The accompanying consolidated financial statements have been prepared on a basis that assumes that the Company will continue as a going concern and that contemplates the continuity of operations, the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. As of the Company had cash and cash equivalents of million, net accounts receivable of million, current assets of million and current liabilities of million. For the year ended the Company incurred a net loss of million and cash used in operating activities was million. 

 

 

On the Company completed a registered direct public offering, which resulted in gross proceeds to the Company of approximately million, (net proceeds of million after expenses). In the Company closed on equity offerings raising gross proceeds of million. See Note Subsequent Events, of Notes to the Consolidated Financial Statements.

 

The Company also entered into a Credit Agreement with SCM Specialty Finance Opportunities Fund, L.P. on as described further below, on which it has not yet drawn.and not be able to draw down any funds in the near future. The Company also anticipates operating losses to continue for the foreseeable future due to, among other things, costs related to its commercial operations, developing products and product candidates, right sizing and reorganizing its administrative organization and winding down activities and managing obligations related to its discontinued operations.

      

On (the “Closing Date”), the Company and its wholly-owned direct and indirect subsidiaries, Interpace Diagnostics, LLC (“Interpace LLC”) and Interpace Diagnostics Corporation (“IDC” and together with Interpace LLC, its “Subsidiaries”), entered into a Credit Agreement (the “Credit Agreement”) with SCM Specialty Finance Opportunities Fund, L.P. (the “Lender”). Pursuant to and subject to the terms of the Credit Agreement, the Lender agreed to provide a revolving loan (the “Loan”) to the Company in the maximum principal amount of million (“Facility Cap”). The maturity date of the Loan is The Loan bears interest at an annual rate equal to the Prime Rate (as defined in the Credit Agreement) plus payable in cash monthly in arrears. The interest rate will be increased by in the event of a default under the Credit Agreement. Events of default under the Credit Agreement, some of which are subject to certain cure periods, include a failure to pay or perform obligations when due, the making of a material misrepresentation to the Lender, the rendering of certain judgments or decrees against the Company and its Subsidiaries and the initiation, voluntarily or involuntarily, of a bankruptcy or similar proceeding against the Company or its Subsidiaries. 

 

Also on the Closing Date, the Company and its Subsidiaries acknowledged and agreed to an Intercreditor Agreement (the “Intercreditor Agreement”) by and between the Lender and the RedPath Equityholder Representative pursuant to which the Lender has a lien security interest on all of the accounts receivable (and related intangibles) of the Company and its Subsidiaries and the RedPath Equityholder Representative has a lien security interest, subordinated to the Lender, on all the accounts receivables (and related intangibles) of the Company and its Subsidiaries. In addition, pursuant to the Intercreditor Agreement, the RedPath Equityholder Representative has a lien security interest on all other assets of the Company and its Subsidiaries and the Lender has no lien with respect to such other assets. As discussed below, the RedPath Equityholder Representative assigned all of its rights, title and interest in the RedPath Note, including, but not limited to, its security interest in all of our assets and the assets of the Company subsidiaries, to the Investor in connection with the consummation of the sale of the RedPath Note to the Investor. 

 

The Company agreed to pay certain out-of-pocket costs and expenses incurred by the Lender in connection with the Credit Agreement and related documents, the administration of the Loan and related documents and the enforcement or protection of the Lender’s rights. The Lender is also entitled to: (a) a origination fee; (b) a monthly unused line fee equal to the amount which is - of percent of the difference between (i) the outstanding balance of the Loan during the preceding month, and (ii) the Facility Cap on the date of determination; (c) a monthly collateral management fee equal to - of percent of the average daily balance under the Credit Agreement outstanding during the preceding month; and (d) a termination fee equal to (i) percent of the Facility Cap if the Credit Agreement is terminated before the anniversary of the Closing Date (the “First Anniversary”), or (ii) percent of the Facility Cap if the Credit Agreement is terminated after the First Anniversary. The Company must also pay certain fees in the event that (a) the amount outstanding under the Credit Agreement exceeds the availability under the Credit Agreement’s borrowing base, and (b) receivables are not properly deposited in the appropriate lockbox account.

  

The Credit Agreement contains customary representations and warranties in favor of the Lender and certain covenants, including, among other things, financial covenants relating to loan turnover rates, liquidity and revenue targets. 

 

As of the Company had not borrowed any funds under the Credit Agreement and funds not be available to the Company for the forseeable future.

On the Company entered into an exchange agreement (the “Exchange Agreement”), with an institutional investor (the “Investor”). Prior to the Company entering into the Exchange Agreement, the Investor acquired that certain Non-Negotiable Subordinated Secured Promissory Note, dated as of as amended (the “RedPath Note”), issued by the Company and the Company’s subsidiary, Interpace, LLC, in favor of RedPath Equityholder Representative, LLC (the “RedPath Equityholder Representative”) on behalf of the former equityholders of RedPath. The RedPath Note, which was entered into in connection with the Company’s acquisition of RedPath in had an aggregate principal amount of outstanding and was acquired by the Investor for The RedPath Equityholder Representative assigned all of its rights, title and interest in the RedPath Note to the Investor, including, but not limited to, its security interest in all of the assets of the Company and the assets of the Company’s subsidiaries.

Pursuant to the Exchange Agreement, the Company and the Investor agreed to exchange the RedPath Note for (i) a senior secured convertible note in the aggregate principal amount of (the “Exchanged Convertible Note”), which is convertible into shares of the Company’s common stock, in accordance with its terms, and (ii) a senior secured non-convertible note with an aggregate principal amount of (the “Exchanged Non-Convertible Note” and collectively, the “Exchanged Notes”), for a combined aggregate principal amount of The Exchanged Notes will rank senior to all of the Company’s outstanding and future indebtedness, other than the indebtedness in favor of the Company’s credit line lender and are secured by a perfected security interest in all of the existing and future assets of the Company and those of the Company’s subsidiaries. Upon the reduction of of the aggregate principal amount of each of the Exchanged Notes, the Investor will release its security interest in its entirety.

The Exchanged Notes mature at of the face value on the month anniversary of the closing date, or and bear interest quarterly at and hundredth percent per annum (as be adjusted from time to time).

additional capital.