Precipio (PRPO) risk factors, FY2025 10-K

Risks Related to Our Business and Strategy

1. 01There is substantial doubt about our ability to continue as a going concern
2. 02Our ability to expand our business may depend on access to additional capitalNew
3. 03If we are unable to maintain positive operating performance or obtain additional capital when needed, we may be required to delay or scale back certain growth initiatives, product development efforts or strategic plansNew
4. 04We have had several customers who, from time to time, have individually represented 10% or more of our total revenue, or whose accounts receivable balances individually represented 10% or more of our total accounts receivable36% rewritten
5. 05We may become subject to costly litigation, which could adversely affect our business, financial condition and results of operations
6. 06Failure to Comply with Insider Trading Regulations and Policies Could Result in Significant Legal and Reputational Consequences
7. 07The commercial success of our diagnostic products, including those we are developing, will depend upon the degree of market acceptance of these products among physicians, patients, health care payers and the medical community and on our ability to successfully market our products
8. 08In addition, physicians may rely on guidelines issued by industry groups, such as the NCCN, medical societies, such as the College of American Pathologists (“CAP”), or other key oncology-related organizations before utilizing any diagnostic test
9. 09If we cannot compete successfully with our competitors, including new entrants in the market, we may be unable to increase or sustain our revenue or achieve and sustain profitability
10. 10We may not be able to develop new products or enhance the capabilities of our systems to keep pace with rapidly changing technology and customer requirements, which could have a material adverse effect on our business and operating results
11. 11International expansion of our business could expose us to business, regulatory, political, operational, financial and economic risks associated with doing business outside of the United States
12. 12Any of these factors could significantly harm our future international expansion and operations and, consequently, our revenue and results of operations76% rewritten
13. 13On May 12, 2022, we received CE-IVD marking for our HemeScreen® reagents in the EU in accordance with the requirements of the EU In Vitro Diagnostic Directive ("IVDD") (Directive 98/79/EC). The EU In Vitro Diagnostic Regulation ("IVDR") (Regulation (EU) 2017/746) came into effect on May 26, 2022 and replaced the IVDDNew
14. 14Changes to the UK regulations may require additional review of our devices and there is a risk our devices may not be compliant with any revised UK regulations100% rewritten
15. 15Unfavorable U.S. or global economic conditions could adversely affect our business, financial condition or results of operations90% rewritten
16. 16governments and other third-party payors around the world facing tightening budgets could move to further reduce the reimbursement rates or the scope of coverage offered, which could adversely affect sales of our productsNew
17. 17Global climate change could negatively affect our business
18. 18We may be impacted by economic and supply disruptions associated with events beyond our control, such as war, including the current conflicts between Russia and Ukraine and between Israel and Hamas, acts of terror, political unrest, public health concerns, labor disputes or natural disasters
19. 19Significant political, trade, regulatory developments, and other circumstances beyond our control, could have a material adverse effect on our financial condition or results of operations71% rewritten
20. 20administration, increased tariffs were implemented on goods imported into the U.S., particularly from China, Canada, and MexicoNew
21. 21We depend upon a limited number of key personnel, and if we are not able to retain them or recruit additional qualified personnel, the execution of our strategy, management of our business and commercialization of our product candidates could be delayed or negatively impacted
22. 22We will need to increase the size of our organization, and we may experience difficulties in managing growth
23. 23We currently have limited experience in marketing products. If we are unable to establish marketing and sales capabilities and retain the proper talent to execute on our sales and marketing strategy, we may not be able to generate product revenue86% rewritten
24. 24We need to ensure strong product performance and reliability to maintain and grow our businessNew
25. 25Cybersecurity risks could compromise our information and expose us to liability, which may harm our ability to operate effectively and may cause our business and reputation to suffer39% rewritten
26. 26systems and the data maintained in those systems, it is possible that our safety and security measures will not prevent the systems’ improper functioning or damage or the improper access or disclosure of personally identifiable information such as in the event of cyberattacksNew
27. 27Changes in tax law could adversely affect our business and financial condition94% rewritten
28. 28Our ability to use net operating loss carryforwards to offset future taxable income for U.S. federal tax purposes is subject to limitation and risk that could further limit our ability to utilize our net operating losses
29. 29The testing, manufacturing and marketing of diagnostics entails an inherent risk of product liability and personal injury claims
30. 30All of our diagnostic technology development and our clinical services are performed at two laboratories, and in the event either or both of these facilities were to be affected by a termination of the lease or a man-made or natural disaster, our operations could be severely impaired
31. 31An impairment in the carrying value of our intangible assets could negatively affect our results of operations
32. 32Governmental payers and health care plans have taken steps to control costs, which could negatively affect our business50% rewritten
33. 33Changes in payer mix could have a material adverse impact on our net sales and profitability
34. 34Our laboratories require ongoing CLIA certification, and we cannot guarantee that our laboratories will pass all future certification inspections
35. 35We believe that we are in compliance with all applicable laboratory requirements, but no assurances can be given that our laboratories will pass all future certification inspections53% rewritten
36. 36Failure to comply with HIPAA could be costly
37. 37Our failure to comply with any applicable government laws and regulations or otherwise respond to claims relating to improper handling, storage or disposal of hazardous chemicals that we use may adversely affect our results of operations
38. 38We may become subject to the Anti-Kickback Statute, Stark Law, False Claims Act, Civil Monetary Penalties Law and may be subject to analogous provisions of applicable state laws and could face substantial penalties if we fail to comply with such laws
39. 39Civil Monetary Penalties Law
40. 40The use of artificial intelligence in diagnostic or laboratory applications may subject us to additional regulatory and liability risks New
41. 41We cannot be certain that measures taken to protect our intellectual property will be effective
42. 42If any of our owned patent applications do not issue as patents in any jurisdiction, we may not be able to compete effectively
43. 43We depend on certain technologies that are licensed to us. We do not control these technologies and any loss of our rights to them could prevent us from selling some of our products
44. 44If we are unable to protect the confidentiality of our trade secrets, our business and competitive position may be harmed
45. 45If our trademarks and trade names are not adequately protected, then we may not be able to build name recognition in our markets of interest and our business may be adversely affected
46. 46Third-party claims of intellectual property infringement, misappropriation or other violations may prevent or delay our product discovery and development efforts and have a material adverse effect on our business
47. 47Obtaining and maintaining our patent protection depends on compliance with various procedural, document submission, fee payment and other requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements
48. 48We may become involved in lawsuits to protect or enforce our patents or other intellectual property, which could be expensive, time-consuming and unsuccessful
49. 49Changes to the patent law in the U.S. and other jurisdictions could diminish the value of patents in general, thereby impairing our ability to protect our product candidates
50. 50Third parties may assert ownership or commercial rights to inventions we develop
51. 51Third parties may assert that our employees or consultants have wrongfully used or disclosed confidential information or misappropriated trade secrets
52. 52We have limited foreign intellectual property rights and may not be able to protect our intellectual property rights throughout the world
53. 53Intellectual property rights do not necessarily address all potential threats to our competitive advantage

Risks Related to Our Common Stock

1. 54The price of our common stock may fluctuate significantly, which could negatively affect us and holders of our common stock39% rewritten
2. 55The price of our stock may be vulnerable to manipulation
3. 56Although our common stock is listed on The Nasdaq Capital Market (“Nasdaq”), we may be unable to continue to satisfy the listing maintenance requirements and rules. If we are unable to satisfy Nasdaq’s criteria for maintaining our listing, our securities could be subject to delisting
4. 57Increased costs associated with corporate governance compliance may significantly impact our results of operations
5. 58Our internal control over financial reporting and our disclosure controls and procedures may not prevent all possible errors that could occur
6. 59We have not paid dividends on our common stock in the past and do not expect to pay dividends on our common stock for the foreseeable future. Any return on investment may be limited to the value of our common stock
7. 60We may be at an increased risk of securities class action litigation
8. 61If securities or industry analysts do not publish research or reports about our business, or if they change their recommendations regarding our stock adversely, our stock price and trading volume could decline
9. 62Raising additional capital may cause dilution to our stockholders, restrict our operations or require us to relinquish rights to our diagnostic technologies or current or future development programs
10. 63The issuance of our common stock to creditors or litigants may cause significant dilution to our stockholders and cause the price of our common stock to fall
11. 64Improper timing of equity awards could result in regulatory scrutiny and reputational harm
12. 65Unstable market and economic conditions may have serious adverse consequences on our business, financial condition and stock price
13. 66Our amended and restated bylaws, as amended, designate specific courts in as the exclusive forum for certain litigation that may be initiated by the Company’s stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us
14. 67Anti-takeover provisions under our charter documents and Delaware law could delay or prevent a change of control, which could limit the market price of our common stock and may prevent or frustrate attempts by our stockholders to replace or remove our current management
15. 68We are a “smaller reporting company,” and the reduced disclosure requirements applicable to smaller reporting companies may make our common stock less attractive to investors