Filed Pursuant to Rule 424(b)(5)
Registration No. 333-271277
Prospectus supplement
(To prospectus dated April 25, 2023)
4,125,000 shares of common stock
Pre-funded warrants to purchase up to 319,445 shares of common stock
We are offering 4,125,000 shares of our common stock, par value $0.01
per share at a price of $0.45 per share and pre-funded warrants (the “Pre-funded Warrants”) to purchase 319,445 shares of
common stock at a price of $0.45 in a registered direct offering directly to investors pursuant to this prospectus supplement and the
accompanying prospectus and securities purchase agreements with such investors.
In a concurrent private placement (the “Concurrent Private Placement”),
the Company will also sell to the Purchaser, for no additional consideration, warrants (“Common Warrants”) to purchase up
to 8,888,890 shares of our Common Stock. Each Common Warrant will have an initial exercise price of $0.63 per share and will be exercisable
six months after the date of issuance and will expire five and one-half years from issuance.
We are offering the Pre-funded Warrants to purchase shares of common
stock (and the shares of common stock issuable from time to time upon exercise of the Pre-funded Warrants), in lieu of shares of common
stock, to purchasers who so choose. Each Pre-funded Warrant will be exercisable for one share of common stock at an exercise price of
$0.0001 per share of common stock. Each Pre-funded Warrant will be exercisable upon issuance and will expire when exercised in full. There
is no established public trading market for the Pre-funded Warrants, and we do not expect a market to develop. We do not intend to apply
for listing of the Pre-funded Warrants on any securities exchange or nationally recognized trading system. Without an active trading market,
the liquidity of the Pre-funded Warrants will be limited.
As of June 7, 2023, the aggregate market value of our
outstanding common stock held by non-affiliates, or public float, was approximately $15.8 million, based on 23,437,298 shares of
outstanding Common Stock, of which approximately 800,000 shares were held by affiliates, and a price of $0.698 per share, which was
the price at which our common stock was last sold on Nasdaq on April 17, 2023. We have offered and sold $634,953 in value of shares
of our common stock pursuant to General Instruction I.B.6 of Form S-3 during the prior 12-calendar-month period that ends on
and includes the date of this prospectus. Pursuant to General Instruction I.B.6 of Form S-3, in no event will we sell
securities registered on this registration statement in a public primary offering with a value exceeding more than one-third of our
public float in any 12-month period so long as our public float remains below $75 million (the “Baby Shelf
Limitation”).
We are an “smaller reporting company” as defined under
U.S. federal securities laws and are subject to reduced public company reporting requirements. See “Summary—Implications of
Being a Smaller Reporting Company.”
Our common stock is listed on The Nasdaq Capital Market under the symbol
“PRPO.” On June 7, 2023, the closing price of our common stock, as reported on The Nasdaq Capital Select Market, was
$0.68 per share.
Investing in our securities involves a high degree of risk. You
should review carefully the risks and uncertainties referenced under the heading “Risk Factors” on page S-7
of this prospectus supplement, page 10 of the accompanying prospectus and in the documents that are incorporated herein by
reference.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation
to the contrary is a criminal offense.
We have retained A.G.P./Alliance Global Partners to act as financial
advisor (the “financial advisor”) in connection with this offering. The financial advisor has agreed to use its reasonable
best efforts to arrange for sale of the securities offered by this prospectus supplement and the accompanying prospectus. The financial
advisor has no obligation to purchase or sell any securities offered by this prospectus supplement and the accompanying base prospectus.
We have agreed to pay the financial advisor fees set forth in the table below. See “Plan of Distribution” beginning on page S-21
of this prospectus supplement for more information regarding these arrangements.
| |
Per share | | |
Per pre-funded
warrant | | |
Total | |
| Offering price | |
$ | 0.45 | | |
$ | 0.449 | | |
$ | 2,000,000.25 | |
| Financial advisorfees(1) | |
$ | 0.0315 | | |
$ | 0.03143 | | |
$ | 140,000.00 | |
| Proceeds to us, before expenses(2) | |
$ | 0.4185 | | |
$ | 0.41757 | | |
$ | 1,860,000.25 | |
(1) We have agreed to pay the financial advisor a cash fee equal
to $140,000. See “Plan of Distribution” beginning on page S-21 of this prospectus supplement for a description
of the compensation payable to the financial advisor.
(2) The amount of the offering proceeds to us presented in this
table does not give effect to any exercise of the warrants being issued in this offering.
We expect to deliver the securities against payment on or about June 12,
2023.
Financial Advisor
A.G.P.
The date of this prospectus supplement is June 8,
2023.
TABLE OF CONTENTS
Prospectus
About This Prospectus Supplement
This document is in two parts. The first part is this prospectus supplement,
which describes the specific terms of this offering of common stock and Pre-funded Warrants. The second part is the accompanying prospectus,
which provides more general information, some of which may not apply to this offering. The information included or incorporated by reference
in this prospectus supplement also adds to, updates and changes information contained or incorporated by reference in the accompanying
prospectus. If information included or incorporated by reference in this prospectus supplement is inconsistent with the accompanying prospectus
or the information incorporated by reference therein, then this prospectus supplement or the information incorporated by reference in
this prospectus supplement will apply and will supersede the information in the accompanying prospectus and the documents incorporated
by reference therein.
This prospectus supplement is part of a registration statement that
we filed with the Securities and Exchange Commission (“SEC”), using a “shelf” registration process. Under the
shelf registration process and subject to the Baby Shelf Limitation, we may from time to time offer and sell any combination of the securities
described in the accompanying prospectus up to a total dollar amount of $50 million, of which this offering is a part.
You should rely only on the information contained or incorporated
by reference in this prospectus supplement, the accompanying prospectus and any free writing prospectus prepared by us or on our behalf.
We have not, and the financial advisors have not, authorized any other person to provide you with information different from that contained
in this prospectus supplement and the accompanying prospectus or incorporated by reference in this prospectus supplement and the accompanying
prospectus. If anyone provides you with different or inconsistent information, you should not rely on it. We are not, and the financial
advisors are not, making an offer to sell or soliciting an offer to buy these securities under any circumstance in any jurisdiction where
the offer or solicitation is not permitted. You should assume that the information contained in this prospectus supplement, the accompanying
prospectus and any free writing prospectus prepared by us or on our behalf is accurate only as of the date of the respective document
in which the information appears, and that any information in documents that we have incorporated by reference is accurate only as of
the date of the document incorporated by reference, regardless of the time of delivery of this prospectus supplement or any sale of a
security. Our business, financial condition, results of operations and prospects may have changed since those dates.
It is important for you to read and consider all of the information
contained in this prospectus supplement and the accompanying prospectus in making your investment decision. We include cross-references
in this prospectus supplement and the accompanying prospectus to captions in these materials where you can find additional related discussions.
The table of contents in this prospectus supplement provides the pages on which these captions are located. You should read both
this prospectus supplement and the accompanying prospectus, together with the additional information described in the sections entitled
“Where you can find more information” and “Incorporation of certain information by reference” of this prospectus
supplement, before investing in our common stock or Pre-funded Warrants.
We are offering to sell, and seeking offers to buy, shares of common
stock or Pre-funded Warrants only in jurisdictions where offers and sales are permitted. The distribution of this prospectus supplement
and the accompanying prospectus and the offering of the common stock, and Pre-funded Warrants in certain jurisdictions may be restricted
by law. Persons outside the United States who come into possession of this prospectus supplement and the accompanying prospectus must
inform themselves about, and observe any restrictions relating to, the offering of the common stock and Pre-funded Warrants and the distribution
of this prospectus supplement and the accompanying prospectus outside the United States. This prospectus supplement and the accompanying
prospectus do not constitute, and may not be used in connection with, an offer to sell, or a solicitation of an offer to buy, any securities
offered by this prospectus supplement and the accompanying prospectus by any person in any jurisdiction in which it is unlawful for such
person to make such an offer or solicitation.
Unless otherwise indicated, information contained in this prospectus
supplement, the accompanying prospectus or the documents incorporated by reference herein concerning our industry and the markets in which
we operate, including our general expectations and market position, market opportunity and market share, is based on information from
our own management estimates and research, as well as from industry and general publications and research, surveys and studies conducted
by third parties. Management estimates are derived from publicly available information, our knowledge of our industry and assumptions
based on such information and knowledge, which we believe to be reasonable. In addition, assumptions and estimates of our and our industry’s
future performance are necessarily subject to a high degree of uncertainty and risk due to a variety of factors, including those described
in “Risk Factors” in this prospectus supplement, and the accompanying prospectus and in our Annual Report for the year ended
December 31, 2022, as filed with the SEC on March 30, 2023, as amended, supplemented or superseded from time to time by other
reports we file with the SEC in the future, which are incorporated by reference into this prospectus supplement. These and other important
factors could cause our future performance to differ materially from our assumptions and estimates. See “Cautionary Note Regarding
Forward-Looking Statements.”
Unless the context otherwise requires, references to “Precipio,”
the “company,” “we,” “us” and “our” refer to Precipio, Inc., and its consolidated
subsidiaries, or either or all of them as the context may require.
The information in this prospectus is accurate only as of the date
on the front cover of this prospectus and the information in any free writing prospectus that we may provide you in connection with this
offering is accurate only as of the date of that free writing prospectus. Our business, financial condition, results of operations and
prospects may have changed since those dates. No person is authorized in connection with this prospectus to give any information or to
make any representations about us, the securities offered hereby or any matter discussed in this prospectus, other than the information
and representations contained in this prospectus. If any other information or representation is given or made, such information or representation
may not be relied upon as having been authorized by us.
For investors outside the United States: We have not, and the financial
advisors have not, taken any action that would permit this offering or possession or distribution of this prospectus in any jurisdiction
where action for that purpose is required, other than in the United States. Persons outside the United States who come into possession
of this prospectus must inform themselves about, and observe any restrictions relating to, the offering of the securities covered hereby
and the distribution of this prospectus outside the United States.
All references in this prospectus supplement and the accompanying prospectus
to our consolidated financial statements include the related notes thereto.
Unless the context otherwise indicates, references in this prospectus
to “Precpio”, “we”, “our”, “us” and “the Company” refer, collectively, to
Precipio, Inc. and its subsidiaries.
We own various U.S. federal trademark applications and unregistered
trademarks, including “Precipio” and our corporate logo. All other trademarks or trade names referred to in this prospectus
are the property of their respective owners. Solely for convenience, the trademarks and trade names in this prospectus are referred
to without the symbols ® and ™, but such references should not be construed as any indicator that their respective owners will
not assert, to the fullest extent under applicable law, their rights thereto. We do not intend our use or display of other companies’
trademarks and trade names to imply a relationship with, or endorsement or sponsorship of us by, any other companies.
Prospectus
summary
The following summary of our business highlights some of the information
contained elsewhere in, or incorporated by reference into, this prospectus supplement. Because this is only a summary, however, it does
not contain all of the information that may be important to you. You should carefully read this prospectus supplement and the accompanying
prospectus, including the documents incorporated by reference, which are described under “Incorporation of certain information by
reference” in this prospectus supplement. You should also carefully consider the matters discussed in the section of this prospectus
supplement entitled “Risk factors” and under similar sections of the accompanying prospectus and other periodic reports incorporated
herein and therein by reference.
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 to mitigate the
root causes of this problem in the form of diagnostic products, reagents and services. Misdiagnoses are caused by numerous factors, among
them outdated diagnostic technologies, lack of subspecialized expertise, and sub-optimal laboratory processes that are needed in today’s
diagnostic cancer testing in order to provide accurate, rapid, and resource-effective results to treat patients. We focus on blood related
cancers which represent some of the most complex cancers to diagnose, and are prone to some of the highest rates of misdiagnosis; industry
studies estimate 1 in 5 blood-cancer patients are misdiagnosed. As cancer diagnostic testing has evolved from a cellular to a molecular/genetic-based
approach, laboratory testing has become extremely complex, requiring even greater diagnostic precision, attention to process and a more
appropriate evaluation of the abundance of genetic data to effectively gather, consider, analyze and present information for the physician
for patient treatment.
We develop and sell diagnostic products, reagents and services
that improve the accuracy and efficiency of diagnostics, and lead to fewer misdiagnoses. We believe that our products and services impact
patient outcomes by providing more accurate diagnostic results than current industry accepted practices that better inform the selection
of appropriate therapeutic options. Furthermore, we believe that better patient outcomes have a positive impact on healthcare expenses
as a result of fewer misdiagnoses. We believe our platform delivers better diagnostic accuracy than industry peers because of the technologies,
workflow processes and experience we have developed. We market our technologies to other laboratories; additionally, we also operate
our own laboratory, focused on delivering specialized diagnostic services to physicians and their patients to better ensure they receive
accurate results leading to fewer misdiagnoses and promoting cost savings. Better Diagnostic Results – Better Patient Outcome –
Lower Healthcare Expenditures.
To deliver our strategy, we have structured our organization
in order to drive development of diagnostic products. In our laboratory and R&D facilities located in New Haven, Connecticut and
Omaha, Nebraska, our development teams work to develop, test, and ultimately run new products and services in a clinical setting. We
operate CLIA (Clinical Laboratory Improvement Amendments), laboratories in both the New Haven, Connecticut and Omaha, Nebraska locations
providing essential blood cancer diagnostics to office-based oncologists in many states nationwide.
Industry
We believe there is a significant problem of misdiagnosis across
numerous disease states (particularly in blood-related cancers) due to an inefficient and commoditized industry. We believe that the
diagnostic industry focuses primarily on competitive pricing and test turnaround times, (“TAT”), at the expense of quality
and accuracy. Increasingly complex disease states are met with eroding specialization rather than increased subspecialized expertise.
According to a study conducted by the National Coalition of Health, this results in blood cancer misdiagnosis rates as high as 28%, failing
to meet the needs of physicians, patients and the healthcare system as a whole. New technologies offer improved accuracy; however, many
are either inaccessible or are not economically practical for clinical use. Despite much publicity of the industry transitioning from
fee-per-service to value-based payments, this transition has not yet occurred in diagnostics. When a patient is misdiagnosed, physicians
often end up administering incorrect treatments, creating adverse effects rather than improving outcomes. We believe that Insurance Providers,
Medicare and Medicaid waste valuable dollars on the application of incorrect treatments and can incur substantial downstream costs. According
to a report by Pinnacle Health, the estimated cost of misdiagnosis within the healthcare system is $750 billion annually. Most importantly
however, patients pay the ultimate price of misdiagnosis with increased morbidity and mortality. Developing diagnostic products that
increase accuracy, while also providing improved workflow and economic outcomes to laboratories is key to addressing this problem and
delivering better diagnostic care.
Market
Our market is the United States domestic oncology market where
we participate as a commercial diagnostic laboratory and market our products. The oncology total available market, (“TAM”),
is estimated to exceed $20 billion in 2023, with an estimated compound annual growth rate exceeding 5%. We also provide new technologies
to the oncology diagnostic laboratory market in the form of HemeScreen and IV-Cell product offerings. The diagnostics product market
is estimated to have annual revenues exceeding $14 billion by 2025. The annual growth rate of each market segment is estimated
at 5%. Successful deployment within the United States will be closely followed by international marketing where the same product opportunities
exist for our products.
From our New Haven, Connecticut commercial lab, we currently
provide diagnostic blood cancer testing services to oncology practices in over 20 states. Building on our commercial laboratory
expertise, we have developed several impactful diagnostic technologies that are more cost effective than current industry alternatives,
which reduces the diagnostic testing time and improves efficiencies to perform such tests. We anticipate gaining a share of the
oncology diagnostic product market as commercial diagnostic laboratories and oncology practices adopt these new cost effective technologies.
Our Technologies
Our strategy is to develop, manufacture and sell multiple technologies
that we expect to be adopted by laboratories. Since we operate a clinical laboratory, we have access to patient samples that can, in
parallel to the clinical work we conduct, be utilized to develop these new technologies. Since its inception, our R&D team has developed
two products that are offered in the market, and we continue to develop a robust pipeline of products we expect to launch in the future.
The following is a description of the two products currently on the market:
The ongoing introduction of new, genetic-based targeted therapies
have made molecular testing a mainstream and essential component of the diagnostic process. WHO (World Health Organization) and NCCN
(The National Comprehensive Cancer Network®) guidelines have delineated the testing requirements of several specific genetic markers
that are required during the diagnostic workup based on the patient’s disease state.
The current products on the market offer two solutions for genetic
testing. One of those solutions is single-gene testing products via various testing modalities; the other solution is broad, NGS (Next
Generation Sequencing) panels that typically range from 50 to >500 genes in one panel. There are benefits and drawbacks to both current
product options. While the single-gene products are focused, a lab requires multiple different products to address the clinical testing
needs; using multiple products requires the purchase of multiple products and multiple testing machines, requiring the lab to spend substantial
capital expenditures; a complex lab workflow; the splitting of a sample; all resulting in poor economics. Poor economics of an assay
require the laboratory to batch samples, resulting in lengthy turnaround time to provide results to patients, and impacting patient care.
Conversely, NGS, although providing broad gene coverage, is cumbersome and expensive to operate, thus resulting in lengthy TAT; and is
costly to the payors who are reluctant to pay for the testing of 50 genes, when only 5 are defined as medically necessary.
A small panel targeted approach that operates on a single, low-cost,
and easy-to-operate platform should be considered an attractive solution that provides the clinician with the answers they need while
maintaining a simple, cost-effective workflow and economic model within the laboratory. HemeScreen utilizes an inexpensive RT-PCR (reverse
transcription polymerase chain reaction). HemeScreen is a set of disease-specific reagents that provide a simple workflow, is easy to
use, and create attractive economics to the lab, resulting in their ability to reduce batches and provide faster TAT. Our customers that
utilize HemeScreen have demonstrated a reduction in TAT of 2 weeks to 2 days, and have also improved their financial outcome through
this cost-effective technology.
The first panel developd using HemeScreen technology was our
Myeloproliferative Neoplasms (MPN) panel. We have since added Acute Myeloid Leukemia (AML), Chronic Lymphocytic Leukemia (CLL), Cytopenia,
and BCR-ABL panels, evolving HemeScreen into a “suite” of robust genetic diagnostic panels, and we expect the release of
additional diagnostic panels during 2023.
We own a provisional patent application on our proprietary panels.
Our technology enables testing to be completed in one rapid scanning process. The HemeScreen panels test for the presence of various
mutations. In developing HemeScreen, we focused on improving the economics of providing blood cancer diagnostic tests and reducing laboratory
technician time consumed in the testing process. By using our HemeScreen media, laboratories can:
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Avoid the cost of multiple platforms and test all the genes on one single platform; |
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Reduce the threshold of expertise required to perform these tests; |
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Reduce the batch requirements for the test and to subsequently significantly reduce the turnaround time for patient results; |
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Provide improved clinical service to physicians; and |
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Yield significant revenue to the laboratory. |
The cytogenetics laboratory workflow of bone marrow and peripheral
blood samples suffers from an inherent flaw. The flaw stems from the requirement of the oncologist to provide their clinical suspicion,
which determines the pathway of diagnosis, and guides the laboratory in the testing to be conducted, intended to confirm/rule out
the oncologist’s clinical suspicion.
When a laboratory receives a sample, the cytogenetics laboratory
must immediately set up the sample for cell culturing. Faced with four different options of cell lineages for culturing – myeloid,
B-cell, T-cell, and Plasma, current products limit the laboratory to select only one cell lineage to culture. This selection is typically
based solely on the clinical suspicion provided; hence, if the clinical suspicion is incorrect, the laboratory will have cultured the
wrong cell lineage, potentially arriving at a false negative result. Our data shows this occurs in approximately 40% of patient cases,
creating a substantial driver of misdiagnoses.
IV-Cell is a proprietary cell culture media that addresses the
problem of diagnostic mistakes through the process of selective culturing. IV-Cell is a universal media that enables simultaneous culturing
of all four hematopoietic cell lineages. Developed by Precipio, the culturing technology ensures that the laboratory is able to obtain
sufficient information through other test modalities, thereby not relying solely on clinical suspicion, in order to ultimately select
the correct cell lineage for culturing and evaluation.
IV-Cell was validated in our laboratory in parallel with existing
commercially available reagents and has successfully demonstrated superior results compared to MarrowMax. Subsequently, IV-Cell
has been used at our laboratory for the past few years on more than 1,000 clinical specimens, producing superior diagnostic results.
We are marketing this technology by providing major laboratories
with access to the media. The IV-Cell technology and media can be purchased via a direct supply contract, whereby we are contracted with
a manufacturer (under license and non-disclosure) to produce the media.
Corporate History
Precipio, Inc. was incorporated in Delaware on March 6,
1997. Our principal office is located at 4 Science Park, New Haven, Connecticut 06511.
Our internet address is www.precipiodx.com. Information found
on our website is not incorporated by reference into this report and should not be considered as part of this report. We make available
free of charge through our website our Securities and Exchange Commission, (“SEC”), filings, including exhibits, furnished
pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after we electronically file
such material with, or furnish it to, the SEC. You can review our electronically filed reports and other information that we file with
the SEC on the SEC’s web site at http://www.sec.gov.
Implications of being smaller reporting company
We are a “smaller reporting company” and accordingly may
provide less public disclosure than larger public companies, including the inclusion of only two years of audited financial statements
and only two years of related management’s discussion and analysis of financial condition and results of operations disclosure.
As a result, the information that we provide to our stockholders may be different than you might receive from other public reporting companies
in which you hold equity interests.
The
Offering
| Issuer: |
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Precipio, Inc. |
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| Common stock offered by us: |
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4,125,000 shares of our common stock. |
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| Pre-funded Warrants offered by us: |
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Pre-funded warrants to purchase up to 319,445 shares of common stock. We are also offering to each purchaser the opportunity to purchase, if the purchaser so chooses, Pre-funded Warrants, in lieu of shares of common stock. The shares of common stock and Pre-funded Warrants will be issued separately but will be purchased together in this offering. Each Pre-funded Warrant will be exercisable for one share of our common stock. The purchase price of each Pre-funded Warrant will equal the price per share at which the shares of common stock are being sold to the public in this offering, minus $0.0001, and the exercise price of each Pre-funded Warrant will be $0.0001 per share. This offering also relates to the shares of common stock issuable upon exercise of any Pre-funded Warrants sold in this offering. The exercise price and number of shares of common stock issuable upon exercise will be subject to certain further adjustments as described herein. See “Description of Securities Offered” on page S-15 of this prospectus supplement. |
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| Concurrent Private Placement |
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In the Concurrent Private Placement and pursuant to the Purchase Agreement, we are also selling to the Purchaser, for no additional consideration, Common Warrants to purchase up to 8,888,890 shares of our Common Stock. The Common Warrants will have an exercise price of $0.63 per share, will be exercisable six months after the date of issuance and will expire five and one-half years from issuance. The Common Warrants and the shares of Common Stock underlying the Common Warrant are not being registered under the Securities Act, are not being offered pursuant to this prospectus supplement and the accompanying base prospectus, and are being offered on a private placement basis pursuant to the exemption provided in Section 4(a)(2) of the Securities Act and Rule 506(b) of Regulation D thereunder. |
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| Common Stock to be outstanding immediately after this offering: |
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27,562,298 shares, assuming no exercise of any of the warrants issued in this offering. |
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| Use of proceeds: |
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We estimate the net proceeds from this offering will be approximately $1.7 million, excluding any proceeds that may be received upon the cash exercise of the warrants, after deducting the financial advisor's fees and estimated offering expenses payable by us. We intend to use the net proceeds, if any, from this offering, for working capital and general corporate purposes. See “Use of Proceeds” on page S-12 of this prospectus supplement. |
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| Risk Factors: |
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Investing in our securities involves a high degree of risk. See “Risk Factors” beginning on page S-7 of this prospectus supplement and other information included or incorporated by reference into this prospectus supplement for a discussion of factors you should carefully consider before investing in our securities. |
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| Listing: |
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Our common stock is listed on The Nasdaq Capital Market under the symbol “PRPO”. There is no established trading market for the Pre-Funded Warrants and we do not expect a market to develop. In addition, we do not intend to apply for the listing of the Pre-Funded Warrants on any national securities exchange or other trading market. Without an active trading market, the liquidity of the Pre-Funded Warrants will be limited. |
The number of shares of our common stock that will be outstanding immediately
after this offering as shown above is based on 23,364,086 shares outstanding as of March 31, 2023. The number of shares outstanding
as of March 31, 2023 as used throughout this prospectus, unless otherwise indicated, excludes:
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689,131 shares of common stock issuable upon the exercise of outstanding warrants at a weighted average exercise price of $6.33 per share; |
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4,764,905 shares of common stock issuable upon the exercise of outstanding stock options at a weighted average exercise price of $2.33 per share; |
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117,500 shares of our common stock issuable upon conversion of 47 shares of our Series B Preferred Stock; and |
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227,662 shares of common stock available for future grants under our Amended and Restated 2017 Stock Option and Incentive Plan, as amended (the “2017 Plan”) as well as any automatic increases in the number of common shares reserved for issuance under the 2017 Plan after the date of this prospectus. |
Unless otherwise indicated, all information in this prospectus supplemented,
including share and per share amounts, assumes no exercise of the warrants to purchase shares of our common stock issued in connection
with this offering.
Risk
factors
Investing
in our securities involves a high degree of risk. You should carefully consider the risks and uncertainties described below and in the
documents incorporated by reference in this prospectus supplement, as well as other information we include or incorporate by reference
into this prospectus supplement, before making an investment decision. Our business, financial condition and results of operations could
be materially adversely affected by the materialization of any of these risks. The trading price of our securities could decline due to
the materialization of any of these risks, and you may lose all or part of your investment. This prospectus supplement and the documents
incorporated herein by reference also contain forward-looking statements that involve risks and uncertainties. Actual results could differ
materially from those anticipated in these forward-looking statements as a result of certain factors, including the risks described in
the documents incorporated herein by reference, including our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, and as described or may be described in any subsequent quarterly report on Form 10-Q, which are on file with
the SEC and are incorporated herein by reference, and other reports and documents that are incorporated by reference into this prospectus
supplement and other documents we file with the SEC that are deemed incorporated by reference into this prospectus supplement.
Risks related to this offering
You will experience substantial dilution.
Based on an public offering price of $0.45 per share, and a net tangible
book value of $0.7 million, or approximately $0.03 per share of common stock, as of March 31, 2023, if you purchase securities in
this offering, you will experience dilution of $0.36 per share in the net tangible book value of the common stock you purchase representing
the difference between our as adjusted net tangible book value per share after giving effect to this offering and the public offering
price per share of common stock. The exercise of outstanding stock options and warrants, including those sold in this offering, will,
however, result in dilution of your investment. See the section titled “Dilution” below for a more detailed illustration of
the dilution you would incur if you participate in this offering.
We have broad discretion in the use of our existing cash, cash
equivalents and marketable securities and the net proceeds from this offering and may not use them effectively.
Our management will have broad discretion in the application of our
existing cash, cash equivalents and marketable securities and the net proceeds from this offering, including for any of the purposes described
in the section titled “Use of Proceeds,” and you will not have the opportunity as part of your investment decision to assess
whether such proceeds are being used appropriately. Because of the number and variability of factors that will determine our use of our
existing cash and cash equivalents and the net proceeds from this offering, their ultimate use may vary substantially from their currently
intended use. Our management might not apply our existing cash and cash equivalents and the net proceeds from this offering in ways that
ultimately increase the value of your investment. The failure by our management to apply these funds effectively could harm our business.
Pending their use, we may invest the net proceeds from this offering in short-term, investment-grade, interest-bearing securities. These
investments may not yield a favorable return to our stockholders. If we do not invest or apply the net proceeds from this offering in
ways that enhance stockholder value, we may fail to achieve expected financial results, which could cause our stock price to decline.
You may experience future dilution as a result of future equity
offerings.
In order to raise additional capital, we may in the future offer additional
shares of our common stock or other securities convertible into or exchangeable for our common stock at prices that may not be the same
as the price per share in this offering. We may sell shares or other securities in any other offering at a price per share that is less
than the price per share paid by investors in this offering, and investors purchasing shares or other securities in the future could have
rights superior to those of existing stockholders. The price per share at which we sell additional shares of our common stock, or securities
convertible or exchangeable into common stock, in future transactions may be higher or lower than the price per share paid by investors
in this offering.
Sales of a substantial number of shares of our common stock in
the public market after this offering could cause our stock price to fall.
Sales of a substantial number of shares of our common stock in the
public market or the perception that these sales might occur could depress the market price of our common stock and could impair our ability
to raise capital through the sale of additional equity securities. We are unable to predict the effect that sales may have on the prevailing
market price of our common stock. In addition, the sale of substantial amounts of our common stock could adversely impact the price of
our common stock. As of March 31, 2023, 23,364,086 shares of our common stock were outstanding. The sale, or the availability for
sale, of a large number of shares of our common stock in the public market could cause the price of our common stock to decline.
We do not intend to pay dividends on our common stock so any
returns will be limited to the value of our stock.
We currently anticipate that we will retain future earnings for the
development, operation and expansion of our business and do not anticipate declaring or paying any cash dividends for the foreseeable
future. Any return to stockholders will therefore be limited to the appreciation of their stock.
The sale of our common stock in this offering, including any
shares issuable upon exercise of any Pre-funded Warrants, and any future sales of our common stock, or the perception that such sales
could occur, may depress our stock price and our ability to raise funds in new stock offerings.
We may from time to time issue additional shares of common stock at
a discount from the current trading price of our common stock. As a result, our stockholders would experience immediate dilution upon
the purchase of any shares of our common stock sold at such discount. In addition, as opportunities present themselves, we may enter into
financing or similar arrangements in the future, including the issuance of debt securities, preferred stock or common stock. Sales of
shares of our common stock in this offering, including any shares issuable upon exercise of any Pre-funded Warrants issued in this offering
and in the public market following this offering, or the perception that such sales could occur, may lower the market price of our common
stock and may make it more difficult for us to sell equity securities or equity-related securities in the future at a time and price that
our management deems acceptable, or at all.
There is no public market for the Pre-funded Warrants being offered
in this offering.
There is no established public trading market for the Pre-funded Warrants
being offered in this offering, and we do not expect a market to develop. In addition, we do not intend to apply to list the Pre-funded
Warrants on any securities exchange or nationally recognized trading system, including Nasdaq. Without an active market, the liquidity
of the Pre-funded Warrants will be limited.
Holders of our warrants will have no rights as stockholders until
they acquire shares of our common stock, if ever.
If you acquire warrants to purchase shares of our common stock in this
offering, you will have no rights with respect to our common stock until you acquire shares of such common stock upon exercise of your
warrants. Upon exercise of your warrants, you will be entitled to exercise the rights of a common stockholder only as to matters for which
the record date occurs after the exercise date.
We may not receive any additional funds upon the exercise of
the Pre-Funded Warrants.
Each Pre-Funded Warrant may be exercised by way of a cashless exercise,
meaning that the holder may not pay a cash purchase price upon exercise, but instead would receive upon such exercise the net number of
shares of our common stock determined according to the formula set forth in the Pre-Funded Warrants. Accordingly, we may not receive any
additional funds upon the exercise of the Pre-Funded Warrants.
Cautionary
statement regarding forward-looking statements
This prospectus supplement and the accompanying prospectus, including
the documents that we incorporate by reference herein and therein, contain forward-looking statements within the meaning of Section 27A
of the Securities Act, and Section 21E of the Exchange Act. Any statements about our expectations, beliefs, plans, objectives, assumptions
or future events or performance are not historical facts and may be forward-looking. These statements are often, but are not always, made
through the use of words or phrases such as “anticipate,” “believe,” “contemplate,” “continue,”
“could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,”
“predict,” “project,” “seek,” “should,” “target,” “will,” “would,”
and similar expressions, or the negative of these terms, or similar expressions. Accordingly, these statements involve estimates, assumptions
and uncertainties which could cause actual results to differ materially from those expressed in them. Any forward-looking statements are
qualified in their entirety by reference to the factors discussed throughout this prospectus supplement and the accompanying prospectus,
and in particular those factors referenced in the section “Risk factors.”
This prospectus supplement and the accompanying prospectus contain
forward-looking statements that are based on our management’s belief and assumptions and on information currently available to our
management. These statements relate to future events or our future financial performance, and involve known and unknown risks, uncertainties
and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any
future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Forward-looking
statements include, but are not limited to, statements about:
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the progress, timing and amount of expenses associated with our development and commercialization activities; |
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our plans and ability to develop and commercialize new products and services, and make improvements to our existing products and services; |
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our ability or the amount of time it will take to achieve successful reimbursement of our existing and future products and services from third-party payors, such as commercial insurance companies and health maintenance organizations, and government insurance programs, such as Medicare and Medicaid; |
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the accuracy of our estimates of the size and characteristics of the markets that may be addressed by our products; |
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the success of our study to demonstrate the impact of academic pathology expertise on diagnostic accuracy, and any other studies or trials we may conduct; |
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our intention to seek, and our ability to establish, strategic collaborations or partnerships for the development or sale of our products and the effectiveness of such collaborations or partnerships; |
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our expectations as to future financial performance, expense levels and liquidity sources; |
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our anticipated cash needs and our estimates regarding our capital requirements and our needs for additional financing, as well as our ability to obtain such additional financing on reasonable terms; |
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our anticipated cash needs and our estimates regarding our capital requirements and our needs for additional financing, as well as our ability to obtain such additional financing on reasonable terms; |
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our ability to compete with other companies that are or may be developing or selling products that are competitive with our products; |
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our ability to build a sales force to market our products and services, and anticipated increases in our sales and marketing costs due to an expansion in our sales force and marketing activities; |
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federal and state regulatory requirements, including potential United States Food and Drug Administration regulation of our products or future products; |
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anticipated trends and challenges in our potential markets; |
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our ability to attract and retain key personnel; |
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our expected use of proceeds from this offering; and |
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other factors discussed elsewhere in this prospectus |
We have included important factors in the cautionary statements included
in this prospectus supplement and the accompanying prospectus and the documents we incorporate by reference herein and therein, particularly
in the “Risk factors” sections of these documents, that we believe could cause actual results or events to differ materially
from the forward-looking statements that we make. Our forward-looking statements do not reflect the potential impact of any future acquisitions,
mergers, dispositions, joint ventures or investments we may make. No forward-looking statement is a guarantee of future performance.
You should read this prospectus supplement the accompanying prospectus
and the documents that we incorporate by reference herein and therein completely and with the understanding that our actual future results
may be materially different from what we expect. The forward-looking statements in this prospectus supplement and the accompanying prospectus
and the documents we incorporate by reference herein and therein represent our views as of the date of this prospectus. We anticipate
that subsequent events and developments will cause our views to change. However, while we may elect to update these forward- looking statements
at some point in the future, we have no current intention of doing so except to the extent required by applicable law. You should, therefore,
not rely on these forward-looking statements as representing our views as of any date subsequent to the date of this prospectus. In addition,
statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements
are based upon information available to us as of the date of this prospectus supplement, and while we believe such information forms a
reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate
that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information.
Use
of proceeds
We estimate the net proceeds to us from this offering will be approximately
$1.7 million, after deducting the financial advisor fees and estimated offering expenses payable to us. These estimates exclude the proceeds,
if any, from the exercise of Pre-funded Warrants sold in this offering.
We currently intend to use the net proceeds from this 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. We have not determined
the amount of net proceeds to be used specifically for such purposes. As a result, management will retain broad discretion over the allocation
of net proceeds.
Dividend
policy
We have never declared or paid cash dividends on our capital stock.
We currently intend to retain our future earnings, if any, for use in our business and therefore do not anticipate paying cash dividends
in the foreseeable future. Payment of future dividends, if any, will be at the discretion of our board of directors after taking into
account various factors, including our financial condition, operating results, current and anticipated cash needs and plans for expansion.
Dilution
Our net tangible book value as of March 31, 2023 was approximately
$0.7 million, or approximately $0.03 per share of common stock. Net tangible book value per share represents the amount of total tangible
assets (total assets less intangible assets) less total liabilities, divided by the number of shares of our common stock outstanding as
of March 31, 2023.
Net
tangible book value dilution per share to investors participating in this offering represents the difference between the effective public
offering price per share paid by purchasers of securities in this offering and the pro forma as adjusted net tangible book value per share
of our common stock immediately after this offering. After giving effect to (i) the receipt of $47,000 subsequent to March 31,
2023, as a result of the sale of 73,212 shares of common stock, (ii) the sale of shares of our common stock in this offering at a
public offering price of $0.45 per share, and (iii) the sale of Pre-funded Warrants to purchase shares of our common stock at a public
offering price of $0.45 per Pre-funded Warrant, and after deducting estimated financial advisor fees and commissions and offering expenses
payable by us, our pro forma as adjusted net tangible book value as of March 31, 2023 would have been approximately $2.5 million,
or $0.09 per share. This represents an immediate increase in net tangible book value of $0.06 per share to existing stockholders and immediate
dilution of $0.36 per share to investors purchasing our common stock in this offering at the public offering price. The following table
illustrates this dilution on a per share basis:
| Public offering price per share of common stock | |
| | | |
$ | 0.45 | |
| Historical net tangible book value per share as of March 31, 2023 | |
$ | 0.03 | | |
| | |
| Increase in pro forma net tangible book value per share attributable to this offering | |
$ | 0.06 | | |
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| Pro forma as adjusted net tangible book value per share after giving effect to this offering | |
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$ | 0.09 | |
| Dilution per share to investors participating in this offering | |
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$ | 0.36 | |
The discussion and table above assumes no exercise of Pre-funded Warrants
sold in this offering.
The information above and in the foregoing table is based upon 23,364,086
shares of our common stock outstanding as of March 31, 2023. The information above and in the foregoing table excludes as of March 31,
2023:
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689,131 shares of common stock issuable upon the exercise of outstanding warrants at a weighted average exercise price of $6.33 per share; |
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4,764,905 shares of common stock issuable upon the exercise of outstanding stock options at a weighted average exercise price of $2.33 per share; |
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117,500 shares of our common stock issuable upon conversion of 47 shares of our Series B Preferred Stock; and |
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227,662 shares of common stock available for future grants under our Amended and Restated 2017 Stock Option and Incentive Plan, as amended (the “2017 Plan”) as well as any automatic increases in the number of common shares reserved for issuance under the 2017 Plan after the date of this prospectus. |
To the extent that outstanding options as of March 31, 2023 have
been or may be exercised, unvested restricted stock units have settled or other shares issued, investors purchasing our securities in
this offering may experience dilution. To the extent that Pre-funded Warrants purchased in this offering may be exercised, investors purchasing
our securities in this offering may experience dilution. In addition, we may choose to raise additional capital due to market conditions
or strategic considerations even if we believe we have sufficient funds for our current or future operating plans. To the extent that
additional capital is raised through the sale of equity or convertible debt securities, the issuance of these securities could result
in further dilution to our stockholders.
DESCRIPTION OF SECURITIES OFFERED
We are offering 4,125,000 shares of our common stock and Pre-funded
Warrants to purchase 319,445 shares of our common stock. We are also registering the shares of common stock issuable from time to time
upon exercise of the Pre-funded Warrants offered hereby.
Common stock
The material terms and provisions of our common stock and each other
class of our securities which qualifies or limits our common stock are described in the section entitled “Description of Capital
Stock” beginning on page 13 of the accompanying prospectus and the Description of Capital Stock included as Exhibit 4.2
to our Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on March 30, 2023.
Pre-funded warrants
The following summary of certain terms and provisions of Pre-funded
Warrants that are being offered hereby is not complete and is subject to, and qualified in its entirety by, the provisions of the Pre-funded
Warrant, the form of which will be filed as an exhibit to a Current Report on Form 8-K in connection with this offering and incorporated
by reference into the registration statement of which this prospectus supplement forms a part. Prospective investors should carefully
review the terms and provisions of the form of Pre-funded Warrant for a complete description of the terms and conditions of the Pre-funded
Warrants.
Pre-funded warrants will be issued in certificated form only.
Duration and exercise price
Each Pre-funded Warrant offered hereby will have an initial exercise
price per share equal to $0.0001. The exercise price and number of shares of common stock issuable upon exercise is subject to appropriate
adjustment in the event of stock dividends, stock splits, reorganizations or similar events affecting our common stock and the exercise
price.
Exercisability
The Pre-funded Warrants will be exercisable, at the option of each
holder, in whole or in part, by delivering to us a duly executed exercise notice accompanied by payment in full for the number of shares
of our common stock purchased upon such exercise (except in the case of a cashless exercise as discussed below). A holder (together with
its affiliates) may not exercise any portion of such holder’s Pre-funded Warrant to the extent that the holder would own more than
4.99% (or, at the election of the purchaser, 9.99%) of the outstanding shares of common stock immediately after exercise, except that
upon at least 61 days’ written prior notice from the holder to us, the holder may increase or decrease the amount of ownership of
outstanding shares of common stock after exercising the holder’s Pre-funded Warrants up to 19.99% of the number of shares of common
stock outstanding immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms
of the Pre-funded Warrants. No fractional shares of common stock will be issued in connection with the exercise of a Pre-funded Warrant.
In lieu of fractional shares, we will either pay the holder an amount in cash equal to the fractional amount multiplied by the exercise
price or round up to the next whole share.
Cashless exercise
In lieu of making the cash payment otherwise contemplated to be made
to us upon such exercise in payment of the aggregate exercise price, the holder may elect instead to receive upon such exercise (either
in whole or in part) the net number of shares of common stock determined according to a formula set forth in the Pre-funded Warrants.
Fundamental transactions
In the event of any fundamental transaction, as described in the Pre-funded
Warrants and generally including any merger with or into another entity, sale of all or substantially all of our assets, tender offer
or exchange offer, or reclassification of our shares of common stock, then upon any subsequent exercise of a Pre-funded Warrant, the holder
will have the right to receive as alternative consideration, for each share of common stock that would have been issuable upon such exercise
immediately prior to the occurrence of such fundamental transaction, the number of shares of common stock of the successor or acquiring
corporation or of our company, if it is the surviving corporation, and any additional consideration receivable upon or as a result of
such transaction by a holder of the number of shares of common stock for which the Pre-funded Warrant is exercisable immediately prior
to such event.
Transferability
Subject to applicable laws, the pre-funded warrants may be offered
for sale, sold, transferred or assigned without our consent. The Pre-funded Warrants will be held in definitive form by the warrant agent.
The ownership of the Pre-funded Warrants and any transfers of the Pre-funded Warrants will be registered in a warrant register maintained
by the warrant agent. We will initially act as warrant agent.
Exchange listing
There is no established trading market for the Pre-funded Warrants.
We do not intend to list the Pre-funded Warrants on any securities exchange or nationally recognized trading system.
Right as a stockholder
Except as otherwise provided in the Pre-funded Warrants or by virtue
of such holder’s ownership of shares of our common stock, the holders of the Pre-funded Warrants do not have the rights or privileges
of holders of our common stock, including any voting rights, until such Pre-funded Warrant holders exercise their Pre-funded Warrants.
Certain
Material U.S. Federal Income Tax Considerations
for
Non-U.S. Holders
Subject to the limitations, assumptions and qualifications described
herein, the following discussion is a summary of certain U.S. federal income tax considerations applicable to non-U.S. holders (as defined
below) with respect to their ownership and disposition of shares of our common stock and/or Pre-funded Warrants issued pursuant to this
offering. For purposes of this discussion, a non-U.S. holder means a beneficial owner of our common stock and/or Pre-funded Warrants that
is for U.S. federal income tax purposes:
| · | a non-resident alien individual; |
| · | a foreign corporation or any other foreign organization taxable as a corporation for U.S. federal income tax purposes; or |
| · | a foreign estate or trust, the income of which is not subject to U.S. federal income tax on a net income basis. |
This discussion does not address the tax treatment of partnerships
(including any entity or arrangement treated as a partnership for U.S. federal income tax purposes) or other entities that are pass-through
entities for U.S. federal income tax purposes or persons that hold their common stock and/or Pre-funded Warrants through partnerships
or other pass-through entities. A partner in a partnership or other pass-through entity that will hold our common stock and/or Pre-funded
Warrants should consult his, her or its tax advisor regarding the tax consequences of acquiring, holding and disposing of our common stock
and/or Pre-funded Warrants through a partnership or other pass-through entity, as applicable.
This discussion is based on current provisions of the U.S. Internal
Revenue Code of 1986, as amended, which we refer to as the Code, existing and proposed U.S. Treasury Regulations promulgated thereunder,
published rulings and administrative pronouncements of the Internal Revenue Service, which we refer to as the IRS, and judicial decisions,
all as in effect as of the date of this prospectus and, all of which are subject to change or to differing interpretation, possibly with
retroactive effect. Any such change or differing interpretation could alter the tax consequences to non-U.S. holders described in this
prospectus. There can be no assurance that a court or the IRS will not challenge one or more of the tax consequences described herein.
We assume in this discussion that a non-U.S. holder holds shares of our common stock and/or Pre-funded Warrant as a capital asset within
the meaning of Section 1221 of the Code, generally property held for investment.
This discussion does not address all aspects of U.S. federal income
taxation that may be relevant to a particular non-U.S. holder in light of that non-U.S. holder’s individual circumstances nor does
it address any U.S. state, local or non-U.S. taxes, the alternative minimum tax, the Medicare tax on net investment income, the rules regarding
qualified small business stock within the meaning of Section 1202 of the Code, or any other aspect of any U.S. federal tax other
than the income tax. This discussion also does not consider any specific facts or circumstances that may apply to a non-U.S. holder and
does not address the special tax rules applicable to particular non-U.S. holders, such as:
| · | bank, insurance companies or other financial institutions; |
| · | tax-exempt or governmental organizations; |
| · | traders in securities that elect to use a mark-to-market method of accounting for their securities holdings; |
| · | brokers or dealers in securities; |
| · | regulated investment companies or real estate investment trusts; |
| · | “controlled foreign corporations,” “passive foreign investment companies,” and corporations that accumulate
earnings to avoid U.S. federal income tax; |
| · | “qualified foreign pension funds” as defined in Section 897(l)(2) of the Code or entities wholly owned by a
“qualified foreign pension fund”; |
| · | entities or arrangements classified as partnerships for U.S. federal income tax purposes or other pass-through entities such as subchapter
S corporations (or investors in such entities or arrangements); |
| · | persons deemed to sell our common stock and/or Pre-funded Warrants under the constructive sale provisions of the Code; |
| · | persons that hold our common stock and/or Pre-funded Warrants as part of a straddle, hedge, conversion transaction, synthetic security
or other integrated investment; |
| · | Non-U.S. holders that own, or are deemed to own, more than 5% of our common stock (directly, indirectly or by attribution) or more
than 5% of our Pre-funded Warrants; |
| · | holders that acquire the common stock or Pre-funded Warrants through the exercise of an employee stock option or otherwise as compensation
or through a tax-qualified retirement plan; and |
| · | U.S. expatriates and former citizens or former long-term residents of the United States. |
THE TAX CONSEQUENCES TO ANY PARTICULAR HOLDER OF ACQUIRING, HOLDING,
AND DISPOSING OF OUR COMMON STOCK AND/OR PRE-FUNDED WARRANTS WILL DEPEND ON THE HOLDER’S PARTICULAR TAX CIRCUMSTANCES. THE DISCUSSION
OF U.S. FEDERAL INCOME TAX CONSIDERATIONS IS FOR GENERAL INFORMATION ONLY. IT IS NOT TAX ADVICE. EACH PROSPECTIVE NON-U.S. HOLDER IS URGED
TO CONSULT THEIR TAX ADVISOR REGARDING THE PARTICULAR U.S. FEDERAL, STATE, LOCAL, AND NON-U.S. INCOME AND OTHER TAX CONSEQUENCES, IN
LIGHT OF THEIR PARTICULAR INVESTMENT OR TAX CIRCUMSTANCES, OF ACQUIRING, HOLDING, AND DISPOSING OF OUR COMMON STOCK AND/OR PRE-FUNDED
WARRANTS, INCLUDING THE CONSEQUENCES OF ANY PROPOSED CHANGE IN APPLICABLE LAWS.
General Treatment of Pre-funded Warrants
Although it is not entirely free from doubt, a Pre-funded Warrant should
be treated as a share of our common stock for U.S. federal income tax purposes and a holder of Pre-funded Warrants should generally be
taxed in the same manner as a holder of common stock, as described below. Accordingly, no gain or loss should be recognized upon the exercise
of a Pre-funded Warrant and,upon exercise, the holding period of a Pre-funded Warrant should carry over to the share of common stock received.
Similarly, the tax basis of the Pre-funded Warrant should carry over to the share of common stock received upon exercise, increased by
the exercise price of $0.001 per share. Each holder should consult his, her or its own tax advisor regarding the risks associated with
the acquisition of Pre-funded Warrants pursuant to this offering (including potential alternative characterizations). The balance of this
discussion generally assumes that the characterization described above is respected for U.S. federal income tax purposes.
Our position with respect to the characterization of Pre-funded Warrants
is not binding on the IRS and the IRS may treat the Pre-funded Warrants as warrants to acquire our common stock and, if so, the amount
and character of your gain with respect to an investment in our Pre-funded Warrants could change. Holders of Pre-funded Warrants should
consult your tax advisor regarding the characterization of Pre-funded Warrants for U.S. federal income tax purposes, and the consequences
to you of an investment in the Pre-funded Warrants based on your own particular facts and circumstances.
Distributions on Our Common Stock
Distributions, if any, on our common stock will constitute dividends
for U.S. federal income tax purposes to the extent paid from our current or accumulated earnings and profits, as determined under U.S.
federal income tax principles. If a distribution exceeds our current and accumulated earnings and profits, the excess will be treated
as a tax-free return of the non-U.S. holder’s investment, up to such holder’s tax basis in the common stock and reduce a the
holder’s adjusted tax basis in such common stock. Any remaining excess will be treated as capital gain, subject to the tax treatment
described below in “Gain on Sale or Other Taxable Disposition of Our Common Stock and/or Pre-Funded Warrants.” Any such distributions
will also be subject to the discussions below under the sections titled “Backup Withholding and Information Reporting” and
“Withholding and Information Reporting Requirements—FATCA.”
Subject to the discussion in the following two paragraphs in this section,
any dividend paid to a non-U.S. holder generally will be subject to withholding of U.S. federal income tax at a 30% rate of the gross
amount of the dividend or such lower rate as may be specified by an applicable income tax treaty between the United States and such holder’s
country of residence.
Dividends (including constructive dividends) that are treated as effectively
connected with a trade or business conducted by a non-U.S. holder within the United States and, if an applicable income tax treaty so
provides, that are attributable to a permanent establishment or a fixed-base maintained by the non-U.S. holder within the United States,
are generally exempt from the 30% withholding tax if the non-U.S. holder satisfies applicable certification and disclosure requirements.
However, such U.S. effectively connected income, net of specified deductions and credits, is taxed at the same graduated U.S. federal
income tax rates applicable to United States persons (as defined in the Code). Any U.S. effectively connected income received by a non-U.S.
holder that is a corporation may also, under certain circumstances, be subject to an additional “branch profits tax” at a
30% rate or such lower rate as may be specified by an applicable income tax treaty between the United States and such holder’s country
of residence.
A non-U.S. holder of our common stock who claims the benefit of an
applicable income tax treaty between the United States and such holder’s country of residence generally will be required to provide
a properly executed IRS Form W-8BEN or W-8BEN-E (or applicable successor form) to the applicable withholding agent and satisfy applicable
certification and other requirements. Non-U.S. holders are urged to consult their tax advisors regarding their entitlement to benefits
under a relevant income tax treaty, including the possible imposition of the branch profits tax. Any documentation provided to an
applicable withholding agent may need to be updated in certain circumstances. The certification requirements described above also may
require a non-U.S. holder to provide its U.S. taxpayer identification number. A non-U.S. holder that is eligible for a reduced rate of
U.S. withholding tax under an income tax treaty may obtain a refund or credit of any excess amounts withheld by timely filing a U.S. tax
return with the IRS.
The Pre-funded Warrants are not entitled to any distributions until
such warrant is exercised.
Gain on Sale or Other Taxable Disposition of Our Common Stock and/or
Pre-Funded Warrants
Subject to the discussions below under “Backup Withholding and
Information Reporting” and “Withholding and Information Reporting Requirements—FATCA,” a non-U.S. holder generally
will not be subject to any U.S. federal income tax on any gain realized upon such holder’s sale or other taxable disposition of
shares of our common stock and/or Pre-funded Warrants unless:
| · | the gain is effectively connected with the non-U.S. holder’s conduct of a U.S. trade or business and, if an applicable income
tax treaty so provides, is attributable to a permanent establishment or a fixed-base maintained by such non-U.S. holder in the United
States, in which case the non-U.S. holder generally will be taxed on a net income basis at the regular U.S. federal income tax rates applicable
to United States persons (as defined in the Code) and, if the non-U.S. holder is a foreign corporation, the branch profits tax described
above in “Distributions on Our Common Stock” also may apply; |
| · | the non-U.S. holder is a nonresident alien individual who is present in the United States for a period or periods aggregating 183
days or more in the calendar year in which the sale of other taxable disposition occurs, and certain other conditions are met, in which
case the non-U.S. holder will be subject to a flat 30% tax (or such lower rate as may be specified by an applicable income tax treaty
between the United States and such holder’s country of residence) on the amount by which the non-U.S. holder’s capital gains
allocable to U.S. sources exceed capital losses allocable to U.S. sources during the taxable year of the disposition (without taking into
account any capital loss carryovers), provided that the non-U.S. holder has timely filed U.S. federal income tax returns with respect
to such losses; or |
| · | we are, or have been, at any time during the five-year period preceding such sale or other taxable disposition (or the non-U.S. holder’s
holding period, if shorter) a “U.S. real property holding corporation,” unless any class of our stock is regularly traded
on an established securities market and the non-U.S. holder disposes of such class of stock and holds no more than 5% of such class of
stock, directly or indirectly, actually or constructively, during the shorter of the 5-year period ending on the date of the disposition
or the period that the non-U.S. holder held such class of stock. Generally, a corporation is a “U.S. real property holding corporation”
only if the fair market value of its “U.S. real property interests” equals or exceeds 50% of the sum of the fair market value
of its worldwide real property interests plus its other assets used or held for use in a trade or business. Although there can be no assurance,
we do not believe that we are, or have been, a “U.S. real property holding corporation” for U.S. federal income tax purposes,
or that we are likely to become one in the future. Further, there can be no assurance that our common stock will be regularly traded on
an established securities market for purposes of the rules described above. |
Backup Withholding and Information Reporting
We must report annually to the IRS and to each non-U.S. holder the
gross amount of the distributions on our common stock paid to such holder and the tax withheld, if any, with respect to such distributions.
Non-U.S. holders may have to comply with specific certification procedures to establish that the holder is not a “United States
person” (as defined in the Code) in order to avoid backup withholding at the applicable rate with respect to dividends on our common
stock. Dividends paid to non-U.S. holders subject to withholding of U.S. federal income tax, as described above in “Distributions
on Our Common Stock,” generally will be exempt from U.S. backup withholding.
Information reporting and backup withholding (currently at a rate of
24 percent) will generally apply to the proceeds of a sale, exchange or other disposition of our common stock and/or Pre-funded Warrants
by a non-U.S. holder effected by or through the U.S. office of any broker, U.S. or foreign, unless the holder certifies its status as
a non-U.S. holder and satisfies certain other requirements, or otherwise establishes an exemption. Generally, information reporting and
backup withholding will not apply to a payment of disposition proceeds to a non-U.S. holder where the transaction is effected outside
the United States through a non-U.S. office of a broker. However, for information reporting purposes, dispositions effected through a
non-U.S. office of a broker with substantial U.S. ownership or operations generally will be treated in a manner similar to dispositions
effected through a U.S. office of a broker.
Non-U.S. holders should consult their tax advisors regarding the application
of the information reporting and backup withholding rules to them. Copies of information returns may be made available to the tax
authorities of the country in which the non-U.S. holder resides or is incorporated under the provisions of a specific treaty or agreement.
Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules from a payment to a non-U.S.
holder can be refunded or credited against the non-U.S. holder’s U.S. federal income tax liability, if any, provided that an appropriate
claim is filed with the IRS in a timely manner.
Withholding and Information Reporting Requirements—FATCA
Provisions of the Code commonly referred to as the Foreign Account
Tax Compliance Act (“FATCA”) generally impose a U.S. federal withholding tax at a rate of 30% on payments of dividends on
our common stock paid to a foreign entity unless (i) if the foreign entity is a “foreign financial institution,” such
foreign entity undertakes certain due diligence, reporting, withholding, and certification obligations, (ii) if the foreign entity
is not a “foreign financial institution,” such foreign entity identifies certain of its U.S. investors, if any, or (iii) the
foreign entity is otherwise exempt under FATCA. Such withholding may also apply to gross proceeds from the sale or other disposition of
our common stock and/or Pre-funded Warrants, although under recently proposed U.S. Treasury Regulations, no withholding would apply to
such gross proceeds. The preamble to the proposed regulations specifies that taxpayers (including withholding agents) are permitted to
rely on the proposed regulations pending finalization. Under certain circumstances, a non-U.S. holder may be eligible for refunds or credits
of this withholding tax. An intergovernmental agreement between the United States and an applicable foreign country may modify the requirements
described in this paragraph. Non-U.S. holders should consult their tax advisors regarding the possible implications of this legislation
on their investment in our common stock and/or Pre-funded Warrants and the entities through which they hold our common stock and/or Pre-funded
Warrants, including, without limitation, the process and deadlines for meeting the applicable requirements to prevent the imposition of
the 30% withholding tax under FATCA.
PLAN OF DISTRIBUTION
A.G.P./Alliance Global Partners has agreed to act as financial advisor
in connection with this offering subject to the terms and conditions of the Financial Advisory Agreement dated June 8, 2023. The
financial advisor is not purchasing or selling any of the securities offered by this prospectus supplement, but will use its reasonable
best efforts to arrange for the sale of the securities offered by this prospectus supplement. We have entered into a securities purchase
agreement directly with investors in connection with this offering. We will make offers only to a limited number of accredited investors.
The offering is expected to close on or about June 12, 2023, subject to customary closing conditions, without further notice to you.
Fees and Expenses
We have agreed to pay the financial advisor a financial advisor
cash fee equal to $140,000. The following table shows the public offering price per share and accompanying warrant and total
cash financial advisor’s fees we will pay to the financial advisor in connection with the sale of the securities offered pursuant
to this prospectus supplement and the accompanying prospectus.
| |
Per share | | |
Per pre-funded
warrant | | |
Total | |
| Offering price | |
$ | 0.45 | | |
$ | 0.449 | | |
$ | 2,000,000.25 | |
| Financial advisor fees(1) | |
$ | 0.0315 | | |
$ | 0.03143 | | |
$ | 140,000.00 | |
| Proceeds to us, before expenses(2) | |
$ | 0.4185 | | |
$ | 0.41757 | | |
$ | 1,860,000.25 | |
In addition, we have agreed to reimburse
the financial advisor’s expenses up to $40,000 upon closing the offering. We estimate that the total expenses of the offering payable
by us, excluding the financial advisor fees and expenses, will be approximately $100,000.
Regulation M
The financial advisor may be deemed to be an underwriter within
the meaning of Section 2(a)(11) of the Securities Act, and any commissions received by it and any profit realized on the resale
of the shares sold by it while acting as principal might be deemed to be underwriting discounts or commissions under the Securities Act.
As an underwriter, the financial advisor would be required to comply with the requirements of the Securities Act and the Exchange Act,
including, without limitation, Rule 415(a)(4) under the Securities Act and Rule 10b-5 and Regulation M under the Exchange
Act. These rules and regulations may limit the timing of purchases and sales of shares by the financial advisor acting as principal.
Under these rules and regulations, the financial advisor:
| |
● |
may not engage in any stabilization activity in connection with our securities; and |
| |
● |
may not bid for or purchase any of our securities or attempt to induce any person to purchase any of our securities, other than as permitted under the Exchange Act, until they have completed their participation in the distribution. |
Nasdaq Listing
Our common stock is listed on The Nasdaq Capital Market under
the symbol “PRPO.” On June 7, 2023, the last reported sale price of our common stock on The Nasdaq Capital Market was
$0.68 per share.
Indemnification
We have agreed to indemnify the financial advisor and other
specified persons against certain civil liabilities, including liabilities under the Securities Act and the Exchange Act, and to contribute
to payments that the financial advisor may be required to make in respect of such liabilities.
Restrictions
Each of our executive officers and directors have agreed with
the financial advisor to be subject to a lock-up period of 90 days following the date of this prospectus. This means that, during the
applicable lock-up period, they may not offer for sale, contract to sell, or sell any shares of our common stock or any securities convertible
into, or exercisable or exchangeable for, shares of our common stock subject to certain customary exceptions. The financial advisor may,
in its sole discretion and without notice, waive the terms of any of these lock-up agreements. In addition, we have agreed to 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 90 days following the closing date of this offering,
subject to certain exceptions, and for a period of 180 days following the closing date of this offering, to not issue any securities
that are subject to a price reset based on trading prices of our common stock or upon a specified or contingent event in the future,
or enter into an agreement to issue securities at a future determined price, including securities issued pursuant to an equity line of
credit or an “at the market” offering, subject to certain exceptions.
Other Relationships
The financial advisor or its affiliates may in the future engage
in transactions with, and may perform, from time to time, investment banking and advisory services for us in the ordinary course of their
business and for which they would receive customary fees and expenses. In addition, in the ordinary course of their business activities,
the financial advisor and its affiliates may make or hold a broad array of investments and actively trade debt and equity securities
(or related derivative securities) and financial instruments (including bank loans) for its own account and for the accounts of its customers.
Such investments and securities activities may involve securities and/or instruments of ours or our affiliates.
Specifically, on April 14, 2023, we entered into a Sales
Agreement with A.G.P., pursuant to which we may offer and sell from time to time shares of our common stock to or through A.G.P., as
sales agent (the “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. A.G.P. will be entitled to a commission at a fixed rate of 3.0% of the gross proceeds
from each sale of Shares pursuant to the Sales Agreement. Prior to the Sales Agreement, on April 2, 2021, we entered into a sales
agreement with A.G.P., pursuant to which we were able to offer and sell our common stock to or through AGP, as sales agent. A.G.P. was
entitled to a commission at a fixed rate of 3.0% of the gross proceeds from each sale of shares pursuant to this sales agreement.
The transfer agent for our common stock to be issued in this
offering is EQ Shareowner Services, 1110 Centre Pointe Curve Suite 101, Mendota Heights, MN 55120, Tel: 855-217-6361. Our common
stock is traded on The Nasdaq Capital Market under the symbol “PRPO.” We do not intend to apply for listing of the warrants
on any securities exchange or other nationally recognized trading system. We currently anticipate that the closing of the securities
will take place on or about June 12, 2023. At the closing, EQ Shareowner Services will credit the shares of common stock to the
respective accounts of the investors.
LEGAL MATTERS
Certain legal matters, including the legality of the securities offered,
will be passed upon for us by Goodwin Procter LLP, New York, New York. The financial advisor is being represented in this offering
by Sheppard, Mullin, Richter & Hampton LLP, New York, New York.
EXPERTS
The
consolidated financial statements of Precipio, Inc. as of and for the years ended December 31, 2022 and 2021 appearing in our Annual Report on Form 10-K filed for the year ended December 31, 2022, have been audited by Marcum LLP, independent registered public
accounting firm, to the extent and for the periods as set forth in their report which includes an explanatory paragraph as to the Company's
ability to continue as a going concern, thereon, and incorporated herein by reference in reliance upon such report given on the authority
of such firm as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
This prospectus is part of a registration statement on Form S-3
that we have filed with the SEC. This prospectus, filed as part of the registration statement, does not contain all the information set
forth in the registration statement and its exhibits and schedules, portions of which have been omitted as permitted by the rules and
regulations of the SEC. For further information about us, we refer you to the registration statement and to its exhibits and schedules.
Certain information in the registration statement has been omitted from this prospectus in accordance with the rules of the SEC.
We are subject to the reporting and information requirements of the
Exchange Act and, in accordance therewith, file annual, quarterly and special reports, proxy statements and other information with the
SEC. These documents also may be accessed through the SEC’s electronic data gathering, analysis and retrieval system (“EDGAR”),
via electronic means, including the SEC’s home page on the Internet (www.sec.gov). Written requests for such copies should
be directed to Precipio, Inc., 4 Science Park, New Haven, Connecticut 06511, telephone: (203) 787-7888 and our website is located
at www. https://www.precipiodx.com/. We do not incorporate the information on or accessible through our website into this prospectus,
and you should not consider any information on, or that can be accessed through, our website to be part of this prospectus. We have included
our website address in this prospectus solely as an inactive textual reference.
We have the authority to designate and issue more than one class or
series of stock having various preferences, conversion and other rights, voting powers, restrictions, limitations as to dividends, qualifications,
and terms and conditions of redemption. See “Description of Capital Stock” in the accompanying base prospectus. We will furnish
a full statement of the relative rights and preferences of each class or series of our stock which has been so designated and any restrictions
on the ownership or transfer of our stock to any shareholder upon request and without charge.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The SEC allows us to incorporate by reference
the information and reports we file with it, which means that we can disclose important information to you by referring you to these documents.
The information incorporated by reference is an important part of this prospectus, and information that we file later with the SEC will
automatically update and supersede the information already incorporated by reference. We are incorporating by reference the documents
listed below, which we have already filed with the SEC, and any future filings we make with the SEC under Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act, including all filings made after the date of the filing of this registration statement and prior to the
effectiveness of this registration statement, except as to any portion of any future report or document that is not deemed filed under
such provisions, until we sell all of the securities:
Upon request, we will provide, without charge,
to each person, including any beneficial owner, to whom a copy of this prospectus is delivered, a copy of the documents incorporated by
reference into this prospectus but not delivered with the prospectus. You may request a copy of these filings, and any exhibits we have
specifically incorporated by reference as an exhibit in this prospectus, at no cost by writing us at the following address:
Precipio, Inc.
4 Science Park
New Haven, CT 06511
(203) 787-7888
You may also access these documents, free
of charge on the SEC’s website at www.sec.gov or on our website at http://www.precipiodx.com (Click the “Investors”
link and then the “SEC Filings” link). Information contained on our website is not incorporated by reference into this prospectus,
and you should not consider any information on, or that can be accessed from, our website as part of this prospectus or any accompanying
prospectus supplement.
Notwithstanding the foregoing, unless specifically
stated to the contrary, information that we furnish (and that is not deemed “filed” with the SEC) under Items 2.02 and 7.01
of any Current Report on Form 8-K, including the related exhibits under Item 9.01, is not incorporated by reference into this prospectus
or the registration statement of which this prospectus is a part.
This prospectus is part of a registration
statement we filed with the SEC. We have incorporated exhibits into this registration statement. You should read the exhibits carefully
for provisions that may be important to you.
You should rely only on the information incorporated
by reference or provided in this prospectus or any prospectus supplement. We have not authorized anyone to provide you with different
information. We are not making an offer of these securities in any state where the offer is not permitted. You should not assume that
the information in this prospectus or in the documents incorporated by reference is accurate as of any date other than the date on the
front of this prospectus or those documents.
PROSPECTUS
$50,000,000
Common Stock
Preferred Stock
Debt Securities
Warrants
Units
We
may from time to time issue, in one or more series or classes, our common stock, preferred stock, debt securities, warrants and/or units.
We may offer these securities separately or together in units. We will specify in the applicable accompanying prospectus supplement the
terms of the securities being offered. We may sell these securities to or through underwriters and also to other purchasers or through
agents. We will set forth the names of any underwriters or agents, and any fees, conversions or discount arrangements, in the applicable
accompanying prospectus supplement. We may not sell any securities under this prospectus without delivery of the applicable prospectus
supplement.
This
prospectus provides a general description of the securities we may offer. We will provide specific terms of these offerings and securities
in one or more supplements to this prospectus, which may also supplement, update or amend information contained in this document. You
should carefully read this prospectus and any accompanying prospectus supplement, together with the documents we incorporate by reference,
before you invest in any of these securities.
We
may sell these securities on a continuous or delayed basis directly, through agents, dealers or underwriters as designated from time
to time, or through a combination of these methods. We reserve the sole right to accept, and together with any agents, dealers and underwriters,
reserve the right to reject, in whole or in part, any proposed purchase of securities. If any agents, dealers or underwriters are involved
in the sale of any securities offered by this prospectus, the applicable prospectus supplement will set forth any applicable commissions
or discounts. Our net proceeds from the sale of securities also will be set forth in the applicable prospectus supplement, as well as
the specific terms of the plan of distribution.
Our common stock is listed
on The Nasdaq Capital Market under the symbol “PRPO”. The last reported sale price of our common stock on April 21, 2023
was $0.6551 per share. Our principal executive office is located 4 Science Park, New Haven, Connecticut 06511. Pursuant to General Instruction
I.B.6 of Form S-3, in no event will we sell the shelf securities in a public primary offering with a value exceeding more than one-third
of the aggregate market value of our common stock held by non-affiliates in any 12-month period so long as the aggregate market value
of our outstanding common stock held by non-affiliates remains below $75 million. During the 12 calendar months prior to and including
the date of this prospectus, we have offered and sold $634,628 in value of shares of our common stock pursuant to General Instruction
I.B.6 of Form S-3. Each prospectus supplement will indicate if the securities offered thereby will be listed on any securities exchange.
Investing in our
securities involves a high degree of risk. See “Risk Factors” on page 10 in this prospectus to read about
the factors you should consider before buying shares of our common stock
Neither the Securities
and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy
or accuracy of this prospectus. Any representation to the contrary is a criminal offense.
The date of this
prospectus is
, 2023
TABLE OF CONTENTS
ABOUT
THIS PROSPECTUS
This
prospectus is a part of a registration statement on Form S-3 that we filed with the Securities and Exchange Commission, or SEC,
utilizing a “shelf” registration process. Under the shelf registration, we and/or selling stockholders may offer shares of
our common stock and preferred stock, various series of warrants to purchase common stock or preferred stock, debt securities or any
combination thereof, from time to time in one or more offerings.
This
prospectus provides you with a general description of the securities we may offer. Each time we sell securities, we will provide one
or more prospectus supplements that will contain specific information about the terms of the offering. The applicable prospectus supplement
may also add, update or change information contained in this prospectus. You should read both this prospectus and any accompanying prospectus
supplement together with the additional information described under the heading “Where You Can Find More Information” beginning
on page 28 of this prospectus.
You
should rely only on the information contained in or incorporated by reference in this prospectus, the accompanying prospectus supplement
or in any related free writing prospectus filed by us with the SEC. We have not authorized anyone to provide you with different information.
This prospectus and the accompanying prospectus supplement do not constitute an offer to sell or the solicitation of an offer to buy
any securities other than the securities described in the accompanying prospectus supplement or an offer to sell or the solicitation
of an offer to buy such securities in any circumstances in which such offer or solicitation is unlawful. You should assume that the information
appearing in this prospectus, any prospectus supplement, the documents incorporated by reference and any related free writing prospectus
is accurate only as of their respective dates. Our business, financial condition, results of operations and prospects may have changed
materially since those dates.
Unless
the context otherwise requires, references to “Precipio,” the “company,” “we,” “us” and
“our” refer to Precipio, Inc., and its consolidated subsidiaries, or either or all of them as the context may require.
PROSPECTUS
SUMMARY
This
summary does not contain all of the information you should consider in making your investment decision. You should read the entire prospectus
carefully, especially the “Risk Factors” and our financial statements and the related notes from our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, filed with the SEC on March 30, 2023, and is incorporated herein by reference,
and other documents we file with the SEC that are deemed incorporated by reference into this prospectus before deciding to invest in
shares of our common stock.
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 to mitigate the root causes of this problem in the form of diagnostic products, reagents and services. Misdiagnoses
are caused by numerous factors, among them outdated diagnostic technologies, lack of subspecialized expertise, and sub-optimal laboratory
processes that are needed in today’s diagnostic cancer testing in order to provide accurate, rapid, and resource-effective results
to treat patients. We focus on blood related cancers which represent some of the most complex cancers to diagnose, and are prone to some
of the highest rates of misdiagnosis; industry studies estimate 1 in 5 blood-cancer patients are misdiagnosed. As cancer diagnostic testing
has evolved from a cellular to a molecular/genetic-based approach, laboratory testing has become extremely complex, requiring even greater
diagnostic precision, attention to process and a more appropriate evaluation of the abundance of genetic data to effectively gather,
consider, analyze and present information for the physician for patient treatment.
We
develop and sell diagnostic products, reagents and services that improve the accuracy and efficiency of diagnostics, and lead to fewer
misdiagnoses. We believe that our products and services impact patient outcomes by providing more accurate diagnostic results than current
industry accepted practices that better inform the selection of appropriate therapeutic options. Furthermore, we believe that better
patient outcomes have a positive impact on healthcare expenses as a result of fewer misdiagnoses. We believe our platform delivers better
diagnostic accuracy than industry peers because of the technologies, workflow processes and experience we have developed. We market our
technologies to other laboratories; additionally, we also operate our own laboratory, focused on delivering specialized diagnostic services
to physicians and their patients to better ensure they receive accurate results leading to fewer misdiagnoses and promoting cost savings.
Better Diagnostic Results – Better Patient Outcome – Lower Healthcare Expenditures.
To
deliver our strategy, we have structured our organization in order to drive development of diagnostic products. In our laboratory and
R&D facilities located in New Haven, Connecticut and Omaha, Nebraska, our development teams work to develop, test, and ultimately
run new products and services in a clinical setting. We operate CLIA (Clinical Laboratory Improvement Amendments), laboratories in both
the New Haven, Connecticut and Omaha, Nebraska locations providing essential blood cancer diagnostics to office-based oncologists in
many states nationwide.
Industry
We
believe there is a significant problem of misdiagnosis across numerous disease states (particularly in blood-related cancers) due to
an inefficient and commoditized industry. We believe that the diagnostic industry focuses primarily on competitive pricing and test turnaround
times, (“TAT”), at the expense of quality and accuracy. Increasingly complex disease states are met with eroding specialization
rather than increased subspecialized expertise. According to a study conducted by the National Coalition of Health, this results in blood
cancer misdiagnosis rates as high as 28%, failing to meet the needs of physicians, patients and the healthcare system as a whole. New
technologies offer improved accuracy; however, many are either inaccessible or are not economically practical for clinical use. Despite
much publicity of the industry transitioning from fee-per-service to value-based payments, this transition has not yet occurred in diagnostics.
When a patient is misdiagnosed, physicians often end up administering incorrect treatments, creating adverse effects rather than improving
outcomes. We believe that Insurance Providers, Medicare and Medicaid waste valuable dollars on the application of incorrect treatments
and can incur substantial downstream costs. According to a report by Pinnacle Health, the estimated cost of misdiagnosis within the healthcare
system is $750 billion annually. Most importantly however, patients pay the ultimate price of misdiagnosis with increased morbidity and
mortality. Developing diagnostic products that increase accuracy, while also providing improved workflow and economic outcomes to laboratories
is key to addressing this problem and delivering better diagnostic care.
Market
Our
market is the United States domestic oncology market where we participate as a commercial diagnostic laboratory and market our products.
The oncology total available market, (“TAM”), is estimated to exceed $20 billion in 2023, with an estimated compound annual
growth rate exceeding 5%. We also provide new technologies to the oncology diagnostic laboratory market in the form of HemeScreen and
IV-Cell product offerings. The diagnostics product market is estimated to have annual revenues exceeding $14 billion by 2025. The
annual growth rate of each market segment is estimated at 5%. Successful deployment within the United States will be closely followed
by international marketing where the same product opportunities exist for our products.
From
our New Haven, Connecticut commercial lab, we currently provide diagnostic blood cancer testing services to oncology practices in over
20 states. Building on our commercial laboratory expertise, we have developed several impactful diagnostic technologies that are
more cost effective than current industry alternatives, which reduces the diagnostic testing time and improves efficiencies to perform
such tests. We anticipate gaining a share of the oncology diagnostic product market as commercial
diagnostic laboratories and oncology practices adopt these new cost effective technologies.
Our Technologies
Our
strategy is to develop, manufacture and sell multiple technologies that we expect to be adopted by laboratories. Since we operate a clinical
laboratory, we have access to patient samples that can, in parallel to the clinical work we conduct, be utilized to develop these new
technologies. Since its inception, our R&D team has developed two products that are offered in the market, and we continue to develop
a robust pipeline of products we expect to launch in the future. The following is a description of the two products currently on the
market:
The
ongoing introduction of new, genetic-based targeted therapies have made molecular testing a mainstream and essential component of the
diagnostic process. WHO (World Health Organization) and NCCN (The National Comprehensive Cancer Network®) guidelines have delineated
the testing requirements of several specific genetic markers that are required during the diagnostic workup based on the patient's disease
state.
The
current products on the market offer two solutions for genetic testing. One of those solutions is single-gene testing products via various
testing modalities; the other solution is broad, NGS (Next Generation Sequencing) panels that typically range from 50 to >500 genes
in one panel. There are benefits and drawbacks to both current product options. While the single-gene products are focused, a lab requires
multiple different products to address the clinical testing needs; using multiple products requires the purchase of multiple products
and multiple testing machines, requiring the lab to spend substantial capital expenditures; a complex lab workflow; the splitting of
a sample; all resulting in poor economics. Poor economics of an assay require the laboratory to batch samples, resulting in lengthy turnaround
time to provide results to patients, and impacting patient care. Conversely, NGS, although providing broad gene coverage, is cumbersome
and expensive to operate, thus resulting in lengthy TAT; and is costly to the payors who are reluctant to pay for the testing of 50 genes,
when only 5 are defined as medically necessary.
A
small panel targeted approach that operates on a single, low-cost, and easy-to-operate platform should be considered an attractive solution
that provides the clinician with the answers they need while maintaining a simple, cost-effective workflow and economic model within
the laboratory. HemeScreen utilizes an inexpensive RT-PCR (reverse transcription polymerase chain reaction). HemeScreen is a set of disease-specific
reagents that provide a simple workflow, is easy to use, and create attractive economics to the lab, resulting in their ability to reduce
batches and provide faster TAT. Our customers that utilize HemeScreen have demonstrated a reduction in TAT of 2 weeks to 2 days, and
have also improved their financial outcome through this cost-effective technology.
The
first panel developed using HemeScreen technology was our Myeloproliferative Neoplasms (MPN) panel. We have since added Acute Myeloid
Leukemia (AML), Chronic Lymphocytic Leukemia (CLL), Cytopenia, and BCR-ABL panels, evolving HemeScreen into a “suite” of
robust genetic diagnostic panels, and we expect the release of additional diagnostic panels during 2023.
We
own a provisional patent application on our proprietary panels. Our technology enables testing to be completed in one rapid scanning
process. The HemeScreen panels test for the presence of various mutations. In developing HemeScreen, we focused on improving the economics
of providing blood cancer diagnostic tests and reducing laboratory technician time consumed in the testing process. By using our HemeScreen
media, laboratories can:
| · | Avoid
the cost of multiple platforms and test all the genes on one single platform; |
| · | Reduce
the threshold of expertise required to perform these tests; |
| · | Reduce
the batch requirements for the test and to subsequently significantly reduce the turnaround
time for patient results; |
| · | Provide
improved clinical service to physicians; and |
| · | Yield
significant revenue to the laboratory. |
The
cytogenetics laboratory workflow of bone marrow and peripheral blood samples suffers from an inherent flaw. The flaw stems from the requirement
of the oncologist to provide their clinical suspicion, which determines the pathway of diagnosis, and guides the laboratory in the testing
to be conducted, intended to confirm/rule out the oncologist’s clinical suspicion.
When
a laboratory receives a sample, the cytogenetics laboratory must immediately set up the sample for cell culturing. Faced with four different
options of cell lineages for culturing – myeloid, B-cell, T-cell, and Plasma, current products limit the laboratory to select only
one cell lineage to culture. This selection is typically based solely on the clinical suspicion provided; hence, if the clinical suspicion
is incorrect, the laboratory will have cultured the wrong cell lineage, potentially arriving at a false negative result. Our data shows
this occurs in approximately 40% of patient cases, creating a substantial driver of misdiagnoses.
IV-Cell
is a proprietary cell culture media that addresses the problem of diagnostic mistakes through the process of selective culturing. IV-Cell
is a universal media that enables simultaneous culturing of all four hematopoietic cell lineages. Developed by Precipio, the culturing
technology ensures that the laboratory is able to obtain sufficient information through other test modalities, thereby not relying solely
on clinical suspicion, in order to ultimately select the correct cell lineage for culturing and evaluation.
IV-Cell
was validated in our laboratory in parallel with existing commercially available reagents and has successfully demonstrated superior
results compared to MarrowMax. Subsequently, IV-Cell has been used at our laboratory for the past few years on more than 1,000 clinical
specimens, producing superior diagnostic results.
We
are marketing this technology by providing major laboratories with access to the media. The IV-Cell technology and media can be purchased
via a direct supply contract, whereby we are contracted with a manufacturer (under license and non-disclosure) to produce the media.
Corporate History
Precipio, Inc.
was incorporated in Delaware on March 6, 1997. Our principal office is located at 4 Science Park, New Haven, Connecticut 06511.
Our
internet address is www.precipiodx.com. Information found on our website is not incorporated by
reference into this report and should not be considered as part of this report. We make available free of charge through our website
our Securities and Exchange Commission, (“SEC”), filings, including exhibits, furnished pursuant to Section 13(a) or
15(d) of the Exchange Act as soon as reasonably practicable after we electronically file such material with, or furnish it to, the
SEC. You can review our electronically filed reports and other information that we file with the SEC on the SEC’s web site at http://www.sec.gov.
RISK
FACTORS
Investing
in our securities involves a high degree of risk. You should carefully consider the risks referenced below and described in the documents
incorporated by reference in this prospectus and any applicable prospectus supplement, as well as other information we include or incorporate
by reference into this prospectus and any applicable prospectus supplement, before making an investment decision. Our business, financial
condition or results of operations could be materially adversely affected by the materialization of any of these risks. The trading price
of our securities could decline due to the materialization of any of these risks, and you may lose all or part of your investment. This
prospectus and the documents incorporated herein by reference also contain forward-looking statements that involve risks and uncertainties.
Actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including
the risks referenced below and described in the documents incorporated herein by reference, including our annual report on Form 10-K for the fiscal year ended December 31, 2022, which is on file with the SEC and is incorporated herein by reference, and other documents
we file with the SEC that are deemed incorporated by reference into this prospectus.
CAUTIONARY
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This
prospectus, each prospectus supplement, and the documents incorporated by reference into this prospectus and each prospectus supplement
contain forward-looking statements within the meaning of Section 27A of the Securities Act
of 1933, as amended (the "Securities Act"), and Section 21E of the Exchange Act, which are subject to the "safe harbor"
created by those sections. The forward-looking statements are based on our management’s belief and assumptions and on information
currently available to our management. Although we believe that the expectations reflected in these forward-looking statements are reasonable,
these statements relate to our strategy, future operations, future financial position, future revenue, projected costs, prospects, plans,
objectives of management and expected market growth, and involve known and unknown risks, uncertainties and other factors that may cause
our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity,
performance or achievements expressed or implied by these forward-looking statements. Forward-looking statements in this prospectus include,
but are not limited to, statements about:
| · | the
progress, timing and amount of expenses associated with our development and commercialization
activities; |
| · | our
plans and ability to develop and commercialize new products and services, and make improvements
to our existing products and services; |
| · | our
ability or the amount of time it will take to achieve successful reimbursement of our existing
and future products and services from third-party payors, such as commercial insurance companies
and health maintenance organizations, and government insurance programs, such as Medicare
and Medicaid; |
| · | the
accuracy of our estimates of the size and characteristics of the markets that may be addressed
by our products; |
| · | the
success of our study to demonstrate the impact of academic pathology expertise on diagnostic
accuracy, and any other studies or trials we may conduct; |
| · | our
intention to seek, and our ability to establish, strategic collaborations or partnerships
for the development or sale of our products and the effectiveness of such collaborations
or partnerships; |
| · | our
expectations as to future financial performance, expense levels and liquidity sources; |
| · | our
anticipated cash needs and our estimates regarding our capital requirements and our needs
for additional financing, as well as our ability to obtain such additional financing on reasonable
terms; |
| · | our
anticipated cash needs and our estimates regarding our capital requirements and our needs
for additional financing, as well as our ability to obtain such additional financing on reasonable
terms; |
| · | our
ability to compete with other companies that are or may be developing or selling products
that are competitive with our products; |
| · | our
ability to build a sales force to market our products and services, and anticipated increases
in our sales and marketing costs due to an expansion in our sales force and marketing activities; |
| · | federal
and state regulatory requirements, including potential United States Food and Drug Administration
regulation of our products or future products; |
| · | anticipated
trends and challenges in our potential markets; |
| · | our
ability to attract and retain key personnel; and |
| · | other
factors discussed elsewhere in this prospectus |
In
some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,”
“expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,”
“predicts,” “potential,” “continue” or the negative of these terms or other comparable terminology.
These statements are only predictions. You should not place undue reliance on forward-looking statements because they involve known and
unknown risks, uncertainties and other factors, which are, in some cases, beyond our control and which could materially affect results.
Factors that may cause actual results to differ materially from current expectations include, among other things, those listed under
“Risk Factors” and elsewhere in this prospectus. If one or more of these risks or uncertainties occur, or if our underlying
assumptions prove to be incorrect, actual events or results may vary significantly from those implied or projected by the forward-looking
statements. No forward-looking statement is a guarantee of future performance. You should read this prospectus and the documents that
we reference in this prospectus and have filed with the SEC as exhibits to the registration statement, of which this prospectus is a
part, completely and with the understanding that our actual future results may be materially different from any future results expressed
or implied by these forward-looking statements.
The
forward-looking statements in this prospectus represent our views as of the date of this prospectus. We anticipate that subsequent events
and developments will cause our views to change. However, while we may elect to update these forward-looking statements at some point
in the future, we have no current intention of doing so except to the extent required by applicable law. You should, therefore, not rely
on these forward-looking statements as representing our views as of any date subsequent to the date of this prospectus.
USE
OF PROCEEDS
We
will retain broad discretion over the use of the net proceeds from the sale of the securities offered hereby. Except as described in
any applicable prospectus supplement or in any free writing prospectuses that we may authorize to be provided to you in connection with
a specific offering, we currently intend to use the net proceeds from the sale of the securities offered hereby, if any, for working
capital and general corporate purposes, including research and development expenses and capital expenditures, which may include costs
of funding future acquisitions or for any other purpose we describe in the applicable prospectus supplement.
We
will set forth in the applicable prospectus supplement or free writing prospectus our intended use for the net proceeds received from
the sale of any securities sold pursuant to the prospectus supplement or free writing prospectus. Pending the use of net proceeds, we
plan to invest the net proceeds in short-term interest-bearing investment-grade securities, certificates of deposit or government securities.
DIVIDEND
POLICY
We
have never declared or paid dividends on our common stock. We do not anticipate paying any dividends on our common stock in the foreseeable
future. We currently intend to retain all available funds and any future earnings to fund the development and growth of our business.
Any future determination to declare dividends will be subject to the discretion of our board of directors and will depend on various
factors, including applicable laws, our results of operations, financial condition, future prospects and any other factors deemed relevant
by our board of directors. Investors should not purchase our common stock with the expectation of receiving cash dividends.
DESCRIPTION
OF CAPITAL STOCK
Our authorized capital stock
consists of 150,000,000 shares of common stock, par value $0.01 per share, and 15,000,000 shares of preferred stock, par value $0.01
per share. As of April 11, 2023, there were 23,436,798 shares of our common stock outstanding and 47 shares of Series B preferred stock
outstanding convertible into an aggregate of 117,500 shares of common stock. In addition, as of April 11, 2023, options to purchase 4,764,905
shares of our common stock were outstanding at a weighted average exercise price of $2.33 per share, 227,662 shares of our common stock
were reserved for future grants under our stock option plans and warrants to purchase 689,131 shares of our common stock were outstanding
at a weighted average exercise price of $6.33 per share.
The
following description of our capital stock and provisions of our amended and restated certificate of incorporation, amended and restated
by-laws and certificate of designation are summaries of material terms and provisions and are qualified by reference to our amended and
restated certificate of incorporation, amended and restated by-laws and certificates of designation, copies of which have been previously
filed with the SEC.
Common Stock
We
may issue shares of our common stock from time to time. Holders of our common stock are entitled to one vote per share on all matters
to be voted upon by the stockholders. Holders of our common stock do not have cumulative voting rights in the election of directors.
Subject to the preferences that may be applicable to any then outstanding preferred stock, holders of common stock are entitled to receive
ratably such dividends, if any, as may be declared by our Board of Directors out of funds legally available therefor. Upon the liquidation,
dissolution, or winding up of our company, holders of common stock are entitled to share ratably in all of our assets which are legally
available for distribution after payment of all debts and other liabilities and liquidation preference of any outstanding preferred stock.
There are no sinking fund provisions applicable to our common stock. Holders of common stock have no preemptive, subscription, redemption
or conversion rights. The rights, preferences and privileges of holders of common stock are subject to, and may be adversely affected
by, the rights of the holders of shares of any series of preferred stock that we have designated and issued and may designate and issue
in the future.
Preferred Stock
We
may issue shares of our preferred stock from time to time, in one or more series. The 15,000,000 shares of preferred stock authorized
under our amended and restated certificate of incorporation are undesignated as to preferences, privileges and restrictions, other than
as set forth herein. Our Board of Directors will determine the rights, preferences and privileges of the shares of each wholly unissued
series, and any qualifications, limitations or restrictions thereon, including dividend rights, conversion rights, terms of redemption
or repurchase, liquidation preferences, sinking fund terms and the number of shares constituting any series or the designation of any
series.
We
will incorporate by reference into the registration statement of which this prospectus is a part the form of any certificate of designation
that describes the terms of the series of preferred stock we are offering before the issuance of the related series of preferred stock.
We urge you, however, to read the applicable prospectus supplement (and any related free writing prospectus that we may authorize to
be provided to you) related to the series of preferred stock being offered, as well as the complete certificate of designation that contains
the terms of the applicable series of preferred stock.
If
we issue and sell shares of preferred stock pursuant to this prospectus, together with any applicable prospectus supplement or free writing
prospectus, the shares will be fully paid and nonassessable.
The
General Corporation Law of the State of Delaware, the state of our incorporation, provides that the holders of preferred stock will have
the right to vote separately as a class (or, in some cases, as a series) on an amendment to our amended and restated certificate of incorporation
if the amendment would change the par value, the number of authorized shares of the class or the powers, preferences or special rights
of the class or series so as to adversely affect the class or series, as the case may be. This right is in addition to any voting rights
that may be provided for in the applicable certificate of designation.
Our
Board of Directors may authorize the issuance of preferred stock with voting or conversion rights that could adversely affect the voting
power or other rights of the holders of our common stock. The issuance of preferred stock, while providing flexibility in connection
with possible acquisitions, financings and other corporate purposes, could, among other things, have the effect of delaying, deferring
or preventing a change in our control and may adversely affect the market price of our common stock and the voting and other rights of
the holders of our common stock.
Series B
Preferred Stock
On
August 25, 2017, we filed a Certificate of Designation of Preferences, Rights and Limitations of Series B Convertible Preferred
Stock (the “Series B Certificate of Designation”) with the State of Delaware, which designates 6,900 shares of our preferred
stock as Series B Senior Convertible Preferred Stock (the “Series B Preferred Stock”). The Series B Preferred
Stock has a stated value of $1,000 per share and a par value of $0.01 per share.
If,
prior to the second anniversary of the original issue date of the Series B Preferred Stock, we sell or grant any option to purchase
or sell or grant any right to reprice, or otherwise dispose of or issue, any of our common stock or securities convertible into or exercisable
for shares of our common stock at an effective price per share that is lower than the then effective Series B Conversion Price (as
defined below), then the Series B Conversion Price will be reduced to equal the higher of (A) such lower price or (B) $0.75,
subject to an exception for the following types of issuances (i) issuances to our employees, officers or directors pursuant to any
stock or option plan adopted by a majority of the non-employee members of our Board of Directors or committee thereof, (ii) issuances
upon the exercise or exchange of any securities issued in connection with the August 2017 Offering or convertible into shares of
common stock issued and outstanding on the date of the underwriting agreement entered into in connection with the August 2017 Offering,
provided that such securities have not been amended since the date of the underwriting agreement to increase the number of securities
or decrease the exercise, exchange or conversion price, or (iii) issuances pursuant to acquisitions or strategic transactions approved
by a majority of the disinterested members of our Board of Directors, provided that such securities are “restricted securities”
under Rule 144 and carry no registration rights that require or permit the filing of any registration statement in connection therewith
during the 90-day period following the original issuance date of the Series B Preferred Stock, and provided that any such issuance
is to a person or its equity holders that is an operating company or an owner of an asset in a business synergistic with the business
of our company and will provide our company with additional benefits in addition to the investment of funds, but will not include a transaction
in which we issue securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities
(the issuances referred to in (i) through (iii) above, the “Exempt Issuances”).
In
the event of a liquidation, the holders of Series B Preferred Shares are entitled to an amount equal to the par value of the Series B
Preferred Stock and thereafter to participate on an as-converted-to-common stock basis with holders of the common stock in any distribution
of our assets to the holders of the common stock. The Series B Certificate of Designation provides, among other things, that we
will not pay any dividends on shares of common stock (other than dividends in the form of common stock) unless and until such time as
we pay dividends on each Series B Preferred Share on an as-converted basis. Other than as set forth in the previous sentence, the
Series B Certificate of Designation provides that no other dividends will be paid on Series B Preferred Shares and that we
will pay no dividends (other than dividends in the form of common stock) on shares of common stock unless we simultaneously comply with
the previous sentence. The Series B Certificate of Designation does not provide for any restriction on the repurchase of Series B
Preferred Shares by us while there is any arrearage in the payment of dividends on the Series B Preferred Shares. There are no sinking
fund provisions applicable to the Series B Preferred Shares.
In
addition, in the event we consummate a merger or consolidation with or into another person or other reorganization event in which our
shares of common stock are converted or exchanged for securities, cash or other property, or we sell, lease, license, assign, transfer,
convey or otherwise dispose of all or substantially all of our assets or we or another person acquire 50% or more of our outstanding
shares of common stock, then following such event, the holders of the Series B Preferred Shares will be entitled to receive upon
conversion of the Series B Preferred Shares the same kind and amount of securities, cash or property which the holders would have
received had they converted the Series B Preferred Shares immediately prior to such fundamental transaction. Any successor to us
or surviving entity is required to assume the obligations under the Series B Preferred Shares.
Notwithstanding
the foregoing, in the event we are not the surviving entity of a fundamental transaction or in the event of a reverse merger or similar
transaction where we are the surviving entity, then, automatically and contemporaneous with the consummation of such transaction, the
surviving entity (or our company in the event of a reverse merger or similar transaction) will purchase the then outstanding shares of
Series B Preferred Stock by paying and issuing, in the event that such consideration given to the holders of our common stock is
non-cash consideration, as the case may be, to each holder an amount equal to the cash consideration plus the non-cash consideration
in the form issuable to the holders of our common stock (in the case of a reverse merger or similar transaction, shares of common stock
issuable to the holders of the acquired company) per share of our common stock in the fundamental transaction multiplied by the number
of shares of common stock underlying the shares of Series B Preferred Stock held by the holder on the date immediately prior to
the consummation of the fundamental transaction. Such amount will be paid in the same form and mix (whether securities, cash or property,
or any combination of the foregoing) as the consideration received by holders of our common stock in the fundamental transaction.
With
certain exceptions, as described in the Series B Certificate of Designation, shares of Series B Preferred Stock, or Series B
Preferred Shares, have no voting rights. However, as long as any shares of Series B Preferred Shares remain outstanding, the Series B
Certificate of Designation provides that we may not, without the affirmative vote of holders of a majority of the then-outstanding Series B
Preferred Shares, (a) alter or change adversely the powers, preferences or rights given to the Series B Preferred Shares or
alter or amend the Series B Certificate of Designation, (b) increase the number of authorized shares of Series B Preferred
Shares or (c) amend our Certificate of Incorporation or other charter documents in any manner that adversely affects any rights
of holders of Series B Preferred Shares.
Each
Series B Preferred Share is convertible at any time at the holder’s option into a number of shares of common stock equal to
$1,000 divided by the Series B Conversion Price. The “Series B Conversion Price” was initially $37.50 and is subject
to adjustment for stock splits, stock dividends, distributions, subdivisions and combinations and, as discussed above, certain dilutive
issuances of our common stock or securities convertible into or exercisable for shares of our common stock. In November 2017, at
the time of our issuance of our Series C Preferred Stock, the conversion price of the Series B Preferred Stock was reduced
from $37.50 per share to $21.00 per share. In February 2018, we entered into an equity purchase agreement and, as a result, the
conversion price of the Series B Convertible Preferred Stock was automatically adjusted from the reduced $21.00 per share price
to $15.60 per share. On March 21, 2018, the Series B Conversion Price was reduced from $15.60 to $11.25 as a result of our
letter agreement with certain holders of shares of our Series B Preferred Stock and Series C Preferred Stock (the “Letter
Agreement”). In April 2018, as a result of a securities purchase agreement pursuant to which we agreed to issue up to approximately
$3,296,703 in Senior Secured Convertible Promissory Notes, the Series B Conversion Price was automatically adjusted from $11.25
per share to $4.50 per share. On November 29, 2018, as a result of the Amendment Agreement, the Series B Conversion Price was
automatically adjusted from $4.50 per share to $2.25 per share. On March 26, 2020 as a result of the Amendment No. 1 Agreement,
the Series B Conversion Price was reduced from $2.25 to $0.40 and is subject to further adjustment as set forth in the Series B
Certificate of Designation. Notwithstanding the foregoing, the Series B Certificate of Designation further provides that we may
not effect any conversion of Series B Preferred Shares, with certain exceptions, to the extent that, after giving effect to an attempted
conversion, the holder of Series B Preferred Shares (together with such holder’s affiliates, and any persons acting as a group
together with such holder or any of such holder’s affiliates) would beneficially own a number of shares of our common stock in
excess of 4.99% (or, at the election of the holder, 9.99%) of the shares of our common stock then outstanding after giving effect to
such exercise (the “Preferred Stock Beneficial Ownership Limitation”); provided, however, that upon notice to us, the holder
may increase or decrease the Preferred Stock Beneficial Ownership Limitation, provided that in no event may the Preferred Stock Beneficial
Ownership Limitation exceed 9.99% and any increase in the Preferred Stock Beneficial Ownership Limitation will not be effective until
61 days following notice of such increase from the holder to us.
As of April 11, 2023, 47 shares of Series B Preferred Stock are outstanding.
Stock Options and
Stock Awards
As of April 11, 2023, we
had outstanding options to purchase an aggregate of 4,764,905 shares of our common stock with exercise prices ranging from $0.62 to $2,490.00
per share, with an approximate weighted average exercise price of $2.33 per share.
Warrants
As of April 11, 2023, we had
outstanding warrants to purchase an aggregate of 689,131 shares of our common stock with exercise prices ranging from $5.40 to $9.56 per
share, with an approximate weighted average exercise price of $6.33 per share.
2018 Common
Warrants
In 2018, we sold
warrants to purchase 534,788 shares of common stock.
Form.
The warrants are issued as individual warrant agreements to each individual purchaser of a warrant.
Term. The warrants
are immediately exercisable at any time on or after the date which is six months after the date of issuance date and will expire upon
11:59 p.m., New York time, on the five-year anniversary of the issuance date.
Exercise
price. Each warrant has an initial exercise price per share equal to 150% of the closing price
on Issuance Date. The exercise price and number of shares of common stock issuable upon exercise is subject to appropriate adjustment
in the event of stock dividends, stock splits, combinations, reorganizations or similar events affecting our common stock and the exercise
price, may be lowered by us.
Exercisability.
The warrants are exercisable, at the option of each holder, in whole or in part, by delivering to us a duly executed written exercise
notice accompanied by, within one trading day, payment in full for the number of shares of our common stock purchased upon such exercise
(except in the case of a cashless exercise as discussed below). No fractional shares of common stock will be issued in connection with
the exercise of the warrant. In lieu of fractional shares, we will round up to the next whole share.
Exercise
limitations. A holder (together with its affiliates) may not exercise any portion of such holder’s
warrant to the extent that the holder would own more than 4.99% of the common stock, such percentage ownership is determined in accordance
with Section 13(d) of the Exchange Act. Upon exercise of the warrant, we shall not be obligated to issue any shares of common
stock, and the holder of the warrant shall not have the right to receive any shares of common stock if the issuance of such shares would
exceed the aggregate number of shares of common stock we are permitted to issue under the rules or regulations of the Nasdaq Capital
Market, subject to certain exceptions.
Cashless
exercise. If at the time of exercise hereof there is no effective registration statement registering,
or the prospectus contained therein is not available for the issuance of the shares of common stock issuable upon exercise of the warrants,
then in lieu of making the cash payment otherwise contemplated to be made to us upon such exercise in payment of the aggregate exercise
price, the holder may, in its sole discretion, elect instead to receive upon such exercise (either in whole or in part) the net number
of shares of common stock determined according to a formula set forth in the warrants.
Fundamental
transactions. In the event of any fundamental transaction, as described in the warrants and
generally including any merger with or into another entity, sale of all or substantially all of our assets, tender offer or exchange
offer, acquisition of more than 50% of outstanding shares of common stock or reclassification of our shares of common stock, then upon
any subsequent exercise of a warrant, the holder will have the right to receive as alternative consideration, for each share of common
stock that would have been issuable upon such exercise immediately prior to the occurrence of such fundamental transaction, the number
of shares of common stock (or its equivalent) of the successor or acquiring corporation or of our company, if it is the surviving corporation,
and any additional consideration receivable upon or as a result of such transaction by a holder of the number of shares of common stock
for which the warrant is exercisable immediately prior to such event.
Transferability.
Warrant may be offered for sale, sold, transferred or assigned without our consent.
Exchange
listing. There is no established trading market for the warrants. We do not intend to list the
warrants on any securities exchange or nationally recognized trading system.
Right
as a stockholder. Except as otherwise provided in the warrants or by virtue of such holder’s
ownership of shares of our common stock, the holders of the warrants do not have the rights or privileges of holders of our common stock,
including any voting rights, until they exercise their warrants.
2019 Common
Warrants
In
2019, we sold warrants to purchase 154,343 shares of common stock.
Form.
The warrants are issued as individual warrant agreements to each individual purchaser of a warrant.
Term. The warrants
are immediately exercisable at any time on or after the date which is six months after the date of issuance date and will expire upon
11:59 p.m., New York time, on the five-year anniversary of the issuance date.
Exercise
price. Each warrant has an initial exercise price per share equal to $9.56. The exercise price
and number of shares of common stock issuable upon exercise is subject to appropriate adjustment in the event of stock dividends, stock
splits, combinations, reorganizations or similar events affecting our common stock and the exercise price.
Exercisability.
The warrants are exercisable, at the option of each holder, in whole or in part, by delivering to us a duly executed written exercise
notice accompanied by, within one trading day, payment in full for the number of shares of our common stock purchased upon such exercise
(except in the case of a cashless exercise as discussed below). No fractional shares of common stock will be issued in connection with
the exercise of the warrant. In lieu of fractional shares, we will round up to the next whole share.
Exercise
limitations. A holder (together with its affiliates) may not exercise any portion of such holder’s
warrant to the extent that the holder would own more than 4.99% of the common stock, such percentage ownership is determined in accordance
with Section 13(d) of the Exchange Act.
Cashless
exercise. If at the time of exercise hereof there is no effective registration statement registering,
or the prospectus contained therein is not available for the issuance of the shares of common stock issuable upon exercise of the warrants,
then in lieu of making the cash payment otherwise contemplated to be made to us upon such exercise in payment of the aggregate exercise
price, the holder may, in its sole discretion, elect instead to receive upon such exercise (either in whole or in part) the net number
of shares of common stock determined according to a formula set forth in the warrants.
Fundamental
transactions. In the event of any fundamental transaction, as described in the warrants and
generally including any merger with or into another entity, sale of all or substantially all of our assets, tender offer or exchange
offer, acquisition of more than 50% of outstanding shares of common stock or reclassification of our shares of common stock, then upon
any subsequent exercise of a warrant, the holder will have the right to receive as alternative consideration, for each share of common
stock that would have been issuable upon such exercise immediately prior to the occurrence of such fundamental transaction, the number
of shares of common stock (or its equivalent) of the successor or acquiring corporation or of our company, if it is the surviving corporation,
and any additional consideration receivable upon or as a result of such transaction by a holder of the number of shares of common stock
for which the warrant is exercisable immediately prior to such event.
Transferability.
Warrant may be offered for sale, sold, transferred or assigned without our consent.
Exchange
listing. There is no established trading market for the warrants. We do not intend to list the
warrants on any securities exchange or nationally recognized trading system.
Right
as a stockholder. Except as otherwise provided in the warrants or by virtue of such holder’s
ownership of shares of our common stock, the holders of the warrants do not have the rights or privileges of holders of our common stock,
including any voting rights, until they exercise their warrants.
Antitakeover Effects of Delaware
Law and Provisions of our Amended and Restated Certificate of Incorporation and Amended and Restated By-laws
Certain
provisions of the Delaware General Corporation Law and of our amended and restated certificate of incorporation and amended and restated
by-laws could have the effect of delaying, deferring or discouraging another party from acquiring control of us. These provisions, which
are summarized below, are expected to discourage certain types of coercive takeover practices and inadequate takeover bids and, as a
consequence, they might also inhibit temporary fluctuations in the market price of our common stock that often result from actual or
rumored hostile takeover attempts. These provisions are also designed in part to encourage anyone seeking to acquire control of us to
first negotiate with our board of directors. These provisions might also have the effect of preventing changes in our management. It
is possible that these provisions could make it more difficult to accomplish transactions that stockholders might otherwise deem to be
in their best interests. However, we believe that the advantages gained by protecting our ability to negotiate with any unsolicited and
potentially unfriendly acquirer outweigh the disadvantages of discouraging such proposals, including those priced above the then-current
market value of our common stock, because, among other reasons, the negotiation of such proposals could improve their terms.
Delaware Takeover
Statute
We
are subject to the provisions of Section 203 of the Delaware General Corporation Law. In general, Section 203 prohibits a publicly
held Delaware corporation from engaging in a “business combination” with an “interested stockholder” for a three-year
period following the time that this stockholder becomes an interested stockholder, unless the business combination is approved in a prescribed
manner. Under Section 203, a business combination between a corporation and an interested stockholder is prohibited unless it satisfies
one of the following conditions:
| |
· |
before the stockholder became
interested, our board of directors approved either the business combination or the transaction which resulted in the stockholder
becoming an interested stockholder; |
| |
· |
upon consummation of the transaction
which resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting
stock of the corporation outstanding at the time the transaction commenced, excluding for purposes of determining the voting stock
outstanding, shares owned by persons who are directors and also officers, and employee stock plans, in some instances, but not the
outstanding voting stock owned by the interested stockholder; or |
| |
· |
at or after the time the stockholder
became interested, the business combination was approved by our board of directors and authorized at an annual or special meeting
of the stockholders by the affirmative vote of at least two-thirds of the outstanding voting stock which is not owned by the interested
stockholder. |
Section 203 defines
a business combination to include:
| |
· |
any merger or consolidation
involving the corporation and the interested stockholder; |
| |
· |
any sale, transfer, lease,
pledge or other disposition involving the interested stockholder of 10% or more of the assets of the corporation; |
| |
· |
subject to exceptions, any
transaction that results in the issuance or transfer by the corporation of any stock of the corporation to the interested stockholder; |
| |
· |
subject to exceptions, any
transaction involving the corporation that has the effect of increasing the proportionate share of the stock of any class or series
of the corporation beneficially owned by the interested stockholder; or |
| |
· |
the receipt by the interested
stockholder of the benefit of any loans, advances, guarantees, pledges or other financial benefits provided by or through the corporation. |
In
general, Section 203 defines an interested stockholder as any entity or person beneficially owning 15% or more of the outstanding
voting stock of the corporation and any entity or person affiliated with or controlling or controlled by the entity or person.
Provisions
of our Amended and Restated Certificate of Incorporation and Amended and Restated By-laws. Our
amended and restated certificate of incorporation and amended and restated by-laws include a number of provisions that may have the effect
of delaying, deferring or discouraging another party from acquiring control of us and encouraging persons considering unsolicited tender
offers or other unilateral takeover proposals to negotiate with our board of directors rather than pursue non-negotiated takeover attempts.
These provisions include the items described below.
Board
composition and filling vacancies. In accordance with our amended and restated certificate of
incorporation, our board is divided into three classes serving staggered three-year terms, with one class being elected each year. Our
amended and restated certificate of incorporation also provides that directors may be removed only for cause and then only by the affirmative
vote of the holders the majority of the shares then entitled to vote at an election of directors. Furthermore, any vacancy on our board
of directors, however occurring, including a vacancy resulting from an increase in the size of our board, may only be filled by the affirmative
vote of a majority of our directors then in office even if less than a quorum.
No
written consent of stockholders. Our amended and restated certificate of incorporation provides
that all stockholder actions are required to be taken by a vote of the stockholders at an annual or special meeting, and that stockholders
may not take any action by written consent in lieu of a meeting. This limit may lengthen the amount of time required to take stockholder
actions and would prevent the amendment of our by-laws or removal of directors by our stockholder without holding a meeting of stockholders.
Meetings
of stockholders. Our amended and restated by-laws provide that only a majority of the members
of our board of directors then in office may call special meetings of stockholders and only those matters set forth in the notice of
the special meeting may be considered or acted upon at a special meeting of stockholders. Our amended and restated by-laws limit the
business that may be conducted at an annual meeting of stockholders to those matters properly brought before the meeting.
Advance
notice requirements. Our amended and restated by-laws establish advance notice procedures with
regard to stockholder proposals relating to the nomination of candidates for election as directors or new business to be brought before
meetings of our stockholders. These procedures provide that notice of stockholder proposals must be timely given in writing to our corporate
secretary prior to the meeting at which the action is to be taken. Generally, to be timely, notice must be received at our principal
executive offices not less than 90 days or more than 120 days prior to the first anniversary date of the annual meeting for the preceding
year. The notice must contain certain information specified in our amended and restated by-laws.
Amendment
to certificate of incorporation and by-laws. As required by the Delaware General Corporation
Law, any amendment of our amended and restated certificate of incorporation must first be approved by a majority of our board of directors,
and if required by law or our amended and restated certificate of incorporation, must thereafter be approved by a majority of the outstanding
shares entitled to vote on the amendment, and a majority of the outstanding shares of each class entitled to vote thereon as a class,
Our amended and restated by-laws may be amended by the affirmative vote of a majority vote of the directors then in office, subject to
any limitations set forth in the amended and restated by-laws; and may also be amended by the affirmative vote of at least a majority
of the outstanding shares entitled to vote on the amendment, or, if the board of directors recommends that the stockholders approve the
amendment, by the affirmative vote of the majority of the outstanding shares entitled to vote on the amendment, in each case voting together
as a single class.
Undesignated
preferred stock. Our amended and restated certificate of incorporation provides for authorized
shares of preferred stock. The existence of authorized but unissued shares of preferred stock may enable our board of directors to render
more difficult or to discourage an attempt to obtain control of us by means of a merger, tender offer, proxy contest or otherwise. For
example, if in the due exercise of its fiduciary obligations, our board of directors were to determine that a takeover proposal is not
in the best interests of us or our stockholders, our board of directors could cause shares of preferred stock to be issued without stockholder
approval in one or more private offerings or other transactions that might dilute the voting or other rights of the proposed acquirer
or insurgent stockholder or stockholder group. In this regard, our amended and restated certificate of incorporation grants our board
of director’s broad power to establish the rights and preferences of authorized and unissued shares of preferred stock. The issuance
of shares of preferred stock could decrease the amount of earnings and assets available for distribution to holders of shares of common
stock. The issuance may also adversely affect the rights and powers, including voting rights, of these holders and may have the effect
of delaying, deterring or preventing a change in control of us.
Choice
of forum. Our amended and restated by-laws provide that the Court of Chancery of the State of
Delaware is the sole and exclusive forum for any derivative action or proceeding brought on our behalf, any action asserting a breach
of fiduciary duty, any action asserting a claim against us arising pursuant to the Delaware General Corporation Law, our certificate
of incorporation or our by-laws, or any action asserting a claim against us that is governed by the internal affairs doctrine. Although
our amended and restated by-laws contain the choice of forum provision described above, it is possible that a court could rule that
such a provision is inapplicable for a particular claim or action or that such provision is unenforceable.
Transfer Agent and Registrar
The
transfer agent and registrar for our common stock is EQ Shareowner Services, 1110 Centre Pointe Curve Suite 101, Mendota Heights,
MN 55120, Tel: 855-217-6361. The transfer agent for any series of preferred stock that we may offer under this prospectus will be named
and described in the prospectus supplement for that series.
Listing
Our
common stock is listed on The Nasdaq Capital Market under the symbol “PRPO”.
DESCRIPTION
OF DEBT SECURITIES
We
may issue debt securities from time to time, in one or more series, as either senior or subordinated debt or as senior or subordinated
convertible debt. We will file as exhibits to the registration statement of which this prospectus is a part, or will incorporate by reference
from reports that we file with the SEC, the form of debt securities and indentures that describes the terms of the particular series
of debt we are offering. We urge you to read the applicable prospectus supplements related to the particular debt securities that we
may offer under this prospectus, as well as any related free writing prospectuses, and the indentures that contain the terms of the debt
securities.
We
will describe in the applicable prospectus supplement the terms of the series of debt securities being offered, including:
| |
· |
|
the
title of the series of debt securities; |
| |
· |
|
any
limit upon the aggregate principal amount that may be issued; |
| |
· |
|
the
maturity date or dates; |
| |
· |
|
the
form of the debt securities of the series; |
| |
· |
|
the
applicability of any guarantees; |
| |
· |
|
whether
or not the debt securities will be secured or unsecured, and the terms of any secured debt; |
| |
· |
|
whether
the debt securities rank as senior debt, senior subordinated debt, subordinated debt or any combination thereof, and the terms of
any subordination; |
DESCRIPTION
OF WARRANTS
The
following description, together with the additional information we may include in any applicable prospectus supplements, summarizes the
material terms and provisions of the warrants that we may offer under this prospectus and the related warrant agreements and warrant
certificates. While the terms summarized below will apply generally to any warrants that we may offer, we will describe the particular
terms of any series of warrants in more detail in the applicable prospectus supplement. If we indicate in the prospectus supplement,
the terms of any warrants offered under that prospectus supplement may differ from the terms described below. Specific warrant agreements
will contain additional important terms and provisions and will be incorporated by reference as an exhibit to the registration statement,
which includes this prospectus.
General
We
may issue warrants for the purchase of common stock, preferred stock and/or debt securities in one or more series. We may issue warrants
independently or together with common stock, preferred stock and/or debt securities, and the warrants may be attached to or separate
from these securities.
We
will evidence each series of warrants by warrant certificates that we will issue under a separate warrant agreement. We will enter into
the warrant agreement with a warrant agent. We will indicate the name and address of the warrant agent in the applicable prospectus supplement
relating to a particular series of warrants.
We
will describe in the applicable prospectus supplement the terms of the series of warrants, including:
| · | the
offering price and aggregate number of warrants offered; |
| · | the
currency for which the warrants may be purchased; |
| · | if
applicable, the designation and terms of the securities with which the warrants are issued
and the number of warrants issued with each such security or each principal amount of such
security; |
| · | if
applicable, the date on and after which the warrants and the related securities will be separately
transferable; |
| · | in
the case of warrants to purchase debt securities, the principal amount of debt securities
purchasable upon exercise of one warrant and the price at, and currency in which, this principal
amount of debt securities may be purchased upon such exercise; |
| · | in
the case of warrants to purchase common stock or preferred stock, the number of shares of
common stock or preferred stock, as the case may be, purchasable upon the exercise of one
warrant and the price at which these shares may be purchased upon such exercise; |
| · | the
effect of any merger, consolidation, sale or other disposition of our business on the warrant
agreement and the warrants; |
| · | the
terms of any rights to redeem or call the warrants; |
| · | any
provisions for changes to or adjustments in the exercise price or number of securities issuable
upon exercise of the warrants; |
| · | the
periods during which, and places at which, the warrants are exercisable; |
| · | the
dates on which the right to exercise the warrants will commence and expire; |
| · | the
manner in which the warrant agreement and warrants may be modified; |
| · | federal
income tax consequences of holding or exercising the warrants; |
| · | the
terms of the securities issuable upon exercise of the warrants; and |
| · | any
other specific terms, preferences, rights or limitations of or restrictions on the warrants. |
DESCRIPTION OF UNITS
We may issue units
comprised of shares of common stock, shares of preferred stock, debt securities and warrants in any combination. We may issue units
in such amounts and in as many distinct series as we wish. This section outlines certain provisions of the units that we may issue.
If we issue units, they will be issued under one or more unit agreements to be entered into between us and a bank or other financial
institution, as unit agent. The information described in this section may not be complete in all respects and is qualified entirely by
reference to the unit agreement with respect to the units of any particular series. The specific terms of any series of units
offered will be described in the applicable prospectus supplement. If so described in a particular supplement, the specific terms of
any series of units may differ from the general description of terms presented below. We urge you to read any prospectus supplement
related to any series of units we may offer, as well as the complete unit agreement and unit certificate that contain the terms
of the units. If we issue units, forms of unit agreements and unit certificates relating to such units will be incorporated
by reference as exhibits to the registration statement, which includes this prospectus.
Each unit that we
may issue will be issued so that the holder of the unit is also the holder of each security included in the unit. Thus, the holder of
a unit will have the rights and obligations of a holder of each included security. The unit agreement under which a unit is issued may
provide that the securities included in the unit may not be held or transferred separately, at any time or at any time before a specified
date. The applicable prospectus supplement may describe:
| · | the
designation and terms of the units and of the securities comprising the units,
including whether and under what circumstances those securities may be held or transferred
separately; |
| · | any
provisions of the governing unit agreement; |
| · | the
price or prices at which such units will be issued; |
| · | the
applicable United States federal income tax considerations relating to the units; |
| · | any
provisions for the issuance, payment, settlement, transfer or exchange of the units
or of the securities comprising the units; and |
| · | any
other terms of the units and of the securities comprising the units. |
The provisions described
in this section, as well as those described under “Description of Capital Stock,” “Description of Debt Securities”
and “Description of Warrants” will apply to the securities included in each unit, to the extent relevant and as may be updated
in any prospectus supplements.
Issuance in Series
We may issue units
in such amounts and in as many distinct series as we wish. This section summarizes terms of the units that apply generally to all
series. Most of the financial and other specific terms of your series will be described in the applicable prospectus supplement.
Unit Agreements
We will issue the units
under one or more unit agreements to be entered into between us and a bank or other financial institution, as unit agent. We may add,
replace or terminate unit agents from time to time. We will identify the unit agreement under which each series of units will be
issued and the unit agent under that agreement in the applicable prospectus supplement.
The following provisions
will generally apply to all unit agreements unless otherwise stated in the applicable prospectus supplement:
Modification
without Consent
We and the applicable
unit agent may amend any unit or unit agreement without the consent of any holder:
| · | to
cure any ambiguity, including modifying any provisions of the governing unit agreement that
differ from those described below; |
| · | to
correct or supplement any defective or inconsistent provision; or |
| · | to
make any other change that we believe is necessary or desirable and will not adversely affect
the interests of the affected holders in any material respect. |
We do not need any
approval to make changes that affect only units to be issued after the changes take effect. We may also make changes that do not
adversely affect a particular unit in any material respect, even if they adversely affect other units in a material respect. In
those cases, we do not need to obtain the approval of the holder of the unaffected unit; we need only obtain any required approvals from
the holders of the affected units.
Modification
with Consent
We may not amend any
particular unit or a unit agreement with respect to any particular unit unless we obtain the consent of the holder of that unit, if the
amendment would:
| · | impair
any right of the holder to exercise or enforce any right under a security included in the
unit if the terms of that security require the consent of the holder to any changes that
would impair the exercise or enforcement of that right; or |
| · | reduce
the percentage of outstanding units or any series or class the consent of whose
holders is required to amend that series or class, or the applicable unit agreement with
respect to that series or class, as described below. |
Any other change to
a particular unit agreement and the units issued under that agreement would require the following approval:
| · | If
the change affects only the units of a particular series issued under that agreement,
the change must be approved by the holders of a majority of the outstanding units of
that series; or |
| · | If
the change affects the units of more than one series issued under that agreement, it
must be approved by the holders of a majority of all outstanding units of all series
affected by the change, with the units of all the affected series voting together as
one class for this purpose. |
These provisions regarding
changes with majority approval also apply to changes affecting any securities issued under a unit agreement, as the governing document.
In each case, the
required approval must be given by written consent.
Unit Agreements
Will Not Be Qualified under Trust Indenture Act
No unit agreement
will be qualified as an indenture, and no unit agent will be required to qualify as a trustee, under the Trust Indenture Act. Therefore,
holders of units issued under unit agreements will not have the protections of the Trust Indenture Act with respect to their units.
Mergers and
Similar Transactions Permitted; No Restrictive Covenants or Events of Default
The unit agreements
will not restrict our ability to merge or consolidate with, or sell our assets to, another corporation or other entity or to engage in
any other transactions. If at any time we merge or consolidate with, or sell our assets substantially as an entirety to, another corporation
or other entity, the successor entity will succeed to and assume our obligations under the unit agreements. We will then be relieved
of any further obligation under these agreements.
The unit agreements
will not include any restrictions on our ability to put liens on our assets, nor will they restrict our ability to sell our assets. The
unit agreements also will not provide for any events of default or remedies upon the occurrence of any events of default.
Governing Law
The unit agreements
and the units will be governed by Delaware law.
Form, Exchange
and Transfer
Unless the accompanying
prospectus supplement states otherwise, we will issue each unit in global — i.e., book-entry — form
only. Units in book-entry form will be represented by a global security registered in the name of a depositary, which will be the holder
of all the units represented by the global security. Those who own beneficial interests in a unit will do so through participants
in the depositary’s system, and the rights of these indirect owners will be governed solely by the applicable procedures of the
depositary and its participants. We will describe book-entry securities, and other terms regarding the issuance and registration of the units
in the applicable prospectus supplement.
Unless the accompanying
prospectus supplement states otherwise, each unit and all securities comprising the unit will be issued in the same form.
If we issue any units
in registered, non-global form, the following will apply to them.
The units will
be issued in the denominations stated in the applicable prospectus supplement. Holders may exchange their units for units of
smaller denominations or combined into fewer units of larger denominations, as long as the total amount is not changed.
| · | Holders
may exchange or transfer their units at the office of the unit agent. Holders may also
replace lost, stolen, destroyed or mutilated units at that office. We may appoint another
entity to perform these functions or perform them ourselves. |
| · | Holders
will not be required to pay a service charge to transfer or exchange their units, but
they may be required to pay for any tax or other governmental charge associated with the
transfer or exchange. The transfer or exchange, and any replacement, will be made only if
our transfer agent is satisfied with the holder’s proof of legal ownership. The transfer
agent may also require an indemnity before replacing any units. |
| · | If
we have the right to redeem, accelerate or settle any units before their maturity, and
we exercise our right as to less than all those units or other securities, we may block
the exchange or transfer of those units during the period beginning 15 days before
the day we mail the notice of exercise and ending on the day of that mailing, in order to
freeze the list of holders to prepare the mailing. We may also refuse to register transfers
of or exchange any unit selected for early settlement, except that we will continue to permit
transfers and exchanges of the unsettled portion of any unit being partially settled. We
may also block the transfer or exchange of any unit in this manner if the unit includes securities
that are or may be selected for early settlement. |
Only the depositary
will be entitled to transfer or exchange a unit in global form, since it will be the sole holder of the unit.
Payments and
Notices
In making payments
and giving notices with respect to our units, we will follow the procedures as described in the applicable prospectus supplement.
PLAN
OF DISTRIBUTION
We may sell securities:
| · | directly
to purchasers; or |
| · | through
a combination of any of these methods or any other method permitted by law. |
In
addition, we may issue the securities as a dividend or distribution or in a subscription rights offering to our existing security holders.
We
may directly solicit offers to purchase securities, or agents may be designated to solicit such offers. In the prospectus supplement
relating to such offering, we will name any agent that could be viewed as an underwriter under the Securities Act and describe any commissions
that we must pay to any such agent. Any such agent will be acting on a best efforts basis for the period of its appointment or, if indicated
in the applicable prospectus supplement, on a firm commitment basis. This prospectus may be used in connection with any offering of our
securities through any of these methods or other methods described in the applicable prospectus supplement.
The distribution
of the securities may be effected from time to time in one or more transactions:
| · | at
a fixed price, or prices, which may be changed from time to time; |
| · | at
market prices prevailing at the time of sale; |
| · | at
prices related to such prevailing market prices; or |
Each
prospectus supplement will describe the method of distribution of the securities and any applicable restrictions.
The
prospectus supplement with respect to the securities of a particular series will describe the terms of the offering of the securities,
including the following:
| · | the
name of the agent or any underwriters; |
| · | the
public offering or purchase price; |
| · | any
discounts and commissions to be allowed or paid to the agent or underwriters; |
| · | all
other items constituting underwriting compensation; |
| · | any
discounts and commissions to be allowed or paid to dealers; and |
| · | any
exchanges on which the securities will be listed. |
If
any underwriters or agents are used in the sale of the securities in respect of which this prospectus is delivered, we will enter into
an underwriting agreement, sales agreement or other agreement with them at the time of sale to them, and we will set forth in the prospectus
supplement relating to such offering the names of the underwriters or agents and the terms of the related agreement with them.
In
connection with the offering of securities, we may grant to the underwriters an option to purchase additional securities with an additional
underwriting commission, as may be set forth in the accompanying prospectus supplement. If we grant any such option, the terms of such
option will be set forth in the prospectus supplement for such securities.
If
a dealer is used in the sale of the securities in respect of which the prospectus is delivered, we will sell such securities to the dealer,
as principal. The dealer, who may be deemed to be an “underwriter” as that term is defined in the Securities Act, may then
resell such securities to the public at varying prices to be determined by such dealer at the time of resale.
If
we offer securities in a subscription rights offering to our existing security holders, we may enter into a standby underwriting agreement
with dealers, acting as standby underwriters. We may pay the standby underwriters a commitment fee for the securities they commit to
purchase on a standby basis. If we do not enter into a standby underwriting arrangement, we may retain a dealer-manager to manage a subscription
rights offering for us.
Agents,
underwriters, dealers and other persons may be entitled under agreements which they may enter into with us to indemnification by us against
certain civil liabilities, including liabilities under the Securities Act, and may be customers of, engage in transactions with or perform
services for us in the ordinary course of business.
If
so indicated in the applicable prospectus supplement, we will authorize underwriters or other persons acting as our agents to solicit
offers by certain institutions to purchase securities from us pursuant to delayed delivery contracts providing for payment and delivery
on the date stated in the prospectus supplement. Each contract will be for an amount not less than, and the aggregate amount of securities
sold pursuant to such contracts shall not be less nor more than, the respective amounts stated in the prospectus supplement. Institutions
with whom the contracts, when authorized, may be made include commercial and savings banks, insurance companies, pension funds, investment
companies, educational and charitable institutions and other institutions, but shall in all cases be subject to our approval. Delayed
delivery contracts will not be subject to any conditions except that:
| · | the
purchase by an institution of the securities covered under that contract shall not at the
time of delivery be prohibited under the laws of the jurisdiction to which that institution
is subject; and |
| · | if
the securities are also being sold to underwriters acting as principals for their own account,
the underwriters shall have purchased such securities not sold for delayed delivery. The
underwriters and other persons acting as our agents will not have any responsibility in respect
of the validity or performance of delayed delivery contracts. |
Offered
securities may also be offered and sold, if so indicated in the prospectus supplement, in connection with a remarketing upon their purchase,
in accordance with a redemption or repayment pursuant to their terms, or otherwise, by one or more remarketing firms, acting as principals
for their own accounts or as agents for us. Any remarketing firm will be identified and the terms of its agreement, if any, with us and
its compensation will be described in the applicable prospectus supplement. Remarketing firms may be deemed to be underwriters in connection
with their remarketing of offered securities.
Certain
agents, underwriters and dealers, and their associates and affiliates, may be customers of, have borrowing relationships with, engage
in other transactions with, or perform services, including investment banking services, for us or one or more of our respective affiliates
in the ordinary course of business.
In
order to facilitate the offering of the securities, any underwriters may engage in transactions that stabilize, maintain or otherwise
affect the price of the securities or any other securities the prices of which may be used to determine payments on such securities.
Specifically, any underwriters may overallot in connection with the offering, creating a short position for their own accounts. In addition,
to cover overallotments or to stabilize the price of the securities or of any such other securities, the underwriters may bid for, and
purchase, the securities or any such other securities in the open market. Finally, in any offering of the securities through a syndicate
of underwriters, the underwriting syndicate may reclaim selling concessions allowed to an underwriter or a dealer for distributing the
securities in the offering if the syndicate repurchases previously distributed securities in transactions to cover syndicate short positions,
in stabilization transactions or otherwise. Any of these activities may stabilize or maintain the market price of the securities above
independent market levels. Any such underwriters are not required to engage in these activities and may end any of these activities at
any time.
We
may engage in at the market offerings into an existing trading market in accordance with Rule 415 (a)(4) under the Securities
Act. In addition, we may enter into derivative transactions with third parties, or sell securities not covered by this prospectus to
third parties in privately negotiated transactions.
If the applicable
prospectus supplement so indicates, in connection with those derivatives, the third parties may sell securities covered by this prospectus
and the applicable prospectus supplement, including in short sale transactions. If so, the third party may use securities pledged by
us or borrowed from us or others to settle those sales or to close out any related open borrowings of stock, and may use securities received
from us in settlement of those derivatives to close out any related open borrowings of stock. The third party in such sale transactions
will be an underwriter and, if not identified in this prospectus, will be named in the applicable prospectus supplement (or a post-effective
amendment). In addition, we may otherwise loan or pledge securities to a financial institution or other third party that in turn may
sell the securities short using this prospectus and an applicable prospectus supplement. Such financial institution or other third party
may transfer its economic short position to investors in our securities or in connection with a concurrent offering of other securities.
Under
Rule 15c6-1 of the Exchange Act, trades in the secondary market generally are required to settle in two business days, unless the
parties to any such trade expressly agree otherwise. The applicable prospectus supplement may provide that the original issue date for
your securities may be more than two scheduled business days after the trade date for your securities. Accordingly, in such a case, if
you wish to trade securities on any date prior to the second business day before the original issue date for your securities, you will
be required, by virtue of the fact that your securities initially are expected to settle in more than two scheduled business days after
the trade date for your securities, to make alternative settlement arrangements to prevent a failed settlement.
The
securities may be new issues of securities and may have no established trading market. The securities may or may not be listed on a national
securities exchange. We can make no assurance as to the liquidity of or the existence of trading markets for any of the securities.
The
specific terms of any lock-up provisions in respect of any given offering will be described in the applicable prospectus supplement.
The
underwriters, dealers and agents may engage in transactions with us, or perform services for us, in the ordinary course of business for
which they receive compensation.
The
anticipated date of delivery of offered securities will be set forth in the applicable prospectus supplement relating to each offer.
LEGAL
MATTERS
Certain
legal matters in connection with this offering will be passed upon for us by Goodwin Procter LLP, New York, New York. Any underwriters
will also be advised about the validity of the securities and other legal matters by their own counsel, which will be named in the prospectus
supplement.
EXPERTS
The
consolidated financial statements of Precipio, Inc. as of and for the years ended December 31, 2022 and 2021 appearing in
our Annual
Report on Form 10-K filed for the year ended December 31, 2022, have been audited by Marcum LLP, independent
registered public accounting firm, to the extent and for the periods as set forth in their report which includes an explanatory
paragraph as to the Company's ability to continue as a going concern, thereon, and incorporated herein by reference in reliance upon
such report given on the authority of such firm as experts in accounting and auditing.
WHERE
YOU CAN FIND MORE INFORMATION
This
prospectus is part of a registration statement that we have filed with the SEC. Certain information in the registration statement has
been omitted from this prospectus in accordance with the rules of the SEC. We are subject to the information requirements of the
Exchange Act and, in accordance therewith, file annual, quarterly and current reports, proxy statements and other information with the
SEC. These documents also may be accessed through the SEC’s electronic data gathering, analysis and retrieval system, or EDGAR,
via electronic means, including the SEC’s home page on the Internet (www.sec.gov). We also maintain a website at www.kymeratx.com.
The information contained in or accessible from our website is not incorporated into this prospectus, and you should not consider it
part of this prospectus. We have included our website address in this prospectus solely as an inactive textual reference.
We
have the authority to designate and issue more than one class or series of stock having various preferences, conversion and other rights,
voting powers, restrictions, limitations as to dividends, qualifications, and terms and conditions of redemption. See “Description
of Capital Stock.” We will furnish a full statement of the relative rights and preferences of each class or series of our stock
which has been so designated and any restrictions on the ownership or transfer of our stock to any stockholder upon request and without
charge. Written requests for such copies should be directed to Precipio, Inc., 4 Science Park, New Haven, Connecticut 06511, telephone:
(203) 787-7888. Information contained on our website is not incorporated by reference into this prospectus and you should not consider
any information on, or that can be accessed from, our website as part of this prospectus or any accompanying prospectus supplement.
INCORPORATION
OF CERTAIN INFORMATION BY REFERENCE
The
SEC allows us to incorporate by reference the information and reports we file with it, which means that we can disclose important information
to you by referring you to these documents. The information incorporated by reference is an important part of this prospectus, and information
that we file later with the SEC will automatically update and supersede the information already incorporated by reference. We are incorporating
by reference the documents listed below, which we have already filed with the SEC, and any future filings we make with the SEC under
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act, including all filings made after the date of the filing of this registration
statement and prior to the effectiveness of this registration statement, except as to any portion of any future report or document that
is not deemed filed under such provisions, until we sell all of the securities:
Upon
request, we will provide, without charge, to each person, including any beneficial owner, to whom a copy of this prospectus is delivered,
a copy of the documents incorporated by reference into this prospectus but not delivered with the prospectus. You may request a copy
of these filings, and any exhibits we have specifically incorporated by reference as an exhibit in this prospectus, at no cost by writing
us at the following address:
Precipio, Inc.
4 Science Park
New Haven, CT 06511
(203) 787-7888
You
may also access these documents, free of charge on the SEC’s website at www.sec.gov or on our website at http://www.precipiodx.com
(Click the “Investors” link and then the “SEC Filings” link). Information contained on our website is not incorporated
by reference into this prospectus, and you should not consider any information on, or that can be accessed from, our website as part
of this prospectus or any accompanying prospectus supplement.
Notwithstanding
the foregoing, unless specifically stated to the contrary, information that we furnish (and that is not deemed “filed” with
the SEC) under Items 2.02 and 7.01 of any Current Report on Form 8-K, including the related exhibits under Item 9.01, is not incorporated
by reference into this prospectus or the registration statement of which this prospectus is a part.
This
prospectus is part of a registration statement we filed with the SEC. We have incorporated exhibits into this registration statement.
You should read the exhibits carefully for provisions that may be important to you.
You
should rely only on the information incorporated by reference or provided in this prospectus or any prospectus supplement. We have not
authorized anyone to provide you with different information. We are not making an offer of these securities in any state where the offer
is not permitted. You should not assume that the information in this prospectus or in the documents incorporated by reference is accurate
as of any date other than the date on the front of this prospectus or those documents.
4,125,000 shares of common stock
Pre-funded warrants to purchase up to
319,445 shares of common stock
PROSPECTUS SUPPLEMENT
June 8, 2023
Financial Advisor
A.G.P.
Grafico Azioni Precipio (NASDAQ:PRPO)
Storico
Da Mag 2024 a Giu 2024
Grafico Azioni Precipio (NASDAQ:PRPO)
Storico
Da Giu 2023 a Giu 2024
