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Cancer Genetics Settles Failed Merger Deal With NovellusDx; Receives $6M From Interpace

NEW YORK — Cancer Genetics said on Thursday that it had resolved all outstanding issues related to its failed merger with NovellusDx as it works with an advisor to evaluate other potential strategic transactions.

Rutherford, New Jersey-based Cancer Genetics also said that it has received a $6 million payment tied to the recent $23.5 million sale of its biopharma business to Interpace Diagnostics, and that it has restructured a loan agreement with an unsecured lender.  

In September 2018, Cancer Genetics borrowed $1.5 million under a credit agreement and unsecured convertible promissory note with NovellusDx in connection with the companies' agreement to merge. A few months later, however, Cancer Genetics pulled the plug on the business combination.

Cancer Genetics said it has now agreed to pay NovellusDx roughly $1.1 million in cash, as well as $450,000 over a nine-month period, in order to settle all matters between the companies. Cancer Genetics said that it has also signed on HC Wainwright to help it identify another potential acquisition, merger, business combination, or other strategic transaction.

Cancer Genetics also said on Thursday that it has received roughly $6 million in cash from Interpace as partial settlement of a $7.7 million promissory note included in the deal for the biopharma business. Cancer Genetics said that after post-closing reductions of about $800,000, it may receive up to $900,000 more next year.

Cancer Genetics further noted that it recently entered into a note purchase agreement with Atlas Sciences to borrow $1.25 million pursuant to an existing unsecured promissory note. Cancer Genetics said that these funds, along with around $1.5 million that it will provide itself, will be used to repay an outstanding debt to Atlas Sciences affiliate Iliad Research and Trading under a promissory note issued in mid-2018.

Cancer Genetics separately announced on Thursday a 1-for-30 reverse stock split, effective today.