Company Overview - Precipio, Inc. is a healthcare biotechnology company focused on cancer diagnostics, aiming to address cancer misdiagnoses through innovative diagnostic products and services [3] - The company's mission includes delivering higher accuracy, improving laboratory workflow, and enhancing patient outcomes, which ultimately reduces healthcare expenses [3] Upcoming Corporate Update - Precipio will host its Q3-2025 corporate update call on November 17, 2025, at 5:00 PM ET, providing updates on its current core businesses [1] - Interested listeners can submit questions in advance via email, and a replay of the call will be available approximately 24 hours after the event [2] Communication Channels - Precipio encourages stakeholders to visit its website and follow its social media channels for updates, disclosures, and other material information [4]

Core Viewpoint - Precipio, Inc. has terminated its At-The-Market (ATM) instrument with Alliance Global Partners, indicating a shift towards more responsible capital management and a stronger financial position [1][2]. Company Overview - Precipio is a healthcare biotechnology company focused on cancer diagnostics, aiming to address cancer misdiagnoses through innovative diagnostic products and services that enhance accuracy and improve patient outcomes [3]. Financial Position - The company has eliminated negative cash flow from operations and increased its cash balance, leading to the decision to terminate the ATM instrument as it no longer needs this tool for capital raises [2].

Financial Data and Key Metrics Changes - Q2 2025 marked a strong quarter with continued revenue growth, improved margins, and progress towards breakeven, with overall company gross margins improving from 39% to 43% [4][5] - Pathology services business is growing at an annualized growth rate of about 70%, while products revenue grew by 23% from the previous quarter, representing almost a 100% annualized growth rate [4][6] Business Line Data and Key Metrics Changes - The pathology services division continues to deliver consistent revenues, with a record of exceeding $2,000,000 in revenue in a single month in July [7][9] - The products division faced operational challenges in the past year but is now seeing revenue growth as issues are resolved and new customers are onboarded [10][11] Market Data and Key Metrics Changes - A strong pipeline of new customers is expected to contribute to continued growth in Q3, with efforts to scale market penetration through distributors [5][14] Company Strategy and Development Direction - The company is focused on strengthening its revenue base and mitigating future disruptions through strategic investments and customer support initiatives [5][12] - A commitment to customer service continuity has led to the implementation of a backup testing program for customers, ensuring uninterrupted patient testing [12][13] Management's Comments on Operating Environment and Future Outlook - Management remains confident in the strength of the business and believes it is well-positioned to reach breakeven without additional capital, targeting this milestone in 2025 [6][21] - The company has begun to engage with investors and tell its story, which has contributed to increased interest and demand for its shares [22][23] Other Important Information - The company structured a recent warrant exercise to balance capital inflow with dilution control, minimizing the impact on share price [20] - The stock price has tripled in the last quarter due to solid revenue growth, improved margins, and increased investor interest [21][22] Q&A Session Summary Question: What drove the stock price increase in the last quarter? - The increase is attributed to company performance, with three consecutive quarters of solid revenue growth and reduced cash needs, making the company attractive relative to its valuation [21] - The company began to engage with investors and share its story, transitioning from being relatively unknown to gaining more attention in the market [22][23]

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].

PART I. Financial Information [Condensed Consolidated Financial Statements](index=3&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements) The company's unaudited statements show significant revenue growth, a return to net income driven by non-recurring items, and a persistent working capital deficit [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets and liabilities increased, resulting in a working capital deficit of $0.3 million and total stockholders' equity of $12.3 million as of June 30, 2025 Key Balance Sheet Items (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash | $1,130 | $1,389 | | Accounts receivable, net | $1,488 | $799 | | Total current assets | $4,053 | $3,451 | | Total assets | $18,816 | $16,996 | | Total current liabilities | $4,353 | $4,271 | | Total liabilities | $6,528 | $4,902 | | Total stockholders' equity | $12,288 | $12,094 | - The company reported a **working capital deficit of $0.3 million** as of June 30, 2025, and an **accumulated deficit of $103.3 million**[25](index=25&type=chunk) [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) The company achieved net income in Q2 2025, a significant turnaround from the prior year's loss, primarily due to a 27% sales increase and substantial other income Q2 & H1 2025 vs 2024 Performance (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Net sales | $5,654 | $4,441 | $10,583 | $7,873 | | Gross profit | $2,429 | $1,716 | $4,569 | $2,636 | | Operating loss | $(824) | $(1,209) | $(1,683) | $(3,283) | | Net income (loss) | $74 | $(1,220) | $(810) | $(3,299) | | Basic EPS | $0.05 | $(0.83) | $(0.54) | $(2.28) | - The company's Q2 2025 profitability was significantly impacted by non-operating items, including a **$789 thousand Employee Retention Credit** and a **$143 thousand gain on settlement of a liability**[11](index=11&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the first half of 2025, net cash from operations was positive, though the overall cash position decreased by $0.26 million to $1.13 million Six Months Ended June 30 Cash Flow Summary (in thousands) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $309 | $(167) | | Net cash used in investing activities | $(197) | $(70) | | Net cash (used in) provided by financing activities | $(371) | $14 | | Net change in cash | $(259) | $(223) | | Cash at end of period | $1,130 | $1,279 | [Notes to Unaudited Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) The notes highlight a "going concern" uncertainty, detail revenue sources, and disclose significant events including an ERC receipt and a post-quarter warrant exercise - The company has **substantial doubt about its ability to continue as a going concern** for the next twelve months, citing historical operating losses and a working capital deficit[25](index=25&type=chunk)[26](index=26&type=chunk) - In Q2 2025, the company received and recognized as other income approximately **$0.8 million from an Employee Retention Credit (ERC)** claim originally filed in November 2022[120](index=120&type=chunk) - Subsequent to the quarter end, in July 2025, the company received approximately **$1.3 million in net cash proceeds** from the exercise of 100,000 warrants[123](index=123&type=chunk) Service Revenue by Payer (Six Months Ended June 30, in thousands) | Payer | 2025 | 2024 | | :--- | :--- | :--- | | Medicare | $4,189 | $2,616 | | Third party payers | $5,009 | $4,053 | | Medicaid | $13 | $25 | | Self-pay | $10 | $32 | | Contract diagnostics and other | $41 | $4 | | **Total Service Revenue, net** | **$9,262** | **$6,730** | [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=39&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes strong Q2 revenue growth to increased case volume, which improved gross margins, while noting that net income was driven by non-recurring items [Results of Operations](index=45&type=section&id=Results%20of%20Operations) Q2 2025 net sales rose 27% year-over-year, driven by a 19% increase in cases processed, which expanded gross margin from 39% to 43% Q2 2025 vs Q2 2024 Performance Summary (in thousands) | Metric | Q2 2025 | Q2 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Net Sales | $5,654 | $4,441 | $1,213 | 27% | | Gross Profit | $2,426 | $1,716 | $710 | 41% | - The increase in Q2 2025 net sales was primarily driven by processing **3,692 cases compared to 3,099 cases** in Q2 2024, a 19% increase in volume[150](index=150&type=chunk) - **Gross margin improved to 43% from 39%** year-over-year, which management attributes to economies of scale and leveraging fixed expenses in its CLIA certified laboratory[152](index=152&type=chunk) [Liquidity and Capital Resources](index=49&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity remains a key focus with a working capital deficit, though a post-quarter warrant exercise provided a crucial $1.3 million cash infusion Working Capital Position (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Current assets | $4,053 | $3,451 | | Current liabilities | $4,353 | $4,271 | | Working capital | $(300) | $(820) | - A warrant exercise in July 2025 provided **net cash proceeds of approximately $1.3 million**, which is a critical event for the company's liquidity subsequent to the reporting period[163](index=163&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=53&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, the company is not required to provide information for this item - Precipio is exempt from providing quantitative and qualitative disclosures about market risk because it **qualifies as a smaller reporting company**[174](index=174&type=chunk) [Controls and Procedures](index=53&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal controls during the quarter - Management concluded that the company's **disclosure controls and procedures were effective** as of June 30, 2025[175](index=175&type=chunk) - **No material changes** were made to the company's internal control over financial reporting during the second quarter of 2025[176](index=176&type=chunk) PART II. Other Information [Legal Proceedings](index=54&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in ordinary course legal matters that are not expected to have a material adverse effect on the business - The company is currently defending against a legal proceeding from a former employee in San Antonio, Texas, alleging unfair dismissal, which management **does not expect to have a material impact** on its financial results[182](index=182&type=chunk) [Risk Factors](index=54&type=section&id=Item%201A.%20Risk%20Factors) A new risk factor has been introduced concerning potential adverse effects from the recently enacted "One Big Beautiful Bill Act" (OBBBA) tax law changes - A new risk factor has been introduced related to changes in tax law, specifically highlighting the **"One Big Beautiful Bill Act" (OBBBA)** signed into law on July 4, 2025, which could adversely affect the company's business and financial condition[186](index=186&type=chunk) [Other Part II Items](index=56&type=section&id=Other%20Part%20II%20Items) This section confirms no unregistered equity sales, no defaults on senior securities, and no adoption or termination of Rule 10b5-1 trading plans by insiders - The company did not have any **sales of unregistered securities** during the three months ended June 30, 2025[187](index=187&type=chunk) - 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[190](index=190&type=chunk)

Company Overview - Precipio, Inc. is a healthcare biotechnology company focused on cancer diagnostics, aiming to address cancer misdiagnoses through innovative diagnostic products and services [3] - The company develops technologies in its laboratory to improve diagnostic outcomes and commercializes these as proprietary products for the global laboratory community [3] Upcoming Events - Precipio will host its Q2-2025 corporate update call on August 14, 2025, at 5:00 PM ET, which will include updates on the company's core businesses [1] - Listeners can submit questions in advance via email, and a replay of the call will be available approximately 24 hours after the event [2] Communication Channels - The company encourages stakeholders to visit its website and follow its social media channels for updates, disclosures, and other material information [4]

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)