CANCER GENETICS, INC. (NASDAQ:CGIX) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01 Entry into a Material Definitive Agreement.

Merger Agreement Amendment

On February 26, 2021, Cancer Genetics, Inc. (the “Company” or “CGI”) entered into Amendment No. 2 to Agreement and Plan of Merger and Reorganization (the “Amendment”) with StemoniX, Inc. (“StemoniX”) and CGI Acquisition, Inc., a wholly owned subsidiary of CGI (“Merger Sub”), which amends the Agreement and Plan of Merger and Reorganization dated August 21, 2020, as previously amended on February 8, 2021 (the “Original Merger Agreement” and, as amended by the Amendment, the “Merger Agreement”) whereby Merger Sub will be merged with and into StemoniX, with StemoniX surviving the merger as a wholly-owned subsidiary of CGI (the “Merger”). The Original Merger Agreement, prior to its amendment on February 8, 2021, had conditions that included (A) that the Company shall have consummated a financing transaction (the “Private Placement”) no later than the closing of the Merger resulting in aggregate gross proceeds of $10 million (or such other amount as the Company and StemoniX agree), which condition (the “Financing Condition”) was amended on February 8, 2021 to only require that StemoniX have sold an aggregate of $5 million of its Series C Preferred Stock (as defined below) prior to the closing of the Merger, and (B) that the shares of common stock of CGI (the “Common Stock”) (or Common Stock underlying other securities of CGI) being issued in the Merger shall have been approved for listing on the Nasdaq Stock Market (“Nasdaq”).

As previously reported, on February 16, 2021, CGI consummated a registered direct offering of its common stock with certain institutional investors to which the Company issued to the investors an aggregate of 2,777,778 shares of the Company’s common stock at an offering price of $6.30 per share for gross proceeds of approximately $17.5 million (the “CGI RD Financing”). The net proceeds to the Company from the CGI RD Financing were approximately $15.8 million, after deducting placement agent fees and expenses and estimated offering expenses payable by the Company.

CGI and StemoniX have confirmed in the Amendment that the CGI RD Financing is to be treated as part of the “Private Placement” under the Merger Agreement, such that any securities to be issued therein will be deemed to be outside of, and not considered in computing the number of securities of CGI to be issued with respect, to the existing 78/22% ratio, and so will dilute the historic holders of CGI and StemoniX securities ratably. In addition, the cash raised in the CGI RD Financing will not be included in either company’s Net Cash (as defined in the Merger Agreement) in determining any adjustments required to such ratio. The parties also agreed that any condition of the Merger Agreement requiring either party to raise additional cash prior to closing shall be deemed satisfied other than if required to satisfy Nasdaq initial listing requirements of the post-merger company, and that StemoniX will not issue nor commit to issue any further securities without the consent of CGI (other than under its option plan, upon conversion of already outstanding convertible securities, or as otherwise permitted under the Merger Agreement, including additional Convertible Notes (as defined below) provided for in the Merger Agreement and the up to $2 million of Series C Preferred Stock that is the subject of a binding purchase agreement as of the date hereof).

The foregoing description of the Amendment does not purport to be complete and is qualified in its entirety by the full text of the Amendment, a copy of which is filed as Exhibit 2.1 hereto and is incorporated by reference herein.

Item 8.01 Other Events.

StemoniX Series C Preferred Stock and Convertible Notes

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 to which StemoniX agreed to issue shares of its Series C Convertible Preferred Stock (the “Series C Preferred Stock”) for an aggregate purchase price of $5 million. Also as previously reported, one of those investors determined thereafter to acquire $3 million of StemoniX Convertible Notes (“Convertible Notes”) in lieu of acquiring the same amount of Series C Preferred Stock.