CANCER GENETICS, INC (CGIX) IPO

We estimate that we will receive net proceeds of approximately $3.1 million from
the sale of shares of common stock offered in this offering, or approximately
$4.0 million if the underwriters exercise their over-allotment option in full,
and after deducting the estimated underwriting discounts and commissions and
estimated offering expenses. Of the estimated offering expenses, we already paid
approximately $1.4 million and therefore will have approximately $1.4 million of
additional net proceeds from this offering available to us.

We currently intend to use the net proceeds of the offering as follows:

. $2.0 million to fund our initial contribution to our joint venture with Mayo 
  (assuming we negotiate an extension of the Mayo agreement); and 

. the balance to fund ongoing operations and expansion of the business, 
  including but not limited to further research and development, and hiring 
  additional sales and marketing personnel and support increased sales and 
  marketing activities. 

The expected use of net proceeds of this offering represents our current 
intentions based upon our present plan and business conditions. As of the date 
of this prospectus, we cannot specify with certainty all of the particular uses
for the net proceeds to be received upon the completion of this offering. For 
example, if we identify opportunities that we believe are in the best interests
of our stockholders, we may use a portion of the net proceeds from this offering
to acquire, invest in or license complementary products, technologies or 
businesses although we have no current commitments, understandings or agreements
to do so. We will have broad discretion in the application of the net proceeds,
and investors will be relying on our judgment regarding the application of the 
proceeds of this offering. The actual amounts and timing of our actual 
expenditures depend on numerous factors, including the success of our efforts 
to market MatBA®-CLL, MatBA®-SLL and MatBA®-DLCBL, to obtain regulatory 
approval to sell MatBA®-CLL, MatBA®-SLL and MatBA®-DLCBL outside our clinical 
laboratory, the timing and progress of our discovery, research and development 
activities for the tests in our pipeline, the success of our efforts to increase
sales of our laboratory services, the success of our efforts to expand our 
international sales, our ability to continue to reduce manufacturing costs by 
leveraging operations in low cost countries, changes in regulatory requirements 
for LDTs, and other unforeseen regulatory or compliance costs. The costs and 
timing of test discovery and development activities, particularly conducting 
clinical validation studies and obtaining regulatory clearance or approval, are 
highly uncertain, subject to substantial risks and can often change. Depending 
on the outcome of these activities, our plans and priorities may change and we 
may apply the net proceeds of this offering differently than we currently 
anticipate. For example, if our joint venture with Mayo does not close, we will 
not be required to make an initial $2.0 million capital contribution, or if once
formed the joint venture fails to achieve certain operational milestones, we may 
not be required to make additional capital contributions. 

As of December 31, 2012, an aggregate of $3.0 million in principal remained
outstanding under the DAM credit facility. Effective January 1, 2012, the DAM
debt bears interest at an annual rate of 10.0%, payable in equal monthly
installments. On February 13, 2013, DAM agreed to convert $1.0 million of the
outstanding principal due to DAM to common stock at the initial offering price
per share upon consummation of this offering. The DAM debt is due on August 15,
2013.

As of December 31, 2012, we had an aggregate of $6.0 million outstanding
pursuant to a Credit Agreement dated December 21, 2011, as amended and restated
as of February 13, 2012 with John Pappajohn, a member of our board of directors
and a stockholder, Dr. Pecora (indirectly through an investment company), a
member of our board of directors, and NNJCA Capital, LLC, a limited liability
company of which Dr. Pecora is a member. The $6.0 million loan bears an annual
interest rate equal to the prime rate plus 6.25% (9.50% at December 31, 2012)
and matures in twelve months, with an option at our election, if there has been
no event of default, to extend the loan term for an additional six months. The
term loan is due on August 15, 2013 (except as with respect to amounts due to 
Mr. Pappajohn, as described below). On February 13, 2013, NNJCA agreed to 
convert $500,000 of the outstanding principal due to it to common stock at the 
initial offering price per share upon consummation of this offering. Mr. 
Pappajohn will convert $2.0 million of the indebtedness due to him, and on 
February 13, 2013 he agreed to convert the remaining $2.0 million due to his 
spouse pursuant to the December 2011 Credit Agreement, to common stock at the 
initial offering price per share upon consummation of this offering. We 
requested the conversion discussed in this and the preceding paragraph to 
assist the Company in meeting Nasdaq’s initial listing standard for 
stockholders’ equity and in response to market feedback regarding retaining 
capital in the Company after this offering (although we subsequently have 
determined that we are not eligible to list on Nasdaq at this time). We used a 
portion of the net proceeds from this financing to pay approximately $1.4 
million in expenses incurred in connection with our initial public offering.

As a provider of genomic-based tests and services that provide personalized 
diagnostic and prognostic information for hematological, urogenital and 
HPV-associated cancers, we rely extensively on our ability to combine research 
insights with high-quality, state-of-the art clinical laboratory testing. We 
believe that we compete principally on the basis of: 

. our ability to address complex cancers that are currently difficult to 
  prognose and challenging to predict treatment outcomes using currently 
  available technologies; 

. the ability of our proprietary tests and services to provide more information
  than existing tests with respect to the cancers we address; 

. our ability to utilize a wide variety of sample types, accelerating the 
  time-frame for clinical validation of our tests and allowing health care 
  providers to readily integrate our tests into their established workflow; 

. our ability to perform clinical studies using FFPE samples to either validate
  or develop novel insights for our proprietary programs; 

. the quality of our services and our ability to collaborate with our customers
  on a consultative basis; 

. our research and clinical collaborations with key academic and clinical study
  groups; 

. the quality of our clinical reference laboratory, which enables consistent, 
  comprehensive and reproducible results; 

. the level of disease specific knowledge and customer service we provide, both
  to academic centers and community based health care professionals; and 

. our workplace environment, recognized by being named #20 nationwide by The 
  Scientist in “Best Places to Work Industry, 2011”, which increases our 
  ability to attract both clinical and research talent. 

We believe that we compete favorably with respect to these factors, although we
cannot assure you that we will be able to continue to do so in the future or 
that new products or tests that perform better than our proprietary tests and 
services will be introduced. We believe that our continued success depends on 
our ability to: 

. expand and enhance our MatBA® tests to provide clinically meaningful 
  information in additional indications; 

. continue to innovate and maintain scientifically advanced technology;

. successfully market and sell our proprietary tests in the United States; 

. continue to obtain appropriate regulatory approvals in the United States and 
  abroad; 

. continue to validate our pipeline of microarray tests and DNA probes; 

. continue to obtain positive reimbursement decisions from payors and from CMS;

. continue to enter into partnerships with local distributors and/or 
  manufacturers to expand into emerging markets, including India, Mexico and 
  Brazil; 

. maintain existing and enter into new research and clinical collaborations 
  with key academic and clinical study groups; 

. continue to attract and retain skilled scientific and clinical personnel; 

. obtain patents or other protection for our proprietary tests and services; 
  and 

. obtain and maintain our clinical reference laboratory accreditations and 
  licenses. 

Our principal competition comes from existing mainstream diagnostic methods that
pathologists and oncologists use and have used for many years. It may be
difficult to change the methods or behavior of the referring pathologists and
oncologists to incorporate our molecular diagnostic testing in their practices.
In addition, companies offering capital equipment and kits or reagents to local
pathology laboratories represent another source of potential competition. These
kits are used directly by the pathologist, which can facilitate adoption.

We also face competition from companies that offer products or have conducted 
research to profile genes, gene expression or protein biomarkers in various 
cancers. In particular, Quest Diagnostics and CombiMatrix Corporation market 
arrays which are competitive to our MatBA®-CLL and MatBA®-SLL arrays. 
Personalized genetic diagnostics is a new area of science, and we cannot 
predict what tests others will develop that may compete with or provide results
superior to the results we are able to achieve with the tests we develop. Our 
competitors include public companies such as CombiMatrix Corporation, Quest 
Diagnostics, Abbott Laboratories, Inc., Johnson & Johnson, Roche Molecular 
Systems, Inc., bioTheranostics, Inc. (part of the bioMérieux SA), Genomic 
Health, Inc., Myriad Genetics, Inc., Qiagen N.V. and Response Genetics, Inc. 
and many private companies, including Agendia B.V. and Foundation Medicine, Inc.
We expect that pharmaceutical and biopharmaceutical companies will increasingly
focus attention and resources on the personalized diagnostic sector as the 
potential and prevalence increases of molecularly targeted oncology therapies 
approved by FDA along with companion diagnostics. For example, FDA has recently
approved two such agents—Xalkori crizotinib from Pfizer Inc. along with its 
companion anaplastic lymphoma kinase FISH test from Abbott Laboratories, Inc. 
and Zelboraf vemurafenib from Genentech USA Incorporated and Daiichi-Sankyo Inc.
along with its companion B-RAF kinase V600 mutation test from Roche Molecular 
Systems, Inc. These two recent FDA approvals are only the second and third 
instances ever of simultaneous approvals of a drug and companion diagnostic, 
the first being the 1998 approval of Genentech, Inc.’s Herceptin trastuzumab 
for HER2 positive breast cancer along with the HercepTest from partner Dako A/S.
Our competitors may invent and commercialize technology platforms or tests that
compete with ours. 

With respect to our clinical laboratory services business we face competition
from companies such as Genoptix, Inc. (a Novartis AG company), Clarient, Inc. (a
division of GE Healthcare, a unit of General Electric Company), Bio-Reference
Laboratories, Inc. and Genzyme Genetics (a LabCorp Specialty Testing Group).

Additionally, projects related to cancer genomics have received increased
government funding, both in the United States and internationally. As more
information regarding cancer genomics becomes available to the public, we
anticipate that more products aimed at identifying targeted treatment options
will be developed and that these products may compete with ours. In addition,
competitors may develop their own versions of our tests in countries where we
did not apply for patents or where our patents have not issued and compete with
us in those countries, including encouraging the use of their test by physicians
or patients in other countries.