company should have initiated amortization of such intangible asset in fiscal 2014 and therefore each of fiscal years 2014, 2015, 2016, 2017, 2018, and 2019 and the first two quarters of fiscal 2020 require adjustment to record amortization expense; (3) the consolidated financial statements contained in the Company’s Annual Reports on Form 10-K for the years ended December 31, 2014, 2015, 2016, 2017, 2018, and 2019, as well as the consolidated financial statements contained in the Quarterly Reports on Form 10-Q for each quarterly period within those fiscal years as well as the quarterly periods ended March 31, 2020 and June 30, 2020, should no longer be relied upon. As a result the Company is restating its consolidated financial statements for the three months ended March 31, 2020 and March 31, 2019 in this Form 10-Q/A.anticipated savings.

The following tables present reconciliation from our prior periods as previously reported to the restated values for the consolidated balance sheets and the consolidated statement of operations. A description of misstatements is listed below:

	a)	Amortization expense - We recorded amortization expense starting at the dates of acquisition for our Barrett’s and Thyroid intangible assets. The impact of the additional amortization charge was approximately $0.1 million in the quarters ended March 31, 2020 and March 31, 2019, respectively.

	b)	~~Asset impairment - We recorded an impairment charge on our Barrett’s intangible asset of approximately $11.6 million in the fourth quarter of 2016.~~

	c)	~~Adjustments - Adjustments to correct certain other immaterial errors, including previously unrecorded immaterial adjustments identified in audits of prior years’ financial statements.~~

~~INTERPACE BIOSCIENCES, INC.~~

~~CONDENSED CONSOLIDATED BALANCE SHEET~~

~~(in thousands, except share and per share data)~~

March 31, 2020
As
Previously
Reported Restatement
Amount Restatement
Reference As Restated
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 13,370 $ - $ 13,370
Accounts receivable, net of allowance for doubtful accounts of $275 9,799 - 9,799
Other current assets 4,976 - 4,976
Total current assets 28,145 - 28,145
Property and equipment, net 6,610 6,610
Other intangible assets, net 32,470 (17,736 ) (a) (b) 14,734
Goodwill 8,433 - 8,433
Operating lease right of use assets 2,811 - 2,811
Other long-term assets 42 - 42
Total assets $ 78,511 $ (17,736 ) $ 60,775

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable $ 4,456 $ - $ 4,456
Accrued salary and bonus 1,865 - 1,865
Other accrued expenses 8,639 - 8,639
Current liabilities from discontinued operations 766 - 766
Total current liabilities 15,726 - 15,726
Contingent consideration 2,264 - 2,264
Operating lease liabilities, net of current portion 1,384 - 1,384
Line of credit 1,200 - 1,200
Other long-term liabilities 4,563 - 4,563
Total liabilities 25,137 - 25,137

Commitments and contingencies (Note 8)

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

Stockholders’ equity:
Common stock, $.01 par value; 100,000,000 shares authorized; 4,055,454 and 4,043,673 shares issued and outstanding, respectively; 402 - 402
Additional paid-in capital 182,580 - 182,580
Accumulated deficit (174,423 ) (17,736 ) (a) (b) (c) (192,159 )
Treasury stock, at cost (11,781 shares) (1,721 ) - (1,721 )
Total stockholders’ equity 6,838 (17,736 ) (10,898 )
Total liabilities and stockholders’ equity $ 31,975 $ (17,736 ) $ 14,239

Total liabilities, preferred stock and stockholders’ equity $ 78,511 $ (17,736 ) $ 60,775

~~INTERPACE BIOSCIENCES, INC.~~

~~CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS~~

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

Three Months Ended March 31, 2020 Three Months Ended March 31, 2019
As Previously Reported Restatement Amount Restatement Reference As Restated As Previously Reported Restatement Amount Restatement Reference As Restated

Revenue, net $ 9,200 $ (141 ) (c) $ 9,059 $ 6,010 $ - $ 6,010
Cost of revenue 6,113 - 6,113 2,622 - 2,622
Gross profit 3,087 (141 ) (c) 2,946 3,388 - 3,388
Operating expenses:
Sales and marketing 2,481 - 2,481 2,411 - 2,411
Research and development 809 - 809 528 - 528
General and administrative 4,887 6 (c) 4,893 2,912 (177 ) (c) 2,735
Acquisition related amortization expense 1,031 84 (a) 1,115 813 84 (a) 897
Total operating expenses 9,208 90 (a) (c) 9,298 6,664 (93 ) (a) (c) 6,571

Operating loss (6,121 ) (231 ) (a) (c) (6,352 ) (3,276 ) 93 (a) (c) (3,183 )
Interest accretion (109 ) - (109 ) (129 ) - (129 )
Other income (expense), net 47 - 47 48 - 48
Loss from continuing operations before tax (6,183 ) (231 ) (a) (c) (6,414 ) (3,357 ) 93 (a) (c) (3,264 )
Provision for income taxes 15 - 15 5 - 5
Loss from continuing operations, net of tax (6,198 ) (231 ) (a) (c) (6,429 ) (3,362 ) 93 (a) (c) (3,269 )

Loss from discontinued operations, net of tax (65 ) - (65 ) (57 ) - (57 )

Net loss (6,263 ) (231 ) (a) (c) (6,494 ) (3,419 ) 93 (a) (c) (3,326 )

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

Net loss attributable to common stockholders (9,296 ) (231 ) (9,527 ) (3,419 ) 93 (3,326 )

Basic and diluted loss per share of common stock:
From continuing operations $ (2.31 ) $ (0.06 ) $ (2.37 ) $ (0.96 ) $ 0.03 $ (0.93 )
From discontinued operations (0.01 ) - (0.01 ) (0.01 ) - (0.01 )
Net loss per basic and diluted share of common stock $ (2.32 ) $ (0.06 ) $ (2.38 ) $ (0.97 ) $ 0.03 $ (0.94 )
Weighted average number of common shares and common share equivalents outstanding:
Basic 4,004 4,004 4,004 3,515 3,515 3,515
Diluted 4,004 4,004 4,004 3,515 3,515 3,515

~~INTERPACE BIOSCIENCES, INC.~~

~~CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY~~

~~(unaudited, in thousands)~~

As Previously Reported As Restated
For The Three Months Ended For The Three Months Ended
March 31, 2020 Restatement Restatement March 31, 2020
Shares Amount Amount Reference Shares Amount
Common stock:
Balance at January 1 3,932 $ 393 $ - 3,932 $ 393
Common stock issued 37 1 - 37 1
Restricted stock issued 6 - - 6 -
Common stock issued through market sales 80 8 - 80 8
Common stock issued through offerings - - - - -
Balance at March 31 4,055 402 - 4,055 402
Treasury stock:
Balance at January 1 12 (1,721 ) - 12 (1,721 )
Treasury stock purchased - - - - -
Balance at March 31 12 (1,721 ) - 12 (1,721 )
Additional paid-in capital:
Balance at January 1 182,514 - 182,514
Common stock issued through offerings, net of expenses - - -
Extinguishment of Series A Shares (828 ) - (828 )
Beneficial Conversion Feature in connection with Series B Issuance 2,205 - 2,205
Amortization of Beneficial Conversion Feature (2,205 ) - (2,205 )
Common stock issued through market sales 476 - 476
Stock-based compensation expense 418 - 418
Balance at March 31 182,580 - 182,580
Accumulated deficit:
Balance at January 1 (168,160 ) (17,505 )
(a)(b)(c)
(185,665 )
Net loss (6,263 ) (231 )
(a)(c)
(6,494 )
Adoption of ASC 842 - - -
Balance at March 31 (174,423 ) (17,736 ) (192,159 )

Total stockholders’ equity $ 6,838 $ (17,736 ) $ (10,898 )

~~INTERPACE BIOSCIENCES, INC.~~

~~CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY~~

~~(unaudited, in thousands)~~

As Previously Reported As Restated
For The Three Months Ended For The Three Months Ended
March 31, 2019 Restatement Restatement March 31, 2019
Shares Amount Amount Reference Shares Amount
Common stock:
Balance at January 1 2,877 $ 287 $ - 2,877 $ 287
Common stock issued 9 1 - 9 1
Restricted stock issued - - - - -
Common stock issued through market sales - - - - -
Common stock issued through offerings 933 94 - 933 94
Balance at March 31 3,819 382 - 3,819 382
Treasury stock:
Balance at January 1 7 (1,680 ) - 7 (1,680 )
Treasury stock purchased 3 (32 ) - 3 (32 )
Balance at March 31 10 (1,712 ) - 10 (1,712 )
Additional paid-in capital:
Balance at January 1 175,820 - 175,820
Common stock issued through offerings, net of expenses 5,868 - 5,868
Extinguishment of Series A Shares - - -
Beneficial Conversion Feature in connection with Series B Issuance - - -
Amortization of Beneficial Conversion Feature - - -
Common stock issued through market sales - - -
Stock-based compensation expense 266 - 266
Balance at March 31 181,954 - 181,954
Accumulated deficit:
Balance at January 1 (141,489 ) (17,492 ) (a)(b)(c)
(158,981 )
Net loss (3,419 ) 93 (a)(c)
(3,326 )
Adoption of ASC 842 55 - 55
Balance at March 31 (144,853 ) (17,399 ) (162,252 )

Total stockholders’ equity $ 35,771 $ (17,399 ) $ 18,372

~~INTERPACE BIOSCIENCES, INC.~~

~~CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS~~

~~(unaudited, in thousands)~~

For The Three Months Ended March 31,
2020 2020
As Previously
Reported Restatement
Amount Restatement
Reference As Restated

Cash Flows From Operating Activities
Net loss $ (6,263 ) $ (231 ) (a)(c) $ (6,494 )
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization 1,235 84 (a) 1,319
Interest accretion 109 - 109
Mark to market on warrants (26 ) - (26 )
Stock-based compensation 418 - 418
Bad debt expense 250 - 250
Other gains and expenses, net - - -
Other changes in operating assets and liabilities:
Decrease (increase) in accounts receivable 148 141 (c) 289
(Increase) decrease in other current assets (1,125 ) - (1,125 )
(Decrease) increase in accounts payable (356 ) 103 (c) (253 )
(Decrease) increase in accrued salaries and bonus �� (476 ) - (476 )
(Decrease) increase in accrued liabilities (1,052 ) (97 ) (c) (1,149 )
Increase in long-term liabilities 16 - 16
Net cash used in operating activities (7,122 ) - (7,122 )

Cash Flows From Investing Activity
Purchase of property and equipment - - -
Sale of property and equipment - - -
Net cash provided by investing activity - - -

Cash Flows From Financing Activities
Issuance of common stock, net of expenses 434 - 434
Payments on Line of Credit (1,800 ) - (1,800 )
Issuance of Series B preferred stock, net of expenses 19,537 - 19,537
Net cash provided by financing activities 18,171 - 18,171

Net increase in cash and cash equivalents 11,049 - 11,049
Cash and cash equivalents – beginning 2,321 - 2,321
Cash and cash equivalents – ending $ 13,370 $ - $ 13,370

~~INTERPACE BIOSCIENCES, INC.~~

~~CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS~~

~~(unaudited, in thousands)~~

For The Three Months Ended March 31,
2019 2019
As Previously
Reported Restatement
Amount Restatement
Reference As Restated

Cash Flows From Operating Activities
Net loss $ (3,419 ) $ 93 (a)(c) $ (3,326 )
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization 873 84 (a) 957
Interest accretion 129 - 129
Mark to market on warrants (3 ) - (3 )
Stock-based compensation 538 - 538
Bad debt expense - - -
Other gains and expenses, net 18 - 18
Other changes in operating assets and liabilities:
Decrease (increase) in accounts receivable (1,738 ) - (1,738 )
(Increase) decrease in other current assets 11 - 11
(Decrease) increase in accounts payable 93 - �� 93
(Decrease) increase in accrued salaries and bonus 325 (120 ) (c) 205
(Decrease) increase in accrued liabilities 156 (57 ) (c) 99
Increase in long-term liabilities 57 - 57
Net cash used in operating activities (2,960 ) - (2,960 )

Cash Flows From Investing Activity
Purchase of property and equipment (12 ) - (12 )
Sale of property and equipment 13 - 13
Net cash provided by investing activity 1 - 1

Cash Flows From Financing Activities
Issuance of common stock, net of expenses 6,015 - 6,015
Net cash provided by financing activities 6,015 - 6,015

Net increase in cash and cash equivalents 3,056 - 3,056
Cash and cash equivalents – beginning
6,068
-
6,068

Cash and cash equivalents – ending $
9,124
$ - $
9,124

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 ~~Interpace Biosciences, Inc. (the “Company” or “Interpace”),~~the Company and its wholly-owned subsidiaries ~~Interpace~~(Interpace Diagnostics Lab Inc., Interpace Diagnostics Corporation, Interpace Pharma Solutions, Inc. and Interpace Diagnostics, ~~LLC,~~LLC), and related notes as included in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2019,~~2020, as filed with the ~~SEC~~Securities & Exchange Commission (“SEC”) on April ~~22, 2020~~1, 2021 and as amended on ~~May~~April 29, ~~2020 and the date hereof (the “Form 10-K”).~~2021.

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, ~~or Group DCA;~~ InServe Support Solutions; and TVG, Inc. and its Commercial Services ~~(“CSO”)~~ business unit which was sold on December 22, 2015. All significant intercompany balances and transactions have been eliminated in consolidation. Operating results for the three-month period ended March 31, ~~2020~~2021 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2020. All information related to common stock, stock options, restricted stock units, warrants and earnings per share have been retroactively adjusted to give effect to the reverse stock split (1 for 10) that occurred in January 2020.2021.

3.	~~LIQUIDITY~~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.

As of March 31, ~~2020,~~2021, the Company had cash and cash equivalents, net of ~~$13.4~~restricted cash of $2.8 million, net accounts receivable of ~~$9.8~~$7.9 million, total current assets, net of ~~$28.1~~restricted cash of $13.7 million and total current liabilities of ~~$15.7~~$20.5 million. For the ~~three-months~~three month period ended March 31, ~~2020,~~2021, the Company had a net loss of ~~$6.5~~$4.2 million and cash used in operating activities was ~~$7.1~~$5.0 million.

We do not expect to generate positive cash flows from operations for the year ending December 31, 2020. We intend to meet our ongoing capital needs by using our available cash, proceeds under the Securities Purchase and Exchange Agreement, additional borrowings under the Line As of ~~Credit as well as by increasing our line~~May 10, 2021 we had approximately $6.4 million of credit limit as a result of the additional accounts receivable acquired in July 2019 as part of our acquisition of the Biopharma business of Cancer Genetics, Inc. or CGI, now our pharma services (which requires a modification to the bank agreement and approval by Silicon Valley Bank (“SVB”), revenue growth and margin improvement, collecting accounts receivable, containing costs as well as exploring other financing options. Management believes that the Company has sufficient cash on hand, ~~and sufficient access to cash to sustain operations through at least June 30, 2021.~~

In September 2019, we entered into the Equity Distribution Agreement (the “Agreement”) with Oppenheimer & Co. Inc., as sales agent (the “Agent”), pursuant to which we may, from time to time, issue and sell sharesnet of ~~our common stock in an aggregate offering price of up to $4.8 million through the Agent. See Note 16,~~ ~~Equity~~, for more details. As of March 31, 2020, approximately 178,000 shares of common stock were sold for net proceeds of approximately $0.7 million. As a result of the preferred shares transaction mentioned below, additional shares may no longer be sold under the ATM arrangement without a majority approval by the holders of the preferred shares. See Note 16, ~~Equity~~~~, for more detail.~~restricted cash.

In January 2020, we sold 20,000 Series B preferred shares to investors, led by 1315 Capital II, L.P. (“1315 Capital”), for net proceeds of approximately ~~$19.5~~$19.2 million. See Note 16, Equity, for more detail.

The Company maintains an up to a $4.0 million secured Line of Credit facility including a 3-year term loan for $850,000 with SVB. The proceeds of the term loan are expected to be used for laboratory capital expenditures and will be repaid monthly. The balance of the Line of Credit is available for working capital purposes as a revolving line of credit and has a three-year term. The borrowing limit of the revolving line of credit is the lower of 80% of the Company’s eligible accounts receivable (as adjusted by SVB) and the aggregate amount of cash collections with respect to accounts receivable during the three prior calendar months. Term loan outstanding amounts incur interest at a rate per annum equal to the greater of the Wall Street Journal Prime Rate (the “Prime Rate”) and 5.00%. Revolving Line outstanding amounts incur interest at a rate per annum equal to the Prime Rate plus 0.5%. As of March 31, 2020, $1.2 million was outstanding and $2.2 million was remaining on the Line of Credit.

See Note 1, Overview, regarding the potential adverse impact of the COVID-19 pandemic on our results of operations, cash flows and financial ~~condition for~~condition.

In September 2020, we repaid approximately $3.4 million to Silicon Valley Bank (“SVB”) under our former secured revolving line of credit facility (the “Revolver”), which was part of our Loan and Security Agreement with SVB dated November 13, 2018, as amended March 18, 2019 (as so amended, the ~~second quarter~~“SVB Loan Agreement”). On January 5, 2021, the Company terminated the SVB Loan Agreement.

On January 7, 2021, the Company entered into a $3 million loan through a secured promissory note with Ampersand 2018 Limited Partnership (“Ampersand”) and a $2 million loan through a secured promissory note with 1315 Capital, its Series B shareholders. Both loans are secured by substantially all of ~~fiscal 2020 and possibly beyond.~~the Company’s assets. See Note 14, Notes Payable – Related Parties.

During ~~April~~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. As of May 1, 2020, we~~Act (the “CARES Act”) and received $2.1 million in advances under the Centers for Medicare & Medicaid Services ~~(CMS)~~(“CMS”) accelerated and advance payment ~~program, as well as a $0.65 million grant from the Department of Health and Human Services (HSS). The CMS~~program. This advance will be offset against future Medicare billings of the Company ~~and~~beginning in the HSS grant is subject to certain conditions regarding its use, including developing coronavirus and serology tests. These grants and advances require certain certifications by the Company and impose specific limitations on the usesecond quarter of the proceeds. Based on these restrictions and limitations, the Company is treating the $0.65 million HSS grant as restricted cash until we have clarity on how the funds can be utilized by the Company based on the specific requirements of the HSS.2021.

During April and early May 2020, the Company made payments totaling $888,000 to CGI for funds withheld from the Excess Consideration Note to satisfy certain adjustments and indemnification obligations under the Asset Purchase Agreement. The ~~funds used to satisfy this obligation were not included in~~Company’s cash and cash equivalents ~~as of~~balance is decreasing and we do not expect to generate positive cash flows from operations for the year ending December 31, ~~2019~~2021. We intend to meet our ongoing capital needs by using our available cash, including the loans from Ampersand and ~~March 31, 2020. These funds~~1315 Capital, as well as revenue growth and margin improvement; collection of accounts receivable; containment of costs; and the ~~related liability were included in Other Assets and Other Current Liabilities, respectively, as~~potential use of ~~those period ends, and the settlement of the liability had no net impact on the Company’s operating cash flow or liquidity.~~other financing options.

~~As of June 17, 2020 we have approximately $16.2 million of cash on hand. Also as of June 17, 2020, the~~

The Company has ~~no further availability on~~and may continue to delay, scale-back, or eliminate certain of its ~~credit facility, but is in the process~~activities and other aspects of ~~completing an agreement with SVB to expand the credit facility. No assurance can be given that~~its operations until such ~~an expansion agreement will be entered into.~~

~~Upon the filing of this Form 10Q/A, the Company’s stockholders’ equity~~time as ~~of March 31, 2020 was below the minimum required by Nasdaq. In the event~~ the Company is ~~unable to maintain its~~successful in securing additional funding. The Company is exploring various dilutive and non-dilutive sources of funding, including equity and debt financings, strategic alliances, business development and other sources.

The delisting from Nasdaq ~~listing for its~~of our common stock ~~due~~which is now listed for trading on OTCQX and the Company’s inability to ~~a failure~~use Form S-3 after it filed its Form 10-K for the fiscal year ended December 31, 2020 may each have an adverse impact on our ability to raise additional capital. 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 ability to raise additional capital. The future success of the Company is dependent upon its ability to obtain additional funding. 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 ~~minimum stockholder equity~~its anticipated cash requirements ~~due to~~through the ~~classification of its preferred stock as temporary equity and as a result~~end of the ~~amortization and impairment~~second quarter of ~~certain intangible assets set forth herein,~~2021. These factors raise substantial doubt about the Company’s ability to ~~raise additional capital may be adversely impacted. Therefore, there is no guarantee that additional capital can be raised to fund our future operations.~~continue as a going concern.

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 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 ~~would affect~~affects net revenue in the period such variances become known.

For our pharma services, ~~performance~~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. ~~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.

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 ~~or diagnostics business~~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 ~~when incurred because~~in the ~~amortization~~ period ~~would~~in which they have been ~~one year or less.~~earned. These costs are recorded in sales and marketing expense in the condensed consolidated statements of operations.

Accounts Receivable

The Company’s accounts receivables 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~~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 March 31, ~~2020~~2021 and December 31, ~~2019:~~2020:

	March 31, 2020		December 31, 2019		March 31, 2021		December 31, 2020
	(unaudited)				(unaudited)
Lab supply inventory		1,885		1,825	$	2,227	$	2,052
Prepaid expenses		826		971		560		625
Funds in escrow		888		888
Due from CGI		1,297		92
Other		80		75		188		45
Total other current assets	$	4,976	$	3,851	$	2,975	$	2,722

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~~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, ~~(the “Common Stock”),~~ used in the calculation of basic and diluted loss per share for the three-month periods ended March 31, ~~2020~~2021 and ~~2019~~2020 is as follows:

Three Months Ended
March 31,
2020 2019
(unaudited)
Basic weighted average number of common shares 4,004 3,515
Potential dilutive effect of stock-based awards - -
Diluted weighted average number of common shares 4,004 3,515

	Three Months Ended
	March 31,
	2021		2020
	(unaudited)
Basic weighted average number of common shares		4,089		4,004
Potential dilutive effect of stock-based awards		-		-
Diluted weighted average number of common shares		4,089		4,004

The Company’s Series B Preferred Stock, on an as converted basis of 7,833,334 shares for the ~~three~~three- months ended March 31, ~~2020,~~2021, 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):

Three Months Ended
March 31,
2020 2019
(unaudited)
Options 578 394
Stock-settled stock appreciation rights (SARs) - 3
Restricted stock 6 -
Restricted stock units (RSUs) 36 61
Warrants 1,420 1,420
2,040 1,878

	Three Months Ended
	March 31,
	2021		2020
	(unaudited)
Options		1,061		578
Restricted stock and restricted stock units (RSUs)		395		42
Warrants		1,405		1,420
		2,861		2,040

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 $15.6 million, with goodwill of approximately $8.3 million and identifiable intangible assets of approximately $7.3 million. The goodwill balance at March 31, ~~2020~~2021 was $8.4 million. The net carrying value of the identifiable intangible assets from all acquisitions as of March 31, ~~2020~~2021 and December 31, ~~2019~~2020 are as follows:

			As Restated			As Restated
			As of March 31, 2020			As of December 31, 2019				As of March 31, 2021			As of December 31, 2020
	Life		Carrying			Carrying			Life	Carrying			Carrying
	(Years)		Amount			Amount			(Years)	Amount			Amount
										(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		6,719			6,719		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			$	39,288		$	39,288			$	39,251		$	39,251

Accumulated Amortization			$	(24,554	)	$	(23,439	)		$	(29,013	)	$	(27,900	)

Net Carrying Value			$	14,734		$	15,849			$	10,238		$	11,351

Amortization expense was approximately $1.1 million for both the three-month periods ended March 31, 2021 and 2020, respectively. Estimated amortization expense for the next five years is as follows:

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, ~~2019~~2020 to March 31, ~~2020:~~2021:

Carrying
Amount
Balance as of December 31, 2019 $ 8,433
Adjustments -
Balance as of March 31, 2020 $ 8,433

Amortization expense was approximately $1.1 million and $0.9 million for the three-month periods ended March 31, 2020 and 2019, respectively. Estimated amortization expense for the next five years is as follows:

As Restated
2020 2021 2022 2023 2024

$ 4,871 $ 4,078 $ 2,156 $ 1,745 $ 873

	Carrying
	Amount
Balance as of December 31, 2020	$	8,433
Adjustments		-
Balance as of March 31, 2021	$	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 and warrant liability. 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:

As of March 31, 2020 Fair Value Measurements
Carrying Fair As of March 31, 2020
Amount Value Level 1 Level 2 Level 3
Liabilities: (unaudited)
Contingent consideration:
Asuragen ⁽¹⁾ $ 2,866 $ 2,866 $ - $ - $ 2,866
Other long-term liabilities:
Warrant liability ⁽²⁾ 55 55 - - 55
$ 2,921 $ 2,921 $ - $ - $ 2,921

	As of December 31, 2019				Fair Value Measurements						As of March 31, 2021				Fair Value Measurements
	Carrying		Fair		As of December 31, 2019						Carrying		Fair		As of March 31, 2021
	Amount		Value		Level 1		Level 2		Level 3		Amount		Value		Level 1		Level 2		Level 3
															(unaudited)
Liabilities:
Contingent consideration:
Asuragen ⁽¹⁾	$	2,893	$	2,893	$	-	$	-	$	2,893	$	2,175	$	2,175	$	-	$	-	$	2,175
Other long-term liabilities:
Warrant liability ⁽²⁾		82		82		-		-		82		62		62		-		-		62
	$	2,975	$	2,975	$	-	$	-	$	2,975	$	2,237	$	2,237	$	-	$	-	$	2,237

	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

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.

A roll forward of the carrying value of the Contingent Consideration Liability and the 2017 Underwriters’ Warrants to March 31, ~~2020~~2021 is as follows:

Cancellation Adjustment
of Obligation/ to Fair Value/

December 31,
2019
Payments Accretion
Conversions
Exercises

Mark to
Market

March 31,
2020
(unaudited)
Asuragen $ 2,893 $ (136 ) $ 109 $ - $ - $ 2,866

Underwriters Warrants 82 - - - (27 ) 55
$ 2,975 $ (136 ) $ 109 $ - $ (27 ) $ 2,921

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.

								Cancellation		Adjustment
								of Obligation/		to Fair Value/
	December 31, 2020		Payments			Accretion		Conversions Exercises		Mark to Market			March 31, 2021
	(unaudited)
Asuragen	$	2,216	$	(119	)	$	135	$	-	$	(57	)	$	2,175

Underwriters Warrants		21		-			-		-		41			62
	$	2,237	$	(119	)	$	135	$	-	$	(16	)	$	2,237

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:

	Classification on the Balance Sheet	March 31, 2020		Classification on the Balance Sheet	March 31, 2021
		(unaudited)			(unaudited)
Assets
Financing lease assets	Property and equipment, net	$	475	Property and equipment, net	$	690
Operating lease assets	Operating lease right of use assets		2,811	Operating lease right of use assets		3,980
Total lease assets		$	3,286		$	4,670

Liabilities
Current
Financing lease liabilities	Other accrued expenses	$	160	Other accrued expenses	$	150
Operating lease liabilities	Other accrued expenses		1,251	Other accrued expenses		894
Total current lease liabilities		$	1,411		$	1,044
Noncurrent
Financing lease liabilities	Other long-term liabilities		85	Other long-term liabilities		112
Operating lease liabilities	Operating lease liabilities, net of current portion		1,384	Operating lease liabilities, net of current portion		3,326
Total long-term lease liabilities			1,469			3,438
Total lease liabilities		$	2,880		$	4,482

The weighted average remaining lease term for the Company’s operating leases was ~~2.6~~7.2 years as of March 31, ~~2020~~2021 and the weighted average discount rate for those leases was 6.0%. The Company’s operating lease expenses are recorded within ~~cost~~“Cost of ~~revenue~~revenue” and ~~general~~“General and administrative expenses. ~~With respect to the Rutherford lease, in March 2020 the Company delivered a notice of early termination which would terminate the lease in March 2021.~~”

The table below reconciles the cash flows to the lease liabilities recorded on the Company’s Condensed Consolidated Balance Sheet as of March 31, ~~2020:~~2021:

Operating Leases Financing Leases
2020 1,189 170
2021 878 120
2022 660 13
2023 250 -
Total minimum lease payments 2,977 303
Less: amount of lease payments representing effects of discounting 342 58
Present value of future minimum lease payments 2,635 245
Less: current obligations under leases 1,251 160
Long-term lease obligations $ 1,384 $ 85

	Operating Leases		Financing Leases
2021		822		133
2022		1,028		78
2023		629		65
2024		390		-
2025-2030		2,327		-
Total minimum lease payments		5,196		276
Less: amount of lease payments representing effects of discounting		976		14
Present value of future minimum lease payments		4,220		262
Less: current obligations under leases		894		150
Long-term lease obligations	$	3,326	$	112

As of March 31, ~~2020,~~2021, 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:

Less than 1 to 3 3 to 5 After
Total 1 Year Years Years 5 Years
Operating lease obligations $ 2,977 $ 1,189 $ 1,538 $ 250 $ -

			Less than		1 to 3		3 to 5		After
	Total		1 Year		Years		Years		5 Years
Operating lease obligations	$	5,196	$	822	$	1,657	$	793	$	1,924
Total	$	5,196	$	822	$	1,657	$	793	$	1,924

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~~activities. There is also the risk of employment related litigation and ~~recent increases~~other litigation in ~~litigation related to healthcare products.~~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 March 31, ~~2020~~2021 and December 31, ~~2019:~~2020:

As Restated As Restated
March 31, 2020 December 31, 2019
(unaudited)
Accrued royalties $ 2,101 $ 1,934
Contingent consideration 602 502
Operating lease liability 1,251 1,321
Financing lease liability 160 184
Deferred revenue 354 457
Payable to CGI 888 888
Accrued sales and marketing - diagnostics 167 197
Accrued lab costs - diagnostics 104 163
Accrued professional fees 1,064 1,399
Taxes payable 327 403
Unclaimed property 565 565
All others 1,056 1,463
Total other accrued expenses $ 8,639 $ 9,476

	March 31, 2021		December 31, 2020
	(unaudited)
Accrued royalties	$	2,984	$	2,710
Contingent consideration		437		398
Upfront Medicare payment		2,066		2,066
Operating lease liability		894		1,027
Financing lease liability		150		177
Deferred revenue		52		54
Accrued sales and marketing - diagnostics		75		51
Accrued lab costs - diagnostics		160		161
Accrued professional fees		538		854
Taxes payable		331		334
Unclaimed property		565		565
All others		1,170		1,398
Total other accrued expenses	$	9,422	$	9,795

Long-term liabilities consisted of the following as of March 31, ~~2020~~2021 and December 31, ~~2019:~~2020:

March 31, 2020 December 31, 2019
(unaudited)
Warrant liability $ 55 $ 82
Uncertain tax positions 4,146 4,081
Deferred revenue 258 269
Other 104 141
Total other long-term liabilities $ 4,563 $ 4,573

	March 31, 2021		December 31, 2020
	(unaudited)
Warrant liability	$	62	$	21
Uncertain tax positions		4,396		4,342
Deferred revenue		123		136
Other		111		138
Total other long-term liabilities	$	4,692	$	4,637

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, ~~expire~~with expiration 10 years from the date they are granted, and generally ~~vested~~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 ~~employees generally have a three-year graded vesting period~~Board members and ~~are subject to accelerated vesting and forfeiture under certain circumstances. Restricted shares and RSUs granted to Board members~~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 ~~three month~~three-month periods ended March 31, ~~2020~~2021 and ~~2019.~~2020.

	March 31, 2020			March 31, 2019			March 31, 2021			March 31, 2020
	(unaudited)						(unaudited)
Risk-free interest rate		1.51	%		2.51	%		0.78	%		1.51	%
Expected life		6.0 years			6.0 years			6.0 years			6.0 years
Expected volatility		128.87	%		127.81	%		134.79	%		128.87	%
Dividend yield		-			-			-			-

During March 2021, the Company granted 312,500 stock options with an exercise price of $6.00 and 152,500 RSUs. The market value of the Company’s common stock was $5.00 at the grant date of these awards. The Company recognized approximately ~~$0.4~~$0.3 million and ~~$0.5~~$0.4 million of stock-based compensation expense during the three-month periods ended March 31, 2021 and 2020, ~~and 2019,~~ respectively.

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-month periods ended March 31, 2021 and 2020:

	Three Months Ended
	March 31,
	2021			2020
	(unaudited)

Provision for income tax	$	15		$	15
Effective income tax rate		(0.4	%)		(0.2	%)

Income tax expense for both the three-month periods ended March 31, ~~2020~~2021 and ~~2019:~~

Three Months Ended
March 31,
2020 2019
(unaudited)

Provision for income tax $ 15 $ 5
Effective income tax rate (0.2 %) (0.1 %)

~~Income tax expense for the three-month periods ended March 31,~~ 2020 ~~and 2019~~ was primarily due to minimum state and local taxes.

The Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was enacted in March 2020. The CARES Act includes several U.S. income tax provisions related to, among other things, net operating loss carrybacks, alternative minimum tax credits, modifications to the net interest deduction limitations, and technical amendments regarding the income tax depreciation of qualified improvement property placed in service after December 31, 2017. The CARES Act is not expected to have a material impact on the Company’s financial results.

12.	SEGMENT INFORMATION

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

13.	DISCONTINUED OPERATIONS

The components of liabilities classified as discontinued operations ~~relate to Commercial Services and~~ consist of the following as of March 31, ~~2020~~2021 and December 31, ~~2019:~~2020:

	March 31, 2020		December 31, 2019		March 31, 2021		December 31, 2020
	(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 results included within loss from discontinued operations, net of tax in the condensed consolidated statements of operations for the three-months ended March 31, 2021 and 2020.

	Three Months Ended
	March 31,
	2021			2020
	(unaudited)
Income from discontinued operations, before tax	$	-		$	-
Income tax expense		54			65
Loss from discontinued operations, net of tax	$	(54	)	$	(65	)

14.

~~LINE OF CREDIT~~NOTES PAYABLE – RELATED PARTIES

Secured Promissory Notes

On January 7, 2021, the Company entered into 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 39.3% and 26.7% 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 Ampersand and 1315 Capital, they each have the right to (1) approve certain of our actions, including our borrowing of money and (2) designate two directors to our Board of Directors; provided, that certain of such rights held by 1315 Capital have been delegated pursuant to the related Support Agreement (See Note 16). As a result, the Company considers the Notes and Security Agreement to be a related party transaction.

On November 13, 2018 the Company, Interpace Diagnostics Corporation, and Interpace Diagnostics, LLC entered into a Loan and Security Agreement (the “SVB Loan Agreement”) with SVB, which provides for up to $4.0 million of debt financing consisted of a term loan of up to $850,000 and a revolving line of credit based on its outstanding accounts receivable (the “Revolving Line”) of up to $3.75 million. The ability to use the term loan portion of the SVB Loan Agreement expired in 2019.

The amount that may be borrowed under the Revolving Line is the lower of (i) $3.75 million or (ii) 80% of the Company’s eligible accounts receivable (as adjusted by SVB). Revolving Line outstanding amounts incur interest at a rate per annum equal to the Wall Street Journal Prime Rate plus 0.5%. The Company is also required to pay an unused Revolving Line facility fee monthly in arrears in an amount equal to 0.35% per annum of the average unused but available portion of the Revolving Line. The Revolving Line has a maturity date three years from the effective date, or November 13, 2021.

As of March 31, 2020, the Company had drawn $1.2 million of the available funds with the Revolving Line and had $2.55 million of remaining availability. As of December 31, 2019, we were in violation of a financial covenant for which we received a waiver from SVB on March 19, 2020. The Company currently is in compliance with all covenants.

As of June 17, 2020, the Company has maximized its borrowing under its line of credit facility and therefore has no further availability on its credit facility; however, we are in the process of seeking to expand availability under the credit facility on terms similar to existing terms, but there can be no assurance that such credit line extension will be granted or that it will be granted on commercially reasonable and acceptable terms
The rate of interest on the Notes is equal to eight percent (8.0%) per annum and their maturity date is 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.

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 of the Company occurs (as defined in the Notes) the Company is required to make a prepayment of the Notes in an amount equal to the unpaid principal amount, all accrued and unpaid interest, and all other amounts payable under the Notes out of the net cash proceeds received by the Company from the consummation 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.
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)

	Three Months Ended
	March 31,
	2021		2020
	(unaudited)
Investing
Preferred Stock Deemed Dividend	$	-	$	3,033
Financing
Accrued financing costs	$	123	$	314

Three Months Ended
March 31,
2020 2019
(unaudited)
Operating
Adoption of ASC 842 - right of use asset $ - $ 2,449
Adoption of ASC 842 - operating lease liability $ - $ (2,536 )
Taxes accrued for repurchase of restricted shares $ - $ 32
Financing
Accrued Financing costs $ 314 $ 53
Preferred Stock Deemed Dividend $ 3,033 $ -

16.

EQUITY

Preferred Stock ~~Issuance~~

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 ~~II, L.P., (“1315 Capital”),~~ and Ampersand ~~2018 Limited Partnership (“Ampersand” and, together with 1315 Capital,~~(collectively, the “Investors”) pursuant to which the Company agreed to sell to the Investors an aggregate of $20.0 million in Series B ~~convertible preferred stock~~Preferred Stock of the Company, ~~par value $0.01 per share (the “Series B Preferred Stock”),~~ 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 ~~diagnostics business~~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~~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 ~~represents~~represented a deemed dividend to the preferred shareholders.

~~ATM program~~

~~On September 20, 2019,~~In April 2020, the Company entered into ~~an Equity Distribution Agreement (the “Agreement”)~~support agreements with Oppenheimer & Co. Inc., as sales agent (the “Agent”), pursuant to which the Company may, from time to time, issue and sell shares of its Common Stock, at an aggregate offering price of up to $4.8 million (the “Shares”) through the Agent. Under the terms of the Agreement, the Agent may sell the Shares at market prices by any method that is deemed to be an “at the market offering” as defined in Rule 415 under the Securities Act of 1933, as amended.

Subject to the terms and conditions of the Agreement, the Agent will use its commercially reasonable efforts to sell the Shares from time to time, based upon the Company’s instructions. The Company has no obligation to sell any of the Shares, and may at any time suspend sales under the Agreement or terminate the Agreement in accordance with its terms. The Company has provided the Agent with customary indemnification rights, and the Agent will be entitled to a fixed commission of 3.0% of the aggregate gross proceeds from the Shares sold. The Agreement contains customary representations and warranties, and the Company is required to deliver customary closing documents and certificates in connection with sales of the Shares. As of March 31, 2020, approximately 178,000 shares have been sold for net proceeds to the Company of approximately $0.7 million.

~~As a result of the January 15, 2020 Securities Purchase and Exchange Agreement, additional Shares may no longer be sold under the ATM arrangement without a majority approval by the holders~~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 ~~accordance with~~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~~Agreement. The support agreement between the Company and Ampersand was terminated by mutual agreement on July 9, 2020; however, the support agreement entered into ~~on that date.~~with 1315 Capital remains in effect.

17.

WARRANTS

Warrants outstanding and warrant activity for the three-months ended March 31, ~~2020~~2021 are as follows:

Description	Classification	Exercise Price		Expiration Date	Warrants Issued		Warrants Exercised			Warrants Cancelled/ Expired			Balance December 31, 2019		Balance March 31, 2020		Classification		Exercise Price		Expiration Date	Warrants Issued		Balance December 31, 2020		Warrants Cancelled/ Expired		Balance March 31, 2021

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		-			(4,000	)		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		(567,286	)		-			870,214		870,214		Equity	$	12.50	June 2022		1,437,500		870,214				870,214
Vendor Warrants, issued August 6, 2017	Equity	$	12.50	August 2020		15,000		-			-			15,000		15,000
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

						1,990,934		(567,286	)		(4,000	)		1,419,648		1,419,648							1,975,934		1,404,648		-		1,404,648

The weighted average exercise price of the warrants is $15.97 and the weighted average remaining contractual life is approximately 1.2 years.

18.

RECENT ACCOUNTING PRONOUNCEMENTS

Recently Adopted Accounting Guidance

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.

~~Standards not yet effective~~

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 is effective for annual periods beginning after December 15, 2020. We do not expect that the requirements of ASU 2017-04 will have a material impact on our consolidated financial statements.

19.	SUBSEQUENT EVENTS

~~Federal Stimulus Programs in Connection with Coronavirus Pandemic~~

AsDisposition of May 1, 2020, we received $2.1 million in advances under the Centers for Medicare & Medicaid Services (CMS) accelerated and advance payment program, as well as a $0.65 million grant from the Department of Health and Human Services (HSS). The CMS advance will be offset against future Medicare billings of the Company, and the HSS grant is subject to certain conditions regarding its use, including developing coronavirus and serology tests. These grants and advances require certain certifications by the Company and impose specific limitations on the use of the proceeds. Based on these restrictions and limitations, the Company is treating the $0.65 million HSS grant as restricted cash until we have clarity on how the funds can be utilized by the Company based on the specific requirements of the HSS. Furthermore, although the Company initially explored the possibility of requesting a loan under the Small Business Administration Paycheck Protection Program, we elected not to complete an application because we are not certain we meet certain criteria of the program.

~~Amendment to Morrisville, North Carolina lease~~New Haven Laboratory

On ~~June 3, 2020,~~April 15, 2021 the Company closed the agreement to sell its New Haven, CT CLIA certified, CAP accredited laboratory to DiamiR Biosciences, Corp. (“DiamiR”). The agreement had been previously announced on March 17, 2021. Under the agreement, DiamiR will provide overflow lab testing in support of the Company’s molecular thyroid testing products which the Company conducts at its main laboratory in Pittsburgh, PA. DiamiR will also support specific Interpace ~~Pharma Solutions, Inc. (“IPS”), a wholly-owned subsidiary~~assay development and validation services on behalf of the Company ~~entered into an agreement with Southport Business Park Limited Partnership (“~~for the ~~Landlord”)~~next three quarters. The Company will receive 42,820 shares of DiamiR’s common stock in consideration as well as the services mentioned above.

Amendments to amend its Morrisville, North Carolina lease effective June 1, 2020 (the “Amendment”). This lease was originally entered into on June 12, 2004 by the Landlord and Cancer Genetics, Inc., the Company’s predecessor-in-interest (the “Original Lease”) and was assigned toPromissory Notes

On May 10, 2021, (i) the Company ~~on July 15, 2019 (the “Lease Assignment”). The Original Lease together with all amendments, as assigned by~~and Ampersand amended the ~~Lease Assignment constitutes~~Ampersand Note to increase its principal amount to $4.5 million, (ii) the ~~“Lease.” The~~ Company ~~re-affirmed~~and 1315 Capital amended the 1315 Capital Note to increase its ~~Guaranty of Lease, dated July 15, 2019, in~~principal amount to $3.0 million and (iii) the ~~Amendment, guaranteeing~~Company and Ampersand amended the ~~obligations of IPS under~~Security Agreement to include the ~~Lease.~~

~~The Amendment provides for an extension~~new total principal amount of the ~~term~~Notes of $7.5 million. The maturity date and interest rate of the ~~Lease, which consists of approximately 24,906 square feet utilized by IPS as laboratory~~Notes remain June 30, 2021 and ~~office space~~8%, respectively and except with respect to ~~provide its pharma solutions services. The~~their respective principal amounts, the terms of the ~~Lease were set to expire on May 31, 2020. Pursuant to~~Notes and the Amendment, the term of the Lease was extended for ten additional years, commencing on June 1, 2020 and continuing until May 31, 2030 (the “Term”). The minimum rent per rentable square foot pursuant to the Amendment is $14.10 from June 1, 2020 to May 31, 2021, with annual increases of 3%. The minimum rent during the first year under the Amendment is $351,174.60, which is subject to a rent abatement consisting of six months of rent forgiveness totaling $175,587, provided there is no outstanding uncured event of default (as defined in the Lease). The Company shall continue to pay to Landlord additional rent, representing the Company’s proportionate share of any direct expenses, as stipulated in the Lease.Security Agreement are otherwise unchanged.

Pursuant to the Amendment, the Company has two options to extend the Term for a period of five years each (the “Extended Terms”). Minimum rent during the Extended Terms, if such options are exercised by the Company, is subject to certain “market value” adjustments as provided for in the Amendment. Also pursuant to the Amendment, the Company has the irrevocable right to terminate the Lease on November 30, 2025, as well as on November 30, 2027, providing certain timely notification is given to Landlord, specified events occur (such as a merger or sale of the Company’s business), and specified termination payments are made to Landlord.

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 ~~(Form 10-Q)~~ contains “forward-looking statements” within the meaning of Section 27A of the Securities Act ~~of 1933, as amended (the “Securities Act”),~~ and Section 21E of the Securities Exchange ~~Act.~~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~~pandemic;

	●	the substantial doubt about our ability to continue as a going concern due to ~~the slowdown in demand for~~ our ~~clinical services and pharma services, a reduction in samples received and testing volume and delayed third party collections~~history of operating losses, declining cash position and other ~~factors;~~liquidity factors, which in the absence of additional short term financing may cause us to cease or scale back operations;

	●	our ability to timely repay our private equity investors the $7.5 million in outstanding secured promissory notes due June 30, 2021, the failure of which could result in the right to foreclose on our assets;

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

	●	we ~~have a history of operating losses, and our clinical services and pharma services have generated limited revenue;~~

	●	~~we expect to incur net losses for the foreseeable future and may never achieve or sustain profitability;~~

	●	our limited operating history and the limited revenue generated from our business thus far and fluctuating quarterly and annual revenue and operating results, including as a result of how we recognize revenue;

	●	wegenerally depend on sales and reimbursements from our clinical services for more than 50% of our ~~revenue, and we will need~~revenue; the ability to continue to generate sufficient revenue from these and other products and/or solutions that we develop ~~or require to grow our business;~~

	●	~~we rely on third parties to process and transmit claims to payers~~in the future is important for ~~our clinical services, and any delay, data loss, or other disruption in processing or transmitting could have an adverse effect on our revenue and financial condition;~~

	●	our ability to ~~utilize~~meet our ~~commercial~~financial and ~~operating experience to sell our clinical and pharma services;~~other targets;

	●	~~our ability to compete successfully in the markets our clinical services and pharma services operate in;~~

	●	our ability to obtain, retain and increase sufficient levels of third party reimbursement for our molecular diagnostic tests in a changing and challenging reimbursement environment, including our current dependence on a concentrated number of third-party payers and the lack of timeliness of their payments, and the potential failure of such payments to ever occur;

	●	~~our billing practices and those of our third-party billing providers to effectively bill and collect on claims for the sale of our tests;~~

●

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

	●	~~a deterioration in the collectability of our accounts receivable could have a material adverse effect on our business, financial condition and results of operations;~~

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

	●	our ability to comply with financial covenants under our current line of credit facility and comply with our debt obligations and our ability to expand our working capital borrowing base to provide sufficient working capital financing during growth periods;

	●	~~we have issued convertible preferred stock and may issue additional convertible preferred stock in the future, and the terms of our preferred stock may dilute our common stock;~~

	●	two private equity firms and their affiliates control, on an as-converted basis, 66% of our fully diluted outstanding shares of common stock through their holdings of Series B Convertible Preferred Stock, par value $0.01 per share (“Series B Preferred Stock”), and this concentration of ownership along with having authority for designation rights for a majority of our directors will have a substantial influence on our decisions;

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

	●	we depend on a few payers for a significant portion of our revenue for our clinical services, and if one or more significant payers stops providing reimbursement or decreases the amount of reimbursement for our tests, our revenue could decline;

	●	~~if payers do not provide reimbursement, rescind or modify their reimbursement policies or delay payments for clinical services, our commercial success could be compromised;~~

	●	~~developing new tests and related services and solutions includes a lengthy and complex process with uncertain results;~~

	●	~~the effect of potential adverse findings resulting from regulatory audits of our billing and payment practices and the impact such results could have on our clinical services;~~

	●	~~the demand for our molecular diagnostic tests from physicians and patients;~~

	●	~~our products and services continuing to perform as expected;~~

	●	~~claims against us for inaccurate results from our molecular diagnostic tests;~~offerings;

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

	●	our ability to obtain data and samples to perform sufficient clinical studies to successfully publish data demonstrating the clinical relevance and value of our molecular diagnostic tests, including to support sufficient levels of third party reimbursement;

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

	●	~~our ability to scale our operations or delays or reagent and supply shortages for our tests and services;~~

	●	~~our ability to develop or acquire tests,~~ services ~~or solutions;~~

	●	~~the ability of our clinical services to enter into additional clinical study collaborations with highly regarded institutions;~~tests;

	●	the ~~effect~~potential adverse impact of current and future laws, licensing requirements and ~~regulation have on~~governmental regulations upon our business operations, including but not limited to the ~~changing~~evolving U.S. ~~Food and Drug Administration~~regulatory environment ~~as it relates~~related to ~~molecular diagnostics and pharma services and~~ laboratory developed tests ~~(LDT’s);~~

	●	~~changes in governmental regulations mandating price controls and limitations on patient access to our products and services;~~

	●	~~if we fail to comply with Federal, State and foreign laboratory licensing requirements, we could lose the ability to perform our tests or experience disruptions to our business;~~

	●	~~legislation reforming the U.S. healthcare system;~~

	●	~~a failure to comply with Federal and State laws and regulations pertaining to our payment practices;~~

	●	~~our ability to comply with fraud and abuse laws or payer regulations could result in our being excluded from participation in Medicare, Medicaid or other governmental payer programs;~~

	●	~~compliance with numerous statutes and regulations pertaining to our business;~~

	●	~~the effect~~(“LDTs”), pricing of ~~The Eliminating Kickbacks in Recovery Act of 2018 as it potentially impacts our ability to incentivize our sales personnel appropriately;~~

	●	~~our ability to realize all of the anticipated benefits of the acquisition of our pharma services or those benefits, if any, taking longer to realize than expected;~~

	●	~~if pharmaceutical and biotech companies, universities and contract research organizations performing clinical trials decide not to use~~ our tests and services ~~we may be unable to generate sufficient revenue to sustain our pharma services;~~

	●	~~if we fail to perform our pharma services in accordance with contractual~~ and ~~regulatory requirements, and ethical considerations, we could be subject to significant costs or liability;~~

	●	~~our ability to compete in the markets our clinical services operate in;~~

	●	~~our ability to attract and retain key employees and management personnel;~~patient access limitations;

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

	●	~~our limited experience in marketing and selling our products;~~

	●	the ability of our molecular diagnostic tests to compete successfully with physicians and members of the medical community who use traditional methods to diagnose gastrointestinal and endocrine cancers, competitors offering broader product lines outside of the molecular diagnostic testing market and having greater brand recognition than we do, and companies with greater financial resources;activities;

	●	our ability to ~~license rights to use technologies in order to commercialize new products and services;~~

	●	~~our involvement in future litigation against us or our ability to collect on judgements found in our favor;~~

	●	~~the effect of acts of nature, seasonal results and adverse weather conditions, hurricanes and floods, on~~implement our business and ~~our suppliers;~~

	●	~~our use of hazardous materials;~~

	●	~~the susceptibility of our information systems to security breaches, loss of data~~restructuring strategy; and ~~other disruptions;~~

	●	~~catastrophic loss of our laboratories;~~

	●	our ability to obtain and maintain sufficient qualified laboratory space to meet our processing needs for all of our business as well as our ability to pass regulatory inspections and continue to be Clinical Laboratory Improvement Amendments (“CLIA”) and the College of American Pathologists (“CAP”) certified or accredited;

	●	~~compliance with the U.S. Foreign Corrupt Practices Act and anti-bribery laws;~~

	●	~~our ability to respond to rapid scientific changes in the areas in which we operate;~~

	●	~~our compliance with our license agreements and our ability to protect and defend our intellectual property rights;~~

	●	~~patent infringement claims against us;~~

	●	~~changes in U.S. and global patent law;~~

	●	~~tax reform legislation;~~

	●	~~stock dilution;~~

	●	~~changes in financial accounting standards or practices;~~

	●	~~exposure to international law, regulations and risk as a result of international expansion;~~

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

	●	~~the impact of contingent liabilities on our financial condition;~~

	●	~~the results of any future impairment testing for intangible assets as required under U.S. generally accepted accounting principles (“GAAP”);~~

	●	~~our ability to maintain and implement effective internal controls over financial reporting especially as we are consolidating operations;~~

	●	if our information technology or communications systems fail or we experience a significant interruption in their operation, our reputation, business and results of operations could be materially and adversely affected;

	●	~~the impact of future issuances of debt, common and preferred shares on stockholders’ interest and stock price;~~

	●	~~our ability to report financial results on a timely and accurate basis;~~

	●	~~our ability to manage our growth or unexpected declines;~~

	●	the potential that the temporary equity classification of our preferred stock and the amortization and impairment of certain intangible assets set forth herein may trigger a Nasdaq compliance default for failure to meet minimum stockholder equity requirements which could result in a delisting of our common stock from Nasdaq leading to a possible reduced stock price; potential difficulty in raising additional capital or debt as well as loss of exemptions from various state securities laws which could hamper action plans to remediate such a Nasdaq compliance default;

	●	~~uncertainty regarding the regulatory obligations related to our receipt of $650,000 funding for COVID testing;~~

	●	~~our ability to rebuild our cost structure in anticipation of volume growth that does not happen as planned;~~

	●	the potential impact of existing and future contingent liabilities on ~~customers currently in clinical trials in~~ our ~~Rutherford, NJ lab that we are now relocating to North Carolina which may require revalidation in the new site;~~

	●	~~the impact of increased costs building expanded laboratory capabilities in North Carolina in anticipation of the move from Rutherford, NJ and the potential loss of customers related to the move;~~

	●	~~our ability to efficiently execute and complete the planned laboratory move from Rutherford, NJ to North Carolina on a timely basis within our forecasted costs;~~

	●	the risk of loss of personnel that are uniquely qualified to perform the breadth of specialty testing and lab applications necessary for developing customized assays in our pharma solutions business; and

	●	~~the risk related to our sales reps fully reengaging with customers after reducing physical visits by our commercial team during the pandemic.~~financial condition.

Please see Part I – Item 1A – “Risk Factors” in our Form 10-K for the fiscal year ended December 31, ~~2019~~2020 filed with the SEC on April ~~22, 2020, as amended on May 29, 2020, and January 19,~~1, 2021, 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 ~~services~~ 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- and 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 ~~advances~~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.

During fiscal 2019, in connection with the acquisition of our pharma services, we raised $27 million with Ampersand, a diagnostic laboratory private equity investor. This was followed by raising an additional $20 million in early 2020 led by 1315 Capital, another sophisticated private equity investor. We believe that the combination of our clinical services and acquired pharma services uniquely positions us for growth and expansion in the fast-growing biopharma sector where we can provide our unique diagnostic capabilities to a broad customer base.

~~Impact of~~ COVID-19 pandemic

We have taken what we believe are all necessary precautions to safeguard our employees from the Coronavirus (COVID-19) pandemic. We are following CDC guidance and local restrictions. All employees who do not work in a lab have been on a telecommunication work arrangement. Our employees in the lab are wearing what we believe is appropriate protective gear. There can be no assurance that key employees will not become ill or that we will able to continue to operate our labs. We have furloughed a number of employees as a result of reductions in customer demand and we have closed our administrative offices. Our labs require in-person staffing and as of the date of this report, we have been able to successfully operate our labs though a combination of social distancing, managing lab scheduling and protective equipment. Our management, finance staff and sales personnel have generally been able to successfully work remotely. As of June 15, 2020 we began allowing general and administrative staff to return to their respective offices on a limited basis.

The ~~extent to which~~outbreak of the COVID-19 pandemic ~~impacts~~continues to impact a significant portion of the regions in which we operate. The continuing impact that the COVID-19 pandemic will have on our operations, ~~continues to depend on future developments, which are~~including duration, severity and scope, remains highly uncertain and cannot be fully predicted at this ~~time, and include~~time. While we believe we have generally recovered from the ~~duration, severity and scope of~~adverse impact that the outbreak and the actions taken to contain or treat the coronavirus outbreak. In particular, the continued spread of the coronavirus globally has adversely affecting global economies and financial markets resulting in an economic downturn which could materially and adversely impactCOVID-19 pandemic had on our operations including, without limitation, the functioning of our laboratories, the availability of supplies including reagents, the progress and data collection of our pharma services, customer demand and travel and employee health and availability.

Webusiness during 2020, we believe that the COVID-19 pandemic ~~will also~~could continue to adversely impact our results of operations, cash flows and financial condition ~~for~~in the ~~second quarter of fiscal 2020 and possibly beyond. Our fiscal 2020 first quarter revenue was~~future.

As our business operations continue to be impacted by ~~lower than expected clinical service volume throughout March 2020, which~~the pandemic, we ~~believe has resulted from~~continue to monitor the ~~temporary reduction~~situation and the guidance that is being provided by relevant federal, state and local public health authorities. We may take additional actions based upon their recommendations. However, it is possible that we may have to make further adjustments to our operating plans in ~~non-essential testing procedures in connection with the COVID-19 pandemic. Further, we did reduce overall costs~~reaction to ~~match the lower volumes in the labs.~~developments that are beyond our control.

However, as of the date of this Report, our overall business is still down approximately 30% from our run rate before the pandemic. We have continued to add resources to support the increased volume consistent with the changing environment. However, as we rebuild our cost structure to support the improved volume, there is risk that the anticipated volume growth will not materialize as planned and we will be required to adjust accordingly.

To optimize the pharma services lab operations we are transitioning lab work from Rutherford, NJ to our facility in Morrisville, NC. We will be investing several million dollars to facilitate the move, transfer personnel, build out facilities and validate processes over the next several months. We believe this investment and transition will result in reduced operating costs in the future: however, there is no guarantee we will be as successful with the move or the benefits expected thereof as we currently plan.

~~All of our labs are currently operating and we believe we are appropriately staffed for the volume of work. At this time,~~While we do not anticipate any lab closures at this time beyond periodic, temporary work stoppages ~~from time to time~~ to clean and disinfect the ~~labs. Lab supplies including reagents have been secured to mitigate any potential~~labs, this could change in the future based upon conditions caused by the pandemic. It is also possible that we could experience supply chain ~~issues for~~shortages if the pandemic worsens and if one or more suppliers is unable to continue to provide us with supplies. For the foreseeable future, however, we do not anticipate supply chain shortages of critical supplies.

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

Transition costs

To optimize the operations of laboratory operations within our pharma services, we ~~are~~transitioned activities from the Rutherford, NJ facility to our Morrisville, NC facility. We invested several million dollars to facilitate this relocation, including but not ~~observing any shortages~~limited to 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.

Nasdaq delisting

On February 16, 2021, the Company received a delisting determination letter (the “Letter”) from the Listing Qualifications Department (the “Staff”) of The Nasdaq Stock Market LLC (“Nasdaq”) stating that the Staff had determined to delist the Company’s common stock from Nasdaq due to ~~supply chain issues. Our third party clinical services billing~~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 ~~collections company has taken steps~~the Company’s failure to ~~continue operations remotely. There have been indications that payer processing may slow down but so far there has been little or no material impact~~timely execute its plan to ~~our collections.~~regain compliance under the Rule.

~~As of May 2020, we are~~Nasdaq commenced with delisting the Company’s common stock from the Nasdaq Capital Market and, suspended trading in the ~~process~~Company’s common stock effective at the open of ~~launching a new product line of antibody testing for~~business on February 25, 2021.

On February 24, 2021, the ~~COVID-19 virus. Validation is complete; we~~Company was approved to have ~~acquired acceptable kits and reference samples and are now offering this testing to our employees and customers. The serological, or antibody, test measures~~its common stock quoted on the ~~amount of antibodies present in the blood. In response to an infection, such as COVID-19, the body develops an overall immune response to fight the infection. One component~~OTCQX® Best Market tier of the ~~immune system’s response is~~OTC Markets Group Inc. (the “OTCQX”), an electronic quotation service operated by OTC Markets Group Inc. The trading of the ~~development~~Company’s common stock commenced on OTCQX at the open of antibodies that attach to the virus and help eliminate it. Antibody tests detect the body’s immune response to the infection caused by the virus rather than detecting the virus itself. The FDA has issued guidance allowing companies to market serological tests that have been validated following notification to FDA. Validated antibody tests offeredbusiness on February 25, 2021 under the policy should, among other things, include in test reports language explaining that negative results do not rule out COVID-19 infection and that follow-up testing with a molecular diagnostic should be considered to rule out infection. There is no guarantee that we will be successful in realizing revenue or benefit from these efforts.trading symbol IDXG.

Additional Reimbursement Coverage and Price Increase During ~~2020~~2021

Reimbursement progress is key for ~~any molecular diagnostic company.~~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 ~~products in 2020. Specifically, the most significant~~ progress ~~we have made regarding payers to date in 2020 is as follows:~~include:

●	In ~~February 2020,~~January 2021, we announced an ~~increase in Medicare reimbursement~~agreement with Blue Cross Blue Shield of Florida under which ThyGeNEXT^®and ThyraMIR^®tests are now covered in-network services for ~~our ThyraMIR~~^® ~~test from $1,800 to $3,000, retroactive to January 1, 2020, reflecting a re-evaluation of the technical and clinical performance of the test relative to other molecular tests in the market and~~ their ~~respective prices.~~5 million members.

●	In ~~March 2020,~~February 2021, we announced ~~we had entered into a contract~~an agreement with Blue Cross Blue Shield of ~~Massachusetts making~~Illinois that makes ThyGeNEXT^®and ThyraMIR^®tests covered in-network services for their more than 38 million members in ~~Massachusetts and across New England.~~Illinois.

●	In March 2020, we announced we had entered into a contract with CareFirst Blue Cross Blue Shield, making ThyGeNEXT® and ThyraMIR® tests covered in-network services for their more than 3.3 million members in Maryland, Washington, D.C., and Northern Virginia.

●	In ~~March 2020,~~April 2021, we announced ~~we had entered into~~that Novitas, our Medicare Administrative Contractor, has agreed to recognize the new Proprietary Laboratory Analysis (PLA) code that specifically identifies ThyGeNEXT^® as a ~~contract with Premera Blue Cross, making ThyGeNEXT®~~distinct test from any other test or service. The new PLA code for ThyGeNEXT^® is 0245U and ~~ThyraMIR® tests covered in-network services~~the reimbursement for ~~their more than 2 million members in Washington State and Alaska.~~this code remains $2,919, representing a significant price increase over the prior reimbursement level of $560.

●	In ~~April 2020,~~May 2021, we ~~executed an agreement with Avalon~~announced that eviCore Healthcare ~~Solutions (Avalon)~~(“eviCore”), a wholly owned subsidiary of Cigna, has updated their laboratory ~~benefit manager representing numerous~~management guidelines to include positive coverage for ThyGeNEXT^® and ThyraMIR^®. This update, which impacts approximately 27 health ~~plans. Our agreement with Avalon offers us in-network status to approximately 5.8~~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 ~~by the following health plans: Blue Cross Blue Shield North Carolina, South Carolina, Kansas City and Vermont, and Capital Blue Cross of Central Pennsylvania.~~

●	~~In April 2020, we executed a contract with Blue Cross of Idaho making ThyGeNEXT® and ThyraMIR® tests covered in-network services for their more than 576 thousand members.~~

●	~~In May 2020, we executed a contract with Blue Cross Blue Shield of Wyoming.~~service.

Revenue Recognition

Clinical services derive its revenues from the performance of its proprietary assays or tests. ~~The Company’s~~Our performance obligation is fulfilled upon completion, review and release of test results to the ~~customer. The Company subsequently bills~~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 onupon 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.~~offered. To the extent that the transaction price includes variable consideration, for all third party and direct-bill payers and proprietary tests, ~~the Company estimates~~we estimate 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~~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 ~~would affect~~affects net revenue in the period such variances become known.

~~For~~With respect to our pharma services, ~~customers,~~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.

Deferred Revenue

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~~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.

CONDENSED CONSOLIDATED RESULTS OF OPERATIONS

The following table sets forth, for the periods indicated, certain statements of operations ~~data and have been restated to reflect the additional amortization expense and certain other adjustments.~~data. The trends illustrated in this table may not be indicative of future results.

Condensed Consolidated Results of Continuing Operations for the Quarter Ended March 31, ~~2020~~2021 Compared to the Quarter Ended March 31, ~~2019~~2020 (unaudited, in thousands)

	As Restated
	Three Months Ended March 31,												Three Months Ended March 31,
	2020			2020			2019			2019			2021			2021			2020			2020

Revenue, net	$	9,059			100.0	%	$	6,010			100.0	%	$	9,833			100.0	%	$	9,059			100.0	%
Cost of revenue		6,113			67.5	%		2,622			43.6	%		5,316			54.1	%		6,113			67.5	%
Gross profit		2,946			32.5	%		3,388			56.4	%		4,517			45.9	%		2,946			32.5	%
Operating expenses:
Sales and marketing		2,481			27.4	%		2,411			40.1	%		2,351			23.9	%		2,481			27.4	%
Research and development		809			8.9	%		528			8.8	%		637			6.5	%		809			8.9	%
General and administrative		4,893			54.0	%		2,735			45.5	%		2,979			30.3	%		4,837			53.4	%
Transition expenses														1,253			12.7	%		56			0.6	%
Acquisition related amortization expense		1,115			12.3	%		897			14.9	%		1,112			11.3	%		1,115			12.3	%
Total operating expenses		9,298			102.6	%		6,571			109.3	%		8,332			84.7	%		9,298			102.6	%

Operating loss		(6,352	)		-70.1	%		(3,183	)		-53.0	%		(3,815	)		-38.8	%		(6,352	)		-70.1	%
Interest accretion		(109	)		-1.2	%		(129	)		-2.1	%
Other income (expense), net		47			0.5	%		48			0.8	%
Interest accretion expense														(135	)		-1.4	%		(109	)		-1.2	%
Other (expense)income, net														(188	)		-1.9	%		47			0.5	%
Loss from continuing operations before tax		(6,414	)		-70.8	%		(3,264	)		-54.3	%		(4,138	)		-42.1	%		(6,414	)		-70.8	%
Provision for income taxes		15			0.2	%		5			0.1	%		15			0.2	%		15			0.2	%
Loss from continuing operations		(6,429	)		-71.0	%		(3,269	)		-54.4	%		(4,153	)		-42.2	%		(6,429	)		-71.0	%

Loss from discontinued operations, net of tax		(65	)		-0.7	%		(57	)		-0.9	%		(54	)		-0.5	%		(65	)		-0.7	%

Net loss	$	(6,494	)		-71.7	%	$	(3,326	)		-55.3	%	$	(4,207	)		-42.8	%	$	(6,494	)		-71.7	%

Revenue, net

Consolidated revenue, net for the three months ended March 31, ~~2020~~2021 increased by ~~$3.0~~$0.8 million, or ~~51%~~9%, to ~~$9.1~~$9.8 million, compared to ~~$6.0~~$9.1 million for the three months ended March 31, ~~2019. This~~2020. The increase ~~was principally attributable to our acquisition of our pharma services business~~ in ~~2019. Our first quarter~~net revenue was ~~impacted~~largely driven by lower than expected clinical service volume throughout March 2020, which we believe has resulted from the temporary reduction in non-essential testing procedures in connection with the COVID-19 pandemic.increased reimbursement rates.

Cost of revenue

Consolidated cost of revenue for the three months ended March 31, ~~2020~~2021 was ~~$6.1~~$5.3 million, as compared to ~~$2.6~~$6.1 million for the three months ended March 31, ~~2019.~~2020. This decrease is primarily attributed to the closing of the lab in Rutherford, New Jersey. As a percentage of revenue, cost of revenue ~~increased to 66%~~was approximately 54% for the three months ended March 31, ~~2020 as compared to 44% in~~2021 and 68% for the ~~comparable same period in 2019. This increase as a percentage of revenue can be primarily attributed to the lower margins associated with pharma services.~~three months ended March 31, 2020.

Gross profit

Consolidated gross profit was approximately $4.5 million for the three months ended March 31, 2021 and $2.9 million for the three months ended March 31, ~~2020 and $3.4 million~~2020. The gross profit percentage was approximately 46% for the three months ended March 31, ~~2019. The gross profit percentage decreased from 56% in the first quarter of 2019 to~~3021 and 33% for the ~~first quarter of~~three months ended March 31, 2020. ~~This decrease~~The increase can be attributed to increased reimbursement rates as well as the ~~lower margins associated with pharma services mentioned above and~~change in the ~~reduction in net revenue from clinical services.~~gross profit mix.

Sales and marketing expense

Sales and marketing expense was approximately $2.4 million for the three months ended March 31, 2021 and $2.5 million for the three months ended March 31, ~~2020, or 27% as~~2020. As a percentage of ~~net revenue. For~~revenue, sales and marketing expense decreased to 24% from 27% in the comparable prior year period due to the higher revenue for the three months ended March 31, 2019, sales and marketing expense was $2.4 million, or 40% as a percentage of net revenue. The increase in sales and marketing expense primarily reflects the addition of sales and marketing costs associated with pharma services.2021.

Research and development

Research and development expense was $0.6 million for the three months ended March 31, 2021 and $0.8 million for the three months ended March 31, 2020 ~~and $0.5 million for~~due to lower professional services costs in the ~~three months ended March 31, 2019. The increase was primarily attributable to costs associated with the acquired pharma services.~~quarter. As a percentage of revenue, research and development expense ~~stayed the same at approximately~~decreased to 7% from 9% in ~~both periods.~~the comparable prior year period.

General and administrative

General and administrative expense ~~for the three months ended March 31, 2020~~ was ~~$4.9 million as compared to $2.7~~approximately $3.0 million for the three months ended March 31, ~~2019.~~2021 and $4.8 million for the three months ended March 31, 2020. The ~~increase was~~decrease can be primarily ~~attributable~~attributed to the closing of the Rutherford, NJ office and the employee and consulting costs associated with it.

Transition expense

Transition expense was approximately $1.3 million for the ~~acquired pharma services.~~three months ended March 31, 2021 and $0.1 million for the three months ended March 31, 2020. These expenses are related to the Rutherford, NJ lab closing and subsequent move to North Carolina as well as other cost-saving initiatives.

Acquisition ~~related~~ amortization expense

During the three months ended March 31, ~~2020~~2021 and March 31, ~~2019,~~2020, we recorded amortization expense of approximately $1.1 million, ~~and $0.9 million,~~ respectively in both periods, which is related to intangible assets associated with prior acquisitions. ~~The increase is related to our acquisition of our pharma services in 2019 and the associated intangible assets.~~

Operating loss

Operating loss from continuing operations was $3.8 million for the three months ended March 31, 2021 as compared to $6.4 million for the three months ended March 31, ~~2020 as compared to $3.2 million for the three months ended March 31, 2019.~~2020. The ~~increase can be attributed~~lower operating loss was primarily attributable to the ~~operating loss associated with our pharma services as well as the reduced revenue and~~increase in gross profit ~~in our clinical services.~~discussed above.

Provision for income taxes

Income tax expense was approximately $15,000 for the three months ended March 31, ~~2020~~2021 and ~~$5,000~~$15,000 for the three months ended March 31, ~~2019.~~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 ~~both~~ the three months ended March 31, ~~2020~~2021 and a loss from discontinued operations of approximately $0.1 million for the three months ended March 31, ~~2019.~~2020.

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.

41Reconciliation of Adjusted EBITDA (Unaudited)

($ in thousands)

	Quarters Ended
	March 31,
	2021			2020
Loss from continuing operations (GAAP Basis)	$	(4,153	)	$	(6,429	)
Bad debt (recovery) expense		(140	)		250
Transition expenses		1,253			56
Depreciation and amortization		1,532			1,319
Stock-based compensation		286			418
Taxes		15			15
Financing interest and related costs		144			-
Interest accretion expense		135			109
Mark to market on warrant liability		41			(26	)
Change in fair value of contingent consideration		(57	)		-
Non-GAAP Adjusted EBITDA	$	(944	)	$	(4,288	)

LIQUIDITY AND CAPITAL RESOURCES

For the three months ended March 31, ~~2020,~~2021, we had an operating loss of ~~$6.4~~$3.8 million. As of March 31, ~~2020,~~2021, we had cash and cash equivalents of ~~$13.4~~$2.8 million, net of restricted cash, total current assets of ~~$28.1~~$13.7 million, net of restricted cash and current liabilities of ~~$15.7~~$20.5 million. ~~Currently, the Company has no further availability~~As of May 10, 2021, we had approximately $6.4 million of cash on ~~its credit facility, but is in the process~~hand, net of ~~completing an agreement with SVB to expand the credit facility. No assurance can be given that such an expansion agreement will be entered into.~~restricted cash.

During the three months ended March 31, 2021, net cash used in operating activities was $5.0 million. The main component of cash used in operating activities was our net loss of $4.2 million. During the three months ended March 31, 2020, net cash used in operating activities was $7.1 million. The main component of cash used in operating activities was our net loss of $6.5 million. ~~During~~

For the three months ended March 31, ~~2019, net~~2021, cash ~~used in operating~~provided from financing activities was ~~$3.0~~$5.0 million, ~~all~~ of which ~~was used in continuing operations. The main component of cash used in operating activities during the three months ended March 31, 2019 was~~$4.9 million were the net ~~loss~~ proceeds from the Company’s secured promissory notes with Ampersand and 1315. See Note 14, Notes Payable - Related Parties of ~~$3.4 million.~~

the notes to the financial statements. For the three months ended March 31, 2020, there was cash provided from financing activities of $18.2 million, $19.5 million which resulted from the issuance of Preferred Stock in January 2020, and $0.4 million from sales of common stock, and which was partially offset by $1.8 million in a net repayment of funds under our revolving line of credit with SVB. ~~For~~

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 Loan and Security Agreement with SVB dated November 13, 2018, as amended March 18, 2019 (as so amended, the ~~three months ended March 31, 2019, there was cash provided from financing activities of $6.0 million which resulted from~~“SVB Loan Agreement”). On January 5, 2021, the ~~issuance of common stock in our underwritten public offering completed in January 2019.~~Company terminated the SVB Loan Agreement.

~~In September 2019, we~~On January 7, 2021, the Company entered into secured promissory notes in the ~~Equity Distribution Agreement (the “Agreement”)~~amount of $3 million and $2 million with ~~Oppenheimer & Co. Inc., as sales agent (the “Agent”), pursuant to which we may, from time to time, issue~~Ampersand and ~~sell shares of our common stock in an aggregate offering price of up to $4.8 million through the Agent.~~1315 Capital, respectively. See Note ~~16,~~14, ~~Equity~~Notes Payable – Related Parties of the notes to the financial statements ~~for more details. In January 2020, 80,341 shares (as adjusted for the reverse stock split) of common stock were sold for net proceeds of approximately $0.4 million.~~.

As of March 31, 2020, the Company had drawn $1.2 million of the $3.75 million of available funds under its Revolving Line with SVB. As of June 17, 2020, we had no funds available on the Revolving Line because we were fully drawn.

In January 2020, we sold 20,000 preferred shares to investors, led by 1315 Capital, for net proceeds of approximately ~~$19.5~~$19.2 million; see Note 16, Equity of the ~~footnotes~~notes to the financial statements for more detail.

AsSee Note 1, Overview, of ~~June 17,~~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, wethe 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 million in advances under the Centers for Medicare & Medicaid Services ~~(CMS)~~(“CMS”) accelerated and advance payment ~~program, as well as a $0.65 million grant from the Department of Health and Human Services (HSS). The CMS~~program. This advance will be offset against future Medicare billings of the Company beginning in the second quarter of 2021.

The Company has and ~~the HSS grant is subject~~may continue to delay, scale-back, or eliminate certain ~~conditions regarding~~of its ~~use, including developing coronavirus~~activities and ~~serology tests. These grants and advances require certain certifications by the Company and impose specific limitations on the use~~other aspects of ~~the proceeds. Based on these restrictions and limitations,~~its operations until such time as the Company is ~~treating~~successful in securing additional funding. The Company is 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 the ~~$0.65 million HSS grant as restricted cash until we have clarity on how the funds~~Company is dependent upon its ability to obtain additional funding. There can be ~~utilized by~~no assurance, however, that the Company ~~based~~will be successful in obtaining such funding in sufficient amounts, on ~~the specific requirements of the HSS. Furthermore, although~~terms acceptable to the Company, ~~initially explored~~or at all. These factors raise substantial doubt about the ~~possibility of requesting~~Company’s ability to continue as a ~~loan under the Small Business Administration Paycheck Protection Program, we elected not to complete an application because we are not certain we meet certain criteria of the program.~~going concern.

~~We do~~we will not ~~expect to~~ generate positive cash flows from operations for the year ending December 31, ~~2020.~~2021. We intend to meet our ongoing capital needs by using our available cash, ~~proceeds under~~including the ~~Securities Purchase~~Ampersand and ~~Exchange Agreement, additional borrowings under the Line of Credit~~1315 Capital loans, as well as increasing our line of credit limit as a result of the additional accounts receivable acquired in July 2019 as part of our acquisition of pharma services (which requires a modification to the bank agreement and approval by SVB which cannot be assured, revenue growth and margin ~~improvement, collecting~~improvement; collection of accounts ~~receivable, containing costs as well as exploring~~receivable; containment of costs; and the potential use of other financing options. Our planned capital expenditures over the next twelve months currently includes several million dollars to be utilized in consolidating our laboratories, which includes equipment purchases, calibration and testing costs, moving and other related costs, and leasehold improvements. Management believes that the Company has sufficient cash on hand and available to sustain operations through at least June 30, 2021. However, in the event the Company is unable to maintain its Nasdaq listing for its common stock due to a failure to meet minimum stockholder equity requirements as a result of the classification of its preferred stock as temporary equity and the amortization and impairment of certain intangible assets, the Company’s ability to raise additional capital may be adversely impacted. Therefore, there is no guarantee that additional capital can be raised to fund our future operations.

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 inflation on our operating results by controlling operating costs and whenever possible, seeking to ~~insure~~ensure that billing rates reflect increases in costs due to inflation.

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~~Disclosure Controls and ~~procedures~~Procedures

~~As of the end of the period covered by this report, the Company’s~~Our management, with the participation of ~~the~~our Chief Executive Officer ~~(“CEO”)~~ and Chief Financial Officer, ~~(“CFO”), carried out an evaluation of~~evaluated the effectiveness of ~~the Company’s~~our disclosure controls and procedures ~~(as defined in Rules 13a-15(e) and 15d-15(e) of~~pursuant to Rule 13a-15 under the Exchange ~~Act). Based upon that evaluation, the then CEO and CFO concluded at that time that the Company’s disclosure controls and procedures were effective~~Act as of the end of the period covered by this ~~report.~~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.

~~Subsequent to this~~Based on the evaluation ~~and in light~~ of the restatement of the Company’s condensed financial statements for the quarters ended March 31, 2020 and 2019 relating to the amortization and the impairment of certain intangible assets referenced in Note 1, Restatement of Previously Issued Consolidated Financial Statements, the Company’s management, with the participation of the CEO and the CFO, has reevaluated 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 ~~March 31, 2020, including whether~~ the ~~errors identified were~~Company and the ~~result~~Chief Financial Officer of ~~a material weakness in~~ the Company’s internal control over financial reporting. Based on this assessment, management has identified a material weakness in the Company’s internal control over financial reporting related to properly identifying all the events that could trigger an asset impairment. The Company did not properly amend policies and procedures associated with its valuation process for asset impairment, specifically for intangible assets, and as a result failed to develop appropriate control activities to adequately respond to the triggering events identified. As a result, the CEO and CFOhave concluded that the Company’s disclosure controls and procedures were not effective as of March 31, ~~2020 as a result of this material weakness.~~

Remediation Plan - The Company plans to amend its control activities designed to mitigate the significant risks identified, including updating its policies and procedures regarding the recognition of asset impairments, specifically to review the procedures identifying and considering all outside triggering events that can cause such impairments. The Company believes implementation of these processes and appropriate testing of their effectiveness will remediate this material weakness.2021.

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

Changes in ~~internal controls~~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

Item 1.01. Entry into a Material Definitive Agreement

On January 7, 2021, the Company entered into promissory notes with Ampersand 2018 Limited Partnership (“Ampersand”), in the amount of $3 million (the “Ampersand Note”), and 1315 Capital II, L.P. (“1315 Capital”), in the amount of $2 million (the “1315 Capital Note”), respectively (together, the “Notes”), and a related security agreement (the “Security Agreement”).

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 and interest rate of the Notes remain June 30, 2021 and 8%, respectively and except with respect to their respective principal amounts, the terms of the Notes and the Security Agreement are otherwise unchanged.

Ampersand holds 28,000 shares of the Company’s Series B Convertible Preferred Stock (“Series B”), which are convertible from time to time into an aggregate of 4,666,666 shares of the Company’s Common Stock, and 1315 Capital holds 19,000 shares of the Company’s Series B, which are convertible from time to time into an aggregate of 3,166,668 shares of the Company’s 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. As ~~disclosed~~a result, the Company considers the May 10, 2021 amendments to the Notes and Security Agreement to be related party transactions.

Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information set forth in Item ~~8.01~~1.01 above is incorporated by reference into this Item 2.03.

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On May 10, 2021 Company entered into an at-will employment agreement with Thomas Freeburg (the “Freeburg Employment Agreement”), as of February 1, 2021 (the “Effective Date”). Mr. Freeburg will serve as Chief Financial Officer of the ~~May 15~~^th ~~8-K and in~~Company. As previously reported on the Company’s ~~definitive proxy statement, as~~current report on Form 8-K filed February 4, 2021, the Company agreed to pay to Mr. Freeburg a base salary of $225,000 annually during the initial term, increasing to $250,000 on August 1, 2021, to be paid in accordance with the ~~SEC on June 10, 2020 (the “Proxy Statement”),~~Company’s payroll practices. Mr. Freeburg is also eligible to receive additional annual incentive compensation with an annual target of up to 40% of the base salary, paid out in cash, less applicable taxes and deductions and/or stock as determined by the Chief Executive Officer of the Company ~~plans to hold its 2020 Annual Meeting of Stockholders~~(“CEO”) and the Company’s Compensation and Management Development Committee (the ~~“2020 Annual Meeting”~~“Compensation Committee”) on July 9, 2020 at 10:00 a.m., Eastern Time. The 2020 Annual Meeting will be held in a virtual format only, via the Internet, with no physical in-person meeting. Additional details regarding the location via the Internet and matters to be voted on at the 2020 Annual Meeting are available in the Proxy Statement..

~~The~~On March 10, 2021, the Company awarded to Mr. Freeburg under the Company’s 2019 ~~Annual Meeting~~Equity Incentive Plan, as amended, (the “Plan”) (i) an option to purchase 50,000 shares of ~~Stockholders (the “2019 Annual Meeting”~~the Company’s common stock, par value $0.01 per share (“Common Stock”) ~~was held~~with an exercise price equal to $6.00 per share (such option, the “Initial Time-Vesting Option”), and (ii) restricted stock units with respect to 50,000 shares of Common Stock (such grant, the “Initial Time-Vesting RSUs”). The Initial Time-Vesting Option and the Initial Time-Vesting RSUs shall be subject to the terms of the Plan and an applicable award agreement by and between Mr. Freeburg and the Company, and shall vest in equal installments on ~~October 10, 2019. Because~~each of the first three anniversaries of the date of grant, subject to Mr. Freeburg’s continued employment with the ~~2020 Annual Meeting represents a change of more than 30 days from~~Company through the ~~anniversary date~~applicable vesting date; provided that, notwithstanding the terms of the ~~2019 Annual Meeting,~~Plan and the applicable award agreement, the Initial Time-Vesting Options, the Initial Time-Vesting RSUs and any other then-outstanding awards of Mr. Freeburg under the Plan shall vest and become exercisable in full immediately prior to the occurrence of a Change in Control, as defined in the Plan, subject to Mr. Freeburg’s continuous employment through such Change in Control following the grant of the Initial RSUs. Mr. Freeburg will be eligible to receive equity awards under the Plan as determined by the CEO and Board. Mr. Freeburg will also be entitled to receive certain other benefits such as housing and participation in retirement and welfare plans.

In the event that Mr. Freeburg’s employment is terminated by the Company ~~disclosed~~without Cause or by Mr. Freeburg for Good Reason (in each case, as defined in the ~~May 15~~^th ~~8-K~~Freeburg Employment Agreement), then subject to, among other things, Mr. Freeburg’s execution and non-revocation of a ~~new deadline for the submission of stockholder proposals. In accordance with Rule 14a-5(f) of the Exchange Act and consistent with the Amended and Restated ByLaws~~release agreement in favor of the Company, ~~effective November 12, 2019,~~Mr. Freeburg would be entitled to( i) severance equal to six (6) months’ base salary (as in effect as of the termination date), payable semi-monthly on the Company’s regularly scheduled payroll dates, (ii) if Mr. Freeburg properly and timely elects to continue health and dental coverage under the Company’s plans in accordance with the continuation requirements of COBRA, payment for the cost of the premiums for such coverages for Mr. Freeburg for a six (6) month period beginning on the termination date, or if earlier, through the date on which Mr. Freeburg becomes eligible for other group health coverage in connection with new employment and (iii) all outstanding equity awards that were scheduled to vest during the 24-month period following the termination date, but for the termination, would become fully vested and exercisable.

In addition to the Freeburg Employment Agreement described herein, the Company ~~informed stockholders~~and Mr. Freeburg will enter into the Company’s standard form of indemnification and confidentiality agreements.

During employment with the Company through the twelve month period following termination of employment, Mr. Freeburg agrees not to set up or engage in any business enterprise that ~~a proposal~~ would be in competition with the Company in its oncology-based laboratory services and/or ~~notice~~pharma services businesses. Mr. Freeburg is also subject to limitations on ~~Schedule 14N under Rule 14a-18 under the Exchange Act (i) intended to be included~~solicitation of Company personnel and on disclosure of confidential information (as defined in the ~~Proxy Statement under Rule 14a-8 under the Exchange Act or (ii) intended~~Freeburg Employment Agreement), and Mr. Freeburg agreed to ~~be presented at the 2020 Annual Meeting other than by inclusion in the Proxy Statement, must have been received by~~assign to the Company onany work product developed or ~~prior to 5:00 p.m. Eastern Time on~~ ~~May 28, 2020 to be considered timely. Any proposal or nomination received after such date will be considered untimely.~~made while so employed.

Item 6. Exhibits

Exhibit No.		Description

3.1**2.1		Asset Purchase Agreement by and among the Company and Diamir Biosciences Corp. dated March 16, 2021, filed herewith. Upon the request of the SEC, the Company agrees to furnish copies of the following exhibits and schedules: Attachment A – Statement of Post-Closing Obligations of Seller; Attachment B – Bill of Sale; APA Schedule 1.3; APA schedule 1.5.

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,Inc incorporated by reference to Exhibit 3.1 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 filed with ~~the~~ SEC on April 22, ~~2020.~~2020 as amended from time to time.

~~10.1~~3.2		~~Securities Purchase~~Amended and ~~Exchange Agreement, dated January 10, 2020, by and among~~Restated Bylaws of Interpace Biosciences, Inc., ~~1315 Capital II, L.P. and Ampersand 2018 Limited Partnership,~~ incorporated by reference to Exhibit ~~10.1~~3.2 of the Company’s Current Report on Form 8-K, filed with the SEC on ~~January~~November 14, ~~2020.~~2019.

~~10.2~~10.1*		~~Amended~~Severance agreement and ~~Restated Investor Rights Agreement,~~General Release, dated ~~as of~~ January 15, 2020, by and among Interpace Biosciences, Inc., 1315 Capital II, L.P. and Ampersand 2018 Limited Partnership, incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K, filed with the SEC on January 17, 2020.

~~10.3~~		~~Form of Indemnification Agreement~~31, 2021, by and between ~~Interpace Biosciences, Inc. and Indemnitee, incorporated by reference to Exhibit 10.2 of~~ the ~~Company’s Current Report on Form 8-K, filed with the SEC on January 17, 2020.~~

~~10.4#~~		~~Employment Agreement, dated as of January 29, 2020, by and between Interpace Biosciences, Inc.~~Company and Fred Knechtel, incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K, filed with the SEC on ~~January 31, 2020.~~February 4, 2021.

~~10.5#~~10.2*		~~Severance~~Employment agreement entered into May 10, 2021, effective February 1, 2021, between Thomas Freeburg and ~~Consulting Agreement and General Release, dated January 29, 2020, by and between Interpace Biosciences, Inc. and James Early, incorporated by reference to Exhibit 10.2 of~~ the ~~Company’s Current Report on Form 8-K,~~Company, filed ~~with the SEC on January 31, 2020.~~herewith.

~~10.6#~~10.3		~~First Amendment to Amended~~Promissory Note entered into between the Company and ~~Restated Employment Agreement,~~Ampersand 2018 Limited Partnership, dated January ~~29, 2020, by and between Interpace Biosciences, Inc. and Jack E. Stover, incorporated by reference to Exhibit 10.3 of the Company’s Current Report on Form 8-K,~~7, 2021, filed ~~with the SEC on January 31, 2020.~~herewith.

~~10.7~~10.4		~~Eleventh Amendment to Lease, effective as of June 1, 2020, by~~Promissory Note entered into between the Company and ~~between Southport Business Park Limited Partnership and Interpace Pharma Solutions, Inc., incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K,~~1315 Capital II, L.P, dated January 7, 2021, filed ~~with the SEC on June 9, 2020.~~herewith.

~~10.8*#~~10.5		~~Amendment to~~Security Agreement entered into between the ~~Interpace Biosciences, Inc. 2019 Equity Incentive Plan,~~Company and Ampersand 2018 Limited Partnership, dated January 7, 2021, filed herewith.

~~10.9*#~~31.1		~~Form of Interpace Biosciences, Inc. 2019 Equity Incentive Plan Restricted Stock Unit And Restricted Stock Unit Agreement, filed herewith.~~

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

31.2*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 March 31, 2021 formatted in 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; (iv) the Condensed Consolidated Statements of Cash Flows; and (v) the Notes to Condensed Consolidated Financial Statements.

* Filed herewith.

	+	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.

	**	This exhibit is being filed pursuant to Item 601(b)(3)(i) of Regulation S-K which requires a conformed version of the Company’s charter reflecting all amendments in one document. The exhibit reflects the Company’s Certificate of Incorporation, as amended, 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.
	#	Denotes compensatory plan, compensation arrangement or management contract.

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: ~~January 19,~~May 11, 2021	Interpace Biosciences, Inc.
	(Registrant)

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

Date: ~~January 19,~~May 11, 2021	~~/s/ Fred Knechtel~~
	~~Fred Knechtel~~
	~~Chief Financial Officer~~
	~~(Principal Financial Officer)~~

~~Date: January 19, 2021~~	/s/ Thomas Freeburg
	Thomas Freeburg
	Chief ~~Accounting~~Financial Officer
	(Principal ~~Accounting~~Financial Officer)

	March 31, 2020
	As Previously Reported			Restatement Amount			Restatement Reference		As Restated
	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	13,370		$	-				$	13,370
Accounts receivable, net of allowance for doubtful accounts of $275		9,799			-					9,799
Other current assets		4,976			-					4,976
Total current assets		28,145			-					28,145
Property and equipment, net		6,610								6,610
Other intangible assets, net		32,470			(17,736	)		(a) (b)		14,734
Goodwill		8,433			-					8,433
Operating lease right of use assets		2,811			-					2,811
Other long-term assets		42			-					42
Total assets	$	78,511		$	(17,736	)			$	60,775

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	4,456		$	-				$	4,456
Accrued salary and bonus		1,865			-					1,865
Other accrued expenses		8,639			-					8,639
Current liabilities from discontinued operations		766			-					766
Total current liabilities		15,726			-					15,726
Contingent consideration		2,264			-					2,264
Operating lease liabilities, net of current portion		1,384			-					1,384
Line of credit		1,200			-					1,200
Other long-term liabilities		4,563			-					4,563
Total liabilities		25,137			-					25,137

Commitments and contingencies (Note 8)

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

Stockholders’ equity:
Common stock, $.01 par value; 100,000,000 shares authorized; 4,055,454 and 4,043,673 shares issued and outstanding, respectively;		402			-					402
Additional paid-in capital		182,580			-					182,580
Accumulated deficit		(174,423	)		(17,736	)		(a) (b) (c)		(192,159	)
Treasury stock, at cost (11,781 shares)		(1,721	)		-					(1,721	)
Total stockholders’ equity		6,838			(17,736	)				(10,898	)
Total liabilities and stockholders’ equity	$	31,975		$	(17,736	)			$	14,239

Total liabilities, preferred stock and stockholders’ equity	$	78,511		$	(17,736	)			$	60,775

	Three Months Ended March 31, 2020										Three Months Ended March 31, 2019
	As Previously Reported			Restatement Amount			Restatement Reference	As Restated			As Previously Reported			Restatement Amount			Restatement Reference	As Restated

Revenue, net	$	9,200		$	(141	)	(c)	$	9,059		$	6,010		$	-			$	6,010
Cost of revenue		6,113			-				6,113			2,622			-				2,622
Gross profit		3,087			(141	)	(c)		2,946			3,388			-				3,388
Operating expenses:
Sales and marketing		2,481			-				2,481			2,411			-				2,411
Research and development		809			-				809			528			-				528
General and administrative		4,887			6		(c)		4,893			2,912			(177	)	(c)		2,735
Acquisition related amortization expense		1,031			84		(a)		1,115			813			84		(a)		897
Total operating expenses		9,208			90		(a) (c)		9,298			6,664			(93	)	(a) (c)		6,571

Operating loss		(6,121	)		(231	)	(a) (c)		(6,352	)		(3,276	)		93		(a) (c)		(3,183	)
Interest accretion		(109	)		-				(109	)		(129	)		-				(129	)
Other income (expense), net		47			-				47			48			-				48
Loss from continuing operations before tax		(6,183	)		(231	)	(a) (c)		(6,414	)		(3,357	)		93		(a) (c)		(3,264	)
Provision for income taxes		15			-				15			5			-				5
Loss from continuing operations, net of tax		(6,198	)		(231	)	(a) (c)		(6,429	)		(3,362	)		93		(a) (c)		(3,269	)

Loss from discontinued operations, net of tax		(65	)		-				(65	)		(57	)		-				(57	)

Net loss		(6,263	)		(231	)	(a) (c)		(6,494	)		(3,419	)		93		(a) (c)		(3,326	)

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

Net loss attributable to common stockholders		(9,296	)		(231	)			(9,527	)		(3,419	)		93				(3,326	)

Basic and diluted loss per share of common stock:
From continuing operations	$	(2.31	)	$	(0.06	)		$	(2.37	)	$	(0.96	)	$	0.03			$	(0.93	)
From discontinued operations		(0.01	)		-				(0.01	)		(0.01	)		-				(0.01	)
Net loss per basic and diluted share of common stock	$	(2.32	)	$	(0.06	)		$	(2.38	)	$	(0.97	)	$	0.03			$	(0.94	)
Weighted average number of common shares and common share equivalents outstanding:
Basic		4,004			4,004				4,004			3,515			3,515				3,515
Diluted		4,004			4,004				4,004			3,515			3,515				3,515

	Carrying
	Amount
Balance as of December 31, 2019	$	8,433
Adjustments		-
Balance as of March 31, 2020	$	8,433