Lee Roth – Executive Vice President-The Ruth Group Jay Roberts – Interim Chief Executive Officer and Chief Operating Officer Ralf Brandt – President-Discovery Services Rita Shaknovich – Chief Medical Officer and Group Medical Director

Mike Okunewitch – Maxim Group

Good afternoon and welcome to the Cancer Genetics’ Fourth Quarter and Full Year 2017 Earnings Call and Company Update. This afternoon, the company issued a press release that provided an overview of the fourth quarter and full year 2017 financial results and business update. Today’s conference is being recorded and will be available online at investors.cgix.com. Additionally, CGIX has also provided a set of slides to accompany today’s update that are available both online or by contacting ir@cgix.com. All participants on this call will be in a listen-only mode. The call will be followed by question-and-answer session. At this time, I’d like to turn the conference over to Mr. Lee Roth, Executive Vice President at The Ruth Group. Please go ahead, sir.

Thank you, Cody, and thank you, all for joining the Cancer Genetics’ fourth quarter and full year 2017 earnings conference call. Joining me today is Cancer Genetics’ Interim Chief Executive Officer and COO, Jay Roberts; our President of Discovery Services, Dr. Ralf Brandt; and our Chief Medical Officer and Group Medical Director, Dr. Rita Shaknovich. The company issued a news release at the close of market today as well as set of slides to accompany this earnings call. These materials are available under the Investor Relations section of our website. Following the Safe Harbor statement, Jay will provide a strategic overview and update on recent corporate developments as well as brief financial overview. Ralf will discuss the value of CGI’s early stage testing services. And Rita will provide details on the company’s comprehensive diagnostic test portfolio. Jay will then make some closing remarks before we open the call to your questions. We’d like to remind everyone the various comments about future expectations, plans and prospects constitute forward-looking statements for purposes of the 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 our actual results to differ materially from those indicated, including the risks described in the Company’s filings with the SEC. Any forward-looking statements made during this call speak only as of today’s date, Monday, April 2, 2018, and Cancer Genetics does not intend to update any of these forward-looking statements to reflect events or circumstances that would occur after today’s date. As a reminder, this call is also being recorded for rebroadcast on the Company’s website at cancergenetics.com. With that, it’s my pleasure to turn the call over to Interim Chief Executive Officer, Jay Roberts. Jay?

Thank you, Lee, and welcome to our fourth quarter and full year 2017 earnings conference call. In February of this year, I took over the Interim CEO of Cancer Genetics. In the roughly two months since assuming this role, I have been working closely with our board and members of the CGI leadership team to conduct a comprehensive review of our strategy and every facet of our organization. The goal of this process which included analysis of our financial and laboratory operations, pipeline programs, revenue streams and financial resources was to devise a transformative plan for Cancer Genetics. One that would result in a stronger, more focused and more efficient company position to grow through targeted strategic investment in our core areas of strength. One major area of focus during this review was an in-depth evaluation of our accounts receivable, which had increased to approximately $16 million, primarily related to disruptions in collection from our clinical services business. We engage a third-party consultant with the tools necessary to gain greater visibility into receivables and determine that the majority of our cash collection challenges were related to our acquisition of response genetics and the integration of their invoices into our billing platform. Some of these claims, which denied for a variety of reasons date back as far as 2015. We are continuing our efforts to collect on all of these claims, but based on the information is now available to us. We made the decision to write-off a significant portion of our outstanding receivables in the fourth quarter. This resulted in the bad debt expense of $4.4 million and $1.8 million write-off against account receivable and a revenue reversal of $1.6 million in the fourth quarter. As a result of these onetime adjustment, we ended 2017 with a receivables balance never the allowance for doubtful accounts slightly under $11 million. While these actions had a significant impact on our fourth quarter result, we believe that they have giving us a much clearer path regarding collection, particularly in our clinical services business, which accounts for approximately 65% of the remaining balance. We are confident that the remaining receivables are collectible and that this was a prudent decision, which better position of the company moving forward. As a result of recording a large bad debt expense, we triggered to fall of our loan covenants with our senior lenders, which we are currently negotiating a waiver. We are currently in the negotiation to amend the agreement. Consequently our audited financial statements contain a going concern qualification paragraph in the audit opinion from our auditors and the company is also disclosing that it had a Material Weakness in Internal Controls Over Financial Reporting at December 31, 2017. While the receivables evaluation is the only initiative directly reflected in our results of the full year and the fourth quarter ended December 31, 2017, we are undertaking additional measures aimed at further streamlining our operations, reducing cost and decreasing our overall laboratory facilities footprint. We expect that these activities will have a meaningful, positive effect on our financial and operational performance in future period. It is important to emphasize that the goal of this program is more than just cutting cost. It is identifying our core strengths and investing in those areas that have the greatest potential to drive future growth and profitability. Before I review the financial results, I’d like to take a few moments to discuss how this vision relates to each of our three businesses. In Biopharma Services, we offer a uniquely comprehensive array of tests in clinical trial capabilities for our industry partners, including genomic testing, biomarker measurement and identification, custom protocol execution and patient profiling and monitoring. These services are designed to optimize what are often lengthy, costly and challenging clinical trials and generate significant added value for our partners. We continue to see strong demand for our services and end of the year supporting over 220 clinical trials including 52 for immuno-oncology candidate and many evaluating combination therapies. Our book-to-bill ratio in the quarter was 1.6, which represents a continued increase in our inventory of new projects, which we expect will drive revenues into our future. Immuno-oncology and combination therapies are areas of significant development activity in the industry and areas in which we believe we can significantly expand our presence. We are actively engaged with a number of potential biopharma partners and look forward to updating you on our efforts to grow this business as new agreements are signed. Turning to our Discovery & Early Development Services, which Ralf will elaborate on shortly. I’m pleased to report that the integration of vivoPharm is well underway and its business contributed approximately $2 million in revenue in the fourth quarter. Its first full quarter as part of Cancer Genetics, driven by growing demand for early stage discovery results combined with bioinformatics analysis. We have begun to leverage the numerous sales and revenue synergies that exist between our core biopharma business and the vivoPharm business to drive incremental opportunities across the enterprise. We have not yet realized the full value of the synergies as we believe there is significant untapped growth potential in the pre-clinical market driven by growing industry demand for the type of comprehensive integrated solutions we offer. Looking at Clinical Services, The receivables write off I mentioned earlier was the key step toward repositioning the business. As I noted, we believe that we have the most robust comprehensive portfolio of diagnostic test in oncology today, while the breadth of our portfolio is an important differentiator for the company and a significant reason that many of our biopharma partners choose to work with us. It reduces the efficiency with which our Clinical Services business can profitably be managed. Based on this, we are carefully evaluating our portfolio to determine, which of our clinical – which of our commercial test generate the most value for the company in terms of positive reimbursement. While assuring that we are able to continue working toward our primary mission of assisting the medical community and treating patients suffering from cancer. The goal of this activity is to refocus our test portfolio with an emphasis on those tests that can be run profitably while streamlining our clinical services operation. We are currently exploring several other initiatives that have the potential to drive growth in our Clinical Services business and plan to share additional details as they materialize. With that, I would now like to briefly review our financial results. Starting with the fourth quarter, our total revenues were $7.5 million an increase of 4% compared to $7.2 million for the same period in 2016. Biopharma Services revenue totaled $3.5 million in the fourth quarter, compared to $4 million during the Q4 2016. Additionally, the company increased the number of clinical studies and trials it is supporting to 224, up over 50 from Q4 2016. Clinical Services revenue decreased to $1.9 million in the fourth quarter of 2017 from $3 million in the fourth quarter of 2016. The decrease in revenue was primarily related to higher contractual allowance adjustments than we historically have taken following the close examination of outstanding receivables and increased bad debt expense with respect to older AR. Discovery Services contributed $2.1 million in revenue for the fourth quarter of 2017 and $1.8 million increased over Q4 2016, driven by the full quarter of vivoPharm revenue and growing demand for early stage discovery results combined with bioinformatics analysis capabilities. Gross profit margin decreased to 30% or $2.3 million compared to 41% or $2.9 million in Q4 2016. Total operating expenses for Q4 2017 were $11.8 million compared to $6.5 million during Q4 2016. The increase in operating expenses was primarily the result of the additional $5.3 million in bad debt expense, to increase our reserve for doubtful accounts receivable. Net loss was $7.9 million or $0.35 per share for the fourth quarter of 2017, compared to a net loss of $2.8 million or $0.15 per share for the fourth quarter of 2016, primarily impacted by the additional $4.4 million in bad debt expense. Moving onto the full year financial results, our 2017 revenues were $29 million as compared to $27 million for the full year 2016, an 11% increase from the previous year. Biopharma Services revenue was approximately 14.6 million. Clinical Services revenue were approximately $10.8 million. And Discovery Services revenue were approximately $3.7 million. Gross margin for the 12 months ended December 31, 2017 was 37.9% compared to 36.8% last year. And total operating expenses increased $3 million to $29.7 million for full year 2017. Net loss was $20.9 million or $1.01 per share for 2017, compared to a net loss of $15.8 million or $1 per share for the corresponding year-ago period. Cash and cash equivalents totaled $9.5 million as of December 31, 2017. Finally, we disclosed in our press release this afternoon, we’ve engaged Raymond James to be our financial adviser to assist us in the evaluating options for the company’s strategic direction. Our board is committed to evaluating any and all potential opportunities and to pursuing the path that best positions us to create near and longer-term shareholder value. These options could include additional financing, the acquisition of another company and/or complementary assets, the sale of the company or another type of strategic partnership. We are in the very early stages of the process and will provide updates on potential opportunities as appropriate. With that, I’d like to turn the call over to Dr. Ralf Brandt, President of Discovery and Early Development Services. Ralf?

Thank you, Jay. Hello, everyone. Since the acquisition of vivoPharm’s capabilities, CGI has successfully expanded this offering to include unique specialized studies to guide direct discovery and development programs, particularly in immuno-oncology models, two more micro-environment studies, specialized pharmacology services and patient-derived xenograft model studies that support basic discovery preclinical and Phase I clinical trials. The integration of vivoPharm’s capabilities have added and importantly to CGI’s bench-to-bedside model, enabling the company to provide high-quality tests and services in both preclinical and clinical applications in oncology and immuno-oncology. We believe that our ability to integrate drug discovery and clinical trial testing in oncology makes CGI a highly attractive partner for pharmaceutical and biotech companies. The growing prevalence of combination trials and drug repurposing is expected to drive increased demand for our services, which span the entire discovery and development life cycle. As we move ahead, we will look to further leverage the expertise in immuno-oncology, vaccine biology and endpoint assessment that has made CGI the partner of choice for biopharma companies to generate new innovative services offerings for discovery and early-development customers. Our tests and services address the main challenges posed by traditional approaches to cancer therapies, reliance on human inspection of specimens, interpretation of clinical measurements and inter-institutional variability. Our discovery services help partners overcome these challenges to accelerate the development of novel treatment candidates and precision medicine in oncology. Currently, we are supporting 73 discovery and preclinical projects, which 36 are related to immuno-oncology. We expect the total to continue to grow. We have experienced increasing demand for our wide range of discovery and preclinical offerings to support drug development, target validation and biomarker analysis, and we, therefore, believe that we are well positioned to capture this demand in the form of new projects and contracts. This is an exciting time for our discovery and preclinical service businesses and for Cancer Genetics as a whole. With that, I would like to turn over to our Chief Medical Officer, Rita Shaknovich, for a more in-depth discussion of our test portfolio and its salient features. Rita?

Thank you, Ralf, and thank you, everyone, for joining our call today. Today, I would like to focus my remarks on our highly specialized oncology-focused testing portfolio that comprises proprietary tests, along with the compressive range of nonproprietary oncology-focused tests and laboratory services. Our testing portfolio includes tests for all 10 most prevalent solid and hematologic cancers, while our Tissue of Origin or TOO test is the only FDA-cleared molecular test to detect tumors of unknown origin. Let me take a minute to go through the highlights of our TOO test. TOO test represents an important clinical diagnostic tool and an asset that allows us to provide a way to identify tumor’s site of origin to support direct evidence-based treatments. Tissue of Origin is a microarray-based gene expression test that generates over 22,300 data points by analyzing more than 2,000 genes, allowing diagnosis of 15 most common tumor types. From our extensive validation studies, the test generates significantly more accurate results as compared to the non-molecular diagnostic method currently available in the market, like Immunohistochemistry. Findings from multi-cancer clinical studies have shown that TOO test results have been changes to treatment plan 65% of the time for patients with challenging tumors that include fully differentiated and undifferentiated cancers. We believe that this test could provide significant value to our customers and patients through its ability to not only assess difficult-to-diagnose tumor types but also inform potential changes in treatment. Now, turning to another FDA-approved test in our portfolio, the Oncomine Dx Target Test from Thermo Fisher. We are one of the first companies to offer Oncomine Dx, an NGS-based test that assesses multiple biomarkers to assist in matching non-small cell lung cancer patients with suitable FDA-approved therapeutics. The test cam simultaneously screen tumor samples for 23 genes commonly affected in non-small cell lung cancer, eliminating the need for performing multiple single biomarker tests, and does so with minimal amount of sample materials and in a matter of days as opposed to several weeks that other testing methods require. Ultimately, our objective, along with Thermo, is to collaborate with pharmaceutical companies and clinical cancer centers to drive awareness and adoption of this test by physicians and lung cancer patients, enabling optimized individualized care both rapidly and at a lower cost than alternative method. And finally, I would like to touch on our leading immuno-oncology panel, the Complete::IO test. In January, we announced the addition of five new markers to Complete::IO panel, bringing the total number of markers it concurrently can detect to 27. With the addition of these new markers, Complete::IO test is the most comprehensive flow-cytometry-based biomarker panel with a 24-hour turnaround time currently available in the industry. The test has been utilized in several important immunotherapy trials, including studies of CAR T-cell therapies and checkpoint inhibitors. It plays a unique role in recognizing ideal patient populations for specific I/O therapies, along with monitoring and stratifying patient populations during clinical trials as well as monitoring patients for safety and toxicity throughout the trials. The test also analyzes the dynamic changes across immune cell population and measures the myeloid-derived suppressor cells, which are typically responsible for inhibiting antitumor immune response. The efficacy of immunotherapeutics can be increased by targeting myeloid-derived suppressor cells, thus creating a sizable opportunity for CGI’s Complete::IO test. Currently, there are as many as 2,500 active clinical trials globally evaluating I/O therapies, there is a significant potential to expand our customer base by providing vital information about the immune marker status, the tumor microenvironment and cell surface biomarker expression in order to predict patient responses to these trials. This is just a small sample of our broader portfolio, which includes microarrays, next-generation sequencing, Fluorescence In Situ Hybridization, gene and protein expression test, each serving a unique diagnostic and prognostic function. And with that, I would like to turn the call back over to Jay for closing remarks. Jay?

Thank you, Rita. We made a number of important strategic decisions during the last two months. While they clearly had an impact on our short-term results, we expect that they will have a far more significant effect on our future performance. We believe that the execution of this new growth strategy will bring CGI closer to being a premier company in the precision oncology arena. With that, we can open up the line for questions and answers.

Thank you. [Operator Instructions] And we’ll take our first question from Jason McCarthy with Maxim Group. Please go ahead.

Hi, this is Mike Okunewitch on behalf of Jason McCarthy. Thanks for taking my question. So I was just wondering, now that you have full coverage of the drug development process from discovery into commercialization, what sort of contribution to revenue are you expecting from the biopharmaceutical partnerships going forward?

So Michael, we – obviously, we’re putting a lot of energy and focus on our biopharma business. And in combination with our preclinical activities through the acquisition of the vivoPharm business, we now have a very robust pharmaceutical industry and biotechnology company-facing group and a breadth of capabilities. So that is, for us, an area where we anticipate very strong and robust growth going forward. We can’t quantify it for you only because we don’t give revenue guidance, but we anticipate that, on a quarter-over-quarter and a year-over-year basis, that we’ll see growth. As you know, that business can be a little bit – it will fluctuate just a little bit on a quarter-to-quarter basis, but on a year-over-year basis, we do think that it’s a growth area for us, and we’re putting significant emphasis and resources into it.

All right, thank you. And then just one more on that topic. Do you expect that partnerships with companies in biopharma will continue through from discovery into clinical development and then possibly even into commercialization?

Yes. So interesting question. So if you – particularly, if you take that from the precision medicine perspective, right, and as we further develop our capabilities and as we further partner with biopharma companies, of course, we’re seeing a lot more interest in precision medicine. And we think that from a commercialization perspective, that there’s a lot more opportunities for us to play a part, bringing our existing capabilities, not doing anything really different than what we do really well. And as we thought about building our go-forward strategy into 2018 and beyond, we knew that our biopharma capabilities – it’s an area where we do it well. We have a very high degree of respect from our customers and prospective customers. We know that the bar is set high in terms of barrier to entry, and so we do know that it’s an area that we can excel in. And consequently, it’s become a big part of our go-forward strategy.

All right. Thank you very much.

Thank you. [Operator Instructions] And with no further questions in the queue, that does conclude our question-and-answer session. At this time, I’d like to turn the conference back over to Mr. Roberts for any additional or closing remarks.

Great. Yes, that’s great. Thank you very much. So we’d like to thank everybody for joining our call today. We do look forward to keeping you apprised of our progress. We think it’s going to be an exciting rest of this year. I think we’re well positioned, and we expect to start seeing a meaningful impact in Q2 and as we move throughout the rest of this year and into next year. So again, thank you very much for joining the call.

Thank you. And that does conclude today’s conference. Thank you all for your participation.