Item
8.01 Other Events.
StemoniX
Shareholder Approval of Merger Agreement
Effective
March 15, 2021, the shareholders of StemoniX, Inc. (“StemoniX”), acting by written action in lieu of a special meeting
of the shareholders, approved the Agreement and Plan of Merger and Reorganization dated August 21, 2020, as amended on February
8, 2021 and February 26, 2021 (the “Merger Agreement”) with Cancer Genetics, Inc. (“CGI”) and CGI Acquisition,
Inc., a wholly owned subsidiary of CGI (“Merger Sub”), whereby Merger Sub will be merged with and into StemoniX, with
StemoniX surviving the merger as a wholly-owned subsidiary of CGI (the “Merger”), subject to approval by CGI’s
shareholders and satisfaction of other closing conditions.
In
the same written action described above, the shareholders of StemoniX approved the exercise of the drag-along rights contained
in the Fifth Amended and Restated Shareholder Agreement of StemoniX (the “Shareholder Agreement”) to compel the remaining
shareholders of StemoniX who are a party to the Shareholder Agreement to vote their shares in favor of the Merger and execute
all other documents required to be executed by the shareholders in connection with the Merger.
StemoniX
Convertible Note Offering
On
March 12, 2021, StemoniX completed its offering of Convertible Promissory Notes (the “Convertible Notes”). As of March
12, 2021, StemoniX had outstanding $12,673,134 in principal amount of Convertible Notes, plus $418,154 in accrued interest. The
Convertible Notes are convertible into StemoniX common stock based on the lesser of (i) a percent of the then-fair market value
per share of StemoniX common stock and (ii) a per share price reflecting a pre-money, fully-diluted StemoniX valuation of $57,000,000,
assuming conversion or exercise of all outstanding StemoniX securities convertible or exercisable for equity securities (other
than the Convertible Notes or any other convertible promissory notes issued after the date of the Convertible Notes) and the exercise
of all outstanding options and warrants to purchase equity securities of StemoniX, calculated as of immediately prior to their
conversion. The Convertible Notes will be converted into shares of StemoniX common stock immediately prior to the Merger.
StemoniX
Series C Preferred Stock Offering
As
previously reported, on January 28, 2021, StemoniX entered into a stock purchase agreement (the “Series C Preferred Stock
Purchase Agreement”) with two institutional accredited investors pursuant to which StemoniX agreed to issue shares of its
Series C Convertible Preferred Stock (the “Series C Preferred Stock”). Also as previously reported, one of those investors
determined thereafter to acquire a $3 million StemoniX Convertible Note in lieu of investing the same amount in Series C Preferred
Stock. On February 18, 2021, StemoniX and the remaining investor committed to issuing and purchasing, respectively, $2 million
of Series C Preferred Stock and, in light of the consummation of CGI’s other financing activities, amended and restated
the Series C Preferred Stock Purchase Agreement to provide that only $2 million of Series C Preferred Stock would be issued in
the aggregate.
On
March 15, 2021, StemoniX and the remaining institutional investor closed the purchase and sale of Series C Preferred Stock as
contemplated under the Series C Preferred Stock Purchase Agreement.
Additional
Information about the Proposed Merger and Where to Find It
In
connection with the proposed merger between CGI and StemoniX, CGI has filed relevant materials with the SEC, including a registration
statement on Form S-4, as amended, that contains a proxy statement/prospectus/information statement. INVESTORS AND SECURITY HOLDERS
OF CGI AND STEMONIX ARE URGED TO READ THESE MATERIALS (AS WELL AS AMENDMENTS AND SUPPLEMENTS THERETO AND ANY DOCUMENTS INCORPORATED
BY REFERENCE THEREIN) WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT CGI, STEMONIX AND THE PROPOSED
MERGER. The proxy statement/prospectus/information statement and other relevant materials (when they become available), and any
other documents filed by CGI with the SEC, may be obtained free of charge at the SEC website at www.sec.gov. In addition, investors
and security holders may obtain free copies of the documents filed with the SEC by CGI by directing a written request to: Cancer
Genetics, Inc., c/o John A. Roberts, Chief Executive Officer, 201 Route 17 North 2nd Floor, Rutherford, NJ 07070. Investors and
security holders are urged to read the Registration Statement and the other relevant materials when they become available before
making any voting or investment decision with respect to the proposed merger.
This
report shall not constitute an offer to sell or the solicitation of an offer to sell or the solicitation of an offer to buy any
securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful
prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities in connection
with the proposed merger shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities
Act of 1933, as amended.
Participants
in the Solicitation
CGI
and its directors and executive officers and StemoniX and its directors and executive officers may be deemed to be participants
in the solicitation of proxies from the shareholders of CGI in connection with the proposed transaction under the rules of the
SEC. Information about the directors and executive officers of CGI and their ownership of shares of CGI’s common stock is
set forth in its Annual Report on Form 10-K for the year ended December 31, 2019, which was filed with the SEC on May 29, 2020,
and in subsequent documents filed and to be filed with the SEC, including the Registration Statement referred to above. Additional
information regarding the persons who may be deemed participants in the proxy solicitations and a description of their direct
and indirect interests in the proposed merger, by security holdings or otherwise, are included in the Registration Statement and
other relevant materials to be filed with the SEC when they become available. These documents are available free of charge at
the SEC web site (www.sec.gov) and from the Chief Executive Officer at CGI at the address described above.
Forward-Looking
Statements
This
report contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of
1995. CGI and StemoniX generally identify forward-looking statements by terminology such as “may,” “should,”
“expects,” “plans,” “anticipates,” “could,” “intends,” “target,”
“projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential”
or “continue” or the negative of these terms or other similar words. These statements are only predictions. CGI and
StemoniX have based these forward-looking statements largely on their then-current expectations and projections about future events
and financial trends as well as the beliefs and assumptions of management. Forward-looking statements are subject to a number
of risks and uncertainties, many of which involve factors or circumstances that are beyond each of CGI’s and StemoniX’s
control. CGI’s and StemoniX’s actual results could differ materially from those stated or implied in forward-looking
statements due to a number of factors, including but not limited to: (i) risks associated with CGI’s and StemoniX’s
ability to obtain the approval of Nasdaq for continued listing and listing after the merger, and the shareholder approvals required
to consummate the proposed merger transaction and the timing of the closing of the proposed merger transaction, including the
risks that a condition to closing would not be satisfied within the expected timeframe or at all or that the closing of the proposed
merger transaction will not occur; (ii) the outcome of any legal proceedings that may be instituted against the parties and others
related to the Merger Agreement relating to the merger; (iii) the occurrence of any event, change or other circumstance or condition
that could give rise to the termination of the Merger Agreement, (iv) unanticipated difficulties or expenditures relating to the
proposed merger transaction, the response of business partners and competitors to the announcement of the proposed merger transaction,
and/or potential difficulties in employee retention as a result of the announcement and pendency of the proposed merger transaction;
(v) volatility and uncertainty in the financial markets and general economic conditions, which could have an adverse impact on
CGI and/or StemoniX, and (vi) those risks detailed in CGI’s most recent Annual Report on Form 10-K and Quarterly Report
on Form 10-Q, and its registration statement on Form S-4, as amended, and subsequent reports filed with the SEC, as well as other
documents that may be filed by CGI from time to time with the SEC. Accordingly, you should not rely upon forward-looking statements
as predictions of future events. Neither CGI nor StemoniX can assure you that the events and circumstances reflected in the forward-looking
statements will be achieved or occur, and actual results could differ materially from those projected in the forward-looking statements.
The forward-looking statements made in this communication relate only to events as of the date on which the statements are made.
Except as required by applicable law or regulation, CGI and StemoniX undertake no obligation to update any forward-looking statement
to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated
events.