Highlights Independent institutional experience shows archival cytology slides enabled successful molecular results in cases previously insufficient for testing by another commercially available molecular diagnostic test, helping avoid repeat FNAsLarge real-world analysis (n=28,144) demonstrates how ThyGeNEXT® + ThyraMIR®v2 refines risk in Bethesda III/IV nodules, especially in RAS-like and mutation-negative casesPresentations were held during the ATA Annual Meeting, September 10–14, 2025, at the Westin Kie ...

Interpace Biosciences Q2 2025 Financial and Business Results [Business & Financial Highlights](index=1&type=section&id=Business%20%26%20Financial%20Highlights) The company is transitioning to a thyroid testing focus, with Q2 2025 revenue impacted by PancraGEN wind-down, but showing strong July 2025 growth - The company is transitioning to a business focused solely on **Thyroid testing** following the loss of reimbursement for its PancraGEN test[2](index=2&type=chunk)[3](index=3&type=chunk) - The reported loss includes **$1.2 million** in one-time charges associated with the wind-down of the PancraGEN business[2](index=2&type=chunk)[5](index=5&type=chunk) - The core Thyroid testing business demonstrated significant year-over-year growth in Q2, with **double-digit increases** in both volume and revenue[3](index=3&type=chunk)[4](index=4&type=chunk) - Positive momentum continued into Q3, with preliminary revenue for July 2025 reaching **$3.3 million**, a **54% increase** compared to July 2024[2](index=2&type=chunk) [Second Quarter 2025 Financial Performance](index=1&type=section&id=Second%20Quarter%202025%20Financial%20Performance) Q2 2025 net revenue decreased to $9.2 million, resulting in an operating loss, primarily due to PancraGEN reimbursement loss, despite strong Thyroid segment growth Q2 2025 vs. Q2 2024 Financial Comparison | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Net Revenue | $9.2 million | $12.0 million | -23% | | Thyroid Revenue | $8.7 million | Not specified | +25% | | Thyroid Test Volume | Record levels | Not specified | +16% | | Gross Profit % | 57% | 65% | -8 p.p. | | Operating (Loss) Income | ($0.5 million) | $2.6 million | - | | Loss from Continuing Ops | ($0.5 million) | $2.5 million (Income) | - | | Adjusted EBITDA | $0.4 million | $2.8 million | -85.7% | | Cash Collections | $10.8 million | $11.0 million | -1.8% | - Excluding the one-time impact from the PancraGEN reimbursement loss, the Gross Profit percentage would have been **65%**, consistent with the prior year quarter[5](index=5&type=chunk) [Financial Statements](index=3&type=section&id=Financial%20Statements) The consolidated financial statements show a Q2 2025 net loss, reduced assets and liabilities, and positive operating cash flow offset by financing activities [Condensed Consolidated Statements of Operations](index=3&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) Interpace reported a Q2 2025 net loss of $640,000, a reversal from prior year income, driven by revenue decline and increased operating expenses Statement of Operations Highlights (in thousands) | Metric | Q2 2025 | Q2 2024 | Six Months 2025 | Six Months 2024 | | :--- | :--- | :--- | :--- | :--- | | Revenue, net | $9,232 | $12,042 | $20,747 | $22,219 | | Gross Profit | $5,276 | $7,806 | $12,646 | $14,117 | | Operating (loss) income | $(468) | $2,632 | $1,362 | $3,746 | | (Loss) income from continuing operations | $(533) | $2,511 | $1,221 | $3,323 | | Net (loss) income | $(640) | $2,437 | $1,007 | $3,145 | [Selected Balance Sheet Data](index=4&type=section&id=Selected%20Balance%20Sheet%20Data) As of June 30, 2025, cash and cash equivalents decreased to $502 thousand, with total assets and liabilities also reduced, while the stockholders' deficit improved Balance Sheet Highlights (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $502 | $1,461 | | Total current assets | $9,504 | $11,773 | | Total assets | $12,335 | $14,792 | | Total current liabilities | $7,149 | $10,615 | | Total liabilities | $13,548 | $17,009 | | Total stockholders' deficit | $(1,213) | $(2,217) | [Selected Cash Flow Data](index=4&type=section&id=Selected%20Cash%20Flow%20Data) For the six months ended June 30, 2025, net cash provided by operating activities was $1,755 thousand, offset by financing activities, resulting in a net decrease in cash Cash Flow Highlights for Six Months Ended June 30 (in thousands) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $1,755 | $1,346 | | Net cash used in investing activities | $(201) | $(225) | | Net cash used in financing activities | $(2,513) | $(2,600) | | Change in cash and cash equivalents | $(959) | $(1,479) | [Non-GAAP Financial Measures](index=5&type=section&id=Non-GAAP%20Financial%20Measures) Adjusted EBITDA, a non-GAAP measure, significantly decreased to $365 thousand in Q2 2025, reflecting adjustments for severance and asset impairment related to the PancraGEN wind-down - Adjusted EBITDA is used by management to measure the cash flow of the ongoing business, defined as income/loss from continuing operations adjusted for specific non-cash and non-recurring items[21](index=21&type=chunk) Reconciliation of Adjusted EBITDA (in thousands) | Metric | Q2 2025 | Q2 2024 | Six Months 2025 | Six Months 2024 | | :--- | :--- | :--- | :--- | :--- | | (Loss) income from continuing operations (GAAP) | $(533) | $2,511 | $1,221 | $3,323 | | Severance & related expense | $524 | $ - | $692 | $ - | | Asset impairment - lab supplies | $198 | $ - | $198 | $ - | | Adjusted EBITDA (Non-GAAP) | $365 | $2,752 | $2,472 | $3,997 | [Company Overview](index=2&type=section&id=About%20Interpace%20Biosciences) Interpace Biosciences specializes in personalized medicine, offering molecular diagnostic tests and pathology services for cancer risk assessment, including commercialized tests for thyroid and lung cancer - Interpace offers specialized services in **personalized medicine**, focusing on diagnosis and prognostic planning for cancer[6](index=6&type=chunk) - The company has three commercialized molecular tests: **ThyGeNEXT**, **ThyraMIRv2** (for thyroid cancer), and **RespriDX** (for lung cancer)[7](index=7&type=chunk) [Forward-Looking Statements](index=2&type=section&id=Forward-looking%20Statements) This section contains forward-looking statements subject to risks and uncertainties, including the company's history of losses, financing needs, and dependence on clinical service reimbursements - The press release contains forward-looking statements regarding future financial and operating performance, which are subject to significant risks and uncertainties[9](index=9&type=chunk) - Key risks include the company's history of operating losses, ability to finance its business, dependence on clinical service reimbursements, and the impact of the PancraGEN product reimbursement loss[9](index=9&type=chunk)

PART I - FINANCIAL INFORMATION [Item 1. Unaudited Interim Condensed Consolidated Financial Statements](index=4&type=section&id=Item%201.%20Unaudited%20Interim%20Condensed%20Consolidated%20Financial%20Statements) Interim financials for June 30, 2025, reflect decreased assets, a Q2 net loss due to lost Medicare coverage, and reduced cash despite positive operating cash flow [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets and liabilities decreased, while the total stockholders' deficit slightly improved Condensed Consolidated Balance Sheet Highlights (in thousands) | Metric | June 30, 2025 (unaudited) | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $502 | $1,461 | | Total current assets | $9,504 | $11,773 | | Total assets | $12,335 | $14,792 | | Total current liabilities | $7,149 | $10,615 | | Total liabilities | $13,548 | $17,009 | | Total stockholders' deficit | $(1,213) | $(2,217) | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q2 2025 revenue decreased 23% year-over-year, resulting in a net loss, with six-month revenue also declining Statement of Operations Summary (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | Six Months 2025 | Six Months 2024 | | :--- | :--- | :--- | :--- | :--- | | Revenue, net | $9,232 | $12,042 | $20,747 | $22,219 | | Gross profit | $5,276 | $7,806 | $12,646 | $14,117 | | Operating (loss) income | $(468) | $2,632 | $1,362 | $3,746 | | Net (loss) income | $(640) | $2,437 | $1,007 | $3,145 | | Net (loss) income per basic share | $(0.14) | $0.56 | $0.23 | $0.72 | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2025, operating cash flow increased, but financing outflows led to a net cash decrease Cash Flow Summary for the Six Months Ended June 30 (in thousands) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $1,755 | $1,346 | | Net cash used in investing activities | $(201) | $(225) | | Net cash used in financing activities | $(2,513) | $(2,600) | | **Net decrease in cash and cash equivalents** | **$(959)** | **$(1,479)** | | Cash and cash equivalents – ending | $502 | $2,019 | [Notes to Unaudited Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) The notes detail liquidity challenges from lost Medicare coverage for PancraGEN, a restructuring plan, and the BroadOak term loan status - The company was negatively impacted by Local Coverage Determination (LCD) L39365, which resulted in the loss of Medicare coverage for its **PancraGEN molecular test** as of April 24, 2025[22](index=22&type=chunk) - A restructuring and cost-savings plan was implemented, resulting in workforce reductions and severance costs of **$0.7 million** for the six months ended June 30, 2025[23](index=23&type=chunk)[25](index=25&type=chunk)[87](index=87&type=chunk) - Despite the loss of PancraGEN revenue, management anticipates that current cash and forecasted receipts will be **sufficient to meet cash requirements for the next twelve months**[29](index=29&type=chunk) - The outstanding balance of the Term Loan with BroadOak was **$1.9 million** as of June 30, 2025, with the maturity date extended to **December 31, 2025**[73](index=73&type=chunk)[72](index=72&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=22&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the impact of lost Medicare coverage for PancraGEN, leading to revenue decline and operating loss, and liquidity strategies - The primary challenge discussed is the reliance on Medicare reimbursement and the negative impact from the Center for Medicare and Medicaid Services' decision to cease coverage for the **PancraGEN test**, effective April 24, 2025[94](index=94&type=chunk)[97](index=97&type=chunk) - As a result of the PancraGEN non-coverage, the company implemented a restructuring plan, incurring approximately **$0.7 million** in related costs for the first six months of 2025[100](index=100&type=chunk) - The company's **liquidity strategy** involves using available cash, improving margins, collecting receivables, containing costs, and exploring other financing or strategic alternatives[139](index=139&type=chunk)[140](index=140&type=chunk) Reconciliation of Adjusted EBITDA (in thousands) | Metric | Q2 2025 | Q2 2024 | Six Months 2025 | Six Months 2024 | | :--- | :--- | :--- | :--- | :--- | | (Loss) income from continuing operations (GAAP) | $(533) | $2,511 | $1,221 | $3,323 | | **Adjusted EBITDA (Non-GAAP)** | **$365** | **$2,752** | **$2,472** | **$3,997** | [Results of Operations](index=25&type=section&id=Results%20of%20Operations) Q2 2025 net revenue decreased 23% due to lost PancraGEN reimbursement, leading to an operating loss, with six-month revenue also down - Q2 2025 net revenue decreased by **$2.8 million (23%)** year-over-year, primarily driven by the loss of reimbursement for **PancraGEN**[108](index=108&type=chunk) - Q2 2025 operating expenses included **$0.5 million** in severance and related costs and a **$0.2 million** asset impairment charge for lab supplies associated with PancraGEN[111](index=111&type=chunk)[113](index=113&type=chunk) - For the six months ended June 30, 2025, net revenue decreased by **$1.5 million (7%)** year-over-year, also due to the loss of PancraGEN revenue[119](index=119&type=chunk) [Liquidity and Capital Resources](index=29&type=section&id=Liquidity%20and%20Capital%20Resources) The company ended with **$0.5 million** cash, with operating cash flow of **$1.8 million**, anticipating sufficient liquidity for the next twelve months - As of June 30, 2025, the company had **$0.5 million** in cash and cash equivalents, down from **$1.5 million** at year-end 2024[136](index=136&type=chunk) - The Term Loan with BroadOak has been amended multiple times, extending the maturity date to **December 31, 2025**. The outstanding balance was **$1.9 million** at June 30, 2025[135](index=135&type=chunk) - Management believes that even with the loss of PancraGEN reimbursement, current cash and forecasted receipts are **sufficient for the next twelve months**[144](index=144&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=31&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, the company is not required to provide quantitative and qualitative disclosures about market risk - The company is not required to provide information for this item as it qualifies as a **smaller reporting company**[148](index=148&type=chunk) [Item 4. Controls and Procedures](index=32&type=section&id=Item%204.%20Controls%20and%20Procedures) A material weakness in internal control over financial reporting was identified, rendering disclosure controls ineffective, with a remediation plan adopted - A **material weakness** was identified in internal control over financial reporting related to accruing royalty expense and understanding complex royalty agreements[150](index=150&type=chunk) - Due to the material weakness, the company's disclosure controls and procedures were concluded to be **not effective** as of June 30, 2025[150](index=150&type=chunk) - A **remediation plan** has been adopted, involving quarterly meetings between the accounting department and lab management to mitigate the weakness[151](index=151&type=chunk) PART II - OTHER INFORMATION [Item 1. Legal Proceedings](index=32&type=section&id=Item%201.%20Legal%20Proceedings) The company reported no pending legal proceedings at this time - There are **no pending legal proceedings** involving the Company at this time[153](index=153&type=chunk)[48](index=48&type=chunk) [Item 1A. Risk Factors](index=32&type=section&id=Item%201A.%20Risk%20Factors) The report refers to previously disclosed risk factors in the Annual Report on Form 10-K, with no material changes noted - The company directs investors to the risk factors disclosed in its **Annual Report on Form 10-K** filed on March 31, 2025, as amended[154](index=154&type=chunk) [Other Items (2, 3, 4, 5)](index=32&type=section&id=Other%20Items%20%282%2C%203%2C%204%2C%205%29) The company reported no information for Items 2, 3, 4, or 5, including no unregistered equity sales or defaults - **No information was reported** for Item 2 (Unregistered Sales of Equity Securities), Item 3 (Defaults Upon Senior Securities), Item 4 (Mine Safety Disclosures), or Item 5 (Other Information)[155](index=155&type=chunk)[156](index=156&type=chunk)[157](index=157&type=chunk)[158](index=158&type=chunk) [Item 6. Exhibits](index=34&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including corporate governance documents and officer certifications - The exhibits include certifications from the Principal Executive Officer and Principal Financial Officer as required by the **Sarbanes-Oxley Act of 2002**[160](index=160&type=chunk)

PART I - FINANCIAL INFORMATION [Unaudited Interim Condensed Consolidated Financial Statements](index=3&type=section&id=Item%201.%20Unaudited%20Interim%20Condensed%20Consolidated%20Financial%20Statements) Unaudited Q1 2025 financial statements detail revenue and net income growth, stockholders' deficit, and notes on PancraGEN, restructuring, and debt [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2025, total assets slightly decreased, total liabilities decreased, and the stockholders' deficit improved Condensed Consolidated Balance Sheets (in thousands) | | March 31, 2025 (unaudited) | December 31, 2024 | | :--- | :--- | :--- | | **Total current assets** | $11,654 | $11,773 | | **Total assets** | $14,494 | $14,792 | | **Total current liabilities** | $8,678 | $10,615 | | **Total liabilities** | $15,076 | $17,009 | | **Total stockholders' deficit** | $(582) | $(2,217) | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For Q1 2025, net revenue grew **13%**, operating income increased, and net income more than doubled Q1 2025 vs Q1 2024 Statement of Operations (in thousands, except per share data) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | **Revenue, net** | $11,515 | $10,178 | | **Gross profit** | $7,370 | $6,311 | | **Operating income from continuing operations** | $1,829 | $1,114 | | **Net income** | $1,647 | $708 | | **Net income per basic share** | $0.37 | $0.16 | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Q1 2025 saw significant improvement in operating cash flow, with cash used in financing activities, leading to an overall cash decrease Q1 2025 vs Q1 2024 Cash Flows (in thousands) | Cash Flow Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | **Net cash provided by (used in) operating activities** | $1,235 | $(58) | | **Net cash used in investing activities** | $0 | $(28) | | **Net cash used in financing activities** | $(1,500) | $(600) | | **Net decrease in cash and cash equivalents** | $(265) | $(686) | | **Cash and cash equivalents – ending** | $1,196 | $2,812 | [Notes to Unaudited Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) These notes detail liquidity, a corporate restructuring plan, amendments to the term loan, preferred stock conversion, and subsequent events - The company provides molecular diagnostics and pathology services focused on early cancer detection[21](index=21&type=chunk) - A Local Coverage Determination (LCD) by Medicare contractor Novitas resulted in the loss of Medicare coverage for the PancraGEN test, effective **April 24, 2025**, with the company stopping specimen acceptance after **May 2, 2025**[25](index=25&type=chunk)[27](index=27&type=chunk) - In response to losing PancraGEN coverage, the board approved a Restructuring Plan to reduce operating costs, expecting to incur severance costs of **$0.5 to $0.6 million** in Q2 2025, in addition to **$0.2 million** recorded in Q1 2025[26](index=26&type=chunk)[28](index=28&type=chunk)[92](index=92&type=chunk) - Despite the loss of PancraGEN, management anticipates that current cash, cash equivalents, and forecasted cash receipts will be sufficient to meet cash requirements for the next twelve months[32](index=32&type=chunk) - The company's term loan with BroadOak was amended multiple times, with the maturity date extended to **December 31, 2025**, and an outstanding balance of **$2.9 million** as of March 31, 2025[75](index=75&type=chunk)[76](index=76&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=22&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2025 financial results, PancraGEN reimbursement cessation impact, a corporate restructuring plan, and sufficient liquidity [Results of Operations](index=25&type=section&id=Results%20of%20Operations) Q1 2025 revenue increased **13%** due to higher test volumes, with gross profit margin improving and operating income growing Q1 2025 vs Q1 2024 Results of Operations (in thousands) | | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | **Revenue, net** | $11,515 | $10,178 | | **Gross profit** | $7,370 | $6,311 | | **Gross Margin** | 64.0% | 62.0% | | **Operating income** | $1,829 | $1,114 | | **Net income** | $1,647 | $708 | - The increase in revenue was driven by increased test volumes compared to the prior year[112](index=112&type=chunk) [Liquidity and Capital Resources](index=28&type=section&id=Liquidity%20and%20Capital%20Resources) The company generated cash from operations, amended its primary term loan, and anticipates sufficient liquidity for the next twelve months - As of **May 2, 2025**, the company had approximately **$1.6 million** of cash and cash equivalents[130](index=130&type=chunk) - The company's term loan with BroadOak was amended in **January 2025**, extending the maturity date to **December 31, 2025**[127](index=127&type=chunk)[128](index=128&type=chunk) - Management anticipates that current cash and forecasted cash receipts will be sufficient to meet its cash requirements through the next twelve months, even with the loss of PancraGEN reimbursement[138](index=138&type=chunk) [Non-GAAP Financial Measures](index=27&type=section&id=Non-GAAP%20Financial%20Measures) Adjusted EBITDA, a non-GAAP measure, significantly increased in Q1 2025, with reconciliation from GAAP income Reconciliation of Adjusted EBITDA (in thousands) | | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | **Income from continuing operations (GAAP Basis)** | $1,754 | $812 | | **Adjusted EBITDA** | $2,096 | $1,245 | [Quantitative and Qualitative Disclosures About Market Risk](index=30&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, Interpace Biosciences is not required to provide market risk disclosures - The company is a smaller reporting company and is not required to provide the information requested by this item[141](index=141&type=chunk) [Controls and Procedures](index=30&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls were ineffective due to a material weakness in royalty expense accrual, with a remediation plan adopted - A material weakness was identified in the company's internal control over financial reporting related to accruing royalty expense and understanding complex agreements[143](index=143&type=chunk) - Due to this material weakness, the principal executive officer and principal financial officer concluded that disclosure controls and procedures were not effective as of **March 31, 2025**[143](index=143&type=chunk) - A remediation plan has been adopted, which includes holding quarterly meetings between the accounting department and lab management to discuss new agreements[144](index=144&type=chunk) PART II - OTHER INFORMATION [Legal Proceedings](index=32&type=section&id=Item%201.%20Legal%20Proceedings) The company reported no legal proceedings during the period - There are no legal proceedings to report[147](index=147&type=chunk) [Risk Factors](index=32&type=section&id=Item%201A.%20Risk%20Factors) The company refers investors to risk factors in its Annual Report on Form 10-K, with no material changes reported - The report refers to the risk factors disclosed in the company's Annual Report on Form 10-K filed on **March 31, 2025**[148](index=148&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=32&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities or use of proceeds during the period - There were no unregistered sales of equity securities or use of proceeds to report[149](index=149&type=chunk) [Exhibits](index=32&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including the BroadOak loan amendment and officer certifications - Key exhibits filed include the Fourth Amendment to the Loan and Security Agreement with BroadOak Fund V, L.P., and officer certifications pursuant to the Sarbanes-Oxley Act of 2002[153](index=153&type=chunk)

[Interpace Biosciences First Quarter 2025 Results](index=1&type=section&id=Interpace%20Biosciences%20First%20Quarter%202025%20Results) [Business and Financial Highlights](index=1&type=section&id=Business%20and%20Financial%20Highlights) Interpace Biosciences reported strong Q1 2025 financial results, driven by record Thyroid test revenue and cash collections, and initiated full-year 2025 revenue guidance - Management highlighted **record Thyroid test revenue and cash collections**, attributing the success to increased volume and collection initiatives. The company's cash position enabled investments in AI and automation for lab efficiency and allowed for additional principal payments on long-term debt[2](index=2&type=chunk)[3](index=3&type=chunk) - The company has initiated its full-year 2025 revenue guidance at approximately **$38 million**, factoring in the expected loss of PancraGEN revenue after May 2, 2025[2](index=2&type=chunk) Q1 2025 Financial Performance vs. Q1 2024 | Metric | Q1 2025 | Q1 2024 | % Change | | :--- | :--- | :--- | :--- | | **Net Revenue** | **$11.5 million** | $10.2 million | **+13%** | | **Cash Collections** | **$11.3 million** | - | **+10%** | | **Thyroid Test Volume** | - | - | **+16%** | | **Thyroid Revenue** | **$8.0 million** | - | **+19%** | | **Gross Profit %** | **64%** | 62% | **+2 p.p.** | | **Operating Income** | **$1.8 million** | $1.1 million | **+64%** | | **Income from Continuing Ops** | **$1.8 million** | $0.8 million | **+125%** | | **Adjusted EBITDA** | **$2.1 million** | $1.2 million | **+75%** | [Financial Statements](index=3&type=section&id=Financial%20Statements) This section presents the company's condensed consolidated statements of operations, selected balance sheet data, and cash flow information [Condensed Consolidated Statements of Operations](index=3&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) The Q1 2025 statement of operations reflects significant year-over-year growth in net revenue, gross profit, and net income Q1 2025 vs Q1 2024 Statement of Operations (in thousands) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | **Revenue, net** | **$11,515** | **$10,178** | | Gross Profit | $7,370 | $6,311 | | Total operating expenses | $5,541 | $5,197 | | **Operating income** | **$1,829** | **$1,114** | | Income from continuing operations | $1,754 | $812 | | **Net income** | **$1,647** | **$708** | | Basic EPS from continuing ops | $0.40 | $0.19 | [Selected Balance Sheet Data](index=4&type=section&id=Selected%20Balance%20Sheet%20Data) The balance sheet as of March 31, 2025, indicates a reduction in total liabilities and a significant improvement in the stockholders' deficit Balance Sheet Data (in thousands) | Metric | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $1,196 | $1,461 | | Total current assets | $11,654 | $11,773 | | Total current liabilities | $8,678 | $10,615 | | **Total liabilities** | **$15,076** | **$17,009** | | **Total stockholders' deficit** | **($582)** | **($2,217)** | [Selected Cash Flow Data](index=5&type=section&id=Selected%20Cash%20Flow%20Data) Cash flow data for Q1 2025 shows a positive shift to cash generation from operating activities, with increased cash used in financing for debt repayment Cash Flow Data for Three Months Ended March 31 (in thousands) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | **Net cash provided by (used in) operating activities** | **$1,235** | **($58)** | | Net cash used in investing activities | $0 | ($28) | | Net cash used in financing activities | ($1,500) | ($600) | | **Change in cash and cash equivalents** | **($265)** | **($686)** | | Cash and cash equivalents – ending | $1,196 | $2,812 | [Non-GAAP Financial Measures](index=6&type=section&id=Non-GAAP%20Financial%20Measures) The company presents Adjusted EBITDA as a key non-GAAP measure to assess ongoing business performance and cash flow, showing a significant increase in Q1 2025 - Management uses **Adjusted EBITDA** to measure the cash flow of the ongoing business. It is defined as income from continuing operations adjusted for depreciation, amortization, stock-based compensation, severance, interest, taxes, and other non-cash expenses[20](index=20&type=chunk)[21](index=21&type=chunk) Reconciliation of Adjusted EBITDA (in thousands) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | **Income from continuing operations (GAAP)** | **$1,754** | **$812** | | Depreciation and amortization | $95 | $52 | | Stock-based compensation | $15 | $79 | | Severance expense | $168 | $0 | | Note payable interest | $78 | $197 | | Other adjustments | ($15) | $86 | | **Adjusted EBITDA (Non-GAAP)** | **$2,096** | **$1,245** | [About Interpace Biosciences & Forward-Looking Statements](index=2&type=section&id=About%20Interpace%20Biosciences%20%26%20Forward-Looking%20Statements) Interpace Biosciences specializes in molecular diagnostic tests for cancer risk evaluation, and this report includes standard forward-looking statements regarding future performance - The company's clinical services offer molecular diagnostic tests for cancer risk evaluation, including three commercialized tests: **ThyGeNEXT®**, **ThyraMIR®v2** (thyroid cancer), and **RespriDX®** (lung cancer)[7](index=7&type=chunk) - The press release includes **forward-looking statements** concerning future financial and operating performance, which are subject to various risks and uncertainties, including the potential inaccuracy of revenue estimates and reliance on third-party payer reimbursements[9](index=9&type=chunk)[10](index=10&type=chunk)

Core Viewpoint - Interpace Biosciences reported strong financial results for Q1 2025, highlighting record revenues in thyroid testing and a positive outlook for the full year despite the loss of PancraGEN revenue after May 2, 2025 [2][3]. Financial Performance - Q1 2025 net revenue was $11.5 million, a 13% increase from $10.2 million in Q1 2024 [6][7]. - Income from continuing operations was $1.8 million, up from $0.8 million in the prior year quarter, reflecting a $0.9 million improvement [2][7]. - Gross profit margin improved to 64% compared to 62% in the prior year quarter [7]. - Adjusted EBITDA for Q1 2025 was $2.1 million, compared to $1.2 million in Q1 2024 [7][21]. Revenue Growth - Cash collections reached $11.3 million, a 10% increase year-over-year, achieving record levels [6][7]. - Thyroid test revenue was $8.0 million, representing a 19% increase year-over-year, with test volume up 16% [6][7]. Future Guidance - The company initiated full-year 2025 revenue guidance of approximately $38 million, despite anticipated challenges from the loss of PancraGEN revenue [2][3]. Company Overview - Interpace Biosciences is focused on personalized medicine, providing molecular diagnostic tests and bioinformatics services to evaluate cancer risk [5].

Core Viewpoint - Interpace Diagnostics will cease offering the PancraGEN test due to the end of Medicare reimbursement, but the company expects to remain profitable through its thyroid-focused testing services [1][3]. Group 1: Company Overview - Interpace Diagnostics is a subsidiary of Interpace Biosciences, focusing on personalized medicine and molecular diagnostic tests [4]. - The company has three commercialized molecular tests: ThyGeNEXT, ThyraMIRv2, and RespriDX, along with BarreGEN currently in clinical evaluation [5]. Group 2: Impact of Reimbursement Changes - The Genetic Testing for Oncology Local Coverage Determination (LCD) by Novitas Solutions will end reimbursement for the PancraGEN test, effective May 2, 2025 [1][2]. - PancraGEN has been utilized for over a decade to assess the risk of pancreatic cyst progression to cancer, primarily for Medicare patients [2][3]. - The loss of reimbursement will require Interpace to restructure its operations, although the company believes it can sustain profitability without PancraGEN [3]. Group 3: Future Outlook - The company anticipates that its testing franchise for indeterminate thyroid nodules, specifically ThyGeNEXT and ThyraMIRv2, will support continued profitability in 2025 and beyond [3].

[Explanatory Note](index=3&type=section&id=Explanatory%20Note) [Restatement of Financial Statements](index=3&type=section&id=Restatement%20of%20Financial%20Statements) The company restated 2023 and 2024 financial statements due to incorrect royalty accruals, identifying a material weakness in internal controls - The company determined it should not have been accruing royalty expense for certain agreements, leading to a reversal of accruals from 2016-2023[11](index=11&type=chunk) - Previously issued financial statements for the year ended December 31, 2023, and quarterly reports for 2023 and 2024, are no longer reliable and have been restated in this Form 10-K[12](index=12&type=chunk)[14](index=14&type=chunk) - A material weakness in internal control over financial reporting was identified, attributed to a lack of communication between the accounting and science teams regarding the technology used in revenue-generating products (ThyraMIR and ThyGeNEXT)[13](index=13&type=chunk) - The company does not plan to amend previously filed Annual or Quarterly reports for the affected periods; this Form 10-K supersedes that information[16](index=16&type=chunk) [PART I](index=6&type=section&id=PART%20I) [Business](index=6&type=section&id=Item%201.%20Business) Interpace Biosciences offers specialized molecular diagnostic and pathology services for cancer risk assessment via five commercialized genomic tests [Company and Market Overview](index=6&type=section&id=Company%20and%20Market%20Overview) The company offers esoteric molecular diagnostic tests for cancer risk, operating in a global market projected for substantial growth - The company provides molecular diagnostic testing and pathology services to aid in cancer risk evaluation for patients with indeterminate biopsies[24](index=24&type=chunk) - The global esoteric molecular diagnostics market is expected to grow at a CAGR of **8.5%** from 2023 to 2029, reaching **$48.3 billion**[27](index=27&type=chunk) - In 2024, Laboratory Corporation of America (LabCorp) was the largest customer for the company's ThyGeNEXT and ThyraMIRv2 products[25](index=25&type=chunk) [Our Service Offerings](index=8&type=section&id=Our%20Service%20Offerings) The company commercializes five molecular diagnostic tests for cancer risk stratification, performed in its accredited laboratory - The company has five commercialized molecular diagnostic tests: PancraGEN, PanDNA, ThyGeNEXT, ThyraMIRv2, and RespriDx[39](index=39&type=chunk) - The addressable market for PancraGEN is estimated at approximately **$200 million** annually, and for endocrine (thyroid) cancer assays, it is about **$300 million** annually[41](index=41&type=chunk)[46](index=46&type=chunk) - All testing is performed in the company's CLIA-certified and CAP-accredited laboratory in Pittsburgh, Pennsylvania[50](index=50&type=chunk) [Competition](index=11&type=section&id=Competition) The company faces competition from established diagnostic firms, with its PancraGEN test having fewer direct integrated competitors - In the thyroid diagnostic market, key competitors include Veracyte (Afirma), Quest Diagnostics, and Sonic (ThyroSeq)[56](index=56&type=chunk) - The company is not aware of any direct competitors to PancraGEN that fully integrate clinical, imaging, cytology, and molecular data, although the University of Pittsburgh Medical Center offers a competitive gene sequencing panel (PancreaSeq)[57](index=57&type=chunk) [Government Regulations and Industry Guidelines](index=14&type=section&id=Government%20Regulations%20and%20Industry%20Guidelines) The company faces extensive regulation and significant revenue risk from a pending Medicare non-coverage decision for PancraGEN - The FDA published a final rule on April 29, 2024, to phase out enforcement discretion for many LDTs over a four-year period, which could subject the company's tests to additional, costly regulatory requirements[76](index=76&type=chunk) - Reimbursement from Medicare and Medicare Advantage programs constituted approximately **53%** of consolidated net revenues in 2024[118](index=118&type=chunk) - A new LCD from Novitas established non-coverage for the PancraGEN test. Implementation has been delayed to April 24, 2025, but if it takes effect, it could negatively impact the company's liquidity[123](index=123&type=chunk) [Business Development](index=24&type=section&id=Business%20Development) The company exchanged Series B for Series C Preferred Stock with investors, lowering the conversion price and reducing investor protections - The company exchanged all 47,000 shares of Series B Preferred Stock for 47,000 shares of new Series C Preferred Stock with investors Ampersand and 1315 Capital[127](index=127&type=chunk) - The new Series C Preferred Stock has a conversion price of **$2.02** per share, significantly lower than the Series B's **$6.00** price, and removes certain investor protections like liquidation preference and director designation rights[128](index=128&type=chunk)[132](index=132&type=chunk) [Risk Factors](index=26&type=section&id=Item%201A.%20Risk%20Factors) The company faces substantial risks from CMS reliance, PancraGEN non-coverage, concentrated ownership, FDA LDT regulation, and internal control weaknesses - A significant risk is the dependence on CMS reimbursement, particularly for the PancraGEN test, which faces non-coverage under a new LCD, potentially impacting liquidity[142](index=142&type=chunk)[149](index=149&type=chunk) - Two private equity firms, Ampersand and 1315 Capital, control an aggregate of **84%** of the company's outstanding common stock on an as-converted basis through their Series C Preferred Stock holdings[142](index=142&type=chunk)[167](index=167&type=chunk) - The FDA's final rule to regulate LDTs could impose substantial costs and delays for obtaining pre-market clearance for the company's tests[142](index=142&type=chunk)[187](index=187&type=chunk)[188](index=188&type=chunk) - The restatement of prior financial statements and the identification of a material weakness in internal controls as of December 31, 2024, pose risks to investor confidence and company reputation[145](index=145&type=chunk)[274](index=274&type=chunk) - The company's common stock was delisted from Nasdaq and now trades on the OTCQX, which has adversely affected liquidity and stock price[145](index=145&type=chunk)[259](index=259&type=chunk) [Cybersecurity](index=62&type=section&id=Item%201C.%20Cybersecurity) The company maintains a cybersecurity risk management program overseen by its IT team and Board, with no material incidents reported - The company maintains processes to assess, identify, and manage cybersecurity risks, overseen by a dedicated IT team and the Board's Compliance Committee[283](index=283&type=chunk)[285](index=285&type=chunk) - The Vice President of Information Technology, with over 15 years of experience, leads the cybersecurity efforts[286](index=286&type=chunk) - No cybersecurity incidents have materially affected the company in the last fiscal year, but ongoing risks are acknowledged[284](index=284&type=chunk) [Properties](index=62&type=section&id=Item%202.%20Properties) The company's corporate headquarters are in Parsippany, NJ, and its main diagnostic laboratory is in Pittsburgh, PA - Corporate headquarters are in Parsippany, NJ on a month-to-month lease[287](index=287&type=chunk) - The diagnostic laboratory is a 21,400 sq. ft. facility in Pittsburgh, PA, with a lease running through June 30, 2028[287](index=287&type=chunk) [PART II](index=63&type=section&id=PART%20II) [Market for Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=63&type=section&id=Item%205.%20Market%20for%20our%20Common%20Equity,%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock was delisted from Nasdaq and now trades on OTCQX, with a recent unregistered preferred stock exchange - The company's common stock was delisted from Nasdaq and now trades on the OTCQX under the symbol "IDXG"[291](index=291&type=chunk) - The company received a notice of non-compliance from OTCQX in December 2023 for its market capitalization falling below **$5 million**, but regained compliance in March 2024[292](index=292&type=chunk) - An unregistered exchange of 47,000 shares of Series B Preferred Stock for new Series C Preferred Stock occurred on October 10, 2024[296](index=296&type=chunk)[297](index=297&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=64&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) In FY2024, revenue increased **17%** to **$46.9 million**, but liquidity is uncertain due to a pending Medicare non-coverage decision for PancraGEN [Consolidated Results of Operations](index=69&type=section&id=Consolidated%20Results%20of%20Operations) For FY2024, net revenue increased **17%** to **$46.9 million**, driving a **104%** increase in operating income to **$8.1 million** Consolidated Results of Operations (Years Ended December 31) | Metric | 2024 | 2023 (as restated) | % Change | | :--- | :--- | :--- | :--- | | **Revenue, net** | $46.9 million | $40.0 million | 17% | | **Gross Profit** | $29.9 million | $25.1 million | 19% | | **Operating Income** | $8.1 million | $4.0 million | 104% | | **Net Income** | $6.7 million | $2.0 million | 243% | - The increase in net revenue was largely driven by increased test volumes compared to the prior year[335](index=335&type=chunk) [Non-GAAP Financial Measures](index=71&type=section&id=Non-GAAP%20Financial%20Measures) Adjusted EBITDA, a key non-GAAP measure, increased **56%** to **$8.7 million** in 2024, reflecting improved operational performance Reconciliation of Adjusted EBITDA (Unaudited, in thousands) | | Years Ended December 31, | | :--- | :--- | :--- | | | **2024** | **2023 (as restated)** | | **Income from continuing operations (GAAP Basis)** | $6,946 | $2,264 | | Depreciation and amortization | 300 | 1,026 | | Stock-based compensation | 291 | 630 | | Tax expense | 4 | 17 | | Interest accretion expense | 34 | 112 | | Financing interest and related costs | 625 | 896 | | Interest income | (48) | (53) | | Change in fair value of note payable | 547 | 678 | | Change in fair value of contingent consideration | - | 7 | | **Adjusted EBITDA** | **$8,699** | **$5,577** | [Liquidity and Capital Resources](index=72&type=section&id=Liquidity%20and%20Capital%20Resources) As of December 31, 2024, the company had **$1.5 million** in cash, with liquidity facing significant risk from potential Medicare non-coverage for PancraGEN - As of December 31, 2024, the company had **$1.5 million** in cash and cash equivalents and current liabilities of **$10.6 million**[355](index=355&type=chunk) - The maturity date of the BroadOak term loan, with a balance of **$4.4 million** at year-end, was extended to December 31, 2025[352](index=352&type=chunk)[354](index=354&type=chunk) - Net cash provided by operating activities was **$4.6 million** in 2024, compared to **$3.8 million** in 2023[356](index=356&type=chunk) - A significant liquidity risk remains due to the potential non-coverage of the PancraGEN test by Medicare, with a final decision delayed until April 24, 2025[361](index=361&type=chunk)[364](index=364&type=chunk)[366](index=366&type=chunk) [Controls and Procedures](index=75&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal control over financial reporting were ineffective as of December 31, 2024, due to a material weakness - Management concluded that disclosure controls and procedures were not effective as of December 31, 2024[372](index=372&type=chunk) - A material weakness in internal control over financial reporting was identified related to an incorrect royalty accrual, stemming from a lack of communication between the science and accounting teams[372](index=372&type=chunk) - A remediation plan is being implemented, including updated procedures for reviewing significant agreements with outside experts and establishing quarterly meetings between management and the science team[373](index=373&type=chunk) - Management also concluded that internal control over financial reporting was not effective as of December 31, 2024[375](index=375&type=chunk) [PART IV](index=77&type=section&id=PART%20IV) [Financial Statements and Exhibits](index=77&type=section&id=Item%2015.%20Exhibits,%20Financial%20Statement%20Schedules) This section presents the company's consolidated financial statements for 2024 and 2023, including notes on the significant restatement and liquidity risks [Note 2. Restatement of Previously Issued Consolidated Financial Statements](index=93&type=section&id=Note%202.%20Restatement%20of%20Previously%20Issued%20Consolidated%20Financial%20Statements) The company restated 2023 and 2024 financial statements due to incorrect royalty expense accruals, reducing accumulated deficit by **$6.1 million** - Financial statements were restated due to the incorrect accrual of royalty expenses and adjustments to revenue recognition timing[445](index=445&type=chunk)[447](index=447&type=chunk) Impact of Restatement on 2023 Consolidated Statement of Operations (in thousands) | Account | As Previously Reported | Restatement Amount | As Restated | | :--- | :--- | :--- | :--- | | **Revenue, net** | $40,214 | $(178) | $40,036 | | **Cost of revenue** | $16,310 | $(1,330) | $14,980 | | **Gross profit** | $23,904 | $1,152 | $25,056 | | **Operating income** | $2,804 | $1,152 | $3,956 | | **Net income** | $802 | $1,152 | $1,954 | Impact of Restatement on Dec 31, 2023 Consolidated Balance Sheet (in thousands) | Account | As Previously Reported | Restatement Amount | As Restated | | :--- | :--- | :--- | :--- | | **Total current liabilities** | $17,474 | $(6,038) | $11,436 | | **Total liabilities** | $28,157 | $(6,038) | $22,119 | | **Accumulated deficit** | $(248,215) | $6,133 | $(242,082) | | **Total stockholders' deficit** | $(61,672) | $6,133 | $(55,539) |

[PART I - FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) This section covers the unaudited interim financial statements, management's analysis, market risk, and internal controls [Item 1. Unaudited Interim Condensed Consolidated Financial Statements](index=4&type=section&id=Item%201.%20Unaudited%20Interim%20Condensed%20Consolidated%20Financial%20Statements) Unaudited interim financial statements show improved performance and a strategic preferred stock exchange [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Balance sheet reflects increased assets, decreased liabilities, and an improved stockholders' deficit Condensed Consolidated Balance Sheet Highlights (in thousands) | Balance Sheet Item | Sep 30, 2024 (unaudited) | Dec 31, 2023 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $2,113 | $3,498 | | Total current assets | $11,110 | $10,322 | | Total assets | $14,039 | $13,021 | | **Liabilities & Stockholders' Deficit** | | | | Total current liabilities | $18,769 | $17,474 | | Total liabilities | $25,185 | $28,157 | | Total stockholders' deficit | $(57,682) | $(61,672) | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Statements of operations show significant revenue growth and a shift to net income Statement of Operations Summary (in thousands, except per share data) | Metric | Q3 2024 | Q3 2023 | Nine Months 2024 | Nine Months 2023 | | :--- | :--- | :--- | :--- | :--- | | Revenue, net | $12,295 | $9,078 | $34,610 | $29,931 | | Gross profit | $7,506 | $4,954 | $21,008 | $17,768 | | Operating income (loss) | $1,905 | $(16) | $5,036 | $1,491 | | Net income (loss) | $1,280 | $(614) | $3,810 | $(88) | | Diluted EPS | $0.29 | $(0.14) | $0.87 | $(0.02) | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash flow statements indicate positive operating cash flow, offset by financing activities Cash Flow Summary for the Nine Months Ended Sep 30 (in thousands) | Cash Flow Category | 2024 | 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $3,462 | $2,649 | | Net cash (used in) provided by investing activities | $(747) | $55 | | Net cash used in financing activities | $(4,100) | $(2,500) | | **Net (decrease) increase in cash** | **$(1,385)** | **$204** | | Cash and cash equivalents – ending | $2,113 | $5,032 | [Notes to Unaudited Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) Notes detail liquidity concerns, Medicare coverage risks, and a strategic preferred stock exchange - The company faces a potential negative impact on liquidity if the Proposed Local Coverage Determination (LCD) by Novitas restricts Medicare coverage for its PancraGEN test. A final decision has been granted an undefined extension by CMS as of July 29, 2024[21](index=21&type=chunk) - As of September 30, 2024, the company had **$2.1 million** in cash and cash equivalents, with current liabilities of **$18.8 million** exceeding current assets of **$11.1 million**. Management believes current cash and forecasted receipts are sufficient for the next twelve months[22](index=22&type=chunk)[26](index=26&type=chunk) - On October 10, 2024, the company exchanged all **47,000 shares** of its Series B Preferred Stock for **47,000 shares** of newly created Series C Preferred Stock. The new series has a lower conversion price (**$2.02** vs. **$6.00**) and fewer restrictive provisions, which is considered a significant step towards a potential Nasdaq uplisting[88](index=88&type=chunk)[89](index=89&type=chunk) - The BroadOak term loan maturity was extended to June 30, 2025, with monthly payments of **$500,000** beginning April 1, 2024. The outstanding balance was **$5.9 million** as of September 30, 2024[68](index=68&type=chunk)[69](index=69&type=chunk)[74](index=74&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=23&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses strong financial performance driven by increased test volumes, alongside key regulatory risks [Results of Operations](index=27&type=section&id=Results%20of%20Operations) Operational results show significant revenue growth and improved profitability Q3 2024 vs Q3 2023 Performance (in thousands) | Metric | Q3 2024 | Q3 2023 | Change (%) | | :--- | :--- | :--- | :--- | | Revenue, net | $12,295 | $9,078 | 35% | | Gross profit | $7,506 | $4,954 | 51.5% | | Gross Margin | 61.0% | 54.6% | +6.4 p.p. | | Operating income (loss) | $1,905 | $(16) | N/A | Nine Months 2024 vs 2023 Performance (in thousands) | Metric | Nine Months 2024 | Nine Months 2023 | Change (%) | | :--- | :--- | :--- | :--- | | Revenue, net | $34,610 | $29,931 | 16% | | Gross profit | $21,008 | $17,768 | 18.2% | | Gross Margin | 60.7% | 59.4% | +1.3 p.p. | | Operating income | $5,036 | $1,491 | 237.8% | - Adjusted EBITDA, a non-GAAP measure, increased to **$2.1 million** in Q3 2024 from **$0.4 million** in Q3 2023. For the nine-month period, it rose to **$5.5 million** from **$2.9 million** year-over-year[137](index=137&type=chunk) [Liquidity and Capital Resources](index=32&type=section&id=Liquidity%20and%20Capital%20Resources) Liquidity strategy focuses on operational cash flow and a preferred stock exchange for Nasdaq uplisting - Cash provided by operating activities was **$3.5 million** for the first nine months of 2024, compared to **$2.6 million** in the prior year period[142](index=142&type=chunk) - Cash used in financing activities was **$4.1 million** for the nine months ended September 30, 2024, due to payments on the BroadOak Term Loan[144](index=144&type=chunk) - The company is pursuing an uplisting of its common stock to Nasdaq, believing it will assist in raising additional capital. The exchange of preferred stock in October 2024 is described as the 'first significant step' in this process[147](index=147&type=chunk) [Regulatory and Market Risks](index=24&type=section&id=Regulatory%20and%20Market%20Risks) Key risks include Medicare coverage restrictions and new FDA regulations impacting LDTs - The company's liquidity could be negatively impacted if Novitas, its Medicare administrative contractor, ultimately restricts coverage for the PancraGEN test following its ongoing review of the relevant LCD[98](index=98&type=chunk)[149](index=149&type=chunk) - The FDA published a final rule on April 29, 2024, to phase out enforcement discretion for many LDTs over a four-year period. This will require compliance with medical device reporting, quality systems, and potentially premarket review, which could be expensive and time-consuming[101](index=101&type=chunk)[103](index=103&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=35&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, the company is not required to provide market risk disclosures - The company is a smaller reporting company and is not required to provide quantitative and qualitative disclosures about market risk[156](index=156&type=chunk) [Item 4. Controls and Procedures](index=35&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls were ineffective due to a material weakness in revenue recognition, with remediation underway - A material weakness in internal control over financial reporting related to the timing of revenue recognition was identified in Q1 2024[158](index=158&type=chunk) - Due to this material weakness, the principal executive officer and principal financial officer concluded that disclosure controls and procedures were not effective as of September 30, 2024[158](index=158&type=chunk) - The company has adopted a remediation plan to amend its internal controls, including updating procedures for testing revenue recognition[159](index=159&type=chunk) [PART II - OTHER INFORMATION](index=36&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) This section covers legal proceedings, risk factors, unregistered equity sales, and a list of exhibits [Item 1. Legal Proceedings](index=36&type=section&id=Item%201.%20Legal%20Proceedings) The company reports no pending legal proceedings as of the filing date - There are no legal proceedings to report[161](index=161&type=chunk) [Item 1A. Risk Factors](index=36&type=section&id=Item%201A.%20Risk%20Factors) This section is not applicable as the company is a smaller reporting company - Not applicable as the company is a smaller reporting company[162](index=162&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=36&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reports no unregistered sales of equity securities or use of proceeds during the period - None reported[163](index=163&type=chunk) [Item 6. Exhibits](index=36&type=section&id=Item%206.%20Exhibits) Exhibits filed with the Form 10-Q include documents related to the Series C Preferred Stock exchange - Key exhibits filed include documents related to the Series C Preferred Stock exchange, such as the Exchange Agreement (10.1) and the Certificate of Designation (part of 3.1)[167](index=167&type=chunk)

[Financial and Business Highlights](index=1&type=section&id=Financial%20and%20Business%20Highlights) Interpace Biosciences reported record financial results for the third quarter of 2024, achieving all-time highs in test volume, revenue, and profitability Summary of Key Financial Metrics | Metric | Q3 2024 | Q3 2023 | Change | | :--- | :--- | :--- | :--- | | **Net Revenue** | $12.3 million | $9.1 million | +35% | | **Test Volume** | N/A | N/A | +26% | | **Cash Collections** | $11.3 million | $9.8 million | +15% | | **Income from Continuing Operations** | $1.4 million | ($0.5) million | +$1.9M | | **Adjusted EBITDA** | $2.1 million | $0.4 million | +$1.7M | - The company's proprietary molecular diagnostics tests, ThyGeNEXT+ ThyraMIRv2 and PancraGEN, continued to experience double-digit growth in Q3 2024 over Q3 2023[3](index=3&type=chunk) - Q3 2024 marked the eighteenth consecutive quarter of year-over-year volume growth for the company[3](index=3&type=chunk) - Interpace is actively interviewing equity research partners and investment bankers to raise additional capital to fund its growth strategy and pursue a potential uplisting to the Nasdaq stock exchange[3](index=3&type=chunk) [Business Overview](index=2&type=section&id=About%20Interpace%20Biosciences) Interpace Biosciences focuses on personalized medicine, offering molecular diagnostic tests and services for cancer diagnosis and risk assessment, with a portfolio of five commercialized tests - The company offers specialized services along the therapeutic value chain, from early diagnosis and prognostic planning to targeted therapeutic applications[6](index=6&type=chunk) - Interpace has five commercialized molecular tests: PancraGEN and PanDNA (pancreatic cancer), ThyGeNEXT and ThyraMIRv2 (thyroid cancer), and RespriDX (lung cancer)[7](index=7&type=chunk) - A sixth test, BarreGEN, for assessing the progression risk of Barrett's Esophagus to esophageal cancer, is currently in a clinical evaluation program (CEP) to gather clinical evidence and support potential payer reimbursement[7](index=7&type=chunk) [Forward-Looking Statements](index=2&type=section&id=Forward-looking%20Statements) This section contains standard legal disclaimers regarding forward-looking statements, highlighting risks such as reimbursement policies, financing capabilities, and the ability to uplist to Nasdaq - The press release contains forward-looking statements concerning future financial and operating performance, which are subject to risks and uncertainties[9](index=9&type=chunk) - Identified risks include, but are not limited to, reimbursement challenges (including CMS review), historical operating losses, ability to finance the business, dependence on sales and reimbursements, and the ability to uplist common stock to Nasdaq[9](index=9&type=chunk) [Financial Performance Analysis](index=3&type=section&id=Financial%20Performance%20Analysis) This section provides a detailed breakdown of Interpace's financial statements for the third quarter and nine months ended September 30, 2024, including statements of operations, balance sheet, cash flow, and Adjusted EBITDA reconciliation [Statements of Operations](index=3&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For Q3 2024, net revenue increased by 35% to $12.3 million, and gross profit rose to $7.5 million, resulting in an operating income of $1.9 million and net income of $1.4 million Condensed Consolidated Statements of Operations | Metric (in thousands, except per share) | Three Months Ended Sep 30, 2024 | Three Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2023 | | :--- | :--- | :--- | :--- | :--- | | **Revenue, net** | $12,295 | $9,078 | $34,610 | $29,931 | | **Gross Profit** | $7,506 | $4,954 | $21,008 | $17,768 | | **Operating income (loss)** | $1,905 | $(16) | $5,036 | $1,491 | | **Income (loss) from continuing operations** | $1,362 | $(528) | $4,070 | $297 | | **Net income (loss)** | $1,280 | $(614) | $3,810 | $(88) | | **Diluted EPS from continuing operations** | $0.31 | $(0.12) | $0.92 | $0.07 | [Balance Sheet](index=4&type=section&id=Selected%20Balance%20Sheet%20Data) As of September 30, 2024, cash and cash equivalents decreased to $2.1 million due to debt paydown, while total liabilities decreased to $25.2 million, improving stockholders' deficit Selected Balance Sheet Data | Metric (in thousands) | September 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | **Cash and cash equivalents** | $2,113 | $3,498 | | **Total assets** | $14,039 | $13,021 | | **Total liabilities** | $25,185 | $28,157 | | **Total stockholders' deficit** | $(57,682) | $(61,672) | - The cash balance decreased from **$5.0 million** as of September 30, 2023, primarily driven by a **$6.6 million** additional paydown of debt[5](index=5&type=chunk) [Cash Flow Statement](index=4&type=section&id=Selected%20Cash%20Flow%20Data) For the first nine months of 2024, operating cash flow increased to $3.5 million, with significant cash used in financing activities, resulting in a net decrease in cash of $1.4 million Selected Cash Flow Data | Metric (in thousands) | For the Nine Months Ended Sep 30, 2024 | For the Nine Months Ended Sep 30, 2023 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $3,462 | $2,649 | | **Net cash (used in) provided by investing activities** | $(747) | $55 | | **Net cash used in financing activities** | $(4,100) | $(2,500) | | **Change in cash and cash equivalents** | $(1,385) | $204 | [Non-GAAP Measures (Adjusted EBITDA)](index=5&type=section&id=Reconciliation%20of%20Adjusted%20EBITDA) Adjusted EBITDA significantly improved to $2.1 million for Q3 2024 and $5.5 million for the nine-month period, reflecting strong operational performance Reconciliation of Adjusted EBITDA | Metric (in thousands) | Three Months Ended Sep 30, 2024 | Three Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2023 | | :--- | :--- | :--- | :--- | :--- | | **Income (loss) from continuing operations (GAAP)** | $1,362 | $(528) | $4,070 | $297 | | **Adjusted EBITDA (Non-GAAP)** | $2,076 | $363 | $5,458 | $2,904 | - Adjusted EBITDA is defined as income or loss from continuing operations, adjusted for depreciation and amortization, stock-based compensation, interest, taxes, and other non-cash expenses like the change in fair value of notes payable[21](index=21&type=chunk)