Cancer Genetics, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Warrants

Warrants

6 Months Ended

Jun. 30, 2017

On March 22, 2017, we issued seven year warrants to PFG and certain of its affiliates to purchase an aggregate of 443,262 shares of our common stock at an exercise price of $2.82 per share, in conjunction with our debt refinancing described in Note 5. The number of warrants may be reduced by 20% subject to us achieving certain financial milestones set forth by PFG. The warrants can be net settled in common stock using the average 90-trading day price of our common stock. These warrants are defined in the table below as 2017 Debt derivative warrants.

During the three and six months ended June 30, 2017, the Company received approximately $21,000 and $1,771,000, respectively, from shareholders who exercised warrants to purchase 9,000 and 786,900 shares of common stock, respectively, at $2.25. In addition, on March 28, 2017, warrant holders exercised warrants to purchase 90,063 shares of common stock at an exercise price of $2.25 per share using the net issuance exercise method whereby 45,162 shares were surrendered as payment in full of the exercise price resulting in a net issuance of 44,901 shares.

The following table summarizes the warrant activity for the six months ended June 30, 2017 (in thousands, except exercise price):



Issued With / For	Exercise Price			Warrants Outstanding January 1, 2017	2017 Warrants Issued	2017 Warrants Exercised		Warrants Outstanding June 30, 2017
Non-Derivative Warrants:
Financing	$	10.00		243	—	—		243
Financing	15.00			361	—	—		361
Debt guarantee	15.00			109	—	—		109
2015 Offering	5.00			3,450	—	—		3,450
Total non-derivative warrants	$	6.42	C	4,163	—	—		4,163
Derivative Warrants:
2016 Offerings	2.25		A	2,870	—	(877	)	1,993
2017 Debt	2.82		B	—	443	—		443
Total derivative warrants	2.35		C	2,870	443	(877	)	2,436
Total	$	4.92	C	7,033	443	(877	)	6,599


A	These warrants are subject to fair value accounting and contain a contingent net cash settlement feature.


B	These warrants are subject to fair value accounting and contain a net settlement provision that uses the 90-trading day price of our common stock. These warrants are subject to a 20% reduction if certain financial milestones are met.


C	Weighted-average exercise prices are as of June 30, 2017.