Item
3.01 Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing.
On
January 29, 2019, Cancer Genetics, Inc. (the “Company”) received written notice from the Listing Qualifications Staff
of The Nasdaq Stock Market (“Nasdaq”) notifying the Company that it was required to seek stockholder approval of the
execution of the Credit Agreement, dated September 18, 2018 (the “Novellus Credit Agreement”), between the Company
and NovellusDx Ltd. (“Novellus”), under which the Company was advanced $1.5 million, the outstanding balance of which,
including interest, is convertible, at the option of Novellus, into shares of the Company’s common stock (the “Common
Stock”) at a conversion price of $0.606 per share, due to the potential for the Company, upon a conversion of such outstanding
balance, with interest, to be required to issue Common Stock at a discount to the market price of the Common Stock on the day
of execution of such agreement in excess of 20% of the pre-transaction outstanding shares of Common Stock, pursuant to Nasdaq
Listing Rule 5635(d) (the “Approval Requirement”). The obligation was convertible into 2,475,248 shares (or approximately
8.9% of the Company’s outstanding Common Stock) on the date of entry into the Novellus Credit Agreement. The Company had
contemplated that the Novellus Credit Agreement would be paid off or otherwise retired in advance of any time at which the outstanding
balance under such agreement could have been convertible into Common Stock in excess of the 20% threshold, due to both the proposed
merger agreement with Novellus, dated September 18, 2018 and the Novellus Credit Agreement having end dates of March 31, 2019.
However, as such merger agreement was terminated in December 2018 before shareholder approval was sought, the Company potentially
may be required to issue shares of Common Stock upon conversion under such agreement in excess of such threshold at a future date.
Nasdaq’s
notice has no immediate effect on the listing of the Company’s common stock on the Nasdaq Capital Market. Under Nasdaq Listing
Rule 5810(c)(2)(C), the Company has 45 calendar days from January 29, 2019, or March 15, 2019, to submit to Nasdaq a plan to regain
compliance with the Approval Requirement. If Nasdaq accepts the Company’s plan, Nasdaq may grant an extension of up to 180
calendar days from January 29, 2019, or July 28, 2019, to regain compliance. If Nasdaq does not accept the Company’s plan,
the Company will have the right to appeal such decision to a Nasdaq hearings panel.
The
Company intends to submit to Nasdaq, within the requisite period, a plan to regain compliance with the Approval Requirement. There
can be no assurance that Nasdaq will accept the Company’s plan or that the Company will be able to regain compliance with
the Approval Requirement or maintain compliance with any other Nasdaq requirement in the future.
Forward-Looking
Statements
This
report contains forward-looking statements within the meaning of the federal securities laws. Forward-looking statements typically
are identified by use of terms such as “may,” “will,” “should,” “plan,” “expect,”
“anticipate,” “estimate” and similar words, and the opposites of such words, although some forward-looking
statements are expressed differently. Forward-looking statements involve known and unknown risks and uncertainties that exist
in the Company’s operations and business environment, which may be beyond the Company’s control, and which may cause
actual results, performance or achievements to be materially different from future results, performance or achievements expressed
or implied by such forward-looking statements. All statements other than statements of historical fact are statements that could
be forward- looking statements. The risks and uncertainties referred to above include, but are not limited to, risks detailed
from time to time in the Company’s filings with the Securities and Exchange Commission, including its Annual Report on Form
10-K for the year ended December 31, 2017 and quarterly reports on Form 10-Q for the quarters ended March 31, 2018, June 30, 2018
and September 30, 2018. These risks could cause actual results to differ materially from those expressed in any forward- looking
statements made by, or on behalf of, the Company. Forward-looking statements represent the judgment of management of the Company
regarding future events. Although the Company believes that the expectations reflected in such forward-looking statements are
reasonable at the time that they are made, the Company can give no assurance that such expectations will prove to be correct.
Unless otherwise required by applicable law, the Company assumes no obligation to update any forward-looking statements, and expressly
disclaims any obligation to do so, whether as a result of new information, future events or otherwise.