Precipio, Inc.
For the period ended Dec 31, 2025. Filed Mar 30, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Mar 30, 2026
PRPO$18.62+0.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2024-12-31; filed 2025-03-27.
0001558370-25-003817
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2025-12-31; filed 2026-03-30.
0001104659-26-036878
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 60 previous paragraphs and 65 current paragraphs.
29 unchanged; 17 reworded; 17 added; 13 removed; 1 previous and 2 current paragraphs rearranged.
Tables are not compared: 9 previous and 8 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (17)
Current report
We are a healthcare biotechnology company focused on improving cancer diagnostics. The Company’sobjective 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.
Current report
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
Current report
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.
Current report
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.
Current report
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.
Current report
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.
Current report
Also, during the year ended December 31, 2025, we received $0.8 million related to refundable Employee Retention Credits that it had applied for.
Current report
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.
Current report
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.
Current report
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.
Current report
Employee Retention Credit (ERC)
Current report
On March 27, 2020, the U.S. government enacted the CARES Act. Under the provisions of the CARES Act, and its subsequent extensions, we 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.
Current report
In November 2022, we submitted an ERC claim totaling approximately $1.5 million. During the year ended December 31, 2025, we received payments totaling approximately $0.8 million. We recorded this amount as other income in the condensed consolidated statements of operations.
Current report
We retain all rights to pursue and receive the remaining balance of approximately $0.7 million and are actively evaluating the likelihood and timing of any additional disbursements. We have not waived any claims to the unpaid portion of the ERC and are 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 we will continue to assess the collectability of the remaining claim in accordance with applicable accounting standards.
Current report
The $0.8 million ERC refund and the $0.1 million CHC write-off discussed above are non-recurring items and, as a result of these non-recurring items, we recorded approximately $0.9 million of other income in the consolidated statements of operations.
Current report
One Big Beautiful Bill Act of 2025
Current report
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the United States. The OBBBA includes significant changes to federal tax law and other regulatory provisions that may impact us. We are currently assessing the impact of the OBBBA on our business, outlook, and financial statements.
Removed paragraphs (13)
Previous report
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.
Previous report
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 misdiagnoses. 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,
Previous report
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.
Previous report
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 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. 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.
Previous report
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.
Previous report
To meet our current and future obligations we have taken the following steps to capitalize the business and successfully achieve our business plan:
Previous report
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.
Previous report
$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. The 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. 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.
Previous report
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.
Previous report
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. 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.
Previous report
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 disclosuresfor 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.
Previous report
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.
Previous report
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.
Reworded paragraphs (17)
Previous wording
respectively, which house teams that collaborate on the development of new products and services. 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. 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.
Current wording
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 laboratories to support R&D beta-testing of the products we develop, in a clinical environment.
Previous wording
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. 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. As of December 31, 2024, we had an accumulated deficit of $102.4 million and a working capital deficit of $0.8 million. 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 andavoiding 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.
Current wording
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. 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, 2025, we had an accumulated deficit of $102.8 million and working capital of $2.3 million. 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 andavoiding 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.
Previous wording
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. 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.
Current wording
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. The accompanying financial statements have been prepared assuming we will continue as a going concern and do not include any adjustments
Previous wording
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. 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. 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. 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. Product revenue decreased by $0.4 million for the year ended December 31, 2024 as compared to the same period in 2023.
Current wording
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. 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. 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.
Previous wording
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 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.
Current wording
Cost of Sales. 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. 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.
Previous wording
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. 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. As such, it is necessary to maintain appropriate staffing levels to provide industry standard laboratory processing and reporting to ordering physicians. An increase in case volume will enable our laboratory to yield economies of scale and to leverage fixed expenses.
Current wording
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. Gross 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. As such, it is necessary to maintain appropriate staffing levels to provide industry standard laboratory processing and reporting to ordering physicians. An increase in case volume will enable our laboratory to yield economies of scale and to leverage fixed expenses.
Previous wording
Operating Expenses. 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
Current wording
Operating Expenses. 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. For 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.
Previous wording
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. For 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.
Current wording
Other (Expense) Income. 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. During the year ended December 31, 2024, we recorded net other expense of $0.1 million which was related to net interest expense.
Previous wording
Net Change in Cash. Cash decreased by $0.1 million and $1.9 million during the years ended December 31, 2024 and 2023, respectively.
Current wording
Net Change in Cash. 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.
Previous wording
Cash Flows Provided by (Used in) Operating Activities. 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 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. 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. 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. The cash flows used in operating activities of $3.6 million
Current wording
Cash Flows Provided by (Used in) Operating Activities. 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 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. 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. 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. 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.
Previous wording
Cash Flows Used In Investing Activities. 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.
Current wording
Cash Flows Used In Investing 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.
Previous wording
Cash Flows (Used in) Provided by Financing Activities. 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 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.
Current wording
Cash Flows Provided by (Used in) Financing Activities. 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 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.
Previous wording
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.
Current wording
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.
Previous wording
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.
Current wording
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, 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.
Previous wording
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. 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. 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.
Current wording
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. 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. 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.
Previous wording
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. 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. 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.
Current wording
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. 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. During the year ended December 31, 2024, we received approximately $1.1 million from CHC through this program.
Previous wording
Inflationary factors, such as increases in our cost of goods, labor, or other operating expenses, may adversely affect our operating results. 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. We cannot assure you, however, that we will be able to increase the prices of our products or reduce our operating expenses in an amount sufficient to offset the effects future inflationary pressures may have on our gross margin. Accordingly, we cannot assure you that our financial condition and results of operations will not be materially impacted by inflation in the future.
Current wording
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. We cannot assure you, however, that we will be able to increase the prices of our products or reduce our operating expenses in an amount sufficient to offset the effects future inflationary pressures may have on our gross margin. Accordingly, we cannot assure you that our financial condition and results of operations will not be materially impacted by inflation in the future.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
that might result should we be unable to continue as a going concern as a result of the outcome of this uncertainty. See “Risk Factors – There is substantial doubt about our ability to continue as a going concern”.
Current report — wording carried from elsewhere
Inflationary factors, such as increases in our cost of goods, labor, or other operating expenses, may adversely affect our operating results. While it is difficult to accurately measure the impact of inflation due to the imprecise nature
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
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. 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.