FORWARD-LOOKING STATEMENTS This quarterly report on Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Statements that are not historical facts, including statements about our plans, objectives, beliefs and expectations, are forward-looking statements. Forward-looking statements include statements preceded by, followed by or that include the words “believes,” “expects,” “anticipates,” “plans,” “estimates,” “intends,” “projects,” “should,” “could,” “may,” “will” or similar words and expressions. These forward-looking statements are contained throughout this Form 10-Q. Forward-looking statements are only predictions and are not guarantees of future performance. These statements are based on current expectations and assumptions involving judgments about, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond our control. These predictions are also affected by known and unknown risks, uncertainties and other factors that may cause our actual results to be materially different from those expressed or implied by any forward-looking statement. Many of these factors are beyond our ability to control or predict. Our actual results could differ materially from the results contemplated by these forward-looking statements due to a number of factors. Such factors include, but are not limited to, the following: ● our expectations of future revenues, expenditures, capital or other funding requirements; ● our reliance on Medicare reimbursement for our clinical services and our being able to successfully restructure ourselves and maintain profitability as a result of the decision of the Center for Medicare and Medicaid Services (“CMS”) to cease reimbursement coverage of our PancraGEN® test 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; ● our dependence on sales and reimbursements from our clinical services for all of our revenue; ● our reliance on sales of our molecular diagnostic tests for thyroid cancer, ThyGeNEXT® and ThyraMIR®v2, following the loss of reimbursement for and resulting discontinuance of PancraGEN®, our pancreatic cancer test; ● our ability to continue to generate sufficient revenue from our clinical service products and other products and/or solutions that we develop in the future is important for our ability to meet our financial and other targets; ● our ability to finance our business on acceptable terms in the future, which may limit the ability to grow our business, develop and commercialize products and services, and develop and commercialize new molecular clinical service solutions and technologies; ● our dependence on third parties for the supply of some of the materials used in our clinical services tests; ● the potential adverse impact of current and future laws, licensing requirements and governmental regulations upon our business operations, including but not limited to the evolving U.S. regulatory environment related to laboratory developed tests (“LDTs”), pricing of our tests and services and patient access limitations; ● our reliance on our sales and marketing activities for future business growth and our ability to continue to expand our sales and marketing activities; 16 ● our being subject to the controlling interests of our two private equity investors who control an aggregate of 84% of our outstanding shares of Common Stock and this concentration of ownership may have a substantial influence on our decisions; ● the delisting of our Common Stock from Nasdaq, the removal of our Common Stock from trading on the OTCQX on August 18, 2025 and the subsequent trading of our Common Stock on the OTCID have adversely affected and may continue to adversely affect our Common Stock and business and financial condition; ● our ability to obtain clinical evidence demonstrating to both customers and payers our molecular diagnostic test’s clinical relevance and value; ● our ability to implement our business strategy; and ● the potential impact of future contingent liabilities on our financial condition. Please see Part I – Item 1A – “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 filed with the SEC on March 30, 2026, and as amended on April 30, 2026, as well as other documents we file with the SEC from time-to-time, for other important factors that could cause our actual results to differ materially from our current expectations as expressed in the forward-looking statements discussed in this Form 10-Q. Because of these and other risks, uncertainties and assumptions, you should not place undue reliance on these forward-looking statements. In addition, these statements speak only as of the date of the report in which they are set forth and, except as may be required by law, we undertake no obligation to revise or update publicly any forward-looking statements for any reason. OVERVIEW We are a company that provides esoteric molecular diagnostic testing and pathology services to aid physicians in their evaluation of cancer risk in patients with indeterminate biopsies and a perceived risk of cancer from clinical features. We develop and commercialize genomic tests 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. Our clinical services’ customers consist primarily of physicians, hospitals, cancer centers, commercial laboratories, pathology groups and clinics. Our largest customer in the six months ended June 30, 2025 and 2026 for ThyGeNEXT® and ThyraMIR®v2 was Laboratory Corporation of America® or LabCorp. Our revenue channels include reimbursement by Medicare, Medicare Advantage, Medicaid and direct client billings (for example, hospitals and clinics), and commercial payers such as Blue Cross® Blue Shield®, Aetna®, Cigna®, United Healthcare® and others. We are developing a new molecular diagnostic test for assessing the risk of pancreatic cyst progression to cancer, distinct from our prior pancreatic test. Our prior pancreatic test (PancraGen®) was discontinued as a result of a loss of reimbursement by Medicare, Medicare Advantage and Medicaid. We believe that the development process will take approximately 12-24 months, is subject to significant uncertainties, and there can be no assurance that the test will be successfully developed or commercialized or generate revenue on any particular timeline, or at all. Before the new test is launched, a positive determination of reimbursement from CMS must be obtained. The timing of such determination is unknown and such positive reimbursement determination may never be obtained. In order to obtain reimbursement from Medicare, Medicare Advantage, Medicaid and private insurers, we will need to prove medical necessity for such test and demonstrate that the results of such test directly influence treatment and patient management, including clinical decisions. 17 Equity 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 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 June 30, 2026. Clinical Services Our clinical services business commercializes clinically useful molecular diagnostic tests and molecular pathology services. We commercialize esoteric diagnostic tests that are 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 pathological, mutational and epigenetic analysis of fine-needle aspiration biopsies derived from thyroid nodules with the goal of better informing surgery or surveillance treatment decisions in patients suspected of thyroid, pancreatic, and other cancers. 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. 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®, to help in further refining the malignancy risk of indeterminate thyroid nodules utilizing a proprietary microRNA gene expression classifier. Revenue Recognition Clinical services derive revenues from the performance of proprietary assays or tests. Our performance obligation is fulfilled upon completion, review and release of test results to the customer, at which time we bill third-party payers or direct-bill payers for the tests performed. Under Accounting Standards Codification 606, revenue is recognized based upon the estimated transaction price or NRV, which is determined based on historical collection rates by each payer category for each proprietary test offered. To the extent that the transaction price includes variable consideration, for all third party and direct-bill payers and proprietary tests, we estimate the amount of variable consideration that should be included in the transaction price using the expected value method based on historical experience. The ultimate amounts received from the third-party and direct-bill payers and related estimated reimbursement rates are regularly reviewed and we adjust the NRVs and related contractual allowances accordingly. If actual collections and related NRVs vary significantly from our estimates, we adjust the estimates of contractual allowances, which affects net revenue in the period such variances become known. Cost of Revenue Cost of revenue consists primarily of the costs associated with operating our laboratory and other costs directly related to our tests. Personnel costs, which constitute the largest portion of cost of services, include all labor-related costs, such as salaries, bonuses, fringe benefits and payroll taxes for laboratory personnel. Other direct costs include, but are not limited to, laboratory supplies, certain consulting expenses, royalty expenses, and facility expenses. 18 CONDENSED CONSOLIDATED RESULTS OF OPERATIONS The following table sets forth, for the periods indicated, certain statements of operations data. The trends illustrated in this table may not be indicative of future results. Condensed Consolidated Results of Continuing Operations for the Quarter Ended June 30, 2026 Compared to the Quarter Ended June 30, 2025 (unaudited, in thousands) Three Months Ended June 30, 2026 2026 2025 2025 % to % to revenue revenue Revenue, net $ 9,131 100.0 % $ 9,232 100.0 % Cost of revenue 3,478 38.1 % 3,956 42.9 % Gross profit 5,653 61.9 % 5,276 57.1 % Operating expenses: Sales and marketing 2,207 24.2 % 2,910 31.5 % Research and development 149 1.6 % 173 1.9 % General and administrative 2,976 32.6 % 2,661 28.8 % Total operating expenses 5,332 58.4 % 5,744 62.2 % Operating income (loss) 321 3.5 % (468 ) -5.1 % Note payable interest - 0.0 % (49 ) -0.5 % Other income (expense), net 9 0.1 % (16 ) -0.2 % Income (loss) from continuing operations before tax 330 3.6 % (533 ) -5.8 % Provision for income taxes 64 0.7 % - 0.0 % Income (loss) from continuing operations 266 2.9 % (533 ) -5.8 % Loss from discontinued operations, net of tax (108 ) -1.2 % (107 ) -1.2 % Net income (loss) $ 158 1.7 % $ (640 ) -6.9 % Revenue, net Revenue, net for the three months ended June 30, 2026 decreased by $0.1 million, or 1%, to $9.1 million, compared to $9.2 million for the three months ended June 30, 2025. The decrease in net revenue was primarily driven by the loss of reimbursement for PancraGEN® in April 2025, which resulted in specimens for PancraGEN® testing no longer being accepted by the Company after May 2, 2025. Cost of revenue Consolidated cost of revenue for the three months ended June 30, 2026 was $3.5 million, as compared to $4.0 million for the three months ended June 30, 2025. As a percentage of revenue, cost of revenue decreased to 38% for the three months ended June 30, 2026 as compared to 43% in the comparable prior year period. This decrease can be attributed to the decline in variable costs, including lab supplies. Gross profit Consolidated gross profit was approximately $5.7 million for the three months ended June 30, 2026 and $5.3 million for the three months ended June 30, 2025. The increase is attributed to the lower cost of revenue discussed above. Sales and marketing expense Sales and marketing expense was approximately $2.2 million for the three months ended June 30, 2026 and $2.9 million for the three months ended June 30, 2025. There was approximately $0.5 million in severance and related costs included in the three months ended June 30, 2025. These costs pertained 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. 19 Research and development Research and development expense was approximately $0.1 million for the three months ended June 30, 2026 and $0.2 million 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 General and administrative expense was approximately $3.0 million for the three months ended June 30, 2026 and $2.7 million for the three months ended June 30, 2025. The increase can be primarily attributed to an increase in professional services costs of $0.1 million and an increase in employee and related costs of $0.2 million. Operating income (loss) There was operating income from continuing operations of $0.3 million for the three months ended June 30, 2026 as compared to an operating loss from continuing operations of $0.5 million for the three months ended June 30, 2025. The increase in operating income from continuing operations was primarily attributable to the increase in gross profit and the absence of severance costs in 2026 that were recorded in the three months ended June 30, 2025. Note payable interest expense Note payable interest expense was $49,000 for the three months ended June 30, 2025. The interest expense was from our former Term Loan with BroadOak Fund V, L.P. (“Term Loan”) which has since been repaid. There was no note payable interest expense for the three months ended June 30, 2026. Provision for income taxes Income tax expense was approximately $0.1 million for the three months ended June 30, 2026. There was no income tax expense for the three months ended June 30, 2025. Loss from discontinued operations, net of tax We had a loss from discontinued operations of approximately $0.1 million for both the three months ended June 30, 2026 and for the three months ended June 30, 2025, respectively. 20 Condensed Consolidated Results of Continuing Operations for the Six Months Ended June 30, 2026 Compared to the Six Months Ended June 30, 2025 (unaudited, in thousands) Six Months Ended June 30, 2026 2026 2025 2025 % to % to revenue revenue Revenue, net $ 18,163 100.0 % $ 20,747 100.0 % Cost of revenue 6,606 36.4 % 8,101 39.0 % Gross profit 11,557 63.6 % 12,646 61.0 % Operating expenses: Sales and marketing 4,384 24.1 % 5,723 27.6 % Research and development 301 1.7 % 350 1.7 % General and administrative 5,427 29.9 % 5,211 25.1 % Total operating expenses 10,112 55.7 % 11,284 54.4 % Operating income 1,445 8.0 % 1,362 6.6 % Note payable interest - 0.0 % (127 ) -0.6 % Other income, net 18 0.1 % 4 0.0 % Income from continuing operations before tax 1,463 8.1 % 1,239 6.0 % Provision for income taxes 366 2.0 % 18 0.1 % Income from continuing operations 1,097 6.0 % 1,221 5.9 % Loss from discontinued operations, net of tax (218 ) -1.2 % (214 ) -1.0 % Net income $ 879 4.8 % $ 1,007 4.9 % Revenue, net Revenue, net for the six months ended June 30, 2026 decreased by $2.5 million, or 12%, to $18.2 million, compared to $20.7 million for the six months ended June 30, 2025. The decrease in net revenue was largely driven by the loss of PancraGEN® revenue discussed above. Cost of revenue Consolidated cost of revenue for the six months ended June 30, 2026 was $6.6 million and was $8.1 million for the six months ended June 30, 2025. As a percentage of revenue, cost of revenue was approximately 36% for the six months ended June 30, 2026 as compared to 39% for the six months ended June 30, 2025. The decrease in cost of revenue was largely driven by the loss of PancraGEN® revenue discussed above. Gross profit Consolidated gross profit was approximately $11.6 million for the six months ended June 30, 2026 and $12.6 million for the six months ended June 30, 2025. The gross profit percentage was approximately 64% for the six months ended June 30, 2026 and 61% for the six months ended June 30, 2025. The decrease is largely attributed to the loss of PancraGEN® discussed above. Sales and marketing expense Sales and marketing expense was approximately $4.4 million for the six months ended June 30, 2026 and $5.7 million for the six months ended June 30, 2025. The decrease is primarily the result of the loss of PancraGEN® in 2025 which had approximately four months of sales force and severance costs as compared to none in 2026. As a percentage of revenue, sales and marketing expense decreased to 24% from 28% in the comparable prior year period due to the decrease in sales force costs. 21 Research and development Research and development expense was approximately $0.3 million for the six months ended June 30, 2026 and $0.4 million for the six months June 30, 2025, respectively. As a percentage of revenue, research and development expense remained the same at approximately 2% for both periods. General and administrative General and administrative expense was approximately $5.4 million for the six months ended June 30, 2026 and $5.2 million for the six months ended June 30, 2025. The increase can be primarily attributed to a $0.2 million increase in professional services costs. Operating income Operating income from continuing operations remained comparable as it was $1.4 million for both the six months ended June 30, 2026 and for the six months ended June 30, 2025. Note payable interest expense Note payable interest expense was $0.1 million for the six months ended June 30, 2025. The interest expense was from our former Term Loan with BroadOak Fund V, L.P. (“Term Loan”) which has since been repaid. Provision for income taxes Income tax expense was approximately $0.4 million for the six months ended June 30, 2026 and $18,000 for the six months ended June 30, 2025. The income tax expense for the six months ended June 30, 2026 was primarily due to our net income for the six months ended June 30, 2026 and deferred tax expense. The income tax expense for the six months ended June 30, 2025 was primarily related to state and local taxes. Loss from discontinued operations, net of tax We had a loss from discontinued operations of approximately $0.2 million for both the six months ended June 30, 2026 and June 30, 2025, respectively. Non-GAAP Financial Measures In addition to the GAAP results provided throughout this document, we have provided certain non-GAAP financial measures to help evaluate the results of our performance. We believe that these non-GAAP financial measures, when presented in conjunction with comparable GAAP financial measures, are useful to both management and investors in analyzing our ongoing business and operating performance. We believe that providing the non-GAAP information to investors, in addition to the GAAP presentation, allows investors to view our financial results in the way that management views financial results. In this Quarterly Report on Form 10-Q, we discuss Adjusted EBITDA, a non-GAAP financial measure. Adjusted EBITDA is a metric used by management to measure cash flow of the ongoing business. Adjusted EBITDA is defined as income or loss from continuing operations, plus depreciation and amortization, non-cash stock-based compensation, non-recurring legal expenses, severance expense, asset impairment, interest and taxes, and other non-cash expenses including change in fair value of notes payable. The legal expenses included are related to NASDAQ uplist costs, special proxy and charter work, and an employment dispute. The table below includes a reconciliation of this non-GAAP financial measure to the most directly comparable GAAP financial measure. 22 Reconciliation of Adjusted EBITDA (Unaudited) ($ in thousands) Three Months Ended Six Months Ended June 30, June 30, 2026 2025 2026 2025 Income (loss) from continuing operations (GAAP Basis) $ 266 $ (533 ) $ 1,097 $ 1,221 Depreciation and amortization 127 101 245 196 Stock-based compensation 4 9 8 24 Non-recurring legal expenses 65 - 380 - Severance & related expense - 524 - 692 Asset impairment - lab supplies - 198 - 198 Lab supplies write-off 217 - 217 - Taxes expense 64 - 366 18 Note payable interest - 49 - 127 Other income/expense, net (9 ) 10 (18 ) 14 Change in fair value of note payable - 7 - (18 ) Adjusted EBITDA $ 734 $ 365 $ 2,295 $ 2,472 LIQUIDITY AND CAPITAL RESOURCES For the six months ended June 30, 2026, we had operating income from continuing operations of $1.4 million. As of June 30, 2026, we had cash and cash equivalents of $2.7 million, total current assets of $11.0 million and current liabilities of $5.0 million. As of July 31, 2026, we had approximately $2.7 million of cash and cash equivalents. During the six months ended June 30, 2026, net cash provided by operating activities was $0.4 million. The main component of cash provided by operating activities was our net income of $0.9 million and non-cash adjustments of $1.0 million, which were partially offset by a decrease in accrued salaries and bonus of $0.9 million and increase in accounts receivable of $0.7 million. During the six months ended June 30, 2025, net cash provided by operating activities was $1.8 million. The main component of cash provided by operating activities was our net income of $1.0 million. For both the six months ended June 30, 2026 and June 30, 2025, respectively, cash used in investing activities was $0.2 million which pertained to the purchase of lab equipment. For the six months ended June 30, 2026, there was no cash used in financing activities. For the six months ended June 30, 2025, cash used in financing activities was $2.5 million, which were payments made on our former Term Loan. We generated positive cash flows from operations for the six months ending June 30, 2026. We intend to meet our ongoing capital needs by using our available cash as well as through targeted margin improvement, collection of accounts receivable, containment of costs, 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 is seeking an uplisting of its Common Stock to Nasdaq, but no assurances can be given that a Nasdaq listing will be achieved. 23 Inflation 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 restrictions or slowdowns in shipping or logistics, increases in demand for certain goods used in our operations, tariffs, or otherwise, could impact our operations in the near term. Critical Accounting Estimates See Note 5, Summary of Significant Accounting Policies and Note 15, Recent Accounting Standards to the Interim Financial Statements included elsewhere in this Quarterly Report on Form 10-Q for information regarding newly adopted and recent accounting pronouncements. See also Note 1, Nature of Business and Significant Accounting Policies to our financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2025, as amended, for a discussion of our critical accounting policies. There have been no material changes to such critical accounting policies. We believe our most critical accounting policies include accounting for revenue recognition, leases, and income taxes. Off-Balance Sheet Arrangements None. Item