See Notes to Unaudited Condensed Consolidated Financial Statements.

See Notes to Unaudited Condensed Consolidated Financial Statements.

We were incorporated in the State of Delaware on April 8, 1999 and, haveuntil the Business Disposals, had offices and state-of-the-art laboratories located in California, New Jersey and North Carolina and today continue to have laboratories in Pennsylvania Shanghai (China), Victoria (Australia) and Hyderabad (India).Australia. Our laboratories comply with the highest regulatory standards as appropriate for the services they deliver including CLIA, CAP, and NY State, California State and NABL (India).State. Our services are built on a foundation of world-class scientific knowledge and intellectual property in solid and blood-borne cancers, as well as strong academic relationships with major cancer centers such as Memorial Sloan-Kettering, Mayo Clinic, and the National Cancer Institute. We offer preclinical services such as predictive tumor models, human orthotopic xenografts and syngeneic immuno-oncology relevant tumor models in our Hershey PA facility, and are a leader in the field of immuno-oncology preclinical services in the United States. This service is supplemented with GLP toxicology and extended bioanalytical services in our Australian based facility in Bundoora VIC.

The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions for interim reporting as prescribed by the Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary to make the financial statements not misleading have been included. As such, the information included in this quarterly report on Form 10-Q should be read in conjunction with the audited consolidated financial statements as of and for the year ended December 31, 2016,2018, filed with the Securities and Exchange Commission on March 23, 2017.April 16, 2019. The consolidated balance sheet as of December 31, 2016,2018, included herein was derived from the audited financial statements as of that date, but does not include all disclosures including notes required by GAAP. Interim financial results are not necessarily indicative of the results that may be expected for any future interim period or for the year ending December 31, 2017.

The Business Disposals have been classified as discontinued operations in conformity with GAAP. Accordingly, BioPharma and Clinical operations and balances have been reported as discontinued operations and removed from all financial disclosures of continuing operations. As permitted by Accounting Standards Codification (“ASC”) 205-20, the Company elected to allocate approximately $657,000 and $1,442,000 of interest expense on debt not required to be repaid to discontinued operations during the three and six months ended SeptemberJune 30, 2017,2019, respectively. No interest expense was allocated to discontinued operations for the three and six months ended June 30, 2018, as all debt outstanding during those periods was repaid as part of the BioPharma Disposal. Unless otherwise indicated, information in these notes to unaudited condensed consolidated financial statements relates to continuing operations. Certain of our operations have been presented as discontinued.

On January 9, 2019, we started accountingentered into an underwriting agreement with H.C. Wainwright & Co., LLC (“H.C. Wainwright”), relating to an underwritten public offering of 13,333,334 shares of our common stock for $0.225 per share. We received proceeds from the offering of approximately $2,437,000, net of expenses and discounts of approximately $563,000. We also issued warrants to purchase 933,334 shares of common stock to H.C. Wainwright in connection with this offering. The warrants are exercisable for five years from the date of issuance at a per share price of $0.2475.

The January 9, 2019 and January 26, 2019 offerings will be referred to collectively as the “2019 Offerings.” As disclosed in Note 15, certain of our foreign currency translationdirectors and executive officers purchased shares in other comprehensive income (loss). Assets and liabilities recorded in foreign currencies are translatedthe 2019 Offerings at the exchangepublic offering price.

At SeptemberJune 30, 2017,2019, our cash position and history of losses required management to assesassess our ability to continue operating as a going concern, according to FASB Accounting Standards Update No. 2014-15,ASC 205-40, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (“ASU 2014-15”). Management evaluatedConcern. Prior to the history and operational lossesclosing of the Business Disposals transactions in July 2019, the Company did not have sufficient cash at June 30, 2019 to have a material effect on ourfund normal operations beyond the next three months from the date of this report unless certain current assets were converted to cash, as described below. After the Business Disposals, the Company’s ability to continue as a going concern unless we take actionsis still dependent on the Company’s ability to alleviate those conditions. Our primary sources of liquidity have been funds generatedraise additional equity or debt capital, spin-off non-core assets to raise additional cash, collect its outstanding accounts receivable and timely collect on the Excess Consideration Note or receive the Earn-Out payments from our debt financingssiParadigm without significant offsets, and equity financings. We have reduced, and plannegotiate discounts in good faith with its trade suppliers. These factors raise substantial doubt about the Company's ability to continue reducing, our operating expenses, and expect to grow our revenue in 2017 and beyond, and have also increased our cash collections from our customers and third-party payors and plan to continue to improve our cash collection results.

AcquisitionNet cash used in operating activities for continuing operations was $0.9 million for the six months ended June 30, 2019 and the Company had unrestricted cash and cash equivalents of vivoPharm$0.7 million at June 30, 2019, an increase from $0.2 million at December 31, 2018. The Company has negative working capital from continuing operations at June 30, 2019 of $7.3 million.

The Company currently requires a significant amount of additional capital to fund operations and pay its unsecured debt and accounts payable, and its ability to continue as a going concern is dependent upon its ability to collect its Excess Consideration Note and its outstanding accounts receivable, receive the Earn-Out payments from siParadigm and negotiate discounts in good faith with its trade suppliers. In July 2019, we purchasedsold our BioPharma Business and Clinical Business as described in Note 1. While the Buyer assumed certain of our liabilities in the BioPharma Disposal, the cash received to date from the Business Disposals is insufficient to satisfy all of the outstanding stock of vivoPharm, with its principal place of business in Victoria, Australia, in a transaction valuedCompany’s liabilities and other obligations, and the Company cannot determine at approximately $1.2 million in cash, $9.5 million in the Company's common stock based on the closing pricethis time if future Earn-Out payments and payoff of the stock on August 15, 2017, plus an estimated settlementExcess Consideration Note, combined with settlements of $345,000claims against the Company will enable all creditors to be paid in full and provide sufficient funds for excess working capital in accounts payable and accrued expenses infuture operations. We are continuing to evaluate additional strategic options, which could include the accompanying balance sheet. The Company has deposited in escrow 20%sale of the stock consideration until the expiration of twelve months from the closing date to serve as the initial source for any indemnification claims and adjustments. The Company had an estimated $150,000 in transaction costs associated with the purchase of vivoPharm, which were expensed during the three and nine months ended September 30, 2017.other assets, a merger, reverse merger or

other strategic transaction. We can provide no assurances that specialized in planning and conducting unique, specialized studies to guide drug discovery and development programs with a concentration in oncology and immuno-oncology. The transaction is being accounted for using the acquisition method of accounting for business combinations in accordance with GAAP. Under this method, the total consideration transferred to consummate the acquisition is being allocated to the identifiable tangible and intangible assets acquired and liabilities assumed based on their respective fair values as of the closing date of the acquisition. The acquisition method of accounting requires extensive use of estimates and judgments to allocate the consideration transferred to the identifiable tangible and intangible assets acquired and liabilities assumed. Accordingly, the allocation of the consideration transferred is preliminary andour current actions will be adjusted upon completionsuccessful or that additional sources of cash or financing will be available to us on favorable terms, if at all. If the final valuation ofCompany is not able to collect its accounts and notes receivable or raise additional capital on a timely basis or on favorable terms, the assets acquired and liabilities assumed. The final valuation is expectedCompany may need to be completed as soon as practicable but no later than twelve months after the closing date of the acquisition.scale back further or, in extreme cases, discontinue its operations or liquidate its assets.

The estimated allocation of the purchase price as of August 15, 2017 consists of the following (in thousands):

As of September 30, 2017,described in Note 1, the Company has sold 1,000,000 shares under this agreement at $3.00 per share, resultingits BioPharma Business and Clinical Business in proceedsJuly 2019. In conjunction with the BioPharma Disposal, the Company repaid its debt to SVB and PFG. At June 30, 2019, we had borrowings of approximately $2,965,000, net$2.8 million on the ABL and the principal balance of offering costs of approximately $35,000.the PFG Term Note was $6.0 million. The Company has also issued 320,000 shareselected to allocate approximately $657,000 and $1,442,000 of interest expense from the Convertible Note and Advance from NovellusDx to discontinued operations during the three and six months ended June 30, 2019, respectively. No interest expense was allocated to discontinued operations for the three and six months ended June 30, 2018, as consideration for entering intoall debt outstanding during those periods was repaid as part of the Purchase Agreement. The Company has not deferred any offering costsBioPharma Disposal. Revenue and other significant accounting policies associated with thisthe discontinued operations have not changed since the most recently filed audited financial statements as of and for the year ended December 31, 2018, except for the adoption of ASC 842 as described in Note 1.

For purposes of this calculation, stock warrants, outstanding stock options, convertible debt and unvested restricted shares are considered common stock equivalents using the treasury stock method, and are the only such equivalents outstanding.

The following table summarizes equivalent units outstanding that were excluded from the earnings per share calculation because their effects were anti-dilutive (in thousands):

We have two equity incentive plans: the 2008 Stock Option Plan (the “2008 Plan”) and the 2011 Equity Incentive Plan (the “2011 Plan”, and together with the 2008 Plan, the “Stock Option Plans”). The Stock Option Plans are meant to provide additional incentive to officers, employees and consultants to remain in our employment. Options granted are generally exercisable for up to 10 years. Effective April 9, 2018, the Company cannot issue additional options from the 2008 Plan.

At SeptemberJune 30, 2017, 391,3172019, 1,174,875 shares remain available for future awards under the 2011 PlanPlan. On July 23, 2019, the Company issued 100,000 stock options to each of its five non-employee directors. The options will vest in equal monthly installments over the next twelve months and 134,354 shares remain available for future awards under the 2008 Plan.have an exercise price of $0.15 per share.

A summary of employee and non-employee stock option activity for the ninesix months ended SeptemberJune 30, 20172019 is as follows:

Aggregate intrinsic value represents the difference between the fair value of our common stock and the exercise price of outstanding, in-the-money options. During the three and nine months ended September 30, 2017, the Company received approximately $2,500 and $6,500, respectively, from the exercise of options.

As of SeptemberJune 30, 2017,2019, total unrecognized compensation cost related to non-vested stock options granted to employees was $2,865,963$423,948 which we expect to recognize over the next 2.322.89 years.

Restricted stock awards have been granted to employees, directors and consultants as compensation for services. At SeptemberJune 30, 2017,2019, there was $383,829$13,817 of unrecognized compensation cost related to non-vested restricted stock granted to employees and directors; we expect to recognize the cost over 1.500.25 years.

The following table summarizes the activities for our non-vested restricted stock awards for the ninesix months ended SeptemberJune 30, 2017:2019:

The TSA with Buyer described in Note 1 requires the Company to continue to employ individuals who will transfer to Buyer no later than six months from the closing of the transaction. Buyer will reimburse the Company for the payroll and benefit costs of these employees, but not the stock-based compensation. Therefore, stock-based compensation is considered part of the Company’s continuing operations. The following table presents the effects of stock-based compensation related to stock option and restricted stock awards to employees and non-employees on our Unaudited Condensed Consolidated Statements of Operations and Other Comprehensive Loss during the periods presented (in thousands):

During the three and ninesix months ended SeptemberJune 30, 2017, the Company received approximately $56,000 and $1,827,000, respectively, from shareholders who exercised2019, 3,675,000 warrants to purchase 25,000 and 811,900 shares of common stock, respectively, at $2.25. In addition, on March 28, 2017, warrant holders exercised warrants to purchase 90,063 shares of common stock at an exercise price of $2.25 per share using the net issuance exercise method whereby 45,162 shares were surrenderedissued as payment in fullpart of the exercise price resulting in a net issuance of 44,901 shares.2017 Offering expired unexercised.

The following table summarizes the derivative warrant activity subject to fair value accounting for the ninesix months ended SeptemberJune 30, 20172019 (in thousands):