Precipio (PRPO) Q2 2025 Earnings Call August 14, 2025 05:00 PM ET Speaker0Welcome to the Presidio Q2 twenty twenty five Shareholder Update Conference Call. All participants will be in a listen only mode. Please note that this conference is being recorded. Statements made during this call contain forward looking statements about our business. You should not place undue reliance on forward looking statements as these statements are based upon current expectations, forecasts, and assumptions and are subject to ...

Core Viewpoint - Precipio, Inc. has reported continued revenue growth across its divisions, improved gross margins, and is on track to achieve cash flow positivity and a debt-free balance sheet by the end of 2025 [2][3]. Financial Performance - Q2-2025 revenues reached $5.7 million, a 27% increase year-over-year from $4.4 million in Q2-2024, and a 15% increase quarter-over-quarter from Q1-2025 [7]. - Pathology Services revenue increased by approximately $0.75 million, or 17%, from $4.25 million in Q1-2025 to $5.0 million in Q2-2025 [6]. - Adjusted EBITDA for Q2-2025 was ($78,000), a significant improvement of 87% compared to ($609,000) in Q2-2024 [7]. Products Division - The Products Division experienced a strong rebound in revenues, driven by the return of two customers to full operational volume and the onboarding of a new customer [4]. - Organic revenue growth was noted from existing customers expanding their test offerings with new HemeScreen panels [5]. Pathology Services Division - The Pathology Services Division achieved revenue growth through the acquisition of new customers and increased volume from existing customers, with no substantial capital expenditures anticipated to support this growth [6]. - Gross margins for the Pathology Services Division increased year-over-year from 37% to 43% due to increased case volume and a more profitable case mix [8]. Gross Margins and Operating Expenses - Overall gross margins improved year-over-year from 39% to 43% [9]. - Product division gross margins were 44% in Q2-2025, down from 50% in Q2-2024, attributed to increased rent and depreciation expenses due to expansion and equipment purchases [8]. Cash Flow and Debt Management - Cash used by operations decreased from $516,000 in Q2-2024 to $148,000 in Q2-2025, marking a 71% improvement year-over-year [7]. - The company is expected to complete the repayment of the Change Healthcare loan by the end of the year, contributing to a strong balance sheet [2]. Future Outlook - Management believes the company is on track to end the year as a cash flow positive business with a strong balance sheet [2]. - A quarterly shareholder call is scheduled for August 14, 2025, to provide further details on performance and outlook [12].

WASHINGTON, D.C. 20549 Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2025 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: 001-36439 PRECIPIO, INC. (Exact name of registrant as specified in its charter) Delaware 91-1789357 (S ...

Conference Call to be held on August 14th, 2025 at 5:00 PM ESTNEW HAVEN, Conn., July 31, 2025 (GLOBE NEWSWIRE) -- Specialty cancer diagnostics company Precipio, Inc. (NASDAQ: PRPO), will be hosting its Q2-2025 corporate update call on August 14th, 2025 at 5:00 PM ET. The call will include updates on all of the company’s current core businesses. The conference call may be accessed by calling 800.717.1738. All callers should ask for the Precipio conference call. Listeners interested in submitting questions in ...

Core Insights - Precipio, Inc. has amended its warrant exercise agreement with its largest warrant holder, changing the structure from cash exercise to a combination of cash and cashless exercise, resulting in a cash inflow of approximately $1.2 million instead of $3.8 million [1][6] Company Overview - Precipio is a healthcare biotechnology company focused on cancer diagnostics, aiming to reduce cancer misdiagnoses through innovative diagnostic products and services that enhance accuracy and improve patient outcomes [3] Financial Impact - The amendment to the warrant exercise will reduce the number of shares added to the company's outstanding shares from approximately 300,000 to between 130,000 and 150,000, depending on the share price at the time of exercise [6]

Financial Performance - Revenues for Q1 2025 were $4.9 million, up 43% year over year, but down 9.5% from Q4 2024, reflecting seasonal pressures in the healthcare industry [5][6][30] - Adjusted EBITDA improved by 92%, with a loss of $108,000 compared to a loss of $1.4 million in Q1 of the previous year [5][6] - Cash used in operations improved by 93%, with a cash reduction of $44,000 in Q1 2025, down from $667,000 in Q1 2024 [6][30] - Net cash used for the quarter was $372,000, a 49% improvement year over year [6] Business Line Performance - The pathology services division saw test volume increase by 46% and revenue grow by 53% year over year, with 11 new physicians utilizing services [8][18] - Pathology gross margin increased from 24% to 42% year over year due to increased case volume and scale efficiencies [9][12] - The product division's gross margin improved from 37% to 51% year over year, driven by operational efficiencies [21][24] Market Data - The company expects to see a rebound in Q2 2025 and anticipates returning to positive cash flow in either Q2 or Q3 [6][30] - The recent overturning of the FDA ruling on laboratory developed tests has led to renewed interest from prospective customers, which is expected to drive growth in product revenues [19][21] Company Strategy and Industry Competition - The company is focused on operational efficiency, improved cost management, and strategic investments in equipment and talent to drive growth [12][15] - The pathology services division is critical for the development of the product division, enabling continuous testing and product development at low costs [18][24] Management Comments on Operating Environment and Future Outlook - Management noted that seasonal pressures are typical in the healthcare industry, particularly in diagnostics, and they expect a rebound in Q2 [6][30] - The company anticipates revenue growth to continue in Q2 and accelerate in the second half of the year, particularly on the product side [30] Other Important Information - The company received $1.1 million through Change Healthcare's temporary funding assistance program due to a cyber attack that affected billing processes [27][28] - The company also received over $400,000 in COVID relief funds from the treasury, contributing to nonrecurring income [29][30] Q&A Session Summary - No specific questions or answers were provided in the content regarding the Q&A session.

Financial Performance - Revenues for Q1 2025 were $4.9 million, up 43% year over year, but down 9.5% from Q4 2024, reflecting seasonal pressures typical in the healthcare industry [4][5] - Adjusted EBITDA improved by 92%, with a loss of $108,000 compared to a loss of $1.4 million in Q1 of the previous year [4] - Cash used in operations improved by 93%, with a cash reduction of $44,000 in Q1 2025, down from $667,000 in Q1 2024 [5] - Net cash used for the quarter was $372,000, a 49% improvement year over year [5] Business Line Performance - The pathology services division saw test volume increase by 46% and revenue grow by 53% year over year, with 11 new physicians utilizing services [7] - Pathology gross margin increased from 24% to 42% year over year due to increased case volume and scale efficiencies [9] - The product division's gross margin improved from 37% to 51% year over year, driven by operational efficiencies and cost management [22] Market Developments - The company received MoDx approval for next-generation sequencing (NGS) testing, which is expected to increase revenue by approximately $250,000 per quarter from existing case volumes [16][18] - The FDA ruling on laboratory developed tests (LDPs) was overturned in March 2025, alleviating uncertainty and allowing prospective customers to proceed with product adoption [21][22] Strategic Direction - The company aims to return to positive cash flow in Q2 or Q3 2025, driven by higher pathology volumes and increased product sales [32] - Continued investment in state-of-the-art equipment and staff training is expected to enhance operational efficiency and improve margins [13][14] Management Commentary - Management noted that seasonal pressures are typical in the healthcare industry, particularly in diagnostics, and expressed confidence in a rebound in Q2 [5][6] - The company anticipates revenue growth to continue in Q2 and accelerate in the second half of the year, particularly on the product side [32] Other Important Information - The company received approximately $1.1 million through Change Healthcare's temporary funding assistance program due to a cyber attack that affected billing processes [29][30] - The company also received over $400,000 in COVID relief funds from the treasury, contributing to nonrecurring income [31] Q&A Summary - No specific questions and answers were provided in the content, thus this section is not applicable.

[Form 8-K Current Report](index=1&type=section&id=Form%208-K%20Current%20Report) This Form 8-K details Precipio, Inc.'s recent financial results announcement, accompanying exhibits, and official signature [Item 2.02 Results of Operations and Financial Condition](index=2&type=section&id=Item%202.02%20Results%20of%20Operations%20and%20Financial%20Condition) Precipio, Inc. announced its financial results for the quarter ended March 31, 2025, via a press release furnished with this report - The company announced its financial results for the quarter ending **March 31, 2025**, on **May 14, 2025**[5](index=5&type=chunk) - The press release (Exhibit 99.1) is furnished but not considered "filed" under Section 18 of the Exchange Act, limiting legal liabilities[6](index=6&type=chunk) [Item 9.01 Financial Statements and Exhibits](index=2&type=section&id=Item%209.01%20Financial%20Statements%20and%20Exhibits) This section lists the exhibits accompanying the Form 8-K, including the financial results press release and interactive data file - The report includes **Exhibit 99.1**, the Press Release issued by Precipio Inc. on May 14, 2025, and **Exhibit 104**, the Cover Page Interactive Data File[7](index=7&type=chunk) [Signature](index=3&type=section&id=Signature) The report was signed and authorized by Ilan Danieli, Chief Executive Officer of Precipio, Inc., on May 15, 2025 - The report was signed by **Ilan Danieli**, Chief Executive Officer of Precipio, Inc.[10](index=10&type=chunk) - The signature date is **May 15, 2025**[10](index=10&type=chunk)

Core Insights - Precipio, Inc. reported strong financial performance in Q1-2025, with a 43% year-over-year revenue increase, reaching $4.9 million [9][10] - The company anticipates continued revenue growth and a return to positive operating cash flow by Q2 or Q3 of 2025, driven by momentum in its Product business and expanded reimbursement opportunities in Pathology Services [2][8] Financial Performance - Q1-2025 revenues increased by 43% year-over-year, but decreased by 9.5% from Q4-2024 due to seasonal factors and onboarding delays [9] - Adjusted EBITDA improved significantly to ($108K) from ($1,409K) year-over-year, marking a 92% improvement [9] - Cash used in operations decreased to ($44K) in Q1-2025 from ($667K) in Q1-2024, an improvement of 93% [9] Product Division Highlights - The Products Division onboarded one new customer and launched two new panels in Q1-2025, with expectations for increased orders in Q2 [5] - Gross margins for the Products Division increased from 37% to 51% year-over-year [10] Pathology Services Division Highlights - Pathology Services revenues grew 54% year-over-year, with test volume increasing by 46% [7] - The division received MolDx approval for NGS testing, allowing Medicare billing, which is expected to positively impact future revenues [7] Operational Efficiency - Operating expenses as a percentage of net revenue decreased from 87% to 61% year-over-year, with management maintaining flat operating expenses at approximately $3 million per quarter [9] - Overall gross margins improved from 27% to 43% year-over-year, with expectations for continued growth as the revenue mix shifts towards more product sales [10]

[Financial Information](index=4&type=section&id=PART%20I%2E%20Financial%20Information) This section presents the company's condensed consolidated financial statements, management's discussion and analysis, market risk disclosures, and internal controls assessment [Condensed Consolidated Financial Statements](index=4&type=section&id=Item%201%2E%20Condensed%20Consolidated%20Financial%20Statements) Unaudited Q1 2025 financials show reduced net loss, but liquidity issues persist, raising going concern doubts Condensed Consolidated Balance Sheets (in thousands) | | (unaudited) March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :--- | :--- | :--- | | **ASSETS** | | | | Cash | $1,017 | $1,389 | | Total current assets | $3,278 | $3,451 | | Total assets | $17,785 | $16,996 | | **LIABILITIES AND STOCKHOLDERS' EQUITY** | | | | Total current liabilities | $4,331 | $4,271 | | Total liabilities | $6,087 | $4,902 | | Total stockholders' equity | $11,698 | $12,094 | | Total liabilities and stockholders' equity | $17,785 | $16,996 | Condensed Consolidated Statements of Operations (in thousands, except per share data) | | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | | :--- | :--- | :--- | | Net sales | $4,929 | $3,432 | | Gross profit | $2,140 | $920 | | Operating loss | $(859) | $(2,074) | | Net loss | $(884) | $(2,079) | | Basic and diluted loss per common share | $(0.59) | $(1.46) | Condensed Consolidated Statements of Cash Flows (in thousands) | | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | | :--- | :--- | :--- | | Net cash used in operating activities | $(44) | $(667) | | Net cash used in investing activities | $(138) | — | | Net cash used in financing activities | $(190) | $(59) | | Net change in cash | $(372) | $(726) | | Cash at end of period | $1,017 | $776 | - The company is a healthcare biotechnology firm focused on developing diagnostic products and services to address cancer misdiagnoses[19](index=19&type=chunk) - The company has incurred substantial operating losses, has a working capital deficit of **$1.1 million**, and an accumulated deficit of **$103.3 million** as of March 31, 2025, raising **substantial doubt about its ability to continue as a going concern**[26](index=26&type=chunk)[27](index=27&type=chunk) - In April 2025, the company received an initial payment of approximately **$0.4 million** related to an Employee Retention Credit (ERC) claim, which will be recorded as other income in Q2 2025[117](index=117&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=37&type=section&id=Item%202%2E%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes Q1 2025 sales growth to increased diagnostic cases, improving gross margin, while addressing working capital and going concern risks Net Sales Comparison (in thousands) | | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | Change $ (in thousands) | Change % | | :--- | :--- | :--- | :--- | :--- | | Service revenue, net | $4,275 | $2,775 | $1,500 | 54% | | Product revenue | $654 | $657 | $(3) | -% | | **Net Sales** | **$4,929** | **$3,432** | **$1,497** | **44%** | - The increase in service revenue was driven by processing **3,021 cases** in Q1 2025, a **47% increase** from the **2,062 cases** processed in Q1 2024[142](index=142&type=chunk) Gross Profit and Margin Comparison | (Dollars in Thousands) | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | | :--- | :--- | :--- | | Gross Profit | $2,140 | $920 | | Gross Margin % | 43% | 27% | - Operating expenses remained flat at **$3.0 million** for Q1 2025 compared to Q1 2024[145](index=145&type=chunk) Working Capital Position (in thousands) | | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | Change (in thousands) | | :--- | :--- | :--- | :--- | | Current assets | $3,278 | $3,451 | $(173) | | Current liabilities | $4,331 | $4,271 | $60 | | **Working capital** | **$(1,053)** | **$(820)** | **$(233)** | - Net cash used in operating activities significantly decreased to **$44 thousand** in Q1 2025 from **$667 thousand** in Q1 2024, primarily due to a smaller net loss and changes in working capital[149](index=149&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=47&type=section&id=Item%203%2E%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, the company is exempt from providing quantitative and qualitative market risk disclosures - As a smaller reporting company, Precipio is not required to provide the information under this item[158](index=158&type=chunk) [Controls and Procedures](index=47&type=section&id=Item%204%2E%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that disclosure controls were effective with no material changes to internal controls during Q1 2025 - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were **effective at a reasonable assurance level** as of March 31, 2025[161](index=161&type=chunk) - No changes in internal control over financial reporting occurred during the quarter ended March 31, 2025, that have materially affected, or are reasonably likely to materially affect, internal controls[162](index=162&type=chunk) [Other Information](index=50&type=section&id=PART%20II%2E%20Other%20Information) This section covers legal proceedings, risk factors, equity sales, defaults, mine safety disclosures, and a list of exhibits [Legal Proceedings](index=50&type=section&id=Item%201%2E%20Legal%20Proceedings) The company is involved in a legal proceeding with a former employee, which management disputes and does not expect to have a material financial impact - The company is involved in a legal proceeding brought by a former employee alleging unfair dismissal, which it is defending vigorously and **does not expect to have a material financial impact**[168](index=168&type=chunk) [Risk Factors](index=50&type=section&id=Item%201A%2E%20Risk%20Factors) No material changes to risk factors have occurred since the company's most recent Annual Report on Form 10-K - There have been no material changes from the risk factors disclosed in the company's most recent Annual Report on Form 10-K[171](index=171&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=52&type=section&id=Item%202%2E%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no sales of unregistered equity securities during the three months ended March 31, 2025 - During the three months ended March 31, 2025, the company did not have any sales of unregistered securities[173](index=173&type=chunk) [Defaults Upon Senior Securities](index=52&type=section&id=Item%203%2E%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities - None reported[174](index=174&type=chunk) [Mine Safety Disclosures](index=52&type=section&id=Item%204%2E%20Mine%20Safety%20Disclosures) This item is not applicable to the company's business operations - Not applicable[175](index=175&type=chunk) [Other Information](index=52&type=section&id=Item%205%2E%20Other%20Information) No directors or officers adopted or terminated Rule 10b5-1 or other trading plans during Q1 2025 - No directors or officers adopted or terminated a Rule 10b5-1 trading plan or a non-Rule 10b5-1 trading arrangement during the fiscal quarter[177](index=177&type=chunk) [Exhibits](index=53&type=section&id=Item%206%2E%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including corporate governance documents, SOX certifications, and Inline XBRL files - The report includes a list of filed exhibits, such as the Certificate of Incorporation, Bylaws, Sarbanes-Oxley certifications (31.1, 31.2, 32.1, 32.2), and Inline XBRL documents[180](index=180&type=chunk)