As used herein, the "Company" refers to Cancer Genetics, Inc. and its wholly
owned subsidiaries: Cancer Genetics Italia, S.r.l., Gentris, LLC, and vivoPharm
Pty, Ltd., except as expressly indicated or unless the context otherwise
requires. The following Management's Discussion and Analysis of Financial
Condition and Results of Operations ("MD&A") is intended to help facilitate an
understanding of the Company's financial condition and its historical results of
operations for the periods presented. This MD&A should be read in conjunction
with the audited consolidated financial statements and notes thereto included in
this annual report on Form 10-K. This MD&A may contain forward-looking
statements that involve risks and uncertainties. For a discussion on
forward-looking statements, see the information set forth in the Introductory
Note to this Annual Report under the caption "Forward Looking Statements", which
information is incorporated herein by reference. The share numbers in the
following discussion reflect a 1-for-30 reverse stock split that the Company
effected October 24, 2019.

Overview

The Company is focused on supporting the efforts of the biotechnology and
pharmaceutical industries to develop innovative new drug therapies. Until the
closing of the Business Disposals (as defined below) in July 2019, the Company
was an emerging leader in enabling precision medicine in oncology by providing
multi-disciplinary diagnostic and data solutions, facilitating individualized
therapies through the Company's diagnostic tests, services and molecular
markers. Following the Business Disposals, the Company currently has an
extensive set of anti-tumor referenced data based on predictive xenograft and
syngeneic tumor models from the acquisition of vivoPharm, Pty Ltd. ("vivoPharm")
in 2017, to provide Discovery Services such as contract research services,
focused primarily on unique specialized studies to guide drug discovery and
development programs in the oncology and immuno-oncology fields.

The Company offers preclinical services such as predictive tumor models, human
orthotopic xenografts and syngeneic immuno-oncology relevant tumor models in its
U.S. operations, and is a leader in the field of immuno-oncology preclinical
services for its global customers. This service is supplemented with GLP
toxicology and extended bioanalytical services in the Company's Australia-based
operations.

Net cash used in operating activities from continuing operations was $3.2
million and $3.2 million for the years ended December 31, 2019 and 2018,
respectively, and the Company had unrestricted cash and cash equivalents of $3.9
million at December 31, 2019, an increase of $3.7 million from December 31,
2018. The Company has working capital from continuing operations at December 31,
2019 of $1.4 million. In addition, the Company has $1.2 million of liabilities
associated with its discontinuing operations that will be funded primarily from
its continuing operations.

The Company does not project that cash at December 31, 2019 will be sufficient
to fund normal operations for the twelve months from the issuance of these
financial statements in the Annual Report on Form 10-K. The Company's ability to
continue as a going concern is dependent on reduced losses and improved future
cash flows. Alternatively, the Company may be required to raise additional
equity or debt capital, or consummate other strategic transactions. These
factors raise substantial doubt about the Company's ability to continue as a
going concern. The Company can provide no assurance that these actions will be
successful or that additional sources of financing will be available on
favorable terms, if at all.
Business Disposals - Discontinuing Operations

BioServe Biotechnologies

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

siParadigm, Inc.



On July 5, 2019, the Company entered into an asset purchase agreement (the
"Clinical Agreement") by and among the Company and siParadigm, LLC
("siParadigm"), pursuant to which the Company sold to siParadigm certain assets
associated with the Company's clinical laboratory business (the "Clinical
Business," and such assets, the "Designated Assets") and agreed to cease
operating the Clinical Business. The Designated Assets include intellectual
property, equipment and customer lists associated with the Clinical Business,
and for a period the Company was providing certain transitional services to
siParadigm pursuant to the Clinical Agreement. The cash consideration paid by
siParadigm at closing was $747 thousand, which includes $45 thousand for certain
equipment plus a $1.0 million advance payment of the Earn-Out (as defined
below), less $177 thousand of supplier invoices paid directly by siParadigm, an
adjustment of $11 thousand and transaction costs of $110 thousand. The Earn-Out,
to be paid over

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the 24 months post-closing, is based on fees for all tests performed by siParadigm for the Company's clinical customers during the 12-month period following the closing (the "Earn-Out"). The Clinical Business sale (together with the BioPharma Disposal defined below, the "Business Disposals") was completed on July 8, 2019.

Interpace Biosciences, Inc.



On July 15, 2019, the Company entered into a secured creditor asset purchase
agreement (the "BioPharma Agreement") by and among the Company, Gentris, LLC, a
wholly owned subsidiary of the Company, Partners for Growth IV, L.P. ("PFG"),
Interpace Biosciences, Inc. ("IDXG") and a newly-formed subsidiary of IDXG,
Interpace BioPharma, Inc. ("Buyer"). The BioPharma Agreement provided for a
consensual private foreclosure sale by PFG of all assets relating to the
Company's BioPharma Business (as defined in the BioPharma Agreement) to Buyer
(the "BioPharma Disposal"). The BioPharma Disposal was consummated on July 15,
2019.

Pursuant to the BioPharma Agreement, Buyer purchased from PFG certain assets and
assumed certain liabilities of the Company relating to the BioPharma Business,
providing as gross consideration $23.5 million, less certain closing adjustments
totaling $2.0 million, of which $7.7 million was settled in the form of a
promissory note issued by Buyer to the Company (the "Excess Consideration Note")
and the remainder was paid to PFG in cash. PFG utilized the cash proceeds to
satisfy the outstanding balances of the Silicon Valley Bank ("SVB") asset-based
revolving line of credit ("ABL") and the $6.0 million term note to PFG ("PFG
Term Note"), and to satisfy certain transaction expenses. The balance of $2.3
million was delivered to the Company in addition to the Excess Consideration
Note. The Excess Consideration Note which required interest-only quarterly
payments at a rate of 6% per year, was settled on October 24, 2019 for $6.0
million, including interest of $24 thousand. The Buyer withheld from the
settlement of the Excess Consideration Note $775 thousand for a net worth
adjustment (assets less liabilities) of the BioPharma business ("Net Worth"),
$153 thousand to secure collection of certain older accounts receivable of the
Company purchased by Buyer ("AR Holdback") and an additional $735 thousand as
security for indemnification obligations of the Company for any breaches of
certain limited warranties and covenants of the Company and other specified
items, subject to agreed-upon caps, baskets and survival periods as set forth in
the BioPharma Agreement ("Indemnification Holdback"). The Company received the
full amounts of the AR Holdback and the Indemnification Holdback in April and
May 2020, respectively.

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

The above business disposals have been classified as discontinuing operations in
conformity with accounting principles generally accepted in the United States of
America. Accordingly, the operations and balances of BioServe and the Company's
BioPharma and Clinical operations have been reported as discontinuing
operations. Unless otherwise indicated, information in the MD&A relates to
continuing operations.

2019 Offerings



In January 2019, the Company closed two public offerings and issued an aggregate
of 952 thousand shares of common stock for $5.4 million, net of expenses and
discounts of $1.1 million. The Company also issued 67 thousand warrants to its
underwriters in conjunction with these offerings.

Note Payable to Atlas Sciences, LLC



On October 21, 2019, the Company issued an unsecured promissory note to Atlas
Sciences, LLC ("Atlas Sciences"), an affiliate of Iliad Research and Trading,
L.P. ("Iliad"), for $1.3 million ("Note Payable"). The Company received
consideration of $1.3 million, reflecting an original issue discount of $88
thousand and expenses payable by the Company of $10 thousand. The Note Payable
has a 12-month term and bears interest at 10% per annum. The proceeds from the
Note Payable were utilized to partially repay the Convertible Note (see Note 8
to the audited consolidated financial statements included in Part II Item 8 of
this Annual Report on Form 10-K).

Key Factors Affecting the Company's Results of Operations and Financial Condition


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The Company's wholly-owned subsidiary, vivoPharm, provides proprietary
preclinical oncology and immuno-oncology services, offering integrated services
in different disease areas to the biotechnology and pharmaceutical
industries. vivoPharm is a leader in orthotopic and metastases tumor models. The
Company provides all services including toxicology testing and bioanalytical
analysis to GLP. vivoPharm specializes in conducting studies tailored to guide
drug development, starting from compound libraries and ending with a
comprehensive set of in vitro and in vivo data and reports, as needed for
Investigational New Drug (IND) filing.

The Company's ability to complete such studies is dependent upon its ability to
leverage its collaborative relationships with pharmaceutical and biotechnology
companies and leading institutions to facilitate its research and obtain data
for its quality assurance and test validation efforts.

The Company believes that the factors discussed in the following paragraphs have
had and are expected to continue to have a material impact on its results of
operations and financial condition.

Revenues from Continuing Operations



Revenue from the Company's Discovery Services comes from preclinical oncology
and immuno-oncology services offered to its biotechnology and pharmaceutical
customers.  The Company is a leader in orthotopic and metastases tumor models
and offer whole body imaging, in addition to toxicology testing and
bioanalytical analysis. Discovery Services are designed to specialize in
conducting studies tailored to guide drug development, starting from compound
libraries and ending with a comprehensive set of in vitro and in vivo data and
reports, as needed for Investigational New Drug (IND) filing.

During the year ended December 31, 2019, three customers accounted for
approximately 61% of the consolidated revenue from continuing operations. During
the year ended December 31, 2018, three customers accounted for approximately
53% of the consolidated revenue from continuing operations.

Cost of Revenues from Continuing Operations



The Company's cost of revenues consists principally of internal personnel costs,
including non-cash stock-based compensation, laboratory consumables, shipping
costs, overhead and other direct expenses, such as specimen procurement and
third-party validation studies. The Company continues to pursue various
strategies to control its cost of revenues, including automating the Company's
processes through more efficient technology and attempting to negotiate improved
terms with its suppliers.

Operating Expenses from Continuing Operations



The Company classifies its operating expenses into five categories: research and
development, sales and marketing, general and administrative, impairment of
goodwill and merger costs. The Company's operating expenses principally consist
of personnel costs, including non-cash stock-based compensation, outside
services, laboratory consumables and overhead, development costs, marketing
program costs and legal and accounting fees.

Research and Development Expenses. Research and development expenses from continuing operations relate to the Company's allocation of losses from its joint venture with Mayo Foundation for Medical Education and Research. The Company was in the process of winding down the joint venture during 2019, and the joint venture was dissolved in February 2020.



General and Administrative Expenses. General and administrative expenses consist
principally of personnel-related expenses, professional fees, such as legal,
accounting and business consultants, occupancy costs, bad debt and other general
expenses.

Sales and Marketing Expenses. The Company's sales and marketing expenses consist
principally of personnel and related overhead costs for its business development
team and their support personnel, travel and entertainment expenses, and other
selling costs including sales collaterals and trade shows. The Company expects
its sales and marketing expenses to remain relatively flat as it continues to
operate and grow its Discovery Services business.

Impairment of Goodwill: During 2019, the Company recorded a goodwill impairment
charge of $2.9 million after considering the effects of the Business Disposals
and declines in its stock price.  If the Company is not successful in executing
its strategic business plans, there may be further impairments in the future.

Merger Costs. In the pursuit of various strategic options for the Company, legal and other professional costs are incurred while evaluating, negotiating, executing and implementing merger and acquisition alternatives.


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Coronavirus (COVID-19) Pandemic. On March 11, 2020 the World Health Organization
declared the novel strain of coronavirus ("COVID-19") a global pandemic and
recommended containment and mitigation measures worldwide. In addition, as the
Company is located in New Jersey, the Company is currently under a
shelter-in-place mandate and many of its customers worldwide are similarly
impacted. The global outbreak of COVID-19 continues to rapidly evolve, and the
extent to which COVID-19 may impact the Company's business will depend on future
developments, which are highly uncertain and cannot be predicted with
confidence, such as the ultimate geographic spread of the disease, the duration
of the outbreak, travel restrictions and social distancing in the United States
and other countries, business closures or business disruptions, and the
effectiveness of actions taken in the United States and other countries to
contain and treat the disease. As a healthcare provider, the Company is still
providing Discovery Services and has yet to experience a slowdown in its project
work, however, the future of many projects may be delayed. The Company continues
to vigilantly monitor the situation with its primary focus on the health and
safety of its employees and clients.

Results of Operations

Years Ended December 31, 2019 and 2018

The following table sets forth certain information concerning the Company's results of continuing operations for the periods shown (in thousands):


                                          Year Ended December 31,                 Change
                                           2019              2018            $              %

Revenue                               $      7,305       $    4,932     $    2,373            48  %
Cost of revenues                             3,701            3,090            611            20  %
Research and development                         -              154           (154 )        -100  %
General and administrative                   5,171            6,716         (1,545 )         -23  %
Sales and marketing                          1,146            1,197            (51 )          -4  %
Impairment of goodwill                       2,873                -          2,873           N/A
Merger costs                                   117            1,464         (1,347 )         -92  %
Loss from continuing operations             (5,703 )         (7,689 )        1,986           -26  %
Interest expense, net                       (1,329 )           (298 )       (1,031 )         346  %
Change in fair value of acquisition
note payable                                     4              136           (132 )         -97  %
Change in fair value of other
derivatives                                     86              (86 )          172          -200  %
Change in fair value of warrant
liability                                       70            3,732         (3,662 )         -98  %
Change in fair value of siParadigm
Earn-Out                                      (935 )              -           (935 )         N/A
Change in fair value of Excess
Consideration Note                              93                -             93           N/A
Gain on troubled debt restructuring            258                -            258           N/A
Other expense                                   59                -             59           N/A
Loss before income taxes                    (7,397 )         (4,205 )       (3,192 )          76  %
Income tax benefit                             512                -            512           N/A

Net loss from continuing operations $ (6,885 ) $ (4,205 ) $ (2,680 ) 64 %

Non-GAAP Financial Information



In addition to disclosing financial results in accordance with United States
generally accepted accounting principles ("GAAP"), the table below contains
non-GAAP financial measures that the Company believes are helpful in
understanding and comparing its past financial performance and its future
results, and are reflected as "Adjusted EBITDA." The Company uses Adjusted
EBITDA to normalize its operations. The Company defined adjusted EBITDA as
earnings before (1) net interest expense, (2) taxes, (3) depreciation and
amortization, (4) non-cash stock-based compensation, (5) goodwill impairment,
(7) gain on troubled debt restructuring and (6) changes in fair value of various
assets and liabilities that are remeasured on a recurring basis. These non-GAAP
financial measures should not be considered a substitute for, or superior to,
financial measures calculated in accordance with GAAP, and the financial results
calculated in accordance with GAAP and reconciliations from these results should
be carefully evaluated. Management believes that these non-GAAP measures provide
useful information about the Company's core operating results and cash flow
performance and thus are appropriate to enhance the overall understanding of the
Company's past financial performance and its prospects for the future. The
non-GAAP financial measures are included in the table below.

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Reconciliation from GAAP to Non-GAAP Results (in thousands):


                                                            Year Ended

December 31,


                                                              2019

2018

Reconciliation of net loss from continuing operations: Net loss from continuing operations

$     (6,885 )     $ (4,205 )
Adjustments:
Interest expense, net                                           1,329            298
Depreciation                                                      159            310
Amortization                                                      454            491
Stock-based compensation                                          263            530
Impairment of goodwill                                          2,873              -
Merger costs                                                      117          1,464
Change in fair value of acquisition note payable                   (4 )         (136 )
Change in fair value of other derivatives                         (86 )

86


Change in fair value of warrant liability                         (70 )       (3,732 )
Change in fair value of siParadigm Earn-Out                       935

-


Change in fair value of Excess Consideration Note                 (93 )

-


Gain on troubled debt restructuring                              (258 )

-


Income tax benefit                                               (512 )

-

Adjusted EBITDA (loss) from continuing operations $ (1,778 ) $ (4,894 )





Adjusted EBITDA loss from continuing operations decreased 64% to $1.8 million
during the year ended December 31, 2019, from an Adjusted EBITDA loss of $4.9
million during the year ended December 31, 2018.

Revenue from Continuing Operations



Revenue from continuing operations increased 48%, or $2.4 million, to $7.3
million for the year ended December 31, 2019, from $4.9 million for the year
ended December 31, 2018, principally due to an increase in the number of
clinical studies conducted in the Company's U.S. operations from sponsors based
in the U.S. and Europe, which resulted in a higher volume of active projects as
the demand for its CRO services continued to increase throughout the year.

Cost of Revenues from Continuing Operations



Cost of revenues from continuing operations increased 20%, or $611 thousand, to
$3.7 million for the year ended December 31, 2019, from $3.1 million for the
year ended December 31, 2018, principally due to increased usage of lab supplies
of $431 thousand, outsourced labor of $124 thousand and payroll costs and
benefits of $110 thousand required to support the increase in revenue. Gross
margin increased from 37% to 49% during the year ended December 31, 2019. The
increase in gross margin was caused by gaining operating leverage over the
Company's fixed costs associated with its laboratory operations and personnel as
its revenue increased incrementally higher than its related costs.

Operating Expenses from Continuing Operations

Research and Development Expenses. Research and development expenses from continuing operations decreased $154 thousand due to winding down the joint venture with the Mayo Foundation for Medical Education and Research.



General and Administrative Expenses. General and administrative expenses from
continuing operations decreased 23%, or $1.5 million to $5.2 million for the
year ended December 31, 2019, from $6.7 million for the year ended December 31,
2018 primarily due to decreased legal costs of $1.2 million and decreased costs
of other professional services of $557 thousand as a result of negotiating fee
arrangements with certain vendors. The Company also had a $207 thousand
reduction in director fees primarily as a result of the directors waiving past
due compensation of $263 thousand in exchange for stock options valued at $54
thousand. Other causes for the decline include reduced stock-based compensation
expense of $251 thousand and a $237 thousand decrease in NASDAQ and transfer
agent fees during the year ended December 31, 2019. These reductions were
offset, in part, by an increase

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in salaries and bonuses of $302 thousand, an increase in depreciation and amortization expense of $149 thousand and increases in software and other office supplies of $88 thousand and $87 thousand, respectively.



Impairment of Goodwill. During the year ended December 31, 2019, the Company
recorded impairment of goodwill of $2.9 million after considering the effects of
the Business Disposals and declines in its stock price.

Merger Costs. During the year ended December 31, 2019, the Company recognized
$117 thousand of merger costs associated with the Business Disposals, as
compared to $1.5 million during the year ended December 31, 2018 related to its
failed merger with NovellusDx, Ltd. ("NDX").

Interest Expense, Net



Net interest expense from continuing operations increased by $1.0 million during
the year ended December 31, 2019 primarily due to two financing agreements that
were only in place for a portion of the year ended December 31, 2018. The
Company incurred $571 thousand of interest on the Convertible Note and the
Advance from NDX (defined below) during the year ended December 31, 2019,
compared to $175 thousand during the year ended December 31, 2018. The Company
also amortized $1.1 million of debt discounts on these two agreements during the
year ended December 31, 2019 compared to $517 thousand during the year ended
December 31, 2018. The Company entered into a standstill agreement with Iliad
during the first quarter of 2019, which resulted in $202 thousand of additional
fees. Later the Company entered into a second standstill agreement that reduced
the conversion price on a portion of the Convertible Note, resulting in $547
thousand of additional interest. In June 2019, the Company defaulted on the
Convertible Note, creating a 15% increase in the outstanding balance at the date
of default, which totaled $409 thousand. The Company allocated $1.5 million and
$389 thousand of this interest to discontinuing operations during the years
ended December 31, 2019 and 2018, respectively.

The interest expense was partially offset by interest income received from the
Excess Consideration Note of $107 thousand during the year ended December 31,
2019.

Change in Fair Value of Warrant Liability



Changes in fair value of some of the Company's common stock warrants may impact
its results.  Accounting rules require the Company to record certain of its
warrants as a liability, measure the fair value of these warrants each quarter
and record changes in that value in earnings. The Company recognized non-cash
income of $70 thousand for the year ended December 31, 2019, as compared to
non-cash income of $3.7 million for the year ended December 31, 2018, as a
result of fluctuations in its stock price. In the future, if the its stock price
increases, the Company would record a non-cash charge as a result of changes in
the fair value of its common stock warrants. Consequently, the Company may be
exposed to non-cash charges, or it may record non-cash income, as a result of
this warrant exposure in future periods.

Change in Fair Value of siParadigm Earn-Out

The siParadigm Earn-Out relates to the disposal of the Company's Clinical Business in July 2019. During the year ended December 31, 2019, the Company recognized a $935 thousand loss due to the decrease in fair value of the siParadigm Earn-Out due to the loss of several significant Clinical Business customers in the latter part of 2019.

Change in Fair Value of Excess Consideration Note



The Excess Consideration Note relates to the disposal of its Biopharma Business
in July 2019. During the year ended December 31, 2019, the Company recognized a
$93 thousand gain due to the increase in fair value of the Excess Consideration
Note due to changes in the expected settlement of the AR Holdback and the
Indemnification Holdback.

Gain on Troubled Debt Restructuring



During the year ended December 31, 2019, the Company recognized a $258 thousand
gain on troubled debt restructuring related to a settlement agreement reached
with NDX ("NDX Settlement Agreement") covering $1.5 million in funds advanced to
the Company prior to the failed merger in 2018 ("Advance from NDX"). The NDX
Settlement Agreement required the Company to repay $1.1 million of principal and
interest on the Advance from NDX. Upon receipt of these payments, the Advance
from NDX was reduced to $450 thousand. The remaining amount due is interest-free
and payable in monthly installments of $50 thousand, which began in November
2019.

Income Tax Benefit

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On April 4, 2019, the Company sold $11.6 million of gross State of New Jersey
NOLs relating to the 2017 tax year as well as $72 thousand of state research and
development tax credits. The sale resulted in the net receipt by the Company of
$512 thousand. The Company did not sell any NOLs during 2018. The Company's
effective rate for the years ended December 31, 2019 and 2018 was 7.1% and 0.0%,
respectively.

Liquidity and Capital Resources

Sources and Uses of Liquidity



The primary sources of the Company's liquidity have been cash collections from
customers, funds generated from debt financings and equity financings, and cash
received from the Business Disposals. The Company expects to continue generating
additional cash from its customers in the future and from its Business Disposals
for a limited time until the Earn-Out is paid as discussed below.

During January 2019, the Company closed two public offerings and issued an
aggregate of 952 thousand shares of common stock for $5.4 million, net of
expenses and discounts of $1.1 million. In October 2019, the Company issued the
Note Payable to Atlas Sciences for $1.3 million, net of discounts, which was
remitted directly to Iliad to satisfy a portion of the Convertible Note balance.
The Company also sold $11.6 million of gross State of New Jersey NOL's relating
to the 2017 tax year as well as $72 thousand of state research and development
tax credits in April 2019. The sale resulted in the net receipt by the Company
of $512 thousand.

In July 2019, the Company completed two business disposals, resulting in an
aggregate of $9.0 million of net cash proceeds at the time of closing; however,
$1.0 million of the funds received is an advance from siParadigm that is being
deducted from the Earn-Out amounts due during the period. At December 31, 2019.
the estimated future Earn-Out payments from siParadigm, net of the remaining
balance of the advance, were $285 thousand, which are expected to be collected
in variable monthly payments through July 2021; the monthly payment amount is
based on the number of tests performed by siParadigm for the Company's former
Clinical Services' customers. At December 31, 2019, the Company also holds a
note receivable from IDXG (the Excess Consideration Note) for $888 thousand. The
balance at December 31, 2019 represents the AR Holdback of $153 thousand and the
Indemnification Holdback of $735 thousand, which were due to the Company on
January 15, 2020 and were received in full in April and May 2020, respectively.

The primary uses of the Company's liquidity have been cash used to fund the
Company's operations, as detailed in the cash flows section below, as well as
cash used to repay the Company's lenders. During 2019, the Company settled the
Convertible Note owed to Iliad and significantly reduced the amount of its
Advance from NDX. The Note Payable to Atlas Sciences matures in October 2020;
furthermore, Atlas Sciences is entitled to demand monthly redemptions of up to
$300 thousand beginning in April 2020. The Company is also required to remit
monthly installments of $50 thousand to NDX until the Advance from NDX is
repaid. Subsequent to year-end, an additional $250 thousand was repaid on the
Advance from NDX.

At December 31, 2019, the Company does not project that cash at December 31,
2019 will be sufficient to fund normal operations for the twelve months from the
issuance of these financial statements in the Annual Report on Form 10-K. The
Company's ability to continue as a going concern is dependent on reduced losses
and improved future cash flows. Alternatively, the Company may be required to
raise additional equity or debt capital, or consummate other strategic
transactions. These factors raise substantial doubt about the Company's ability
to continue as a going concern for the next twelve months from the issuance of
these financial statements in the Annual Report on Form 10-K. The Company can
provide no assurance that these actions will be successful or that additional
sources of financing will be available on favorable terms, if at all.

Cash Flows from Continuing Operations

The Company's net cash flow from operating, investing and financing activities from continuing operations for the periods below were as follows (in thousands):


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                                                                    Year Ended December 31,
                                                                      2019             2018

Cash provided by (used in) continuing operations:
Operating activities                                             $     (3,239 )     $ (3,201 )
Investing activities                                                      (28 )          (17 )
Financing activities

3,420 3,957 Effect of foreign currency exchange rates on cash and cash equivalents and restricted cash

(17 ) (59 ) Net increase in cash and cash equivalents and restricted cash from continuing operations

$        136       $    680

The Company had cash and cash equivalents and restricted cash of $4.2 million and $511 thousand at December 31, 2019 and 2018, respectively.



The $136 thousand increase in cash and cash equivalents and restricted cash from
continuing operations was principally the result of $5.4 million received in the
2019 Offerings, net of expenses. These receipts were offset, in part, by $3.2
million of net cash used to fund operations, $1.0 million used to settle the
remainder of the Convertible Note with Iliad, and $892 thousand of payments on
the Advance from NDX.

The $680 thousand increase in cash and cash equivalents and restricted cash from
continuing operations for the year ended December 31, 2018, principally resulted
from proceeds of $2.5 million and $1.5 million from the Convertible Note and
Advance from NDX, respectively, offset, in part, by net cash used in operations
of $3.2 million.

Cash Used in Operating Activities from Continuing Operations



During the year ended December 31, 2019, cash used in operating activities from
continuing operations was $3.2 million, consisting of net loss from continuing
operations of $6.9 million, positive non-cash adjustments of $5.4 million and
additional uses of cash relating to changes in working capital items of $1.7
million. Changes in cash flows from working capital items were primarily driven
by a net increase in other current assets of $279 thousand, a net decrease in
accounts payable, accrued expenses and deferred revenue of $1.3 million, and a
decrease in obligations under operating leases of $189 thousand. These uses of
cash were partially offset by a net decrease in accounts receivable of $81
thousand.

During the year ended December 31, 2018, cash used in operating activities from
continuing operations was $3.2 million, consisting of net loss from continuing
operations of $4.2 million, negative non-cash adjustments of $2.0 million and
additional cash provided relating to changes in working capital items of $3.0
million. Cash flows from changes in working capital items were primarily driven
by a net increase in accounts payable, accrued expenses and deferred revenue of
$2.9 million and a net reduction in accounts receivable of $296 thousand. These
cash flows were offset by an increase in other current assets of $87 thousand
and other non-current assets of $49 thousand.

Cash Provided by Investing Activities from Continuing Operations

Net cash used in continuing investing activities was $28 thousand for the year ended December 31, 2019, relating to purchases of fixed assets.

Net cash used in continuing investing activities was $17 thousand for the year ended December 31, 2018, relating to purchases of fixed assets.

Cash Provided by Financing Activities from Continuing Operations



Net cash provided by continuing financing activities was $3.4 million for the
year ended December 31, 2019 and principally resulted from net proceeds received
from the 2019 Offerings of $5.4 million, offset, in part, by principal payments
of $1.0 million and $892 thousand on the Convertible Note and the Advance from
NDX, respectively, as well as $72 thousand of payments on finance leases.

Net cash provided by continuing financing activities was $4.0 million for the
year ended December 31, 2018 and resulted from proceeds of $2.5 million and $1.5
million from the Convertible Note and Advance from NDX, respectively.

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Capital Resources and Expenditure Requirements



The Company expects to continue to incur operating losses in the future, as the
costs of being public have significant effect on losses that keep the Company
from being profitable. The Company expects losses to continue, only to the
extent that the business does not outpace the public company-related expenses,
such as legal and audit fees and director's and officer's liability insurance.
These losses have had, and will continue to have, an adverse effect on the
Company's working capital, total assets and stockholders' equity. Because of the
numerous risks and uncertainties associated with its revenue growth and costs
associated with being a public company, the Company is unable to predict when it
will become profitable, and it may never become profitable. Even if the Company
does achieve profitability, it may not be able to sustain or increase
profitability on a quarterly or annual basis. The Company's inability to achieve
and then maintain profitability would negatively affect its business, financial
condition, results of operations and cash flows. As a result, it may need to
raise additional capital to fund its current operations, to repay certain
outstanding indebtedness and to fund its business to meet its long-term business
objectives through public or private equity offerings, debt financings,
borrowings or strategic partnerships coupled with an investment in the Company
or a combination thereof. If the Company raises additional funds through the
issuance of convertible debt securities, or other debt securities, these
securities could be secured and could have rights senior to those of its common
stock. In addition, any new debt incurred by the Company could impose covenants
that restrict its operations and increase its interest expense. The issuance of
any new equity securities will also dilute the interest of current stockholders.

In October 2019, the Company settled the Convertible Note owed to Iliad and now
owes $1.3 million in principal amount to Atlas Sciences under a new unsecured
note due in October 2020. The Company also owes an aggregate of $350 thousand to
NDX as of December 31, 2019 pursuant to the NDX Settlement Agreement, which is
payable in monthly installments of $50 thousand. The Company has no material
capital commitments outside of its existing debt arrangements.

Even after the Business Disposals, the Company does not project that cash at
December 31, 2019 will be sufficient to fund normal operations for the twelve
months from the issuance of these financial statements in the Annual Report on
Form 10-K. The Company's ability to continue as a going concern is dependent on
reduced losses and improved future cash flows. Alternatively, the Company may be
required to raise additional equity or debt capital, or consummate other
strategic transactions. These factors raise substantial doubt about the
Company's ability to continue as a going concern for the next twelve months from
the issuance of these financial statements in the Annual Report on Form 10-K.
The Company can provide no assurance that these actions will be successful or
that additional sources of financing will be available on favorable terms, if at
all. The Company made this assessment in light of the expected impact of COVID
19.

The Company's forecast of the period of time through which its current financial
resources will be adequate to support its operations and its expected operating
expenses are forward-looking statements and involve risks and uncertainties.
Actual results could vary materially and negatively as a result of a number of
factors, including:

• the Company's ability to adapt its business for future developments in


           light of the global outbreak of the novel coronavirus, which

continues


           to rapidly evolve;

• the Company's ability to achieve profitability by increasing sales of


           the Company's preclinical CRO services focused on oncology and
           immuno-oncology;


•          the Company's ability to raise additional capital to repay its
           indebtedness and meet its liquidity needs;

• the Company's ability to execute on its marketing and sales strategy


           for its preclinical research services and gain acceptance of its
           services in the market;

• the Company's ability to keep pace with rapidly advancing market and


           scientific developments;


•          the Company's ability to satisfy U.S. (including FDA) and
           international regulatory requirements with respect to its

services;


•          the Company's ability to maintain its present customer base and obtain
           new customers;

• competition from preclinical CRO services companies, many of which are


           much larger than the Company in terms of employee base, revenues and
           overall number of customers and related market share;

• the Company's ability to maintain the Company's clinical and research


           collaborations and enter into new collaboration agreements with highly
           regarded organizations in the field of oncology so that, among other
           things, the Company has access to thought leaders in advanced
           preclinical and translational science;


• potential product liability or intellectual property infringement claims;


•          the Company's dependency on third-party manufacturers to supply it
           with instruments and specialized supplies;


•          the Company's ability to attract and retain a sufficient number of
           scientists, clinicians, sales personnel and other key personnel with
           extensive experience in oncology and immuno-oncology, who are in short
           supply;


•          the Company's ability to obtain or maintain patents or other
           appropriate protection for the intellectual property in its
           proprietary tests and services;



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• the Company's ability to effectively manage its international


           businesses in Australia, Europe and China, including the

expansion of


           its customer base and volume of new contracts in these markets;

• the Company's dependency on the intellectual property licensed to the


           Company or possessed by third parties; and

• the Company's ability to adequately support future growth; and

• other risks discussed in the section entitled "Risk Factors."





The consolidated financial statements for the year ended December 31, 2019 were
prepared on the basis of a going concern, which contemplates that the Company
will be able to realize assets and discharge liabilities in the normal course of
business. Accordingly, they do not give effect to adjustments that would be
necessary should the Company be required to liquidate its assets.  The ability
of the Company to meet its obligations, and to continue as a going concern is
dependent upon the availability of future funding and the continued growth in
revenues. The consolidated financial statements do not include any adjustments
that might result from the outcome of these uncertainties.

Future Contractual Obligations



The following table reflects a summary of the Company's estimates of future
contractual obligations as of December 31, 2019. The information in the table
reflects future unconditional payments and is based on the terms of the relevant
agreements, appropriate classification of items under U.S. GAAP as currently in
effect and certain assumptions, such as the interest rate on the Company's
variable debt that was in effect as of December 31, 2019. Future events could
cause actual payments to differ from these amounts.
                                                             Payments Due

by Period


                                                 Less than 1                                      More than 5
Contractual Obligations              Total          Year          1-3 Years       3-5 Years          years
(dollars in thousands)
Principal and interest on
unsecured debt                    $   1,789     $     1,789     $         -     $         -     $           -
Finance lease obligations,
including interest, for
equipment                               209              84              80              45                 -
Operating lease obligations
relating to administrative
offices and laboratories                220             209              11               -                 -
Total                             $   2,218     $     2,082     $        91     $        45     $           -



Income Taxes

Over the past several years the Company has generated operating losses in all
jurisdictions in which it may be subject to income taxes. As a result, the
Company has accumulated significant net operating losses and other deferred tax
assets. Because of the Company's history of losses and the uncertainty as to the
realization of those deferred tax assets, a full valuation allowance has been
recognized. The Company does not expect to report a benefit related to the
deferred tax assets until it has a history of earnings, if ever, that would
support the realization of its deferred tax assets.

Off-Balance Sheet Arrangements

Since inception, the Company has not engaged in any off-balance sheet activities as defined in Item 303(a)(4) of Regulation S-K.

Critical Accounting Policies and Significant Judgment and Estimates



The Company's management's discussion and analysis of financial condition and
results of operations is based on its consolidated financial statements, which
have been prepared in accordance with U.S. GAAP. The preparation of consolidated
financial statements requires management to make estimates and judgments that
affect the reported amounts of assets, liabilities, revenue and expenses and
related disclosure of contingent assets and liabilities. On an ongoing basis,
the Company evaluates its estimates based on historical experience and makes
various assumptions, which management believes to be reasonable under the
circumstances, which form the basis for judgments about the carrying values of
assets and liabilities that are not readily apparent from other sources. Actual
results may differ from these estimates under different assumptions or
conditions.

The notes to the Company's audited consolidated financial statements contain a
summary of its significant accounting policies. Management considers the
following accounting policies critical to the understanding of the results of
the Company's operations:

• Revenue recognition;

• Accounts receivable and bad debts;


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• Warrant liabilities and other derivatives;

• Stock-based compensation;

• Income taxes; and

• Impairment of intangibles and long-lived assets.

Recent Accounting Pronouncements

The notes to the Company's audited consolidated financial statements contain a summary of recent accounting pronouncements.

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