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 September 30, 2023 OR Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ☐ 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 91-17893 ...

Precipio, Inc. (NASDAQ:PRPO) Q2 2023 Earnings Conference Call August 17, 2023 5:00 PM ET Company Participants Ilan Danieli - CEO Conference Call Participants Operator Welcome to the Precipio Second Quarter 2023 Shareholder Update Conference Call. All participants will be in listen-only mode. [Operator Instructions] Please note that the 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 s ...

[PART I. Financial Information](index=3&type=section&id=PART%20I.%2E%20Financial%20Information) [Condensed Consolidated Financial Statements](index=3&type=section&id=Item%201%2E%20Condensed%20Consolidated%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for Precipio, Inc. as of June 30, 2023, and for the three and six-month periods then ended Condensed Consolidated Balance Sheet Summary (in thousands) | Account | June 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | **Total Current Assets** | $4,348 | $5,710 | | **Total Assets** | $19,472 | $21,504 | | **Total Current Liabilities** | $4,721 | $4,361 | | **Total Liabilities** | $5,381 | $5,137 | | **Total Stockholders' Equity** | $14,091 | $16,367 | | **Working Capital** | ($373) | $1,349 | Condensed Consolidated Statements of Operations Summary (in thousands) | Metric | Q2 2023 | Q2 2022 | H1 2023 | H1 2022 | | :--- | :--- | :--- | :--- | :--- | | **Net Sales** | $3,533 | $2,359 | $6,350 | $4,806 | | **Gross Profit** | $1,371 | $773 | $2,120 | $1,476 | | **Operating Loss** | ($2,292) | ($2,433) | ($5,318) | ($7,242) | | **Net Loss** | ($2,293) | ($2,138) | ($5,323) | ($6,722) | | **Basic and Diluted Loss Per Share** | ($0.09) | ($0.09) | ($0.22) | ($0.30) | Condensed Consolidated Statements of Cash Flows Summary (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :--- | :--- | :--- | | **Net cash used in operating activities** | ($2,777) | ($3,980) | | **Net cash used in investing activities** | ($54) | ($106) | | **Net cash provided by (used in) financing activities** | $1,959 | ($109) | | **Net change in cash** | ($872) | ($4,195) | | **Cash at end of period** | $2,573 | $7,473 | - The company's ability to continue as a going concern is in substantial doubt due to a history of operating losses, negative working capital of **$0.4 million**, and a net loss of **$5.3 million** for the first six months of 2023[25](index=25&type=chunk)[28](index=28&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=28&type=section&id=Item%202%2E%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial performance for the three and six months ended June 30, 2023, compared to the same periods in 2022 [Results of Operations for the Three Months Ended June 30, 2023 and 2022](index=30&type=section&id=Results%20of%20Operations%20for%20the%20Three%20Months%20Ended%20June%2030%2C%202023%20and%202022) Q2 Net Sales Comparison (in thousands) | Revenue Type | Q2 2023 | Q2 2022 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Service revenue, net | $2,656 | $2,139 | $517 | 24% | | Other | $877 | $220 | $657 | 299% | | **Total Net Sales** | **$3,533** | **$2,359** | **$1,174** | **50%** | - The **50% increase** in Q2 net sales was driven by a **60% increase** in cases processed (1,614 in Q2 2023 vs. 1,009 in Q2 2022) and a significant increase in 'Other revenue' primarily from HemeScreen product sales[149](index=149&type=chunk) Q2 Gross Profit Comparison (in thousands) | Metric | Q2 2023 | Q2 2022 | | :--- | :--- | :--- | | **Gross Profit** | $1,371 | $773 | | **Gross Margin** | 39% | 33% | - Operating expenses increased by **$0.5 million** to **$3.7 million** in Q2 2023, driven by higher general & administrative expenses (+$0.3M), sales & marketing (+$0.2M), and R&D (+$0.1M), partially offset by lower stock-based compensation (-$0.1M)[153](index=153&type=chunk)[154](index=154&type=chunk) [Results of Operations for the Six Months Ended June 30, 2023 and 2022](index=31&type=section&id=Results%20of%20Operations%20for%20the%20Six%20Months%20Ended%20June%2030%2C%202023%20and%202022) H1 Net Sales Comparison (in thousands) | Revenue Type | H1 2023 | H1 2022 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Service revenue, net | $4,712 | $4,064 | $648 | 16% | | Other | $1,638 | $742 | $896 | 121% | | **Total Net Sales** | **$6,350** | **$4,806** | **$1,544** | **32%** | - The **32% increase** in H1 net sales was driven by a **40% increase** in cases processed (2,810 in H1 2023 vs. 2,006 in H1 2022) and strong growth in HemeScreen product sales[156](index=156&type=chunk) H1 Gross Profit Comparison (in thousands) | Metric | H1 2023 | H1 2022 | | :--- | :--- | :--- | | **Gross Profit** | $2,120 | $1,476 | | **Gross Margin** | 33% | 31% | - Operating expenses for H1 2023 decreased by **$1.3 million** to **$7.4 million**, primarily due to a **$1.9 million reduction** in stock-based compensation expense, partially offset by an **$0.8 million increase** in sales and marketing costs from an expanded sales force[161](index=161&type=chunk) [Liquidity and Capital Resources](index=32&type=section&id=Liquidity%20and%20Capital%20Resources) Working Capital Position (in thousands) | Metric | June 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Current Assets | $4,348 | $5,710 | | Current Liabilities | $4,721 | $4,361 | | **Working Capital** | **($373)** | **$1,349** | - During the first six months of 2023, the company raised net proceeds of **$2.2 million** from the sale of **4,742,038 shares** of common stock through purchase agreements and at-the-market offerings[163](index=163&type=chunk) - Net cash used in operating activities decreased to **$2.8 million** in H1 2023 from **$4.0 million** in H1 2022, an improvement of **$1.2 million**[164](index=164&type=chunk) - Cash flows from financing activities were a net inflow of **$2.0 million** in H1 2023, compared to a net outflow of **$0.1 million** in H1 2022, primarily due to proceeds from the issuance of common stock[167](index=167&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=33&type=section&id=Item%203%2E%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is a smaller reporting company and is not required to provide the information for this item - As a smaller reporting company, Precipio, Inc. is not required to provide quantitative and qualitative disclosures about market risk[174](index=174&type=chunk) [Controls and Procedures](index=34&type=section&id=Item%204%2E%20Controls%20and%20Procedures) Management, including the CEO and Interim CFO, evaluated the company's disclosure controls and procedures and concluded they were effective at a reasonable assurance level as of June 30, 2023 - Management concluded that the company's disclosure controls and procedures were effective at a reasonable assurance level as of June 30, 2023[175](index=175&type=chunk) - There were no changes in internal control over financial reporting during the quarter ended June 30, 2023, that have materially affected, or are reasonably likely to materially affect, the company's internal controls[176](index=176&type=chunk) [PART II. Other Information](index=35&type=section&id=PART%20II%2E%20Other%20Information) [Legal Proceedings](index=35&type=section&id=Item%201%2E%20Legal%20Proceedings) The company is subject to various laws and regulations typical of the healthcare industry and is involved in incidental legal proceedings - The company is involved in a dispute with CPA Global, which claims approximately **$0.2 million** is owed for patent services, and a liability of less than **$0.1 million** has been recorded for this matter[182](index=182&type=chunk) - Management believes the company is in compliance with healthcare fraud and abuse regulations, but notes that compliance is subject to future government review and interpretation[179](index=179&type=chunk) [Risk Factors](index=35&type=section&id=Item%201A%2E%20Risk%20Factors) This section updates key risks facing the company, including a history of losses, the need for additional capital, and non-compliance with Nasdaq listing rules - The company has a history of losses, with a net loss of **$5.3 million** and an operating cash flow deficit of **$2.8 million** for the six months ended June 30, 2023, and expects to incur losses for the foreseeable future[184](index=184&type=chunk) - The company is not in compliance with the Nasdaq minimum bid price rule (**$1.00 per share**) and has until **October 23, 2023**, to regain compliance or face potential delisting[188](index=188&type=chunk)[189](index=189&type=chunk) - As of June 30, 2023, there is a risk of substantial dilution from approximately **9.7 million shares** underlying outstanding warrants and **4.6 million shares** underlying outstanding stock options[199](index=199&type=chunk) - The company may need to raise substantial additional capital to fund operations and commercialize its technology, and failure to do so on acceptable terms could force it to delay or cease operations[187](index=187&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=39&type=section&id=Item%202%2E%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reports no sales of unregistered securities during the three months ended June 30, 2023, except as previously detailed in a Form 8-K filing - During Q2 2023, the company did not have any sales of unregistered securities other than those disclosed in the Form 8-K filed on **June 12, 2023**, related to the private placement of warrants[204](index=204&type=chunk) [Defaults Upon Senior Securities](index=39&type=section&id=Item%203%2E%20Defaults%20Upon%20Senior%20Securities) Not applicable [Mine Safety Disclosures](index=39&type=section&id=Item%204%2E%20Mine%20Safety%20Disclosures) Not applicable [Other Information](index=39&type=section&id=Item%205%2E%20Other%20Information) None [Exhibits](index=39&type=section&id=Item%206%2E%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including forms of warrants, the securities purchase agreement, and officer certifications

As filed with the U.S. Securities and Exchange Commission on July 7, 2023 Registration No. 333- UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM S-1 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 Precipio, Inc. (Exact name of registrant as specified in its charter) | Delaware | 3826 | 91-1789357 | | --- | --- | --- | | (State or other jurisdiction of | (Primary Standard Industrial | (I.R.S. Employer | | incorporation or organization) | Classification Code Number) | Ident ...

Precipio, Inc. (NASDAQ:PRPO) Q1 2023 Earnings Conference Call May 17, 2023 5:00 PM ET Company Participants Ilan Danieli - CEO Conference Call Participants Operator Welcome to the Precipio Q1 2023 Shareholder Update Conference Call. All participants will be in listen-only mode. [Operator Instructions] Please note that the 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 th ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 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 March 31, 2023 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 i ...

Precipio, Inc. (NASDAQ:PRPO) Q4 2022 Earnings Conference Call April 3, 2023 5:00 PM ET Company Participants Ilan Danieli - CEO Operator Welcome to the Precipio Shareholder 2022 Fourth Quarter and Year-End Shareholder Update Conference Call. All participants will be in listen-only mode. [Operator Instructions] Please note that the 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 stateme ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2022 OR ◻ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | Commission File Number: 001-36439 | | | --- | --- | | PRECIPIO, | INC. | | (Exact name of registrant as specified in its charter) | | | Delaware | 91-1789357 | | (State or ot ...

Precipio, Inc. (NASDAQ:PRPO) Q3 2022 Earnings Conference Call November 14, 2022 5:00 PM ET Company Participants Ilan Danieli - Chief Executive Officer Conference Call Participants Operator Welcome to the Precipio Shareholder Third Quarter 2022 Shareholder Update Conference Call. All participants will be in listen-only mode. [Operator Instructions] Please note that the conference is being recorded. Statements made during this contain forward-looking statements about our business. You should not place undue r ...

[PART I. Financial Information](index=3&type=section&id=PART%20I.%20Financial%20Information) [Condensed Consolidated Financial Statements](index=4&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements) Precipio, Inc.'s unaudited financial statements as of September 30, 2022, reflect decreased assets and equity, an increased net loss, and significant going concern uncertainty [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Precipio's balance sheet as of September 30, 2022, shows total assets decreased to $23.5 million and stockholders' equity fell to $18.3 million Condensed Consolidated Balance Sheets (in thousands) | | September 30, 2022 (unaudited) | December 31, 2021 | | :--- | :--- | :--- | | **Total Current Assets** | $7,418 | $13,478 | | **Total Assets** | **$23,547** | **$30,439** | | **Total Current Liabilities** | $4,410 | $4,213 | | **Total Liabilities** | **$5,293** | **$5,835** | | **Total Stockholders' Equity** | **$18,254** | **$24,604** | | **Total Liabilities and Stockholders' Equity** | **$23,547** | **$30,439** | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Net sales remained stable for Q3 2022, but the net loss widened to $3.2 million, while nine-month net sales increased to $7.0 million with a significant loss of $9.9 million Statement of Operations Highlights (in thousands, except per share data) | | Three Months Ended Sep 30, 2022 | Three Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2021 | | :--- | :--- | :--- | :--- | :--- | | **Net Sales** | $2,215 | $2,246 | $7,021 | $6,414 | | **Gross Profit** | $436 | $528 | $1,912 | $1,747 | | **Operating Loss** | $(3,229) | $(2,439) | $(10,471) | $(6,708) | | **Net Loss Attributable to Precipio, Inc.** | $(3,179) | $(1,860) | $(9,913) | $(6,325) | | **Basic and Diluted Loss Per Share** | $(0.14) | $(0.08) | $(0.44) | $(0.31) | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the nine months ended September 30, 2022, net cash used in operating activities increased to $6.2 million, with financing activities using $0.1 million, resulting in a $6.5 million net cash decrease Cash Flow Summary (in thousands) | | Nine Months Ended September 30, 2022 | Nine Months Ended September 30, 2021 | | :--- | :--- | :--- | | **Net cash used in operating activities** | $(6,221) | $(5,136) | | **Net cash used in investing activities** | $(225) | $(624) | | **Net cash flows (used in) provided by financing activities** | $(78) | $16,327 | | **Net Change in Cash** | $(6,524) | $10,567 | | **Cash at End of Period** | $5,144 | $13,223 | [Notes to Unaudited Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) The notes detail the company's cancer diagnostics business, disclose substantial doubt about its going concern ability due to losses, and mention a Nasdaq delisting notice - The company is a healthcare solutions company focused on addressing cancer misdiagnoses through diagnostic products, reagents, and services. It operates CLIA laboratories in New Haven, CT, and Omaha, NE[19](index=19&type=chunk)[20](index=20&type=chunk) - There is substantial doubt about the Company's ability to continue as a going concern. For the nine months ended Sep 30, 2022, the company had a net loss of **$9.9 million** and used **$6.2 million** in cash from operations. Its continuation depends on generating more revenue and raising additional capital[23](index=23&type=chunk)[25](index=25&type=chunk) - Subsequent to the quarter end, on October 28, 2022, the company received a delisting notice from Nasdaq for failing to maintain a minimum bid price of **$1.00 per share**. The company has until April 26, 2023, to regain compliance[130](index=130&type=chunk)[131](index=131&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=44&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses a 9% increase in net sales for the first nine months of 2022, offset by rising operating expenses and a wider operating loss, reiterating the going concern risk and reliance on ATM sales - Management reiterates that there is substantial doubt about the company's ability to continue as a going concern due to a history of operating losses and cash usage. The company is relying on its ATM Sales Agreement with AGP, which has **$6.4 million** available for future sales, to fund operations[143](index=143&type=chunk)[144](index=144&type=chunk) - On September 1, 2022, the company terminated its license agreement with Dana-Farber Cancer Institute for the ICE COLD PCR (ICP) technology. Management does not believe this will have a material impact on the business[142](index=142&type=chunk) Results of Operations Comparison (in thousands) | | Nine Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2021 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | **Net Sales** | $7,021 | $6,414 | $607 | 9% | | **Gross Profit** | $1,912 | $1,747 | $165 | 9% | | **Operating Expenses** | $12,383 | $8,455 | $3,928 | 46% | | **Operating Loss** | $(10,471) | $(6,708) | $(3,763) | 56% | Working Capital (in thousands) | | September 30, 2022 | December 31, 2021 | Change | | :--- | :--- | :--- | :--- | | **Current Assets** | $7,418 | $13,478 | $(6,060) | | **Current Liabilities** | $4,410 | $4,213 | $197 | | **Working Capital** | **$3,008** | **$9,265** | **$(6,257)** | [Quantitative and Qualitative Disclosures About Market Risk](index=56&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, Precipio, Inc. is exempt from providing quantitative and qualitative disclosures about market risk - As a smaller reporting company, Precipio, Inc. is not required to provide quantitative and qualitative disclosures about market risk[176](index=176&type=chunk) [Controls and Procedures](index=56&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of September 30, 2022, with no material changes to internal control over financial reporting - The CEO and Interim CFO concluded that the company's disclosure controls and procedures were effective at a reasonable assurance level as of September 30, 2022[177](index=177&type=chunk) - There were no changes in internal control over financial reporting during the third quarter of 2022 that have materially affected, or are reasonably likely to materially affect, these controls[178](index=178&type=chunk) [PART II. Other Information](index=57&type=section&id=PART%20II.%20Other%20Information) [Legal Proceedings](index=57&type=section&id=Item%201.%20Legal%20Proceedings) The company operates in a highly regulated healthcare industry, is subject to fraud and abuse laws, and faces an outstanding claim from CPA Global for patent management services - The company is subject to numerous laws and regulations in the healthcare industry, and violations could result in significant fines and penalties. Management believes it is currently in compliance[180](index=180&type=chunk)[181](index=181&type=chunk) - CPA Global has claimed approximately **$0.2 million** for patent maintenance services. A liability of less than **$0.1 million** is recorded on the balance sheet for this matter[184](index=184&type=chunk) [Risk Factors](index=57&type=section&id=Item%201A.%20Risk%20Factors) Key risks include a history of losses, the critical need for additional capital, Nasdaq delisting risk due to non-compliance, and ongoing challenges from inflation and market volatility - **History of Losses:** The company has incurred losses since inception, with a net loss of **$9.9 million** for the nine months ended Sep 30, 2022, and expects to incur losses for the foreseeable future[186](index=186&type=chunk) - **Need for Additional Capital:** The company may need to raise substantial additional capital to commercialize its technology and fund operations. Failure to do so could force it to delay or cease operations[190](index=190&type=chunk) - **Nasdaq Delisting Risk:** The company is not in compliance with Nasdaq's minimum bid price rule. Failure to regain compliance by the deadline could result in delisting, which would negatively impact the stock's liquidity and the company's ability to raise capital[191](index=191&type=chunk)[194](index=194&type=chunk) - **Inflation Risk:** Rising inflation may adversely affect the company's business and financial condition by increasing its overall cost structure[205](index=205&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=64&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales of equity securities occurred during the reporting period - None[207](index=207&type=chunk) [Exhibits](index=64&type=section&id=Item%206.%20Exhibits) The report includes exhibits such as CEO and CFO certifications under Sarbanes-Oxley Act sections 302 and 906, and Inline XBRL data files - The exhibits filed include certifications from the Principal Executive Officer and Principal Financial Officer, as well as Inline XBRL documents[212](index=212&type=chunk)