IDXG 10-K & 10-Q changes, risk factors and insider trading

We depend on a few payers for a significant portion of our revenue for our clinical services, and if one or more significant payers, including CMS, stops providing reimbursement as CMS did with our now discontinued PancraGEN® test, or decreases the amount of reimbursement for our tests, or if we are unable to successfully negotiate additional reimbursement contracts for our clinical services tests, our revenue could decline and our commercial success could be compromised.

Novitas has been and is the current regional MAC that handles claims processing for Medicare services with jurisdiction for PancraGEN®, ThyGeNEXT®, ThyraMIR®v2, and RespriDxThyraMIR®. v2. On a five-year rotational basis, Medicare requests bids for its regional MAC services. Any future changes in the MAC processing or coding for Medicare claims for our molecular diagnostic tests could result in a change in the coverage or reimbursement rates for such molecular diagnostic tests, or the loss of coverage.

Our ThyraMIR®v2 and ThyGeNEXT® tests are and, until April 24, 2025 our PancraGEN® test is reimbursed by Medicare based on applicable CPT codes. RespriDx® is currently only covered by the Medicare Advantage program and our BarreGEN® assay is not reimbursed at all. Any future reductions from the current reimbursement rates for our clinical services tests would have a material adverse effect on business and results of operations.

Our quarterly and annual revenues and operating results may varyvary, which may cause the price of our common stock to fluctuate.

All of our revenue is derived from our clinical services business.business and specifically our ThyraMIR®v2 and ThyGeNEXT® tests. We have molecular diagnostics tests and complimentary service extensions that are in development, but there can be no assurance that we will be able to successfully commercialize or sufficiently increase revenues from those tests. If we are unable to increase sales of our molecular diagnostic tests, expand reimbursement for these tests, or successfully develop and commercialize other molecular diagnostic tests, our revenue and our ability to achieve and sustain profitability would be impaired, and this could have a material adverse effect on our business, financial condition and results of operations, and the market price of our common stock could decline.

We rely on third-partiesthird parties to process and transmit claims to payers for our clinical services, and any delay in processing or transmitting could have an adverse effect on our revenue and financial condition.

We rely on third-partiesthird parties to provide overall processing of claims and to transmit actual claims to payers based on specific payer billing formats. If claims for our clinical services are not submitted to payers on a timely basis, or if we are again required to switch to a different third-party processor to handle claim submissions, we may experience delays in our ability to process claims and receive payment from payers, which could have a material adverse effect on our business, financial condition and results of operations.

AdditionalNew funding may not be available to us on acceptable terms, or at all. If we seek to raise funds by issuing additional equity securities, dilution to our stockholders stockholders could result. Since our common stock has been delisted from Nasdaq and is currently quoted on the OTCID, it has been very difficult for us to raise funds on the public markets. In addition, we are currently ineligible to use a Form S-3 shelf registration statement. If we are unable toThe timely repay the BroadOak borrowing when due, BroadOak will have the right to foreclose on our assets. The incurrence of additional indebtedness or the issuance of certain equity securities could result in increased fixed payment obligations and could also result in restrictive covenants, such as limitations on our ability to incur additional debt or issue additional equity, limitations on our ability to acquire or license intellectual property rights, limitations on our ability to enter into mergers or acquisition of assets, and other operating restrictions that could adversely affect our ability to conduct our business.

We havemay issued and may issue additional preferred stock in the future, and the terms of the preferred stock may reduce the value of our common stock.

We are authorized to issue up to five million shares of preferred stock in one or more series. Our Board may determine the terms of future preferred stock offerings without further action by our stockholders. If we issue additional preferred stock, it could affect stockholder rights or reduce the market value of our outstanding common stock. In particular, specific rights granted to future holders of preferred stock may include voting rights, preferences as to dividends and liquidation, conversion and redemption rights, sinking fund provisions, and restrictions on our ability to merge with or sell our assets to a third party. We have designated, issued and sold an aggregate of 47,000 outstanding shares of Series C Preferred Stock. These shares were converted to common stock in January 2026.

Two private equity firms and their affiliate’saffiliates control, on an as-converted basis,control an aggregate of 84% of our outstanding shares of common stock through their holdings of our Series C Preferred Stock, and this concentration of ownership may have a substantial influence on our decisions.

Ampersand holds 28,000 shares of our Series C Preferred Stock and 1315 Capital holds 19,000 sharesAs of ourFebruary Series28, C Preferred Stock. Accordingly, on an as converted basis,2026, Ampersand and its affiliates beneficially own 50% of the Company’s outstanding common stock of 4,423,09327,700,904 shares and 1315 Capital and its affiliates beneficially own 34%. The conversion and sale by such holders of one or more large blocks of our common stock could have a negative impact on the market price of our common stock.

These stockholders, acting together, have control over the outcome of matters submitted to our stockholders for approval, including the election of directors and any merger, consolidation or sale of all or substantially all of our assets. The Series C Preferred Stock issuance removed the director designation rights that Ampersand and 1315 Capital had as holders of Series B Preferred Stock, now exchanged for Series C Preferred Stock. This concentration of ownership of Ampersand and 1315 Capital might harm the market price of our common stock by delaying, deterring or preventing a change in control, making some transactions more difficult or impossible to complete without the support of these shareholders, regardless of the impact of this transaction on our other shareholders. Such ownership interests could effectively deter a third party from making an offer to buy us, which might involve a premium over our current stock price or other benefits for our stockholders, or otherwise prevent changes in the control or management. For example, this concentration of ownership may have the effect of impeding a merger, consolidation, takeover or other business combination involving us or discouraging a potential acquirer from making a tender offer or otherwise attempting to obtain control of us.

As we grow and introduce new clinical services tests and other services, we will likely need to add new codes to our billing process as well as our financial reporting systems. Failure or delays in effecting these changes in external billing and internal systems and processes could negatively affect our revenue and cash flow from our clinical services. Additionally, our billing activities require us to implement compliance procedures and oversight, train and monitor our employees or contractors, challenge coverage and payment denials, assist patients in appealing claims, and undertake internal audits to evaluate compliance with applicable laws and regulations as well as internal compliance policies and procedures. Payers also conduct external audits to evaluate payments, which addadds further complexity to the billing process. These billing complexities, and the related uncertainty in obtaining payment for our diagnostic solutions, could negatively affect our revenue and cash flow, our ability to achieve profitability, and the consistency and comparability of our results of operations.

Physicians may generally not order our clinical services tests unless payers reimburse a substantial portion of the test price. There is uncertainty concerning third-party reimbursement of any test incorporating new molecular diagnostic technology. Reimbursement by a payer may depend on a number of factors, including a payer’s determination that tests such as our molecular diagnostic tests are: (a) not experimental or investigational; (b) pre-authorized and appropriate for the patient; (c) cost-effective; (d) supported by peer-reviewed publications; and (e) included in clinical practice guidelines. Since each payer generally makes its own decision as to whether to establish a policy or enter into a contract to reimburse our clinical services tests, seeking these approvals is a time-consuming and costly process. Although we have contracted rates of reimbursement with certain payers, which establishes allowable rates of reimbursement for our PancraGEN®, ThyGeNEXT®, and ThyraMIR®v2 and RespriDx® assays, payers may suspend or discontinue reimbursement at any time, may require or increase co-payments from patients, may impose pre-authorization requirements, may establish non-coverage for our tests, or may reduce the reimbursement rates paid to us. Any such actions could have a negative effect on our revenue for our clinical services tests. See Part I – Item 1 – “Business – Government Regulations and Industry Guidelines - Third Party Coverage and Reimbursement for our Clinical Services – Novitas LCD for PancraGEN®.Services.”

We have contracted rates of reimbursement with select payers for PancraGEN®, ThyGeNEXT® and ThyraMIR®v2 and to a limited extent, RespriDx®.v2. Without a contracted rate for reimbursement, claims may be denied upon submission, and we may need to appeal the claims. The appeals process is time consumingtime-consuming and expensive,expensive and may not result in payment. We expect to continue to focus resources on increasing adoption ofof, and coverage and reimbursement forfor, our molecular diagnostic tests. We cannot, however, predict whether, under what circumstances, or at what payment levels payers will reimburse us for our molecular diagnostic tests, if at all. In addition to our current commercial products on the market and in our pipeline, the launch of any new molecular diagnostic tests in the future may require that we expend substantial time and resources in order to obtain and retain reimbursement. Also, payer consolidation can create uncertainty as to whether coverage and contracts with existing payers will even remain in effect. Finally, commercial payers may tie their allowable rates to Medicare rates, and should Medicare reduce their rates, we may be negatively impacted. If we fail to establish broad adoption of and reimbursement for our assays, or if we are unable to maintain existing reimbursement from payers, our ability to generate revenue for our clinical services tests could be harmed and this could have a material adverse effect on our business, financial condition and results of operations.

In many cases, practice guidelines in the United States have recommended therapies or surgery to determine if a patient’s condition is malignant or benign. Accordingly, physicians may be reluctant to order a diagnostic test that may suggest surgery is unnecessary.not recommended by practice guidelines. In addition, our assays are performed at our laboratory rather than by a pathologist in a local laboratory, so pathologists may be reluctant to support our tests. Moreover, guidelines for the diagnosis and treatment of thyroid nodules may change to recommend another type of treatment protocol, and these changes may result in medical practitioners deciding not to use our molecular diagnostic tests. These facts may make physicians reluctant to use our assays, which could limit our ability to generate revenue from our clinical services tests and achieve profitability, which could have a material adverse effect on our business, financial condition and results of operations.

Some patients may decide not to use our clinical services tests due to price, all or part of which may be payable directly by the patient if the patient’s insurer denies reimbursement in full or in part. Many insurers seek to shift more of the cost of healthcare to patients in the form of higher deductibles, co-payments, or premiums. In addition, the economic environment in the United States may result in the loss of healthcare coverage. Implementation of provisions of PPACA provided coverage for many patients, particularly in the individual market, who were previously either uninsured or faced high premiums. However, premiums for many of the plans participating in the exchanges established as part of this legislation have increased and some health plans have chosen to drop out of these networks in specific markets or the program altogether. In 2018, Congress passed legislation revising certain provisions of PPACA and federal agencies also have issued final rules to repeal or revise regulations governing the implementation of certain provisions of PPACA which may negatively impact our revenues. Overall, the scope and timing of any further legislation, judicial action or federal regulations to limit, revise, or replace PPACA or regulations governing its implementation is uncertain, but if enacted could have a significant impact on the U.S. healthcare system and our revenues. These events may result in an increase of uninsured patients, increases in premiums, and reductions in coverage for some patients. Patients may therefore delay or forego medical checkups or treatment due to their inability to pay for our clinical services tests, which could have a negative effect on our revenues. We do have a Patient Assistance Program that allows eligible patients to apply for assistance in covering a portion of their out of pocketout-of-pocket obligation or all costs for claims denied as non-covered for our clinical services tests if they meet the criteria for participation.

Clinical utility studies show when and how to use a molecular diagnostic clinical test and describe the particular clinical situations or settings in which it can be applied and the expected results. Clinical utility studies also show the impact of the molecular diagnostic test results on patient care and management. Clinical utility studies are typically performed with collaborating oncologists or other physicians at medical centers and hospitals, analogous to a clinical trial, and generally result in peer-reviewed publications. Sales and marketing representatives use these publications to demonstrate to customers how to use a molecular diagnostic clinical test, as well as why they should use it. These publications are also used with payers to obtain coverage for a molecular diagnostic test, helping to assure there is appropriate reimbursement. We will need to conduct additional studies for our molecular diagnostic tests and other diagnostic tests we plan to introduce, to increase the market adoption and obtain coverage and adequate reimbursement. Should we not be able to perform these studies, should the costs or length of time required for these studies exceed their value, or should their results not provide clinically meaningful data and value for oncologists and other physicians, adoption of our molecular diagnostic tests could be impaired, and we may not be able to obtain coverage and adequate reimbursement for them. For more information, on how reimbursement has been affected for our PancraGEN test, please see Part I – Item 1 – “Business – Government Regulations and Industry Guidelines - Third Party Coverage and Reimbursement for our Clinical Services – Novitas LCD for PancraGEN.”

We rely on sole suppliers for certain materials that we use to perform our tests and services for our endocrine cancer diagnostic tests. We also purchase reagents used in our tests and services from sole-source suppliers. While we have developed alternate sourcing strategies for these materials and vendors, we cannot be certain whether these strategies will be effective or the alternative sources will be available in a timely manner. If these suppliers can no longer provide us with the materials we need to perform our tests and services, if the materials do not meet our quality specifications, or if we cannot obtain acceptable substitute materials, an interruption in test processing and services could occur. Any such interruption may directly impact our revenue and cause us to incur higher costs.costs, In particular, the continued spread of the coronavirus globallywhich could materially and adversely impact our operations including without limitation our supply chain, which may have a material and adverse effect on our business, financial condition and results of operations.

The marketing, sale and use of our tests and services could lead to product liability claims if someone were to allege that the test or service failed to perform as it was designed. We may also be subject to liability for errors in the results we provide to physicians or for a misunderstanding of, or inappropriate reliance upon, the information we provide. A product liability or errors and omissions liability claim could result in substantial damages and be costly and time consumingtime-consuming for us to defend. Although we maintain product liability and errors and omissions insurance, we cannot be certain that our insurance would fully protect us from the financial impact of defending against these types of claims or any judgments, fines or settlement costs arising out of such claims. Any product liability or errors and omissions liability claim brought against us, with or without merit, could increase our insurance rates or prevent us from securing insurance coverage in the future. Additionally, any product liability lawsuit could cause injury to our reputation or cause us to suspend sales of our products and solutions. The occurrence of any of these events could have a material adverse effect on our business, financial condition and results of operations.

We have, from time to time, restructured or made other adjustments to our workforce and manufacturing footprint. For example, in response to the new LCD which established non-coverage for our PancraGEN® test as discussed elsewhere in this Annual Report, we announced that our board of directors had approved the Restructuring Plan (as defined below) to reduce operating costs and better align its workforce with the loss of PancraGEN®. As a result of CMS’ determination to delay implementation of the Genetic Testing for Oncology LCD (L39365) until April 24, 2025, the Company is re-evaluating certain parts of the Restructuring Plan and will determine what parts will or will not be postponed, or cancelled. For more information on the Restructuring Plan, please see Part II – Item 7 – “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Potential Restructuring.”

In the event we proceed with some or all parts of the Restructuring Plan, thereThere are significant costs involved with the execution of restructuring programs or other significant organizational changes, including expenses related to severance, asset impairments and other potential charges. There are also significant risks involved with such changes, including the potential for significant business disruption, diversion of management’s time and attention from ongoing operations, loss of human capital talent, temporarily reduced productivity and the risk of failing to achieve some or all of the anticipated benefits of the restructuring or organizational changes. We may need to implement additional restructuring plans or other strategic initiatives in the future in response to market or product changes, performance issues, changes in strategy, acquisitions and/or other internal or external considerations. If we are unable to successfully manage and implement any future restructuring plan, we may not achieve or sustain the expected growth or cost savings benefits of these activities, or do so within the expected timeframe, and in such instance, our financial condition and results of operations could be materially adversely impacted.

As a small company with approximately 111102 employees, the success of our business depends largely on the skills, experience and performance of members of our senior management team, including our chief executive officer, our chief financial officer, and others in key management positions The efforts of these persons will be critical to us as we continue to grow our clinical services and develop and/or acquire additional molecular diagnostic tests. If we were to lose one or more of these key employees, we may experience difficulties in competing effectively, developing our technologies and implementing our business strategy. In addition, our commercial laboratory operations depend on our ability to attract and retain highly skilled scientists, including licensed clinical laboratory scientists. We may not be able to attract or retain qualified scientists and technicians in the future due to the competition for qualified personnel, and we may have to pay higher salaries to attract and retain qualified personnel. We may also be at a disadvantage in recruiting and retaining key personnel as our small size, limited resources, and limited liquidity may be viewed as providing a less stable environment, with fewer opportunities than would be the case at one of our larger competitors. If we are not able to attract and retain the necessary personnel to accomplish our business objectives, we may experience constraints that could adversely affect our ability to support our clinical laboratory and commercialization.

If we lose the support of key opinion leaders or KOL’s,leaders, it may limit our revenue growth from our tests or services and our ability to achieve profitability.

We have established relationships with leading oncology opinion leaders at premier cancer institutions and oncology networks. If these key opinion leaders determine that our existing products and services or other products and services that we develop are not clinically effective, that alternative technologies are more effective, or if they elect to use internally developed products, we would encounter significant difficulty validating our testing platform, driving adoption, or establishing our tests as a standard of care, which would limit our revenue growth and our ability to achievemaintain profitability.

If our sales force is less successful than anticipated, our business expansion plans could suffer and our ability to generate revenues could be diminished. In addition, we have limited history selling our clinical services tests on a direct basis, and leveraging our bioinformatics data and our limited history makes forecasting difficult.

We compete with physicians and the medical community who use traditional methods to diagnose gastrointestinal, endocrine and lung cancers and to conduct clinical trials. In many cases, practice guidelines in the United States have recommended non-molecular testing like cytology or diagnostic surgery to determine if a patient’s condition is malignant or benign. As a result, we believe that we will need to continue to educate physicians and the medical community on the value and benefits of our clinical services tests in order to impact clinical practices. In addition, we face competition from other companies that offer diagnostic tests. Specifically, in regard to our thyroid diagnostic tests, Veracyte, Inc. (“Veracyte”) has thyroid nodule cancer diagnostic tests which are currently on the market that compete with our ThyGeNEXT® and ThyraMIR®v2 tests. Quest Diagnostics Inc. currently offers Veracyte’s tests via a co-marketing agreement, and CBLPath, Inc. is offering a diagnostic test performed via the University of Pittsburgh Medical Center (UPMC) that analyzes genetic alterations using next-generation sequencing mutation panel for pancreatic cysts. While we do not believe we currently have significant direct competition for PancraGEN® in the gastrointestinal market, technology such as a next-generation sequencing mutation panel could in the future lead to increased competition.

It is also possible that we face future competition from laboratory developed tests, or LDTs, developed by commercial laboratories such as Quest and/or other diagnostic companies developing new molecular diagnostic tests or technologies. Furthermore, we may be subject to competition as a result of the new, unforeseen technologies that can be developed by our competitors in the gastrointestinal and endocrine cancer molecular diagnostic testing space. To compete successfully, we must be able to demonstrate, among other things, that our test results are accurate and cost effective, and we must secure a meaningful level of reimbursement for our tests. Since our clinical services began in 2014, many of our potential competitors have stronger brand recognition and greater financial capabilities than we do. Others may develop a test with a lower price than ours that could be viewed by physicians and payers as functionally equivalent to our molecular diagnostic tests or offer a test at prices designed to promote market penetration, which could force us to lower the price of our clinical services tests and affect our ability to achieve and maintain profitability. If we are unable to compete successfully against current and future competitors, we may be unable to increase market acceptance of our clinical services tests and overall sales, which could prevent us from increasing our revenue or achievingsustaining profitability and cause the market price of our common stock to decline. As we add new clinical services tests and other products and services, we will likely face many of these same competitive risks that we do currently.

Our business requires that we and our third-party service providers collect and store sensitive data, including PHI, personally identifiable information such as genetic information or credit card information about patients or other individuals, and our proprietary business and financial information. We must comply with the HIPAA and HITECH privacy, security, and breach notification regulations with respect to PHI in our capacity as a covered entity and business associate, and with consumer protection and consumer privacy laws that apply to our processing of this sensitive data, which may increase our operational costs. Furthermore, the privacy, security, and breach notification regulations implemented under HIPAA and HITECH as well as other federal and state consumer protection and consumer privacy laws and regulations that may apply to us provide for significant fines and other penalties, including potential civil and criminal fines and penalties, for non-compliance. We face a number of risks relative to our protection of, and our service providers’ protection of, this critical information, other personally identifiable information, and our proprietary business and financial information, including loss of access, fraudulent modifications, inappropriate disclosure and inappropriate access, as well as risks associated with our ability to identify and audit such events. The secure processing, storage, maintenance and transmission of this critical information is vital to our operations and business strategy, and we devote significant resources to protecting such information. Although we take measures to protect sensitive information from unauthorized access or disclosure, our information technology and infrastructure may be vulnerable to attacks by hackers or viruses or otherwise breached due to employee error, malfeasance or other activities. If such event wouldwere to occur and cause interruptions in our operations, our networks would be compromised and the information we store on those networks could be accessed by unauthorized parties, publicly disclosed, modified without our knowledge, lost or stolen.

We are a company that provides esoteric molecular diagnostic testing,testing and pathology services to aid physicians in their evaluation of cancer risk in patients with indeterminate biopsies and a perceived high risk of cancer from clinical features. We develop and commercialize genomic tests and related first-line assays that can personalize medicine to help improve patient diagnosis and management. Due to the decision of CMS to cease reimbursement coverage of our PancraGEN® test for assessing the risk of pancreatic cyst progression to cancer on April 24, 2025 which resulted in specimens for first-line fluid chemistry and PancraGEN® testing not being accepted by the Company after May 2, 2025, we are currently concentrating our efforts on our molecular diagnostic tests for thyroid cancer, ThyGeNEXT® and ThyraMIR®v2.

On January 9, 2025, the Company announced the new LCD established non-coverage for its PancraGEN® test, and that it would stop offering the test and would not accept specimens for first-line fluid chemistry and PancraGEN® testing after February 7, 2025. As a result of the established non-coverage for PancraGEN®, the Company announced in January 2025 that its board of directors had approved a restructuring and cost-savings plan to reduce operating costs and better align its workforce with the loss of PancraGEN® (the “Restructuring Plan”). For more information, please see Potential Restructuring below.

On January 27, 2025, the Company announced that CMS had directed its Medicare Administrative Contractors, Novitas and First Coast Service Options, Inc., to delay implementation of the Genetic Testing for Oncology LCD (L39365), from February 23, 20252025, until April 24, 2025. On April 24, 2025, the The Company statedannounced that this change of effective date will allow the TrumpLCD administrationwould timetake toeffect fullyimmediately. review the proposed policy changes, re-evaluate for themselves the supporting clinical evidence for theBecause PancraGEN® assay,is primarily ordered for Medicare patients, the decision to end reimbursement coverage meant that the Company was no longer able to continue offering this test. Specimens for first-line fluid chemistry and fullyPancraGEN® assesstesting were not accepted by the negativeCompany impact onafter patientMay care2, if2025. As a result of the currentlyloss proposedof PancraGEN®, LCDon comesApril into25, effect.2025, the Company announced implementation of its previously approved Restructuring Plan whereby it reduced its workforce and impacted employees received severance benefits. For more information, please see “Restructuring” below.

Potential Restructuring

As discussed above in “Impact of Our Reliance on CMS and Novitas,” on January 14, 2025, the Board of Directors approved a Restructuring Plan and cost-savings to reduce and better align its workforce with the anticipated loss of PancraGEN® coverage by CMS. However, due to the delay in the implementation of the new LCD from February 23, 2025 until April 24, 2025, the Company is re-evaluating certain parts of the Restructuring Plan and will determine what parts will or will not be postponed or cancelled.

Our clinical services business commercializes clinically useful molecular diagnostic tests and molecular pathology services. We commercialize genomic tests and related first-line assays principally focused on risk-stratification of cancer using the latest technology to help personalize medicine and improve patient diagnosis and management. Our tests and services provide mutational analysis of genomic material contained in suspicious cysts, nodules, and lesions with the goal of better informing surgery or surveillance treatment decisions in patients suspected of thyroid,thyroid pancreatic, and other cancers. cancer. The molecular diagnostic tests we offer enable healthcare providers to stratify cancer risk, helping to avoid unnecessary surgical treatment in patients at low risk, while also helping to identify patients that would benefit from increased surveillance or surgical intervention.

Our mission is to assist healthcare providers in the diagnosis, triage, and treatment of patients through advanced diagnostics. Our laboratory is licensed pursuant to federal law under Clinical Laboratory Improvement Amendments of 1988 (“CLIA”) and are accredited by the College of American Pathologists (“CAP”) and our products are approved by New York State. We are leveraging our laboratory to refine and commercialize our assays and products. We aim to provide physicians and patients with diagnostic options for detecting genomic and other molecular alterations that are associated with gastrointestinal, endocrine, and other cancers. Our customers consist primarily of physicians, hospitals, and clinics.

We currently have fivetwo commercialized molecular diagnostic tests in the marketplace: PancraGENThyGeNEXT®, a pancreatic cyst and pancreaticobiliary solid lesion genomic test that helps physicians better risk-stratify pancreaticobiliary cancers using our proprietary PathFinderTG® platform and full integration of clinical factors; PanDNA®, an alternate reporting option of the PathFinderTG platform, which provides physicians the “molecular only” information provided within PancraGEN; ThyGeNEXT®, an expanded oncogenic mutation panel that helps “rule-in” and “rule-out” malignancy in thyroid nodules; and ThyraMIR®v2, used in combination with ThyGeNEXT®, which further stratifies thyroid nodules for malignancy risk utilizing a proprietary microRNA gene expression classifier; and RespriDx® a genomic test that also utilizes our PathFinderTG® platform, to help physicians differentiate metastatic or recurrent lung cancer from the presence of newly formed primary lung cancer.classifier.

The global esoteric molecular diagnostics market, valued at $29.9$29.6 billion (USD) in 2023 and2025, is expectedprojected to grow to $48.3$32.6 billion (USD) in 2026 and to $75.9 billion (USD) by 2029 with2034, exhibiting a Compound Annual Growth raterate, or CAGRCAGR, of 8.5%11.12% betweenduring 2023the andforecast 2029,period, according to MarketsandMarketsFortune Business Insights™ (Report CodeID: MD5930, publishedFBI108868, JuneUpdated 2024January, 2026).

OTCQXOTCID

On December 28,May 2023,20, 2025, we received notice from the OTCQX indicating that the Company’s market capitalization has stayed below the required $5 million for 30 consecutive calendar days preceding the date of such notice, and that the Company no longer meets the standards for continued qualification for the OTCQX U.S. tier under the OTCQX Rules for U.S. Companies section 3.2.b.2. OnThe MarchCompany’s 20,common 2024stock wewas received noticeremoved from quotation on the OTCQX indicatingon thatAugust the18, Company’s market capitalization has stayed above the required $5 million for ten consecutive trading days preceding the date of such notice, and that the Company currently satisfies the standards for continued qualification for the OTCQX U.S. tier under the OTCQX Rules for U.S. Companies.2025.

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’sNRVs and related contractual allowances accordingly. If actual collections and related NRV’s NRVs vary significantly from our estimates, we adjust the estimates of contractual allowances, which would affect net revenue in the period such variances become known.

Significant judgment is also required in evaluating the need for and magnitude of appropriate valuation allowances against deferred tax assets. We currently have significant deferred tax assets resulting from net operating loss carryforwards and deductible temporary differences. The realization of these assets is dependent on generating future taxable income. We perform an analysis quarterlyeach year to determine whether the expected future income will more likely than not be sufficient to realize the deferred tax assets. Our recent operating results and projections of future income weighed heavily in our overall assessment. TheAs existingof December 31, 2025, we are in a cumulative income position for the current year and forecastedprior levelstwo ofyears. pretaxAs earningssuch, we for financial reporting purposes are nothave sufficient positive evidence to generateproject future taxable incomeincome. andAccordingly, realizewe have released a significant portion of the valuation allowance against our deferred tax assets and, as a result, we established a full federal and state valuation allowance for the net deferred tax assets atof December 31, 20242025 and 2023, asthat we determined that it waswere more likely than not that these assets would not to be realized.realized based upon those future projections of taxable income.

The NOL carry forwards are subject to review and possible adjustment by the Internal Revenue Service and state tax authorities. NOL, and tax credit carry forwards may become subject to an annual limitation in the event of certain cumulative changes in the ownership interest of significant stockholders over a three yearthree-year period in excess of 50%, as defined under Sections 382 and 383 of the Code as well as similar state tax provisions. The amount of the annual limitation, if any, will be determined based on the value of our company immediately prior to an ownership change. Subsequent ownership changes may further affect the limitation in future years. Additionally, U.S. tax laws limit the time during which these carry forwards may be applied against future taxes, therefore, we may not be able to take full advantage of these carry forwards for federal income tax purposes. During 2021, the Company completed a 382 assessment of the available NOLs under Section 382 and determined that the Company underwent an ownership change on September 30, 2017 and July 15, 2019, and as a result, NOLs attributable to the pre-ownership change are subject to a substantial annual limitation under Section 382 of the Code due to the multiple ownership changes. The Company has adjusted their NOL carryforwards to address the impact of the 382 ownership change.

Consolidated revenue for revenuethe year ended December 31, 2025 decreased by $8.2 million, or 18%, to $38.7 million, compared to $46.9 million for the year ended December 31, 2024 increased by $6.9 million, or 17%, to $46.9 million, compared to $40.0 million for the year ended December 31, 2023.2024. The increasedecrease in net revenue was largelyprimarily driven by increasedthe testloss volumesof asreimbursement comparedfor toPancraGEN® in April 2025, which resulted in specimens for PancraGEN® testing no longer being accepted by the priorCompany year.after May 2, 2025.

Consolidated cost of revenue for the year ended December 31, 2025 decreased by $2.4 million, or 14%, to $14.6 million, compared to $17.0 million for the year ended December 31, 2024. This decrease was primarily driven by the discontinuance of our PancraGEN® test resulting from the loss of reimbursement discussed above. As a percentage of revenue, cost of revenue increased to approximately 38% for the year ended December 31, 2025 as compared to approximately 36% for the year ended December 31, 2024 increased by $2.0 million, or 14%, to $17.0 million, compared to $15.0 million for the year ended December 31, 2023.2024. This increase wascan primarilybe drivenattributed byto the increaseddecline testin volumesrevenue mentioned discussedabove above.and costs decreasing at a lower rate overall.

Consolidated gross profit for the year ended December 31, 20242025 increaseddecreased $4.8$5.8 million, or 19%, to $29.9$24.1 million, compared to $25.1$29.9 million for the year ended December 31, 2023.2024. The increasedecrease can be attributed to the increasedecrease in revenue.revenue resulting from the discontinuance of our PancraGEN® test as a result of the loss of reimbursement.

Sales and marketing expense was was$9.9 million for the year ended December 31, 2025 and $11.7 million for the year ended December 31, 20242024. andThe $10.2decrease millioncan forbe attributed to the yearreduction endedin Decembersalesforce 31,size 2023.as a result of the discontinuance of our PancraGEN® test resulting from the loss of ThePancraGEN® increasereimbursement wasdiscussed primarily due to increased employee costs.previously. As a percentage of revenue, sales and marketing expense was approximately 26% for the year ended December 31, 2025 and 25% infor boththe periods.year ended December 31, 2024.

Research and development expense was $0.6 million for the year ended December 31, 2025 and $0.7 million for the year ended December 31, 20242024. and $0.6 million for the year ended December 31, 2023. As a percentage of revenue, research and development expense decreasedincreased to 1.4%1.7% from 1.6%1.4% in the prior year period due to the increase decrease in revenue discussed above.

General and administrative expense was approximately $9.5 million for both the year years ended December 31, 20242025 and $9.4December million31, 2024, respectively. As a percentage of net revenue, general and administrative expense was 25% for the year ended December 31, 2023.2025 Asas acompared percentage of net revenue, general and administrative expense wasto 20% for the year ended December 31, 20242024. asThis comparedpercentage increase can be attributed to 23% for the yeardecline endedin Decemberrevenue 31,mentioned 2023.above.

Operating income from continuing operations was $8.1$4.1 million for the year ended December 31, 20242025 as compared to operating income of $4.0$8.1 million for the year ended December 31, 2023.2024. The increasedecrease in operating income was primarily attributable to the increasesdecreases in revenue and gross profit discussed above.

Note payable interest expense was $0.6 million for the year ended December 31, 2024 and $0.9$0.2 million for the year ended December 31, 2023.2025 and $0.6 million for the year ended December 31, 2024. The reduction in interest expense was fromattributable to a lower principal balance on the BroadOak loan.loan in 2025.

During the years ended December 31, 20242025 and December 31, 2023,2024, there were other expenses, net of approximately $0.5$0.1 million and $0.7$0.5 million, respectively. The amounts are primarily related to the fair value adjustments recorded on the note payable.payable to BroadOak.

Provision (Benefit) provision for income taxes

We had a loss from discontinued operations of approximately $0.2$0.4 million and $0.3$0.2 million for the years ended December 31, 20242025 and December 31, 2023,2024, respectively. The loss in both periods pertained to the interest accrued on uncertain tax position liabilities.

In this 10-K, 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, non-cash stock-based compensation, severance and related expense, interest and taxes, and other non-cash expenses including asset impairment costs, change in fair value of contingent consideration, and change in fair value of notes payable. The table below includes a reconciliation of this non-GAAP financial measure to the most directly comparable GAAP financial measure.

In October 2021, the Company and its subsidiaries entered into the Term Loan with BroadOak, providing for a term loan in the aggregate principal amount of $8,000,000. Funding of the Term Loan took place on November 1, 2021. The Term Loan was scheduled to mature upon the earlier of (i) October 31, 2024 or (ii) the occurrence of a change in control, and bears interest at the rate of 9% per annum. The Term Loan is secured by a security interest in substantially all the Company’s and its subsidiaries’ assets and was subordinate to the Company’s former $7,500,000 revolving credit facility with Comerica Bank. The Term Loan hashad an origination fee of 3% of the Term Loan amount, and a terminal payment equal to (i) 15% of the original principal amount of the Term Loan if the change of control occursoccurred on or prior to the first anniversary anniversary of the funding of the Term Loan, (ii) 20% of the original principal amount of the Term Loan if the change of control occurs occurred after the first anniversary but on or prior to the second anniversary of the funding of the Term Loan and (iii) 30% of the original principal amount amount of the Term Loan if the change of control occursoccurred after the second anniversary of the funding of the Term Loan, or if the Term Loan is repaid on its maturity date. Upon receipt of the termTerm loan,Loan, the proceeds were used to repay in full at their maturity the certain notes extended by Ampersand and 1315 Capital discussed above.Capital. See Note 13,12, Notes Payable, for more details. In May 2022, the Company issued a Convertible Convertible Note to BroadOak, pursuant to which BroadOak funded a term loan in the aggregate principal amount of $2.0 million which was converted converted into a subordinated term loan and was added to the outstanding balance of the Term Loan. See Note 13,12, Notes Payable, in the Company’s Consolidated Financial Statements for more details.

On March 29, 2024, the Company entered into a Third Amendment to the Loan and Security Agreement with BroadOak (the “Third Amendment”), extending the loan maturity date to June 30, 2025.. The primary changes to the Second Amendment were as follows:

On January 14, 2025, the Company entered into a Fourth Amendment to the Loan and Security Agreement with BroadOak (the “Fourth Amendment”), extending the loan maturity date to December 31, 2025.. The primary changes to the Third Amendment were as follows:

The Term Loan containscontained affirmative and negative restrictive covenants, including restrictions on certain mergers, acquisitions, investments and encumbrances which could have adversely affectaffected our ability to conduct our business. The Term Loan also containscontained customary events of default. The balance of the loanTerm at December 31, 2024Loan was $4.4paid million.in full in November 2025.

During the year ended December 31, 2025, there was net cash used in investing activities of $0.4 million which primarily pertained to capital expenditures associated with the lab. During the year ended December 31, 2024, there was net cash used in investing activities of $0.9 million which primarily pertained to capital expenditures associated with the lab. During the year ended December 31, 2023, there was net cash used in investing activities of $0.1 million.

On January 9, 2025, we announced that the new LCD established non-coverage for the Company’s PancraGEN® test, and that we would stop offering the test and would not accept specimens for first-line fluid chemistry and PancraGEN® testing after February 7, 2025. As a result of the established non-coverage for PancraGEN®., we announcedannounced, in January 2025, that our board of directors had approved the Restructuring Plan to reduce operating costs and better align our workforce with the loss of PancraGEN®. See “Restructuring.”

On January 27, 2025, the Company announced that CMS had directed its Medicare Administrative Contractors, Novitas and First Coast Service Options, Inc., to delay implementation of the Genetic Testing for Oncology LCD (L39365), from February 23, 2025 until April 24, 2025. On April 24, 2025, the Company announced that the LCD would take effect immediately and that specimens for first-line fluid chemistry and PancraGEN® testing will not be accepted by the Company after May 2, 2025. On April 25, 2025, the Company announced implementation of its previously approved Restructuring Plan. The Company statedhas thatincurred approximately $0.7 million in severance and related costs as a result of this change of effective date will allow the Trump administration time to fully review the proposed policy changes, re-evaluate for themselves the supporting clinical evidence for the PancraGEN® assay, and fully assess the negative impact on patient care if the currently proposed LCD comes into effect.plan.

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K of the Company filed with the SEC on March 30, 2026, as amended, and as updated and supplemented in subsequent filings. These risk factors could materially harm our business, operating results and financial condition. Additional factors and uncertainties not currently known to us or that we currently consider immaterial also may materially adversely affect our business, financial condition or future results.

On January 20, 2026, we announced that all shares of Series C Preferred Stock were converted into shares of Common Stock, resulting in the issuance of approximately 23,267,327 shares of Common Stock (calculated as $1,000 stated value per preferred share divided by the $2.02 conversion price). As a result of these conversions and the subsequent issuances, there were 27,700,904 shares of Common Stock outstanding as of MarchJune 31,30, 2026.

Our clinical services business commercializes clinically useful molecular diagnostic tests and molecular pathology services. We commercialize genomicesoteric diagnostic tests andthat related first-line assaysare principally focused on risk-stratification of cancer using the latest technology to help personalize personalize medicine and improve patient diagnosis and management. Our tests and services provide pathological, mutational analysis of genomic material contained in suspicious cysts, nodules, and lesionsepigenetic analysis of fine-needle aspiration biopsies derived from thyroid nodules with the goal of better informing surgery or surveillance treatment decisions in in patients suspected of thyroid, pancreatic, and other cancers. The molecular diagnostic tests we offer enable healthcare providers to to stratify cancer risk, helping to avoid unnecessary surgical treatment in patients at low risk, while also helping to identify patients that would benefit from increased surveillance or surgical intervention.

We currently have two commercialized molecular diagnostic tests in the marketplace: ThyGeNEXT®, an expanded oncogenic mutation panel that helps “rule-in” and “rule-out” malignancy in thyroid nodules and ThyraMIR®v2, used in combination with ThyGeNEXT®, whichto help in further stratifiesrefining the malignancy risk of indeterminate thyroid nodules for malignancy risk utilizing a proprietary microRNA gene expression classifier.

Condensed Consolidated Results of Continuing Operations for the Quarter Ended MarchJune 31,30, 2026 Compared to the Quarter Ended MarchJune 31,30, 2025 (unaudited, in thousands)

ConsolidatedRevenue, revenue, net for the three months ended MarchJune 31,30, 2026 decreased by $2.5$0.1 million, or 22%,1%, to $9.0$9.1 million, compared to $11.5$9.2 million for the three months ended MarchJune 31,30, 2025. The decrease in net revenue was primarily driven by the loss of reimbursement for PancraGEN® in in April 2025, which resulted in specimens for PancraGEN® testing no longer being accepted by the Company after May 2, 2, 2025.

Consolidated cost of revenue for the three months ended MarchJune 31,30, 2026 was $3.1$3.5 million, as compared to $4.1$4.0 million for the three months ended MarchJune 31,30, 2025. The decrease was primarily driven by the discontinuance of our PancraGEN® test resulting from the loss of reimbursement discussed above. As a percentage of revenue, cost of revenue wasdecreased approximatelyto 35%38% for the three months ended MarchJune 31,30, 2026 andas 36%compared to 43% in forthe comparable prior year period. This decrease can be attributed to the threedecline monthsin endedvariable Marchcosts, 31,including 2025.lab supplies.

Consolidated gross profit was approximately $5.9$5.7 million for the three months ended MarchJune 31,30, 2026 and $7.4$5.3 million for the three months ended MarchJune 31,30, 2025. The grossincrease profit percentage was approximately 65% for the three months ended March 31, 2026 and 64% for the three months ended March 31, 2025. The decrease in gross profit can beis attributed to the decreaselower incost of revenue resultingdiscussed from the discontinuance of our PancraGEN® test as a result of the loss of reimbursement.above.

Sales and marketing expense was approximately $2.2 million for the three months ended MarchJune 31,30, 2026 and $2.8$2.9 million for the three months ended endedJune March 31,30, 2025. TheThere decreasewas canapproximately be$0.5 attributedmillion toin severance and related costs included in the reductionthree inmonths salesforceended sizeJune as30, a2025. These resultcosts ofpertained to the loss of PancraGEN® reimbursement as discussed previously. As a percentage of revenue, sales and marketing expense was approximately 24% for the three months ended June 30, 2026 and 32% for the three months ended June 30, 2025.

Research and development expense was approximately $0.2$0.1 million for both the three months ended MarchJune 31,30, 2026 and March$0.2 31,million 2025,for the three months ended June 30, 2025. As a percentage of revenue, research and development expense was approximately 2% in both periods, respectively.

General and administrative expense was approximately $2.5$3.0 million for the three months ended MarchJune 31,30, 2026 and $2.6$2.7 million for the three months ended MarchJune 31,30, 2025. As a percentage of revenue, general and administrative expense was 27% for the three months ended March 31, 2026 as compared to 22% for the three months ended March 31, 2025. This percentageThe increase can be primarily attributed to thean declineincrease in revenueprofessional mentionedservices costs of $0.1 million and an increase above.in employee and related costs of $0.2 million.

Operating income from continuing operations remained comparable as it was $1.1$1.4 million for both the threesix months ended MarchJune 31,30, 2026 and $1.8 million for the three months ended March 31, 2025. The decrease in operating income for the threesix months ended MarchJune 31,30, 2026 can be primarily attributed to the decrease in revenue and gross profit discussed above.2025.

Note payable interest expense was $0.1 million for the threesix months ended MarchJune 31,30, 2025. The interest expense was from our former Term Loan with BroadOak Fund V, L.P. (“Term Loan”) which has since been repaid.

Income tax expense was approximately $0.3$0.4 million for the threesix months ended MarchJune 31,30, 2026 and $18,000 for the threesix months ended March 31,June 30, 2025. The income tax expense for the threesix months ended MarchJune 31,30, 2026 was primarily due to our net income for the threesix months ended MarchJune 31,30, 2026 and deferred tax expense. The income tax expense for the threesix months ended MarchJune 31,30, 2025 was primarily related to state and local taxes.

We had a loss from discontinued operations of approximately $0.1$0.2 million for both the threesix months ended MarchJune 31,30, 2026 and MarchJune 31,30, 2025.2025, respectively.

In this Quarterly Report on Form 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, non-cash stock-based compensation, non-recurring legal expenses, severance expense, asset impairment, interest and taxes, and other non-cash expenses including change in fair value of notes payable. The legal expenses included are related to NASDAQ uplist costs, special proxy and charter work, and an employment dispute. The table below includes a reconciliation of this non-GAAP financial measure to the most directly comparable GAAP financial measure.

For the threesix months ended MarchJune 31,30, 2026, we had operating income from continuing operations of $1.1$1.4 million. As of MarchJune 31,30, 2026, we had cash cash and cash equivalents of $2.6$2.7 million, total current assets of $10.0$11.0 million and current liabilities of $4.0$5.0 million. As of MayJuly 1,31, 2026, 2026, we had approximately $2.9$2.7 million of cash and cash equivalents.

During the threesix months ended MarchJune 31,30, 2026, net cash provided by operating activities was $0.3$0.4 million. The main component of cash provided by operating activities was our net income of $0.7$0.9 million and non-cash adjustments of $0.5$1.0 million, which were partially offset by a decrease in accrued salaries and bonus of $1.2$0.9 million and increase in accounts receivable of $0.7 million. During the threesix months ended MarchJune 31, 30, 2025, net cash provided by operating activities was $1.2$1.8 million. The main component of cash provided by operating activities was our net income of $1.6 $1.0 million.

For both the threesix months ended MarchJune 31,30, 2026,2026 and June 30, 2025, respectively, cash used in investing activities was $0.1$0.2 million which pertained to the purchase of lab equipment. For the three months ended March 31, 2025, cash used in investing activities was zero.

For the threesix months ended MarchJune 31,30, 2026, there was no cash used in financing activities. For the threesix months ended MarchJune 31,30, 2025, cash used used in financing activities was $1.5$2.5 million, which were payments made on our former Term Loan.

We generated positive cash flows from operations for the threesix months ending MarchJune 31,30, 2026. We intend to meet our ongoing capital needs by by using our available cash as well as through targeted margin improvement, collection of accounts receivable, containment of costs, and and the potential use of other financing options and other strategic alternatives.

The Company continues to explore various strategic alternatives, dilutive and non-dilutive sources of funding, including equity and debt financings, strategic alliances, business development and other sources in order to provide additional liquidity. With the delisting of the Common Stock from Nasdaq in February 2021, our ability to raise additional capital on terms acceptable to the Company has been adversely impacted. There can be no assurance that the Company will be successful in obtaining such funding on terms acceptable to the Company. The Company intendsis to seekseeking an uplisting of its Common Stock to Nasdaq, but no assurances can be given that a Nasdaq listing will will be achieved.

We do not believe that inflation had a significant impact on our results of operations for the periods presented. However, inflation and supply chain disruptions, whether caused by tariffs, restrictions or slowdowns in shipping or logistics, increases in demand for certain goods goods used in our operations, tariffs, or otherwise, could impact our operations in the near term.