Exhibit 99.2

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

On December 10, 2018, NeoGenomics Laboratories, Inc. (“NeoGenomics Labs”), a wholly owned subsidiary of NeoGenomics, Inc. (the “Company” or “NeoGenomics”), completed the previously announced merger (the “Merger”) of Genesis Acquisition Holdings Corp. (“Genesis”) contemplated by the Merger Agreement dated October 23, 2018, which was filed as Exhibit 2.1 to the Current Report of the Company on Form 8-K, filed with the Securities and Exchange Commission on October 26, 2018. The unaudited pro forma condensed combined statements of operations for the year ended December 31, 2017 and for the nine months ended September 30, 2018 combine the historical consolidated statement of operations of Genoptix, Inc. (Predecessor) for the period from January 1, 2017 to February 28, 2017 and the historical consolidated statements of operations of Genesis and its wholly-owned subsidiaries (referred herein as “Genoptix”) for the period March 1, 2017 to December 31, 2017 and for the nine months ended September 30, 2018 and the historical consolidated statements of operations of NeoGenomics for the year ended December 31, 2017 and the nine months ended September 30, 2018, giving effect to the Merger as if it had occurred on January 1, 2017, the first day of the fiscal year ended December 31, 2017. The Predecessor consolidated financial statements include amounts that have been derived from the accounting records of Novartis using the historical results of operations and historical cost basis of the assets and liabilities of Genoptix. The unaudited pro forma condensed combined balance sheet as of September 30, 2018, combines the historical consolidated balance sheets of NeoGenomics and Genoptix, giving effect to the Merger as if it had occurred on September 30, 2018. The historical consolidated financial information has been adjusted in the unaudited pro forma condensed combined financial statements to give effect to pro forma events that are (i) directly attributable to the Merger, (ii) factually supportable, and (iii) with respect to the statements of income, expected to have a continuing impact on the combined company’s results. The unaudited pro forma condensed combined financial statements should be read in conjunction with the accompanying notes to the unaudited pro forma condensed combined financial information. In addition, the unaudited pro forma condensed combined financial information was based on, and should be read in conjunction with, the historical consolidated financial statements.

The unaudited pro forma condensed combined financial information has been prepared by NeoGenomics using the acquisition method of accounting in accordance with U.S. GAAP. The acquisition accounting is dependent upon certain valuation and other studies that have yet to commence or progress to a stage where there is sufficient information for a definitive measurement. Under the Hart-Scott-Rodino Act (“HSR Act”) and other relevant laws and regulations, before completion of the Merger, there are significant limitations regarding what NeoGenomics can learn about Genoptix. The assets and liabilities of Genoptix have been measured based on various preliminary estimates using assumptions that NeoGenomics believes are reasonable based on information that is currently available to it. Differences between these preliminary estimates and the final acquisition accounting will occur, and those differences could have a material impact on the accompanying unaudited pro forma condensed combined financial statements and the combined company’s future results of operations and financial position. The pro forma adjustments are preliminary and have been made solely for the purpose of providing unaudited pro forma condensed combined financial statements prepared in accordance with the rules and regulations of the SEC.
 
NeoGenomics will finalize the acquisition accounting as soon as practicable within the required measurement period prescribed by Accounting Standards Codification (“ASC”) 805, but in no event later than one year following completion of the Merger. The unaudited pro forma condensed combined financial information has been presented for informational purposes only and should not be relied upon. The unaudited pro forma condensed combined financial information does not purport to represent the actual results of operations that NeoGenomics and Genoptix would have achieved had the companies been combined during the periods presented in the unaudited pro forma condensed combined financial statements and is not intended to project the future results of operations that the combined company may achieve after the Merger. The unaudited pro forma condensed combined financial information does not reflect any potential divestitures that may occur subsequent to, the completion of the Merger or cost savings that may be realized as a result of the Merger and also does not reflect any restructuring or integration-related costs to achieve those potential cost savings.


1



    
Unaudited Pro Forma Condensed Combined Balance Sheet
September 30, 2018
(in thousands)
 
 
 
 
 
 
 
 
 
 
 
Historical
 
 
 
 
 
 
Assets
NeoGenomics
 
Genoptix
 
Pro Forma Adjustments
 
 
 
Pro Forma Combined
Current assets
 
 
 
 
 
 
 
 
 
  Cash and cash equivalents
$
118,440

 
$
12,030

 
$
(135,080
)
 
 (a)
 
$
(4,610
)
  Restricted cash

 
70

 
(70
)
 
 (a)
 

  Accounts receivable
62,694

 
20,574

 

 
 
 
83,268

  Inventories
6,829

 
2,270

 

 
 
 
9,099

  Other current assets
6,307

 
3,576

 

 
 
 
9,883

        Total current assets
194,270

 
38,520

 
(135,150
)
 
 
 
97,640

 
 
 
 
 
 
 
 
 


Property and Equipment, net
41,004

 
18,253

 

 
 
 
59,257

Intangible assets, net
69,909

 
1,980

 
31,320

 
(b)
 
103,209

Goodwill
147,019

 
9,294

 
68,207

 
(c)
 
224,520

Other assets
2,937

 
224

 

 
 
 
3,161

        Total assets
$
455,139

 
$
68,271

 
$
(35,623
)
 
 
 
$
487,787

 
 
 
 
 
 
 
 
 
 
Liabilities and Stockholders' Equity
 
 
 
 
 
 
 
 
 
Current liabilities
 
 
 
 
 
 
 
 
 
    Accounts payable and other current liabilities
33,163

 
9,681

 
3,000

 
(d)
 
45,844

    Short-term portion of capital leases and debt
13,892

 
4,046

 
(4,046
)
 
(e)
 
13,892

       Total current liabilities
$
47,055

 
$
13,727

 
$
(1,046
)
 
 
 
$
59,736

 
 
 
 
 
 
 
 
 
 
Long-term liabilities
 
 
 
 
 
 
 
 
 
Long-term portion of capital leases and debt
96,427

 
6,564

 
(6,564
)
 
(e)
 
96,427

Long-term pharma contract liability
1,199

 

 

 
 
 
1,199

Deferred income tax liability, net
6,899

 
(59
)
 
6,286

 
(f)
 
13,126

Other liabilities

 
2,021

 
(100
)
 
(e)
 
1,921

        Total long-term liabilities
104,525

 
8,526

 
(378
)
 
 
 
112,673

        Total Liabilities
$
151,580

 
$
22,253

 
$
(1,424
)
 
 
 
$
172,409

 
 
 
 
 
 
 
 
 
 
 Preferred Stock

 
50,438

 
(50,438
)
 
(g)
 

 
 
 
 
 
 
 
 
 
 
Stockholders' Equity/(Deficit)
 
 
 
 
 
 
 
 
 
    Common stock
93

 
3

 
(1
)
 
(h)
 
95

    Additional paid-in capital
354,487

 
1,115

 
13,072

 
(h)
 
368,674

 Accumulated other comprehensive income
536

 

 

 
 
 
536

    Retained earnings/(deficit)
(51,557
)
 
(5,538
)
 
3,168

 
(i)
 
(53,927
)
        Total Stockholders' Equity/(deficit)
$
303,559

 
$
(4,420
)
 
$
16,239

 
 
 
$
315,378

 Total Liabilities, Preferred Stock and Stockholders' Equity/(deficit)
$
455,139

 
$
68,271

 
$
(35,623
)
 
 
 
$
487,787


See the accompanying notes to the unaudited pro forma condensed combined financial statements.


2



Unaudited Pro Forma Condensed Combined Statement of Operations
For the Twelve Months Ended December 31, 2017
(in thousands except share and per share data)
 
 
 
 
 
 
 
 
 
 
 
 
 
Historical
 
 
 
 
 
 
 
NeoGenomics
 
Genoptix
 
Pro Forma Adjustments
 
 
 
Pro Forma Combined
 
 
 
Predecessor
 
Successor
 
 
 
 
 
 
 
 
 
Two Months Ended February 28, 2017
 
Ten Months Ended December 31, 2017
 
 
 
 
 
 
NET REVENUE
$
240,251

 
$
19,435

 
$
97,025

 
$

 
(a)
 
$
356,711

COST OF REVENUE
138,294

 
10,989

 
55,621

 

 
 
 
204,904

GROSS PROFIT
101,957

 
8,446

 
41,404

 

 
 
 
151,807

 
 
 
 
 
 
 
 
 
 
 


Operating expenses:
 
 
 
 
 
 
 
 
 
 

General and administrative
70,360

 
3,437

 
24,866

 
1,312

 
(b)
 
99,975

Research and development
3,636

 
658

 
2,887

 

 
 
 
7,181

Sales and marketing
24,001

 
5,195

 
18,442

 

 
 
 
47,638

Loss on sale of Path Logic
1,058

 

 

 

 
 
 
1,058

Total operating expenses
99,055

 
9,290

 
46,195

 
1,312

 
 
 
155,852

 
 
 
 
 
 
 
 
 
 
 


INCOME (LOSS) FROM OPERATIONS
2,902

 
(844
)
 
(4,791
)
 
(1,312
)
 
 
 
(4,045
)
Interest and other income (expense)
(5,552
)
 
(131
)
 
(1,018
)
 
1,094

 
(c)
 
(5,607
)
Intangible asset impairment

 
(26,344
)
 

 

 
 
 
(26,344
)
Income (loss) before taxes
(2,650
)
 
(27,319
)
 
(5,809
)
 
(218
)
 
 
 
(35,996
)
Income tax expense (benefit)
(2,254
)
 
105

 
(1,245
)
 
(9,205
)
 
(d)
 
(12,599
)
NET INCOME (LOSS)
(396
)
 
(27,424
)
 
(4,564
)
 
8,987

 
 
 
(23,397
)
Deemed dividends on preferred stock
3,645

 

 
3,354

 
(3,354
)
 
(e)
 
3,645

Amortization of preferred stock beneficial conversion feature
6,902

 

 

 

 
 
 
6,902

NET INCOME (LOSS) AVAILABLE TO COMMON STOCKHOLDERS
$
(10,943
)
 
$
(27,424
)
 
$
(7,918
)
 
$
12,341

 
 
 
$
(33,944
)
 
 
 
 
 
 
 
 
 
 
 
 
LOSS PER SHARE ATTRIBUTABLE TO COMMON STOCKHOLDERS:
 
 
 
 
 
 
 
 
 
 
 
Basic
$
(0.14
)
 
 
 

 
 
 
 
 
$
(0.42
)
Diluted
$
(0.14
)
 
 
 
 
 
 
 
 
 
$
(0.42
)
 
 
 
 
 
 
 
 
 
 
 
 
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
 
 
 
 
 
 
 
 
 
 
 
Basic
79,426,349

 
30

 
100

 
999,870

 
(f)
 
80,426,349

Diluted
79,426,349

 
30

 
100

 
999,870

 
(f)
 
80,426,349



See the accompanying notes to the unaudited pro forma condensed combined financial statements.


3



Unaudited Pro Forma Condensed Combined Statement of Operations
For the Nine Months Ended September 30, 2018
(in thousands except share and per share data)
 
 
 
 
 
 
 
 
 
Historical
 
 
 
 
 
 
 
NeoGenomics
 
Genoptix
 
Pro Forma Adjustments
 
 
 
Pro Forma Combined
NET REVENUE
$
200,266

 
$
74,344

 

 
(a)
 
$
274,610

COST OF REVENUE
110,111

 
37,917

 

 
 
 
148,028

GROSS PROFIT
90,155

 
36,427

 

 
 
 
126,582

 
 
 
 
 
 
 
 
 
 
Operating expenses:
 
 
 
 
 
 
 
 
 
General and administrative
59,106

 
18,685

 
973

 
(b)
 
78,764

Research and development
2,475

 
2,369

 

 
 
 
4,844

Sales and marketing
21,355

 
16,115

 

 
 
 
37,470

Total operating expenses
82,936

 
37,169

 
973

 
 
 
121,078

 
 
 
 
 
 
 
 
 
 
INCOME (LOSS) FROM OPERATIONS
7,219

 
(742
)
 
(973
)
 
 
 
5,504

Interest and other income (expense)
(4,797
)
 
(687
)
 
1,013

 
(c)
 
(4,471
)
Income (loss) before taxes
2,422

 
(1,429
)
 
40

 
 
 
1,033

Income tax expense (benefit)
135

 
(455
)
 
537

 
(d)
 
217

NET INCOME (LOSS)
2,287

 
(974
)
 
(497
)
 
 
 
816

Deemed dividends on preferred stock
1,950

 
3,030

 
(3,030
)
 
(e)
 
1,950

Amortization of preferred stock beneficial conversion feature
3,677

 

 

 
 
 
3,677

Gain on redemption of preferred stock
(9,075
)
 

 

 
 
 
(9,075
)
NET INCOME (LOSS) AVAILABLE TO COMMON STOCKHOLDERS
$
5,735

 
$
(4,004
)
 
$
2,533

 
 
 
$
4,264

 
 
 
 
 
 
 
 
 
 
INCOME (LOSS) PER SHARE ATTRIBUTABLE TO COMMON STOCKHOLDERS
 
 
 
 
 
 
 
 
 
Basic
$
0.07

 

 
 
 
 
 
$
0.05

Diluted
$
0.06

 
 
 
 
 
 
 
$
0.05

 
 
 
 
 
 
 
 
 
 
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
 
 
 
 
 
 
 
 
 
Basic
87,381,239

 
100

 
999,900

 
(f)
 
88,381,239

Diluted
89,925,292

 
100

 
999,900

 
(f)
 
90,925,292





See the accompanying notes to the unaudited pro forma condensed combined financial statements.


4



1.     Description of the Transaction
On October 23, 2018, NeoGenomics Laboratories, Inc. (the “Company” or “NeoGenomics”), Genoptix Merger Sub, Inc. (“Merger Sub”), Genesis Acquisition Holdings Corp. and Ampersand 2014 Limited Partnership entered into an Agreement and Plan of Merger (the “Merger Agreement”). Pursuant to the terms and subject to the conditions of the Merger Agreement, NeoGenomics acquired 100% of the equity interests of Genesis from its stockholders in exchange for (i) cash consideration of $125.0 million and (ii) 1,000,000 shares of NeoGenomics common stock, par value $0.001 per share, subject to net working capital and other adjustments as set forth in the Merger Agreement (the “Merger”). The Company funded the Merger with cash on hand.
2.
Basis of Presentation
The unaudited pro forma condensed combined financial statements were prepared using the acquisition method of accounting and are based on the historical consolidated financial statements of NeoGenomics and Genoptix. The acquisition method of accounting is based on Accounting Standards Codification (“ASC”) 805, Business Combinations, and uses the fair value concepts defined in ASC 820, Fair Value Measurements. The Genoptix unaudited historical condensed combined statement of operations for the year ended December 31, 2017 is shown in a predecessor/successor format and reflects two months of activity while Genoptix, Inc. was a wholly-owned subsidiary of Novartis Finance Corporation in 2017. The Predecessor consolidated financial statements include amounts that have been derived from the accounting records of Novartis using the historical results of operations and historical cost basis of the assets and liabilities of Genoptix.
ASC 805 requires that most assets acquired and liabilities assumed are recognized at their fair values as of the acquisition date. The acquisition accounting is dependent upon certain valuation and other studies that have yet to progress to a stage where there is sufficient information for a definitive measurement. The preliminary purchase price used in the unaudited pro forma condensed combined financial information is based on preliminary estimates and assumptions that NeoGenomics believes are reasonable based on currently available information. The preliminary purchase price allocation was determined based on the market price of NeoGenomics common stock of $14.19 on December 7, 2018, which may differ from the market price of NeoGenomics common stock at the date the Merger is complete.
The unaudited pro forma condensed combined financial information is provided based on estimates and assumptions considered appropriate by management; however, differences between these preliminary estimates and assumptions and the final acquisition accounting will occur, and those differences could have a material impact on the accompanying unaudited pro forma condensed combined financial information. The pro forma adjustments have been made solely for the purpose of providing unaudited pro forma condensed combined financial information prepared in accordance with the rules and regulations of the SEC and should not be assumed to be an indication of our actual combined results of operations or our combined financial position that would have been achieved had the Merger been completed on the dates indicated, nor are they necessarily indicative of our future combined results of operations or combined financial position.
We prepared the unaudited pro forma condensed combined financial information pursuant to Regulation S-X Article 11 of the Securities Exchange Act of 1934. Accordingly, the accompanying unaudited pro forma condensed combined financial information combines the historical consolidated statements of operations of NeoGenomics and Genesis, giving effect to the Merger as if it had occurred on January 1, 2017. The unaudited pro forma condensed combined balance sheet is prepared as if the Merger had been completed on September 30, 2018. The historical consolidated financial information has been adjusted to give effect to pro forma events that are (i) directly attributable to the Merger, (ii) factually supportable, and (iii) with respect to the pro forma condensed combined statements of operations, are expected to have a continuing impact on the combined results.
The final determination of the allocation of the purchase price will be based on the fair values of assets and liabilities of Genoptix as of the date the Merger closes. The unaudited pro forma condensed combined financial information does not give effect to any potential cost reductions or operating efficiencies which may result from the Merger. The unaudited pro forma condensed combined statements of operations also do not reflect any integration or restructuring costs, as those costs are attributable to the Merger but will not have a continuing impact.
The unaudited pro forma condensed combined balance sheet as of September 30, 2018 is required to include adjustments which give effect to events that are directly attributable to the Merger regardless of whether they are expected to have a continuing impact on the combined results or are non-recurring. Therefore, acquisition-related transaction costs expected to be incurred by NeoGenomics and Genoptix subsequent to September 30, 2018 of approximately $3 million, are reflected as a pro forma adjustment to the unaudited pro forma condensed combined balance sheet as of September 30, 2018 as an increase to accrued expenses and other current liabilities, with the related tax benefits reflected as an increase in net deferred income tax liabilities and the after tax impact presented as a decrease to retained earnings.

5



3.
Accounting Policies
After completion of the Merger, NeoGenomics will review Genoptix's accounting policies. As a result of that review, NeoGenomics may identify differences between the accounting policies of the two companies that, when conformed, could have a material impact on the combined consolidated financial statements. At this time, NeoGenomics is not aware of any differences that would have a material impact on the combined financial statements, and therefore, the unaudited pro forma condensed combined financial statements assume there are no differences in accounting policies.
4.
Estimate of Assets to be Acquired and Liabilities to be Assumed
The following is a preliminary estimate of the assets to be acquired and the liabilities to be assumed by NeoGenomics, reconciled to the estimate of total consideration expected to be transferred:
 
 
 
(in thousands)
Total purchase price
(1)
  
$
138,559

 
 
 
 
Cash
(2)
 
1,320

Accounts receivable
 
  
20,574

Inventory
 
 
2,270

Property and equipment, net
 
  
18,253

Intangible assets
(3)
  
33,300

Other assets
 
 
3,800

Total identifiable assets
(5)
  
$
79,517

 
 
 
 
Accounts payable, accrued and other current liabilities
 
  
(9,681
)
Other long term liabilities
(6)
  
(8,778
)
Total liabilities assumed
(5)
  
$
(18,459
)
 
 
  
 
Total estimated pro forma goodwill
(4)
  
$
77,501

(1)    The purchase price consisted of $125 million, adjusted for final working capital, and 1,000,000 shares of NeoGenomics common stock as follows:
(thousands except share and per share amounts)
Cash consideration
$
124,369

Shares of common stock issued as consideration
1,000,000

Stock price per share on December 7, 20181
$
14.19

Value of common stock issued as consideration
14,190

Total consideration
$
138,559


1 The stock price was determined based on the market price of NeoGenomics common stock on December 7, 2018, which may differ from the market price of NeoGenomics common stock at the date the Merger was completed.
(2)    Cash was adjusted to reflect repayment of $10.7 million related to the outstanding term loan, revolving credit facility and accrued debt termination fees, which were repaid by Genoptix prior to the Merger close date.
(3)    As of completion of the Merger, identifiable intangible assets are required to be measured at fair value, and these acquired assets could include assets that are not intended to be used or sold or that are intended to be used in a manner other than their highest and best use. For purposes of these unaudited pro forma condensed combined financial statements and consistent with the ASC 820 requirements for fair value measurements, it is assumed that all assets will be used, and that all acquired assets will be used in a manner that represents the highest and best use of those acquired assets.
    

6



The fair value of identifiable intangible assets is determined primarily using variations of the “income approach,” which is based on the present value of the future after-tax cash flows attributable to each identifiable intangible asset. Other valuation methods, including the market approach and cost approach, were also considered in estimating the fair value. Under the HSR Act and other relevant laws and regulations, there are significant limitations on NeoGenomics' ability to obtain specific information about Genoptix's intangible assets prior to completion of the Merger.

As of the date of this Current Report on Form 8-K, NeoGenomics does not have sufficient information as to the amount, timing and risk of the cash flows from all of Genoptix's identifiable intangible assets to determine their fair value. Some of the more significant assumptions inherent in the development of intangible asset values, from the perspective of a market participant, include, but are not limited to: the amount and timing of projected future cash flows (including revenue and profitability); the discount rate selected to measure the risks inherent in the future cash flows; the assessment of the asset’s life cycle; and the competitive trends impacting the asset. However, for purposes of these unaudited pro forma condensed combined financial statements and using publicly available information, such as historical revenues, Genoptix's cost structure, industry information for comparable intangible assets and certain other high-level assumptions, the fair value of Genoptix's identifiable intangible assets were estimated to be and their weighted-average useful lives have been preliminarily estimated as follows:

 
  
 
 Estimated Fair Value
(thousands)
 
 Estimated Useful Life
(years)
Customer lists
 
$
32,959

  
12 - 15

Tradename
 
341

  
1

Total
 
$
33,300

 
 

These preliminary estimates of fair value and weighted-average useful life will likely be different from the amounts included in the final acquisition accounting, and the difference could have a material impact on the accompanying unaudited pro forma condensed combined financial statements. The estimated intangible asset values and their useful lives could be impacted by a variety of factors that may become known to NeoGenomics only upon access to additional information. Once NeoGenomics has full access to information about Genoptix's intangible assets, additional insight will be gained that could impact (i) the estimated total value assigned to identifiable intangible assets, (ii) the estimated allocation of value between finite-lived and indefinite-lived intangible assets (as applicable) and/or (iii) the estimated weighted-average useful life of each category of intangible assets. The combined effect of any such changes could then also result in a significant increase or decrease to NeoGenomics’s estimate of associated amortization expense.

(4)     Goodwill is calculated as the difference between the acquisition date fair value of the total consideration expected to be transferred and the aggregate values assigned to the assets acquired and liabilities assumed. Goodwill is not amortized.

(5)    As of the completion of the Merger, acquired assets and liabilities are required to be measured at fair value.  As of the date of the filing of this document, NeoGenomics does not have sufficient information to make a reasonable preliminary estimate of the separate assets and liabilities not otherwise discussed.  Accordingly, for purposes of these unaudited pro forma condensed combined financial statements, NeoGenomics has assumed that the historical Genoptix book value approximates the best estimate of fair value for all other assets and liabilities not separately discussed in these unaudited pro forma condensed combined financial statements.

(6)    Other long term liabilities reflects the adjustments related to Genoptix's historical deferred tax liabilities and the elimination of accrued debt termination costs of $0.1 million.
 
 
(in thousands)
Eliminate Genoptix's historical deferred tax liability on intangible assets
 
$
(387
)
Eliminate Genoptix's historical deferred tax liability on outstanding equity awards
 
(129
)
Eliminate Genoptix's historical deferred tax asset on deferred acquisition costs
 
439

Estimate deferred tax liability on transaction-related intangible assets
 
6,993

Eliminate accrued debt termination costs
 
(100
)
Total adjustment
 
6,816



7



5. Unaudited Pro Forma Condensed Combined Statement of Operations Adjustments
(a)    There are differences between the contracted rates negotiated by NeoGenomics and Genoptix for various payors and this could result in significantly lower rates for certain of Genoptix’s agreements after the consummation of the Merger. Additionally, NeoGenomics may be contracted with certain payors that Genoptix is not and vice versa. These differences would result in changes in revenue recorded.
(b)    To reverse amortization expense recorded related to Genoptix's historical intangible assets of $1.2 million for the year ended December 31, 2017 and $0.7 million for the nine months ended September 30, 2018, respectively, and record amortization expense related to the estimated acquired intangible assets of $2.5 million for the year ended December 31, 2017 and $1.6 million for the nine months ended September 30, 2018, respectively.
(c)    To reverse interest expense recorded related to Genoptix's debt obligations of $1.1 million for the year ended December 31, 2017 and $1.0 million for the nine months ended September 30, 2018, respectively.
(d)    NeoGenomics assumed a blended 35% tax rate for the year ended December 31, 2017 and a blended 21% tax rate for the nine months ended September 30, 2018 when estimating the tax impact of the Merger, representing the federal statutory tax rate and exclusion of any state tax impacts which are unknown as of the date of this filing but expected to be immaterial. The effective tax rate of the combined company could be significantly different depending upon post-acquisition activities of the combined company.
(e)    To reverse deemed dividends on preferred stock.
(f)    Pro forma weighted-average shares outstanding have been calculated using the historical weighted-average of NeoGenomics shares outstanding and the additional 1,000,000 NeoGenomics shares issued in connection with the Merger, assuming those shares were outstanding for the nine months ended September 30, 2018 and the year ended December 31, 2017, respectively. Genoptix shares outstanding were eliminated as they were settled as part of the Merger Agreement.
6. Unaudited Pro Forma Condensed Combined Balance Sheet Adjustments
(a)     To reflect the use of an estimated $124.4 million of NeoGenomics available cash in order to fund the Merger. The adjustment also reflects $10.7 million repayment of the Genoptix outstanding term loan, revolving credit facility and accrued debt termination fees, which were repaid prior to the Merger close date. In accordance with the terms of the Merger Agreement, any remaining Genoptix cash balance is excluded from the consideration transferred. The ending cash balance of $(4.6) million does not reflect cash from operations received subsequent to September 30, 2018.
(b)     To adjust intangible assets to their estimated fair value, as follows:
 
  
(in thousands)
Eliminate Genoptix’s historical intangible assets
  
$
(1,980
)
Estimated fair value of intangible assets acquired
  
33,300

Total
  
$
31,320

(c)     To adjust goodwill to an estimate of acquisition-date goodwill, as follows:
 
  
(in thousands)
Eliminate Genoptix’s historical goodwill
  
$
(9,294
)
Estimated transaction goodwill
  
77,501

Total
  
$
68,207

 (d)    To record estimated acquisition-related transaction costs of $3 million expected to be incurred subsequent to September 30, 2018.
(e)     To remove outstanding balances under Genoptix's term loan, revolving loan facility, and corresponding debt termination costs, which will be repaid prior to the completion of the Merger:

8



 
  
(in thousands)
Short-term debt, net
  
$
(3,209
)
Line of credit
 
(837
)
Long-term debt, net
  
(6,564
)
Accrued debt termination costs
 
(100
)
Total adjustment
  
$
(10,710
)
(f)    To adjust tax liabilities as follows:
 
 
(in thousands)
Eliminate Genoptix's historical deferred tax liability on intangible assets
 
$
(387
)
Eliminate Genoptix's historical deferred tax liability on outstanding equity awards
 
(129
)
Eliminate Genoptix's historical deferred tax asset on deferred acquisition costs
 
439

Estimate deferred tax liability on transaction-related intangible assets
 
6,993

Estimated deferred tax asset on deferred transaction costs
 
(630
)
Total adjustment
 
$
6,286


The estimated deferred tax liability on transaction-related intangible assets and deferred tax asset on deferred transaction costs were calculated using a blended 21% tax rate.
(g)    To eliminate Genoptix's preferred stock, which was settled as part the Merger.
(h)    To eliminate Genoptix's historical common shares and additional paid-in capital and record the stock portion of the merger consideration. The equity component consists of 1,000,000 shares of NeoGenomics $0.001 par value common stock, with the remaining excess represented as additional paid in capital, as follows:
 
 
(in thousands)
Eliminate Genoptix's historical common shares and additional paid-in-capital
 
$
(1,118
)
Issuance of NeoGenomics common shares1
 
14,190

Total
 
$
13,072


1 The equity adjusted was determined based on the market price of NeoGenomics common stock on December 7, 2018 of $14.19, which may differ from the market price of NeoGenomics common stock at the date the Merger was completed.

(i)    To eliminate Genoptix's historical retained earnings and to estimate the after-tax portion of the acquisition-related transaction costs estimated to be incurred subsequent to September 30, 2018.
 
  
(in thousands)
Eliminate Genoptix’s historical retained earnings
  
$
5,538

Transaction costs incurred
  
(2,370
)
Total
  
$
3,168




9