What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2026-03-30 compared with 2025-03-27 · 230 added, 253 removed, 685 unchanged (41% of the section changed)

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Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors of

To the Stockholders and Board of Directors of

Precipio, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Precipio, Inc.

(the “Company”) as of December 31, 2024 and 2023, the related consolidated statements of operations, stockholders’ equity and cash flows for each of the two years in the period ended December 31, 2024, and the related notes (collectively referred to as the “financial statements”).

In our opinion, based on our audit, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

We have audited the accompanying consolidated balance sheet of Precipio, Inc.

(the “Company”) as of December 31, 2025, the related consolidated statements of operations , stockholders’ equity and cash flows for the year ended December 31, 2025, and the related notes (collectively referred to as the “financial statements”).

In our opinion, based on our audit, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025, and the results of its operations and its cash flows for the year ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.

Explanatory Paragraph – Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern.

As more fully described in Note 1, the Company has a significant working capital deficiency, has incurred significant losses and needs to raise additional funds to meet its obligations and sustain its operations.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.

As more fully described in Note 1, the Company has incurred significant losses and needs to raise additional funds to meet its obligations and sustain its operations.

These conditions raise substantial doubt about the Company's ability to continue as a going concern.

Management's plans in regard to these matters are also described in Note 1.

The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility of the Company's management.

Our responsibility is to express an opinion on these financial statements based on our audits.

Our responsibility is to express an opinion on the Company's financial statements based on our audit.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting.

As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting.

Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audit provides a reasonable basis for our opinion.

Critical Audit Matters

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(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements,

taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Assessment of the estimation for collections over diagnostic testing for which revenue is recognized.

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We also tested the underlying data used in management’s calculations for accuracy and completeness, which included detail testing of the service revenue.

/s/ Marcum LLP

We have served as the Company’s auditor since 2016.

/s/ CBIZ CPAs P.C.

CBIZ CPAs P.C.

We have served as the Company’s auditor since 2016 (such date takes into account the acquisition of the attest business of Marcum llp by CBIZ CPAs P.C.

effective November 1, 2024).

New Haven, CT

March 30, 2026

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors of

Precipio, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of Precipio, Inc.

(the “Company”) as of December 31, 2024, the related consolidated statements of operations, stockholders’ equity and cash flows for the year ended December 31, 2024, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024, and the results of its operations and its cash flows for the year ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

Explanatory Paragraph – Going Concern

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.

These conditions raise substantial doubt about the Company's ability to continue as a going concern.

Management's plans in regard to these matters are also described in Note 1.

The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility of the Company's management.

Our responsibility is to express an opinion on the Company's financial statements based on our audit.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audit, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting.

Accordingly, we express no such opinion.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audit provides a reasonable basis for our opinion.

We served as the Company’s auditor from 2016 through 2025.

New Haven, CT

March 27, 2025, except for Note 9, as to which the date is March 30, 2026

PRECIPIO, INC.

AND SUBSIDIARIES

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(Dollars in thousands, except per share data)

Year Ended December 31,

Service revenue, net

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OPERATING LOSS

OTHER EXPENSE:

OTHER INCOME (EXPENSE):

Interest expense, net

Gain on write-off of liability

Total other expense

Gain on settlement of liability

Employee Retention Credit

Other expense

Total other income (expense)

LOSS BEFORE INCOME TAXES

INCOME TAX EXPENSE

Net loss per common share:

BASIC AND DILUTED LOSS PER COMMON SHARE

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Preferred Stock

Noncontrolling

Precipio, Inc.

Joint Venture

Balance, January 1, 2024

Gain on dissolution of joint venture

Issuance of common stock in connection with purchase agreements

Issuance of common stock in connection with at the market offering, net of issuance costs

Proceeds upon issuance of common stock from exercise of warrants

Issuance of common stock for Board fees and consulting services

Non-cash stock-based compensation in connection with stock options

Non-cash stock-based compensation in connection with restricted stock awards

Payment of fractional common shares in conjunction with reverse stock split

Balance, December 31, 2024

Issuance of common stock in connection with at the market offering, net of issuance costs

Proceeds upon issuance of common stock from exercise of warrants

Proceeds upon issuance of common stock from exercise of stock options

Issuance of common stock for Board fees and consulting services

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Balance, December 31, 2025

(1) The common stock and additional paid-in capital for all periods presented reflect the one -for-twenty reverse stock split, which was effected on September 21, 2023.

See notes to consolidated financial statements.

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CASH FLOWS FROM OPERATING ACTIVITIES:

Adjustments to reconcile net loss to net cash flows provided by (used in) operating activities:

Adjustments to reconcile net loss to net cash flows provided by operating activities:

Depreciation and amortization

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Amortization of deferred financing costs, debt discounts and debt premiums

Gain on dissolution of joint venture

Gain on write-off of liabilities

Gain on settlement of liability

Stock-based compensation

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Provision for credit losses

Derecognition of finance lease right-of-use asset

Derecognition of finance lease right-of-use asset and liability

Derecognition of operating lease right-of-use asset and liability

Loss on disposal of asset

Changes in operating assets and liabilities:

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Accrued expenses

Net cash provided by (used in) operating activities

Net cash provided by operating activities

CASH FLOWS FROM INVESTING ACTIVITIES:

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Issuance of common stock, net of issuance costs

Proceeds from exercise of warrants

Proceeds from exercise of stock options

Proceeds from debt

Principal payments on long-term debt

Net cash flows (used in) provided by financing activities

Net cash flows provided by (used in) financing activities

NET CHANGE IN CASH

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Business Description.

Precipio, Inc., and its subsidiaries, (collectively, “we”, “us”, “our”, the “Company” or “Precipio”) is a healthcare biotechnology company focused on cancer diagnostics.

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.

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 misdiagnosis.

Precipio, Inc., and its subsidiaries, (collectively, “we”, “us”, “our”, the “Company” or “Precipio”) is 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.

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.

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 diagnostic products in the course of routine clinical testing activities, and at minimal incremental cost.

Through these activities, the Company generates clinical data, operational experience, and specimen access that support ongoing assay development and product improvement.

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.

This division generates revenue and supports the development of the Company’s expertise in oncology diagnostics.

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.

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.

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.

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.

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.

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.

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.

To deliver on our strategy of mitigating misdiagnoses we rely heavily on our CLIA laboratory 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.

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.

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.

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.

As a vendor, this places us as a reputable user of our own products, and we believe gains us significant credibility with existing and prospective customers.

Furthermore, because we use our products as part of our day-to-day operations, we are able to deliver a high level of hands-on, experienced support to customers, improving their experience with our products.

Our Products Division commercial team generates direct sales and works with our key distributors.

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.

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 .

Joint Venture.

The Company has determined that it held a variable interest in a joint venture formed in April 2020 (the “Joint Venture”) and is the primary beneficiary of the variable interest entity (“VIE”).

See Note 2 - Summary of Significant Accounting Policies for further discussion regarding consolidation of variable interest entities.

The Joint Venture was dissolved on November 1, 2023 with an effective date of December 31, 2022 and the Company recorded a gain on dissolution of the Joint Venture of less than $ 0.1 million during the year ended December 31, 2023 which is included in other income in the consolidated statements of operations.

Going Concern.

The consolidated financial statements have been prepared using GAAP applicable for a going concern, which assume that the Company will realize its assets and discharge its liabilities in the ordinary course of business and do not include any adjustments that might result should the Company be unable to continue as a going concern.

The Company has incurred substantial operating losses and has used cash in its operating activities for the past several years.

For the year ended December 31, 2024, the Company had a net loss of $ 4.3 million and net cash provided by operating activities of $ 0.4 million.

As of December 31, 2024, the Company had an accumulated deficit of $ 102.4 million and a working capital deficit of $ 0.8 million.

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 the Company will realize its assets and discharge its liabilities in the ordinary course of business and do not include any adjustments that might result should the Company be unable to continue as a going concern.

The Company has incurred substantial operating losses and has typically used cash in its operating activities for the past several years.

For the year ended December 31, 2025, the Company had an operating loss of $ 1.2 million and net cash provided by operating activities of $ 0.7 million.

As of December 31, 2025, the Company had an accumulated deficit of $ 102.8 million and working capital of $ 2.3 million.

The Company’s ability to continue as a going concern, over the next twelve months from the date of issuance of these consolidated financial statements in this Annual Report on Form 10-K, 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.

To meet its current and future obligations the Company has taken the following steps to capitalize the business and successfully achieve its 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”).

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.

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”).

As of the date the consolidated financial statements were issued, the Company has approximately $ 3.7 million 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.

See N ote 10 – “Stockholders’ Equity”, AGP 2023 Sales Agreement, for further discussion.

Notwithstanding the aforementioned circumstances, there remains substantial doubt about the Company’s ability to continue as a going concern for the next twelve months from the date these consolidated financial statements were issued.

There remains substantial doubt about the Company’s ability to continue as a going concern for the next twelve months from the date these consolidated financial statements were issued.

There can be no assurance that the Company will be able to successfully achieve its initiatives summarized above in order to continue as a going concern over the next twelve months from the date of issuance of this Annual Report Form 10-K .

The accompanying financial statements have been prepared assuming the Company will continue as a going concern over the next twelve months from the date of issuance of this Annual Report Form 10-K .

Reverse Stock Split .

On September 21, 2023 we filed a Certificate of Amendment to our Third Amended and Restated Certificate of Incorporation with the Secretary of State of Delaware, pursuant to which we effected a 1-for- 20 reverse stock split (the “Reverse Stock Split”) of our issued and outstanding common stock.

The Reverse Stock Split became effective as of 5:00 p.m.

(Eastern Time) on September 21, 2023 , and our common stock began trading on a split-adjusted basis on the Nasdaq Capital Market at the market open on September 22 , 2023.

Unless otherwise indicated, all share amounts, per share data, share prices, exercise prices and conversion rates set forth in these notes and the accompanying consolidated financial statements have, where applicable, been adjusted retroactively to reflect this reverse stock split

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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Violations of these laws and regulations could result in expulsion from government healthcare programs together with the imposition of significant fines and penalties, as well as significant repayments for patient services previously billed.

Management believes that the Company is in compliance with fraud and abuse regulations, as well as other applicable government laws and regulations.

Management believes that the Company is in compliance with fraud and abuse regulations, as well as other applicable government laws

and regulations.

While no material regulatory inquiries have been made, compliance with such laws and regulations can be subject to future government review and interpretation as well as regulatory actions unknown or unasserted at this time.

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The majority of these patients are insured under third-party insurance agreements.

The services provided by the Company are routinely billed utilizing the Current Procedural Terminology (CPT) code set designed to communicate uniform information about

medical services and procedures among physicians, coders, patients, accreditation organizations, and payers for administrative, financial, and analytical purposes.

The services provided by the Company are routinely billed utilizing the Current Procedural Terminology (CPT) code set designed to communicate uniform information about medical services and procedures among physicians, coders, patients, accreditation organizations, and payers for administrative, financial, and analytical purposes.

CPT codes are currently identified by the Centers for Medicare and Medicaid Services and third-party payers.

The Company utilizes CPT codes for Pathology and Laboratory Services contained within codes 80000-89398.

Inventories consist of laboratory supplies and are valued at cost (determined on an average cost basis, which approximates the first-in, first-out method) or net realizable value, whichever is lower.

Inventories consist of laboratory supplies and diagnostic assay kits and are valued at cost (determined on an average cost basis, which approximates the first-in, first-out method) or net realizable value, whichever is lower.

We evaluate inventory for items that are slow moving or obsolete and record an appropriate reserve for obsolescence if needed.

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We review our amortizable long-lived assets for impairment annually or whenever events indicate that the carrying amount of the asset (group) may not be recoverable.

An impairment loss may be needed if the sum of the future undiscounted cash flows is less than the carrying amount of the asset (group).

An impairment loss may be needed if the sum of the future

undiscounted cash flows is less than the carrying amount of the asset (group).

The amount of the loss would be determined by comparing the fair value of the asset to the carrying amount of the asset (group).

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Stock-based compensation cost is based on the fair value of the portion of stock-based awards that is ultimately expected to vest.

The Company utilizes the Black-Scholes option pricing model for determining the estimated fair value for stock-based awards.

Unvested awards as of December 31, 2024 had vesting periods of up to four years from the date of grant.

No awards outstanding at December 31, 2024 and 2023, respectively, are subject to performance vesting conditions or market-based vesting.

The Company utilizes the Black-Scholes or other option pricing models for determining the estimated fair value for stock-based awards.

As of December 31, 2025 unvested awards with time-based vesting had vesting periods of up to four years from the date of grant.

As of December 31, 2025 and 2024, the Company had unvested awards with market-condition vesting of 30,000 and zero , respectively.

No awards outstanding at December 31, 2025 and 2024, respectively, are subject to performance vesting conditions.

Net Sales Recognition.

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Accounts Receivable result from diagnostic services provided to self-pay and insured patients, project based testing services and clinical research.

The payment for services provided by the Company are generally due within 30 days from the invoice date.

The payment for services provided by the Company are generally due within 30 days

from the invoice date.

Accounts receivable are reduced by an allowance for credit losses.

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Advertising costs are expensed as incurred and are included in operating expenses on the consolidated statements of operations.

Advertising costs charged to operations totaled approximately $ 0.1 million in 2024 and 2023, respectively.

Advertising costs charged to operations were approximately $ 0.1 million in 2025 and 2024, respectively.

Research and Development Costs.

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The Company classifies as assets or liabilities any contracts that (i) require net-cash settlement (including a requirement to net-cash settle the contract if an event occurs and if that event is outside of the Company’s control), or (ii) gives the counterparty a choice of net-cash settlement or settlement in stock (physical settlement or net-stock settlement).

Certain of our issued and outstanding warrants to purchase common stock do not qualify to be treated as equity and accordingly, are recorded as a liability (“Common Stock Warrant Liability”).

Historically, certain of our issued warrants to purchase common stock did not qualify to be treated as equity and accordingly, were recorded as a liability (“Common Stock Warrant Liability”).

We are required to present these instruments at fair value at each reporting date and any changes in fair values are recorded as an adjustment to earnings.

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(1) has the power to make decisions that most significantly affect the economic performance of the VIE, and (2) has the obligation to absorb losses or the right to receive benefits that in either case could potentially be significant to the VIE.

We determined that we hold a variable interest in the Joint Venture, have the power to make significant operational decisions on behalf of the VIE and also have the obligation to absorb the majority of the losses from the VIE.

As such we have also determined that we are the primary beneficiary of the VIE.

The Joint Venture was dissolved on November 1, 2023 with an effective date of December 31, 2022.

Loss Per Share.

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Diluted loss per share includes shares issuable upon exercise of outstanding stock options, warrants or conversion rights that have exercise or conversion prices below the market value of our common stock.

Options, warrants and conversion rights pertaining to 754,251 and 698,154 shares of our common stock have been excluded from the

computation of diluted loss per share at December 31, 2024 and 2023, respectively, because the effect is anti-dilutive due to the net loss.

Options, warrants and conversion rights pertaining to 375,181 and 754,251 shares of our common stock have been excluded from the computation of diluted loss per share at December 31, 2025 and 2024, respectively, because the effect is anti-dilutive due to the net loss.

The following table summarizes the outstanding securities not included in the computation of diluted net loss per share:

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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”).

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.

The amendments in this Update also require additional disclosures for equity securities subject to contractual sale restrictions.

The Company adopted this guidance on January 1, 2024.

The adoption of this standard was not material to our consolidated financial statements .

In August 2020, the FASB issued ASU 2020-06 “ Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40):

Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity .” This ASU amends the guidance on convertible instruments and the derivatives scope exception for contracts in an entity’s own equity and improves and amends the related earnings per share (“EPS”) guidance for both Subtopics.

The Company adopted this guidance on January 1, 2024.

The adoption of this standard was not material to our consolidated financial statements.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures, which requires disclosure of incremental segment information on an annual and interim basis, primarily through enhanced disclosures of significant segment expenses.

Under the new guidance an entity is required to disclose the title and position of the chief operating decision maker ("CODM") and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources.

The ASU also requires that an entity that has a single reportable segment provide all the disclosures required by this ASU and all existing segment disclosures in Topic 280.

The ASU does not change how operating segments are identified or, when applicable, aggregated.

The Company adopted this standard for fiscal year 2024 and such adoption did not have a material impact on our consolidated financial statements.

Refer to Note 14 Segment Reporting.

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.

ASU 2023-09 requires additional disaggregation of the reconciliation between the statutory and effective tax rate for an entity and of income taxes paid, both of which are disclosures required by current GAAP.

The amendments improve the transparency of income tax disclosures by requiring (1) consistent categories and greater disaggregation of information in the rate reconciliation and (2) income taxes paid disaggregated by jurisdiction.

The amendments in ASU 2023-09 apply to all entities that are subject to Topic 740, Income Taxes.

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.

Adoption of ASU 2023-09 is expected to enhance the usefulness of income tax disclosures and is not expected to have a material impact on the Company’s financial position, results of operations or cash flows.

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.

Recent Accounting Pronouncements Not Yet Adopted.

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income (Topic 220):

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The Company is currently evaluating the impact of this standard on its financial statement presentation and disclosures.

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.

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.

The Company is currently evaluating the impact of adopting this standard on its consolidated financial statements and disclosures.

In September 2025, the FASB issued ASU 2025-06, Intangibles — Goodwill and Other — Internal-use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software, which eliminates the previous stage-based model for capitalizing software costs and replaces it with a principles-based framework.

This new guidance is designed to be more adaptable to modern, agile software development methods, clarifying when an entity should capitalize software costs based on a “probable-to-complete” threshold.

This ASU is effective for fiscal years beginning after December 15, 2027, and interim reporting periods within those annual reporting periods, and may be applied using a prospective, modified, or retrospective transition approach.

The Company is currently evaluating the impact of adopting this standard on its consolidated financial statements and disclosures.

PROPERTY AND EQUIPMENT, NET

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The maturity date of the DECD 2018 Loan was extended to May 31, 2028 and the modification did not have a material impact on the Company’s cash flows.

Debt issuance costs associated with the DECD 2018 Loan were approximately $ 31,000 .

Amortization of the debt issuance cost was approximately $ 3,000 and $ 3,000 for the years ended December 31, 2024 and 2023, respectively.

Net debt issuance costs were approximately $ 9,000 and $ 12,000 at December 31, 2024 and 2023, respectively, and are presented as a reduction of the related debt in the accompanying consolidated balance sheets.

Amortization for each of the next three years is expected to be approximately $ 3,000 .

Debt issuance costs associated with the DECD 2018 Loan were approximately $ 31.0 thousand.

Amortization of the debt issuance cost was approximately $ 3.0 thousand and $ 3.0 thousand for the years ended December 31, 2025 and 2024, respectively.

Net debt issuance costs were approximately $ 6.0 thousand and $ 9.0 thousand at December 31, 2025 and 2024, respectively, and are presented as a reduction of the related debt in the accompanying consolidated balance sheets.

Amortization for each of the next two years is expected to be approximately $ 3.0 thousand.

Financed Insurance Loan.

The Company finances certain of its insurance premiums (the “Financed Insurance Loans”).

In July 2024, the Company financed $ 0.3 million with a 9.99 % interest rate and is obligated to make payments on a monthly basis through June 2025.

In July 2023, the Company financed $ 0.4 million with a 9.99 % interest rate, which was paid off in June 2024.

As of December 31, 2024 and 2023, the Financed Insurance Loan’s outstanding balance of $ 0.2 million, respectively, was included in current maturities of long-term debt in the Company’s consolidated balance sheets.

A corresponding prepaid asset was included in other current assets.

In July 2024, the Company financed $ 0.3 million with a 9.99 % interest rate and made payments on a monthly basis through June 2025.

As of December 31, 2025 and 2024, the Financed Insurance Loan’s outstanding balance of zero and $ 0.2 million, respectively, was included in current maturities of long-term debt in the Company’s consolidated balance sheets.

A corresponding prepaid asset was included in other current assets in the Company’s consolidated balance sheets.

Business Loan Agreement.

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Furthermore, the Company’s Chief Executive Officer provided a personal guaranty for the Secured Loan.

The Secured Loan has a term of one year and an interest rate of 20 % , such that pursuant to the Loan Agreement, the Company is obligated to pay the Lender fifty-two payments of $ 5,769 on a weekly basis and the total sum of the Secured Loan and interest (not including any fees) shall equal a total repayment amount of $ 300,000 .

If the Company defaults on payments then a default fee of $ 15,000 shall be payable to the lender.

The Company has the right, at its discretion, to request the lender to loan an additional amount of up to $ 250,000 on the same terms and conditions as set forth in the Loan Agreement, provided that there has been no material change in the Company’s finances.

As of December 31, 2024 and December 31, 2023, the outstanding balance of $ 0.1 million and zero , respectively, under the Loan Agreement, was included in current maturities of long-term debt in the Company’s consolidated balance sheets.

The Secured Loan has a term of one year and an interest rate of 20 % , such that pursuant to the Loan Agreement, the Company is obligated to pay the Lender fifty-two payments of $ 5,769 on a weekly basis and the total sum of the Secured Loan and interest (not including any fees) is equal to a total repayment amount of $ 300,000 (“the Repayment Amount“).

If the Company defaulted on payments then a default fee of $ 15,000 shall be payable to the lender.

As of the date hereof, the Repayment Amount was paid in full and the Company did not default on any payments

As of December 31, 2025 and December 31, 2024, the outstanding balance of zero and $ 0.1 million, respectively, under the Loan Agreement, was included in current maturities of long-term debt in the Company’s consolidated balance sheets.

The aggregate future maturities required on gross long-term debt at December 31, 2025 are as follows:

Financed insurance loan

Business loan agreement

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES.

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On October 28, 2024, the Company received a notice from CHC stating that they have restored the connectivity of their systems and are requesting repayment of the funds the Company received through the Temporary Assistance Program.

The repayment date contained in the notice is January 2, 2025.

The Company has been in correspondence with CHC and anticipates negotiating a repayment plan that will enable the Company to meet its obligations to CHC while continuing to support its ongoing operational needs with minimal disruption.

From January 1, 2025 through the date of issuance of this Annual Report on Form 10-K we have made approximately $ 0.1 million in repayments to CHC.

The repayment date contained in the notice was January 2, 2025.

During the year ended December 31, 2025, we made approximately $ 0.9 million in repayments to CHC and wrote off another $ 0.1 million, leaving a balance of approximately $ 0.1 million as of December 31, 2025 .

In January 2026, the Company paid the remaining amount due and as of the issuance of this Annual Report on Form 10-K there was no amount due to CHC.

The Company leases administrative facilities and laboratory equipment through operating lease agreements.

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Finance lease ROU assets and finance lease liabilities are recognized at the lease commencement date, and at the sublease commencement date the finance lease ROU asset is derecognized and is recorded as cost of sales in the consolidated statements of operations.

There were no derecognized finance lease ROU assets related to the HSSR program for the years ended December 31, 2024 and 2023.

There were no derecognized finance lease ROU assets related to the HSRR program for the years ended December 31, 2025 and 2024.

Where Precipio is the lessor, customers lease diagnostic testing equipment from the Company with the transfer of ownership to the customer at the end of the lease term at no additional cost.

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The lease asset for sales-type leases is the net investment in leased asset, which is recorded once the finance lease ROU asset is derecognized and a related gain or loss is noted.

The net investment in leased assets was $ 0.1 million as of December 31, 2024 and 2023, respectively, and is included in other current assets and other assets in our consolidated balance sheets.

The net investment in leased assets was zero and less than $ 0.1 million as of December 31, 2025 and 2024, respectively, and is included in other current assets and other assets in our consolidated balance sheets.

The balance sheet presentation of our operating and finance leases is as follows:

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Total lease liabilities

(1) As of December 31, 2024 and 2023, finance lease right-of-use assets included zero , respectively, of assets related to finance leases associated with the HSRR program.

As of December 31, 2025, the estimated future minimum lease payments, excluding non-lease components, are as follows:

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Finance leases

During the years ended December 31, 2024 and 2023, operating cash flows from operating leases were $ 0.2 million, respectively, and operating lease ROU assets obtained in exchange for operating lease liabilities were zero and $ 0.1 million, respectively.

During the years ended December 31, 2025 and 2024, operating cash flows from operating leases were $ 0.2 million, respectively, and operating lease ROU assets obtained in exchange for operating lease liabilities were $ 2.5 million and zero , respectively.

Operating Lease Costs

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Finance lease amortization and interest expenses are included in the consolidated statements of operations for the years ended December 31, 2025 and 2024.

The balances within these accounts are approximately $ 0.1 million, respectively.

The balances within these accounts are approximately $ 0.3 million and $ 0.1 million, respectively.

COMMITMENTS AND CONTINGENCIES

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The Company has entered into purchase commitments for reagents from suppliers.

These agreements started run through 2031.

Some of these agreements run through 2031.

The Company and the suppliers will true up the amounts on an annual basis.

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A liability of less than $ 0.1 million has been recorded and is reflected in accounts payable within the accompanying consolidated balance sheets at December 31, 2025 and 2024.

The Company is 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.

It disputes these allegations and intends to defend itself vigorously.

While the outcome remains uncertain, management does not currently expect the case to have a material impact on its financial results.

During the year ended December 31, 2025, the Company was involved in a legal proceeding brought by a former employee before the court in San Antonio, Texas, alleging unfair dismissal and seeking monetary damages.

The matter was resolved in 2025 through a settlement agreement.

The settlement was reached without any admission of liability and is not material to the Company’s financial statements.

Accordingly, the matter is considered closed .

LEGAL AND REGULATORY ENVIRONMENT

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While no material regulatory inquiries have been made, compliance with such laws and regulations can be subject to future government review and interpretation, as well as regulatory actions unknown or unasserted at this time.

Net loss before income tax expense for the years ended December 31, 2025 and 2024 is as follows:

Dollars in Thousands

The income tax expense consists of the following for the years ended December 31, 2025 and 2024.

Dollars in Thousands

Total Federal

Total Foreign

Total Tax Provision

The Company’s provision for income taxes for the years ended December 31, 2025 and December 31, 2024 relates to income taxes in states and other jurisdictions and differs from the amounts determined by applying the statutory federal income tax rate to the loss before income taxes for the following reasons:

Dollars in Thousands

US Federal Statutory Tax Rate

State and Local Income Taxes—net of Federal Income Tax Effect *

Foreign Tax Effects

Other foreign jurisdictions

Effect of changes in tax laws or rates enacted in the current period

Effect of Cross-Border Tax Laws

Research and development credits

Foreign tax credits

Changes in valuation allowances

Nontaxable or Nondeductible Items

Public company expense

Incentive stock options

Changes in unrecognized tax benefits

Other Adjustments

Effective Tax Rate

*State taxes in New Jersey and Florida made up the majority (greater than 50%) of the tax effect in this category.

The following table presents the components of income taxes paid, net of refunds.

Dollars in Thousands

Deferred income taxes reflect the net effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

The Company’s net deferred tax assets relate primarily to its net operating loss carryforwards, allowance for credit losses and stock-based compensation,

partially offset by property and equipment and intangible assets.

The Company’s net deferred tax assets relate primarily to its net operating loss carryforwards, allowance for credit losses and stock-based compensation, partially offset by property and equipment and intangible assets.

The Company has recorded a full valuation allowance to offset the net deferred tax assets, as it is more likely than not that the Company will not realize future benefits associated with these net deferred tax assets at December 31, 2025 and 2024.

At December 31, 2025 and 2024, the Company had net deferred tax assets of $ 19.0 million and $ 21.2 million, respectively, against which a full valuation allowance has been recorded.

The increase in the valuation allowance for the years ended December 31, 2024 and 2023 is $ 1.3 million and $ 1.4 million, respectively, resulting from additional net operating losses generated in the year.

The increase in the valuation allowance for the years ended December 31, 2025 is a decrease of $ 2.2 million resulting from a change in the tax treatment of stock-based compensation.

The change required a decrease in the deferred tax asset resulting from the cumulative effect related to the tax treatment of incentive stock options as opposed to non-qualified stock options.

This change is offset by an adjustment to the valuation allowance.

In 2024, there was an increase of $ 1.3 million resulting from additional net operating losses generated in the year.

The deferred tax liabilities associated with the book versus tax basis difference of intangible assets are the result of an asset step-up pursuant to a June 2017 merger transaction (the “Merger”).

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Net deferred liability

The Company’s provision for income taxes for the years ended December 31, 2024 and December 31, 2023 relates to income taxes in states and other jurisdictions and differs from the amounts determined by applying the statutory federal income tax rate to the loss before income taxes for the following reasons:

Dollars in Thousands

Benefit at federal rate

Increase (decrease) resulting from:

State income taxes—net of federal benefit

Miscellaneous permanent differences

Meals and entertainment

Federal and state credits

Rate difference

Change in valuation allowance

Total income tax benefit

The income tax expense consists of the following for the years ended December 31, 2024 and 2023.

Dollars in Thousands

Total Federal

Total Foreign

Total Tax Provision

The Company had available gross federal net operating loss (“NOL”) carryforwards of approximately $ 81 million, and state NOL carryforwards of $ 2.7 million as of December 31, 2025.

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.

After passage of the Tax Cuts and Jobs Act of 2017, federal loss NOL carryforwards arising in taxable years beginning after December 31, 2017 have an unlimited carryforward period;

After passage of the Tax Cuts and Jobs Act of 2017, federal loss NOL carryforwards arising in taxable

years beginning after December 31, 2017 have an unlimited carryforward period;

however, such losses can only offset 80% of taxable income in any one year.

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The Company has not yet implemented this increase.

During the years ended December 31, 2024 and 2023, the Company issued zero and 15,972 shares of its common stock, respectively, in connection with the exercise of zero and 15,972 warrants, respectively.

The warrant exercises resulted in net cash proceeds to the Company of zero and less than $ 0.1 million during the years ended December 31, 2024 and 2023, respectively.

During the years ended December 31, 2024 and 2023, the Company issued 61,692 and 23,598 shares of its common stock, respectively, in connection with consulting services of approximately $ 0.4 million and $ 0.2 million, respectively.

During the years ended December 31, 2025 and 2024, the Company issued 15,279 and zero shares of its common stock, respectively, in connection with the exercise of 15,279 and zero stock options, respectively.

The stock option exercises resulted in net cash proceeds to the Company of $ 0.1 million and zero during the years ended December 31, 2025 and 2024, respectively.

During the years ended December 31, 2025 and 2024, the Company issued 29,419 and 61,692 shares of its common stock, respectively, in connection with Board fees and consulting services of approximately $ 0.2 million and $ 0.4 million, respectively.

At The Market Offering Agreement

AGP 2023 Sales Agreement

On April 2, 2021, the Company entered into a sales agreement with A.G.P./Alliance Global Partners (“AGP”), pursuant to which we may offer and sell its common stock, par value $ 0.01 per share (the “Common Stock”) (the “Shares”), having aggregate sales proceeds of up to $ 22.0 million.

Shares can be sold either directly to or through AGP as a sales agent (the “AGP Sales Agreement”), from time to time, in an “at the market offering” (as defined in Rule 415(a)(4) under the Securities Act of 1933, as amended) of the Shares (the “2021 ATM Offering”).

We are limited in the number of shares we can sell in the 2021 ATM Offering due to the offering limitations currently applicable to us under General Instruction I.B.6.

of Form S-3 and our public float as of the applicable date of such sales, as well as the number of authorized and unissued shares available for issuance, in accordance with the terms of the AGP Sales Agreement.

The sale of our shares of Common Stock to or through AGP, will be made pursuant to the registration statement (the “Registration Statement”) on Form S-3 (File No.

333-237445), which was declared effective by the Securities and Exchange Commission (the “SEC”) on April 13, 2020, for an aggregate offering price of up to $ 50.0 million.

Under the AGP Sales Agreement, Shares were permitted to be sold by any method permitted by law deemed to be an “at the market offering.” AGP will also be able to sell shares of Common Stock by any other method permitted by law, including in negotiated transactions with the Company’s prior written consent.

Upon delivery of a placement notice and subject to the terms and conditions of the AGP Sales Agreement, AGP was required to use its commercially reasonable efforts consistent with its normal trading and sales practices, applicable state and federal law, rules and regulations, and the rules of The Nasdaq Capital Market to sell the Shares from time to time based upon the Company’s instructions, including any price, time or size limits specified by the Company.

AGP is not under any obligation to purchase any of the Shares on a principal basis pursuant to the AGP Sales Agreement, except as otherwise agreed by AGP and the Company in writing and expressly set forth in a placement notice.

AGP’s obligations to sell the Shares under the AGP Sales Agreement are subject to satisfaction of certain conditions, including customary closing conditions.

The Company is not obligated to make any sales of Shares under the AGP Sales Agreement and any determination by the Company to do so will be dependent, among other things, on market conditions and the Company’s capital raising needs.

The Company agreed to pay AGP a cash fee of 3.0 % of the aggregate gross proceeds from the sale of the Shares on the Company’s behalf pursuant to the AGP Sales Agreement.

The AGP Sales Agreement contains representations, warranties and covenants that are customary for transactions of this type.

In addition, the Company has provided AGP with customary indemnification and contribution rights.

The Company also agreed to reimburse AGP for certain specified expenses, including the expenses of counsel to AGP.

During the year ended December 31, 2023, we received net proceeds of approximately $ 0.5 million from the sale of 30,827 shares of common stock through AGP.

As of the date of issuance of this Annual Report on Form 10-K, we have received an aggregate of $ 15.6 million in net proceeds, after issuance costs of approximately $ 0.5 million, from the sale of 260,128 shares of common stock pursuant to the AGP Sales Agreement.

The offering of the Shares pursuant to the AGP Sales Agreement terminated upon the expiration of the Company’s Registration Statement on Form S-3 (File No.

AGP 2023 Sales Agreement

On April 14, 2023, the Company entered into the AGP 2023 Sales Agreement, in an “at the market offering” (as defined in Rule 415(a)(4) under the Securities Act of 1933, as amended) of the shares of common stock.

AGP will be entitled to a commission at a fixed rate of 3.0 % of the gross proceeds from each sale of shares of Common Stock pursuant to the AGP 2023 Sales Agreement.

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 2023 Registration Statement on Form S-3 (File No.

The sale of our shares of Common Stock to or through AGP, pursuant to the AGP 2023 Sales Agreement, are made pursuant to 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.

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On April 8, 2024, we filed a prospectus supplement (the “April 2024 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.

During the years ended December 31, 2024 and 2023, we received net proceeds of $ 0.1 million and less than $ 1,000 , respectively, from the sale of 11,822 and 25 shares of common stock, respectively, pursuant to the AGP 2023 Sales Agreement.

During the year ended December 31, 2025, there were no sales of common stock pursuant to the AGP 2023 Sales Agreement.

During the year ended December 31, 2024, we received net proceeds of $ 0.1 million, from the sale of 11,822 shares of common stock pursuant to the AGP 2023 Sales Agreement.

The Company terminated the AGP 2023 Sales Agreement effective September 2, 2025.

Following the termination of the AGP 2023 Sales Agreement, the Company may not offer or sell any additional shares of common stock under the AGP 2023 Sales Agreement.

As of the date of issuance of this Annual Report on Form 10-K, we have received an aggregate of $ 0.1 million in net proceeds, after issuance costs of approximately $ 2 thousand, from the sales of 11,847 shares of common stock through AGP.

Registered Direct Offering

On June 8, 2023, the Company, entered into a securities purchase agreement (the “Purchase Agreement”) with certain institutional investors (the “Purchasers”), pursuant to which the Company agreed to issue and sell to the Purchasers, in a registered direct offering (the “Registered Direct Offering”), an aggregate of:

(i) 206,250 shares (the “Shares”) of its common stock, $ 0.01 par value (the “Common Stock”), at a price of $ 9.00 per share, and (ii) pre-funded warrants (the “Pre-Funded Warrants”) to purchase up to 15,972 shares of Common Stock, at a price of $ 8.98 per Pre-Funded Warrant.

The Company reviewed the provisions of the Pre-Funded Warrants to determine the balance sheet classification and concluded that these warrants are to be classified as equity and are not subject to remeasurement on each balance sheet date.

The Pre-Funded Warrants are immediately exercisable, have an exercise price of $ 0.02 per share, and may be exercised at any time until all of the Pre-Funded Warrants are exercised in full.

All of the Pre-Funded Warrants were exercised during the year ended December 31, 2023 and no Pre-Funded Warrants were outstanding as of December 31, 2024.

In a concurrent private placement (the “Private Placement” and together with the Registered Direct Offering, the “Offering”), pursuant to the Purchase Agreement, the Company agreed to issue and sell to the Purchasers, for no additional consideration, warrants (the “RDO Common Warrants” and, together with the Shares and the Pre-Funded Warrants, the “Securities”) to purchase up to 444,444 shares of Common Stock.

The Company reviewed the provisions of the RDO Common Warrants to determine the balance sheet classification and concluded that these warrants are to be classified as equity and are not subject to remeasurement on each balance sheet date.

The RDO Common Warrants are exercisable beginning six months after the date of issuance, have an exercise price of $ 12.60 per share, and will expire December 12, 2028.

The fair value of the RDO Common Warrants of approximately $ 3.5 million at the date of issuance was estimated using the Black-Scholes model which used the following inputs:

term of 5 years;

risk free rate of 3.89 %;

volatility of 143 %;

and share price of $ 9.00 per share based on the trading price of the Company’s common stock.

allocated $ 1.3 million of the issuance proceeds to the RDO Common Warrants based on the relative fair value of the RDO Common Warrants, Common Stock and Pre-Funded Warrants issued in the Offering.

A holder of Pre-Funded Warrants may not exercise the warrant if the holder, together with its affiliates, would beneficially own more than 4.99 % (or, at the election of the purchaser, 9.99 %) of the number of shares of the Common Stock outstanding immediately after giving effect to such exercise.

A holder of Pre-Funded Warrants may increase or decrease this percentage not in excess of 19.99 % by providing at least 61 days ’ prior notice to the Company.

The Registered Direct Offering resulted in gross proceeds to the Company of approximately $ 2.0 million.

The net proceeds to the Company from the Registered Direct Offering are approximately $ 1.8 million, excluding any proceeds that may be received upon the cash exercise of the RDO Common Warrants, after deducting the financial advisor’s fees and estimated offering expenses payable by the Company.

The Company intends to use the net proceeds from the Registered Direct Offering for working capital and general corporate purposes, which may include capital expenditures, research and development expenditures, regulatory affairs expenditures, clinical trial expenditures, acquisitions of new technologies and investments and others.

The Purchase Agreement contains customary representations, warranties and agreements by the Company, customary conditions to closing, indemnification obligations of the Company, other obligations of the parties, and termination provisions.

Additionally, each of the directors and executive officers of the Company, pursuant to lock-up agreements (the “Lock-Up Agreements”), agreed not to sell or transfer any of the Company securities which they hold, subject to certain exceptions, during the 90 -day period following the closing of the Registered Direct Offering.

The Purchase Agreement also requires the Company to use commercially reasonable efforts to file a registration statement with the SEC to register the resale by the Purchasers of the shares of Common Stock issuable upon exercise of the RDO Common Warrants within thirty ( 30 ) days of the date of the Purchase Agreement.

The Company filed this registration statement on Form S-1 (File No.

333-273172), which was declared effective by the SEC on July 19, 2023.

On June 7, 2023, the Company also entered into a financial advisory agreement (the “Financial Advisor Agreement”) with A.G.P./Alliance Global Partners (the “Financial Advisor”).

Pursuant to the terms of the Financial Advisor Agreement, the Financial Advisor agreed to use its reasonable best efforts to arrange for the sale of the Securities.

The Company paid the Financial Advisor a cash fee of $ 140,000 generated from the sale of the Shares and Pre-Funded Warrants.

The Financial Advisor Agreement contains customary representations, warranties and agreements by the Company, customary conditions to closing, indemnification obligations of the Company and the Financial Advisor, including for liabilities under the Securities Act of 1933, as amended (the “Securities Act”), other obligations of the parties, and termination provisions.

Pursuant to the Purchase Agreement, the Company has agreed that, subject to certain exceptions, (i) it will not issue any shares of common stock or securities exercisable or convertible into shares of common stock or to file any registration statement or amendment or supplement thereto for a period of ninety ( 90 ) days following the closing of the Offering and that (ii) it will not enter into a variable rate transaction for a period of one hundred eighty ( 180 ) days following the closing of the Offering.

The Registered Direct Offering was made pursuant to the 2023 Registration Statement, as supplemented by a prospectus supplement dated June 9, 2023.

As a result of sales already made through the AGP 2023 Sales agreement and the Registered Direct Offering, the Company has $ 3.7 million of remaining availability under the 2023 Registration Statement.

Preferred Stock

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(i) the number of shares;

(ii) the dividend rate, whether dividends shall be cumulative and,

if so, from which date;

(ii) the dividend rate, whether dividends shall be cumulative and, if so, from which date;

(iii) whether shares are to be redeemable and, if so, the terms and amount of any sinking fund providing for the purchase or redemption of such shares;

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The following represents a summary of the warrants outstanding as of December 31, 2025:

December 2028

(1) These warrants were issued in connection with the 2023 registered direct offering and concurrent private placement and are the RDO common warrants discussed below .

During the years ended December 31, 2024 and 2023, 15,091 and 19,365 warrants expired.

These warrants had been issued in connection with transactions which were completed between 2018 and 2019.

During the years ended December 31, 2024 and 2023, t here were zero and 15,972 warrants exercised, respectively.

During the years ended December 31, 2024 and 2023, the intrinsic value of the warrants exercised was zero and $ 0.1 million, respectively.

Pre -Funded Warrants .

In connection with the Registered Direct Offering in June 2023, the Company issued 15,972 Pre-Funded Warrants to purchase up to 15,972 shares of Common Stock, at a price of $ 8.98 per Pre-Funded Warrant.

The Pre-Funded Warrants are immediately exercisable and have an exercise price of $ 0.02 per share.

During the year ended December 31, 2023, all of the Pre-Funded Warrants were exercised and there are none outstanding as of December 31, 2024.

February 2027

(1) These warrants were issued to a consultant in connection with services performed .

During the years ended December 31, 2025 and 2024, zero and 15,091 warrants expired.

These warrants had been issued in connection with transactions which were completed in 2019.

RDO Common Warrants .

In connection with the Registered Direct Offering in June 2023, the Company issued 444,444 RDO Common Warrants to purchase up to 444,444 shares of Common Stock.

In connection with the Registered Direct Offering in June 2023, the Company issued 444,444 warrants to purchase up to 444,444 shares of common stock (the “RDO Common Warrants”).

The RDO Common Warrants are exercisable beginning six months after the date of issuance, have an exercise price of $ 12.60 per share, and will expire December 12, 2028.

During the year e nded December 31, 2025, the Company amended the warrant agreements with certain RDO Common Warrant holders giving the holders the right, at their discretion, to exercise their remaining outstanding warrants in a cashless manner.

During the year ended December 31, 2025, 444,444 RDO Common Warrants were exercised for 242,562 shares of our common stock.

The Company received net proceeds of approximately $ 1.3 million from these exercises.

The intrinsic value of the warrants exercised during the year ended December 31, 2025 was $ 3.4 million.

Deemed Dividends

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Common Stock Warrant Liabilities.

Certain of our issued and outstanding warrants to purchase shares of common stock do not qualify to be treated as equity and, accordingly, are recorded as a liability.

Certain of our issued or outstanding warrants to purchase shares of common stock do not qualify to be treated as equity and, accordingly, are recorded as a liability.

We are required to record these instruments at fair value at each reporting date and changes are recorded as a non-cash adjustment to earnings.

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The Bridge Note Warrant Liabilities are considered Level 3 financial instruments and were valued using the Black Scholes model.

During the year ended December 31, 2024, the last remaining warrants related to Bridge Note Warrant Liabilities expired and thus at December 31, 2024 there were no warrant liabilities to be valued.

As of December 31, 2023, assumptions used in the valuation of the Bridge Note Warrant Liabilities include:

remaining life to maturity of 0.3 to 0.4 years;

annual volatility of 71 % to 77 %;

and risk free rate of 5.33 to 5.40 %.

During the year ended December 31, 2024 and 2023, the change in the fair value of the warrant liabilities measured using significant unobservable inputs (Level 3) was zero and less than $ 1 thousand, respectively.

During the year ended December 31, 2024, the last remaining warrants related to Bridge Note Warrant Liabilities expired and thus at December 31, 2025 and 2024, respectively, there were no warrant liabilities to be valued.

During the year ended December 31, 2024, the change in the fair value of the warrant liabilities measured using significant unobservable inputs (Level 3) was zero .

EQUITY INCENTIVE PLAN

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Either incentive or non-qualified stock options may be granted to employees of the Company, but only non-qualified stock options may be granted to non-employee directors and advisors.

However, in either case, the Plan requires that stock options must be granted at exercise prices not less than the fair market value of the common stock on the date of the grant.

However, in either case, the Plan requires that stock options must be granted at exercise prices not less than the fair market value of the common stock

on the date of the grant.

Options issued under the plan vest over periods as determined by the Committee and expire 10 years after the date the option was granted.

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The Company records the expense for stock-based compensation awards subject to performance-based milestone vesting over the remaining service period when management determines that achievement of the milestone is probable based on the expected satisfaction of the performance conditions as of the reporting date.

The fair value of each stock option granted is estimated on the date of grant using the Black-Scholes option pricing model, which requires various assumptions including estimating stock price volatility, expected life of the stock option, risk free interest rate and estimated forfeiture rate.

The Company records the expense for stock-based compensation awards subject to market-condition vesting over a derived service period which is calculated at the grant date.

The fair value of each stock option granted is estimated on the date of grant using the Black-Scholes or other option pricing models, which requires various assumptions including estimating stock price volatility, expected life of the stock option, risk free interest rate and estimated forfeiture rate.

During the year ended December 31, 2025, the Company granted stock options to purchase up to 89,000 shares of common stock at a weighted average exercise price of $ 6.90 .

These awards have vesting periods of up to four years and had a weighted average grant date fair value of $ 4.56 .

The fair value calculation of options granted during 2024 used the follow assumptions:

T he stock options granted have either time-based or market-condition vesting.

The awards with time-based vesting have periods of up to four years and had grant date fair values between $ 5.24 and $ 17.56 .

The fair value was calculated using the Black-Scholes option pricing model and used the follow assumptions:

risk free interest rates of 3.82 % to 4.65 %, based on the U.S.

Treasury yield in effect at the time of grant;

expected life of approximately six years ;

expected life of five to six years ;

and volatility of 121 % to 128 % based on historical volatility of the Company’s common stock over a time that is consistent with the expected life of the option.

The awards with market-condition vesting have a derived service period of 1.6 years and had a grant date fair value of $ 5.70 .

The fair value was calculated using a Monte Carlo Simulation and used the following assumptions:

risk free interest rate of 4.67 % ;

remaining term of ten years ;

and volatility of 121 % .

On August 30, 2024, the Company’s board of directors (the “Board”) approved a one-time stock option repricing (the “Option Repricing”), effective August 31, 2024 (the “Effective Date”).

The Option Repricing was undertaken in accordance with, and as permitted by the 2017 Plan.

The Option Repricing applies to all Relevant Options (as defined below) granted pursuant to the 2017 Plan that were held by employees, including executive officers and non-employee

directors of the Board, to the extent such options had an exercise price in excess of $ 6.56 , the closing price per share of the Company’s Common Stock as reported on The Nasdaq Stock Market on August 30, 2024.

The Option Repricing applies to all Relevant Options (as defined below) granted pursuant to the 2017 Plan that were held by employees, including executive officers and non-employee directors of the Board, to the extent such options had an exercise price in excess of $ 6.56 , the closing price per share of the Company’s Common Stock as reported on The Nasdaq Stock Market on August 30, 2024.

“Relevant Options” means all outstanding eligible stock options granted to eligible employees, service providers and non-employee directors of the board of the Company before and including December 31, 2022.

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The Board approved the Option Repricing after careful consideration of various alternatives and the recommendation of the compensation committee of the Board that the repricing was fair, just, and reasonable to the Company and its stockholders.

Management determined that the Option Repricing represents a modification of the impacted awards and calculated incremental compensation cost of approximately $ 0.5 million resulting from the modification.

The incremental expense will be recognized over 1.4 years.

Management determined that the Option Repricing represented a modification of the impacted awards and calculated incremental compensation cost of approximately $ 0.5 million resulting from the modification.

The incremental expense was recognized over 1.4 years.

The following table summarizes stock option activity under our plans during the year ended December 31, 2025:

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Upon vesting, the restricted stock award shall no longer be deemed restricted.

There were no restricted stock awards granted during the year ended December 31, 2024.

During the year ended December 31, 2023, the Company granted 2,492 restricted stock awards to directors of the Company.

The awards vested immediately and had a weighted average grant date fair value of $ 5.90 .

As of December 31, 2024 and 2023, there were 2,492 and zero restricted stock awards that were vested and unvested, respectively.

There were no restricted stock awards granted during the years ended December 31, 2025 and December 31, 2024, respectively.

As of December 31, 2025 and 2024, respectively, there were no unvested restricted stock awards.

Stock Compensation.

During the years ended December 31, 2025 and 2024, we recorded compensation expense for all stock awards of $ 1.2 million and $ 1.5 million, respectively, within operating expense in the accompanying statements of operations.

The 2025 and 2024 expense included approximately $ 0.3 million and $ 0.2 million, respectively, of expense related to the Option Repricing.

As of December 31, 2025, the unrecognized compensation expense related to unvested stock awards was $ 0.6 million, which is expected to be recognized over a weighted-average period of 2.3 years.

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Third party payers

Credit loss expense

Credit loss income (expense)

Total charges

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Operating expenses (1)

Other segment items (2)

Other segment expense (income) (2)

(1) Operating expenses include sales and marketing expenses, general and administrative expenses, research and development expenses and stock-based compensation.

(2) Other segment items include interest income, interest expense, gain on write-off of liability and other income.

EMPLOYEE RETENTION CREDIT

On March 27, 2020, the U.S.

government enacted the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”).

Under the provisions of the CARES Act, and the subsequent extensions, the Company became eligible to apply for a refundable Employee Retention Credit (the “ERC”) subject to certain criteria, which could be used to offset payroll tax liabilities.

In November 2022, the Company submitted an ERC claim totaling approximately $ 1.5 million.

During the year ended December 31, 2025, the Company received payments for part of the ERC claim totaling approximately $ 0.8 million.

The Company recorded this as other income in the consolidated statements of operations.

The Company retains all rights to pursue and receive the remaining balance of approximately $ 0.7 million and is actively evaluating the likelihood and timing of any additional disbursements.

The Company has not waived any claims to the unpaid portion of the ERC and is taking reasonable steps to secure the remaining balance.

However, there can be no assurance as to the timing, amount, or certainty of receipt of additional funds, and the Company will continue to assess the collectability of the remaining claim in accordance with applicable accounting standards.

SUBSEQUENT EVENTS

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data