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What changed in Precipio, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Precipio, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+310 added−305 removedSource: 10-K (2026-03-30) vs 10-K (2025-03-27)

Top changes in Precipio, Inc.'s 2025 10-K

310 paragraphs added · 305 removed · 214 edited across 9 sections

Item 1. Business

Business — how the company describes what it does

54 edited+30 added−19 removed93 unchanged
Biggest changeOn May 29, 2024, the American Clinical Laboratory Association filed a lawsuit challenging the FDA’s authority to regulate LDTs as medical devices under the Federal Food, Drug, and Cosmetic Act. Subsequently, on August 19, 2024, the Association for Molecular Pathology filed a lawsuit similarly challenging FDA’s final rule on LDTs. The outcome of these lawsuits are uncertain at this time.
Biggest changeSubsequently, in March 2025, a federal district court in American Clinical Laboratory Association v. FDA and Association for Molecular Pathology v. FDA vacated the April 29, 2024 final rule on the basis that FDA lacked statutory authority to regulate LDTs as medical devices under the Federal Food, Drug, and Cosmetic Act.
For example, the U.S. federal transparency requirements under the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act (“PPACA”) including the provision commonly referred to as the Physician Payments Sunshine Act, and its implementing regulations, which requires applicable manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program to report annually to CMS, information related to payments or other transfers of value made to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), certain other licensed health care practitioners, and teaching hospitals, as well as ownership and investment interests held by the physicians described above and their immediate family members. ​ Our business is impacted not only by those laws and regulations that are directly applicable to us but also by certain laws and regulations that are applicable to our payers, vendors and referral sources.
For example, the U.S. federal transparency requirements under the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act (“PPACA”) including the provision commonly referred to as the Physician Payments Sunshine Act, and its implementing regulations, which requires applicable manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program to report annually to Center for Medicare and Medicaid Services (“CMS”), information related to payments or other transfers of value made to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), certain other licensed health care practitioners, and teaching hospitals, as well as ownership and investment interests held by the physicians described above and their immediate family members. ​ Our business is impacted not only by those laws and regulations that are directly applicable to us but also by certain laws and regulations that are applicable to our payers, vendors and referral sources.
Currently, we offer our products as research use only (“RUO”) products. An RUO product is one that is not intended for clinical diagnostic use and must be labeled “For Research Use Only.
Currently, we offer our products as RUO products. An RUO product is one that is not intended for clinical diagnostic use and must be labeled “For Research Use Only.
It is unclear how other healthcare reform measures of the Trump administration or other efforts, if any, to challenge, repeal or replace the PPACA will impact our business. U.S. Food and Drug Administration Regulation Medical devices are subject to extensive regulation by the Food and Drug Administration (“FDA”).
It is unclear how other healthcare reform measures of the Trump administration or other efforts, if any, to challenge, repeal or replace the PPACA will impact our business. U.S. Food and Drug Administration Regulation Medical devices are subject to extensive regulation by the FDA.
Our panels: 1. Typically range from 4-7 genes (matching the clinical requirements); 2. Are all run on one, inexpensive machine (an RT-PCR, which costs between $30-75k); 7 Table of Contents 3. Require very basic laboratory training and can be run by any lab tech with limited training; and 4.
Our panels: 1. Typically range from 4-7 genes (matching the clinical requirements); 2. Are all run on one, inexpensive machine (an RT-PCR, which costs between $30-75k); 3. Require very basic laboratory training and can be run by any lab tech with limited training; and 4.
Subsequently, IV-Cell has been used at our laboratory for the past few years on more than 1,000 clinical specimens, producing more precise diagnostic results. ​ The IV-Cell technology and media can be purchased via a direct supply contract, whereby we are contracted with a manufacturer (under license and non-disclosure) to produce the media. ​ 6 Table of Contents Competition Our principal competition in clinical pathology services comes largely from two groups.
Subsequently, IV-Cell has been used at our laboratory for the past few years on more than 1,000 clinical specimens, producing more precise diagnostic results. ​ The IV-Cell technology and media can be purchased via a direct supply contract, whereby we are contracted with a manufacturer (under license and non-disclosure) to produce the media. ​ Competition Our principal competition in clinical pathology services comes largely from two groups.
Despite much publicity of the industry transitioning from fee-per-service to value-based payments, this transition has not yet occurred in diagnostics. When a 4 Table of Contents patient is misdiagnosed, physicians often end up administering incorrect treatments, creating adverse effects rather than improving outcomes.
Despite much publicity of the industry transitioning from fee-per-service to value-based payments, this transition has not yet occurred in diagnostics. When a patient is misdiagnosed, physicians often end up administering incorrect treatments, creating adverse effects rather than improving outcomes.
Further, to the extent we engage in new business initiatives, we must continue to evaluate whether new laws and regulations are applicable to us. There can be no assurance that we will not be subject to scrutiny or challenge under one or more of these laws or that any enforcement 8 Table of Contents actions would not be successful.
Further, to the extent we engage in new business initiatives, we must continue to evaluate whether new laws and regulations are applicable to us. There can be no assurance that we will not be subject to scrutiny or challenge under one or more of these laws or that any enforcement actions would not be successful.
The existence of comprehensive 15 Table of Contents privacy laws in different states in the country would make our compliance obligations more complex and costly and may increase the likelihood that we may be subject to enforcement actions or otherwise incur liability for noncompliance. There are also states that are specifically regulating health information.
The existence of comprehensive privacy laws in different states in the country would make our compliance obligations more complex and costly and may increase the likelihood that we may be subject to enforcement actions or otherwise incur liability for noncompliance. There are also states that are specifically regulating health information.
HemeScreen utilizes an inexpensive RT-PCR (reverse 5 Table of Contents transcription polymerase chain reaction). HemeScreen is a set of disease-specific reagents that provide a simple workflow, is easy to use, and create attractive economics to the lab, resulting in their ability to reduce batches and provide faster test turnaround time.
HemeScreen utilizes an inexpensive RT-PCR (reverse transcription polymerase chain reaction). HemeScreen is a set of disease-specific reagents that provide a simple workflow, is easy to use, and create attractive economics to the lab, resulting in their ability to reduce batches and provide faster test turnaround time.
We make available free of charge through our website our SEC filings, including exhibits and amendments to these reports, furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.
We make available free of charge through our website 17 Table of Contents our SEC filings, including exhibits and amendments to these reports, furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.
This creates a complex and inefficient workflow. ​ On the other end of the spectrum are companies that have developed NGS panels for molecular analysis. NGS is a robust, broad ranging technology that enables a lab to test for tens, hundreds, and even thousands of genes in one test.
This creates a complex and inefficient workflow. ​ 8 Table of Contents On the other end of the spectrum are companies that have developed NGS panels for molecular analysis. NGS is a robust, broad ranging technology that enables a lab to test for tens, hundreds, and even thousands of genes in one test.
Government Regulation The healthcare industry is subject to extensive regulation by a number of governmental entities at the federal, state and local level. Laws and regulations in the healthcare industry are extremely complex and, in many instances, the industry does not have the benefit of significant regulatory or judicial interpretation.
Government Regulation The healthcare industry is subject to extensive regulation by a number of governmental entities at the federal, state and local level. Laws and regulations in the healthcare industry are extremely complex and, in many instances, the 9 Table of Contents industry does not have the benefit of significant regulatory or judicial interpretation.
For our laboratory services, as blood-related cancers are more likely to be developed later in life, the largest insurance provider is Medicare, which constituted approximately 30% of our patients’ cases during the year ended December 31, 2024. Non-Medicare patients are typically insured by private insurance companies who provide patient coverage and pay for patients’ health-related costs.
For our laboratory services, as blood-related cancers are more likely to be developed later in life, the largest insurance provider is Medicare, which constituted approximately 32% of our patients’ cases during the year ended December 31, 2025. Non-Medicare patients are typically insured by private insurance companies who provide patient coverage and pay for patients’ health-related costs.
All of our employees are based in the U.S. and a majority are based in Connecticut. None of our employees are represented by a labor union or covered by a collective bargaining agreement, and we believe our relationship with our employees is good. Career Development and Growth. We emphasize employee development and training.
All of our employees are based in the U.S. and a majority are based in Connecticut. None of our employees are represented by a labor union or covered by a collective bargaining agreement, and we believe our relationship with our employees is good. 13 Table of Contents Career Development and Growth. We emphasize employee development and training.
For example, California enacted the California Consumer Privacy Act, or CCPA, which, effective January 1, 2023, created new individual privacy rights for California consumers (as defined in the law) and placed increased privacy and security obligations on entities handling personal data of consumers or households.
For example, California enacted the California Consumer Privacy Act, or CCPA, which, effective January 1, 2023, created new individual privacy rights for California consumers (as defined in the law) and placed increased privacy and security obligations on entities 16 Table of Contents handling personal data of consumers or households.
Have attractive economics that provide attractive margins to laboratories who decide to use the RUO assays as an LDT. ​ ​ IV-Cell competition ​ As described in the section above, the cytogenetics workup requires the selection and evaluation of a cell lineage within 4 potential cell lineages.
Have attractive economics that provide attractive margins to laboratories who decide to use only RUO assays. ​ ​ IV-Cell competition ​ As described in the section above, the cytogenetics workup requires the selection and evaluation of a cell lineage within 4 potential cell lineages.
As currently structured, the PPACA increases the number of persons covered under government programs and private insurance; furnishes economic incentives for measurable improvements in health care quality outcomes; promotes a more integrated health care delivery system and 9 Table of Contents the creation of new health care delivery.
As currently structured, the PPACA increases the number of persons covered under government programs and private insurance; furnishes economic incentives for measurable improvements in health care quality outcomes; promotes a more integrated health care delivery system and the creation of new health care delivery.
Furthermore, pending legislative proposals, if enacted, could create new or different regulatory and compliance burdens on us and could have a negative effect on our ability to keep products on the market or develop new products.
Furthermore, any future legislative proposals, if enacted, could create new or different regulatory and compliance burdens on us and could have a negative effect on our ability to keep products on the market or develop new products.
Employees adhere to a robust Code of Business Conduct and Ethics, with an anonymous Ethics Hotline for reporting concerns. ​ 14 Table of Contents Our ESG report, available on our website, details our commitments and progress.
Employees adhere to a robust Code of Business Conduct and Ethics, with an anonymous Ethics Hotline for reporting concerns. ​ Our ESG report, available on our website, details our commitments and progress.
In Europe, with respect to the collection and processing of personal data relating to the European Union (“EU”), European Economic Area (“EEA”) and United kingdom (“UK”), we are subject to the EU General Data Protection Regulation (EU GDPR), the UK General Data Protection Regulation (UK GDPR), as well as applicable data protection laws in effect in the Member States of the EEA and in the UK (including the UK Data Protection Act 2018) which govern the processing of personal data in connection with (i) the marketing or offering of our goods or services to individuals in the UK and EEA; (ii) the monitoring of their behavior so long as this takes place in the EEA/UK (for example, through cookies and other tracking tools), or (iii) the activities of any establishments we may set up in the UK or any EEA Member State (e.g. branches, subsidiaries or any significant sales representative presence).
For example, a small number of states have passed laws that regulate biometric data specifically. ​ In Europe, with respect to the collection and processing of personal data relating to the EU, European Economic Area (“EEA”) and United Kingdom (“UK”), we are subject to the EU General Data Protection Regulation (EU GDPR), the UK General Data Protection Regulation (UK GDPR), as well as applicable data protection laws in effect in the Member States of the EEA and in the UK (including the UK Data Protection Act 2018) which govern the processing of personal data in connection with (i) the marketing or offering of our goods or services to individuals in the UK and EEA; (ii) the monitoring of their behavior so long as this takes place in the EEA/UK (for example, through cookies and other tracking tools), or (iii) the activities of any establishments we may set up in the UK or any EEA Member State (e.g. branches, subsidiaries or any significant sales representative presence).
HemeScreen TM ​ The ongoing introduction of new, genetic-based targeted therapies have made molecular testing a mainstream and essential component of the diagnostic process.
HemeScreen TM ​ 6 Table of Contents The ongoing introduction of new, genetic-based targeted therapies have made molecular testing a mainstream and essential component of the diagnostic process.
This selection is typically based solely on the clinical suspicion provided; hence, if the clinical suspicion is incorrect, the laboratory will have cultured the wrong cell lineage, potentially arriving at a false negative result.
This selection is typically based solely 7 Table of Contents on the clinical suspicion provided; hence, if the clinical suspicion is incorrect, the laboratory will have cultured the wrong cell lineage, potentially arriving at a false negative result.
The oncology total available market, is currently estimated to exceed $20 billion, with an estimated compound annual growth rate exceeding 5%. We also provide new technologies to the oncology diagnostic laboratory market in the form of HemeScreen and IV-Cell product offerings. The diagnostics product market is estimated to have annual revenues exceeding $88 billion by 2025.
The oncology total available market, is currently estimated to exceed $116 billion by 2034, with an estimated compound annual growth rate exceeding 5%. We also provide new technologies to the oncology diagnostic laboratory market in the form of HemeScreen and IV-Cell product offerings. The diagnostics product market is estimated to have annual revenues exceeding $56 billion by 2030.
Ilan holds an MBA from the Darden School at the University of Virginia, and a BA in Economics from Bar-Ilan University in Israel. 13 Table of Contents Matthew Gage, Chief Financial Officer, age 58 ​ Mr.
Ilan holds an MBA from the Darden School at the University of Virginia, and a BA in Economics from Bar-Ilan University in Israel. Matthew Gage, Chief Financial Officer, age 59 ​ Mr.
The RUO Guidance further articulates the FDA’s position that any assistance offered in performing clinical validation or verification, or similar specialized technical support, to clinical laboratories, conflicts with RUO status. Additionally, our CLIA laboratories offer testing utilizing our laboratory developed tests (“LDTs”).
The RUO Guidance further articulates the FDA’s position that any assistance offered in performing clinical validation or verification, or similar specialized technical support, to clinical laboratories, conflicts with RUO status. Additionally, our laboratories offer testing utilizing our LDTs.
Our competitors also may obtain FDA or other regulatory approval for their products more rapidly than we may obtain approval for ours, which could result in our competitors establishing a strong market position before we are able to enter the market. Single gene vs.
Our competitors also may obtain Food and Drug Administration (“ FDA”) or other regulatory approval for their products more rapidly than we may obtain approval for ours, which could result in our competitors establishing a strong market position before we are able to enter the market. Single gene vs.
Competitors include Gibco, Irvine Scientific, Capricorn Scientific, Sigma-Aldrich, Euroclone and others. ​ Precipio’s IV-Cell is the only known media that has an all-in-one product that includes a base media plus all necessary mitogens, enabling the simultaneous culturing of all 4 cell lineages.
Competitors include Gibco, Irvine Scientific, Capricorn Scientific, Sigma-Aldrich, Euroclone and others. ​ Precipio’s IV-Cell is, to our knowledge, based on publicly available information, the only known media that has an all-in-one product that includes a base media plus all necessary mitogens, enabling the simultaneous culturing of all 4 cell lineages.
Some individuals, known as “dual eligibles”, may be eligible for benefits under both Medicare and a state Medicaid program. Reimbursement under the Medicare and Medicaid programs is contingent on the satisfaction of numerous rules and regulations, including those requiring certification and/or licensure. Congress often enacts legislation that affects the reimbursement rates under government healthcare programs.
Some individuals, known as “dual eligibles”, may be eligible for benefits under both Medicare and a state Medicaid program. Reimbursement under the Medicare and Medicaid programs is contingent on the satisfaction of numerous rules and regulations, including those requiring certification and/or licensure.
These private insurance companies will often adjust their rates according to the insurance rates annually published by the Center for Medicare and Medicaid Services, (“CMS”). We, and other providers, typically bill according to the codes relevant to the tests we conduct.
These private insurance companies will often adjust their rates according to the insurance rates annually published by the CMS. We, and other providers, typically bill according to the codes relevant to the tests we conduct.
We invest in professional development through annual performance reviews and targeted training programs. Additionally, we support community engagement through partnerships such as the Salvation Army’s "Adopt-A-Family” program. ​ Governance: Our Board of Directors maintains independence, with three key committees—Audit, Compensation, and Nominating & Corporate Governance—ensuring oversight and accountability.
Additionally, we support community engagement through partnerships such as the Salvation Army’s "Adopt-A-Family” program. ​ Governance: Our Board of Directors maintains independence, with three key committees—Audit, Compensation, and Nominating & Corporate Governance—ensuring oversight and accountability.
If the FDA were to determine that certain tests offered by us as LDTs are no longer eligible for enforcement discretion for any reason, including new rules, policies or guidance, or due to changes in statute, our tests may become subject to extensive FDA requirements.
If the FDA were to determine that certain tests offered by us as LDTs or products offered by us as RUO products are subject to regulation as medical devices for any reason, including new rules, policies or guidance, or due to changes in statute, our tests or products may become subject to extensive FDA requirements.
Historically, the FDA has exercised enforcement discretion with respect to most LDTs and has not required laboratories that offer LDTs to comply with the FDA’s requirements for medical devices, such as the FDA’s requirements pertaining to marketing authorization, establishment registration, device listing, the Quality System Regulation, and other post-market controls.
Historically, it has been the FDA’s position that it has exercised enforcement discretion with respect to most LDTs and has not required laboratories that offer LDTs to comply with the FDA’s requirements for medical devices, such as the FDA’s requirements pertaining to marketing 11 Table of Contents authorization, establishment registration, device listing, the Quality System Regulation (as of February 2, 2026, the Quality Management System Regulation), and other post-market controls.
The GDPR also confers a private right of action on data subjects and consumer associations to lodge complaints with supervisory authorities, seek judicial remedies, and obtain compensation for damages resulting from violations of the GDPR. Corporate History Precipio, Inc. was incorporated in Delaware on March 6, 1997. Our principal office is located at 4 Science Park, New Haven, Connecticut 06511.
The GDPR also confers a private right of action on data subjects and consumer associations to lodge complaints with supervisory authorities, seek judicial remedies, and obtain compensation for damages resulting from violations of the GDPR. ​ Corporate History Precipio, Inc. was incorporated in Delaware on March 6, 1997.
The EU regulatory framework on medical devices continues to apply in Northern Ireland under the Windsor Framework and medical devices in Northern Ireland may either carry an EU CE mark or a UK and Northern Ireland CE mark, or CE UK(NI), although devices bearing the CE UK(NI) marking will not be accepted on the EU market.
The EU regulatory framework for medical devices continues to apply in Northern Ireland under the Windsor Framework. Medical devices placed on the market in Northern Ireland may bear either a CE mark or a CE UK(NI) marking, although devices bearing the CE UK(NI) marking are not accepted on the EU market.
There is no certainty regarding the final IVDR approval. The transition to IVDR continues to present regulatory, operational, and financial challenges, including potential delays in obtaining notified body certification and increased compliance costs.
There is no certainty regarding the timing or outcome of notified body conformity assessments under the IVDR. The transition to IVDR continues to present regulatory, operational, and financial challenges, including potential delays in obtaining notified body certification and increased compliance costs.
If a manufacturer of a device placed on the market in Great Britain is based outside of the UK, the manufacturer must appoint a UK responsible person with a registered place of business in the UK to act on the manufacturer’s behalf in respect of certain activities (e.g. device registration).
If a manufacturer of a device placed on the market in Great Britain is established outside the United Kingdom, the manufacturer must appoint a UK Responsible Person with a registered place of business in the United Kingdom to act on the manufacturer’s behalf with respect to certain regulatory obligations, including device registration.
More information regarding our research and development activities can be found in the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” under Item 7 of this Annual Report. Human Capital Employees. As of March 1, 2025, Precipio employed fifty-four (54) employees on a full-time basis and six (6) employees as part-time.
More information regarding our research and development activities can be found in the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” under Item 7 of this Annual Report. Human Capital Employees. As of March 9, 2026, Precipio employed sixty-one (61) employees on a full-time basis and ten (10) employees as part-time.
In respect of medical devices, since the end of the Brexit transitional period on January 1, 2021, medical devices must be registered with the Medicines and Healthcare products Regulatory Agency, or MHRA (the UK medicines and medical devices regulator) before being placed on the Great Britain market.
The United Kingdom formally left the EU on January 31, 2020. In respect of medical devices, since the end of the Brexit transition period on January 1, 2021, medical devices must be registered with the Medicines and Healthcare products Regulatory Agency, or MHRA, before being placed on the market in Great Britain.
We are actively monitoring regulatory developments and have taken steps to transition our products to IVDR compliance, including engagement with notified bodies and implementation of enhanced post-market surveillance measures. 11 Table of Contents The UK formally left the EU on January 31, 2020.
We are actively monitoring regulatory developments and have taken steps to transition our products to IVDR compliance, including engagement with notified 12 Table of Contents bodies and implementation of enhanced post-market surveillance measures.
Danieli assumed the role of Chief Executive Officer of Precipio, Inc. at the time of a June 2017 merger transaction with Transgenomic, Inc. (the “Merger”).
Danieli was the founder of Precipio Diagnostics LLC and was the Chief Executive Officer of Precipio Diagnostics LLC since 2011. Mr. Danieli assumed the role of Chief Executive Officer of Precipio, Inc. at the time of a June 2017 merger transaction with Transgenomic, Inc. (the “Merger”).
Our internet address is www.precipiodx.com. Information found on our website is not incorporated by reference into this report and should not be considered as part of this report.
Our principal office is located at 4 Science Park, New Haven, Connecticut 06511. Our internet address is www.precipiodx.com. Information found on our website is not incorporated by reference into this report and should not be considered as part of this report.
If required, the regulatory marketing authorization process required to bring our current or future LDTs into compliance may involve, among other things, successfully completing additional clinical validations and submitting to and obtaining clearance, authorization or approval from the FDA.
If required, the regulatory marketing authorization process required to market our current or future tests or products as medical devices in the United States may involve, among other things, successfully completing additional clinical validations and submitting to and obtaining clearance, authorization or approval from the FDA.
The IVDR introduced more stringent requirements than the previous In Vitro Diagnostics Directive 98/79/EC (“IVDD”), including enhanced clinical evidence, post-market surveillance, and increased scrutiny by notified bodies for most device classes. For an in-vitro diagnostic device to be placed on the EU market, a CE mark demonstrating compliance with the IVDR is required.
The IVDR introduced more stringent requirements than the previous In Vitro Diagnostics Directive 98/79/EC (“IVDD”), including enhanced clinical evidence, post-market surveillance, and increased scrutiny by notified bodies for most device classes.
Approximately 34% of our revenue for the year ended December 31, 2024 was derived directly from Medicare, Medicaid or other government-sponsored healthcare programs. Also, we indirectly provide services to beneficiaries of Medicare, Medicaid and other government-sponsored healthcare programs through managed care entities.
Congress often enacts legislation that affects the reimbursement rates under government healthcare programs. 10 Table of Contents Approximately 40% of our revenue for the year ended December 31, 2025 was derived directly from Medicare, Medicaid or other government-sponsored healthcare programs. Also, we indirectly provide services to beneficiaries of Medicare, Medicaid and other government-sponsored healthcare programs through managed care entities.
In addition, other states have proposed and/or passed legislation that regulates the privacy and/or security of certain specific types of information. For example, a small number of states have passed laws that regulate biometric data specifically.
In addition, other states have proposed and/or passed legislation that regulates the privacy and/or security of certain specific types of information.
We intend to satisfy any disclosure requirements under Item 5.05 of Form 8-K regarding an amendment to, or waiver from, a provision of this Code of Business Conduct and Ethics by posting such information on our website, at the Internet address and location specified above.
We intend to satisfy any disclosure requirements under Item 5.05 of Form 8-K regarding an amendment to, or waiver from, a provision of this Code of Business Conduct and Ethics by posting such information on our website, at the Internet address and location specified above. 14 Table of Contents Information about our Executive Officers. ​ Our executive officers, their ages as of March 1, 2026 and their respective positions are as follows: Ilan Danieli, Chief Executive Officer, age 54 ​ Mr.
Following a public consultation, the UK government is implementing changes to the medical devices legislation. The first piece of legislation will come into force on June 16, 2025, and implements changes to the post-market surveillance requirements for medical devices in Great Britain, with the aim of facilitating greater traceability of incidents.
Following a public consultation, the UK government is implementing changes to UK medical devices legislation. The first such legislation came into force on June 16, 2025 and introduced revised post market surveillance requirements for medical devices in Great Britain intended to improve traceability and incident monitoring.
The aim is to structure our compensation programs to balance incentive earnings for both short-term and long-term performance. 12 Table of Contents We are committed to providing comprehensive benefits and some examples of the benefits we offer are: medical insurance including prescription drug benefits, dental insurance, vision insurance, accident insurance, life insurance, disability insurance, health savings accounts, flexible spending accounts and access to mental health support.
We are committed to providing comprehensive benefits and some examples of the benefits we offer are: medical insurance including prescription drug benefits, dental insurance, vision insurance, accident insurance, life insurance, disability insurance, health savings accounts, flexible spending accounts and access to mental health support.
Of the total full-time and part-time employees, nine (9) were in Finance, General and Administration, thirty-five (35) were in laboratory and production, eight (8) were in Sales and Marketing, three (3) were in Customer Service and Support and five (5) were in Research & Development.
Of the total full-time and part-time employees, ten (10) were in Finance, General and Administration, forty-four (44) were in laboratory and production, ten (10) were in Sales and Marketing, two (2) were in Customer Service and Support and five (5) were in Research & Development.
Our ESG efforts focus on corporate governance, environmental responsibility, and human capital management. ​ Environmental: We actively reduce waste by implementing office-wide recycling and minimizing paper usage. We continue to explore further sustainability initiatives to reduce our environmental footprint. ​ Social: Our workforce reflects a commitment to diversity, with a focus on gender, ethnicity, and cultural inclusion.
Our ESG efforts focus on corporate governance, environmental responsibility, and human capital management. 15 Table of Contents ​ Environmental: We actively reduce waste by implementing office-wide recycling and minimizing paper usage.
Further legislation will be put in place in 2025 and 2026 to introduce new pre-market requirements, including an international reliance procedure for approval of certain medical devices for the Great Britain market. Research and Development Expenses For the years ended December 31, 2024 and 2023, we recorded $1.3 million and $1.7 million, respectively, of research and development expenses.
The scope, timing, and final requirements of these reforms remain subject to further legislation and regulatory guidance. Research and Development Expenses For the years ended December 31, 2025 and 2024, we recorded $1.6 million and $1.3 million, respectively, of research and development expenses.
Manufacturers may choose to use the UKCA mark on a voluntary basis prior to such dates. UCKA marking will, however, not be recognized in the EU.
Thereafter, devices and IVDs placed on the Great Britain market will generally be required to bear a UK Conformity Assessed, or UKCA, mark, unless otherwise permitted under applicable reliance or transitional mechanisms. Manufacturers may elect to use the UKCA mark on a voluntary basis prior to such date. UKCA marking is not recognized in the EU.
CE marks issued by EU notified bodies to place in-vitro diagnostic medical devices on the market in the EU will remain valid in the UK up until, at the latest, June 30, 2030, following which a UK Conformity Assessed, or UKCA, mark will be required to place a device on the Great Britain market.
CE marked devices and in vitro diagnostic medical devices, or IVDs, that comply with applicable EU legislation may continue to be placed on the Great Britain market until June 30, 2030, at the latest, subject to compliance with applicable registration and post market requirements.
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Item 1. Business Business Description Precipio, Inc., and its subsidiaries, (collectively, “we”, “us”, “our”, the “Company” or “Precipio”) is a healthcare biotechnology company focused on cancer diagnostics.
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Item 1. Business We are a healthcare biotechnology company with a mission to battle the systemic problem of disease misdiagnosis, by focusing on improving cancer diagnostics, particularly, hematologic malignancies. Our objective is to enhance diagnostic accuracy and accessibility while building a sustainable business model that supports ongoing innovation.
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Our mission is to address the pervasive problem of cancer misdiagnoses by developing solutions in the form of diagnostic products and services. ​ Our products and services aim to deliver higher accuracy, improved laboratory workflow, and ultimately better patient outcomes, which reduce healthcare expenses.
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We aim to achieve this through a combination of clinical laboratory services and proprietary diagnostic product development.
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We develop innovative technologies in our laboratory where we design, test, validate, and use these products clinically. We believe these technologies improve diagnostic outcomes across various diseases within the hematologic field. We then commercialize these technologies as proprietary products that serve the global laboratory community in furtherance of our mission to eliminate or greatly reduce the prevalence of misdiagnoses.
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By integrating diagnostic services with product development, our service business doubles as a self-funded research and development (“R&D”) unit, enabling us to achieve rapid and cost-efficient innovation rather than being a major cost center for us. ​ This unique integrated operating structure is the foundation of our approach to research, development, and product commercialization.
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To deliver our strategy, we have structured our organization to develop diagnostic products, including our laboratory and research and development (“R&D”) facilities located in New Haven, Connecticut and Omaha, Nebraska, respectively, which house teams that collaborate on the development of new products and services.
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Unlike other companies that rely primarily on stand-alone research facilities or external clinical validation programs, our clinical laboratory operations enables our R&D team to evaluate, refine, and validate diagnostic products in the course of routine clinical testing activities, and at incremental cost.
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We operate Clinical Laboratory Improvement Amendments (“CLIA”) compliant laboratories in both New Haven, Connecticut and Omaha, Nebraska, from which we provide essential blood cancer diagnostics to oncologists nationwide.
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Through these activities, we generate clinical data, operational experience, and specimen access that support ongoing assay development and product improvement.
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To deliver on our strategy of mitigating misdiagnoses, we rely heavily on our CLIA laboratories to support R&D beta-testing of the products we develop, in a clinical environment. ​ The development of laboratory products involves a qualified facility; highly skilled laboratory staff; and access to viable patient specimens to conduct development and testing.
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While these activities are initially conducted to provide diagnostic services to patients and their healthcare providers, they also contribute to product development and validation processes. ​ Our Structure (Two Divisions): ​ We have a single operating segment but operate two business divisions that are complementary to each other: ​ Pathology Services Division ​ Our pathology services division provides specialized cancer diagnostic testing services to physicians, hospitals, and laboratories.
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Our CLIA laboratory in New Haven, which is operated by our pathology services division, encapsulates these components, and also generates revenue for us which covers costs associated with operating this laboratory.
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This division generates revenue and supports the development of our expertise in oncology diagnostics. ​ The pathology services division delivers specialized diagnostic testing focused primarily on hematologic cancers. Services include molecular diagnostics, cytogenetics, and related advanced laboratory analyses performed for healthcare providers and institutions.
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This structure of utilizing our clinical lab to obtain samples and utilize the equipment and staffing to develop, test and validate our products, significantly reduces the development costs and timeline for our products.
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We receive patient samples (blood and biopsies) sent in from clinics and hospitals, and conduct a diagnostic analysis, ultimately providing a pathology report that informs the physician about the nature of the disease the patient has. ​ The pathology services division operates two full laboratories that include all the equipment, personnel, and work processes required to receive patient samples daily, and deliver clinical results to the physicians under the proper compliance umbrella.
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This also enables us to accelerate the time to market of new product development and launch. ​ Furthermore, as a clinical laboratory, we are always the first user of every product we develop, which allows us to optimize important laboratory functions such as workflow, inventory management, regulatory and billing issues.
Added
This division provides: ● An internal clinical environment to develop, test and validate all new products before going to market. ● Recurring diagnostic service revenue. ● Direct engagement with clinicians and patient testing needs. ● Operational experience that informs diagnostic development activities. ​ While reimbursement levels and testing volumes may vary, we view this division as an important foundation for both current operations and future product development. ​ Products Division ​ The products division develops and commercializes proprietary assays designed for use by clinical laboratories.
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As a vendor, this enables us to serve as a reputable user of our own products, and we believe this provides us with significant credibility with existing and prospective customers.
Added
These products allow the Company to expand its reach by enabling other laboratories to benefit from the diagnostic products developed by the Company while building scalable diagnostic solutions. ​ We believe this dual structure provides a unique model for R&D development of clinically applicable products, while delivering operational stability and supporting innovation and future growth.
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Furthermore, because we use our products as part of our day-to-day operations, we can deliver a high level of hands-on, expert support to customers, improving their experience with our products. ​ Our Products Division commercial team generates direct sales and works with our key distributors.
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Furthermore, it provides us with substantial competitive advantages in terms of the economics of product development and time to market. 4 Table of Contents ​ The products division focuses on developing proprietary diagnostic assays and kits intended for use by other clinical laboratories.
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Global healthcare distributors, such as ThermoFisher, McKesson, Medline and Cardinal Health, have partnered with us to form the backbone of our go-to-market strategy and enable us to access laboratories around the country that can benefit from using our diagnostic products. ​ Our operating structure promotes the harnessing of our proprietary technology and genetic diagnostic expertise to bring to market our robust pipeline of innovative solutions designed to address the root causes of misdiagnoses. ​ ​ Industry We believe there is a significant problem of misdiagnosis across numerous disease states (particularly in blood-related cancers) due to an inefficient and commoditized industry.
Added
These products are designed to improve testing accessibility and laboratory workflow efficiency while enabling broader market reach without requiring us to perform all testing internally.
Removed
However, at various points in recent years, the FDA has stated that it intends to end its policy of enforcement discretion and to actively regulate LDTs.
Added
Key elements of this division include: ● Assay development and validation. ● Manufacturing and commercialization of diagnostic kits. ● Distribution through laboratory partners and commercial channels. ​ Product revenues may offer greater scalability than traditional laboratory services, although adoption depends on regulatory, reimbursement, and market factors. ​ Integrated R&D Model: Relationship Between Pathology and Products Divisions ​ As described above, our pathology services division operates fully equipped clinical laboratories staffed with specialized personnel, as well as the infrastructure necessary to perform complex diagnostic testing.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeAny return on investment may be limited to the value of our common stock. ● If securities or industry analysts do not publish research or reports about our business, or if they change their recommendations regarding our stock adversely, our stock price and trading volume could decline. ● The sale or issuance of our common stock to Alliance Global Partners may cause significant dilution and the sale of the shares of common stock acquired by Alliance Global Partners, or the perception that such sales may occur, could cause the price of our common stock to fall. ● The issuance of our common stock to creditors or litigants may cause significant dilution to our stockholders and cause the price of our common stock to fall. ● Improper timing of equity awards could result in regulatory scrutiny and reputational harm. ​ Risks Related to Our Business and Strategy There is substantial doubt about our ability to continue as a going concern.
Biggest changeAny return on investment may be limited to the value of our common stock. ● If securities or industry analysts do not publish research or reports about our business, or if they change their recommendations regarding our stock adversely, our stock price and trading volume could decline. ● The issuance of our common stock to creditors or litigants may cause significant dilution to our stockholders and cause the price of our common stock to fall. ● Improper timing of equity awards could result in regulatory scrutiny and reputational harm. ● Unstable market and economic conditions may have serious adverse consequences on our business, financial condition and stock price. 19 Table of Contents ● We are a “smaller reporting company,” and the reduced disclosure requirements applicable to smaller reporting companies may make our common stock less attractive to investors. ​ Risks Related to Our Business and Strategy There is substantial doubt about our ability to continue as a going concern.
Our current controls and any new controls that we develop may become inadequate, and weaknesses in our internal control over financial reporting may be discovered in the future.
Our current controls and any new controls that we develop may become inadequate, and weaknesses in our internal control over financial reporting may be discovered in the future.
If we are not able to demonstrate compliance with the Sarbanes-Oxley Act, that our internal control over financial reporting is perceived as inadequate, or that we are unable to produce timely or accurate financial statements, investors may lose confidence in our operating results, and the price of our common stock could decline .
If we are not able to demonstrate compliance with the Sarbanes-Oxley Act, that our internal control over financial reporting is perceived as inadequate, or that we are unable to produce timely or accurate financial statements, investors may lose confidence in our operating results, and the price of our common stock could decline .
For example: ​ •others may be able to make products that are similar to our product candidates or utilize similar technology but that are not covered by the claims of the patents that we hold rights to; ​ •we, or our licensors or collaborators, might not have been the first to invent or the first to file patent applications covering certain of our or their inventions; ​ 42 Table of Contents •others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our owned intellectual property rights; ​ •it is possible that our current or future pending owned patent applications will not lead to issued patents; ​ •issued patents that we hold rights to may be held invalid or unenforceable, including as a result of legal challenges by our competitors or other third parties; ​ •our competitors or other third parties might conduct research and development activities in countries where we do not have patent rights and then use the information learned from such activities to develop competitive products for sale in the US; ​ •we may not develop additional proprietary technologies that are patentable; ​ •the patents of others may harm our business; and ​ •we may choose not to file a patent in order to maintain certain trade secrets or know-how, and a third party may subsequently file a patent covering such intellectual property. ​ Should any of these events occur, they could have a material adverse effect on our business, financial condition, results of operations and prospects Risks Related to Our Common Stock The price of our common stock may fluctuate significantly, which could negatively affect us and holders of our common stock.
For example: ​ •others may be able to make products that are similar to our product candidates or utilize similar technology but that are not covered by the claims of the patents that we hold rights to; ​ •we, or our licensors or collaborators, might not have been the first to invent or the first to file patent applications covering certain of our or their inventions; ​ •others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our owned intellectual property rights; ​ •it is possible that our current or future pending owned patent applications will not lead to issued patents; ​ •issued patents that we hold rights to may be held invalid or unenforceable, including as a result of legal challenges by our competitors or other third parties; ​ •our competitors or other third parties might conduct research and development activities in countries where we do not have patent rights and then use the information learned from such activities to develop competitive products for sale in the US; ​ •we may not develop additional proprietary technologies that are patentable; ​ •the patents of others may harm our business; and ​ •we may choose not to file a patent in order to maintain certain trade secrets or know-how, and a third party may subsequently file a patent covering such intellectual property. ​ Should any of these events occur, they could have a material adverse effect on our business, financial condition, results of operations and prospects 44 Table of Contents Risks Related to Our Common Stock The price of our common stock may fluctuate significantly, which could negatively affect us and holders of our common stock.
Accordingly, our business and financial results in the future could be adversely affected due to a variety of factors, including: ● multiple, conflicting and changing laws and regulations such as privacy, security and data use regulations, tax laws, export and import restrictions, economic sanctions and embargoes, employment laws, anticorruption laws, regulatory requirements, reimbursement or payer regimes and other governmental; ● approvals, permits and licenses; ● failure by us, our collaborators or our distributors to obtain regulatory clearance, authorization or approval for the use of our products and services in various countries; ● additional potentially relevant third-party patent rights; ● complexities and difficulties in obtaining intellectual property protection and enforcing our intellectual property rights throughout the world; ● difficulties in staffing and managing foreign operations, including repatriating foreign earned profits; ● complexities associated with managing multiple payer reimbursement regimes, government payers or patient self-pay systems; ● difficulties in negotiating favorable reimbursement negotiations with governmental authorities; ● logistics and regulations associated with shipping samples, including infrastructure conditions and transportation delays; ● limits in our ability to penetrate international markets if we are not able to conduct our clinical diagnostic services locally; ● financial risks, such as longer payment cycles, difficulty collecting accounts receivable, the impact of local and regional financial crises on demand and payment for our products and services and exposure to foreign currency exchange rate fluctuations; ● international regulations and license requirements that may restrict foreign investment in and operation of the internet, IT infrastructure, data centers and other sectors, and international transfers of data; ● natural disasters, political and economic instability, including wars, terrorism and political unrest, and outbreak of disease; ● boycotts, curtailment of trade and other business restrictions; and ● regulatory and compliance risks that relate to maintaining accurate information and control over sales and distributors’ activities that may fall within the purview of the Foreign Corrupt Practices Act of 1977, or FCPA, its books and records provisions, or its anti-bribery provisions or laws similar to the FCPA in other jurisdictions in which we may in the future operate, such as the United Kingdom’s (“UK”) Bribery Act of 2010 and anti-bribery requirements of member states in the European Union (“EU”). ​ 23 Table of Contents Any of these factors could significantly harm our future international expansion and operations and, consequently, our revenue and results of operations. ​ The sales of our products in the EU and the UK are regulated through a process that either requires self-certification or certification by a notified body in order to affix a CE mark.
Accordingly, our business and financial results in the future could be adversely affected due to a variety of factors, including: ● multiple, conflicting and changing laws and regulations such as privacy, security and data use regulations, tax laws, export and import restrictions, economic sanctions and embargoes, employment laws, anticorruption laws, regulatory requirements, reimbursement or payer regimes and other governmental; ● approvals, permits and licenses; ● failure by us, our collaborators or our distributors to obtain regulatory clearance, authorization or approval for the use of our products and services in various countries; ● additional potentially relevant third-party patent rights; 23 Table of Contents ● complexities and difficulties in obtaining intellectual property protection and enforcing our intellectual property rights throughout the world; ● difficulties in staffing and managing foreign operations, including repatriating foreign earned profits; ● complexities associated with managing multiple payer reimbursement regimes, government payers or patient self-pay systems; ● difficulties in negotiating favorable reimbursement negotiations with governmental authorities; ● logistics and regulations associated with shipping samples, including infrastructure conditions and transportation delays; ● limits in our ability to penetrate international markets if we are not able to conduct our clinical diagnostic services locally; ● financial risks, such as longer payment cycles, difficulty collecting accounts receivable, the impact of local and regional financial crises on demand and payment for our products and services and exposure to foreign currency exchange rate fluctuations; ● international regulations and license requirements that may restrict foreign investment in and operation of the internet, IT infrastructure, data centers and other sectors, and international transfers of data; ● natural disasters, political and economic instability, including wars, terrorism and political unrest, and outbreak of disease; ● boycotts, curtailment of trade and other business restrictions; and ● regulatory and compliance risks that relate to maintaining accurate information and control over sales and distributors’ activities that may fall within the purview of the Foreign Corrupt Practices Act of 1977, or FCPA, its books and records provisions, or its anti-bribery provisions or laws similar to the FCPA in other jurisdictions in which we may in the future operate, such as the United Kingdom’s Bribery Act of 2010 and anti-bribery requirements of member states in the EU. ​ Any of these factors could significantly harm our future international expansion and operations and, consequently, our revenue and results of operations. ​ The sales of our products in the EU and the UK are regulated through a process that either requires self-certification or certification by a notified body in order to affix a CE mark.
For additional details, refer to our Insider Trading Policy, which is filed as Exhibit 19 to this Form 10-K. The information required by Item 408(a) regarding insider trading plans is incorporated by reference to the Company’s definitive proxy statement to be filed within 120 days of our fiscal year-end.
For additional details, refer to our Insider Trading Policy, which is filed as Exhibit 19.1 to this Form 10-K. The information required by Item 408(a) regarding insider trading plans is incorporated by reference to the Company’s definitive proxy statement to be filed within 120 days of our fiscal year-end.
Debt financing, if available, would increase our fixed payment obligations and may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends . ​ 46 Table of Contents If we raise funds through additional collaborations, strategic alliances or marketing, distribution or licensing arrangements with third parties, we may have to relinquish valuable rights to our intellectual property, future revenue streams, research programs or current or future product candidates or to grant licenses on terms that may not be favorable to us.
Debt financing, if available, would increase our fixed payment obligations and may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends . ​ If we raise funds through additional collaborations, strategic alliances or marketing, distribution or licensing arrangements with third parties, we may have to relinquish valuable rights to our intellectual property, future revenue streams, research programs or current or future product candidates or to grant licenses on terms that may not be favorable 47 Table of Contents to us.
Any decline in available funding or access to our cash and liquidity resources could, among other risks, adversely impact our ability to meet our operating expenses, financial obligations or fulfill our other obligations, result in breaches of our financial and/or contractual obligations or result in violations of federal or state wage and hour laws and otherwise have a material adverse impact on our business. ​ 25 Table of Contents Failure to obtain and retain new customers, the loss of existing customers or material contracts, or a reduction in services or tests ordered or specimens submitted by existing customers, or the inability to retain existing and/or create new relationships with health systems could impact our ability to successfully grow its business.
Any decline in available funding or access to our cash and liquidity resources could, among other risks, adversely impact our ability to meet our operating expenses, financial obligations or fulfill our other obligations, result in breaches of our financial and/or contractual obligations or result in violations of federal or state wage and hour laws and otherwise have a material adverse impact on our business. ​ 26 Table of Contents Failure to obtain and retain new customers, the loss of existing customers or material contracts, or a reduction in services or tests ordered or specimens submitted by existing customers, or the inability to retain existing and/or create new relationships with health systems could impact our ability to successfully grow its business.
The actual or perceived failure to comply with such obligations could lead to government enforcement actions (which could include civil or criminal penalties), fines and sanctions, private litigation and/or adverse publicity and could negatively affect our operating results and business. ● Cybersecurity risks could compromise our information and expose us to liability, which may harm our ability to operate effectively and may cause our business and reputation to suffer. ● Our ability to use net operating loss carryforwards to offset future taxable income for U.S. federal tax purposes is subject to limitation and risk that could further limit our ability to utilize our net operating losses. ● The testing, manufacturing and marketing of diagnostics entails an inherent risk of product liability and personal injury claims. ● All of our diagnostic technology development and our clinical services are performed at two laboratories, and in the event either or both of these facilities were to be affected by a termination of the lease or a man-made or natural disaster, our operations could be severely impaired. 17 Table of Contents ● An impairment in the carrying value of our intangible assets could negatively affect our results of operations. ● Governmental payers and health care plans have taken steps to control costs. ● Changes in payer mix could have a material adverse impact on our net sales and profitability. ● Our laboratories require ongoing CLIA certification and we cannot guarantee that our laboratories will pass all future certification inspections. ● Our products that we sell as research use only products and/or that we offer as laboratory developed tests could become subject to government regulations requiring marketing authorization, and the marketing authorization and maintenance process for such products may be expensive, time-consuming and uncertain in both timing and outcome. ● Failure to comply with HIPAA could be costly. ● Our failure to comply with any applicable government laws and regulations or otherwise respond to claims relating to improper handling, storage or disposal of hazardous chemicals that we use may adversely affect our results of operations. ● We may become subject to the Anti-Kickback Statute, Stark Law, False Claims Act, Civil Monetary Penalties Law and may be subject to analogous provisions of applicable state laws and could face substantial penalties if we fail to comply with such laws. ● We cannot be certain that measures taken to protect our intellectual property will be effective. ● The price of our common stock may fluctuate significantly, which could negatively affect us and holders of our common stock. ● The price of our stock may be vulnerable to manipulation. ● If we cannot continue to satisfy Nasdaq listing maintenance requirements and other rules, our securities may be delisted, which could negatively impact the price of our securities. ● Increased costs associated with corporate governance compliance may significantly impact our results of operations. ● We have not paid dividends on our common stock in the past and do not expect to pay dividends on our common stock for the foreseeable future.
The actual or perceived failure to comply with such obligations could lead to government enforcement actions (which could include civil or criminal penalties), fines and sanctions, private litigation and/or adverse publicity and could negatively affect our operating results and business. 18 Table of Contents ● Cybersecurity risks could compromise our information and expose us to liability, which may harm our ability to operate effectively and may cause our business and reputation to suffer. ● Our ability to use net operating loss carryforwards to offset future taxable income for U.S. federal tax purposes is subject to limitation and risk that could further limit our ability to utilize our net operating losses. ● The testing, manufacturing and marketing of diagnostics entails an inherent risk of product liability and personal injury claims. ● All of our diagnostic technology development and our clinical services are performed at two laboratories, and in the event either or both of these facilities were to be affected by a termination of the lease or a man-made or natural disaster, our operations could be severely impaired. ● An impairment in the carrying value of our intangible assets could negatively affect our results of operations. ● Governmental payers and health care plans have taken steps to control costs. ● Changes in payer mix could have a material adverse impact on our net sales and profitability. ● Our laboratories require ongoing CLIA certification and we cannot guarantee that our laboratories will pass all future certification inspections. ● Our products that we sell as research use only products and/or that we offer as laboratory developed tests could become subject to government regulations requiring marketing authorization, and the marketing authorization and maintenance process for such products may be expensive, time-consuming and uncertain in both timing and outcome. ● Failure to comply with HIPAA could be costly. ● Our failure to comply with any applicable government laws and regulations or otherwise respond to claims relating to improper handling, storage or disposal of hazardous chemicals that we use may adversely affect our results of operations. ● We may become subject to the Anti-Kickback Statute, Stark Law, False Claims Act, Civil Monetary Penalties Law and may be subject to analogous provisions of applicable state laws and could face substantial penalties if we fail to comply with such laws. ● The use of artificial intelligence in diagnostic or laboratory applications may subject us to additional regulatory and liability risks. ● We cannot be certain that measures taken to protect our intellectual property will be effective. ● The price of our common stock may fluctuate significantly, which could negatively affect us and holders of our common stock. ● The price of our stock may be vulnerable to manipulation. ● If we cannot continue to satisfy Nasdaq listing maintenance requirements and other rules, our securities may be delisted, which could negatively impact the price of our securities. ● Increased costs associated with corporate governance compliance may significantly impact our results of operations. ● We have not paid dividends on our common stock in the past and do not expect to pay dividends on our common stock for the foreseeable future.
Pursuant to our amended and restated bylaws, as amended (the “bylaws”), unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware is the sole and exclusive forum for state law claims for (1) any derivative action or proceeding brought on our behalf; (2) any action or proceeding asserting a claim of breach of a fiduciary duty owed by any current or former director, officer or other employee or agent of ours to us or our stockholders or debtholders, (3) any action asserting a claim against us or any director or officer or other employee of ours arising pursuant to any provision of the Delaware General Corporation Law or our certificate of incorporation or the bylaws (in each case, as they may be amended from time to time), (4) any action asserting a claim against us or any current or former director or officer or other employee or agent of ours governed by the internal affairs doctrine or (5) any action asserting an “internal corporate claim” as that term is defined in Section 115 of the General Corporation Law of the State of Delaware (the “Delaware Forum Provision”); provided, however, that the Delaware Forum Provision will not apply to any causes of action arising under the Securities Act or the Exchange Act.
Pursuant to our amended and restated bylaws, as amended (the “bylaws”), unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware is the sole and exclusive forum for state law claims for (1) any derivative action or proceeding brought on our behalf; (2) any action or proceeding asserting a claim 48 Table of Contents of breach of a fiduciary duty owed by any current or former director, officer or other employee or agent of ours to us or our stockholders or debtholders, (3) any action asserting a claim against us or any director or officer or other employee of ours arising pursuant to any provision of the Delaware General Corporation Law or our certificate of incorporation or the bylaws (in each case, as they may be amended from time to time), (4) any action asserting a claim against us or any current or former director or officer or other employee or agent of ours governed by the internal affairs doctrine or (5) any action asserting an “internal corporate claim” as that term is defined in Section 115 of the General Corporation Law of the State of Delaware (the “Delaware Forum Provision”); provided, however, that the Delaware Forum Provision will not apply to any causes of action arising under the Securities Act or the Exchange Act.
To mitigate these risks, the Company has implemented a comprehensive Insider Trading Policy, which: prohibits trading in the Company’s securities while in possession of material nonpublic information; restricts trading by directors, executive officers, and designated employees during blackout periods that typically commence 15 days before the end of each fiscal quarter and continue until two full trading days after earnings are publicly disclosed; requires pre-clearance of trades for directors, officers, and certain employees to prevent inadvertent violations; bans hedging, pledging, short sales, and speculative transactions involving the Company’s stock; and establishes procedures for Rule 10b5-1 trading plans to allow compliant trading activity.
To mitigate these risks, the Company has implemented a comprehensive Insider Trading Policy, which: prohibits trading in the Company’s securities while in possession of material nonpublic information; restricts trading by directors, executive officers, and designated employees during blackout periods that typically 21 Table of Contents commence 15 days before the end of each fiscal quarter and continue until two full trading days after earnings are publicly disclosed; requires pre-clearance of trades for directors, officers, and certain employees to prevent inadvertent violations; bans hedging, pledging, short sales, and speculative transactions involving the Company’s stock; and establishes procedures for Rule 10b5-1 trading plans to allow compliant trading activity.
The Court of Chancery of the State of Delaware and the federal district courts of the United States may also reach different judgments or results than would other courts, including courts where a stockholder considering an action may be 48 Table of Contents located or would otherwise choose to bring the action, and such judgments may be more or less favorable to us than our stockholders.
The Court of Chancery of the State of Delaware and the federal district courts of the United States may also reach different judgments or results than would other courts, including courts where a stockholder considering an action may be 49 Table of Contents located or would otherwise choose to bring the action, and such judgments may be more or less favorable to us than our stockholders.
Any failure to develop or maintain effective controls could adversely affect the results of periodic management evaluations and annual independent registered public accounting firm attestation reports regarding the effectiveness of our internal control over financial reporting, which we may be required to include in our periodic reports that we file with the SEC under Section 404 of the Sarbanes-Oxley Act, and could harm our operating results, cause us to fail to meet our reporting obligations, or result in a restatement of our 44 Table of Contents prior period financial statements.
Any failure to develop or maintain effective controls could adversely affect the results of periodic management evaluations and annual independent registered public accounting firm attestation reports regarding the effectiveness of our internal control over financial reporting, which we may be required to include in our periodic reports that we file with the SEC under Section 404 of the Sarbanes-Oxley Act, and could harm our operating results, cause us to fail to meet our reporting obligations, or result in a restatement of our prior period financial statements.
To date, we have experienced negative cash flow from development of our diagnostic technology, as well as from the costs associated with establishing a laboratory and building a sales force to market our products and services. We expect to incur net losses through at least the first half of 2025 as we further develop and commercialize our diagnostic technology.
To date, we have experienced negative cash flow from development of our diagnostic technology, as well as from the costs associated with establishing a laboratory and building a sales force to market our products and services. We expect to incur net losses through at least the first half of 2026 as we further develop and commercialize our diagnostic technology.
As a result, we cannot be certain that drafting or prosecution of the licensed patents and patent applications by the licensors have been or will be conducted in compliance with applicable laws and regulations or will result in valid and enforceable patents and other intellectual property rights. ​ If we are unable to protect the confidentiality of our trade secrets, our business and competitive position may be harmed. ​ In addition to the protection afforded by patents, we rely upon trade secret protection, know-how and continuing technological innovation to develop and maintain our competitive position.
As a result, we cannot be certain that drafting or prosecution of the licensed patents and patent applications by the licensors have been or will be conducted in compliance with applicable laws and regulations or will result in valid and enforceable patents and other intellectual property rights. ​ 39 Table of Contents If we are unable to protect the confidentiality of our trade secrets, our business and competitive position may be harmed. ​ In addition to the protection afforded by patents, we rely upon trade secret protection, know-how and continuing technological innovation to develop and maintain our competitive position.
Our ability to achieve commercial market acceptance for our existing and future products will depend on several factors, including: ● our ability to convince the medical community of the clinical utility of our products and their potential advantages over existing diagnostics technology; ● the willingness of physicians and patients to utilize our products; and 21 Table of Contents ● the agreement by commercial third-party payers and government payers to reimburse our products, the scope and amount of which will affect patients’ willingness or ability to pay for our products and will likely heavily influence physicians’ decisions to recommend our products.
Our ability to achieve commercial market acceptance for our existing and future products will depend on several factors, including: ● our ability to convince the medical community of the clinical utility of our products and their potential advantages over existing diagnostics technology; ● the willingness of physicians and patients to utilize our products; and ● the agreement by commercial third-party payers and government payers to reimburse our products, the scope and amount of which will affect patients’ willingness or ability to pay for our products and will likely heavily influence physicians’ decisions to recommend our products.
Additionally, if the steps taken to maintain our trade secrets are deemed inadequate, we may have insufficient recourse against third parties for misappropriating our trade secrets. ​ 38 Table of Contents If our trademarks and trade names are not adequately protected, then we may not be able to build name recognition in our markets of interest and our business may be adversely affected. ​ Our registered or unregistered trademarks or trade names may be challenged, infringed, circumvented or declared generic or determined to be infringing on other marks.
Additionally, if the steps taken to maintain our trade secrets are deemed inadequate, we may have insufficient recourse against third parties for misappropriating our trade secrets. ​ If our trademarks and trade names are not adequately protected, then we may not be able to build name recognition in our markets of interest and our business may be adversely affected. ​ Our registered or unregistered trademarks or trade names may be challenged, infringed, circumvented or declared generic or determined to be infringing on other marks.
We cannot predict if investors will find our common stock less attractive because we may rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common 49 Table of Contents stock and our common stock prices may be more volatile.
We cannot predict if investors will find our common stock less attractive because we may rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common 50 Table of Contents stock and our common stock prices may be more volatile.
We may increase the number of employees in the future depending on the progress of our development of diagnostic technology. Our future financial performance and our ability to 27 Table of Contents commercialize our product candidates and to compete effectively will depend, in part, on our ability to manage any future growth effectively.
We may increase the number of employees in the future depending on the progress of our development of diagnostic technology. Our future financial performance and our ability to 28 Table of Contents commercialize our product candidates and to compete effectively will depend, in part, on our ability to manage any future growth effectively.
For these reasons, we may not be able to utilize a material portion of the NOLs, even if we attain profitability, which could potentially result in increased future tax liability to us and could adversely affect our operating results and financial condition. 31 Table of Contents The testing, manufacturing and marketing of diagnostics entails an inherent risk of product liability and personal injury claims.
For these reasons, we may not be able to utilize a material portion of the NOLs, even if we attain profitability, which could potentially result in increased future tax liability to us and could adversely affect our operating results and financial condition. The testing, manufacturing and marketing of diagnostics entails an inherent risk of product liability and personal injury claims.
Efforts by certain market participants to manipulate the price of our 43 Table of Contents common stock for their personal financial gain may cause our stockholders to lose a portion of their investment, may make it more difficult for us to raise equity capital when needed without significantly diluting existing stockholders, and may reduce demand from new investors to purchase shares of our stock.
Efforts by certain market participants to manipulate the price of our common stock for their personal financial gain may cause our stockholders to lose a portion of their investment, may make it more difficult for us to raise equity capital when needed without significantly diluting existing stockholders, and may reduce demand from new investors to purchase shares of our stock.
Some of these tests may use different approaches or means to obtain diagnostic results, which could be more effective or less expensive than our tests for similar indications. Moreover, these and other future competitors have or may have considerably greater resources than we do in terms of technology, sales, marketing, commercialization and capital resources.
Some of these tests may use different approaches or means to obtain diagnostic results, which could be more effective or 22 Table of Contents less expensive than our tests for similar indications. Moreover, these and other future competitors have or may have considerably greater resources than we do in terms of technology, sales, marketing, commercialization and capital resources.
If we were to be sued, it could result in substantial costs and a diversion of management’s attention and resources, which could harm our business. 45 Table of Contents If securities or industry analysts do not publish research or reports about our business, or if they change their recommendations regarding our stock adversely, our stock price and trading volume could decline.
If we were to be sued, it could result in substantial costs and a diversion of management’s attention and resources, which could harm our business. If securities or industry analysts do not publish research or reports about our business, or if they change their recommendations regarding our stock adversely, our stock price and trading volume could decline.
If physician self-referral laws are interpreted differently or if other legislative restrictions are issued, we could incur significant sanctions and loss of revenues, or we could have to change our arrangements and operations in a way that could have a material adverse effect on our business, prospects, damage to our reputation, results of operations and financial condition.
If physician self-referral laws are interpreted differently or if other legislative restrictions are issued, we could 37 Table of Contents incur significant sanctions and loss of revenues, or we could have to change our arrangements and operations in a way that could have a material adverse effect on our business, prospects, damage to our reputation, results of operations and financial condition.
It is critical to our success that we anticipate changes in technology and customer requirements and successfully introduce new, enhanced and competitive technologies to meet our customers’ and prospective customers’ needs on a timely and cost-effective basis. At the same 22 Table of Contents time, however, we must carefully manage the introduction of new products.
It is critical to our success that we anticipate changes in technology and customer requirements and successfully introduce new, enhanced and competitive technologies to meet our customers’ and prospective customers’ needs on a timely and cost-effective basis. At the same time, however, we must carefully manage the introduction of new products.
The rapid evolution of artificial intelligence will require the application of significant resources to design, develop, test and maintain such systems to help ensure that artificial intelligence is implemented in accordance with 29 Table of Contents applicable law and regulation and in a socially responsible manner and to minimize any real or perceived unintended harmful impacts.
The rapid evolution of artificial intelligence will require the application of significant resources to design, develop, test and maintain such systems to help ensure that artificial intelligence is implemented in accordance with applicable law and regulation and in a socially responsible manner and to minimize any real or perceived unintended harmful impacts.
These changes in federal, state, local, and third-party payer regulations or policies may decrease our revenues and adversely affect our results of operations and our financial condition. Occasionally, legislative pauses 32 Table of Contents and changes impact our products that are reimbursed under the Medicare Physician Fee Schedule (“MPFS”), or the Clinical Laboratory Fee Schedule (“CLFS”).
These changes in federal, state, local, and third-party payer regulations or policies may decrease our revenues and adversely affect our results of operations and our financial condition. Occasionally, legislative pauses and changes impact our products that are reimbursed under the Medicare Physician Fee Schedule (“MPFS”), or the Clinical Laboratory Fee Schedule (“CLFS”).
Although we have taken steps to protect the security of our information systems and the data maintained in those systems, it is possible that our safety and security measures will not prevent the systems’ improper functioning or damage or the improper access or disclosure of personally identifiable information such as in the event of cyberattacks.
Although we have taken steps to protect the security of our information 31 Table of Contents systems and the data maintained in those systems, it is possible that our safety and security measures will not prevent the systems’ improper functioning or damage or the improper access or disclosure of personally identifiable information such as in the event of cyberattacks.
While an inadvertent lapse can in many cases be cured by payment of a late fee or by other means in accordance with the applicable rules, there are situations in which noncompliance can result in abandonment or lapse of the patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction.
While an inadvertent lapse can in many cases be cured by payment of a late fee or by other means in accordance with the applicable rules, there are situations in which noncompliance can result in abandonment or lapse of 41 Table of Contents the patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction.
In this case, we could ultimately be forced to cease use of such trademarks. ​ 40 Table of Contents Even if we establish infringement, the court may decide not to grant an injunction against further infringing activity and instead award only monetary damages, which may or may not be an adequate remedy.
In this case, we could ultimately be forced to cease use of such trademarks. ​ Even if we establish infringement, the court may decide not to grant an injunction against further infringing activity and instead award only monetary damages, which may or may not be an adequate remedy.
If we are unable to obtain a necessary license to a third-party patent on commercially reasonable terms, or at all, we may be unable to commercialize our product candidates or such efforts may be impaired or delayed, which could in turn significantly harm our business. ​ 39 Table of Contents Parties making claims against us may seek and obtain injunctive or other equitable relief, which could effectively block our ability to further develop and commercialize our products or product candidates.
If we are unable to obtain a necessary license to a third-party patent on commercially reasonable terms, or at all, we may be unable to commercialize our product candidates or such efforts may be impaired or delayed, which could in turn significantly harm our business. ​ Parties making claims against us may seek and obtain injunctive or other equitable relief, which could effectively block our ability to further develop and commercialize our products or product candidates.
In addition, a cyber security incident, data breach of or other adverse event affecting our information systems could damage our reputation, subject us to liability claims or regulatory penalties for compromised personal information and could have a material adverse effect on our business, financial condition and results of operations.
In addition, a cybersecurity incident, data breach of or other adverse event affecting our information systems could damage our reputation, subject us to liability claims or regulatory penalties for compromised personal information and could have a material adverse effect on our business, financial condition and results of operations.
In addition, a number of states have adopted their own false claims and whistleblower provisions whereby a private 36 Table of Contents party may file a civil lawsuit in state court. We are required to provide information to our employees and certain contractors about state and federal false claims laws and whistleblower provisions and protections.
In addition, a number of states have adopted their own false claims and whistleblower provisions whereby a private party may file a civil lawsuit in state court. We are required to provide information to our employees and certain contractors about state and federal false claims laws and whistleblower provisions and protections.
In addition, we would no longer be subject to Nasdaq rules, including rules requiring us to have a certain number of independent directors and to meet other corporate governance standards. Increased costs associated with corporate governance compliance may significantly impact our results of operations.
In addition, we would no longer be subject to Nasdaq rules, including rules requiring us to have a certain number of independent directors and to meet other corporate governance standards. 45 Table of Contents Increased costs associated with corporate governance compliance may significantly impact our results of operations.
In addition, there is a risk that one or more of our current service providers, manufacturers and 47 Table of Contents other partners may not survive these difficult economic times, which could directly affect our ability to attain our operating goals on schedule and on budget.
In addition, there is a risk that one or more of our current service providers, manufacturers and other partners may not survive these difficult economic times, which could directly affect our ability to attain our operating goals on schedule and on budget.
These efforts, including changes in law or regulations that may occur in the future, may each individually or collectively have a material adverse impact on our business, results of operations, financial condition, and prospects . Changes in payer mix could have a material adverse impact on our net sales and profitability.
These efforts, including changes in law or regulations that may occur in the future, may each 34 Table of Contents individually or collectively have a material adverse impact on our business, results of operations, financial condition, and prospects . Changes in payer mix could have a material adverse impact on our net sales and profitability.
If personal information or protected health information is improperly accessed, tampered with, misused or disclosed as a result of a cyber security incident or data breach, we may incur significant costs to notify impacted stakeholders (including affected individuals, investors and regulators) and mitigate potential harm 30 Table of Contents to affected individuals, and we may be subject to sanctions and civil or criminal penalties if we are found to be in violation of the privacy or security rules under HIPAA or other similar federal or state laws protecting confidential personal information.
If personal information or protected health information is improperly accessed, tampered with, misused or disclosed as a result of a cybersecurity incident or data breach, we may incur significant costs to notify impacted stakeholders (including affected individuals, investors and regulators) and mitigate potential harm to affected individuals, and we may be subject to sanctions and civil or criminal penalties if we are found to be in violation of the privacy or security rules under HIPAA or other similar federal or state laws protecting confidential personal information.
We are continuing to develop and refine our disclosure controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that we file with the SEC is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms, and that information required to be disclosed in reports under the Exchange Act is accumulated and communicated to our principal executive and financial officers.
We are continuing to develop and refine our disclosure controls and other procedures that 46 Table of Contents are designed to ensure that information required to be disclosed by us in the reports that we file with the SEC is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms, and that information required to be disclosed in reports under the Exchange Act is accumulated and communicated to our principal executive and financial officers.
Similarly, changes in U.S. federal policy that affect the geopolitical landscape could give rise to circumstances outside our control that could have negative impacts on our business operations. For example, during the prior Trump administration, increased tariffs were implemented on goods imported into the U.S., particularly from China, Canada, and Mexico.
Similarly, changes in U.S. federal policy that affect the geopolitical landscape could give rise to circumstances outside our control that could have negative impacts on our business operations. For example, during the prior Trump 27 Table of Contents administration, increased tariffs were implemented on goods imported into the U.S., particularly from China, Canada, and Mexico.
Therefore, we cannot be certain that we were the first to make the inventions claimed in any of our owned or pending patent applications, or that we were the first to file for patent protection of such inventions. 37 Table of Contents We depend on certain technologies that are licensed to us.
Therefore, we cannot be certain that we were the first to make the inventions claimed in any of our owned or pending patent applications, or that we were the first to file for patent protection of such inventions. We depend on certain technologies that are licensed to us.
These products may compete with our products in jurisdictions where we do not have any issued patents and any future patent claims or other intellectual property rights may not be effective or sufficient to prevent them from competing. ​ Many companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions.
These products may compete with our products in jurisdictions where we do not have any issued patents and any future patent claims or other intellectual property rights may not be effective or sufficient to prevent them from competing. ​ 43 Table of Contents Many companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions.
Historically, the FDA has exercised enforcement discretion with respect to most LDTs and has not required laboratories that offer LDTs to comply with the FDA’s requirements for medical devices, such as the FDA’s requirements pertaining to marketing authorization, establishment registration, device listing, the Quality System Regulation, and other post-market controls.
Historically, the FDA has exercised enforcement discretion with respect to most LDTs and has not required laboratories that offer LDTs 35 Table of Contents to comply with the FDA’s requirements for medical devices, such as the FDA’s requirements pertaining to marketing authorization, establishment registration, device listing, the Quality System Regulation, and other post-market controls.
Our ability to use net operating loss carryforwards to offset future taxable income for U.S. federal tax purposes is subject to limitation and risk that could further limit our ability to utilize our net operating losses. As of December 31, 2024, we had approximately $79 million of federal net operating losses, (“NOLs”).
Our ability to use net operating loss carryforwards to offset future taxable income for U.S. federal tax purposes is subject to limitation and risk that could further limit our ability to utilize our net operating losses. As of December 31, 2025, we had approximately $81 million of federal net operating losses, (“NOLs”).
The term “remuneration” has been broadly interpreted to include anything of value such as gifts, discounts, rebates, waiver of payments or providing 35 Table of Contents anything at less than its fair market value.
The term “remuneration” has been broadly interpreted to include anything of value such as gifts, discounts, rebates, waiver of payments or providing anything at less than its fair market value.
Approximately $28 million of the federal NOLs will expire at various dates beginning in 2036 through 2037 if not utilized, while the remaining amount will have an indefinite life. As of December 31, 2024, we had approximately $2.5 million of state NOLs. The state NOLs expire on various dates.
Approximately $28 million of the federal NOLs will expire at various dates beginning in 2036 through 2037 if not utilized, while the remaining amount will have an indefinite life. As of December 31, 2025, we had approximately $2.7 million of state NOLs. The state NOLs expire on various dates.
Such measures, however, may not provide adequate protection for our trade secrets or other proprietary information. If such measures do not protect our rights, third parties could use our technology and our ability to compete in the market would be reduced.
Such measures, however, may not provide adequate protection for our trade secrets 38 Table of Contents or other proprietary information. If such measures do not protect our rights, third parties could use our technology and our ability to compete in the market would be reduced.
Additionally, our existing insurance may not be renewed by us at a cost and level of coverage comparable to that presently in effect, if at all.
Additionally, our existing 33 Table of Contents insurance may not be renewed by us at a cost and level of coverage comparable to that presently in effect, if at all.
We have been, and may continue to be, subject to legal proceedings. Due to the nature of our business and our history of insufficient capital resources to pay our obligations on a timely basis, we may be subject to a variety of regulatory investigations, claims, lawsuits and other proceedings in the ordinary course of our business.
Due to the nature of our business and our history of insufficient capital resources to pay our obligations on a timely basis, we may be subject to a variety of regulatory investigations, claims, lawsuits and other proceedings in the ordinary course of our business.
Similarly, if any third-party patent were held by a court of competent jurisdiction to cover aspects of our formulations, processes for manufacture or methods of use, including combination therapy or patient selection methods, the holders of any such patent may be able to block our ability to develop and commercialize the product candidate unless we obtained a license or until such patent expires or is finally determined to be held invalid or unenforceable.
Similarly, if any third-party patent were held by a court of competent jurisdiction to cover aspects of our technologies or product candidates, including processes for manufacture or methods of use, the holders of any such patent may be able to block our ability to develop and commercialize the product candidate unless we obtained a license or until such patent expires or is finally determined to be held invalid or unenforceable.
Either outcome could have an adverse impact on our business. 41 Table of Contents ​ Third parties may assert that our employees or consultants have wrongfully used or disclosed confidential information or misappropriated trade secrets.
Either outcome could have an adverse impact on our business. ​ Third parties may assert that our employees or consultants have wrongfully used or disclosed confidential information or misappropriated trade secrets.
We will need to increase the size of our organization, and we may experience difficulties in managing growth. We are a small company with 54 full-time employees and 6 part-time employees as of March 1, 2025. Future growth will impose significant added responsibilities on members of management, including the need to identify, attract, retain, motivate and integrate highly skilled personnel.
We will need to increase the size of our organization, and we may experience difficulties in managing growth. We are a small company with 61 full-time employees and 10 part-time employees as of March 9, 2026. Future growth will impose significant added responsibilities on members of management, including the need to identify, attract, retain, motivate and integrate highly skilled personnel.
We cannot be certain that we will achieve or sustain profitability ● We are subject to concentrations of revenue risk and concentrations of credit risk in accounts receivable. ● We have been, and may continue to be, subject to costly litigation. ● Failure to Comply with Insider Trading Regulations and Policies Could Result in Significant Legal and Reputational Consequences. ● The commercial success of our products, including those we are developing, will depend upon the degree of market acceptance of these products among physicians, patients, health care payers and the medical community and on our ability to successfully market our products. ● If we cannot compete successfully with our competitors, including new entrants in the market, we may be unable to increase or sustain our revenue or achieve and sustain profitability. ● We may not be able to develop new products or enhance the capabilities of our systems to keep pace with rapidly changing technology and customer requirements, which could have a material adverse effect on our business and operating results. ● International expansion of our business could expose us to business, regulatory, political, operational, financial and economic risks associated with doing business outside of the United States. ● Unfavorable U.S. or global economic conditions and conflicts could adversely affect our business, financial condition or results of operations. ● Global climate change could negatively affect our business. ● We depend upon a limited number of key personnel, and if we are not able to retain them or recruit additional qualified personnel, the execution of our strategy, management of our business and commercialization of our product candidates could be delayed or negatively impacted. ● We will need to increase the size of our organization, and we may experience difficulties in managing growth. ● We currently have limited experience in marketing products.
Summary of Risk Factors ● There is substantial doubt about our ability to continue as a going concern. ● Our ability to expand our business may depend on access to additional capital. ● We are subject to concentrations of revenue risk and concentrations of credit risk in accounts receivable. ● We may become subject to costly litigation, which could adversely affect our business, financial condition and results of operations. ● Failure to Comply with Insider Trading Regulations and Policies Could Result in Significant Legal and Reputational Consequences. ● The commercial success of our products, including those we are developing, will depend upon the degree of market acceptance of these products among physicians, patients, health care payers and the medical community and on our ability to successfully market our products. ● If we cannot compete successfully with our competitors, including new entrants in the market, we may be unable to increase or sustain our revenue or achieve and sustain profitability. ● We may not be able to develop new products or enhance the capabilities of our systems to keep pace with rapidly changing technology and customer requirements, which could have a material adverse effect on our business and operating results. ● International expansion of our business could expose us to business, regulatory, political, operational, financial and economic risks associated with doing business outside of the United States. ● Changes to the UK medical device regulatory framework could require additional compliance measures and affect our ability to market our products in Great Britain. ● Unfavorable U.S. or global economic conditions and conflicts could adversely affect our business, financial condition or results of operations. ● Global climate change could negatively affect our business. ● We depend upon a limited number of key personnel, and if we are not able to retain them or recruit additional qualified personnel, the execution of our strategy, management of our business and commercialization of our product candidates could be delayed or negatively impacted. ● We will need to increase the size of our organization, and we may experience difficulties in managing growth. ● We currently have limited experience in marketing products.
Significant political, trade, regulatory developments, and other circumstances beyond our control, could have a material adverse effect on our financial condition or results of operations. We operate globally and sell our products in countries throughout the world.
Significant political, trade, regulatory developments, and other circumstances beyond our control, could have a material adverse effect on our financial condition or results of operations. We operate mainly in the United States but may sell our products in other countries throughout the world.
We have had several customers who, from time to time, have individually represented 10% or more of our total revenue, or whose accounts receivable balances individually represented 10% or more of our total accounts receivable. For both the years ended December 31, 2024 and 2023, one customer individually represented 10% or more of our total revenue.
We have had several customers who, from time to time, have individually represented 10% or more of our total revenue, or whose accounts receivable balances individually represented 10% or more of our total accounts receivable. For the years ended December 31, 2025 and 2024, one customer individually represented 26% and 17% of our total revenue, respectively.
If we are unable to establish marketing and sales capabilities and retain the proper talent to execute on our sales and marketing strategy, we may not be able to generate product revenue. ● We are subject to stringent and changing laws, regulations and standards, and contractual obligations relating to privacy, data protection, and data security.
If we are unable to establish marketing and sales capabilities and retain the proper talent to execute on our sales and marketing strategy, we may not be able to generate product revenue. ● We need to ensure strong product performance and reliability to maintain and grow our business. ● We are subject to stringent and changing laws, regulations and standards, and contractual obligations relating to privacy, data protection, and data security.
An investor in our securities must carefully consider the substantial challenges, risks and uncertainties inherent in the development and commercialization of tests in the medical diagnostic industry. We may never successfully commercialize our diagnostic technology or any future tests, and our business may fail.
An investor in our securities must carefully consider the substantial challenges, risks and uncertainties inherent in the development and commercialization of tests in the medical diagnostic industry. We may never successfully commercialize our diagnostic technology or any future tests, and our business may fail. Our ability to expand our business may depend on access to additional capital.
However, at various points in recent years, the FDA has stated it intends to end its policy of enforcement discretion and to actively regulate LDTs.
However, at various points in recent years, the FDA has stated it intends to end its policy of enforcement discretion and to actively regulate LDTs. On April 29, 2024, the U.S.
Our consolidated financial statements have been prepared using accounting principles generally accepted in the United States of America applicable for a going concern, which assume that we will realize our assets and discharge our liabilities in the ordinary course of business. We have incurred substantial operating losses and have used cash in our operating activities for the past few years.
Our consolidated financial statements have been prepared using accounting principles generally accepted in the United States of America applicable for a going concern, which assume that we will realize our assets and discharge our liabilities in the ordinary course of business.
In addition, certain state laws govern privacy and security of personal information, including health information specifically. These various privacy and security laws may impact our business activities, 28 Table of Contents including our identification of research subjects, relationships with business partners and ultimately the marketing and distribution of our products.
In addition, certain state laws govern privacy and security of personal information, including health information specifically. These various privacy and security laws may impact our business activities, including our identification of research subjects, relationships with business partners and ultimately the marketing and distribution of our products. State laws are changing rapidly and there are discussions in the U.S.
This could enable third parties to seek revocation of a European patent in a single proceeding at the UPC rather than through multiple proceedings in each of the jurisdictions in which the European patent is validated.
The UPC is a common patent court that hears patent infringement and revocation proceedings effective for member states of the EU . This could enable third parties to seek revocation of a European patent in a single proceeding at the UPC rather than through multiple proceedings in each of the jurisdictions in which the European patent is validated.
Generally, we do not require collateral or other securities 20 Table of Contents to support our accounts receivable and while we are directly affected by the financial condition of our customers, management does not believe significant credit risks exist at December 31, 2024. We have been, and may continue to be, subject to costly litigation.
Generally, we do not require collateral or other securities to support our accounts receivable and while we are directly affected by the financial condition of our customers, management does not believe significant credit risks exist at December 31, 2025. We may become subject to costly litigation, which could adversely affect our business, financial condition and results of operations.
Our use of new and evolving technologies, such as artificial intelligence, may present risks and challenges that can impact our business, including by posing cybersecurity and other risks to our confidential and/or proprietary information, including personal information, and as a result we may be exposed to reputational harm and liability.
Any of the foregoing could have a material adverse effect on our business, financial condition, results of operations and prospects. 30 Table of Contents Our use of new and evolving technologies, such as artificial intelligence, may present risks and challenges that can impact our business, including by posing cybersecurity and other risks to our confidential and/or proprietary information, including personal information, and as a result we may be exposed to reputational harm and liability.
We expect to maintain ongoing relationships with our customers, however, the loss of, or significant decrease in demand from, any of our top customers could have a material adverse effect on our business, results of operations and financial condition.
We expect to maintain ongoing relationships with our customers, however, the loss of, or significant decrease in demand from, any of our top customers could have a material adverse effect on our business, results of operations and financial condition. At December 31, 2025, we had three customers who each individually represented more than 10% of our total accounts receivable.
We may become subject to the Anti-Kickback Statute, Stark Law, False Claims Act, Civil Monetary Penalties Law and may be subject to analogous provisions of applicable state laws and could face substantial penalties if we fail to comply with such laws.
Any such accident could damage our research and manufacturing facilities and operations, resulting in delays and increased costs. 36 Table of Contents We may become subject to the Anti-Kickback Statute, Stark Law, False Claims Act, Civil Monetary Penalties Law and may be subject to analogous provisions of applicable state laws and could face substantial penalties if we fail to comply with such laws.
We cannot predict how future decisions by the courts, the Congress or the USPTO may impact the value of our patents. ​ In addition, a European Unified Patent Court (UPC) came into force in June 2023. The UPC is a common patent court that hears patent infringement and revocation proceedings effective for member states of the European Union.
We cannot predict how future decisions by the courts, the Congress or the USPTO may impact the value of our patents. ​ 42 Table of Contents In addition, a European Unified Patent Court (UPC) came into force in June 2023.
Our consolidated financial statements do not include any adjustments to the amounts and classification of assets and liabilities that may be necessary should we be unable to continue as a going concern.
As of December 31, 2025, the Company had an accumulated deficit of $102.8 million and working capital of $2.3 million. Our consolidated financial statements do not include any adjustments to the amounts and classification of assets and liabilities that may be necessary should we be unable to continue as a going concern.
On May 12, 2022, we received CE-IVD marking for our HemeScreen® reagents in the EU in accordance with the requirements of the EU IVDD (Directive 98/79/EC). The new EU IVDR (Regulation 2017/746), came into effect on May 26, 2022 and replaced the IVDD.
On May 12, 2022, we received CE-IVD marking for our HemeScreen® reagents in the EU in accordance with the requirements of the EU In Vitro Diagnostic Directive ("IVDD") (Directive 98/79/EC).
Short sales are transactions in which a market participant sells a security that it does not own. To complete the transaction, the market participant must borrow the security to make delivery to the buyer. The market participant is then obligated to replace the security borrowed by purchasing the security at the market price at the time of required replacement.
To complete the transaction, the market participant must borrow the security to make delivery to the buyer. The market participant is then obligated to replace the security borrowed by purchasing the security at the market price at the time of required replacement.
Compliance with changes in privacy and information security laws and with rapidly evolving industry standards may result in our incurring significant expense due to increased investment in technology and the development of new operational processes.
Compliance with changes in privacy and information security laws and with rapidly evolving industry standards may result in our incurring significant expense due to increased investment in technology and the development of new operational processes. We maintain our information technology systems with safeguards designed to protect against cyberattacks including passive intrusion protection, firewalls and virus detection software.
The business risks associated with this concentration, including increased credit risks for these and other customers and the possibility of related credit loss write-offs, could negatively affect our margins and profits.
Collectively they accounted for approximately 56% of our total accounts receivable. At December 31, 2024, one customer accounted for approximately 29% of our total accounts receivable. The business risks associated with this concentration, including increased credit risks for these and other customers and the possibility of related credit loss write-offs, could negatively affect our margins and profits.
A weak declining or inflationary economy, or increased U.S. trade tariffs, could also strain our collaborators and suppliers, possibly resulting in supply disruption, or cause delays in their payments to us. ​ Adverse developments affecting the financial services industry, such as actual events or concerns involving liquidity, defaults, or non-performance by financial institutions or transactional counterparties, could adversely affect the Company’s current and projected business operations and its financial condition and results of operations. ​ Actual events involving limited liquidity, defaults, non-performance or other adverse developments that affect financial institutions, transactional counterparties or other companies in the financial services industry or the financial services industry generally, or concerns or rumors about any events of these kinds or other similar risks, have in the past and may in the future lead to market-wide liquidity problems. 24 Table of Contents ​ Inflation and rapid increases in interest rates have led to a decline in the trading value of previously issued government securities with interest rates below current market interest rates.
Furthermore, 25 Table of Contents governments and other third-party payors around the world facing tightening budgets could move to further reduce the reimbursement rates or the scope of coverage offered, which could adversely affect sales of our products. ​ Adverse developments affecting the financial services industry, such as actual events or concerns involving liquidity, defaults, or non-performance by financial institutions or transactional counterparties, could adversely affect the Company’s current and projected business operations and its financial condition and results of operations. ​ Actual events involving limited liquidity, defaults, non-performance or other adverse developments that affect financial institutions, transactional counterparties or other companies in the financial services industry or the financial services industry generally, or concerns or rumors about any events of these kinds or other similar risks, have in the past and may in the future lead to market-wide liquidity problems. ​ Inflation and rapid increases in interest rates have led to a decline in the trading value of previously issued government securities with interest rates below current market interest rates.
State laws are changing rapidly and there are discussions in the U.S. Congress of new comprehensive federal data privacy laws to which we could become subject to, if enacted.
Congress of new comprehensive federal data privacy laws to which we could become subject to, if enacted.
If the FDA asserts that our RUO products are subject to marketing authorization, or that our RUO products are adulterated or misbranded, our business, financial condition or results of operations could be adversely affected . Additionally, our CLIA laboratory offers testing utilizing our laboratory-developed tests (LDTs).
Moreover, if the FDA believed we inappropriately labeled our products as RUO products, it could allege that we had misbranded or adulterated our RUO products. If the FDA asserts that our RUO products are subject to marketing authorization, or that our RUO products are adulterated or misbranded, our business, financial condition or results of operations could be adversely affected.
Supreme Court rulings have narrowed the scope of patent protection available in certain circumstances and weakened the rights of patent owners in certain situations. In addition to increasing uncertainty with regard to our ability to obtain patents in the future, this combination of events has created uncertainty with respect to the value of patents, once obtained.
In addition to increasing uncertainty with regard to our ability to obtain patents in the future, this combination of events has created uncertainty with respect to the value of patents, once obtained.
In addition, the stock market in general has experienced price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of these companies. In the past, when the market price of a stock has been volatile, holders of that stock have instituted securities class action litigation against the company that issued the stock.
In addition, the stock market in general has experienced price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of these companies. Companies that experience significant volatility in the market price of their securities are sometimes subject to securities class action litigation, and we could in the future be subject to such claims.
Furthermore, pending legislative proposals, if enacted, could create new or different regulatory and compliance burdens on us and could have a negative effect on our ability to keep products on the market or develop new products, which could have a material effect on our business. 34 Table of Contents In the event that the FDA requires marketing authorization of our LDTs in the future, the FDA may not ultimately grant any clearance, authorization or approval requested by us in a timely manner, may limit our indication in a way that is not commercially desirable, or refuse to provide such marketing authorization at all.
In the event that the FDA requires marketing authorization of our LDTs in the future, the FDA may not ultimately grant any clearance, authorization or approval requested by us in a timely manner, may limit our indication in a way that is not commercially desirable, or refuse to provide such marketing authorization at all.
We are subject to U.S. federal, state, and foreign data protection laws and regulations, such as laws and regulations that address privacy and data security. For additional details on our US and EU/UK GDPR compliance obligations, see the “ Privacy Laws ” sub-section in the Business section of this Annual Report on Form 10-K.
For additional details on our US and EU/UK GDPR compliance obligations, see the “ Privacy Laws ” sub-section in the Business section of this Annual Report on Form 10-K. 29 Table of Contents In the U.S., numerous federal and state laws and regulations, including state data breach notification laws, state health information privacy laws, and federal and state consumer protection laws, govern the collection, use, disclosure, and protection of health-related and other personal information.
If any of our stockholders brought a lawsuit against us, we could incur substantial costs defending the lawsuit. Such a lawsuit could also divert the time and attention of our management. The price of our stock may be vulnerable to manipulation. We believe our common stock has been the subject of significant short-selling by certain market participants.
Such a claim could also divert the time and attention of our management. The price of our stock may be vulnerable to manipulation. We believe our common stock has been the subject of significant short-selling by certain market participants. Short sales are transactions in which a market participant sells a security that it does not own.
We may never be able to generate sufficient revenue to achieve or, if achieved, sustain profitability. ​ We are subject to concentrations of revenue risk and concentrations of credit risk in accounts receivable.
There can be no assurance that we will achieve or sustain profitability in future periods. ​ We are subject to concentrations of revenue risk and concentrations of credit risk in accounts receivable .
There is a substantial amount of litigation involving patents and other intellectual property rights in the diagnostic industries, as well as administrative proceedings for challenging patents, including interference and reexamination proceedings before the USPTO or oppositions and other comparable proceedings in foreign jurisdictions.
There is a substantial amount of litigation involving patents and other intellectual property rights in the diagnostic industries.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWe have not encountered cybersecurity challenges that have materially impaired our operations or financial standing. For additional information regarding risks from cybersecurity threats, please refer to Item 1A, “Risk Factors,” in this annual report on Form 10-K. Governance One of the key functions of our board of directors is informed oversight of our risk management process.
Biggest changeWhile we have taken mitigation steps, there can be no assurance that similar incidents will not occur in the future or that additional impacts from this or related incidents will not be identified. 51 Table of Contents For additional information regarding risks from cybersecurity threats, please refer to Item 1A, “Risk Factors,” in this annual report on Form 10-K.
Our board of directors administers its risk oversight function directly as a whole, as well as through the audit committee. 50 Table of Contents Our Chief Operating Officer is primarily responsible to assess and manage our material risks from cybersecurity threats with assistance from third-party service providers.
Our board of directors administers its risk oversight function directly as a whole, as well as through the audit committee. Our Chief Operating Officer is primarily responsible to assess and manage our material risks from cybersecurity threats with assistance from third-party service providers.
Our board of directors is responsible for monitoring and assessing strategic risk exposure, and our executive officers are responsible for the day-to-day management of the material risks we face.
Governance One of the key functions of our board of directors is informed oversight of our risk management process. Our board of directors is responsible for monitoring and assessing strategic risk exposure, and our executive officers are responsible for the day-to-day management of the material risks we face.
Added
We recently reported that we experienced a cybersecurity incident involving unauthorized access to an employee’s cloud-based storage account that may have resulted in access to certain personally identifiable information and protected health information of individuals, which we publicly disclosed in January 2026.
Added
In response, we initiated an investigation, engaged third-party cybersecurity specialists, secured the impacted account, notified law enforcement authorities, and are conducting a review of the potentially affected data. The event remains under investigation, and we continue to assess the scope and potential impacts of the incident, including any regulatory, legal, or financial implications.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe also lease approximately 5,300 square feet of laboratory space in Omaha, Nebraska, which we occupy under a lease expiring in May 2025 with annual rental payments of less than $0.1 million and we are currently evaluating our options for renewal of this space. We believe that these facilities are adequate to meet our current and planned needs.
Biggest changeWe also lease approximately 6,808 square feet of laboratory space in Omaha, Nebraska, which we occupy under a lease expiring in July 2030 with annual rental payments of $0.1 million. We believe that these facilities are adequate to meet our current and planned needs.
Item 2. Properties We currently lease approximately 11,382 square feet of laboratory and office space in New Haven, Connecticut, which we occupy under leases expiring in February 2030 with annual rental payments between $0.3 million and $0.4 million.
Item 2. Properties We currently lease approximately 15,298 square feet of laboratory and office space in New Haven, Connecticut, which we occupy under leases expiring in February 2030 with annual rental payments between $0.4 million and $0.6 million.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeWhile the outcome remains uncertain, management does not currently expect the case to have a material impact on its financial results. 51 Table of Contents For a fulsome discussion of legal proceedings, see Note 8 – “Commitment and Contingencies” in the notes to the consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
Biggest changeThe settlement was reached without any admission of liability and is not material to the Company’s financial statements. Accordingly, the matter is considered closed. For a fulsome discussion of legal proceedings, see Note 8 – “Commitment and Contingencies” in the notes to the consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
Although the results of litigation and claims cannot be predicted with certainty, we currently believe that the final outcome of these ordinary course matters will not have a material adverse effect on our business, but, regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.
Although the results of litigation and claims cannot be predicted with certainty, we currently believe that the final outcome of these ordinary course matters will not have a material adverse effect on our business, but, regardless of 52 Table of Contents the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.
This discussion is incorporated herein by reference. ​ Item 4. Mine Safety Disclosures Not Applicable. ​ 52 Table of Contents PART II
This discussion is incorporated herein by reference. Item 4. Mine Safety Disclosures Not Applicable. ​ 53 Table of Contents PART II
We are currently involved in a legal proceeding brought by a former employee before the court in San Antonio, Texas alleging unfair dismissal where the former employee seeks monetary damages. We dispute these allegations and intend to defend ourselves vigorously.
During the year ended December 31, 2025, we were involved in a legal proceeding brought by a former employee before the court in San Antonio, Texas alleging unfair dismissal where the former employee seeks monetary damages. The matter was resolved in 2025 through a settlement agreement.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeWe are a smaller reporting company, as defined by Rule 12b-2 of the Exchange Act, and are not required to provide the information required under this item. Holders. At March 24, 2025, there were 1,504,312 shares of our common stock outstanding and approximately 34 holders of record. Dividends. No cash dividends have been paid on our common stock.
Biggest changeWe are a smaller reporting company, as defined by Rule 12b-2 of the Exchange Act, and are not required to provide the information required under this item. Holders. At March 23, 2026, there were 1,783,682 shares of our common stock outstanding and approximately 33 holders of record. Dividends. No cash dividends have been paid on our common stock.
Investors in our common stock should not rely on an investment in our company if they require dividend income and should not purchase our common stock with the expectation of receiving cash dividends. Issuer Purchases of Equity Securities . We made no purchases of our common stock during the year ended December 31, 2024. Therefore, tabular disclosure is not presented.
Investors in our common stock should not rely on an investment in our company if they require dividend income and should not purchase our common stock with the expectation of receiving cash dividends. Issuer Purchases of Equity Securities . We made no purchases of our common stock during the year ended December 31, 2025. Therefore, tabular disclosure is not presented.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Biggest changeFinancial Statements and Supplementary Data 61 ​ Report of Independent Registered Public Accounting Firm (PCAOB ID#688) 61 ​ Consolidated Balance Sheets as of December 31, 2024 and 2023 63 ​ Consolidated Statements of Operations for the Years Ended December 31, 2024 and 2023 64 ​ Consolidated Statements of Stockholders’ Equity for the Years Ended December 31, 2024 and 2023 65 ​ Consolidated Statements of Cash Flows for the Years Ended December 31, 2024 and 2023 66 ​ Notes to the Consolidated Financial Statements for the Years Ended December 31, 2024 and 2023 68
Biggest changeFinancial Statements and Supplementary Data 62 ​ Reports of Independent Registered Public Accounting Firms (CBIZ CPAs PC, PCAOB ID #199/Marcum LLP, PCAOB ID #688) 62 ​ Consolidated Balance Sheets as of December 31, 2025 and 2024 66 ​ Consolidated Statements of Operations for the Years Ended December 31, 2025 and 2024 67 ​ Consolidated Statements of Stockholders’ Equity for the Years Ended December 31, 2025 and 2024 68 ​ Consolidated Statements of Cash Flows for the Years Ended December 31, 2025 and 2024 69 ​ Notes to the Consolidated Financial Statements for the Years Ended December 31, 2025 and 2024 71
Item 6. [Reserved] 53 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 53 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 60 Item 8.
Item 6. [Reserved] 54 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 54 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 61 Item 8.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe decrease included decreases from: (1) a decrease of $1.5 million in sales and marketing expenses due mainly to a decrease in personnel costs of $1.2 million as a result of a lower headcount and a decrease of $0.3 million in other costs, (2) a decrease of $0.4 million in research and development expenses mainly related to a decrease of $0.1 million in operating supplies, a decrease of $0.1 million in personnel costs and a decrease of $0.2 million in other costs, and (3) a decrease of $0.1 million in stock-based compensation expenses.
Biggest changeFor the year ended December 31, 2025: (1) general and administrative expenses remained flat which included an increase of $0.1 million in personnel costs offset by a decrease of $0.1 million in legal and professional fees, (2) sales and marketing expenses increased by $0.1 million due to an increase in professional fees, (3) research and development expenses increased by $0.3 million due to an increase in personnel costs and operating supplies, and (4) stock-based compensation decreased by $0.3 million . 56 Table of Contents Other (Expense) Income.
Our ability to continue as a going concern over the next twelve months from the date the consolidated financial statements were issued is dependent upon a combination of achieving its business plan, including generating additional revenue and avoiding potential business disruption due to the macroeconomic environment and geopolitical instability, and raising additional financing, if needed, to meet its debt obligations and paying liabilities arising from normal business operations when they come due.
Our ability to continue as a going concern over the next twelve months from the date the consolidated financial statements were issued is dependent upon a combination of achieving our business plan, including generating additional revenue and avoiding potential business disruption due to the macroeconomic environment and geopolitical instability, and raising additional financing, if needed, to meet our debt obligations and paying liabilities arising from normal business operations when they come due.
The cash flows provided by operating activities of $0.4 million during the year ended December 31, 2024 included a decrease in accounts receivables of $0.4 million, a decrease in other assets of $0.3 million, an increase in accrued expenses of $1.0 million, an increase in deferred revenue of $0.1 million and non-cash adjustments of $3.4 million.
The cash flows provided by operating activities of approximately $0.4 million during the year ended December 31, 2024 included a decrease in accounts receivables of $0.4 million, a decrease in other assets of $0.3 million, an increase in accrued expenses of $1.0 million, an increase in deferred revenue of $0.1 million and non-cash adjustments of $3.4 million .
At each of December 31, 2024 and December 31, 2023, other than certain purchase commitments, we did not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
At each of December 31, 2025 and December 31, 2024, other than certain purchase commitments, we did not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
CHC established a Temporary Funding Assistance Program to help bridge the gap in short-term cash flow needs for its customers affected by the disruption of its services due to the cyberattack. On October 28, 2024, the Company received a notice from CHC stating that they had restored the connectivity of their systems.
CHC established a Temporary Funding Assistance Program to help bridge the gap in short-term cash flow needs for its customers affected by the disruption of its services due to the cyberattack. On October 28, 2024, we received a notice from CHC stating that they had restored the connectivity of their systems.
We believe that the following critical accounting estimates are particularly subject to management’s judgment and could materially affect our financial condition and results of operations: ● Assumptions used in the Black-Scholes pricing model for valuation of stock option awards, such as expected volatility, risk-free interest rate, expected term and expected dividends. ● Assumptions used in the recording of allowances for credit losses and contractual allowances, including customer creditworthiness, market conditions, and trends in healthcare and insurance practices.
We believe that the following critical accounting estimates are particularly subject to management’s judgment and could materially affect our financial condition and results of operations: 58 Table of Contents ● Assumptions used in the Black-Scholes pricing model for valuation of stock option awards, such as expected volatility, risk-free interest rate, expected term and expected dividends. ● Assumptions used in the recording of allowances for credit losses and contractual allowances, including customer creditworthiness, market conditions, and trends in healthcare and insurance practices.
Notwithstanding the aforementioned circumstances, there remains substantial doubt about our ability to continue as a going concern for the next twelve months from the date the consolidated financial statements were available to be issued. There can be no assurance that we will be able to successfully achieve our initiatives summarized above in order to continue as a going concern.
There remains substantial doubt about our ability to continue as a going concern for the next twelve months from the date the consolidated financial statements were available to be issued. There can be no assurance that we will be able to successfully achieve our initiatives summarized above in order to continue as a going concern.
(3) These amounts represent purchase commitments, including all open purchase orders See Note 8 – “Commitments and Contingencies” to our accompanying consolidated financial statements included with this Annual Report on Form 10-K. ​ Critical Accounting Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statement and the reported amounts of revenues and expenses during the reporting period. 57 Table of Contents Making estimates requires management to exercise significant judgment.
(3) These amounts represent purchase commitments, including all open purchase orders See Note 8 – “Commitments and Contingencies” to our accompanying consolidated financial statements included with this Annual Report on Form 10-K. ​ Critical Accounting Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statement and the reported amounts of revenues and expenses during the reporting period.
Thus, when CHC shut down its business operations our pathology billings were halted. Our ability to process billings, accept payer remittances, process medical and billing benefit notices, bill secondary insurers, as well as patients, and communicate with commercial payers was severely impacted.
Precipio uses CHC to process its billings for pathology services. Thus, when CHC shut down its business operations our pathology billings were halted. Our ability to process billings, accept payer remittances, process medical and billing benefit notices, bill secondary insurers, as well as patients, and communicate with commercial payers was severely impacted.
Cash flows used in financing activities totaled $0.3 million for the year ended December 31, 2024, which included payments on our long-term debt and finance lease obligations of $0.6 million partially offset by $0.2 million of proceeds from debt and $0.1 million of proceeds from the issuance of common stock.
Cash flows used in financing activities totaled $0.3 million for the year ended December 31, 2024, which included $0.7 million in payments on our long-term debt and finance lease obligations. These were partially offset by $0.3 million of proceeds from debt and $0.1 million of proceeds from the issuance of common stock .
Accordingly, we cannot assure you that our financial condition and results of operations will not be materially impacted by inflation in the future. 59 Table of Contents
Accordingly, we cannot assure you that our financial condition and results of operations will not be materially impacted by inflation in the future.
While it is difficult to accurately measure the impact of inflation due to the imprecise nature of the estimates required, we do not believe inflation had a material effect on our financial condition or results of operations during the years ended December 31, 2024 and 2023.
While it is difficult to accurately measure the impact of inflation due to the imprecise nature 60 Table of Contents of the estimates required, we do not believe inflation had a material effect on our financial condition or results of operations during the years ended December 31, 2025 and 2024.
The gross profit increased during the year ended December 31, 2024, as compared to the prior year period, as a result of increases in case volume and revenue. We operate a fully staffed CLIA and CAP certified clinical pathology and molecular laboratory.
G ross profit increased during the year ended December 31, 2025, as compared to the prior year period, as a result of increases in case volume and revenue. We operate a fully staffed CLIA and CAP certified clinical pathology and molecular laboratory.
It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events.
Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events.
This resulted in billing and cash reimbursement delays during the year ended December 31, 2024. ​ Along with the delays in billing and cash reimbursements, we incurred approximately $0.3 million of expense during the year ended December 31, 2024, as we incurred lost collections and used alternative methods for claims processing.
Along with the delays in billing and cash reimbursements, we incurred approximately $0.3 million of expenses during the year ended December 31, 2024, as we incurred lost collections and used alternative methods for claims processing.
During the year ended December 31, 2024, patient diagnostic service revenue increased $3.7 million as compared to the same period in 2023. This increase was due to a greater number of cases processed in the current year period.
During the year ended December 31, 2025, patient diagnostic service revenue increased $5.4 million as compared to the same period in 2024. This increase was due to a greater number of cases processed in the current year period.
These were partially offset by a net loss of $4.3 million, an increase in inventories of $0.3 million, and a decrease in operating lease liabilities of $0.2 million.
These were partially offset by a net loss of $4.3 million, an increase in inventories of $0.3 million, and a decrease in operating lease liabilities of $0.2 million. Cash Flows Used In Investing Activities.
Product revenue decreased by $0.4 million for the year ended December 31, 2024 as compared to the same period in 2023. Cost of Sales. Cost of sales includes material and supply costs for the patient tests performed, costs related to products and other direct costs (primarily personnel costs, pathologist interpretation costs and rent) associated with the operations of our laboratory.
Cost of sales includes material and supply costs, including shipping, for the patient tests performed, costs related to products and other direct costs (primarily personnel costs, pathologist interpretation costs and rent) associated with the operations of our laboratory. Cost of sales increased by $2.4 million for the year ended December 31, 2025 as compared to the same period in 2024.
Cash flows used in investing activities were $0.2 million and $0.1 million for the years ended December 31, 2024 and 2023, respectively, resulting from purchases of property and equipment. Cash Flows (Used in) Provided by Financing Activities.
Cash flows used in investing activities were $0.3 million and $0.2 million for the years ended December 31, 2025 and 2024, respectively, resulting from purchases of property and equipment. 57 Table of Contents Cash Flows Provided by (Used in) Financing Activities.
Operating expenses primarily consist of personnel costs, professional fees, travel costs, facility costs, stock based compensation costs and depreciation and amortization. Our operating expenses decreased by 55 Table of Contents $1.9 million to $11.8 million for the year ended December 31, 2024 as compared to $13.6 million for the year ended December 31, 2023.
Operating expenses primarily consist of personnel costs, professional fees, travel costs, facility costs, stock-based compensation costs and depreciation and amortization. Our operating expenses increased by $0.1 million to $11.9 million for the year ended December 31, 2025 as compared to $11.8 million for the year ended December 31, 2024.
Gross profit and gross margins were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Dollars in Thousands ​ ​ Year Ended ​ ​ ​ ​ ​ December 31, ​ Margin % ​ 2024 2023 2024 2023 Gross Profit ​ $ 7,559 ​ $ 6,018 41 % 40 % ​ Gross margin was 41% and 40% of total net sales, for the years ended December 31, 2024 and 2023, respectively, and the gross profit was approximately $7.6 million and $6.0 million during the years ended December 31, 2024 and 2023, respectively.
Gross profit and gross margins were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Dollars in Thousands ​ ​ Year Ended ​ ​ ​ ​ ​ December 31, ​ Change ​ ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ $ ​ ​ ​ % Gross Profit ​ $ 10,706 ​ $ 7,559 ​ 3,147 ​ 42 ​ Gross Margin ​ ​ 45% ​ ​ 41% ​ ​ ​ ​ ​ ​ Gross margin was 45% and 41% of total net sales, for the years ended December 31, 2025 and 2024, respectively, and the gross profit was approximately $10.7 million and $7.6 million during the years ended December 31, 2025 and 2024, respectively.
Cash flows provided by financing activities totaled $1.7 million for the year ended December 31, 2023, which included $2.2 million of proceeds from the issuance of common stock partially offset by payments on our long-term debt and finance lease obligations of $0.5 million .
Cash flows provided by financing activities totaled $0.9 million for the year ended December 31, 2025, which included $1.3 million in proceeds from the exercise of warrants and $0.1 million in proceeds from the exercise of stock options. These were partially offset by $0.5 million in payments on our long-term debt and finance lease obligations.
Cash decreased by $0.1 million and $1.9 million during the years ended December 31, 2024 and 2023, respectively. Cash Flows Provided by (Used in) Operating Activities.
Cash increased by $1.3 million during the year ended December 31, 2025 and decreased by $0.1 million during the year ended December 31, 2024. Cash Flows Provided by (Used in) Operating Activities.
We operate Clinical Laboratory Improvement Amendments (“CLIA”) compliant laboratories in both New Haven, Connecticut and Omaha, Nebraska, from which we provide essential blood cancer diagnostics to oncologists nationwide.
We operate clinical laboratory improvement amendment (“CLIA”) laboratories in both New Haven, Connecticut and Omaha, Nebraska where we provide essential blood cancer diagnostics to office-based oncologists in many states nationwide.
The accompanying financial statements have been prepared assuming we will continue as a going concern and do not include any adjustments that might result should we be unable to continue as a going concern as a result of the outcome of this uncertainty. ​ Results of Operations for the Years Ended December 31, 2024 and 2023 Net Sales.
The accompanying financial statements have been prepared assuming we will continue as a going concern and do not include any adjustments 55 Table of Contents that might result should we be unable to continue as a going concern as a result of the outcome of this uncertainty.
We have incurred substantial operating losses and has used cash in its operating activities for the past several years. For the year ended December 31, 2024, we had a net loss of $4.3 million and net cash provided by operating activities of $0.4 million.
We have incurred substantial operating losses and have typically used cash in our operating activities for the past several years. For the year ended December 31, 2025, we had an operating loss of $1.2 million and net cash provided by operating activities of $0.7 million.
As of December 31, 2024, we had an accumulated deficit of $102.4 million and a working capital deficit of $0.8 million.
As of December 31, 2025, we had an accumulated deficit of $102.8 million and working capital of $2.3 million.
To deliver our strategy, we have structured our organization to develop diagnostic products, including our laboratory and research and development (“R&D”) facilities located in New Haven, Connecticut and Omaha, Nebraska, 53 Table of Contents respectively, which house teams that collaborate on the development of new products and services.
Product revenues may offer greater scalability than traditional laboratory services, although adoption depends on regulatory, reimbursement, and market factors. ​ To deliver our strategy, we have structured our organization to develop diagnostic products, including our laboratory and research and development (“R&D”) facilities located in New Haven, Connecticut and Omaha, Nebraska, respectively, which house teams that collaborate on the development of new products and services.
Starting shortly after the breach, we redirected a significant amount of our internal resources to internally handle the billing services that CHC was no longer delivering.
Starting shortly after the breach, we redirected a significant amount of our internal resources to internally handle the billing services that CHC was no longer delivering. This resulted in billing and cash reimbursement delays during the year ended December 31, 2024.
The Company is currently evaluating the impact of this standard on its financial statement presentation and disclosures. Other Developments ​ Change Healthcare ​ Change Healthcare (“CHC”), a subsidiary of UnitedHealth Group, suffered a cybersecurity breach in February 2024 which resulted in the temporary shut-down of some of its systems. Precipio uses CHC to process its billings for pathology services.
The Company is currently evaluating the impact of adopting this standard on its consolidated financial statements and disclosures. 59 Table of Contents Other Developments ​ Change Healthcare ​ Change Healthcare (“CHC”), a subsidiary of UnitedHealth Group, experienced a cybersecurity breach in February 2024 which resulted in the temporary shut-down of some of its systems.
Net sales were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Dollars in Thousands ​ ​ Year Ended ​ ​ ​ ​ ​ December 31, ​ Change ​ 2024 2023 $ % Service revenue, net, less allowance for credit loss ​ $ 15,921 ​ $ 12,178 ​ $ 3,743 ​ 31 % Product revenue ​ 2,611 ​ 3,019 ​ ​ (408) ​ (14) % Net Sales ​ $ 18,532 ​ $ 15,197 ​ $ 3,335 ​ 22 % ​ Net sales for the year ended December 31, 2024 were $18.5 million, an increase of $3.3 million, as compared to the same period in 2023.
Net sales were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Dollars in Thousands ​ ​ Year Ended ​ ​ ​ ​ ​ December 31, ​ Change ​ ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ $ ​ ​ ​ % Service revenue, net, less allowance for credit loss ​ $ 21,309 ​ $ 15,921 ​ $ 5,388 ​ 34 % Product revenue ​ 2,740 ​ 2,611 ​ ​ 129 ​ 5 % Net Sales ​ $ 24,049 ​ $ 18,532 ​ $ 5,517 ​ 30 % ​ Net sales for the year ended December 31, 2025 were $24.0 million, an increase of $5.5 million, as compared to the same period in 2024.
Global healthcare distributors, such as ThermoFisher, McKesson, Medline and Cardinal Health, have partnered with us to form the backbone of our go-to-market strategy and enable us to access laboratories around the country that can benefit from using our diagnostic products. ​ Our operating structure promotes the harnessing of our proprietary technology and genetic diagnostic expertise to bring to market our robust pipeline of innovative solutions designed to address the root causes of misdiagnoses. ​ Going Concern The consolidated financial statements have been prepared using accounting principles generally accepted in the United States of America (“GAAP”) applicable for a going concern, which assume that we will realize our assets and discharge our liabilities in the ordinary course of business.
To deliver on our strategy of mitigating misdiagnoses we rely heavily on our CLIA laboratories to support R&D beta-testing of the products we develop, in a clinical environment. ​ Our operating structure promotes the harnessing of our proprietary technology and genetic diagnostic expertise to bring to market our robust pipeline of innovative solutions designed to address the root causes of misdiagnoses . ​ Going Concern The consolidated financial statements have been prepared using accounting principles generally accepted in the United States of America (“GAAP”) applicable for a going concern, which assume that we will realize our assets and discharge our liabilities in the ordinary course of business.
Analysis of Cash Flows - Years Ended December 31, 2024 and 2023 The following table summarizes our net cash flow activity (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2024 2023 Change Net cash provided by (used in) operating activities ​ $ 439 ​ $ (3,559) ​ $ 3,998 Net cash used in investing activities ​ ​ (223) ​ ​ (126) ​ ​ (97) Net cash (used in) provided by financing activities ​ (329) ​ 1,742 ​ (2,071) Net change in cash ​ $ (113) ​ $ (1,943) ​ $ 1,830 ​ Net Change in Cash.
Analysis of Cash Flows - Years Ended December 31, 2025 and 2024 The following table summarizes our net cash flow activity (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Dollars in Thousands ​ ​ Year Ended December 31, ​ ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ Change Net cash provided by operating activities ​ $ 685 ​ $ 439 ​ $ 246 Net cash used in investing activities ​ ​ (326) ​ ​ (223) ​ ​ (103) Net cash provided by (used in) financing activities ​ 903 ​ (329) ​ 1,232 Net change in cash ​ $ 1,262 ​ $ (113) ​ $ 1,375 ​ Net Change in Cash.
For additional information on critical accounting estimates, see Note 2 to the consolidated Financial Statements, “Summary of Significant Accounting Policies and New Accounting Standards,” in Part II, Item 8, of this Annual Report on Form 10-K. Recently Adopted Accounting Pronouncements In June 2022, the Financial Accounting Standards Board (the “FASB”) issued ASU 2022-03, Fair Value Measurement (Topic 820) (“ASU 2022-03”).
For additional information on critical accounting estimates, see Note 2 to the consolidated Financial Statements, “Summary of Significant Accounting Policies,” in Part II, Item 8, of this Annual Report on Form 10-K.
Cost of sales increased by $1.8 million for the year ended December 31, 2024 as compared to the same period in 2023. The majority of the increase related to increases in reagents, operating supplies, personnel costs and pathologist interpretation costs all due to the increase in the number of cases processed, as discussed above. Gross Profit.
The majority of the increase related to increases in reagents, operating supplies, personnel costs and pathologist interpretation costs all due to the increase in the number of cases processed, as discussed above. Gross Profit.
General and administrative expenses for the year ended December 31, 2024 increased by $0.1 million as compared to the year ended December 31, 2023. Other (Expense) Income. We recorded net other expense of $0.1 million for the year ended December 31, 2024 which was related to net interest expense.
During the year ended December 31, 2024, w e recorded net other expense of $0.1 million which was related to net interest expense .
The Company adopted this standard for fiscal year 2024 and such adoption did not have a material impact on our consolidated financial statements. 58 Table of Contents Recent Accounting Pronouncements Not Yet Adopted In December 2023, the FASB issued ASU 2023-09—Income Taxes (Topic 740)—Improvements to Income Tax Disclosures (“ASU 2023-09”) which amends the Codification to enhance the transparency and decision usefulness of income tax disclosures.
Recently Adopted Accounting Pronouncements In December 2023, the FASB issued ASU 2023-09—Income Taxes (Topic 740)—Improvements to Income Tax Disclosures (“ASU 2023-09”) which amends the Codification to enhance the transparency and decision usefulness of income tax disclosures.
The non-cash adjustments included $0.1 million for the change in provision for credit losses. We routinely provide a reserve for credit losses accounts as a result of having limited in-network payer contracts.
We routinely provide a reserve for credit losses as a result of having limited in-network payer contracts. The other non-cash adjustments to net loss of approximately $3.0 million include, among other things, depreciation and amortization, and stock-based compensation.
For public business entities, the amendments in ASU 2023-09 are effective for annual periods beginning after December 15, 2024. Early adoption is permitted. ASU 2023-09 is effective for the Company beginning January 1, 2025.
For public business entities, the amendments in ASU 2023-09 are effective for annual periods beginning after December 15, 2024, with early adoption permitted. The Company has adopted this standard with retrospective application in the 2025 annual financial statements and have included the additional disclosures in Note 9 - Income Taxes.
During the year ended December 31, 2024, we received approximately $1.1 million from CHC through this program. See Note 6 – “Accrued Expenses and Other Current Liabilities” for further discussion. Impact of Inflation Inflationary factors, such as increases in our cost of goods, labor, or other operating expenses, may adversely affect our operating results.
During the year ended December 31, 2024, we received approximately $1.1 million from CHC through this program. During the year ended December 31, 2025, we made approximately $0.9 million in repayments to CHC and wrote off another $0.1 million . See Note 6 – “Accrued Expenses and Other Current Liabilities” for further discussion.
We processed 11,894 cases during the year ended December 31, 2024 as compared to 6,765 cases during the same period in 2023, or a 76% increase in cases.
We processed 15,470 cases during the year ended December 31, 2025 as compared to 11,894 cases during the same period in 2024, or a 30% increase in cases. Product revenue increased by $0.1 million for the year ended December 31, 2025 as compared to the same period in 2024. Cost of Sales.
The cash flows used in operating activities of $3.6 million 56 Table of Contents during the year ended December 31, 2023 included a net loss of $5.8 million, an increase in accounts receivables of $0.5 million, a decrease in accounts payable of $0.2 million and a decrease in operating lease liabilities of $0.2 million.
The cash flows provided by operating activities of $0.7 million during the year ended December 31, 2025 included an increase in accounts payable of $0.5 million, an increase in deferred revenues of $0.1 million, and non-cash adjustments of $3.2 million.
These were partially offset by a decrease in inventories of $0.3 million, a decrease in other assets of $0.4 million, an increase in accrued expenses of $0.7 million and non-cash adjustments of $1.7 million. Cash Flows Used In Investing Activities.
These were partially offset by a net loss of $0.4 million, an increase in accounts receivables of $1.4 million, an increase in inventories of $0.2 million, a decrease in operating lease liabilities of $0.2 million and a decrease in accrued expenses of $0.9 million. The non-cash adjustments included $0.2 million for the change in provision for credit losses.
Contractual Obligations and Commitments At December 31, 2024, our contractual obligations and other commitments were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Payments Due By Period (in thousands) ​ Total Less Than 1 Year 1-3 Years 3-5 Years More than 5 Years Long term debt (1) ​ $ 413 ​ $ 326 ​ $ 70 ​ $ 17 ​ $ — Finance lease obligations (2) ​ 589 ​ 172 ​ 240 ​ 104 ​ 73 Operating lease obligations (2) ​ 438 ​ 224 ​ 214 ​ — ​ — Purchase obligations (3) ​ 3,116 ​ 2,168 ​ 316 ​ 316 ​ 316 ​ ​ $ 4,556 ​ $ 2,890 ​ $ 840 ​ $ 437 ​ $ 389 (1) Total payments include $383,000 in principal and $30,000 in interest.
Contractual Obligations and Commitments At December 31, 2025, our contractual obligations and other commitments were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Payments Due By Period (in thousands) ​ Total ​ ​ ​ Less Than 1 Year ​ ​ ​ 1-3 Years ​ ​ ​ 3-5 Years ​ ​ ​ More than 5 Years Long term debt (1) ​ $ 87 ​ $ 35 ​ $ 52 ​ $ — ​ $ — Finance lease obligations (2) ​ 1,201 ​ 300 ​ 507 ​ 315 ​ 79 Operating lease obligations (2) ​ 3,273 ​ 648 ​ 1,446 ​ 1,086 ​ 93 Purchase obligations (3) ​ 3,080 ​ 2,290 ​ 316 ​ 316 ​ 158 ​ ​ $ 7,641 ​ $ 3,273 ​ $ 2,321 ​ $ 1,717 ​ $ 330 (1) Total payments include $83,000 in principal and $4,000 in interest.
Liquidity and Capital Resources Our working capital positions at December 31, 2024 and 2023 were as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2024 December 31, 2023 Change Current assets (including cash of $1,389 and $1,502 respectively) ​ $ 3,451 ​ $ 3,682 ​ $ (231) Current liabilities ​ 4,271 ​ 3,141 ​ 1,130 Working capital ​ $ (820) ​ $ 541 ​ $ (1,361) To date, we have incurred significant net losses and have funded our operations primarily through cash generated from operations, the issuance of convertible debt and the issuance of shares of our common stock.
Liquidity and Capital Resources Our working capital positions at December 31, 2025 and 2024 were as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2025 ​ ​ ​ December 31, 2024 ​ ​ ​ Change Current assets (including cash of $2,651 and $1,389 respectively) ​ $ 6,039 ​ $ 3,451 ​ $ 2,588 Current liabilities ​ 3,752 ​ 4,271 ​ (519) Working capital ​ $ 2,287 ​ $ (820) ​ $ 3,107 During the year ended December 31, 2025, we received net cash proceeds of approximately $1.3 million from the exercise of 444,444 warrants, which resulted in the issuance of 242,562 shares of common stock of the Company .
This update requires entities to disaggregate operating expenses into specific categories, such as purchases of inventory, compensation, depreciation, and amortization, to provide enhanced transparency into the nature and function of expenses. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, with early adoption permitted. ASU 2024-03 may be applied retrospectively or prospectively.
ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, with early adoption permitted. ASU 2024-03 may be applied retrospectively or prospectively. The Company is currently evaluating the impact of this standard on its financial statement presentation and disclosures.
F or the year ended December 31, 2023, we recorded net other income of $1.8 million which was related to $1.7 million of income from the write-off of certain liabilities and $0.1 million of income related to a gain on the dissolution of joint venture. These were partially offset by less than $0.1 million of interest expense.
We recorded net other income of $0.8 million for the year ended December 31, 2025 which included income of $0.1 million from the gain on settlement of liabilities, income of $0.8 million from the receipt of Employee Retention Credits (as defined below), and net interest expense of $0.1 million.
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Overview We are a healthcare biotechnology company focused on cancer diagnostics. Our business mission is to address the pervasive problem of cancer misdiagnoses by developing solutions in the form of diagnostic products and services. Our products and services aim to deliver higher accuracy, improved laboratory workflow, and ultimately better patient outcomes, which reduce healthcare expenses.
Added
Overview We are a healthcare biotechnology company focused on improving cancer diagnostics. The Company’s objective is to enhance diagnostic accuracy and accessibility while building a sustainable business model that supports ongoing innovation . The Company can achieve this through a combination of clinical laboratory services and proprietary diagnostic product development.
Removed
We develop innovative technologies in our laboratory where we design, test, validate, and use these products clinically. We believe these technologies improve diagnostic outcomes across various diseases within the hematologic field. We then commercialize these technologies as proprietary products that serve the global laboratory community in furtherance of our mission to eliminate or greatly reduce the prevalence of misdiagnoses.
Added
By integrating diagnostic services with product development, the Company’s service business doubles as a self-funded research and development (R&D) unit, enabling the Company to achieve rapid and cost-efficient innovation, rather than being a major cost center of the Company. ​ This unique integrated operating structure is the foundation of the Company’s approach to research, development, and product commercialization.
Removed
To deliver on our strategy of mitigating misdiagnoses, we rely heavily on our CLIA laboratories to support R&D beta-testing of the products we develop, in a clinical environment. ​ The development of laboratory products involves a qualified facility; highly skilled laboratory staff; and access to viable patient specimens to conduct development and testing.
Added
Unlike companies that rely primarily on stand-alone research facilities or external clinical validation programs, the Company’s clinical laboratory operations enables its R&D team to evaluate, refine, and validate 54 Table of Contents diagnostic products in the course of routine clinical testing activities, and at minimal incremental cost.
Removed
Our CLIA laboratory in New Haven, which is operated by our pathology services division, encapsulates these components, and also generates revenue for us which covers costs associated with operating this laboratory.
Added
Through these activities, the Company generates clinical data, operational experience, and specimen access that support ongoing assay development and product improvement.
Removed
This structure of utilizing our clinical lab to obtain samples and utilize the equipment and staffing to develop, test and validate our products, significantly reduces the development costs and timeline for our products.
Added
While these activities are initially conducted to provide diagnostic services to patients and their healthcare providers, they also contribute to product development and validation processes. ​ Precipio has a single operating segment but operates two business divisions that are complementary to each other. The Company’s pathology services division provides specialized cancer diagnostic testing services to physicians, hospitals, and laboratories.
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This also enables us to accelerate the time to market of new product development and launch. ​ Furthermore, as a clinical laboratory, we are always the first user of every product we develop, which allows us to optimize important laboratory functions such as workflow, inventory management, regulatory and billing issues.
Added
This division generates revenue and supports the development of the Company’s expertise in oncology diagnostics.
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As a vendor, this enables us to serve as a reputable user of our own products, and we believe this provides us with significant credibility with existing and prospective customers.
Added
The pathology services division delivers specialized diagnostic testing focused primarily on hematologic cancers and operates a full laboratory that includes all the equipment, personnel, and work processes required to receive patient samples daily, and deliver clinical results to the physicians under the proper compliance umbrella, while also generating profitable revenue to the company.
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Furthermore, because we use our products as part of our day-to-day operations, we can deliver a high level of hands-on, expert support to customers, improving their experience with our products. ​ Our Products Division commercial team generates direct sales and works with our key distributors.
Added
While reimbursement levels and testing volumes may vary, the Company views this division as an important foundation for both current operations and future product development. ​ The Company’s product division develops and commercializes proprietary diagnostic assay kits designed for use by clinical laboratories.
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To meet our current and future obligations we have taken the following steps to capitalize the business and successfully achieve our business plan: ● On April 14, 2023 , the Company entered into a sales agreement with AGP, pursuant to which the Company may offer and sell its common stock having aggregate sales proceeds of up to $5.8 million, to or through AGP, as sales agent (the “AGP 2023 Sales Agreement”).
Added
These products allow the Company to expand its reach by enabling other laboratories to benefit from the diagnostic products developed by the Company, while building scalable diagnostic solutions. The Company believes this dual structure provides a unique model for R&D development of clinically applicable products, while delivering operational stability and supporting innovation and future growth.
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The sale of our shares of common stock to or through AGP, pursuant to the AGP 2023 Sales Agreement, will be made pursuant to the registration statement (the “2023 Registration Statement”) on Form S-3 (File No. 333-271277), filed by the Company with the SEC on April 14, 2023, as amended by Amendment No. 1 filed by the Company with the SEC on April 25, 2023, and declared effective on April 27, 2023.
Added
Furthermore, it provides the Company with substantial competitive advantages in terms of the economics of product development, and time to market. The products division focuses on developing proprietary diagnostic assays and kits intended for use by other clinical laboratories.
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On April 8, 2024, we filed a prospectus supplement to our prospectus dated April 25, 2023 registering the offer and sale of up to $1,061,478 of shares of our common stock (the “April 2024 Prospectus Supplement”).
Added
These products are designed to improve testing accessibility and laboratory workflow efficiency while enabling broader market reach without requiring Precipio to perform all testing internally.
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As of the date the consolidated financial statements were issued, the Company has approximately $3.7 million 54 Table of Contents available for future sales pursuant to the 2023 Registration Statement, which includes approximately $1.0 million of remaining availability pursuant to the April 2024 Prospectus Supplement.
Added
See “Risk Factors – There is substantial doubt about our ability to continue as a going concern”. ​ Results of Operations for the Years Ended December 31, 2025 and 2024 Net Sales.
Removed
The benefit of the increase in cases billed during the full year ended December 31, 2024 as compared to the full year ended December 31, 2023 was partially offset by a lower average price per case during the current year as a result of a different product mix.
Added
Also, during the year ended December 31, 2025, we received $0.8 million related to refundable Employee Retention Credits that it had applied for.
Removed
During the year ended December 31, 2024 we received $0.3 million in proceeds from debt issuance and net proceeds of $0.1 million from sale of 11,822 shares of our common stock through at the market offerings.
Added
Recent Accounting Pronouncements Not Yet Adopted In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income (Topic 220): Expense Disaggregation Disclosures (ASU 2024-03”). This update requires entities to disaggregate operating expenses into specific categories, such as purchases of inventory, compensation, depreciation, and amortization, to provide enhanced transparency into the nature and function of expenses.
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The Company has approximately $3.7 million available for future sales pursuant to the AGP 2023 Sales Agreement which includes approximately $1.0 million of remaining availability pursuant to the April 2024 Prospectus Supplement.
Added
In July 2025, the FASB issued ASU 2025-05, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets , which provides a practical expedient related to the estimation of expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under Topic 606, including those assets acquired in a business combination.
Removed
The other non-cash adjustments to net loss of approximately $3.3 million include, among other things, depreciation and amortization, the value of stock issued in payment of services, gain on write-off of liabilities and stock-based compensation.
Added
The practical expedient permits all entities to assume that current conditions as of the balance sheet date do not change for the remaining life of the asset. This ASU is effective for fiscal years beginning after December 15, 2025, and interim reporting periods within those annual reporting periods.
Removed
The amendments in ASU 2022-03 clarify that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. The amendments also clarify that an entity cannot, as a separate unit of account, recognize and measure a contractual sale restriction.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeItem 7A. 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, as amended, and are not required to provide the information required under this item. ​ 60 Table of Contents
Biggest changeItem 7A. 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, as amended, and are not required to provide the information required under this item. ​ 61 Table of Contents

Other PRPO 10-K year-over-year comparisons