Paul Arndt - Managing Director, LifeSci Advisors, IR Panna Sharma - President and CEO Edward Sitar - CFO and Treasurer

Ben Haynor – Feltl and Company Sung Ji Nam - Cantor Fitzgerald Paul Nouri - Noble Equity Fund Thomas Pfister – RedChip

Good day ladies and gentlemen and welcome to the Cancer Genetics, Inc. Third Quarter 2014 Financial Results Conference Call. As a reminder this conference call is being recorded. I would now like to introduce your host for today's conference, Paul Arndt with the Cancer Genetics Investor Relations team. Paul, please go ahead.

Thank you, Adam, and thank you for joining us for Cancer Genetics 2014 third quarter earnings conference call. On the call today are company President and Chief Executive Officer, Panna Sharma and Chief Financial Officer, Ed Sitar. The company issued a news release this morning highlighting the company's financial results and progress on operations. Following the Safe Harbor Statement, Panna will provide an overview of the third quarter, recent events, and company activity. Ed Sitar will then provide a summary of the quarterly financial results. Lastly Panna will provide an update on Cancer Genetics’ strategy for developing a long-term sustainable oncology diagnostics business. We will then open up the call to questions. I would like to remind everyone that various remarks about future expectations, plans, and prospects constitute forward-looking statements for purposes of Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995. Cancer Genetics cautions that these forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those indicated, including risks described in the company’s filings with the SEC. Any forward-looking statements made on this conference call speak only as of today’s date Monday, November 10, 2014 and Cancer Genetics does intend to update any of these forward-looking statements to reflect events or circumstances that occur after today’s date. This conference call is being recorded for audio rebroadcast on Cancer Genetics’ website at www.cancergenetics.com. All participants on this call will be in listen-only. The call will be followed by a question-and-answer session. Before I turn the call over to Panna, I’ll like to let you all know that we will be participating in two upcoming investment banking conferences, the Canaccord MedTech and Diagnostics Conference in New York City on November 18th, through the 20th as well as the Piper Jaffray Healthcare Conference in New York City on December 2nd and 3rd. For those of you unable to attend, we encourage you to listen to the webcast presentations which will be available through the investor relations section of our website. With that I would like to turn the call over to President and CEO, Mr. Panna Sharma for his opening comments. Good morning, Panna?

Thank you, Paul and good morning all of you on the call today. Thank you for joining us and taking time to listen in on our company’s update and our third quarter results. For investors and listeners that are new to the company, CGI is a genomic focused oncology diagnostics company with unique clinically validated tests in the areas of high unmet need in cancer. We have established a global footprint that is unmatched in molecular oncology and it positions us to be the premier partner to personalize oncology diagnostics from bench to bedside. Through our recently closed acquisitions we have a footprint to discover, develop, and deliver oncology focused testing in the U.S., India, and China. This footprint not only makes us a unique partner for both biotech and pharmaceutical companies but also for hospitals and cancer centres that have the need for highly validated state of the art cancer testing that is supported by globally harmonized standards and validated tests. As we’ll discuss later this morning, you will notice that we had significant volume and revenue increases organically from our clinical services business which grew 44% year-over-year and also from our biopharma services business which grew a 159% year-over-year. We continue to make significant progress in our portfolio as well this past quarter through additional collaborations with leading cancer research institutions of which we now have 17 major research collaborations and partnerships. But we also make progress through securing patents of which we now have eight important patents which are driven by our unique insights into oncology genomics and the algorithms which ultimately drive clinical insight and patient value. And through the launch of the unique test that have earlier first mover advantage in areas of unmet need in oncology. We do this not only through our own focus on innovation, but also through our joint venture with the Mayo Clinic, OncoSpire Genomics which I’ll be talking about later in this morning’s call and providing an update on. During this third quarter, we closed two important acquisitions Gentris in mid July in North Carolina and Shanghai and BioServe Biotechnologies in Mid August in Hyderabad, India. As you know, selective acquisitions are important part of our strategy and we believe that having significant depth of capabilities in oncology and providing comprehensive genomic testing for patients in trials, and those in cancer centres and hospitals is a unique value proposition that will deliver durable shareholder value. During the third quarter we had strong growth and momentum across all aspects of our business; revenue, new contracts of biopharma partners, and the development of expanded offerings and tests. I will highlight some of the more important points and then turn it over to our CFO, Ed to provide additional details on the quarter. Our revenues were $3.22 million which were 90% higher versus the same quarter last year and a 110% higher, more than double versus the prior or second quarter of 2014. Biopharma services grew to $1.93 million which was 159% higher than the same quarter last year and 372% higher than our prior second quarter. This is driven both by our acquisition and through the start of trials that we had been previously awarded but had been delayed earlier this year. Clinical services grew to $1.23 million which is 44% higher than the same quarter last year and 12% higher than our prior second quarter. This was also driven by both volume growth as a result of our sales and marketing team and also higher reimbursement on average per test. During the third quarter we delivered 2,482 tests for patients which was a 44% increase as well and we continue to see very good momentum in October and going into the fall. Some of you will also note that we provided you insight on a new category of revenue which has just started and it is important in our positioning as a premier partner in oncology diagnostics from bench to bedside. And that is discovery services which provides critical oncology testing and development services to research institutions and groups during their investigational and discovery phase. This service will be provided at all of our sites but since it is nascent we only reported $53,000 in revenue during this past quarter. Demonstrating the value and power of targeted, clinically validated genomic content in oncology is essential to receiving positive reimbursement decisions. And our two recent collaborations, one with Beth Israel Deaconess and the second with Keck School of Medicine at USC, our important validation studies with large patient cohorts over 280, showed a predictive power of our diffused large B-Cell panel and how it helps to drive improved clinical insight and reduces the cost of patient management. In the coming months we will be working closely with payers to develop evidenced based programs that will aid in locking and rational reimbursement rates for our unique test in B-Cell cancers. Tests that have been validated and used both in clinical trials by leading biopharma companies and also by large research centres to help predict outcomes for patients. These tests are not available at any other lab and we will also be announcing in the coming quarter, additional partnerships that will drive the usage of this technology and the tests at other clinical sites outside the U.S. At this point I will hand the call over to Ed Sitar for a review of the third quarter and our nine months financial results. Ed?

Thank you Panna and good morning everybody. The third quarter was a great quarter for CGI. We showed growth across all customer groups and great progress on the integration of our two acquisitions. Revenue was over $3.22 million, approximately a 90% increase compared to the third quarter of 2013 and 110% increase over the second quarter. The growth was due to both a continual increase in our clinical testing and the acquisitions of Gentris and BioServe Biotechnologies, India which contributed approximately $1.4 million. Industry consolidation continues to increase as many of you have seen and our focus on selective M&A is one of the catalysts for us to become the premier diagnostic partner in oncology, serving the industry from bench to bedside. In order to give investors a deeper understanding of our business and customer categories, we have modified the way we categorize revenue going forward. We know this will add clarity and will help provide insight into the drivers of growth and adoption of CGI test and services. The three categories are biopharma services. These services are performed for both biotech and pharmaceutical companies as part of clinical trials and clinical operations. This category was up 159% this quarter. Clinical services, these tests are performed at the request of prescribing clinician, oncologist, pathologist, or hospital on a patient sample. These tests are either billed to insurance companies, Medicare, or to the referring community hospital or healthcare facility. And this category was up 44% this quarter. Discovery services, these are tests and services provided in the development of new testing assays and methods for research centers and organizations. This category is new and emerging but an important part of our value proposition from bench to bedside. As mentioned earlier we experienced revenue increases across our two major product categories, biopharma services were up 159% and clinical services were up 44%. The increase in biopharma services is driven by our acquisition of Gentris. Clinical services volume increased 44% when compared to Q3 of 2013. Clinical test volume also grew sequentially over the second quarter of 2014 by approximately 7%. Cost of revenue has approximately doubled to $2.6 million, principally driven by the acquisitions of Gentris and BioServe. Gross margins during the third quarter were approximately 20% or $656,000 which compares with the 29% or $494,000 in the same period last year. The difference was in part a result of higher Select One revenues recorded in the third quarter of 2013. We also recorded a $100,000 in grant revenue last year which did not have significant COGS associated with it. Total operating expenses were $5.6 million in the quarter, compared to $2.2 million in the same period last year. Included in these expenses, in the expenses this quarter are $836,000 in non-cash charges from stock based compensation and $813,000 of cost from our acquired companies. Research and development expenses increased by 221% to $1.4 million due to our $350,000 share of the loss from OncoSpire, our joint venture with the Mayo Clinic, an increase of $455,000 in compensation cost from increased headcount. General and administrative expenses increased 139% or $1.8 million principally due to an increase of $540,000 in stock based compensation cost, an increase of $500,000 through the acquisition of Gentris and BioServe. And increases in compensation and the cost of associated with it being a public company. Sales and marketing expenses increased to 142% or $628,000, principally due to increase in compensation cost of $277,000 from our increase in headcount along with $240,000 through the acquisitions of Gentris and BioServe. Net loss in the third quarter was $4.8 million or $0.51 per diluted share compared to a loss of $3.1 million or $0.61 per diluted share in the third quarter of 2013. Our Q3 2014 loss includes approximately $200,000 of expenses related to our execution of our acquisitions. A number of you have asked questions regarding our performance on an operating level. To give you a sense of this we have developed metrics that excludes stock based compensation, a non-cash expense and the cost incurred to execute our selected M&A activity. Using this measure for the three month period, our loss in three month period was $3.8 million or $0.41 per diluted share compared to a loss of $2.9 million or $0.58 per diluted share for the third quarter of 2013. These measures are prepared on non GAAP basis and a reconciliation is included in our press release. Now let’s talk briefly about the nine month period ended September 30, 2014. Revenue for the nine month period ended September 30, 2014 increased 30% to $6.1 million. The acquisition of Gentris and BioServe contributed $1.4 million in revenue, clinical test volumes increased by 30% but this increase was offset by lower volumes in our Select One business and lower per cash revenue in our clinical services business due to the mix of test orders. Total operating expenses in nine month period were $14.1 million compared to $6.9 million in the same period last year. On a GAAP basis or a net loss for the nine month period ended September 30, 2014 was $11.5 million or $1.25 per diluted share compared with a loss $9.8 million or $4.02 per diluted share in a comparable period in 2013. Using the operating measure I discussed a few minutes ago, our loss in the nine month period was $9.1 million or $1.01 per diluted share compared to a loss of $9.4 million or $3.90 per diluted share for the same period last year. As a reminder this measure is non-GAAP. Total available cash was $37 million and includes amounts restricted for our loan facility with Wells Fargo. We had unrestricted cash and cash equivalents of $30.7 million as of September 30, 2014. I will now turn the call back over to Panna.

Thank you, Ed. Let me comment on some strategic items and on our overall market strategy before opening up for Q&A. We are developing a very unique genomics focused business that leverages proprietary technology and unique oncology insight to deliver a comprehensive approach to personalizing treatment both for clinical customers and patients as well as the biopharma companies. Going forward we had several drivers of growth and accelerators to our business. Namely one the sales synergies from Gentris and BioServe which helps the acceleration of our biopharma strategy and our testing business where we now have a backlog of over $24 million due to our unique set of capabilities and unique panels. A number of these new trials on hematologic malignances which has been the core strength of the company. This past quarter and into October we had begun to see the effects of sales synergies across the sites. We have added several new trials as a result of broader access to biopharma customers and as also a result of broader set of clinical and genomic capabilities. In Q1 we expect to launch several new offerings that integrate pharmacogenomics and semantic focus assessments of cancer into an industry leading genomics panel that were very unique for both biopharma as well as cancer centers in hospitals. Two additional new partnerships that we are forming as a result of two factors, our global infrastructure for oncology testing which is unique and unparallel and our proprietary test that are focused on delivering disease relevant and clinically useful insight. Third, our blockbuster product for cervical cancer testing, FHACT where we received both a CE mark and a patent in this past quarter, and we expect to receive an additional patent on this test shortly. The addressable market for this product in the U.S. alone is over 2 million tests annually and the unique aspect of this test is that it was designed to work from left over patient material either from the path or HPV test causing no further samples to be invasively taken from a women and at the same time it gets critical guidance and how to best triage her further care. We continue to bring several new women’s health centers and laboratories into trials and into routine ordering sites. We have launched a major initiative to educate and make the broader clinical community aware of the value that this test has and for writing precise genomic information that can triage and guide treatment. We also expect the issuance of another patent shortly and we’ll keep you posted on this front. Fourth, our focus on innovation, both through our own development programs and with our partners, we’ll have two significant papers and a presentation at ASH in San Francisco in December, in diffused large B-Cell lymphoma as well as in multiple myeloma. The multiple myeloma program is through our joint venture with Mayo Clinic, OncoSpire Genomics where we hold the rights not only to diagnostic panels being developed but also to the drug where targets that are identified and characterized which we plan in partnering after biotech and pharma for collaborations and revenue. The first launch we expect is a 70 plus gene panel for multiple myeloma in early 2014 and it provides insight that’s not available in any other test including some of the larger scale Hem (ph) panels that I talked about. We will continue to invest and develop additional programs such as the recent program in MDS and acute myeloid leukemia with leading clinicians at Columbia University, where we will be able to identify and group patients until responder and outcome classes. And also in that collaboration we also are looking at the potential drugable targets. What we are putting in place is the architecture for developing a solid long-term business that is not reliant on a single platform or some unitary approach to oncology and can deliver business on a global scale. As evidenced by our partnerships not only in the U.S. but also in India and China and other markets and we’ll continue making announcements of additional partnerships. We have a scalable business that can capture the interest and serve the needs of biotech and pharma companies and hospitals that are looking to change patient outcomes through genomics and the personalization of treatment. I’d like to now open the line for any questions.

Thank you. (Operator Instructions). Our first question comes from the line of Ben Haynor with Feltl and Company. Please go ahead with your question. Ben Haynor - Feltl and Company: Good morning gentlemen. Just wondering where the sales force is at in terms of numbers now and now that lot of these folks have been with you for a couple of quarters or longer, can you talk about how you see the productivity tracking thus far?

Ben, how are you? Ben Haynor - Feltl and Company: Doing well, thank you.

Good question. So we have our sales force is organized into a group that calls on the biotech and pharma as well as a group that’s focusing the clinical side, the biggest growth has come from our clinical sales force. And we are now overall in terms of our sales force, we are at about 16 people and so we’ve had not a significant amount of growth the past few months. We have been really focused on making our sales force more productive. We had several slots, we expect by the closing this year we’ll be closer to 20. Ben Haynor - Feltl and Company: Well that is helpful. I guess for the rules I should jump back in queue?

Thank you. Our next question comes from the line of Sung Ji Nam with Cantor. Please go ahead with your question. Sung Ji Nam - Cantor Fitzgerald: Hi, there. Thank you for the question. I was wondering for the 24 million that’s in the backlog from the biopharma customers, what’s the timing in terms of when that might be recognized and then is there any risk to some cancellations for some of these partnerships as well? Thank you.

Hi Sung Ji, this is Panna. So I think good question. So the 24 million in contracts that we have, we -- some of those trials are, we expect them to be six months or less some. We expect to be several years. On average we are using about a two and half year period. But again that said it’s hard to state because some are several years in the case of phase III trials that are just beginning and some are shorter and less than a year. So its -- they tend to be quite a range. In terms of cancellations we historically have not had any cancellations in our clinical trial contracts to date. That said we are aware that it happens in the industry and trials get changed or modified. In our case we’ve had trials that get delayed but not cancelled. So we can’t say look at that overall backlog and how it’s tracking and so I think we have gotten a lot better at trying to moderate the pace at which we recognize the risks. We haven’t seen cancellations but we have seen delays. So that said we don’t expect cancellations or much cancellation on that number.

Thank you. Our next question comes from the line of Paul Nouri from Noble Equity Fund. Please go ahead with your question. Paul Nouri - Noble Equity Fund: Is it fair to look at the cost structure for this quarter and extrapolate that out to other quarters coming up?

Paul good question, there are a couple of factors one, we had some unique cost this quarter because of the acquisitions and so that caused us more cash usage than typical. And also this quarter our stock based comp also increased. I think in terms of real cash usage if you normalize out the cash used on the acquisitions and for the acquisition related activity, I think that would be much more in line. Is that fair to say, Ed?

I think this quarter is a fair quarter. We had some unusual expenses in Q1 and Q2. So we got less of that but we do have the expenses related to the M&A execution which you have to consider. We think our stock comp will settle down around where we are this quarter about 900,000 in the quarter going forward. So I think it’s fair. The only change to our expenses of course will be as we add additional sales and marketing staff or bring on other executive positions in to marketing and other areas that we’ve identified that we may need or may want to bring on. But I think this is a fair number if you can use. Paul Nouri - Noble Equity Fund: And do you think as you integrate the acquisitions there is opportunity for the gross margin to be sustainably above 25% or is this range we should expect?

Of course I will take it. Our long-term goal was in the 60 plus percent so we expect the gross margin due to capacity and also due to mix to increase. So this is -- and so we certainly don’t expect to start out in this range. We expect it to continue going higher. As we integrate we’d had some cost to kind of bring the two pieces together and we got some overlaps in terms of COGS that we had to have this quarter. But we expect improvement largely year-to-year, that’s going to be pretty significant on the gross profit side. And again our target is 65 plus percent kind of as a run rate business. Paul Nouri - Noble Equity Fund: Okay, thanks.

Thank you.

Our next question comes from the line Thomas Pfister with RedChip and Company. Please go ahead with your question. Thomas Pfister - RedChip: Hey Panna, hey Ed, how are you guys doing today?

Good, how are you? Thomas Pfister - RedChip: Good, good. My question just relates to the clinical trial backlog again, could you give some detail on how much of this backlog is from the U.S. and I know it is early but how much of this backlog is from India and China?

That is good question Tom. We don’t really typically report out the geographic segments in terms of backlog. But it is -- India and China it would be fair to say is very negligible at this point. Bulk of that is going to be delivered in the U.S. Thomas Pfister - RedChip: Okay, great. Thanks for answering my question guys.

Our next question a follow-up from Ben Haynor with Feltl and Company. Please go ahead with your question. Ben Haynor - Feltl and Company: Just trying to follow the rules here. So, on the increase in backlog, is that from existing customers, new customers, both and then what types or sub types of cancer I guess contributed most there to the increase?

Good question Ben. So let me break in the question. The good thing about this past quarter's increase in backlog, as most of it was due to new customers, the majority of which was in hematologic malignancies and there were a few solid tumors and a few additional obviously RTP or Raleigh site that came on as well that were existing customers. But the vast majority was all new business from new customers, diversifying our exposure which is largely we think as a positive. The other thing we liked is that it was squarely in the hemotologic category where many of these companies are beginning to realize that they can't get the same kind of content and technology anywhere else. So that also seems very much as a positive. Ben Haynor - Feltl and Company: That's helpful and if I could sneak in one more quick one here. How were the -- how is the interest with the combined CGI and Gentris or CGI RTP capabilities, are you still getting RFPs rolling in at a pretty good pace and is that accelerating?

Yeah, we have seen acceleration. You know there is -- we continue to be on in the field with clients and customers. It is -- this quarter is big planning quarter. The activity with Covance and LabCorp has definitely changed people's perspective on where to park risk in terms of trials. So we have had a lot of interests because of people want to have not only multiple vendors but people want to now go best in class with lot of the oncology trials. And so you will see companies like ours who have clear focused, patient centric model with unique content continuing to enjoy pharma revenue increases because pharmas want to have a company that has unique content like we do. And that can deliver in a very good timely fashion. So we see, I think I mean every week we have a major top ten pharma RFP going out. So that’s -- we expect acceleration of the backlog and acceleration of the pace at which our proprietary content is used in those trials, so both are net positive. Ben Haynor - Feltl and Company: Excellent, thank you very much. Good quarter guys.

Thank you Ben.

Thank you. Our next follow-up question comes from Sung Ji Nam with Cantor. Please go ahead with your question. Sung Ji Nam - Cantor Fitzgerald: Hi, thanks for the follow-up. Was wondering if you could break out what the contribution was from FHACT year-to-date and if that is hard to do maybe could you talk about what kind of volume you are seeing thus far?

On our clinical volume, I know we reported our clinical volume number year-to-date as 24 to 2 (ph).

(Inaudible) this quarter.

This quarter. And kind of what we are seeing is that, that FHACT is somewhere around I think similar about 10% now.

Yeah, about 200 to 225 a minute.

It could be, so we started the year in Q1 where I think it was up 7% to 8% and now it is about 10% routinely in terms of the tests that are paid for. We are also doing FHACT test for an NCI trial but that is counted as a research collaboration.

Technical research.

So it is about 10% of our clinical volume right now. Sung Ji Nam - Cantor Fitzgerald: Great, thank you.

Thank you. (Operator Instructions). Our next follow-up question comes from the line of Paul Nouri with Noble Equity Fund. Please go ahead with your question. Paul Nouri - Noble Equity Fund: You used to have a pretty good amount of cash on the balance sheet, is there any thoughts to continuing to look for tuck in acquisitions, are you going to kind of wait and integrate the ones you have already made?

Yeah, we are very focused on integrating, we have got we think some great opportunities for growth with the two that we have already executed. But as we said early in our call, and also last quarter, selective acquisition is part of our growth strategy. So we will continue looking where it makes sense if it helps us achieve our mission which is to impact more lives and personalized treatment of cancer. And obviously the financials and sales synergy are access to content or access to customers make sense, we will take a look at it. So we are constantly evaluating the market for opportunities or proactively getting a lot of interest. But again, we have got through a series of filters and we have pretty selective process but we are looking. As an industry it needs consolidation clearly. Paul Nouri - Noble Equity Fund: Okay, thanks.

Thank you. Ladies and gentlemen it appears there are no further questions at this time. I would like to turn the floor back over to management for concluding comments.

Thank you. Thank you for the questions and we appreciate everyone listening into our call. As we mentioned we believe we are creating a very unique business model that is developing unique insights into oncology through innovative tests and bringing these to market in a way that it is needed both by biotech as well as by the clinical community. We think that our investments in innovation and novel diagnostics will transform patient care and at the same time our business model which will continue to look for selective acquisition targets to consolidate the industry further, we believe will provide very useful long-term to building a durable business in genomics. Thank you for listening in and getting an update on our business and we look forward to talking and meeting all of you soon.

Thank you ladies and gentlemen. This concludes today's conference. You may now disconnect your lines at this time. Thank you for your participation and have a wonderful day.