UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549





FORM
10-Q





(Mark
One)




x
            QUARTERLY
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934





For the
quarterly period ended March 31, 2009.





or





 ̈
            TRANSITION
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934





For the
transition period from __________________ to __________________





Commission
File Number: 333-72097





NEOGENOMICS,
INC.


(Exact
name of registrant as specified in its charter)





Nevada
                    74-2897368(State
      or other jurisdiction of
                    (I.R.S.
      Employer Identification No.)incorporation
      or organization)12701 Commonwealth Drive, Suite 9, Fort
      Myers,
                      Florida
                    33913
                      (Zip
      Code)(Address
      of principal executive offices)




(239)768-0600


(Registrant’s
telephone number, including area code)





Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes x No  ̈




Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files).  Yes  ̈No  ̈




Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act:




Large
      accelerated filer  ̈
                Accelerated
      filer  ̈Non-accelerated
      filer  ̈ (Do not
      check if a smaller reporting company)
                Smaller
      reporting company x





Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). Yes  ̈ No x





As of
May 8, 2009, the registrant had 33,066,059 shares of Common Stock, par
value $0.001 per share outstanding





TABLE
OF CONTENTS




FINANCIAL
      INFORMATIONPART
      IItem
      1.
                                  Financial
      Statements (unaudited)
                                  
                                  4Item
      2.
                                  Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operations
                                  
                                  14Item
      3.
                                  Quantitative
      and Qualitative Disclosures About Market Risk
                                  
                                  18Item
      4.
                                  Controls
      and Procedures
                                  
                                  18Item
      4T.
                                  Controls
      and Procedures
                                  
                                  18OTHER
      INFORMATIONPART
      IIItem
      1.
                                  Legal
      Proceedings
                                  
                                  19Item
      1A.
                                  Risk
      Factors
                                  
                                  19Item
      2.
                                  Unregistered
      Sales of Equity Securities and Use of Proceeds
                                  
                                  19Item
      3.
                                  Defaults
      Upon Senior Securities
                                  
                                  19Item
      4.
                                  Submission
      of Matters to a Vote of Security Holders
                                  
                                  19Item
      5.
                                  Other
      Information
                                  
                                  19Item
      6.
                                  Exhibits
                                  
                                  21SIGNATURES


2


FORWARD-LOOKING
STATEMENTS





The
information in this Quarterly Report on Form 10-Q contains “forward-looking
statements” relating to NeoGenomics, Inc., a Nevada corporation (referred to
individually as the “Parent Company” or collectively with all of its
subsidiaries as “NeoGenomics” or the “Company”) within the meaning of Section
27A of the Securities Act of 1933, as amended (the “Securities Act”), and
Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), which are subject to the “safe harbor” created by those
sections.  These “forward looking statements” represent the Company’s
current expectations or beliefs including, but not limited to, statements
concerning the Company’s operations, performance, financial condition and
growth. For this purpose, any statements contained in this Form 10-Q that are
not statements of historical fact are forward-looking statements. Without
limiting the generality of the foregoing, words such as “anticipates,”
“believes,” “estimates,” “expects,” “intends,” “may,” “plans,” “projects,”
“will,” “would” or the negative or other comparable terminology are intended to
identify forward-looking statements, although not all forward-looking statements
contain these identifying words. These statements by their nature involve
substantial risks and uncertainties, such as credit losses, dependence on
management and key personnel, variability of quarterly results, competition and
the ability of the Company to continue its growth strategy, certain of which are
beyond the Company’s control. Should one or more of these risks or uncertainties
materialize or should the underlying assumptions prove incorrect, actual
outcomes and results could differ materially from those indicated in the
forward-looking statements.





Any
forward-looking statement speaks only as of the date on which such statement is
made, and the Company undertakes no obligation to update any forward-looking
statement or statements to reflect events or circumstances after the date on
which such statement is made or to reflect the occurrence of unanticipated
events. New factors emerge from time to time and it is not possible for
management to predict all of such factors, nor can it assess the impact of each
such factor on the business or the extent to which any factor, or combination of
factors, may cause actual results to differ materially from those contained in
any forward-looking statements.


3


PART
I – FINANCIAL INFORMATION


Item
1.  Financial Statements


NEOGENOMICS,
INC.
 CONDENSED
CONSOLIDATED BALANCE SHEETS
 (unaudited)





March 31,
                                  2009
                                
                                
                                December 31,
                                  2008ASSETSCURRENT
      ASSETSCash
      and cash equivalents
                                
                                $
                                857,190
                                
                                
                                $
                                468,171Accounts
      receivable (net of allowance for doubtful accounts of $474,337 and
      $358,642, respectively)
                                
                                
                                3,955,266
                                
                                
                                
                                2,913,531Inventories
                                
                                
                                577,730
                                
                                
                                
                                491,459Other
      current assets
                                
                                
                                497,158
                                
                                
                                
                                482,408Total
      current assets
                                
                                
                                5,887,344
                                
                                
                                
                                4,355,569PROPERTY AND EQUIPMENT
      (net of accumulated depreciation of $1,839,653 and
      $1,602,594,respectively)
                                
                                
                                2,857,025
                                
                                
                                
                                2,875,297OTHER
      ASSETS
                                
                                
                                72,791
                                
                                
                                
                                64,509TOTAL
      ASSETS
                                
                                $
                                8,817,160
                                
                                
                                $
                                7,295,375LIABILITIES AND STOCKHOLDERS’
      EQUITYCURRENT
      LIABILITIESAccounts
      payable
                                
                                $
                                1,695,518
                                
                                
                                $
                                1,512,427Accrued
      expenses and other liabilities
                                
                                
                                1,328,220
                                
                                
                                
                                1,094,817Revolving
      credit line
                                
                                
                                1,419,033
                                
                                
                                
                                1,146,850Short-term
      portion of equipment capital leases
                                
                                
                                709,735
                                
                                
                                
                                636,900Total
      current liabilities
                                
                                
                                5,152,506
                                
                                
                                
                                4,390,994LONG
      TERM LIABILITIESLong-term
      portion of equipment capital leases
                                
                                
                                1,371,334
                                
                                
                                
                                1,403,271TOTAL
      LIABILITIES
                                
                                
                                6,523,840
                                
                                
                                
                                5,794,265STOCKHOLDERS’
      EQUITYCommon
      stock, $.001 par value, (100,000,000 shares authorized; 33,056,021 and
      32,117,237 shares issued and outstanding, respectively)
                                
                                
                                33,056
                                
                                
                                
                                32,117Additional
      paid-in capital
                                
                                
                                18,139,903
                                
                                
                                
                                17,381,810Accumulated
      deficit
                                
                                
                                (15,879,639
                                )
                                
                                
                                (15,912,817
                                )Total
      stockholders’ equity
                                
                                
                                2,293,320
                                
                                
                                
                                1,501,110TOTAL
      LIABILITIES AND STOCKHOLDERS’ EQUITY
                                
                                $
                                8,817,160
                                
                                
                                $
                                7,295,375





The
accompanying notes are an integral part of these unaudited condensed
consolidated financial statements.


4


NEOGENOMICS,
INC.


CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS


(unaudited)


For the Three-
                                                          Months Ended
                                                          March 31, 2009
                                                        
                                                        
                                                        For the Three-
                                                          Months Ended
                                                          March 31, 2008NET
      REVENUE
                                                        
                                                        $
                                                        6,913,520
                                                        
                                                        
                                                        $
                                                        4,162,762COST
      OF REVENUE
                                                        
                                                        
                                                        3,090,442
                                                        
                                                        
                                                        
                                                        1,858,474GROSS
      PROFIT
                                                        
                                                        
                                                        3,823,078
                                                        
                                                        
                                                        
                                                        2,304,288OPERATING
      EXPENSESGeneral
      and administrative
                                                        
                                                        
                                                        3,675,084
                                                        
                                                        
                                                        
                                                        2,514,555Interest
      expense, net
                                                        
                                                        
                                                        114,816
                                                        
                                                        
                                                        
                                                        55,096Total
      operating expenses
                                                        
                                                        
                                                        3,789,900
                                                        
                                                        
                                                        
                                                        2,569,651NET
      INCOME (LOSS)
                                                        
                                                        $
                                                        33,178
                                                        
                                                        
                                                        $
                                                        (265,363
                                                        )NET INCOME
      (LOSS) PER SHARE-
      Basic
                                                        
                                                        $
                                                        0.00
                                                        
                                                        
                                                        $
                                                        (0.01
                                                        )-
      Diluted
                                                        
                                                        $
                                                        0.00
                                                        
                                                        
                                                        $
                                                        (0.01
                                                        )WEIGHTED
      AVERAGE NUMBER OF SHARES OUTSTANDING- Basic
                                                        
                                                        
                                                        32,173,698
                                                        
                                                        
                                                        
                                                        31,400,947-
      Diluted
                                                        
                                                        
                                                        35,630,058
                                                        
                                                        
                                                        
                                                        31,400,947





The
accompanying notes are an integral part of these unaudited condensed
consolidated financial statements.


5


NEOGENOMICS,
INC.


CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS


(unaudited)


For the Three
                          Months Ended
                          March 31, 2009
                        
                        
                        For the Three
                          Months Ended
                          March 31, 2008CASH
      FLOWS FROM OPERATING ACTIVITIESNet
      income (loss)
                        
                        $
                        33,178
                        
                        
                        $
                        (265,363
                        )Adjustments
      to reconcile net income (loss) to net cash used in provided by operating
      activities:Provision
      for bad debts
                        
                        
                        507,741
                        
                        
                        
                        425,453Depreciation
                        
                        
                        237,059
                        
                        
                        
                        156,416Amortization
      of debt issue costs
                        
                        
                        13,245
                        
                        
                        
                        8,830Stock-based
      compensation
                        
                        
                        58,000
                        
                        
                        
                        48,537Non-cash
      consulting expenses
                        
                        
                        19,724
                        
                        
                        
                        34,271Changes
      in assets and liabilities, net:(Increase)
      decrease in accounts receivable, net of write-offs
                        
                        
                        (1,549,476
                        )
                        
                        
                        (126,607
                        )(Increase)
      decrease in inventories
                        
                        
                        (86,271
                        )
                        
                        
                        58,764(Increase)
      decrease in pre-paid expenses
                        
                        
                        (27,996
                        )
                        
                        
                        (35,402
                        )(Increase)
      decrease in deposits
                        
                        
                        (8,282
                        )
                        
                        
                        12,201Increase
      (decrease) in accounts payable and other liabilities
                        
                        
                        471,539
                        
                        
                        
                        (122,462
                        )NET
      CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES
                        
                        
                        (331,539
                        )
                        
                        
                        194,638CASH
      FLOWS FROM INVESTING ACTIVITIESPurchases
      of property and equipment
                        
                        
                        (5,886
                        )
                        
                        
                        (25,115
                        )NET
      CASH USED IN INVESTING ACTIVITIES
                        
                        
                        (5,886
                        )
                        
                        
                        (25,115
                        )CASH
      FLOWS FROM FINANCING ACTIVITIESProceeds
      from capital lease obligations
                        
                        
                        96,890
                        
                        
                        
                        -Advances
      / (repayments) on credit facility
                        
                        
                        272,183
                        
                        
                        
                        -Repayment
      of capital leases
                        
                        
                        (137,938
                        )
                        
                        
                        (63,208
                        )Issuance
      of common stock and warrants for cash, net of transaction
      expenses
                        
                        
                        495,309
                        
                        
                        
                        13,470NET
      CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES
                        
                        
                        726,444
                        
                        
                        
                        (49,738
                        )NET
      INCREASE IN CASH AND CASH EQUIVALENTS
                        
                        
                        389,019
                        
                        
                        
                        119,785CASH
      AND CASH EQUIVALENTS, BEGINNING OF PERIOD
                        
                        
                        468,171
                        
                        
                        
                        210,573CASH
      AND CASH EQUIVALENTS, END OF PERIOD
                        
                        $
                        857,190
                        
                        
                        $
                        330,358SUPPLEMENTAL
      DISCLOSURE OF CASH FLOW INFORMATIONInterest
      paid
                        
                        $
                        100,391
                        
                        
                        $
                        47,931Income
      taxes paid
                        
                        $
                        -
                        
                        
                        $
                        -NON-CASH
      INVESTING AND FINANCING ACTIVITIESEquipment
      leased under capital leases
                        
                        $
                        178,837
                        
                        
                        $
                        162,043Equipment
      purchased and included in accounts payable at March 31
                        
                        $
                        46,250
                        
                        
                        $
                        33,713Equipment
      purchased and payables settled with issuance of restricted common
      stock
                        
                        $
                        186,000
                        
                        
                        $
                        -





The
accompanying notes are an integral part of these unaudited condensed
consolidated financial statements.


6


NEOGENOMICS,
INC.




NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


AS
OF MARCH 31, 2009




NOTE
A – NATURE OF BUSINESS AND BASIS OF FINANCIAL STATEMENT
PRESENTATION





Nature of
Business





NeoGenomics,
Inc., a Nevada corporation, (the “Parent”) and its subsidiary, NeoGenomics
Laboratories, Inc. (formerly known as NeoGenomics, Inc.), a Florida corporation
(“NEO”, or the “Subsidiary”) (collectively referred to as “we”, “us”, “our”,
“NeoGenomics”, or the “Company”), operates as a certified “high complexity”
clinical laboratory in accordance with the federal government’s Clinical
Laboratory Improvement Amendments of 1988 (“CLIA”), and is dedicated to the
delivery of clinical diagnostic services to pathologists, oncologists,
urologists, hospitals, and other laboratories throughout the United
States.





Basis of
Presentation





The
accompanying condensed consolidated financial statements include the accounts of
the Parent and the Subsidiary.  All significant intercompany accounts
and balances have been eliminated in consolidation.





The
accompanying condensed consolidated financial statements of the Company are
unaudited and include all adjustments, in the opinion of management, which are
necessary to make the financial statements not misleading.  Except as
otherwise disclosed, all such adjustments are of a normal recurring nature.
Interim results are not necessarily indicative of results for a full
year.





The
interim condensed consolidated financial statements and notes are presented in
accordance with the rules and regulations of the Securities and Exchange
Commission and do not contain certain information included in the Company’s
Annual Report on Form 10-K for the year ended December 31, 2008. Therefore, the
interim condensed consolidated financial statements should be read in
conjunction with the consolidated financial statements and notes thereto
contained in the Company’s annual report.





Net Income (Loss) Per Common
Share





We
compute net income (loss) per share in accordance with Financial Accounting
Standards Statement No. 128 “Earnings per Share” (“SFAS 128”) and Securities and
Exchange Commission (“SEC”) Staff Accounting Bulletin No. 98 (“SAB
98”).  Under the provisions of SFAS 128 and SAB 98, basic net income
(loss) per share is computed by dividing the net income (loss) available to
common stockholders by the weighted average number of common shares outstanding
during the period.  Diluted net income (loss) per share is computed by
dividing the net income (loss) for the period by the weighted average number of
common and common equivalent shares outstanding, using the treasury stock
method, during the period.  Equivalent shares consist of employee
stock options and certain warrants issued to consultants and other providers of
financing to the Company.  Common equivalent shares outstanding as of
March 31, 2009 using the treasury stock method includes approximately 2.6
million equivalent shares for unexercised warrants and approximately 827,000
shares for unexercised stock options, and these were included in the earnings
per share calculation for the three months ended March 31,
2009.  There were no common equivalent shares included in the
calculation of diluted earnings per share for the three month period ended March
31, 2008 because they were anti-dilutive.


7





NOTE
B – LIQUIDITY





Our
consolidated financial statements are prepared using accounting principles
generally accepted in the United States of America applicable to a going
concern, which contemplates the realization of assets and liquidation of
liabilities in the normal course of business.   At March 31, 2009
we had stockholders’ equity of approximately $2,293,000.  On November
5, 2008, we entered into a common stock purchase agreement (the “Purchase
Agreement”) with Fusion Capital Fund II, LLC, an Illinois limited liability
company (“Fusion”).  The Purchase Agreement, which has a term of 30 months,
provides for the future funding of up to $8.0 million from sales of our common
stock to Fusion on a when and if needed basis as determined by us in our sole
discretion, depending on, among other things, the market price of our common
stock (see Note G).  On February 1, 2008, we entered into a revolving
credit facility with CapitalSource Finance, LLC (“CapitalSource”), which
allows us to borrow up to $3,000,000 based on a formula which is tied to our
eligible accounts receivable that are aged less than 150 days (see
Note D).  We believe we have adequate resources to meet our
operating commitments for the next twelve months and accordingly our
consolidated financial statements do not include any adjustments relating to the
recoverability and classification of recorded asset amounts or the amounts and
classification of liabilities that might be necessary should we be unable to
continue as a going concern.





NOTE
C - ASSET PURCHASE AGREEMENTS





On
February 2, 2009, we issued 300,000 shares of restricted common stock,
valued at $186,000 based on the February 2, 2009 closing price of the Company’s
common stock on the OTC Bulletin Board, in connection with two agreements to
purchase the assets (primarily laboratory equipment) of two laboratories,
including settlement of certain amounts due to the owners.





NOTE
D – REVOLVING CREDIT AND SECURITY AGREEMENT





On
February 1, 2008, our subsidiary, NeoGenomics Laboratories, Inc., a Florida
corporation (“Borrower”), entered into a Revolving Credit and Security Agreement
(the “Credit Facility” or “Credit Agreement”) with CapitalSource, the terms of
which provide for borrowings based on eligible accounts receivable up to a
maximum borrowing of $3,000,000, as defined in the Credit
Agreement.  Subject to the provisions of the Credit Agreement,
CapitalSource shall make advances to us from time to time during the three year
term, and the Credit Facility may be drawn, repaid and redrawn from time to time
as permitted under the Credit Agreement.





Interest
on outstanding advances under the Credit Facility are payable monthly in arrears
on the first day of each calendar month at an annual rate based on the one-month
LIBOR plus 3.25%, subject to a LIBOR floor of 3.14%.  At March 31,
2009, the effective rate of interest was 6.39%.





To secure
the payment and performance in full of the Obligations (as defined in the Credit
Agreement), we granted CapitalSource a continuing security interest in and lien
upon, all of our rights, title and interest in and to our Accounts (as defined
in the Credit Agreement), which primarily consist of accounts receivable and
cash balances held in lock box accounts.  Furthermore, pursuant to the
Credit Agreement, the Parent guaranteed the punctual payment when due, whether
at stated maturity, by acceleration or otherwise, of all of the Obligations. The
Parent guaranty is a continuing guarantee and shall remain in force and effect
until the indefeasible cash payment in full of the Guaranteed Obligations (as
defined in the Credit Agreement) and all other amounts payable under the Credit
Agreement.





On March
31, 2009, the available credit under the Credit Facility was approximately
$885,000 and the outstanding borrowing was $1,419,033 after netting of $6,172 in
compensating cash on hand.  On November 3, 2008, the Company and
CapitalSource signed a first amendment to the Credit Agreement.  This
amendment increased the amount allowable under the Credit Agreement to pay
towards the settlement of the US Labs lawsuit to $250,000 from $100,000 and
documented other administrative agreements between NeoGenomics and
CapitalSource.





On April
14, 2009, the Parent Company, NeoGenomics Laboratories, Inc. (the wholly owned
subsidiary of the Parent Company) (“Borrower”) and CapitalSource (as agent for
CapitalSource Bank) entered into a Second Amendment to Revolving Credit and
Security Agreement (the “Second Amendment”).  The Second Amendment,
among other things, amends that certain Revolving Credit and Security Agreement
dated February 1, 2008 as amended by that certain First Amendment to Revolving
Credit and Security Agreement dated November 3, 2008 (as amended, the “Loan
Agreement”) to (i) provide that through December 31, 2009, the Borrower must
maintain Minimum Liquidity (as defined in the Loan Agreement) of not less than
$500,000, (ii) amend the definitions of “Fixed Charge Coverage Ratio” and “Fixed
Charges”, (iii) amend the definition of “Permitted Indebtedness” to increase the
amount of permitted capitalized lease obligations and indebtedness incurred to
purchase goods secured by certain purchase money liens and (iv) amend and update
certain representations, warranties and schedules.  In addition,
pursuant to the Second Amendment, CapitalSource waived the following events of
default under the Loan Agreement:  (i) the failure of the Borrower to
comply with the fixed charge coverage ratio covenant for the test period ending
December 31, 2008, (ii) the failure of the Borrower to notify CapitalSource of
the change of Borrower’s name to NeoGenomics Laboratories, Inc. and to obtain
CapitalSource’s prior consent to the related amendment to Borrower’s Articles of
Incorporation,  (iii) the failure of the Parent Company and the
Borrower to obtain CapitalSource’s prior written consent to the amendment of the
Parent Company’s bylaws to allow for the size of the Parent Company’s Board of
Directors to be increased to eight members and (iv) the failure of the Borrower
to notify CapitalSource of the filing of an immaterial complaint by the Borrower
against a former employee of the Borrower.   The Company paid
CapitalSource Bank a $25,000 amendment fee in connection with the Second
Amendment.


8





NOTE
E – EQUIPMENT LEASE LINE





On
November 5, 2008, the Subsidiary entered into a Master Lease Agreement (the
“Lease Agreement”) with Leasing Technologies International, Inc
(“LTI”).  The Lease Agreement establishes the general terms and
conditions pursuant to which the Subsidiary may lease equipment pursuant to a
$1,000,000 lease line.  Advances under the lease line may be made for
one year by executing equipment schedules for each advance.  The lease
term of any equipment schedules issued under the lease line will be for 36
months.  The lease rate factor applicable for each equipment schedule
is 0.0327/month.  If the Subsidiary makes use of the entire lease
line, the monthly rent would be $32,700.  Monthly rent for the leased
equipment is payable in advance on the first day of each month. The obligations
of the Subsidiary are guaranteed by the Parent Company.  At the end of
the term of each equipment schedule the Subsidiary may:  (a) renew the
lease with respect to such equipment for an additional 12 months at fair market
value; (b) purchase the equipment at fair market value, which price will not be
less than 10% of cost nor more than 14% of cost; (c) extend the term for an
additional six months at 35% of the monthly rent paid by the lessee during the
initial term, after which the equipment may be purchased for the lesser of fair
market value or 8% of cost; or (d) return the equipment subject to a remarketing
charge equal to 6% of cost.





On
December 31, 2008, the Company entered into Lease Schedule No. 1 of the Lease
Agreement with LTI for $437,300 which was funded to two vendors for lab
equipment, which is included in the amount of equipment capital lease
obligations in the accompanying consolidated balance sheet.  As of
March 31, 2009, we had the ability to receive additional advances of $562,700
under the Lease Agreement.





On April
22, 2009, the Company entered into Lease Schedule No. 2 of the Lease Agreement
with LTI for $508,651 which will be funded to seven vendors for lab and computer
equipment.





NOTE
F – COMMITMENTS AND CONTINGENCIES





Employment
Contracts





On March
16, 2009, the Company entered into an employment agreement with Douglas M.
VanOort (the “Employment Agreement”) to employ Mr. VanOort in the capacity of
Executive Chairman and interim Chief Executive Officer.  The
Employment Agreement has an initial term from March 16, 2009 through March 16,
2013, which initial term automatically renews for one year
periods.  Mr. VanOort will receive a salary of $225,000 per year for
so long as he spends not less than 2.5 days per week on the affairs of the
Company.  He will receive an additional $50,000 per year while serving
as the Company’s interim Chief Executive Officer; provided that he spends not
less than 3.5 days per week on average on the affairs of the
Company.  Mr. VanOort is also eligible to receive an annual cash bonus
based on the achievement of certain performance metrics of at least 30% of his
base salary (which includes amounts payable with respect to serving as Executive
Chairman and interim Chief Executive Officer).  Mr. VanOort is also
entitled to participate in all of the Company’s employee benefit plans and any
other benefit programs established for officers of the
Company.


9


Pursuant
to the terms of the Employment Agreement, Mr. VanOort was granted an option to
purchase 1,000,000 shares of the Company’s common stock under the Company’s
Amended and Restated Equity Incentive Plan (the “Amended Plan”).  The
exercise price of such option is $0.80 per share.  500,000 shares of
common stock subject to the option will vest according to the following schedule
(i) 200,000 shares will vest on March 16, 2010 (provided that if Mr. VanOort’s
employment is terminated by the Company without “cause” then the pro rata
portion of such 200,000 shares up until the date of termination shall
vest); (ii) 12,500 shares will vest each month beginning on April 16, 2010 until
March 16, 2011; (iii) 8,000 shares will vest each month beginning on April 16,
2011 until March 16, 2012 and (iv) 4,500 shares will vest each month beginning
on April 16, 2012 until March 16, 2013.  500,000 shares of common
stock subject to the option will vest based on the achievement of certain
performance metrics by the Company.  The option was valued at
approximately $275,000 using the trinomial lattice model.  Any unvested
portion of the option described above shall vest in the event of a change of
control of the Company.





Either
party may terminate Mr. VanOort’s employment with the Company at any time upon
giving sixty days advance written notice to the other party.  The
Company and Mr. VanOort also entered into a Confidentiality, Non-Solicitation
and Non-Compete Agreement in connection with the Employment
Agreement.





On March
16, 2009, the Company and the Douglas M. VanOort Living Trust entered into a
Subscription Agreement (the “Subscription Agreement”) pursuant to which the
Douglas M. VanOort Living Trust purchased 625,000 shares of the Company’s common
stock at a purchase price of $0.80 per share (the “Subscription
Shares”).  The Subscription Shares are subject to a two year lock-up
that restricts the transfer of the Subscription Shares; provided, however, that
such lock-up shall expire in the event that the Company terminates Mr. VanOort’s
employment.  The Subscription Agreement also provides for certain
piggyback registration rights with respect to the Subscription
Shares.





On March
16, 2009, the Company and Mr. VanOort entered into a Warrant Agreement (the
“Warrant Agreement”) pursuant to which Mr. VanOort, subject to the vesting
schedule described below, may purchase up to 625,000 shares of the Company’s
common stock at an exercise price of $1.05 per share (the “Warrant
Shares”).  The Warrant Shares were valued at approximately $160,000
using the trinomial lattice model.  The Warrant Shares vest based on
the following vesting schedule:





(i)
            20%
      of the Warrant Shares vested
immediately,


(ii)
            20%
      of the Warrant Shares will be deemed to be vested on the first day on
      which the closing price per share of the Company’s common stock has
      reached or exceeded $3.00 per share for 20 consecutive trading
      days,


(iii)
            20%
      of the Warrant Shares will be deemed to be vested on the first day on
      which the closing price per share of the Company’s common stock has
      reached or exceeded $4.00 per share for 20 consecutive trading
      days,


(iv)
            20%
      of the Warrant Shares will be deemed to be vested on the first day on
      which the closing price per share of the Company’s common stock has
      reached or exceeded $5.00 per share for 20 consecutive trading days
      and


(v)
            20%
      of the Warrant Shares will be deemed to be vested on the first day on
      which the closing price per share of the Company’s common stock has
      reached or exceeded $6.00 per share for 20 consecutive trading
      days.





In the
event of a change of control of the Company in which the consideration payable
to each common stockholder of the Company in connection with such change of
control has a deemed value of at least $4.00 per share then the Warrant Shares
shall immediately vest in full.  In the event that Mr. VanOort resigns
his employment with the Company or the Company terminates Mr. VanOort’s
employment for “cause” at any time prior to the time when all Warrant Shares
have vested, then the rights under the Warrant Agreement with respect to the
unvested portion of the Warrant Shares as of the date of termination will
immediately terminate.





NOTE
G – COMMON STOCK PURCHASE AGREEMENT





On
November 5, 2008, we entered into a common stock purchase agreement (the “Stock
Agreement”) with Fusion Capital Fund II, LLC an Illinois limited liability
company (“Fusion”).  The Stock Agreement, which has a term of 30 months,
provides for the future funding of up to $8.0 million from sales of our common
stock to Fusion on a when and if needed basis as determined by us in our sole
discretion.  In consideration for entering into this Stock Agreement, on
October 10, 2008, we issued to Fusion 17,500 shares of our common stock (valued
at $14,700 on the date of issuance) and $17,500 as a due diligence expense
reimbursement.  In addition, on November 5, 2008, we issued to Fusion
400,000 shares of our common stock (valued at $288,000 on the date of issuance)
as a commitment fee.  Concurrently with entering into the Stock Agreement,
we entered into a registration rights agreement with Fusion.  Under the
registration rights agreement, we agreed to file a registration statement with
the SEC covering the 417,500 shares that have already been issued to Fusion and
at least 3.0 million shares that may be issued to Fusion under the Stock
Agreement.  Presently, we expect to sell no more than the initial 3.0
million shares to Fusion during the term of this Stock Agreement.  The
Company filed a registration statement on Form S-1 on November 28, 2008, on
February 5, 2009 the registration statement became effective and on May 8, 2009
Post Effective Amendment No 1 to the registration statement became
effective.


10




Under the
Stock Agreement we have the right to sell to Fusion shares of our common stock
from time to time in amounts between $50,000 and $1.0 million, depending on the
market price of our common stock.  The purchase price of the shares related
to any future funding under the Stock Agreement will be based on the prevailing
market prices of our stock at the time of such sales without any fixed discount,
and the Company will control the timing and amount of any sales of shares to
Fusion.  Fusion shall not have the right or the obligation to purchase any
shares of our common stock on any business day that the price of our common
stock is below $0.45 per share.  The Stock Agreement may be terminated by
us at any time at our discretion without any cost to us.  There are no
negative covenants, restrictions on future funding from other sources,
penalties, further fees or liquidated damages in the
agreement.




Given our
current liquidity position from cash on hand and our availability under our
Credit Facility with CapitalSource, we have no immediate plans to issue common
stock under the Stock Agreement. If and when we do elect to sell shares to
Fusion under this agreement, we expect to do so opportunistically and only under
conditions deemed favorable by the Company.  Any proceeds received by the
Company from sales under the Stock Agreement will be used for general corporate
purposes, working capital, and/or for expansion activities.





NOTE
H – AMENDED AND RESTATED EQUITY INCENTIVE PLAN





On March
3, 2009, the Company’s Board of Directors approved the Amended and Restated
Equity Incentive Plan (the “Amended Plan”), which amends and restates the
NeoGenomics, Inc. Equity Incentive Plan, originally effective as of October 14,
2003, and amended and restated effective as of October 31, 2006.  The
Amended Plan allows for the award of equity incentives, including stock options,
stock appreciation rights, restricted stock awards, stock bonus awards, deferred
stock awards, and other stock-based awards to certain employees, directors, or
officers of, or key advisers or consultants to, the Company or its
subsidiaries.  Revised provisions included in the Amended Plan
include, among others, (i) provision that the maximum aggregate number of shares
of the Company’s common stock reserved and available for issuance under the
Amended Plan shall be 6,500,000 shares of common stock, (ii) deletion of
provisions governing the grant of “re-load options” and (iii) that the
Amended Plan shall expire on March 3, 2019.





NOTE
I – RELATED PARTY TRANSACTIONS





During
the three months ended March 31, 2009 and 2008, Steven C. Jones, a director of
the Company, earned $56,000 and $59,000, respectively, for various consulting
work performed in connection with his duties as Acting Principal Financial
Officer.





During
the three months ended March 31, 2009 and 2008, George O’Leary, a director of
the Company, earned $21,100 and $1,100, respectively, for various consulting
work performed for the Company.





On March
11, 2005, we entered into an agreement with HCSS, LLC (“HCSS”) and eTelenext,
Inc. (“eTelenext”) to enable NeoGenomics to use eTelenext’s Accessioning
Application, AP Anywhere Application and CMQ Application.  HCSS is a
holding company created to build a small laboratory network for the 50 small
commercial genetics laboratories in the United States.  HCSS is owned
66.7% by Dr. Michael T. Dent, a member of our Board of
Directors.  During the three months ended March 31, 2009 and 2008,
HCSS earned $99,893 and $77,177, respectively, for transaction fees related to
completed tests.


11


On
September 30, 2008, the Company entered into a master lease agreement (the
“Master Lease”) with Gulf Pointe Capital, LLC (“Gulf Pointe”) which allows us to
obtain lease capital from time to time up to an aggregate of $130,000 of lease
financing.  The Company entered into the Master Lease after it was
determined that the lease facility with LTI described in Note E would not allow
for the leasing of certain used and other types of
equipment.    The terms under this lease are consistent with
the terms of our other lease arrangements. Three members of our Board of
Directors Steven Jones, Peter Petersen and Marvin Jaffe, are affiliated with
Gulf Pointe and recused themselves from both sides of all negotiations
concerning this transaction.  In consideration for entering into the
Master Lease with Gulf Pointe, the Company issued a warrant to purchase 32,475
shares of common stock to Gulf Pointe with an exercise price of $1.08 and a five
year term.  Such warrant vests 25% on issuance and then on a pro rata
basis as amounts are drawn under the Master Lease.  The warrant was
valued at approximately $11,000 using the Black-Scholes option pricing model,
and the warrant cost is being expensed as it vests. At the end of the term of
any lease schedule under the Master Lease, the Company’s options are as
follows:  (a) purchase not less than all of the equipment for its then
fair market value  not to exceed 15% of the original equipment cost,
(b) extend the lease term for a minimum of six months, or (c) return not less
than all the equipment at the conclusion of the lease term.  On
September 30, 2008, we also entered into the first lease schedule under the
Master Lease which provided for the sale/leaseback of approximately $130,000 of
used laboratory equipment (“Lease Schedule No. 1”).   Lease
Schedule No. 1 has a 30 month term and a lease rate factor of 0.0397/month,
which equates to monthly payments of $5,154.88 during the term.





On
February 9, 2009, we amended our Master Lease with Gulf Pointe to increase the
maximum size of the facility to $250,000.   As part of this
amendment, we terminated the original warrant agreement, dated September 30,
2008, and replaced it with a new warrant to purchase 83,333 shares of our common
stock.  Such new warrant has a five year term, an exercise price of
$0.75/share and the same vesting schedule as the original
warrant.  The replacement warrant was valued using the Black-Scholes
option pricing model and the value did not materially differ from the valuation
of the original warrant it replaced.   On February 9, 2009, we
also entered into a second schedule under the Master Lease for the
sale/leaseback of approximately $118,000 of used laboratory equipment (“Lease
Schedule No. 2”).  Lease Schedule No. 2 was entered into after it was
determined that LTI was unable to consummate this transaction under the lease
facility described in Note E.  Lease Schedule No. 2 has a 30 month
term at the same lease rate factor per month as Lease Schedule No. 1, which
equates to monthly payments of $4,690.41 during the term.





NOTE
J – SUBSEQUENT EVENTS





Second Amendment to
Revolving Credit and Security Agreement





On April
14, 2009, the Parent Company, NeoGenomics Laboratories, Inc. (the wholly owned
subsidiary of the Parent Company) (“Borrower”) and CapitalSource (as agent for
CapitalSource Bank) entered into a Second Amendment to Revolving Credit and
Security Agreement (the “Second Amendment”).  The Second Amendment,
among other things, amends that certain Revolving Credit and Security Agreement
dated February 1, 2008 as amended by that certain First Amendment to Revolving
Credit and Security Agreement dated November 3, 2008 (as amended, the “Loan
Agreement”) to (i) provide that through December 31, 2009, the Borrower must
maintain Minimum Liquidity (as defined in the Loan Agreement) of not less than
$500,000, (ii) amend the definitions of “Fixed Charge Coverage Ratio” and “Fixed
Charges”, (iii) amend the definition of “Permitted Indebtedness” to increase the
amount of permitted capitalized lease obligations and indebtedness incurred to
purchase goods secured by certain purchase money liens and (iv) amend and update
certain representations, warranties and schedules.  In addition,
pursuant to the Second Amendment, CapitalSource waived the following events of
default under the Loan Agreement:  (i) the failure of the Borrower to
comply with the fixed charge coverage ratio covenant for the test period ending
December 31, 2008, (ii) the failure of the Borrower to notify CapitalSource of
the change of Borrower’s name to NeoGenomics Laboratories, Inc. and to obtain
CapitalSource’s prior consent to the related amendment to Borrower’s Articles of
Incorporation,  (iii) the failure of the Parent Company and the
Borrower to obtain CapitalSource’s prior written consent to the amendment of the
Parent Company’s bylaws to allow for the size of the Parent Company’s Board of
Directors to be increased to eight members and (iv) the failure of the Borrower
to notify CapitalSource of the filing of an immaterial complaint by the Borrower
against a former employee of the Borrower.   The Company paid
CapitalSource Bank a $25,000 amendment fee in connection with the Second
Amendment.


12




Equipment Lease
Line





On April
22, 2009, the Company entered into Lease Schedule No. 2 of the Lease Agreement
with LTI for $508,651 which will be funded to seven vendors for lab and computer
equipment.





END OF
FINANCIAL STATEMENTS.


13





ITEM
      2.
            MANAGEMENT’S
      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
      OPERATIONS





NeoGenomics,
Inc., a Nevada corporation (referred to individually as the “Parent Company” or
collectively with all of its subsidiaries as “NeoGenomics” or the “Company” in
this Form 10-Q) is the registrant for SEC reporting purposes.  Our
common stock is listed on the OTC Bulletin Board under the symbol
“NGNM.”





Introduction





The
following discussion and analysis should be read in conjunction with the
unaudited consolidated condensed financial statements, and the notes thereto
included herein. The information contained below includes statements of the
Company’s or management’s beliefs, expectations, hopes, goals and plans that, if
not historical, are forward-looking statements subject to certain risks and
uncertainties that could cause actual results to differ materially from those
anticipated in the forward-looking statements. For a discussion on
forward-looking statements, see the information set forth in the introductory
note to this Quarterly Report on Form 10-Q under the caption “Forward Looking
Statements”, which information is incorporated herein by reference.





Critical Accounting
Policies





The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires us to make estimates and
assumptions and select accounting policies that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements, as well as the reported amounts of
revenues and expenses during the reporting period. Actual results could differ
from those estimates.





While
many operational aspects of our business are subject to complex federal, state
and local regulations, the accounting for our business is generally
straightforward with net revenues primarily recognized upon completion of the
testing process. Our revenues are primarily comprised of a high volume of
relatively low dollar transactions, and approximately one-half of total
operating costs and expenses consist of employee compensation and benefits. Due
to the nature of our business, several of our accounting policies involve
significant estimates and judgments. These accounting policies have been
described in our Annual Report on Form 10-K for the year ended December 31,
2008, and there have been no material changes in the three months ended March
31, 2009.





Overview





NeoGenomics
operates a network of cancer-focused testing laboratories whose mission is to
provide high quality testing services to pathologists, oncologists, urologists,
hospitals, and other laboratories throughout the United States under the mantra
“When time matters and results count”.  The Company’s laboratory
network currently offers the following types of testing services:





a)
            cytogenetics
      testing, which analyzes human
chromosomes;


b)
              Fluorescence
      In-Situ Hybridization (“FISH”) testing, which analyzes abnormalities at
      the chromosomal and gene
levels;


c)
              flow
      cytometry testing, which analyzes gene expression of specific markers
      inside cells and on cell
surfaces;


d)
              immunohistochemistry
      testing, which analyzes the distribution of tumor antigens in specific
      cell and tissue types, and


e)
              molecular
      testing which involves analysis of DNA and RNA to diagnose and predict the
      clinical significance of various genetic sequence
    disorders.




All of
these testing services are widely utilized in the diagnosis, prognosis, and
prediction for response to therapy of various types of
cancers.


14





Results of Operations for
the Three Months Ended March 31, 2009 as Compared to the Three Months Ended
March 31, 2008





Revenue





Revenues
increased 66.1%, or $2.7 million, to $6.9 million for the three months ended
March 31, 2009 as compared to $4.2 million for the three months ended March 31,
2008.  This was the result of an increase in testing volume of 54.7%
and a 7.3% increase in average revenue per test. The volume increase is the
result of increased acceptance of our product offerings and our competitive
turnaround times resulting in new clients.  The increase in average
revenue per test is primarily the result of certain Medicare fee schedule
increases in 2009 for a number of our tests and to a lesser extent price
increases to client bill customers based on the increase in the Medicare fee
schedule and changes in our product and payer mixes.


Test
volume increased 54.7%, or 3,698 tests, to 10,457 tests for the three months
ended March 31, 2009 as compared to 6,759 tests for the three months ended March
31, 2008.  Average revenue per test increased 7.3% to $661.14 for the
three months ended March 31, 2009 as compared to $615.88 for the three months
ended March 31, 2008.  The increase in average revenue per test is
primarily attributable to an increase in certain Medicare reimbursements for
2009.  Revenues per test are a function of both the nature of the test
and the payer (Medicare, Medicaid, third party insurer, institutional client
etc.).





Our
policy is to record as revenue the amounts that we expect to collect based on
published or contracted amounts and/or prior experience with the
payer.   We have established a reserve for uncollectible amounts
based on estimates of what we will collect from a) third-party payers with whom
we do not have a contractual arrangement or sufficient experience to accurately
estimate the amount of reimbursement we will receive, b) co-payments directly
from patients, and c) those procedures that are not covered by insurance or
other third party payers.   The Company’s allowance for doubtful
accounts increased 32.3%, or approximately $115,695 to $474,337 at March 31,
2009, as compared to $358,642 at December 31, 2008.  The allowance for
doubtful accounts was approximately 10.7% and 11.0% of accounts receivable on
March 31, 2009 and December 31, 2008, respectively.





Cost of
Revenue





Cost of
revenue includes payroll and payroll related costs for performing tests,
depreciation of laboratory equipment, rent for laboratory facilities, laboratory
reagents, probes and supplies, and delivery and courier costs relating to the
transportation of specimens to be tested.





Cost of
revenue increased 66.3%, or $1.2 million, to $3.1 million for the three months
ended March 31, 2009 as compared to $1.9 million for the three months ended
March 31, 2008.  The increase was primarily attributable to increases
in all areas of costs of revenue as the Company scaled its operations in order
to meet increasing demand.  Cost of revenue as a percentage of revenue
was 44.7% for the three months ended March 31, 2009 as compared to 44.6% for the
three months ended March 31, 2008.





Accordingly,
this resulted in a gross margin of 55.3% for the three months ended March 31,
2009 as compared to 55.4% for the three months ended March 31,
2008.





General and Administrative
Expenses





General
and administrative expenses increased 46.2%, or $1.2 million, to $3.7 million
for the three months ended March 31, 2009 as compared to $2.5 million for the
three months ended March 31, 2008.  The increase in general and
administrative expenses is primarily a result of adding sales and marketing
personnel as well as corporate personnel to generate and support revenue
growth.  We anticipate general and administrative expenses will
continue to grow as a result of our expected revenue growth.  However,
we expect these expenses to decline as a percentage of revenue as our
infrastructure costs stabilize.





General
and administrative expenses as a percentage of revenue decreased to 53.2% for
the three months ended March 31, 2009 as compared to 60.4% for the three months
ended March 31, 2008.  These decreases as compared to the same periods
last year were primarily a result of greater economies of scale in our business
from spreading our wage expense over a greater revenue base.


15





Bad debt
expense increased 19.3%, or $82,000, to $508,000 for the three months ended
March 31, 2009 as compared to $426,000 for the three months ended March 31,
2008. This increase was a result of the significant increases in
revenue.  Bad debt expense as a percentage of revenue was 7.3% for the
three months ended March 31, 2009 as compared to 10.2% for the three months
ended March 31, 2008.





The
decrease in bad debt expense as a percentage of revenue for the three months
ended March 31, 2009 as compared to the three months ended March 31, 2008 is the
result of changes we have made in our billing practices as well as the
implementation of a more effective billing system.  These changes were
made at the end of March 2008 and corrected the billing issues we experienced
towards the end of 2007.  Moving forward, we expect that bad debt
expense as a percentage of revenue will be between 5%-7% of
revenue.





Interest Expense,
net





Interest
expense net, which primarily represents interest on borrowing arrangements,
increased 108.4%, or $60,000 to $115,000 for the three months ended March 31,
2009 as compared to $55,000 for the three months ended March 31,
2008.  Interest expense is primarily related to our credit facility
with CapitalSource Finance, LLC (“CapitalSource”), and increased over the same
period in the prior year primarily as a result of the higher balance at March
31, 2009 as compared to March 1, 2008.





Net Income
(Loss)





As a
result of the foregoing, we reported a net income of approximately $33,000 or
$0.00 per share for the three months ended March 31, 2009 as compared to a net
loss of approximately ($265,000) or ($0.01) per share for the three months ended
March 31, 2008, an improvement of $298,000.





Liquidity and Capital
Resources





During
the three months ended March 31, 2009, our operating activities used
approximately $332,000 of cash compared with $195,000 of cash provided in the
three months ended March 31, 2008.  In January, Medicare appended its
policies with respect to its reimbursement procedures for a wide variety of
laboratory tests including certain FISH, flow cytometry and immunohistochemistry
tests in an effort to reduce costly payment errors and ensure they are paying
for the appropriate services. These changes impacted the lab industry nationally
and resulted in an inordinate amount of denials within the industry. Most of
these changes have now been suspended while talks between the Centers for
Medicare and Medicaid Services (CMS) and industry representatives are ongoing to
correct the problems. Some of the test codes we use were caught up in these
changes, which resulted in approximately $500,000 of our first quarter 2009
Medicare claims being denied. We have since modified our billing procedures and
appealed these denials. While we expect that we will be paid on substantially
all of these claims over time, as a result of the initial denials, our accounts
receivable at March 31, 2009 is approximately $500,000 higher than it otherwise
would have been. This, in turn, lowered our cash flow from operations in the
first quarter of 2009 by approximately $500,000. We view this as a timing issue,
and we expect this trend to reverse itself in the second and third quarters of
2009 as our appeals are adjudicated.    This accounted for
the decline in cash from operations for the three months ended March 31, 2009
compared to March 31, 2008.  Our cash used in investing activities for
acquisitions of property and equipment was approximately $6,000 and $25,000 for
the three months ended March 31, 2009 and 2008, respectively.  Net
cash flow provided by financing activities was approximately $726,000 for the
three months ended March 31, 2009 which was primarily derived from the sale for
$500,000 of our common stock to the Douglas M. VanOort Living Trust, in
connection with Mr. VanOort’s hiring as our Executive Chairman and interim Chief
Executive Officer, and amounts borrowed from our revolving credit facility,
offset by payments made on capital lease obligations.  For the three
months ended March 31, 2008, our net cash flow used for financing activities was
approximately $50,000 which was primarily from payments made on capital lease
obligations.  At March 31, 2009 and December 31, 2008, we had cash and
cash equivalents of approximately $857,000 and $468,000,
respectively.





Our
consolidated financial statements are prepared using accounting principles
generally accepted in the United States of America applicable to a going
concern, which contemplate the realization of assets and liquidation of
liabilities in the normal course of business.   At March 31, 2009
and December 31, 2008, we had stockholders’ equity of approximately $2,293,000
and $1,501,000, respectively.


16





On
November 5, 2008, we entered into a common stock purchase agreement (the
“Purchase Agreement”) with Fusion Capital Fund II, LLC an Illinois limited
liability company (“Fusion”).  The Purchase Agreement, which has a term of
30 months, provides for the future funding of up to $8.0 million from sales of
our common stock to Fusion on a when and if needed basis as determined by us in
our sole discretion, depending on, among other things, the market price of our
common stock.  As of March 31, 2009, we had not drawn on any amounts
under the Fusion Purchase Agreement.





On
February 1, 2008, we entered into a revolving credit facility with
CapitalSource, which allows us to borrow up to $3,000,000 based on a formula
which is tied to our eligible accounts receivable that are aged less than 150
days.  As of March 31, 2009, we had approximately $857,000 in cash on
hand and $1,054,000 of availability under our credit facility.  As
such, we believe we have adequate resources to meet our operating commitments
for the next twelve months and accordingly our consolidated financial statements
do not include any adjustments relating to the recoverability and classification
of recorded asset amounts or the amounts and classification of liabilities that
might be necessary should we be unable to continue as a going
concern.





Capital
Expenditures





We
currently forecast capital expenditures in order to execute on our business
plan. The amount and timing of such capital expenditures will be determined by
the volume of business, but we currently anticipate that we will need to
purchase approximately $1.5 million to $2.0 million of additional capital
equipment during the next twelve months.  We plan to fund these
expenditures through capital lease financing arrangements and through our master
lease agreement with Leasing Technology International., Inc.
(“LTI”).   If we are unable to obtain such funding, we will need
to pay cash for these items or we will be required to curtail our equipment
purchases, which may have an impact on our ability to continue to grow our
revenues.





Subsequent
Events





Second Amendment to
RevolvingCredit and Security
Agreement





On April
14, 2009, the Parent Company, NeoGenomics Laboratories, Inc. (the wholly owned
subsidiary of the Parent Company) (“Borrower”) and CapitalSource (as agent for
CapitalSource Bank) entered into a Second Amendment to Revolving Credit and
Security Agreement (the “Second Amendment”).  The
Second Amendment, among other things, amends that certain Revolving Credit
and Security Agreement dated February 1, 2008 as amended by that certain First
Amendment to Revolving Credit and Security Agreement dated November 3, 2008 (as
amended, the “Loan Agreement”) to (i) provide that through December 31, 2009,
the Borrower must maintain Minimum Liquidity (as defined in the Loan Agreement)
of not less than $500,000, (ii) amend the definitions of “Fixed Charge Coverage
Ratio” and “Fixed Charges”, (iii) amend the definition of “Permitted
Indebtedness” to increase the amount of permitted capitalized lease obligations
and indebtedness incurred to purchase goods secured by certain purchase money
liens and (iv) amend and update certain representations, warranties and
schedules.  In addition, pursuant to the Second Amendment,
CapitalSource waived the following events of default under the Loan
Agreement:  (i) the failure of the Borrower to comply with the fixed
charge coverage ratio covenant for the test period ending December 31, 2008,
(ii) the failure of the Borrower to notify CapitalSource of the change of
Borrower’s name to NeoGenomics Laboratories, Inc. and to obtain CapitalSource’s
prior consent to the related amendment to Borrower’s Articles of Incorporation,
(iii) the failure of the Parent Company and the Borrower to obtain
CapitalSource’s prior written consent to the amendment of the Parent Company’s
bylaws to allow for the size of the Parent Company’s Board of Directors to be
increased to eight members and (iv) the failure of the Borrower to notify
CapitalSource of the filing of an immaterial complaint by the Borrower against a
former employee of the Borrower.   The Company paid CapitalSource
Bank a $25,000 amendment fee in connection with the
Second Amendment.





Equipment Lease
Line





On April
22, 2009, the Company entered into Lease Schedule No. 2 of the Lease Agreement
with LTI for $508,651 which will be funded to seven vendors for lab and computer
equipment.


17


ITEM
3 – Quantitative and Qualitative Disclosures About Market Risk





We are a
smaller reporting company as defined by Rule 12b-2 of the Securities Exchange
Act of 1934 and are not required to provide information under this
item.





ITEM
4 – Controls and Procedures





Not
applicable.





ITEM
4T – Controls and Procedures





Disclosure Controls and
Procedures





We
maintain disclosure controls and procedures designed to ensure that information
required to be disclosed in reports filed under the Securities Exchange Act of
1934, as amended, is recorded, processed, summarized, and reported within the
time periods specified in the SEC’s rules and forms, and that such information
is accumulated and communicated to our management, including our principal
executive officer, principal financial officer, and principal accounting
officer, as appropriate, to allow timely decisions regarding required
disclosure.  In designing and evaluating our disclosure controls and
procedures, management recognized that any controls and procedures, no matter
how well designed and operated, can provide only reasonable assurance of
achieving the desired control objectives.





As
required by SEC Rule 15d-15(e), our management carried out an evaluation, under
the supervision and with the participation of our principal executive officer,
principal financial officer, and principal accounting officer, of the
effectiveness of our disclosure controls and procedures as of the end of the
period covered by this report.  Based on that evaluation, our
principal executive officer, principal financial officer, and principal
accounting officer concluded that our disclosure controls and procedures were
not effective at a reasonable assurance level as of the end of the period
covered by this report due to the material weakness that was originally
described more fully in our Annual Report on Form 10-K for the fiscal year ended
December 31, 2008 relating to our failure to maintain proper spreadsheet
controls.





Changes in Internal Control
Over Financial Reporting





There
were no changes in our internal control over financial reporting that occurred
during the three months ended March 31, 2009 that have materially affected, or
are reasonably likely to materially affect, our internal control over financial
reporting.


18





PART
II – OTHER INFORMATION





ITEM
1 – LEGAL PROCEEDINGS





A civil
lawsuit is currently pending between the Company and its liability insurer, FCCI
Commercial Insurance Company ("FCCI") in the 20th Judicial Circuit Court in and
for Lee County, Florida (Case No. 07-CA-017150).  FCCI filed the suit
on December 12, 2007 in response to the Company's demands for insurance benefits
with respect to an underlying action involving US Labs (a settlement agreement
has since been reached in the underlying action, and thus that case has now
concluded).  Specifically, the Company maintains that the underlying
plaintiff's allegations triggered the subject insurance policy's personal and
advertising injury coverage.  In the lawsuit, FCCI seeks a court
judgment that it owes no obligation to the Company regarding the underlying
action (FCCI does not seek monetary damages).  The Company has
counterclaimed against FCCI for breach of the subject insurance policy, and
seeks recovery of defense costs incurred in the underlying matter, amounts paid
in settlement thereof, and fees and expenses incurred in litigating with
FCCI.  The court recently denied a motion by FCCI for judgment on the
pleadings, and the parties are proceeding with discovery.  We intend
to aggressively pursue all remedies in this matter and believe that the courts
will ultimately find that FCCI had a duty to provide coverage in the US Labs
litigation.





ITEM
1A – RISK FACTORS





We are a
smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are
not required to provide information under this item.





ITEM
2 - UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS





The
Company previously disclosed, pursuant to a Current Report on Form 8-K filed
with the Securities and Exchange Commission on March 20, 2009, the Company’s
unregistered sale, on March 16, 2009, of 625,000 shares of the Company’s common
stock to the Douglas M. VanOort Living Trust and the issuance, on March 16,
2009, of a warrant to Douglas M. VanOort to acquire up to 625,000 shares of the
Company’s common stock.





On
February 2, 2009, the Company issued 300,000 shares of its common stock to
the seller in connection with two agreements to purchase the assets (primarily
laboratory equipment) of two laboratories, including settlement of certain
amounts due to the owner of such laboratories. This transaction was effected
under Section 4(2) of the Securities Act.





ITEM
3 – DEFAULTS UPON SENIOR SECURITIES





Not
Applicable





ITEM
4 – SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS





On March
16, 2009, shareholders holding 19,056,745 shares of the Company’s common stock
approved, by written consent, the Company’s Amended and Restated Equity
Incentive Plan.





ITEM
5 – OTHER INFORMATION





Lease
Schedule





The
Company’s disclosure in this Quarterly Report on Form 10-Q under Note E to its
unaudited consolidated financial statements with respect to Lease Schedule No. 1
and Lease Schedule No. 2 to the Company’s $1,000,000 master lease agreement with
Leasing Technology International, Inc. is hereby incorporated by reference into
this item.





19




Earnings
Release





On April 23, 2009, the Company issued a
press release relating to its results for the first quarter ended March 31,
2009.  A copy of the press release is attached to this Quarterly
Report on Form 10-Q as Exhibit 99.1.  Such press release shall not be
deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise
subject to the liabilities of that section, and it shall not be deemed
incorporated by reference in any filing under the Securities Act or under the
Exchange Act, whether made before or after the date hereof, except as expressly
set forth by specific reference in such filing.





20




ITEM
6 – EXHIBITS





EXHIBIT
                            NO.
                          
                          DESCRIPTION3.1
                          
                          Amended
      and Restated Bylaws31.1
                          
                          Certification
      by Principal Executive Officer pursuant to Rule 13a-14(a)/ 15d-14(a), as
      adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
      200231.2
                          
                          Certification
      by Principal Financial Officer pursuant to Rule 13a-14(a)/ 15d-14(a), as
      adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
      200231.3
                          
                          Certification
      by Principal Accounting Officer pursuant to Rule 13a-14(a)/ 15d-14(a), as
      adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
      200232.1
                          
                          Certification
      by Principal Executive Office, Principal Financial Officer and Principal
      Accounting Officer pursuant to 18 U.S.C. Section 1350, as adopted
      pursuant to Section 906 of the Sarbanes-Oxley Act of
    200299.1
                          
                          Press
      release issued by NeoGenomics, Inc. on April 23,
  2009




21




SIGNATURES




Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.





Date:   May 13,
      2009
                NEOGENOMICS,
      INC.By:
                /s/ Robert P. GaspariniName:
                Robert
      P. GaspariniTitle:
                President
      and Chief Science OfficerBy:
                /s/ Steven C. JonesName:
                Steven
      C. JonesTitle:
                Acting
      Principal Financial OfficerBy:
                /s/ Jerome J. DvonchName:
                Jerome
      J. DvonchTitle:
                Director
      of Finance and PrincipalAccounting
      Officer