GlobeNewswire Inc | Aug 14, 2020 07:30AM EDT

August 14, 2020

RUTHERFORD, N.J., Aug. 14, 2020 (GLOBE NEWSWIRE) -- Cancer Genetics, Inc. (the Company) (Nasdaq: CGIX), a leader in drug discovery and preclinical oncology and immuno-oncology services, announced yesterday financial and operating results for the quarter ended June 30, 2020.

SECOND QUARTER 2020 FINANCIAL RESULTS

The Company reported total revenue from continuing operations of $1.4 million for the second quarter of 2020 compared to revenue of $1.5 million in the second quarter of 2019, a decrease of approximately $0.1 million or 5% principally due to the timing of discovery services studies.

Gross profit remained approximately the same in both of the comparable quarters of 2019 and 2020, while the overall gross margin increased by 4 percentage points, from approximately 52% to 56%. The Discovery Services business unit gross margin increased in second quarter of 2020 compared to 2019 principally due to lower lab supplies and outsourcing expenses in the comparable periods.

Total operating expenses for the second quarter of 2020 were approximately $2.5 million, an increase of 68% compared to $1.5 million during the second quarter of 2019. The increase in total operating expenses was primarily due to an increase in professional fees of $901 thousand including one-time costs of approximately $619 thousand associated with accounting for discontinuing operations as well as the timing of such fees incurred (Q1 2019 vs. Q2 2020) and connected to the annual filing of the Companys Form 10-K. These additional expenses resulted from the significant company turnaround associated with the disposition of two business units and close-out of those discontinued operations.

Net loss from continuing operations was $1.8 million or $0.82 per share for the second quarter of 2020, compared to a net loss of $0.5 million or $0.24 per share for the second quarter of 2019.

Cash and cash equivalents totaled approximately $2.9 million as of June 30, 2020.

The Company filed its quarterly report for Q2 2020 on Form 10-Q yesterday with the Securities and Exchange Commission.

ABOUT CANCER GENETICS

Through its vivoPharm subsidiary, Cancer Genetics offers proprietary preclinical test systems supporting clinical diagnostic offerings at early stages, valued by the pharmaceutical industry, biotechnology companies and academic research centers. The Company is focused on precision and translational medicine to drive drug discovery and novel therapies. vivoPharm specializes in conducting studies tailored to guide drug development, starting from compound libraries and ending with a comprehensive set of in vitro and in vivo data and reports, as needed for Investigational New Drug filings. vivoPharm operates in The Association for Assessment and Accreditation of Laboratory Animal Care International (AAALAC) accredited and GLP compliant audited facilities. For more information, please visit www.cancergenetics.com.

For more information, please visit or follow CGI at:

Internet: www.cancergenetics.com

Twitter: @Cancer_Genetics

Forward Looking Statements:

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements pertaining to Cancer Genetics Inc.s expectations regarding future financial and/or operating results, and potential for our services, future revenues or growth, or the potential for future strategic transactions in this press release constitute forward-looking statements.

Any statements that are not historical fact (including, but not limited to, statements that contain words such as will, believes, plans, anticipates, expects, estimates) should also be considered to be forward-looking statements. Forward-looking statements involve risks and uncertainties, including, without limitation, risks inherent in our attempts to adapt to the global coronavirus pandemic, achieve profitability and increase sales of our pre-clinical services, maintain our existing customer base and avoid cancellation of customer contracts or discontinuance of trials, raise capital to meet our liquidity needs, properly evaluate strategic options, and other risks discussed in the Cancer Genetics, Inc. Form 10-K for the year ended December 31, 2019 and Form 10-Q for the quarter ended June 30, 2020, along with other filings with the Securities and Exchange Commission. These forward-looking statements speak only as of the date hereof. Cancer Genetics, Inc. disclaims any obligation to update these forward-looking statements.

Investor Contacts:

Jennifer K. Zimmons. Ph.D.Investor RelationsZimmons International Communications, Inc.Email: jzimmons@zimmonsic.comPhone: +1.917.214.3514

Cancer Genetics, Inc. and SubsidiariesCondensed Consolidated Balance Sheets (Unaudited)(in thousands, except par value)

June 30, December 2020 31, 2019ASSETS CURRENT ASSETS Cash and cash equivalents $ 2,864 $ 3,880 Restricted cash ? 350 Accounts receivable 611 696 Earn-Out from siParadigm, current portion 740 747 Excess Consideration Note ? 888 Other current assets 407 546 Current assets of discontinuing operations ? 71 Total current assets 4,622 7,178 FIXED ASSETS, net of accumulated depreciation 524 558 OTHER ASSETS Operating lease right-of-use assets, net of 123 94 accumulated amortizationEarn-Out from siParadigm, less current portion 48 356 Patents and other intangible assets, net of 2,681 2,895 accumulated amortizationInvestment in joint venture 56 92 Goodwill 3,090 3,090 Other 644 641 Total other assets 6,642 7,168 Total Assets $ 11,788 $ 14,904 LIABILITIES AND STOCKHOLDERS? EQUITY CURRENT LIABILITIES Accounts payable and accrued expenses $ 2,674 $ 2,072 Obligations under operating leases, current 93 193 portionObligations under finance leases, current portion 70 68 Deferred revenue 979 1,217 Note payable, net 840 1,277 Advance from NovellusDx, Ltd., net 50 350 Advance from siParadigm, current portion 536 566 Due to Interpace Biosciences, Inc. 628 ? Current liabilities of discontinuing operations 611 1,229 Total current liabilities 6,481 6,972 Obligations under operating leases, less current 11 10 portionObligations under finance leases, less current 97 107 portionAdvance from siParadigm, less current portion 72 252 Warrant liability 26 178 Total Liabilities 6,687 7,519 STOCKHOLDERS? EQUITY Preferred stock, authorized 9,764 shares, $0.0001 ? ? par value, none issuedCommon stock, authorized 100,000 shares, $0.0001par value, 2,260 and 2,104 shares issued and ? ? outstanding at June 30, 2020 and December 31,2019, respectivelyAdditional paid-in capital 172,431 171,783 Accumulated other comprehensive income (loss) (27 ) 26 Accumulated deficit (167,303 ) (164,424 )Total Stockholders? Equity 5,101 7,385 Total Liabilities and Stockholders? Equity $ 11,788 $ 14,904

See Notes to Unaudited Condensed Consolidated Financial Statements.

Cancer Genetics, Inc. and SubsidiariesCondensed Consolidated Statements of Operations and Other Comprehensive Loss (Unaudited)(in thousands, except per share amounts)

Three Months Ended Six Months Ended June June 30, 30, 2020 2019 2020 2019 Revenue $ 1,446 $ 1,525 $ 2,872 $ 3,347 Cost of revenues 640 734 1,454 1,736 Gross profit 806 791 1,418 1,611 Operating expenses: General and administrative 2,232 1,184 3,765 2,966 Sales and marketing 284 317 625 502 Total operating expenses 2,516 1,501 4,390 3,468 Loss from operations (1,710 ) (710 ) (2,972 ) (1,857 )Other income (expense): Interest expense (97 ) (514 ) (175 ) (1,129 )Interest income ? ? 4 2 Change in fair value of ? 7 4 7 acquisition note payableChange in fair value of ? 55 ? 86 other derivativesChange in fair value of 25 206 152 199 warrant liabilityChange in fair value of (89 ) ? (65 ) ? siParadigm Earn-OutOther income (expense) 105 (11 ) 105 (11 )Total other income (56 ) (257 ) 25 (846 )(expense)Loss from continuingoperations before income (1,766 ) (967 ) (2,947 ) (2,703 )taxesIncome tax expense ? (512 ) 6 (512 )(benefit)Loss from continuing (1,766 ) (455 ) (2,953 ) (2,191 )operationsIncome (loss) from 66 (3,318 ) 74 (6,199 )discontinuing operationsNet loss (1,700 ) (3,773 ) (2,879 ) (8,390 )Foreign currency (157 ) 35 (53 ) (41 )translation gain (loss)Comprehensive loss $ (1,857 ) $ (3,738 ) $ (2,932 ) $ (8,431 ) Basic and diluted net lossper share from continuing $ (0.82 ) $ (0.24 ) $ (1.39 ) $ (1.24 )operationsBasic and diluted netincome (loss) per share 0.03 (1.74 ) 0.04 (3.51 )from discontinuingoperationsBasic and diluted net loss $ (0.79 ) $ (1.98 ) $ (1.35 ) $ (4.75 )per share Basic and dilutedweighted-average shares 2,146 1,905 2,126 1,768 outstanding

See Notes to Unaudited Condensed Consolidated Financial Statements.