Precipio (PRPO) DEF 14A Definitive proxy

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

Filed by the Registrant ☒

Filed by a Party other than the Registrant  ☐

Check the appropriate box:

 ☐
Preliminary Proxy Statement

 ☐
Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

☒
Definitive Proxy Statement

 ☐
Definitive Additional Materials

 ☐
Soliciting Material Pursuant to §240.14a-12

Precipio, Inc.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check all boxes that apply):

☒	No fee required.
☐	Fee paid previously with preliminary materials.
☐	Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11.

 

4 Science Park

New Haven, Connecticut 06511

April 29, 2024

Dear Stockholder:

You are cordially invited to attend our 2024 Annual Meeting of Stockholders (the “Annual Meeting”), which will be held virtually via live webcast at www.virtualshareholdermeeting.com/PRPO2024, on Thursday, June 13, 2024, at 10:00 a.m. Eastern Time. You will be able to attend the meeting online and submit questions during the meeting by visiting the website listed above. You will also be able to vote your shares electronically at the Annual Meeting. The meeting will be held online only. We are pleased to use the virtual meeting format to facilitate stockholder attendance, voting, and questions by leveraging technology to communicate more effectively and efficiently with our stockholders. This format allows stockholders to participate fully from any location, without the cost of travel. Because the Annual Meeting is virtual and being conducted electronically, stockholders cannot attend the Annual Meeting in person. Instructions regarding how to attend the meeting online and details concerning the business to be conducted at the Annual Meeting are more fully described in the accompanying Notice of Annual Meeting of Stockholders and Proxy Statement which are a part of this invitation.

At the Annual Meeting, stockholders will be asked to vote on each of the proposals set forth in the Notice of Annual Meeting of Stockholders and the proxy statement, which describes the formal business to be conducted at the Annual Meeting and follow this letter.

It is important that your shares are represented and voted at the Annual Meeting regardless of the size of your holdings. Whether or not you plan to attend the Annual Meeting, please complete, sign, date and return the accompanying proxy card in the enclosed postage-paid envelope or vote electronically via the Internet or by telephone, if permitted by the broker or other nominee that holds your shares. Voting electronically, by telephone, or by returning your proxy card in advance of the Annual Meeting does not deprive you of your right to attend the Annual Meeting. Please review the instructions on each of your voting options described in the Proxy Statement.

If you have any questions concerning this Proxy Statement or our upcoming Annual Meeting and you are the stockholder of record of your shares, please contact Precipio, Inc.’s Chief Executive Officer Ilan Danieli at (203) 787-7888 ex. 536. If your shares are held by a broker or other nominee (that is, in “street name”), please contact your broker or another nominee for questions concerning the Annual Meeting.

Thank you for your continued support. We look forward to seeing those of you who will be able to attend the Annual Meeting.

Sincerely yours,

Ilan Danieli

Chief Executive Officer

 

4 Science Park

New Haven, Connecticut 06511

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

To be Held June 13, 2024

To the Stockholders of Precipio, Inc.:

Notice is hereby given that the Annual Meeting of Stockholders (the “Annual Meeting”) of Precipio, Inc. (the “Company”) will be held virtually via live webcast at www.virtualshareholdermeeting.com/PRPO2024, on Thursday, June 13, 2024, at 10:00 a.m. Eastern Time. Stockholders will be able to listen to and participate in the meeting live, submit questions, and vote by entering the 16-digit control number included on your proxy card. Because the Annual Meeting is virtual and being conducted electronically, stockholders cannot attend the Annual Meeting in person. The Annual Meeting is being held for the following purposes:

1.
To elect Kathleen D. LaPorte and Ron A. Andrews as Class III directors for terms to expire in 2027 (“Proposal One”);

2.
To hold an advisory (non-binding) vote to approve named executive compensation (“Proposal Two”);

3.
To ratify the appointment of Marcum LLP as our independent registered public accounting firm for the year ending December 31, 2024 (“Proposal Three”).

4.
To transact such other business as may properly come before the Annual Meeting or any adjournment or postponement thereof.

Only stockholders of record at the close of business on Friday, April 19, 2024 (the “Record Date”) are entitled to notice of, and to vote at, the Annual Meeting.

The Proxy Statement contains important information for you to consider when deciding how to vote on the matters brought before the Annual Meeting. To participate in the Annual Meeting, you will need the 16-digit control number included on your proxy card or on the instructions that accompany your proxy materials. The Annual Meeting will begin promptly at 10:00 a.m. Eastern Time on Thursday, June 13, 2024. Online check-in will begin at 9:45 a.m. Eastern Time, and you should allow approximately 15 minutes for the online check-in procedures.

Your vote is important. We encourage you to vote in advance, even if you plan to attend the Annual Meeting online. To vote online or by phone, you will need to use your 16-digit control number found on the Notice of Internet Availability of Proxy Materials, the proxy card or the voting instruction form.

The Company is pleased to take advantage of Securities and Exchange Commission (the “SEC”) rules that allow companies to furnish their proxy materials over the Internet. The Company is mailing to many of our stockholders a Notice of Internet Availability of Proxy Materials (the “Notice”) instead of a paper copy of the proxy materials and our 2023 Annual Report for the fiscal year ended December 31, 2023 on Form 10-K filed with the SEC on March 29, 2024 (“2023 Annual Report”). The Notice of Internet Availability contains instructions on how to access those documents and to cast your vote via the Internet. The Notice of Internet Availability also contains instructions on how to request a paper copy of our proxy materials and our 2023 Annual Report. This method of notice and access gives the Company a low-cost way to furnish stockholders with their proxy materials. If you previously chose to receive proxy materials electronically, you will continue to receive access to these materials via email unless you elect otherwise. The Notice of Internet Availability will be mailed on or about April 29, 2024 to our beneficial owners and stockholders of record who owned our common stock at the close of business on the Record Date. All stockholders who do not receive a Notice will receive a paper copy of the proxy materials and the 2023 Annual Report by mail. This process allows the Company to provide its stockholders with the information they need on a more timely basis, while reducing the environmental impact and lowering the costs of printing and distributing our proxy materials.

In order to attend the Annual Meeting virtually, you will be required to enter the control number provided in the Notice of Availability or the proxy card at www.virtualshareholdermeeting.com/PRPO2024. Beneficial owners of shares held in street name will need to follow the instructions provided in the voting instructions form by the broker, bank or other nominee that holds their shares. Please see the “General Information” section of the proxy statement that accompanies this notice for more details regarding the logistics of the virtual Annual Meeting. You will not be able to attend the Annual Meeting in person.

Your vote is important. Whether or not you are able to attend the Annual Meeting and vote your shares online, it is important that your shares be represented. To ensure that your vote is recorded promptly, please vote as soon as possible, even if you plan to attend the Annual Meeting, by submitting your proxy over the Internet or by telephone as described in the instructions included in the Notice of Availability or by signing, dating and returning the proxy card. Voting promptly will help avoid the additional expense of further solicitation to ensure a quorum at the meeting.

We encourage you to access the Annual Meeting early. Online check-in will begin approximately 15 minutes before 10:00 am Eastern Time. If you encounter difficulties during the check-in or meeting time, we have technicians available to help you. The technical support contact information will be posted on the virtual meeting login page.

Thank you for your continued support.

By Order of the Board of Directors

Ilan Danieli, Chief Executive Officer

New Haven, Connecticut

April 29, 2024

Whether or not you expect to attend the Annual Meeting, we urge you to vote for your shares at your earliest convenience. This will ensure the presence of a quorum at the Annual Meeting. Promptly voting your shares will save Precipio, Inc. the expenses and extra work of additional solicitation. Submitting your proxy now will not prevent you from voting your shares at the Annual Meeting if you desire to do so, as your proxy is revocable at your option. Your vote is important, so please act today!

Important Notice Regarding the Availability of Proxy Materials for the Stockholder Meeting to be held on Thursday, June 13, 2024. This Proxy Statement, the accompanying form of proxy card and our 2023 Annual Report, including consolidated financial statements, are available on the Internet at http://precipiodx.com. Under rules issued by the Securities and Exchange Commission (the “SEC”), we are providing access to our proxy materials both by sending you this full set of proxy materials and by notifying you of the availability of our proxy materials on the Internet. The information contained on or that may be obtained from our website is not, and shall not be, deemed to be, a part of this Proxy Statement. You can review filings we make with the SEC at its website (www.sec.gov), including our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports electronically filed or furnished pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934, as. Our Code of Conduct and Ethics and the charters of our Nominating and Governance Committee, Audit Committee, and Compensation Committee of the Board of Directors may be accessed within the Investor Relations section of our website.

Table of Contents

	Page
GENERAL INFORMATION FOR THE 2024 ANNUAL MEETING OF STOCKHOLDERS	1
PROPOSAL ONE - ELECTION OF CLASS III DIRECTORS	9
PROPOSAL TWO - CONDUCT AN ADVISORY VOTE TO APPROVE NAMED EXECUTIVE COMPENSATION	39
PROPOSAL THREE - RATIFICATION OF THE APPOINTMENT OF MARCUM LLP AS PRECIPIO’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING DECEMBER 31, 2024	40
CORPORATE GOVERNANCE	0
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS	0
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT	0
REPORT OF THE AUDIT COMMITTEE	42
HOUSEHOLDING	43
STOCKHOLDER PROPOSALS	43
OTHER MATTERS	44

4 Science Park

New Haven, Connecticut 06511

PROXY STATEMENT

for

2024 ANNUAL MEETING OF STOCKHOLDERS

of

PRECIPIO, INC.

GENERAL INFORMATION

The Board of Directors (the “Board”) of Precipio, Inc. (the “Company”) is soliciting your proxy to vote at the Annual Meeting of Stockholders (the “Annual Meeting”) which will be held virtually via live webcast at www.virtualshareholdermeeting.com/PRPO2024, on Thursday, June 13, 2024, at 10:00 a.m. Eastern Time. Stockholders will be able to listen to and participate in the meeting live, submit questions, and vote online. Because the Annual Meeting is virtual and being conducted electronically, stockholders cannot attend the Annual Meeting in person. Only stockholders of record as of the close of business on Friday, April 19, 2024 (the “Record Date”) are entitled to vote at the Annual Meeting. To participate in the Annual Meeting, you will need the 16-digit control number included on your proxy card or on the instructions that accompany your proxy materials. The Annual Meeting will begin promptly at 10:00 a.m. Eastern time Thursday, June 13, 2024. Online check-in will begin at 9:45 a.m. Eastern time, and you should allow approximately 15 minutes for the online check-in procedures.

In accordance with rules and regulations adopted by the U.S. Securities and Exchange Commission (the “SEC”), we have elected to provide our beneficial owners and stockholders of record access to our proxy materials over the Internet. Beneficial owners are stockholders whose shares of our common stock are held in the name of a broker, bank or other agent (i.e., in “street name”). Accordingly, a Notice of Internet Availability of Proxy Materials (the “Notice”) will be mailed on or about April 29, 2024 to our beneficial owners and stockholders of record who owned our common stock at the close of business on the Record Date.

Beneficial owners and stockholders of record will have the ability to access the proxy materials on a website referred to in the Notice or request that a printed set of the proxy materials be sent to them by following the instructions in the Notice. Beneficial owners and stockholders of record who have previously requested to receive paper copies of our proxy materials will receive paper copies of the proxy materials instead of the Notice.

This proxy statement has been prepared by the management of Precipio, Inc.

All properly submitted proxies will be voted in accordance with the instructions contained in those proxies. If no instructions are specified, the proxies will be voted in accordance with the recommendation of our board of directors with respect to each of the matters set forth in the accompanying Notice of Meeting. You may revoke your proxy at any time before it is exercised at the meeting by giving our corporate secretary written notice to that effect.

We made this proxy statement and our 2023 Annual Report available to stockholders on or about April 29, 2024.

Important Notice Regarding the Availability of Proxy Materials for

the Annual Meeting of Stockholders to be Held on Thursday, June 13, 2024:

This proxy statement and our 2023 Annual Report are

available for viewing, printing and downloading at www.proxyvote.com.

A copy of our 2023 Annual Report, as filed with the Securities and Exchange Commission (the “SEC”), except for exhibits, will be furnished without charge to any stockholder upon written request to Precipio, Inc., 4 Science Park, New Haven, Connecticut 06511, Attention: Corporate Secretary. This proxy statement and our 2023 Annual Report are also available on the SEC’s website at www.sec.gov.

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QUESTIONS AND ANSWERS ABOUT THIS PROXY MATERIAL AND VOTING

When are this proxy statement and the accompanying materials scheduled to be sent to stockholders?

We have elected to provide access to our proxy materials to our stockholders via the Internet. Accordingly, on or about April 29, 2024, we will begin mailing the Notice of Availability. Our proxy materials, including the Notice of the 2024 Annual Meeting of Stockholders, this proxy statement and the accompanying proxy card or, for shares held in street name (i.e., held for your account by a broker, bank or other nominee), a voting instruction form, and the 2023 Annual Report, will be mailed or made available to stockholders on the Internet on or about the same date.

How to attend the Annual Meeting

We are pleased to use the virtual meeting format to facilitate stockholder attendance, voting and questions by leveraging technology to communicate more effectively and efficiently with our stockholders. This format allows stockholders to participate fully from any location, without the cost of travel.

To participate in the Annual Meeting, you must be a stockholder of record and log in with your 16-digit control number found on the Notice of Internet Availability of Proxy Materials, the proxy card or the voting instruction form. Whether or not you participate in the Annual Meeting online, it is important that your shares are included in the voting process.

If you are a beneficial stockholder, please follow the instructions on the voting instruction form provided by your bank or broker or other nominee to attend the Annual Meeting online. Please contact your bank or broker if you have questions about how to obtain your control number.

Interested persons may also access the Annual Meeting as guests but will not be able to vote or ask questions during the Annual Meeting.

How to ask questions at the Annual Meeting

Stockholders may submit questions during the Annual Meeting using the “Ask a Question” field on the virtual meeting website.

You will need to log in with your 16-digit control number found on the Notice of Internet Availability of Proxy Materials, the proxy card or the voting instruction form to submit a question.

Time has been allocated on the agenda to respond to questions submitted during the Annual Meeting. Questions we do not answer during the Annual Meeting will be answered in writing and posted on the Company’s website at www.precipiodx.com/investors.html. Please refer to the Annual Meeting Rules of Conduct and Procedures for more information on how to ask questions. The Rules of Conduct and Procedures are available at www.proxyvote.com and during the Annual Meeting at www.virtualshareholdermeeting.com/PRPO2024.

A replay of the Annual Meeting will be made available promptly at www.precipiodx.com/investors.html and remain available for at least one year.

Why did I receive a Notice of Internet Availability of Proxy Materials in the mail instead of a full set of proxy materials?

We are pleased to take advantage of the SEC rule that allows companies to furnish their proxy materials over the Internet. Accordingly, we have sent to our stockholders of record a Notice of Internet Availability of Proxy Materials. Instructions on how to access the proxy materials over the Internet free of charge or to request a paper copy may be found in the Notice of Internet Availability of Proxy Materials. Our stockholders may request to receive proxy materials in printed form by mail or electronically on an ongoing basis. A stockholder’s election to receive proxy materials by mail or electronically will remain in effect until such stockholder changes their election.

What does it mean if I receive more than one Notice?

If you receive more than one Notice, your shares may be registered in more than one name or in different accounts. Please follow the voting instructions on each Notice to ensure that all of your shares are voted.

What proposals will be voted on at the Annual Meeting?

(1)
To elect Kathleen D. LaPorte and Ron A. Andrews as Class III directors for terms to expire in 2027 (“Proposal One”);

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(2)
To hold an advisory (non-binding) vote to approve named executive compensation (“Proposal Two”); and

(3)
To ratify the appointment of Marcum LLP as our independent registered public accounting firm for the year ending December 31, 2024 (“Proposal Three”).

Who is soliciting my vote?

Our Board of Directors is soliciting your vote for the Annual Meeting.

Who can Vote?

Stockholders who owned common stock at the close of business on Friday, April 19, 2024 (the “Record Date”), are entitled to vote at the Annual Meeting.

On the Record Date, there were 1,469,540 shares of our common stock outstanding and entitled to vote with respect to all matters to be acted upon at the Annual Meeting. Each stockholder of record is entitled to one vote for each share of our common stock held by such stockholder.

You do not need to attend the Annual Meeting to vote your shares. Shares represented by valid proxies, received in time for the Annual Meeting and not revoked prior to the Annual Meeting, will be voted at the Annual Meeting. A stockholder may revoke a proxy before the proxy is voted by delivering, to our Secretary, a signed statement of revocation or a duly executed proxy card bearing a later date. Any stockholder who has executed a proxy card but attends the Annual Meeting in person may revoke the proxy and vote at the Annual Meeting.

What is the difference between holding shares as a record holder and as a beneficial owner (holding shares in street name)?

If your shares are registered in your name with our transfer agent, EQ Shareowner Services, you are the “record holder” of those shares. If you are a record holder, these proxy materials have been provided directly to you by the Company.

If your shares are held in a stock brokerage account, a bank or other holder of record, you are considered the “beneficial owner” of those shares held in “street name.” If your shares are held in street name, these proxy materials have been forwarded to you by that organization. The organization holding your account is considered to be the stockholder of record for purposes of voting at the Annual Meeting. As the beneficial owner, you have the right to instruct this organization on how to vote your shares.

How do I vote?

Whether you plan to attend the virtual Annual Meeting online or not, we urge you to vote by proxy. All shares represented by valid proxies that we receive through this solicitation, and that are not revoked, will be voted in accordance with your instructions on the proxy card or as instructed via Internet or telephone. You may specify whether your shares should be voted for or withheld for each nominee for director, and how your shares should be voted with respect to each of the other proposals. Except as set forth below, if you properly submit a proxy without giving specific voting instructions, your shares will be voted in accordance with the Board’s recommendations as noted below. Voting by proxy will not affect your right to attend the virtual Annual Meeting. If your shares are registered directly in your name through our stock transfer agent, EQ Shareowner Services, or you have stock certificates, you may vote:

• By mail. Complete and mail the proxy card in the enclosed postage prepaid envelope. Your proxy will be voted in accordance with your instructions. If you sign the proxy card, but do not specify how you want your shares voted, they will be voted as recommended by the Board. Proxy cards submitted by mail must be received no later than by 11:59 p.m., Eastern Time, on June 12, 2024 to be voted at the Annual Meeting.

• By Telephone. You may vote using a touch-tone telephone by calling 1-800-690-6903, 24 hours a day, seven days a week. You will need the 16-digit control number included on the Notice of Internet Availability of Proxy Materials or the proxy card. Votes submitted by telephone must be received by 11:59 p.m., Eastern Time, on June 12, 2024.

• By Internet (before the Annual Meeting). You may vote at www.proxyvote.com, 24 hours a day, seven days a week. You will need the 16-digit control number included on the Notice of Internet Availability of Proxy Materials or the proxy card. Votes submitted through the Internet must be received by 11:59 p.m., Eastern Time, on June 12, 2024.

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• By Attending the Virtual Annual Meeting. This year’s Annual Meeting will be a completely virtual meeting of stockholders and will be webcast live over the Internet. Please go to www.virtualshareholdermeeting.com/PRPO2024 for instructions on how to attend and participate in the Annual Meeting. You will need the 16-digit control number included on the Notice of Internet Availability of Proxy Materials, the proxy card or the voting instruction form. If you previously voted via the Internet (or by telephone or mail), you will not limit your right to vote virtually at the Annual Meeting. The Annual Meeting webcast will begin promptly on Thursday, June 13, 2024 at 10:00 a.m. Eastern Time. We encourage you to access the Annual Meeting prior to the start time. Online check-in will begin at 9:45 a.m. Eastern Time on Thursday, June 13, 2024, and you should allow ample time for the check-in procedures. Please note that to participate in the Annual Meeting, you will need to contact the bank, broker or other nominee who holds your shares to obtain a broker’s proxy card and use the control number found on the broker’s proxy card.

What if during the check-in time or during the Annual Meeting I have technical difficulties or trouble accessing the virtual meeting website?

We will have technicians ready to assist you with any technical difficulties you may have to access the virtual meeting website. If you encounter any difficulties accessing the virtual meeting website during the check-in or meeting time, please call the technical support number that will be posted on the Annual Meeting login page.

What constitutes a quorum for the Annual Meeting?

Our Amended and Restated Bylaws (the “bylaws”), provide that a majority of the shares entitled to vote, present in person or represented by proxy, will constitute a quorum for the transaction of business at the Annual Meeting. There are 1,469,540 shares of our common stock outstanding and entitled to vote on the Record Date. Therefore, a quorum will be present if 734,771 shares of our common stock are present in person or represented by executed proxies timely received by us at the Annual Meeting. Shares present virtually during the Annual Meeting will be considered shares of common stock represented in person at the meeting.

Under the General Corporation Law of the State of Delaware, shares that are voted as “abstain” or “withheld” and broker “non-votes” are counted as present for purposes of determining whether a quorum is present at the Annual Meeting. If a quorum is not present, the meeting may be adjourned until a quorum is obtained.

How is the vote counted?

Under our bylaws, any proposal other than an election of directors is decided by a majority of the votes properly cast for and against such proposal, except where a larger vote is required by law or by our Third Amended and Restated Certificate of Incorporation, or bylaws.

Each holder of common stock is entitled to one vote for each share held by such stockholder as of the Record Date on each matter to come before the Annual Meeting, including the election of a director. Votes cast during the Annual Meeting or by proxy by mail, via the Internet or by telephone will be tabulated by the inspector of election appointed for the Annual Meeting, who will also determine whether a quorum is present. Unless otherwise provided for in this proxy statement, abstentions and broker “non-votes” are not included in the tabulation of the voting results on any such proposal and, therefore, do not have an impact on such proposals. A broker “non-vote” occurs when a nominee holding shares for a beneficial owner does not vote on a particular proposal because the nominee does not have discretionary voting power with respect to that item and has not received instructions from the beneficial owner.

What vote is required to approve each proposal and how are votes counted?

Proposal One: Election of Directors

The directors must be elected by a plurality vote. Our stockholders do not have the right to cumulate votes in the election of directors. If a stockholder votes to “abstain” with respect to this proposal, such stockholder’s shares will not be voted with respect to this proposal. If you do not instruct your broker how to vote with respect to this proposal, your broker, bank or other nominee may not vote for this proposal, and those votes will be counted as broker “non-votes.” Broker non-votes and withheld votes will not be counted as votes cast for this proposal and as such will have no impact on the outcome of this proposal.

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Proposal Two: The approval on an advisory (non-binding) basis, of the compensation of our named executive officers

The affirmative vote of a majority of the votes cast for this proposal i required to approve, on an advisory basis, the compensation of our named executive officers, as set forth in this Proxy Statement. If a stockholder votes to “abstain” with respect to this proposal, such stockholder’s shares will not be voted with respect to this proposal. If you do not instruct your broker how to vote with respect to these proposals, your broker, bank or other nominee may not vote for this proposal, and those votes will be counted as broker “non-votes.” Broker non-votes will not be counted as votes cast for this proposal.

Proposal Three: Ratification of the Appointment of Marcum LLP as our Independent Public Accountant for the Fiscal Year Ending December 31, 2024

The affirmative vote of a majority of the votes cast for this proposal is required to ratify the appointment of the Company’s independent public accountant. If you abstain from voting on this proposal, your shares will not be counted as “votes cast” with respect to this proposal, and the abstention will have no effect on the proposal. This proposal is considered to be a discretionary item, and your broker will be able to vote on this proposal even if it does not receive instructions from you. Accordingly, we do not anticipate that there will be any broker non-votes on this proposal; however, any broker non-votes will not be counted as “votes cast” and will therefore have no effect on this proposal. We are not required to obtain the approval of our stockholders to appoint the Company’s independent accountant. However, if our stockholders do not ratify the appointment of Marcum LLP as the Company’s independent public accountant for the fiscal year ending December 31, 2024, the Audit Committee of the Board may reconsider its appointment.

What do I do if my shares are held in “street name”?

If your shares are held in a brokerage account or by a bank or other holder of record, you are considered the “beneficial owner” of shares held in “street name.” The proxy materials have been forwarded to you by your broker, bank or other nominee who is considered, with respect to those shares, the stockholder of record. As the beneficial owner, you have the right to direct your broker, bank or other holder of record on how to vote your shares by following their instructions for voting. Please refer to information from your bank, broker or other nominee on how to submit your voting instructions.

How does the Board recommend that you vote on the proposals?

Our Board recommends that you vote:

• “FOR” Proposal One - the election of the Board nominees as directors.

• “FOR” Proposal Two - the approval, on an advisory (non-binding) basis, of the compensation of our named executive officers, as set forth in this Proxy Statement.

• “FOR” Proposal Three - ratification of the appointment of Marcum LLP as our independent public accountant for the fiscal year ending December 31, 2024.

What happens if the Annual Meeting is postponed or adjourned?

Your proxy may be voted at the postponed or adjourned meeting. You will still be able to change your proxy until it is voted. If there are insufficient votes to approve Proposals One, Two and Three, your proxy may be voted by the persons named in the proxy to adjourn the Annual Meeting in order to solicit additional proxies in favor of the approval of such proposal. If the Annual Meeting is adjourned or postponed for any purpose, at any subsequent reconvening of the meeting, your proxy will be voted in the same manner as it would have been voted at the original convening of the Annual Meeting unless you withdraw or revoke your proxy. Your proxy may be voted in this manner even though it may have been voted on the same or any other matter at a previous session of the Annual Meeting.

May I change or revoke my proxy?

If you give us your proxy, you may change or revoke it at any time before the Annual Meeting. You may change or revoke your proxy in any one of the following ways:

• signing a new proxy card and submitting it as instructed above;

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• if your shares are held in street name, re-voting by Internet or by telephone as instructed above – only your latest Internet or telephone vote will be counted;

• if your shares are registered in your name, notifying the Company’s Secretary in writing before the Annual Meeting that you have revoked your proxy; or

• attending the Annual Meeting in person and voting in person. Attending the Annual Meeting in person will not in and of itself revoke a previously submitted proxy unless you specifically request it.

Will my shares be voted if I do not return my proxy card?

If your shares are registered in your name or if you have stock certificates, they will not be voted if you do not return your proxy card by mail, telephone, internet or vote at the Annual Meeting as described above under “How Do I Vote?”

If your broker cannot vote your shares on a particular matter because it has not received instructions from you and does not have discretionary voting authority on that matter, or because your broker chooses not to vote on a matter for which it does have discretionary voting authority, this is referred to as a “broker non-vote.” The New York Stock Exchange (“NYSE”) has rules that govern brokers who have record ownership of listed company stock (including stock such as ours that is listed on The Nasdaq Capital Market or Nasdaq) held in brokerage accounts for their clients who beneficially own the shares. Under these rules, brokers who do not receive voting instructions from their clients have the discretion to vote uninstructed shares on certain matters (“routine matters”), but do not have the discretion to vote uninstructed shares as to certain other matters (“non-routine matters”). Under NYSE interpretations, which are also applicable to Nasdaq-listed companies:

• Proposal One – Election of Directors is considered a non-routine matter.

• Proposal Two – Approval, on an advisory (non-binding) basis, of the compensation of our named executive officers is considered a non-routine matter.

• Proposal Three – Ratification of Appointment of an Independent Registered Public Accounting Firm is considered a routine matter.

If your shares are held in street name and you do not provide voting instructions to the bank, broker or other nominee that holds your shares, the bank, broker or other nominee has the authority, even if it does not receive instructions from you, to vote your unvoted shares for Proposal Three - the Ratification of Appointment of Independent Registered Public Accounting Firm.

The bank, broker or other nominee that holds your shares does not have authority to vote your unvoted shares for Proposal One - election of the Board nominees as directors and for Proposal Two - Approval, on an advisory (non-binding) basis, of the compensation of our named executive officers. We encourage you to provide voting instructions. This ensures your shares will be voted at the Annual Meeting in the manner you desire.

What if I do not specify how my shares are to be voted?

If you submit a proxy but do not indicate any voting instructions, the persons named as proxies will vote in accordance with the recommendations of the Board. The Board’s recommendations are set forth above in the section entitled “How does the Board Recommend that You Vote on the Proposals.”

How do I ask questions during the virtual Annual Meeting?

Stockholders may submit questions during the Annual Meeting using the “Ask a Question” field on the virtual meeting website. You will need to log in with your 16-digit control number found on the Notice of Internet Availability of Proxy Materials, the proxy card or the voting instruction form to submit a question. Please refer to the Annual Meeting Rules of Conduct and Procedures for more information on how to ask questions. The Rules of Conduct and Procedures are available at www.proxyvote.com and during the Annual Meeting at www.virtualshareholdermeeting.com/PRPO2024.

Where may I find copies of proxy materials and the 2023 Annual Report?

The Notice of Internet Availability of Proxy Materials and Proxy Statement and 2023 Annual Report are posted on the Company’s website at www.precipiodx.com/investors.html and at www.proxyvote.com.

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Who is paying for this proxy solicitation?

We will bear the cost of soliciting proxies. In addition to mailed proxy materials, our directors, officers and employees may also solicit proxies in person, by telephone, or by other means of communication. We will not pay our directors, officers and employees any additional compensation for soliciting proxies. We may reimburse brokerage firms, banks and other agents for the cost of forwarding proxy materials to beneficial owners.

What interest do officers and directors have in matters to be acted upon?

Members of the Board of Directors and executive officers of the Company do not have any interest in any proposal that is not shared by all other stockholders of the Company except for Proposal One.

Do I have dissenters’ rights of appraisal?

Our stockholders do not have appraisal rights under Delaware law or under our governing documents with respect to the matters to be voted upon at the Annual Meeting.

How may shareholders submit matters for consideration at an annual meeting?

The required notice must be in writing and received by our corporate secretary at our principal executive offices not later than the close of business on the 90th day nor earlier than the close of business on the 120th day prior to the first anniversary of the preceding year’s annual meeting. However, in the event that the date of the annual meeting is convened more than 30 days before or more than 60 days after the first anniversary of the preceding year’s annual meeting, or if no annual meeting were held in the preceding year, a shareholder’s notice must be so received not later than the close of business on the later of (A) the 90^th day prior to the scheduled date of such annual meeting or (B) the tenth day following the day on which public announcement of the date of such annual meeting was first made.

In addition, any shareholder proposal intended to be included in the proxy statement for the next annual meeting of our shareholders in 2024 must also satisfy the requirements of SEC Rule 14a-8 under the Securities Exchange Act of 1934, as amended, or the Exchange Act, and be received not later than December 31, 2024. If the date of the annual meeting is moved by more than 30 days from the date contemplated at the time of the previous year’s proxy statement, then notice must be received within a reasonable time before we begin to print and send proxy materials. If that happens, we will publicly announce the deadline for submitting a proposal in a press release or in a document filed with the SEC.

Important Notice Regarding the Availability of Proxy Materials for the stockholders meeting to be held on Thursday June 13, 2024: The Notice of Annual Meeting of Stockholders, our Proxy Statement and our 2023 Annual Report are available at www.proxyvote.com.

The following documents are being made available to all stockholders entitled to notice of and to vote at the Annual Meeting:

1)
This proxy statement.

2)
The accompanying proxy.

3)
Our 2023 Annual Report.

The 2023 Annual Report includes our consolidated financial statements for the fiscal year ended December 31, 2023, but is not a part of this proxy statement. You can also find a copy of our 2023 Annual Report on the Internet through the Securities and Exchange Commission’s electronic data system called EDGAR at www.sec.gov or through the Investor Relations section of our website at http://precipiodx.com.

How can I find out the results of the voting at the Annual Meeting?

Preliminary voting results will be announced at the Annual Meeting. Final voting results will be published in our Current Report on Form 8-K within four (4) business days after the Annual Meeting.

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VOTING SECURITIES AND BENEFICIAL OWNERSHIP BY

PRINCIPAL STOCKHOLDERS, DIRECTORS AND OFFICERS

Beneficial Ownership of Common Stock

On the Record Date there were 1,469,540 issued and outstanding shares of our common stock and 47 outstanding shares of Series B preferred stock.

The following table provides information known to the Company with respect to beneficial ownership of the Company’s common stock by its directors, by its named executive officers, by all of its current executive officers and directors as a group, and by each person the Company believes beneficially owns more than 5% of its outstanding common stock as of the Record Date. Percentage ownership calculations for beneficial ownership for each person or entity are based on 1,469,540 shares outstanding as of the Record Date. The number of shares beneficially owned by each person or group as of the Record Date includes shares of the Company’s common stock that such person or group had the right to acquire on or within 60 days after the Record Date, including, but not limited to, upon the exercise of options, warrants to purchase common stock or the conversion of securities into common stock. Except as otherwise indicated in the table below, addresses of named beneficial owners are in care of Precipio, Inc., 4 Science Park, New Haven, CT 06511. Beneficial ownership information of persons other than our current executive officers and directors is based on available information including, but not limited to, Schedules 13D, 13F or 13G filed with the SEC or information supplied by these persons.

Name of Beneficial Owner	Number of Shares Beneficially Owned	Percent of Class
Named Executive Officers and Directors:
Ilan Danieli(1)	40,095	2.7%
Jeffrey Cossman, M.D.(2)	16,758	1.1%
David S. Cohen(3)	51,498	3.5%
Richard Sandberg(4)	22,832	1.5%
Christina Valauri.(5)	2,273	*
Kathleen D. LaPorte(6)	17,258	1.2%
Ron A. Andrews(7)	12,572	*
Ayman Mohamed(8)	18,091	1.2%
Ahmed Zaki Sabet(9)	17,068	1.2%
All executive officers and directors as a group (11 persons)(10)	211,937	13.3%

*
Represents beneficial ownership of less than 1% of the shares of Common Stock.

(1)
Consists of 565 shares of Common Stock owned by IDP Holdings, LLC. (Mr. Danieli is the sole member and manager of IDP Holdings, LLC), 2,287 shares of Common Stock owned by Mr. Danieli and 37,243 shares of Common Stock issuable upon the exercise of stock options that are exercisable or will become exercisable within 60 days after the Record Date.

(2)
Consists of 8,462 shares of Common Stock owned and 8,296 shares of Common Stock issuable upon the exercise of stock options that are exercisable or will become exercisable within 60 days after the Record Date.

(3)
Consists of 42,746 shares of Common Stock owned, 1,543 shares of Common Stock issuable upon exercise of warrants to purchase shares of Common Stock that are exercisable or will become exercisable within 60 days after the Record Date, and 7,209 shares of Common Stock issuable upon the exercise of stock options that are exercisable or will become exercisable within 60 days after the Record Date.

(4)
Consists of 16,034 shares of Common Stock owned and 6,798 shares of Common Stock issuable upon the exercise of stock options that are exercisable or will become exercisable within 60 days after the Record Date.

(5)
Consists of 1,446 shares of Common Stock owned and 827 shares of Common Stock issuable upon the exercise of stock options that are exercisable or will become exercisable within 60 days after the Record Date.

(6)
Consists of 10,072 shares of Common Stock owned and 7,186 shares of Common Stock issuable upon the exercise of stock options that are exercisable or will become exercisable within 60 days after the Record Date.

(7)
Consists of 7,461 shares of Common Stock owned and 5,111 shares of Common Stock issuable upon the exercise of stock options that are exercisable or will become exercisable within 60 days after the Record Date.

(8)
Consists of 189 shares of Common Stock owned and 17,902 shares of Common Stock issuable upon the exercise of stock options that are exercisable or will become exercisable within 60 days after the Record Date.

(9)
Consists of 610 shares of Common Stock owned and 16,458 shares of Common Stock issuable upon the exercise of stock options that are exercisable or will become exercisable within 60 days after the Record Date.

(10)
Includes shares of Common Stock owned and shares of Common Stock that may be acquired by executive officers and directors as a group within 60 days after the Record Date through the exercise of stock options or warrants.

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PROPOSAL ONE

ELECTION OF DIRECTORS

Board of Directors and Committees

Our Board consists of seven directors which are elected by the holders of our common stock. The Board is divided into three classes, Class I, Class II and Class III, with directors in each class serving for a term of three years.

The term of office of the current Class I, Class II and Class III and the directors representing each class is set out below.

NAME	Term expiry	Class
Ilan Danieli	2025 Annual Meeting	I
David S. Cohen	2025 Annual Meeting	I
Christina Valauri	2026 Annual Meeting	II
Jeffrey Cossman, M.D.	2026 Annual Meeting	II
Richard Sandberg	2026 Annual Meeting	II
Kathleen D. LaPorte	2024 Annual Meeting	III
Ron A. Andrews	2024 Annual Meeting	III

Upon the expiration of the term of a class of directors, directors in that class will be eligible to be elected for a new three-year term at the Annual Meeting of stockholders in the year in which their term expires.

The Board has nominated Kathleen D. LaPorte and Ron A. Andrews for election by the stockholders as the Class III directors to serve three-year terms expiring at the Annual Meeting of stockholders in 2027. Each of the nominated directors has expressed his intention to continue to serve on the Board if elected. There are no arrangements or understandings between each of the directors and any other person pursuant to which they were selected as nominees.

Our bylaws provide that directors are elected by a plurality vote. Therefore, our directors will be elected as if they are the nominees receiving the highest number of affirmative votes. This means that votes withheld and broker non-votes with respect to the election of the directors will have no effect on the election of such directors. If one of the directors is unable to serve as a director, the Board may nominate a substitute nominee. In that case, the Board will vote all valid proxies that voted in favor of the director that is unable to serve, for the election of the substitute nominee.

Certain biographical information regarding our director nominees and directors continuing in office after the Annual Meeting, including their ages is set forth below in “Information About Our Board Of Directors”. In each individual’s biography we have highlighted specific experience, qualifications, and skills that have led the Board to conclude that such individual is a valued member of our Board. In addition to these specific attributes, all of our directors have significant expertise in one or more areas of importance to our business and have high-level managerial experience in relatively complex organizations or are accustomed to dealing with complex problems. We believe all of our directors are individuals of high character and integrity, are able to work well with others, and have sufficient time to devote to the affairs of our company.

Vote Required

The nominees for director who receive the greatest number of votes FOR election (also known as a plurality) will be elected as directors. If nominees are unopposed, election requires only a single “FOR” vote. Shares voting “withheld” have no effect on the election of directors. You may vote either FOR all of the nominees, WITHHOLD your vote from all of the nominees or WITHHOLD your vote from any one of the nominees. Votes that are withheld will not be included in the vote for the election of directors. Brokerage firms do not have authority to vote customers’ unvoted shares held by the firms in street name for the election of directors. As a result, any shares not voted by a beneficial owner will be treated as a broker non-vote. Such broker non-votes will have no effect on the results of this vote.

OUR BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE “FOR” THE DIRECTOR NOMINEES NAMED IN PROPOSAL ONE

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INFORMATION ABOUT OUR BOARD OF DIRECTORS

BOARD COMPOSITION

Our Board of Directors is made up of seven individuals, each with a valuable core set of skills, talents and attributes that make them appropriate for our Company’s Board as a whole. When searching for new Board candidates, the Nominating and Governance Committee considers the evolving needs of the Company’s global business and searches for Board candidates that fill any current or anticipated future needs or gaps in skills, experience and overall Board composition.

Board Practices Support Thoughtful Board Composition

Board Composition to Support Company Strategy

The Board and the Nominating and Governance Committee regularly evaluate the size and composition of the Board to ensure appropriate alignment with the Company’s evolving business and strategic needs.

Policy on Board Diversity

The Board believes that it is essential that directors represent diverse perspectives, skills and experience. When evaluating the various qualifications, experiences and backgrounds of Board candidates, the Board reviews and discusses many aspects of diversity such as gender, race, national origin, education, professional experience, geographic representation and differences in viewpoints and skills. To the extent possible, director recruitment efforts include several of these factors and the Board strives to recruit candidates that enhance the Board’s diversity.

Board Refreshment

The Board believes the fresh perspectives brought by new directors are critical to a forward-looking and strategic Board when appropriately balanced by the deep understanding of the Company’s business provided by longer-serving directors.

Director Succession Planning

The Nominating and Governance Committee reviews the short- and long-term strategies and interests of the Company to determine what current and future skills and experience are required of the Board in exercising its oversight function.

Our Board’s Qualifications

As determined by our Board and the Nominating and Governance Committee, all of our directors and director candidates possess the following qualifications:

Director Qualification	Description
Financial Literacy	Directors and director candidates should be “financially literate” as such qualification is interpreted by the Board in its business judgment.
Leadership Experience	Directors and director candidates should possess significant leadership experience, such as experience in business, finance/accounting, financial services regulation, education or government, and shall possess qualities reflecting a proven record of accomplishment and ability to work with others.
Commitment to Our Values	Directors and director candidates shall be committed to promoting our financial success and preserving and enhancing our business and ethical reputation, as embodied in our code of business conduct and ethics.
Absence of Conflicting Commitments	Directors and director candidates should not have commitments that would conflict with the time requirement commitments of a director.

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Director Qualification	Description
Reputation and Integrity	Directors and director candidates shall be of high repute and recognized integrity and not have been convicted in a criminal proceeding (excluding traffic violations and other minor offenses). Such person shall not have been found in a civil proceeding to have violated any federal or state securities or commodities law and shall not be subject to any court or regulatory order or decree limiting his or her business activity, including in connection with the purchase or sale of any security or commodity.
Knowledge and Experience	Directors and director candidates should possess knowledge and experience that will complement that of other directors and promote the creation of stockholder value.

The process undertaken by the Nominating and Governance Committee in recommending qualified director candidates is described under “Nominating and Corporate Governance Committee” below. All of our directors bring significant executive leadership derived from their careers and professions. When considering whether our current directors have the experience, qualifications, attributes and skills, taken as a whole, to enable the Board of Directors to satisfy its oversight responsibilities effectively in light of the Company’s business and structure, the Nominating and Governance Committee and the Board of Directors focuses primarily on the information discussed in each of the director’s individual biographies described below.

NAME	AGE	Position	Board member since year
Ilan Danieli	52	Chief Executive Officer Director	2017
David S. Cohen	65	Director Chair of the Compensation Committee Member of the Audit Committee	2017
Jeffrey Cossman, M.D.	77	Director Chair of the Nominating and Corporate Governance Committee	2017
Kathleen D. LaPorte	62	Director Chair of the Audit Committee	2018
Richard Sandberg	81	Chairman Director and Member of the Audit Committee	2019
Ron A. Andrews	63	Director Member of the Compensation Committee	2021
Christina Valauri	65	Director Member of the Nominating and Corporate Governance Committee	2024

The Company’s committees structure from January 1, 2023 to January 1, 2024 was as follows:

Name	Position
David S. Cohen	Member of the Nominating and Corporate Governance Committee
Jeffrey Cossman, M.D.	Chair of the Nominating and Corporate Governance Committee
Kathleen D. LaPorte	Chair of the Audit Committee
Richard Sandberg	Chairman of the board of directors Member of the Audit Committee
Ron A. Andrews	Member of the Compensation Committee
Douglas Fisher	Chair of the Compensation Committee Member of the Audit Committee

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Ilan Danieli, Chief Executive Officer

 

Mr. Danieli, age 52, has served as our Chief Executive Officer and as a member of our board of directors since June 2017. Prior to that, Mr. Danieli was the founder of Precipio Diagnostics LLC and was its Chief Executive Officer from 2011 until 2017. Mr. Danieli has over 20 years managing small and medium-size companies, and some of his previous experiences include serving as Chief Operating Officer of Osiris Therapeutics, Inc., a publicly-traded company based in New York City with operations in the US, Canada, Europe and Asia and as the VP of Operations for Laurus Capital Management LLC, a multi-billion dollar hedge fund, among various other entrepreneurial ventures. Mr. Danieli has a Master’s in Business Administration from the Darden School of Business at the University of Virginia, and a bachelor’s degree in Economics from Bar-Ilan University in Israel. As founder and Chief Executive Officer of the Company since its inception in 2011, Mr. Danieli has developed a unique understanding of the market need. Mr. Danieli has assembled the Company’s management team and is closely familiar with the team’s skill sets and capabilities needed to execute on the Company’s vision. Furthermore, Mr. Danieli possesses both the operational, financial, sales and marketing background to contribute to the Company’s board decisions on strategy and execution.

David S. Cohen

 

Mr. Cohen, age 65, was appointed as a director of the Company in November 2017. Mr. Cohen is the Chief Operating Officer and co-owner of Standard Oil of Connecticut, Inc. the largest independent petroleum retailing company in Connecticut. He founded Standard Security Systems, a provider of electronic security services; ResCom Energy, a multi-state supplier of deregulated electricity; Moneo Technology Solutions, a provider of security and network infrastructure solutions; and My Gene Counsel, a cancer bioformation company. Mr. Cohen is also an experienced investor in numerous start-up and early stage businesses. He currently serves on the boards of the following private companies: Bloomboard Inc, Genixo Construction LLC, Cyberguards USA Inc, Omnio Inc, ZoneFlow Reactor Technologies LLC, Emme Controls LLC, Foresite MSP, LLC, My Gene Counsel, LLC, The Platt & LaBonia Company LLC, and Sirona Medical Technologies, Inc,. Mr. Cohen holds a B.A. from Harvard College and Master’s in Business Administration from the Harvard Business School. Mr. Cohen brings to the Board a wealth of experience as a serial entrepreneur that has built several successful companies, as well as a strong investment track record. Mr. Cohen has been an early-stage investor in Precipio, Inc. and brings his deep familiarity with the business to help guide management and the Board in its strategy.

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Jeffrey Cossman, M.D.

 

Dr. Cossman, age 76, was appointed as a director of the Company in September 2017. Dr. Cossman is a world-recognized expert in medical diagnostics with a career spanning research, academics and industry. Dr. Cossman retired in February 2014. From 2014 to 2022, Dr. Cossman was Medical Advisor for Epigenomics AG. From 2010 to 2014, Dr. Cossman was Founder, Chief Executive Officer and Chairman of the Board at United States Diagnostic Standards, Inc. He is a Co-Founder of the Association for Molecular Pathology (AMP). He was a member of the Board of Directors of The Personalized Medicine Coalition from 2008 to 2014. He previously served as Chief Scientific Officer and as member of the Board of Directors of The Critical Path Institute from 2006 to 2010, and as Medical Director of Gene Logic, Inc. from 1999 to 2006. From 1989 to 2005, he was Professor and Chairman of the Department of Pathology at Georgetown University Medical Center where he was the Oscar Benwood Hunter Chair of Pathology. He also served as Senior Investigator in Hematopathology at the National Cancer Institute from 1981 to 1989. Dr. Cossman holds a B.S. from the University of Michigan and an M.D. from the University of Michigan Medical School. He is board-certified in Pathology and trained in Pathology and Hematopathology at the University of Michigan, Stanford University and the National Institutes of Health. The Board believes that, as former Chairman of the Department of Pathology of Georgetown University, a premier academic institution, Dr. Cossman provides significant insight and guidance as to how the company should execute on its model. Furthermore, his experience in the molecular diagnostics field is significant to the Company’s strategy. He is a pioneer of the field of Molecular Diagnostics and invented some of the first DNA-based molecular diagnostic tests for cancer, which are now in worldwide clinical use.

Kathleen D. LaPorte

 

Ms. LaPorte, age 62, was appointed as a director of the Company in 2018. Ms. LaPorte is an executive and past venture capital investor with 35 years’ experience building innovative life sciences companies. Ms. LaPorte served as general partner with Sprout Group from 1993 to 2005. Ms. LaPorte was one of the founders of New Leaf Venture Partners in 2005 and stayed with New Leaf Venture Partners until 2011. She was a co-founder of HealthTech Capital, a group of healthcare technology focused private and corporate investors. From 2014 to 2016, Ms. LaPorte served as chief business officer and later as CEO of Nodality Inc., an immuno-oncology diagnostics company. In addition to the above, Ms. LaPorte served as a member of the audit committee of Affymax, Inc., from 2002 to 2013. Ms. LaPorte is an independent consultant and currently serves as a director and audit committee chair of Bolt Biotherapeutics, Inc. (NASDAQ: BOLT ) and Q32Bio (NASDAQ: QTTB). She also serves as director and compensation committee chair of 89bio, Inc. NASDAQ: ETNB and of CERo Theraputics NASDAQ: CERO, and on several private company boards. Ms. LaPorte has a B.S. in biology from Yale University and an MBA from Stanford University Graduate School of Business. Ms. LaPorte’s experience complements the diverse expertise of our board with relevant skills and network from her years of involvement within the diagnostic sphere.

13

Richard Sandberg, Chairman

 

Mr. Sandberg, age 81, was appointed as director of the Company in 2019 and has served as our Chairman of the Board of directors since March 2021. Mr. Sandberg is a seasoned executive with a substantial track record as an executive in and a director of emerging diagnostic companies like Precipio. In 1984, Mr. Sandberg founded Dianon Systems, Inc., a leading anatomic pathology laboratory which went public in the United States in 1991 and served at various times as its chairman, chief executive officer, and chief financial officer until 1995. More recently, Mr. Sandberg served from 2008 to June of 2019 as chairman of Oxford Immunotec Global PLC which went public in the United States in 2012 and as a director from 2008 until its sale to PerkinElmer, Inc. in March, 2021. Between those assignments, he served as chairman and chief financial officer of Lifecodes Corporation, a privately held pioneer in DNA testing technology; chief financial officer and director of Matritech, Inc., a publicly traded biotechnology company specializing in proteomic diagnostic products for the early detection of a variety of cancers; and as chief financial officer of Critical Diagnostics Inc, a privately held company specializing in developing new diagnostic tests for cardiology. Since 2017, Mr. Sandberg has served as the chairman and chief executive officer of Resolys Bio, Inc., a privately held pharmaceutical company focused on treating chronic traumatic brain injury. Mr. Sandberg brings substantial market, operational, and financial experience to the Board which can contribute to the Company’s board decisions on strategy and execution.

Ron A. Andrews

 

Mr. Andrews, age 64, was appointed a director of the Company in March 2021. Mr. Andrews is currently CEO and Board member of TwinStrand Biosciences, a genomic biotech company focused on Mutagenesis and Off Target Gene Editing in Cell Therapy. Prior to that, he was the Managing Partner of pH Blueprint, a strategic advisory firm supporting companies in the Diagnostics and Molecular Diagnostics markets. He served as the President and Chief Executive Officer of Oncocyte Corporation (OCX:NASDAQ) from July 1, 2019 to December 2022. Mr. Andrews is the founder and former principal of the Bethesda Group, a consulting firm that advises companies in the molecular diagnostics and genomics fields. Prior to founding the Bethesda Group Psychological Services, LLC in 2015, Mr. Andrews served as President of the Genetic Sciences Division of Thermo Fisher Scientific Inc. (“Thermo Fisher”) from September 2013 to December 2014, and as the President of Medical Sciences Venture for Life Technologies Corporation (“Life Technologies”) from February 2012 to September 2013 when Life Technologies was acquired by Thermo Fisher. From 2004 to December 2010, Mr. Andrews was the Chief Executive Officer and Vice Chairman of the Board of Directors of Clarient, Inc.(CLRT: NASDAQ), a cancer diagnostics company. From December 2010 to February 2012, he served as CEO of GE Molecular Diagnostics after Clarient was acquired by GE Healthcare. Mr. Andrews also held management positions with companies in diagnostics and related medical fields, including Roche Molecular Diagnostics, Immucor, Inc., and Abbott Laboratories. Mr. Andrews has served as the Executive Chairman of SimBioSys, Inc, a private Chicago based AI company, since fall of 2022. Mr. Andrews was also a member of the Board of Governors of CancerLinQ LLC, a wholly-owned non-profit

14

subsidiary of the American Society of Clinical Oncology from 2016 until December of 2023. Mr. Andrews Graduated from Wofford College in 1981 with degrees in Biology and Chemistry. Mr. Andrews’ focus on democratizing important academic capabilities to empower community oncologists and pathologists with diagnostic tools that enable accurate, rapid delivery of important information allowing them to provide the best care for their patient is of significant value to the Company growing its products business.

 

Ms. Christina R. Valauri, age 68, was appointed as a director of the Company in January 2024. Ms. Valauri has over 30 years of experience in the capital markets holding leadership roles as a healthcare analyst, director of research and senior manager at several investment banks and global financial firms. Ms. Valauri was a healthcare equity research analyst from June 1984 to December 1999, primarily focused on the biotechnology and medical technology sectors and held this position at the following firms: Credit Lyonnais Securities (USA), Inc. April 1998 to December 1999 (acquired by Credit Agricole 2003). Grunthal & Company October 1996 to March 1998, Hancock Institutional Equities Services August 1995 to October 1996, Arnhold and S. Bleichroeder April 1994 to July 1995, Paine Webber Incorporated October 1987 to March 1994 (acquired by UBS 2000), and Arnhold and S. Bleichroeder February 1984 to September 1987. Ms. Valauri held senior equity research management roles from April 1998 to December 2015. Ms. Valauri served as a Global Head of Equity Research at Cantor Fitzgerald LLC from August 2013 to July 2015, and served as a US Director of Research at Natixis (USA) from December 2008 to September 2012 as well as serving from September 2012 to July 2013 as a senior member of the firm’s broker dealer management team for Natixis Securities Americas LLC., which provided regulatory and supervisory oversight. Prior to joining Natixis Ms. Valauri was the Director of Research at Broadpoint Securities Group, Inc. (broker-dealer subsidiary of First Albany Cos. Inc.) from April 2001 to October 2008, where she also served on firm’s equity capital markets management team over that timeframe, and held the position of Associate Director of Research at ING Barings LLC (USA) from September 2000 to February 2001 (acquired by ABNAMRO 2001), and was the Director of US Research at Credit Lyonnais from April 1998 to September 2000 (acquired by Credit Agricole 2003). Her background in equity securities research has provided a deep base of knowledge and experience in pharmaceutical, biotech, and med-tech companies. She has been recognized by the Wall Street Journal’s “Best on the Street” All-Star Analyst Survey. Ms. Valauri has been the founder and CEO of Sagestone Advisory, LLC since July 2017, where she is also a business strategy consultant. Ms. Valauri currently serves as an Entrepreneur In Residence at Weill Cornell Medicine BioVenture eLab, since July 2023 and a Senior Mentor since April 2021. She is an advisor to early stage private and public companies and has been an angel investor for over 20 years. Ms. Valauri earned her B.A. in Biology from Reed College, and an MBA from Cornell University Johnson School of Management Class of 2020.

Resignation of Douglas Fisher

Effective January 3, 2024, Dr. Douglas Fisher resigned from the Board, the Audit Committee and Compensation Committee. The Board accepted that Dr. Fisher become an observer, and in such capacity, Dr. Fisher will attend, in a non-voting observer capacity, all meetings of the Board.

Code of Business Conduct and Ethics

The Code of Business Conduct and Ethics is available in the Investor Relations section of our website at https://www.precipiodx.com/wp-content/uploads/2022/08/Code-of-Business-Conduct.pdf. To satisfy our disclosure requirements under Item 5.05 of Form 8-K, we will disclose amendments to, or waivers of, certain provisions of our Code of Business Conduct and Ethics relating to our chief executive officer, chief financial officer, chief accounting officer, controller or persons performing similar functions on our website promptly following the adoption of any such amendment or waiver. The Code provides that any waivers of, or changes to, the Code that apply to the Company’s executive officers or directors may be made only by the Audit Committee. In addition, the Code includes updated procedures for non-executive officer employees to seek waivers of the Code.

15

Corporate Governance

Our Board has determined that having an independent director serve as the Chairperson of the Board is in the best interests of our stockholders. Our Chairperson of the Board is Mr. Richard Sandberg. We believe that this leadership structure enhances the accountability of our CEO to the Board and strengthens the Board’s independence from management. Our Board recognizes the time, effort, and energy that the chief executive officer is required to devote to his position in the current business environment, as well as the commitment required to serve as our chairperson, particularly as the board of directors’ oversight responsibilities continue to grow. While both Mr. Sandberg and Mr. Danieli are actively engaged in significant matters affecting our Company, such as long-term strategy, we believe splitting these leadership positions enables Mr. Danieli to focus his efforts on running our business and managing our Company while permitting Mr. Sandberg to focus on the governance of our Company, including Board oversight.

Director Attendance at Meetings

Our Board conducts its business through meetings, both in person and telephonic and by actions taken by written consent in lieu of meetings. During the fiscal year ended December 31, 2023, our Board held ten (10) meetings. Five (5) of these meetings were held in person or by telephone and five (5) were through written consent. All directors attended 100% of the meetings of our Board and of the committees of our Board on which they served during the fiscal year ended December 31, 2023. Our Board encourages all directors to attend our annual meetings of stockholders unless it is reasonably unpracticable for a director to do so.

Executive Sessions

Executive sessions, which are meetings of the non-management members of the Board, are regularly scheduled throughout the year. In addition, at least twice a year, the independent directors meet in a private session that excludes management and any non-independent directors. Each executive session of the independent directors are presided over by the Chair of the Board, if the Chair of the Board qualifies as independent, or by the lead director, if the Chair of the Board does not qualify as independent.

Director Attendance at Annual Meetings of Stockholders

We do not have a formal policy regarding the attendance of our Board members at our annual meetings of stockholders, but we expect all directors to make every effort to attend any meeting of stockholders.

COMMITTEES OF OUR BOARD OF DIRECTORS

Our Board has established and delegated certain responsibilities to its standing Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee.

Audit Committee

We have a separately designated standing Audit Committee established in accordance with Section 3(a)(58)(A) of the Exchange Act. The Audit Committee’s primary duties and responsibilities include monitoring the integrity of our consolidated financial statements, monitoring the independence and performance of our independent registered public accounting firm, and monitoring our compliance with applicable legal and regulatory requirements. The functions of the Audit Committee also include reviewing periodically with our independent registered public accounting firm the performance of the services for which they are engaged, including reviewing the scope of the annual audit and its results, reviewing with management and the auditors the adequacy of our internal accounting controls, reviewing with management and the auditors the financial results prior to the filing of quarterly and annual reports, reviewing fees charged by our independent registered public accounting firm and reviewing any transactions between our Company and related parties. Our independent registered public accounting firm reports directly and is accountable solely to the Audit Committee. The Audit Committee has the sole authority to hire and fire the independent registered public accounting firm and is responsible for the oversight of the performance of their duties, including ensuring the independence of the independent registered public accounting firm. The Audit Committee also approves in advance the retention of, and all fees to be paid to, the independent registered public accounting firm. The rendering of any auditing services and all non-auditing services by the independent registered public accounting firm is subject to prior approval of the Audit Committee.

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The Audit Committee operates under a written charter which is available in the Investor Relations section of our website at www.precipiodx.com. The Audit Committee is required to be composed of directors who are independent under the rules of the SEC and Nasdaq’s listing standards.

Fiscal year 2023 activity

During fiscal year ended December 31, 2023, the Audit Committee fulfilled its duties and responsibilities as outlined in the charter. The Committee meets at least twice each quarter; once in connection with quarterly Board meetings and once to review the quarterly Form 10-Q or annual Form 10-K. In addition, the Committee meets as needed to address emerging accounting, compliance, or other matters or for educational training. Specifically, the Committee:

• Reviewed and discussed with management and the independent registered public accounting firm the Company’s consolidated financial statements and related periodic reports filed with the SEC;

• Met in periodic executive sessions with each of management and the independent registered public accounting firm to discuss the results of the audit by the independent auditors, their evaluations of internal controls, and the overall quality of the Company’s financial reporting, and any other matters as appropriate; and

• Reviewed the Company’s related party transactions and Policy for Related Party Transactions.

The current members of the Audit Committee are directors Ms. LaPorte, the chairperson of the Audit Committee, Mr. Sandberg and Mr. Cohen, all of whom have been determined by the Board to be independent under the Nasdaq listing standards and rules adopted by the SEC applicable to audit committee members. The Board has determined that Ms. LaPorte, Mr. Sandberg and Mr. Cohen each qualifies as an “audit committee financial expert” under the rules adopted by the SEC and the Sarbanes Oxley Act of 2002. The Audit Committee met eight (8) times during the fiscal year ended December 31, 2023. Four (4) times were during each of the quarterly meetings and four (4) additional were telephonic meetings in conjunction with the filings of the quarterly and annual reports of the Company. The Audit Committee did not take any actions by written consent.

Compensation Committee

The primary duties and responsibilities of our standing Compensation Committee are to review, modify and approve the overall compensation policies for the Company, including the compensation of the Company’s Chief Executive Officer and other senior management; establish and assess the adequacy of director compensation; and approve the adoption, amendment and termination of the Company’s stock option plans, pension and profit sharing plans, bonus plans and similar programs. The Compensation Committee may delegate to one or more officers the authority to make grants of options and restricted stock to eligible individuals other than officers and directors, subject to certain limitations. Additionally, the Compensation Committee has the authority to form subcommittees and to delegate authority to any such subcommittee. The Compensation Committee also has the authority, in its sole discretion, to select, retain and obtain, at the expense of the Company, advice and assistance from internal or external legal, accounting or other advisors and consultants. Moreover, the Compensation Committee has sole authority to retain and terminate any compensation consultant to assist in the evaluation of director, Chief Executive Officer or senior executive compensation, including sole authority to approve such consultant’s reasonable fees and other retention terms, all at the Company’s expense.

The Compensation Committee considers the risks associated with our compensation policies and practices with respect to both executive compensation and compensation generally. The Compensation Committee considers the Company’s long-standing culture, which emphasizes incremental continuous improvement and sustained long-term stockholder value creation, and ensures that these factors are reflected in the design of the Company’s compensations plans. Our compensation program is structured so that a considerable amount of our incentive-eligible employees’ compensation is tied to the long-term health of the Company. We avoid the type of disproportionately large, annual incentives that could encourage employees to take risks that may not be in our stockholder’s long-term interests and we weight our management’s incentive compensation toward profitability and long-term performance decisions.

The Compensation Committee operates under a written charter which is available on our website at www.precipiodx.com. All members of the Compensation Committee must satisfy the independence requirements of Nasdaq applicable to compensation committee members. The members of the Compensation Committee are not and have never been officers or employees of the Company or any of its subsidiaries. No directors or executive officers of our Company serve on the compensation committee of another company of which a member of our Compensation Committee is an officer.

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The Compensation Committee currently consists of directors Mr. Cohen who is acting as the chairperson of the Committee and Mr. Andrews. Each of the Compensation Committee members has been determined by the Board to be independent under Nasdaq listing standards applicable to compensation committee members. The Compensation Committee met five (5) times during the fiscal year ended December 31, 2023, once during each of the quarterly meetings and one (1) additional telephonic meetings.

Nominating and Corporate Governance Committee

The Nominating and Corporate Governance Committee identifies, reviews and evaluates candidates to serve on the Board; reviews and assesses the performance of the Board and the committees of the Board; and assesses the independence of our directors. The Nominating and Corporate Governance Committee is also responsible for reviewing the composition of the Board’s committees and making recommendations to the entire Board regarding the chairpersonship and membership of each committee. In addition, the Nominating and Corporate Governance Committee is responsible for developing corporate governance principles and periodically reviewing and assessing such principles, as well as periodically reviewing the Company’s policy statements to determine their adherence to the Company’s Code of Business Conduct and Ethics.

The Nominating and Corporate Governance Committee has adopted a Director Nominees Consideration Policy, whereby Board candidates are identified primarily through suggestions made by directors, management and stockholders of the Company. We have implemented no material changes to the procedures by which stockholders may recommend nominees for the Board. The Nominating and Corporate Governance Committee will consider director nominees recommended by stockholders that are submitted in writing to the Company’s Corporate Secretary in a timely manner and which provide necessary biographical and business experience information regarding the nominee. The Nominating and Corporate Governance Committee has reviewed its Director Nominee Consideration Policy and it does not intend to alter the manner in which it evaluates candidates, including the criteria considered by the Nominating Committee, based on whether or not the candidate was recommended by a stockholder. The Board does not prescribe any minimum qualifications for director candidates, and all candidates for director will be evaluated based on their qualifications, diversity, age, skill and such other factors as deemed appropriate by the Nominating and Corporate Governance Committee given the current needs of the Board, the committees of the Board and the Company.

We consider diversity, such as gender, race, ethnicity and membership of an underrepresented communities, among those meaningful factors in identifying and considering director nominees, but do not have a formal diversity policy. The Board evaluates each individual in the context of the Board as a whole, with the objective of assembling a group that can best perpetuate the success of the business and represent stockholder interests through the exercise of sound judgment using its diversity of experience and background in these various areas.

Absent other factors which may be material to its evaluation of a candidate, the Nominating and Corporate Governance Committee expects to recommend to the Board for selection incumbent directors who express an interest in continuing to serve on the Board. Following its evaluation of a proposed director’s candidacy, the Nominating and Corporate Governance Committee will make a recommendation as to whether the Board should nominate the proposed director candidate for election by the stockholders of the Company. Kathleen LaPorte and Ron Andrews. the director nominees to be elected at the Annual Meeting, were each initially recommended for reelection to our Board by other members of the Board serving at the time and by members of management. In determining to nominate each director nominee at this Annual Meeting, the nominating and corporate governance committee and Board evaluated each nominee in accordance with our standard review process for director candidates in connection with a director’s initial appointment and his or her nomination for election or re-election, as applicable, at the Annual Meeting.

When considering whether the directors and nominees have the experience, qualifications, attributes and skills, taken as a whole, to enable the Board to satisfy its oversight responsibilities effectively in light of our business and structure, the Board focused primarily on the information discussed in each of the board member’s biographical information set forth above. We believe that our directors provide an appropriate mix of experience and skills relevant to the size and nature of our business. This process resulted in the Board’s nomination of the incumbent directors named in this Proxy Statement and proposed for election by you at the Annual Meeting.

The Nominating and Corporate Governance Committee operates under a written charter which is available on our website at www.precipiodx.com. No member of the Nominating and Corporate Governance Committee may be an employee of the Company and each member must satisfy the independence requirements of Nasdaq and the SEC.

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The Nominating and Corporate Governance Committee currently consists of directors Dr. Cossman, who serves as chairperson of the committee, and Ms. Valauri, each of whom has been determined by the Board to be independent under the Nasdaq listing standards. The Nominating and Corporate Governance Committee met five (5) times in the fiscal year ended December 31, 2023, once during each of the quarterly meetings and one additional telephonic meeting in which the appointment of Ms. Valauri to the Board of Directors considered by the members of the committee.

The following matrix highlights the mix of key skills, qualities, attributes, and experiences of the board members that, among other factors, led the Nominating and Corporate Committee to recommend the individuals for election to the Board. The matrix is intended to depict notable areas of focus for each director, and not having a mark does not mean that a particular director does not possess that qualification or skill. Nominees have developed competencies in these skills through education, direct experience, and oversight responsibilities. Additional biographical information on each nominee is set out below starting on page 10 above.

Director Skills

	Sandberg	Danieli	LaPorte	Valauri	Cossman	Cohen	Andrews
Core
Leadership	•	•	•	•	•	•	•
Corporate Governance	•	•	•	•	•	•	•
Risk Management	•	•	•	•	•	•	•
Financial	•	•	•	•	•	•	•
Strategic
Global Business and Operations	•	•	•	•	•	•	•
Brand and Marketing	•	•	•		•	•
People and Culture	•	•	•	•	•	•	•
Innovation and Technology	•	•			•		•

Diversity is one factor considered when considering candidates to serve on the Board of Directors. The Board believes that diversity supports its goal of best serving the Company and our shareholders, customers, and employees. The below table provides a summary view of the diversity attributes of the Board of Directors as of the Record Date. Each of the categories listed in the table below has the meaning as it is used in Nasdaq Rule 5605(f). The demographic information presented below is based on voluntary self-identification by each nominee.

Board Diversity Matrix (As of April 30, 2024)

Board Size:
Total Number of Directors	7

Gender:	Male	Female	Non- Binary	Gender Undisclosed
Number of directors based on gender identity	4	2	—	1
Number of directors who identify in any of the categories below:
African American or Black		—	—	—
Alaskan Native or American Indian	—	—	—	—
Asian	—	—	—	—
Hispanic or Latinx		—	—	—
Native Hawaiian or Pacific Islander	—	—	—	—
White	4	2	—
Two or More Races or Ethnicities	—	—	—	—
LQBTQ+	—
Undisclosed				1

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To see our Board Diversity Matrix as of April 13, 2023, please refer to our definitive proxy statement filed with the SEC on April 25, 2023.

Corporate Governance Best Practice summary

Precipio’s Board oversees the CEO and other senior management in the competent and ethical operation of Precipio, Inc. on a day-to-day basis and assures that the long-term interests of stockholders are being served.

Board Composition and Independence	Board and Committee Practices	Stockholder Rights
• All directors are independent except CEO   • Separation of the Chair and CEO roles   • 100% independent committees   • Executive sessions provided for all quarterly Board and committee meetings   • Board has significant interaction with senior management and access to other employees	• All members of the Audit Committee are financial experts   • 100% attendance by directors at Board and committee meetings in 2023   • Commitment to diversity of board composition in terms of gender, race, national origin, education, professional experience, geographic representation and difference in viewpoints and skills	• Annual elections for directors depending on their class   • Proxy access for stockholders

Oversight of Risk Management

Risk is inherent with every business, and how well a business manages risk can ultimately determine its success. We face a number of risks, including economic risks, financial risks, legal and regulatory risks and others, such as the impact of competition. Management is responsible for the day-to-day management of the risks that we face, while our Board, as a whole and through its committees, has responsibility for the oversight of risk management. In its risk oversight role, our Board is responsible for satisfying itself that the risk management processes designed and implemented by management are adequate and functioning as designed. Our Board assesses major risks facing our Company and options for their mitigation in order to promote our stockholders’ interests in the long-term health of our Company and our overall success and financial strength. A fundamental part of risk management is not only understanding the risks a company faces and what steps management is taking to manage those risks, but also understanding what level of risk is appropriate for us. The involvement of our full Board in the risk oversight process allows our Board to assess management’s appetite for risk and also determine what constitutes an appropriate level of risk for our Company. Our Board regularly includes agenda items at its meetings relating to its risk oversight role and meets with various members of management on a range of topics, including corporate governance and regulatory obligations, operations and significant transactions, risk management, insurance, pending and threatened litigation and significant commercial disputes.

While our Board is ultimately responsible for risk oversight, various committees of our Board oversee risk management in their respective areas and regularly report on their activities to our entire Board. In particular, the Audit Committee has the primary responsibility for the oversight of financial risks facing our Company. The Audit Committee’s charter provides that it will discuss our major financial risk exposures and the steps we have taken to monitor and control such exposures. Our Board has also delegated primary responsibility for the oversight of all executive compensation and our employee benefit programs to the Compensation Committee. The Compensation Committee strives to create incentives that encourage a level of risk-taking behavior consistent with our business strategy.

We believe the division of risk management responsibilities described above is an effective approach for addressing the risks facing our Company and that our Board’s leadership structure provides appropriate checks and balances against undue risk taking.

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Employee Compensation Risks

As part of its oversight of our executive compensation program, the compensation committee considers the impact of our executive compensation program, and the incentives created by the compensation awards that it administers, on our risk profile. In addition, the compensation committee reviews the compensation policies and procedures for all employees, including the incentives that they create and factors that may reduce the likelihood of excessive risk taking, to determine whether they present a significant risk to us. The compensation committee has determined that, for all employees, our compensation programs are not reasonably likely to have a material adverse effect on us.

Communications with the Board of Directors

Stockholders and other parties may communicate directly with the Board of Directors or the relevant board member by addressing communications to:

Precipio, Inc.

c/o Corporate Secretary

4 Science Park

New Haven, CT 06511

You may submit your concern anonymously or confidentially by postal mail. You may also indicate whether you are a stockholder, customer, supplier, or other interested party. All stockholder correspondence will be compiled by our corporate secretary. Communications will be distributed to the Board of Directors, or to any individual director or directors as appropriate, depending on the facts and circumstances outlined in the communications. A copy of any such written communication may also be forwarded to Precipio’s legal counsel and a copy of such communication may be retained for a reasonable period of time. The director may discuss the matter with Precipio’s legal counsel, with independent advisors, with non-management directors, or with Precipio’s management, or may take other action or no action as the director determines in good faith is necessary, using reasonable judgment, and applying his or her own discretion. Items that are unrelated to the duties and responsibilities of the Board of Directors may be excluded, such as:

• junk mail and mass mailings;

• resumes and other forms of job inquiries;

• surveys; and

• solicitations and advertisements.

In addition, any material that is unduly hostile, threatening, or illegal in nature may be excluded, provided that any communication that is filtered out will be made available to any independent director upon request.

The audit committee oversees the procedures for the receipt, retention, and treatment of complaints received by Precipio, Inc. regarding accounting, internal accounting controls, or audit matters, and the confidential, anonymous submission by employees and third parties of concerns regarding questionable accounting, internal accounting controls or auditing matters. We have also established a toll-free telephone number for the reporting of such activity, which is 1-844-703-8157.

Director Independence

Our Company is governed by our Board. Currently, each member of our Board, other than Ilan Danieli, our Chief Executive Officer, is an independent director and all standing committees of our Board are composed entirely of independent directors, in each case under Nasdaq’s independence definition applicable to boards of directors. For a director to be considered independent, our Board must determine that the director has no relationship which, in the opinion of our Board, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. Members of the Audit Committee also must satisfy a separate SEC independence requirement, which provides that they may not accept directly or indirectly any consulting, advisory or other compensatory fee from us or any of our subsidiaries other than their directors’ compensation. In addition, under SEC rules, an Audit Committee member who is an affiliate of the issuer (other than through service as a director) cannot be deemed to be independent. In determining the independence of members of the Compensation Committee, Nasdaq listing standards require our Board to consider certain factors, including but not limited to: (1) the source of compensation of the

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director, including any consulting, advisory or other compensatory fee paid by us to the director, and (2) whether the director is affiliated with us, one of our subsidiaries or an affiliate of one of our subsidiaries. Under our Compensation Committee Charter, members of the Compensation Committee also must qualify as “outside directors” for purposes of Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”), and as “non-employee directors” for purposes of Rule 16b-3 under the Exchange Act. The independent members of the Board are Ms. LaPorte, Dr. Cossman, M.D., Ms. Valauri, Mr. Andrews, Mr. Sandberg, and Mr. Cohen.

Family Relationships

There are no family relationships among the officers and directors, nor are there any arrangements or understanding between any of the Directors or Officers of our Company or any other person according to which any Officer or Director was or is to be selected as an officer or director.

Involvement in Certain Legal Proceedings

During the past ten years, none of our directors, executive officers, promoters, control persons, or nominees has been:

• the subject of any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years before that time;

• convicted in a criminal proceeding or is subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);

• subject to any order, judgment, or decree, not subsequently reversed, suspended, or vacated, of any court of competent jurisdiction or any Federal or State authority, permanently or temporarily enjoining, barring, suspending, or otherwise limiting his involvement in any type of business, securities or banking activities;

• found by a court of competent jurisdiction (in a civil action), the Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law;

• the subject of, or a party to, any Federal or State judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of (a) any Federal or State securities or commodities law or regulation; (b) any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order; or (c) any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or

• the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26))), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.

Related Person Transactions

There have been no transactions since January 1, 2022 to which we have been a participant in which the amount involved exceeded or will exceed $120,000 or one percent of the average of our total assets at year-end for the last two completed fiscal years, and in which any of our directors, executive officers or holders of more than 5% of our capital stock, or any members of their immediate family, had or will have a direct or indirect material interest, other than compensation arrangements which are described under “Executive Compensation” and “Director Compensation,” and other than the transactions described below.

As disclosed in the Company’s Form 8-K filed on April 23, 2018 and amended on April 26, 2018, on April 20, 2018, the Company entered into a securities purchase agreement (the “2018 Note Agreement”) with certain investors (the “April 2018 Investors”), pursuant to which the Company would issue up to approximately (i) $3,296,703 in Senior Secured Convertible Promissory Notes with an interest rate of 8% per annum and an original issue discount of 9% (the “ Bridge Notes”) and (ii) warrants in an amount equal to the number of shares of common stock issuable upon conversion of the Bridge Notes based on the conversion price at the time of issuance (the “Convertible Debt Transaction”). Some of the warrants were issued with a one-year term and some with a five-year term.

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As previously disclosed in our 2021 Proxy Statement filed on Form DEF 14A with the SEC on April 29, 2021, since April 2018, we amended the terms of the Bridge Notes and warrants issued in connection therewith. In connection with this transaction, a member of our board of directors, Mr. David S. Cohen, was issued an aggregate of $439,560 in principal of the Bridge Notes and issued warrants to purchase 3,797 shares of our common stock. The Bridge Notes issued to Mr. Cohen have been converted into 37,242 shares of common stock. See “SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT” for more information related to Mr. Cohen’s ownership of our securities.

Environmental, Social and Governance (“ESG”) Practices.

We recognize the growing investor interest in “Environmental, Social, and Corporate Governance” (ESG) frameworks. Our long-term success is built and dependent on the long-term, sustainable success of all who live, work and do business in the communities we serve. Our ESG is guided by our common purpose and Mission: Providing Quality Patient Care by developing Innovative Cutting-Edge Technologies to Eradicate Misdiagnosis. We do so by providing uncompromising quality, exceptional service and innovative solutions and by adhering to our core Values: Innovation, Continued Learning, Team-Work and Accountability.

We believe that delivering on our mission requires instituting a high standard of corporate responsibility for the benefit of all of our stakeholders. Further, we believe that this broader view of corporate purpose is expected by our stakeholders, will better serve these stakeholders, and will ultimately create long-term value.

Our Company is at the forefront of a revolution in cancer care and is committed to helping physicians provide accurate, appropriate, and targeted treatments for their patients. Our investments in human capital management, patient advocacy, and community outreach initiatives, along with our commitment to advancing environmental sustainability initiatives, are the foundation of our strategic goals and our Company beliefs.

We view our ESG and corporate sustainability responsibility through several important perspectives such as Good Corporate Citizenship, Business Conduct, Ethics, and Culture. Below we describe some of our guiding principles:

Code of Business Conduct and Ethics: We view good governance as essential to creating and preserving value for our shareholders. Our directors and employees conduct themselves under the highest moral and ethical standards, informed by a robust Code of Business Conduct and Ethics. We are committed to ensuring a fair workplace for our employees as well as partners and customers with whom we do business. We have strict policies to protect against unlawful discrimination and harassment. We have an Open-Door Policy to encourage honest and direct communication to resolve issues and concerns expeditiously. We also have an Ethics Hotline that provides an alternative and anonymous method of reporting suspected compliance violations, unlawful or unethical behavior, or fraud.

Holding Ourselves Accountable: We have an effective and highly experienced Board of Directors which staffs/operates three committees: Audit, Compensation, and Nominating & Corporate Governance. We promote board independence and embrace board diversity in all its facets, including skills, experience, gender, ethnicity, and race. Our Corporate Governance Guidelines outline key principles and rules to help our Board of Directors exercise its responsibilities and serve the interests of the company and its stockholders.

Corporate Culture. We strive to promote a corporate culture through employee engagement, training and Development, Life-work balance, and communication initiatives. We create a fun, good-spirited work environment that rewards innovation and collaboration at all levels. Management is encouraged to demonstrate an “open door policy”. We hold periodic employee appreciation events. We have an unlimited PTO policy which we periodically review to ensure employees are taking sufficient time off. We encourage our managers to ensure that our team takes personal time off so that they can enjoy a good healthy lifestyle, balancing between work and personal time.

Human Capital Management: Human capital management, including the recruitment and retention of a talented, diverse and highly motivated workforce, is an essential component of our strategy for long-term value creation. Our commitment to maintaining an excellent workplace includes investing in ongoing opportunities for employee development in a diverse and inclusive environment. We also aim to foster both personal and professional growth for employees at all levels of the organization through annual performance reviews, role-specific training and professional development opportunities.

Diversity: Diversity in gender and ethnicity is well-established within our workforce. We embrace and value diversity in all its forms, whether gender, age, ethnicity or cultural background. Equal opportunity is integral to our

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recruitment process, as we aim to develop a community of diverse talent. We seek to maintain a positive workplace, free from discrimination and harassment. We believe that a diverse and inclusive workforce where different perspectives are recognized and respected, positively impacts our performance and strengthens our culture.

Environmental and Social Responsibility. We are committed to conducting business in a responsible manner that provides a safe workplace for our employees, protects the environment, and is consistent with our values as a good corporate citizen. We encourage recycling at our offices and limit the use of paper and other consumables to the extent possible to protect the environment. We have a long history of providing meaningful, and often transformational, support to the communities in which we operate. For example, on an annual basis we partner with Salvation Army “Adopt-A-Family” program, a program that matches sponsors with families in need for the holidays, and the sponsors then provide a grocery voucher for a holiday meal and gifts for each child 15 and under.

Our Board plays a critical role in overseeing the potential impact of ESG matters on the Company’s operations and business, with specific oversight responsibilities being delegated to its Nominating and Corporate Governance Committee. We will continue to invest in our employees, culture, community partnerships and outreach, and our environmental efforts, and will continue to report on other ESG and corporate sustainability measures over time. As we build a world-class company to deliver on our mission, we will provide more details around material ESG and sustainability risks.

Insider Trading and Anti-Hedging Policy

We have adopted an insider trading policy that, among other things, expressly prohibits all of our employees, including our named executive officers, as well as our directors, and certain of their family members and related entities, from engaging in short sales of our securities, purchases or sales of puts, calls or other derivative securities based on our securities; and purchases of financial instruments (including prepaid variable forward contracts, equity swaps, collars and exchange funds) that are designed to hedge or offset any decrease in the market value of our securities.

Compensation Recovery (clawback) Policy

As a matter of policy, we have implemented compensation recovery “clawback” provisions for incentive awards that are provided to Executive Officers and based on Company financial metrics. These “clawback” provisions allow the Company to recoup awards that have been previously paid/awarded under certain circumstances such as a material misstatement of financial performance. The clawback right has also been extended to instances where the Named Executive Officers have engaged in intentional misconduct in the performance of their duties to the Company or otherwise violated the Company’s Code of Business Conduct in any material respect.

In October 2022, the SEC adopted a final rule directing national securities exchanges and associations, including the Nasdaq, to implement listing standards that require listed companies to adopt policies mandating the recovery or “clawback” of excess incentive-based compensation earned by a current or former executive officer during the three fiscal years preceding the date the listed company is required to prepare an accounting restatement, including to correct an error that would result in a material misstatement if the error were corrected in the current period or left uncorrected in the current period. The Nasdaq’s listing standards pursuant to the SEC’s rule became effective for incentive-based compensation received on or after October 2, 2023. We adopted a Compensation Recovery Policy pursuant to the Nasdaq listing standards on June 21, 2023. The policy has been filed as Exhibit 97 to the Company’s 2023 Annual Report.

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DIRECTOR COMPENSATION

It is our Board’s general policy that compensation for independent directors should be a mix of cash and equity-based compensation. As part of a director’s total compensation, and to create a direct linkage between corporate performance and stockholder interests, our Board believes that a meaningful portion of a director’s compensation should be provided in, or otherwise based on, the value of appreciation in our common stock.

Our Board has the authority to approve all compensation payable to our directors, although our Compensation Committee is responsible for making recommendations to our Board regarding this compensation. Additionally, our Chief Executive Officer may also make recommendations or assist our Compensation Committee in making recommendations regarding director compensation. Our Board and Compensation Committee annually review our director compensation.

Compensation

Directors who are also our employees are not separately compensated for serving on the Board other than reimbursement for out-of-pocket expenses related to attendance at Board and committee meetings. Independent directors are paid an annual retainer of $35,000 and receive reimbursement for out-of-pocket expenses related to attendance at Board and committee meetings. Independent directors serving as Chairman of the Board receive an additional annual retainer of $23,500. Independent directors serving as members on the Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee receive an additional annual retainer of $7,500, $5,000 and $4,000, respectively. The chairperson of the Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee receives an additional annual retainer of $15,000, $10,000 and $7,000, respectively.

The above-described cash retainers are paid quarterly in arrears and the Board may, in its discretion, permit a non-employee director to elect to receive any portion of his or her cash retainers in the form of shares of our common stock in lieu of cash. Our non-employee directors are also reimbursed for their business-related expenses incurred in connection with attendance at Board and Committee meetings and related activities,

In the fiscal year ended December 31, 2023, the directors were granted non-qualified options to purchase shares of our common stock.

Director Summary Compensation Table

The following table provides information regarding our compensation for non-employee directors during the fiscal year ended December 31, 2023. During the fiscal year ended December 31, 2023, one employee, Ilan Danieli, served as a member of our board of directors as well as an employee. Directors who are our employees did not receive compensation for serving on the Board or its committees in the fiscal year ended December 31, 2023, and their compensation is outlined in the “Summary Compensation Table” below.

Name	Fees Earned or Paid in Cash ($)(3)(4)	Option Awards ($)(1)(2)	All Other Compensation ($)(5)	Total ($)
David S. Cohen	39,000	17,805	2,925	59,730
Douglas Fisher	52,500	17,805	3,938	74,243
Jeffrey Cossman	42,000	17,805	4,200	64,005
Kathleen D. LaPorte	50,000	17,805	5,000	72,805
Richard Sandberg	75,000	17,805	5,625	98,430
Ron A. Andrews	40,000	17,805	3,000	60,805

(1)
The amount in this column reflects the aggregate grant date fair value of each stock award granted in accordance with ASC 718, excluding the effect of estimated forfeitures. The amounts shown may not correspond to the actual value that may be recognized. For a full description of the assumptions we use in calculating these amounts, see Note 12 to our audited financial statements for fiscal year ended December 31, 2023, which is included in our 2023 Annual Report. Our directors will only realize compensation to the extent the trading price of our common stock is greater.

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(2)
The aggregate outstanding options for each non-employee director as of December 31, 2023 is set out herewith:

Name	Aggregate Options Outstanding (#)
David S. Cohen	7,209
Douglas Fisher	7,209
Jeffrey Cossman	8,296
Kathleen D. LaPorte	7,186
Richard Sandberg	6,798
Ron A. Andrews	5,111

(3)
Includes the following amounts for being chairman of the board or a chairperson of a committee; Mr. Sandberg $23,500, Mr. Fisher $10,000; Mr. Cossman $7,000; and Ms. LaPorte $15,000.

(4)
Pursuant to our non-employee director and observers’ compensation policy, directors may elect to receive any portion of their annual fee in the form of shares of common stock of the Company in lieu of cash. The following directors received stock in lieu of cash for a portion of their 2023 fees earned.

Name	Shares of common stock received in 2023 (#)	Shares of common stock received in 2024 (#)	Value of common stock received ($)
David S. Cohen	3,905	1,446	39,000
Douglas Fisher(A)	5,174	1,947	52,500
Jeffrey Cossman	—	6,231	42,000
Kathleen D. LaPorte	—	7,418	50,000
Richard Sandberg	7,510	2,781	75,000
Ron A. Andrews	4,005	1,483	40,000

(A)
Effective January 3, 2024, Dr. Douglas Fisher resigned from the Board but was issued shares of common stock in 2024 as partial payment of his 2023 fees earned.

(5)
Pursuant to our non-employee director and observers’ compensation policy, directors may receive additional compensation resulting from delay in payment of fees earned. Additional compensation related to 2023 fees were settled with both restricted stock awards and shares of common stock.

The restricted stock awards were issued in 2023 and vested immediately. The restricted stock awards were granted under our 2017 Stock Option and Incentive Plan (the “2017 Plan”). Restricted stock awards granted are as follows:

Name	Restricted stock award (#)	Value of restricted stock award ($)
David S. Cohen	296	1,950
Douglas Fisher	398	2,625
Jeffrey Cossman	319	2,100
Kathleen D. LaPorte	379	2,500
Richard Sandberg	569	3,750
Ron A. Andrews	303	2,000

The shares of common stock issued were issued in 2024 and are as follows:

Name	Shares of common stock received in 2024 (#)	Value of common stock received ($)
David S. Cohen	182	975
Douglas Fisher(A)	245	1,313
Jeffrey Cossman	354	2,100
Kathleen D. LaPorte	421	2,500
Richard Sandberg	350	1,875
Ron A. Andrews	186	1,000

(A)
Effective January 3, 2024, Dr. Douglas Fisher resigned from the Board but was issued shares of common stock in 2024 as partial payment of his 2023 additional compensation.

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2023 Grants of Option Plan-Based Awards to Directors

The following table sets forth certain information with respect to grants of plan-based awards in fiscal year ended December 31, 2023 to our directors. The stock option awards granted in fiscal year ended December 31, 2023 were granted under the 2017 Plan. During the fiscal year ended December 31, 2023, no other equity awards were granted to our directors. See the notes below the table for details on option vesting schedules.

Name	Grant Date	All Other Option Awards: Number of Securities Underlying Options (#)	Exercise or Price of Option Awards ($/sh)(1)	Grant Date Fair Value of Option Awards ($)(2)
David S. Cohen Stock options(3)	1/6/2023	1,500	12.40	17,805
Douglas Fisher Stock options(3)	1/6/2023	1,500	12.40	17,805
Jeffrey Cossman Stock options(3)	1/6/2023	1,500	12.40	17,805
Kathleen D. LaPorte Stock options(3)	1/6/2023	1,500	12.40	17,805
Richard Sandberg Stock options(3)	1/6/2023	1,500	12.40	17,805
Ron A. Andrews Stock options(3)	1/6/2023	1,500	12.40	17,805

(1)
The exercise price of the stock awards represent the fair market value of our common stock on the date of grant as defined in the 2017 Plan.

(2)
The amount in this column reflects the aggregate grant date fair value of each stock award granted in accordance with ASC 718, excluding the effect of estimated forfeitures. The amounts shown may not correspond to the actual value that may be recognized. The fair value calculation of options granted during the fiscal year ended December 31, 2023 used the following assumptions: risk free interest rate of 3.66% based on the U.S. Treasury yield in effect at the time of grant; expected life of six years; and volatility of 162% based on historical volatility of the Company’s common stock over a time that is consistent with the expected life of the option. Our directors will only realize compensation to the extent the trading price of our common stock is greater than the exercise price of such stock options on the date the options are exercised.

(3)
The award vests over a one-year period with 12 equal monthly installments and so long as the director remains a director of the Company or a Subsidiary on such dates.

Equity Compensation Plan Information

The following equity compensation plan information summarizes plans and securities approved and not approved by security holders as of December 31, 2023.

	(a)	(b)	(c)
PLAN CATEGORY	Number of securities to be issued upon exercise of outstanding options, warrants and rights	Weighted-average exercise price of outstanding options, warrants and rights	Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a) )
Equity compensation plans approved by security holders	232,744(1)	$46.56	14,392(2)
Equity compensation plans not approved by security holders	—	—	—
Total	232,744	$46.56	14,392

(1)
Includes shares of our common stock issuable upon exercise of options to purchase common stock awarded under our 2017 Plan.

(2)
All shares of our common stock available for future issuance are from our 2017 Plan.

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INFORMATION ABOUT OUR EXECUTIVE OFFICERS

Our executive officers, their ages and their respective positions are as follows:

Ilan Danieli, Founder & Chief Executive Officer, age 52

Mr. Danieli’s biography is set forth above in “INFORMATION ABOUT OUR BOARD OF DIRECTORS - Our Board’s Qualifications.

Matthew Gage, Chief Financial Officer, age 57

Mr. Gage was appointed Interim Chief Financial Officer of Precipio, Inc. effective March 21, 2022 and was promoted to the role of Chief Financial Officer as of July 1, 2023 with no change in compensation structure. Mr. Gage previously served as Director of Financial Reporting and Analysis of Precipio, Inc. upon joining the Company in June 2017, following its acquisition of Transgenomic Inc., where he was Director of Financial Reporting and Analysis from 2014 until the acquisition. Mr. Gage has over 30 years of experience in company finance, 25 years of which being with publicly traded companies. Mr. Gage holds a Bachelor of Science Degree in Business Administration from Bryant University.

Ahmed Zaki Sabet, Chief Operating Officer, age 39

Mr. Sabet has been with Precipio since co-founding the Company in 2011 and currently serves as the Chief Operating Officer. Mr. Sabet holds over 17 years of experience in laboratory management spanning all fields of reference laboratory operations primarily focusing on cancer diagnostics. Prior to Precipio, Mr. Sabet has served as a consultant with the College of American Pathologists (CAP) for many years as well as several diagnostic companies in setting up their specialized cancer testing operations. Mr. Sabet holds a Bachelor of Science degree in Biomedical Engineering from the New Jersey Institute of Technology.

Dr. Ayman Mohamed, Chief Technology Officer, age 40

Dr. Mohamed is one of the co-founders of the Company in 2011, and currently serves as the Chief Technology Officer, as well as the laboratory’s Technical Director. In this dual role, Dr. Mohamed is responsible for the entire process from conceptualization and invention of proprietary technologies, through design and development, economic cost analysis and modeling, testing and validation; and finally, the technical implementation of the technologies for clinical use in the Company’s laboratories. Dr. Mohamed has been responsible for the development and introduction of ground-breaking products such as IV-Cell™ and HemeScreen. Prior to joining the Company, Dr. Mohamed served in various technical and research positions in both commercial diagnostic companies as well as academic centers such as Yale University. Dr. Mohamed holds an MD and a Masters in Human Genetics from the University of Alexanderia, Egypt.

Overview

Our executive compensation programs are designed to attract, motivate, incentivize and retain our executive officers, who contribute to our long-term success. Pay that is competitive, rewards performance and effectively aligns the interests of our executive officers with those of our long-term stockholders is key to our compensation program design and decisions. We structure our executive compensation programs to be heavily weighted towards long-term equity incentives that correlate with the growth of sustainable long-term value for our stockholders.

As a smaller reporting company, we have opted to comply with the executive compensation disclosure rules applicable to “smaller reporting companies,” as such term is defined in the rules promulgated under the Securities Act. Included in this discussion is specific information about the compensation earned or paid in the fiscal year 2023 to the following specified individuals: (i) the individual who served as the Principal Executive Officer of the Company during the fiscal year 2023 and (ii) the next two most highly compensated executive officers of the Company during fiscal year 2023 which include the Chief Operating Officer and the Chief Technology Officer. Our named executive officers for fiscal year 2023 are:

• Ilan Danieli, our Chief Executive Officer and Founder;

• Ahmed Zaki Sabet, our Chief Operating Officer; and

• Ayman Mohamed, our Chief Technology Officer

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Summary Executive Compensation Table

The following table sets forth compensation awarded to, paid to, or earned by our named executive officers for services rendered during fiscal years ended December 31, 2023 and 2022.

Name and Principal Position	Year	Salary ($)	Bonus ($)(1)	Option Awards ($)(2)	All Other Compensation ($)(3)	Total ($)
Ilan Danieli, Chief Executive Officer	2023	300,000	—	148,375	25,065	473,440
	2022	300,000	—	481,000	24,103	805,103
Ahmed Zaki Sabet, Chief Operations Officer	2023	200,000	—	44,513	20,823	265,336
	2022	200,000	—	74,000	19,642	293,642
Ayman Mohamed, Chief Technology Officer	2023	200,000	—	59,350	25,145	284,495
	2022	200,000	10,000	111,000	24,103	345,103

(1)
The amounts in this column represent discretionary annual cash bonuses that each of our named executive officers earned in each respective fiscal year and paid the next fiscal year.

(2)
The amounts in this column reflect the aggregate grant date fair value of the stock option awards granted during the respective fiscal year as computed in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718, excluding the effect of estimated forfeitures. The amounts shown may not correspond to the actual value that may be recognized by the named executive officers. For a full description of the assumptions we use in calculating these amounts, see Note 12 to our audited financial statements for fiscal year ended December 31, 2023, which is included in our 2023 Annual Report. Our named executive officers will only realize compensation to the extent the trading price of our common stock is greater than the exercise price of such stock options on the date the options are exercised.

(3)
Amounts represent employee portion of health insurance premiums paid by the Company on behalf of the executives and their dependents, which is different than the coverage offered to the Company’s regular employees.

Narrative to 2023 Summary Compensation Table

Base Salary

We use base salaries to recognize the experience, skills, knowledge and responsibilities required of all our employees, including our named executive officers. Base salaries are reviewed annually, typically in connection with our annual performance review process, which are adjusted from time to time to realign salaries with market levels after taking into account individual responsibilities, performance and experience. None of our 2023 named executive officers is currently party to an employment agreement or other agreement or arrangement that provides for automatic or scheduled increases in base salary. As of December 31, 2023, the annual base salaries for Messrs. Danieli, Sabet and Mohamed were $300,000, $200,000 and $200,000, respectively.

Cash Incentive Compensation/Bonuses

During fiscal year 2023, Messrs. Danieli, Sabet and Mohamed earned bonuses in the amounts as set forth in the “Summary Compensation Table” above.

Equity Compensation

Although we do not have a formal policy with respect to the grant of equity incentive awards to our executive officers, we believe that equity grants provide our executives with a strong link to our long-term performance, create an ownership culture and help to align the interests of our executives and our stockholders. In addition, we believe that equity grants with a time-based vesting feature promote executive retention because this feature incentivizes our executive officers to remain in our employment during the vesting period. Accordingly, our board of directors periodically reviews the equity incentive compensation of our named executive officers and may grant equity incentive awards to them from time to time. None of our executive officers is currently party to an employment agreement that provides for an automatic grant of long-term equity incentives. During fiscal year 2023, we granted stock options to each of our named executive officers, as described in more detail in the “Outstanding Equity Awards at 2023 Year End” table on page 32 below.

401(k) Savings Plan

We maintain a 401(k) retirement savings plan for the benefit of our employees, including our named executive officers, who satisfy certain eligibility requirements. Under the 401(k) plan, eligible employees may elect to defer a portion of their compensation, within the limits prescribed by the Code, on a pre-tax or after-tax (Roth) basis, through

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contributions to the 401(k) plan. The 401(k) plan is intended to qualify under Sections 401(a) and 501(a) of the Code. As a tax-qualified retirement plan, pre-tax contributions to the 401(k) plan and earnings on those pre-tax contributions are not taxable to the employees until distributed from the 401(k) plan, and earnings on Roth contributions are not taxable when distributed from the 401(k) plan. The 401(k) plan authorizes employer discretionary match contributions. Currently we do not match contributions that eligible participants make to the 401(k) plan.

Health and Welfare Benefits

Our named executive officers, like all full-time employees, are eligible to participate in our health and welfare benefit plans. In addition, the Company pays the entire monthly premium for such health and welfare benefits for our named executive officers and their dependents, as described in more detail in the “Summary Executive Compensation” table above.

Perquisites and Personal Benefits

We generally do not provide perquisites to our executives.

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2023 Grants of Option Plan-Based Awards to Executives

The following table sets forth certain information with respect to grants of plan-based awards in fiscal year ended December 31, 2023 to our named executive officers. The stock option awards granted in fiscal year ended December 31, 2023 were granted under the Company’s 2017 Plan. During the fiscal year ended December 31, 2023, no other equity awards were granted to our named executive officers. See the notes below the table for details on option vesting schedules.

Name	Grant Date	All Other Option Awards: Number of Securities Underlying Options (#)	Exercise or Price of Option Awards ($/sh)(1)	Grant Date Fair Value of Option Awards ($)(2)
Ilan Danieli Stock options(3)
	1/6/2023	12,500	12.40	148,375
Ahmed Zaki Sabet Stock options(3)
	1/6/2023	3,750	12.40	44,513
Ayman Mohamed Stock options(3)
	1/6/2023	5,000	12.40	59,350

(1)
The exercise price of the stock awards represents the fair market value of our common stock on the date of grant as defined in the 2017 Plan.

(2)
The amount in this column reflects the aggregate grant date fair value of each stock award granted in accordance with ASC 718, excluding the effect of estimated forfeitures. The amounts shown may not correspond to the actual value that may be recognized. For a full description of the assumptions we use in calculating these amounts, see Note 12 to our audited financial statements for fiscal year ended December 31, 2023, which is included in our 2023 Annual Report. Our named executive officers will only realize compensation to the extent the trading price of our common stock is greater than the exercise price of such stock options on the date such options are exercised.

(3)
The shares subject to the option award vests over a four-year period. Twenty-five percent (25%) of the shares subject to the option award vest on the first anniversary of the grant and the remainder shall vest in 36 equal monthly installments thereafter, provided that the named executive officer remains an employee of the Company or a Subsidiary as of each applicable vesting date.

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Outstanding Equity Awards at Fiscal 2023 Year-End

The following table sets forth information regarding all outstanding option awards held by our named executive officers as of December 31, 2023. Unless noted, all option awards in the table below were granted under the Company’s 2017 Plan.

		Stock Option Awards(1)
Name	Option Award Grant Date	Number of Securities Underlying Unexercised Options (#) (Exercisable)	Number of Securities Underlying Unexercised Options (#) (Unexercisable)	Option Exercise Price ($)	Option Expiration Date
Ilan Danieli	9/26/2017(2)	222	—	561.00	9/26/2027
	2/16/2018(2)	3,333	—	213.00	2/16/2028
	3/18/2019(2)	833	—	45.00	3/18/2029
	1/16/2020	2,938	62	42.80	1/16/2030
	1/4/2021	2,436	897	42.00	1/4/2031
	8/3/2021	10,500	7,500	64.40	8/3/2031
	1/11/2022	7,791	8,459	30.80	1/11/2032
	1/6/2023	—	12,500	12.40	1/6/2033
Ahmed Zaki Sabet	2/16/2018(2)	916	—	213.00	2/16/2028
	3/18/2019 (2)	833	—	45.00	3/18/2029
	1/16/2020	1,469	31	42.80	1/16/2030
	7/2/2020	215	35	26.00	7/2/2030
	1/4/2021	2,413	888	42.00	1/4/2031
	7/8/2021	6,048	3,952	64.20	7/8/2031
	1/11/2022	1,200	1,300	30.80	1/11/2032
	1/6/2023	—	3,750	12.40	1/6/2033
Ayman Mohamed	2/16/2018(2)	916	—	213.00	2/16/2028
	3/18/2019(2)	833	—	45.00	3/18/2029
	1/16/2020	1,469	31	42.80	1/16/2030
	7/2/2020	430	70	26.00	7/2/2030
	1/4/2021	2,412	888	42.00	1/4/2031
	7/8/2021	6,048	3,952	64.20	7/8/2031
	1/11/2022	1,800	1,950	30.80	1/11/2032
	1/6/2023	—	5,000	12.40	1/6/2033

(1)
Except as noted below, all of the shares subject to the option award vests over a four-year period. Twenty-five percent (25%) of the shares subject to the option vest on the first anniversary of the grant date and the remaining seventy-five (75%) of shares subject to the option vest in 36 equal monthly installments thereafter, provided that the named executive officer remains an employee of the Company or a Subsidiary as of each applicable vesting date. Pursuant to the applicable named executive officer’s employment agreement, upon a termination of employment without cause or upon a resignation of employment for good reason, 100% of the unvested shares subject to the option will vest and become exercisable as of the date of termination.

(2)
The shares subject to the option are fully vested.

Fiscal Year 2023 Option Exercises

No stock options were exercised by any of our named executive officers during the fiscal year ended December 31, 2023.

32

Compensation Arrangements and Employment Agreement with our Named Executive Officers

The Company has entered into employment agreements with each of Mr. Danieli, Mr. Sabet and Mr. Mohamed.

Employment Agreement with Mr. Ilan Danieli

On August 7, 2018, the Company entered into a revised employment agreement with Ilan Danieli, effective as of that date (the “Danieli Employment Agreement”), in connection with his existing role as Chief Executive Officer of the Company, which set forth his annual base salary, his eligibility to receive an annual bonus in accordance with the recommendations made by the Compensation Committee of the Board or a majority of the independent members of the Board, and his eligibility to participate in the Company’s health plan and benefits on terms available to other Company employees.

In addition, under the Danieli Employment Agreement, Mr. Danieli shall be eligible to receive stock options or other equity incentive awards in the Company subject to approval of the Compensation Committee of the Board. The Danieli Employment Agreement subjects Mr. Danieli to certain restrictive covenants, including confidential and proprietary information covenants, 12-month non-competition and non-solicitation covenants and the Danieli Employment Agreement also includes a 280G clawback.

In the event of a termination of employment by the Company without cause or upon a termination of employment by Mr. Danieli for good reason (as such terms are defined in the Danieli Employment Agreement), Mr. Danieli, subject to execution of a release, shall be entitled to (i) 9 months of continued annual base salary at a rate equal to $200,000, less applicable withholding; (ii) a monthly cash payment equal to the monthly employer contribution the Company would have made to provide group health, dental and all other insurance coverages to Mr. Danieli and his family, if Mr. Danieli is eligible for and elects COBRA benefits, for a period of 9 months; and (iii) accelerated vesting of all unvested stock options or equity awards.

Upon death or termination of employment by virtue of disability, Mr. Danieli (or his estate or beneficiaries as applicable) shall have no right to receive any compensation or benefit pursuant to the terms of the agreement on and after the effective date of the termination of employment other than (i) annual salary earned and accrued under the agreement prior to the effective date of termination; (ii) earned, accrued and vested benefits and paid time off under the agreement prior to the effective date of termination, subject to the terms of the plans applicable thereto (and any applicable laws and regulations); and (iii) reimbursement under the Agreement for expenses incurred prior to the effective date of termination, subject to the terms of the agreement and the policies applicable thereto.

If a sale event occurs (as defined in the Danieli Employment Agreement) and the Company, its subsidiaries or a successor entity, as the case may be, terminates the employment agreement and the employment of Mr. Danieli without cause or Mr. Danieli terminates the agreement and his employment for good reason, in either case within 12 months following such sale event, then Mr. Danieli shall be entitled to (i) 12 months of his base salary at a rate equal to (a) the base salary in effect at the date of termination or (b) $200,000, payable in a lump sum; (ii) 12 months of bonus payout earned at 100% of plan; (iii) a monthly cash payment equal to the monthly employer contribution the Company would have made to provide group health, dental and all other insurance coverages to Mr. Danieli and his family, if Mr. Danieli is eligible for and elects COBRA benefits, for a period of 12 months; and (iv) accelerated vesting of all unvested stock options or equity awards.

Employment Agreement with Mr. Sabet

On August 7, 2018, the Company entered into a revised employment agreement with Ahmed Zaki Sabet, effective as of that date (the “Sabet Employment Agreement”), in connection with his existing role as Chief Operating Officer of the Company, which set forth his annual base salary, his eligibility to receive an annual bonus in accordance with the recommendations made by the Compensation Committee of the Board, and his eligibility to participate in the Company’s health plan and benefits on terms available to other Company employees.

In addition, under the Sabet Employment Agreement, Mr. Sabet shall be eligible to receive stock options or other equity incentive awards in the Company subject to approval of the Compensation Committee of the Board. The Sabet Employment Agreement subjects Mr. Sabet to certain restrictive covenants, including confidential and proprietary information covenants, 12-month non-competition and non-solicitation covenants and the Sabet Employment Agreement also includes a 280G clawback.

In the event of a termination of employment by the Company without cause or upon a termination of employment by Mr. Sabet for good reason (as such terms are defined in the Sabet Employment Agreement),

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Mr. Sabet shall be entitled to (i) 9 months of continued annual base salary at a rate equal to $150,000, less applicable withholding (ii) a monthly cash payment equal to the monthly employer contribution the Company would have made to provide group health, dental and all other insurance coverages to Mr. Sabet and his family, if Mr. Sabet is eligible for and elects COBRA benefits for a period of 9 months and (iii) accelerated vesting of all unvested stock options or equity awards.

Upon death or termination of employment by virtue of disability, Mr. Sabet (or his estate or beneficiaries as applicable) shall have no right to receive any compensation or benefit pursuant to the terms of the agreement on and after the effective date of the termination of employment other than (i) annual salary earned and accrued under the agreement prior to the effective date of termination (ii) earned, accrued and vested benefits and paid time off under the agreement prior to the effective date of termination, subject to the terms of the plans applicable thereto (and any applicable laws and regulations); and (iii) reimbursement under the Agreement for expenses incurred prior to the effective date of termination, subject to the terms of the agreement and the policies applicable thereto.

If a sale event occurs (as defined in the Sabet Employment Agreement) and the Company, its subsidiaries or a successor entity, as the case may be, terminates the employment agreement and the employment of Mr. Sabet without cause or Mr. Sabet terminates the agreement and his employment for good reason, in either case within 12 months following such sale event, then Mr. Sabet shall be entitled to receive (i) 12 months of his base salary at a rate equal to (a) the base salary in effect at the date of termination or (b) $150,000, payable in a lump sum; (ii) 12 months of bonus payout earned at 100% of plan; (iii) a monthly cash payment equal to the monthly employer contribution the Company would have made to provide group health, dental and all other insurance coverages to Mr. Sabet and his family, if Mr. Sabet is eligible for and elects COBRA benefits, for a period of 12 months; and (iv) accelerated vesting of all unvested stock options or equity awards.

Employment Agreement with Mr. Ayman Mohamed

On August 7, 2018, the Company entered into a revised employment agreement with Ayman Mohamed, effective as of that date (the “Mohamed Employment Agreement”), in connection with his existing role as VP R&D of the Company, which set forth his annual base salary, his eligibility to receive an annual bonus in accordance with the recommendations made by the Compensation Committee of the Board, and his eligibility to participate in the Company’s health plan and benefits on terms available to other Company employees.

In addition, under the Mohamed Employment Agreement, Mr. Mohamed shall be eligible to receive stock options or other equity incentive awards in the Company subject to approval of the Compensation Committee of the Board. The Mohamed Employment Agreement subjects Mr. Mohamed to certain restrictive covenants, including confidential and proprietary information covenants, 12-month non-competition and non-solicitation covenants. The Mohamed Employment Agreement also includes a 280G clawback.

In the event of a termination of employment by the Company without cause or upon a termination of employment by Mr. Mohamed for good reason (as such terms are defined in the Mohamed Employment Agreement), Mr. Mohamed shall be entitled to (i) 9 months of continued annual base salary at a rate equal to $150,000, less applicable withholding (ii) a monthly cash payment equal to the monthly employer contribution the Company would have made to provide group health, dental and all other insurance coverages to Mr. Mohamed and his family, if Mr. Mohamed is eligible for and elects COBRA benefits for a period of 9 months and (iii) accelerated vesting of all unvested stock options or equity awards.

Upon death or termination of employment by virtue of disability, Mr. Mohamed (or his estate or beneficiaries as applicable) shall have no right to receive any compensation or benefit pursuant to the terms of the agreement on and after the effective date of the termination of employment other than (i) annual salary earned and accrued under the agreement prior to the effective date of termination (ii) earned, accrued and vested benefits and paid time off under the agreement prior to the effective date of termination, subject to the terms of the plans applicable thereto (and any applicable laws and regulations); and (iii) reimbursement under the Agreement for expenses incurred prior to the effective date of termination, subject to the terms of the agreement and the policies applicable thereto.

If a sale event occurs (as defined in the Mohamed Employment Agreement) and the Company, its subsidiaries or a successor entity, as the case may be, terminates the employment agreement and the employment of Mr. Mohamed without cause or Mr. Mohamed terminates the agreement and his employment for good reason, in either case within 12 months following such sale event, then Mr. Mohamed shall be entitled to receive (i) 12 months of his base salary at a rate equal to (a) the base salary in effect at the date of termination or (b) $150,000, payable in a lump sum;

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(ii) 12 months of bonus payout earned at 100% of plan; (iii) a monthly cash payment equal to the monthly employer contribution the Company would have made to provide group health, dental and all other insurance coverages to Mr. Mohamed and his family, if Mr. Mohamed is eligible for and elects COBRA benefits, for a period of 12 months; and (iv) accelerated vesting of all unvested stock options or equity awards.

Compensation Risk Analysis

We have reviewed our material compensation policies and practices for all employees and have concluded that these policies and practices are not reasonably likely to have a material adverse effect on us. While risk-taking is a necessary part of growing a business, our compensation philosophy is focused on aligning compensation with the long-term interests of our stockholders as opposed to rewarding short-term management decisions that could pose long-term risks.

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Pay Versus Performance

As required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(v) of Regulation S-K, we are providing the following information about the relationship between executive compensation actually paid and certain financial performance of the Company. For further information concerning the Company’s variable pay-for-performance philosophy and how the Company’s aligns executive compensation with the Company’s performance, refer to “Executive Compensation – Compensation Discussion and Analysis.”

Year	Summary Compensation Table Total for PEO1	Compensation Actually Paid to PEO2	Average Summary Compensation Table Total for Non-PEO NEOs3	Average Compensation Actually Paid to Non-PEO NEOs4	Value of Initial Fixed $100 Investment Based On:	Net Income (thousands)6
					Total Shareholder Return5
(a)	(b)	(c)	(d)	(e)	(f)	(h)
2023	$473,440	$314,071	$274,916	$213,857	$15.70	($5,853)
2022	$805,103	$137,939	$412,340	$221,026	$26.64	($12,178)
2021	$1,726,692	$1,108,981	$1,079,529	$692,442	$76.33	($8,517)

(1)
The dollar amounts reported in column (b) are the amounts of total compensation reported for Mr. Danieli (our Chief Executive Officer) for each corresponding year in the “Total” column of the Summary Compensation Table. Refer to “Executive Compensation – Executive Compensation Tables – Summary Compensation Table.”

(2)
The dollar amounts reported in column (c) represent the amount of “compensation actually paid” to Mr. Danieli, as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual amount of compensation earned by or paid to Mr. Danieli during the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to Mr. Danieli’s total compensation for each year to determine the compensation actually paid:

Year	Reported Summary Compensation Table Total for PEO	Reported Value of Equity Awards(a)	Equity Award Adjustments(b)	Compensation Actually Paid to PEO
2023	$473,440	($148,375)	($10,994)	$314,071

(a)
The grant date fair value of equity awards represents the total of the amounts reported in the “Stock Awards” and “Option Awards” columns in the Summary Compensation Table for the applicable year.

(b)
The equity award adjustments for each applicable year include the addition (or subtraction, as applicable) of the following: (i) the year-end fair value of any equity awards granted in the applicable year that are outstanding and unvested as of the end of the year; (ii) the amount of change as of the end of the applicable year (from the end of the prior fiscal year) in fair value of any awards granted in prior years that are outstanding and unvested as of the end of the applicable year; (iii) for awards that are granted and vest in same applicable year, the fair value as of the vesting date; (iv) for awards granted in prior years that vest in the applicable year, the amount equal to the change as of the vesting date (from the end of the prior fiscal year) in fair value; (v) for awards granted in prior years that are determined to fail to meet the applicable vesting conditions during the applicable year, a deduction for the amount equal to the fair value at the end of the prior fiscal year; and (vi) the dollar value of any dividends or other earnings paid on stock or option awards in the applicable year prior to the vesting date that are not otherwise reflected in the fair value of such award or included in any other component of total compensation for the applicable year. The valuation assumptions used to calculate fair values did not materially differ from those disclosed at the time of grant. The amounts deducted or added in calculating the equity award adjustments are as follows:

Year	Year End Fair Value of Equity Awards	Year over Year Change in Fair Value of Outstanding and Unvested Equity Awards	Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Year	Year over Year Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year	Fair Value at the End of the Prior Year of Equity Awards that Failed to Meet Vesting Conditions in the Year	Value of Dividends or other Earnings Paid on Stock or Option Awards not Otherwise Reflected in Fair Value or Total Compensation	Total Equity Award Adjustments
2023	$69,425	($77,305)	($3,114)	$0	$0	$0	($10,994)

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(3)
The dollar amounts reported in column (d) represent the average of the amounts reported for the Company’s named executive officers (NEOs) as a group (excluding Mr. Danieli) in the “Total” column of the Summary Compensation Table in each applicable year. The names of each of the NEOs (excluding Mr. Danieli) included for purposes of calculating the average amounts in each applicable year are as follows:

Year	PEO	Non-PEO NEOs
2023	Ilan S. Danieli	Ahmed Zaki Sabet, Ayman Mohamed
2022	Ilan S. Danieli	Carl R. Iberger, Ayman Mohamed
2021	Ilan S. Danieli	Carl R. Iberger, Ahmed Zaki Sabet

(4)
The dollar amounts reported in column (e) represent the average amount of “compensation actually paid” to the NEOs as a group (excluding Mr. Danieli), as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual average amount of compensation earned by or paid to the NEOs as a group (excluding Mr. Danieli) during the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to average total compensation for the NEOs as a group (excluding Mr. Danieli) for each year to determine the compensation actually paid, using the same methodology described above in Note 2:

Year	Average Reported Summary Compensation Table Total for Non-PEO NEOs	Average Reported Value of Equity Awards	Average Equity Award Adjustments(a)	Average Compensation Actually Paid to Non-PEO NEOs
2023	$274,916	$51,932	($9,127)	$213,857

(a)
The amounts deducted or added in calculating the total average equity award adjustments are as follows:

Year	Average Year End Fair Value of Equity Awards	Year over Year Average Change in Fair Value of Outstanding and Unvested Equity Awards	Average Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Year	Year over Year Average Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year	Average Fair Value at the End of the Prior Year of Equity Awards that Failed to Meet Vesting Conditions in the Year	Average Value of Dividends or other Earnings Paid on Stock or Option Awards not Otherwise Reflected in Fair Value or Total Compensation	Total Average Equity Award Adjustments
2023	$24,299	($30,007)	($3,419)	$0	$0	$0	($9,127)

(5)
Cumulative total shareholder return (“TSR”) is calculated by dividing the sum of the cumulative amount of dividends for the measurement period, assuming dividend reinvestment, and the difference between the Company’s share price at the end and the beginning of the measurement period by the Company’s share price at the beginning of the measurement period.

(6)
The dollar amounts reported represent the amount of net income reflected in the Company’s audited financial statements for the applicable year.

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Relationship Between Financial Performance Measures

The graphs below illustrate the relationship between compensation actually paid to our PEO and the average of the compensation actually paid to our remaining NEOs, with (i) our cumulative TSR and (ii) our net income, in each case, for the fiscal years ended December 31, 2023, 2022 and 2021.

TSR amounts reported in the graph assume an initial fixed investment of $100, and that all dividends, if any, were reinvested.

 

 

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PROPOSAL TWO

CONDUCT AN ADVISORY VOTE TO APPROVE NAMED EXECUTIVE COMPENSATION

Under the Dodd-Frank Wall Street Reform and Consumer Protection Act, or the Dodd-Frank Act, and Section 14A of the Exchange Act, our shareholders are entitled to vote to approve, on an advisory basis, the compensation of our named executive officers as disclosed in this proxy statement in accordance with SEC rules. This is commonly known as a “Say-on-Pay” proposal. At our 2021 Annual Meeting of Stockholders, our stockholders approved three years as the preferred frequency for holding non-binding advisory votes to approve the compensation of our named executive officers.

The advisory vote on executive compensation is a non-binding vote on the compensation of the Company’s “Named Executive Officers,” as described in the “Information About our Executive Officers” section, the tabular disclosure regarding such compensation, and the accompanying narrative disclosure, outlined in this Proxy Statement. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our named executive officers and the philosophy, policies and practices described in this proxy statement. As discussed in those disclosures, we believe that our compensation policies and decisions are strongly aligned with our shareholders’ interests and are consistent with current market practices. The compensation of our named executive officers is designed to enable us to attract and retain talented and experienced executives to lead us successfully in a competitive environment.

Our compensation policies are designed to align our key executives’ compensation with both our business objectives and the interests of our stockholders. We also seek to provide compensation policies that attract, motivate, and retain key executives who are critical to our success. A significant portion of the compensation we provide to our key executives is directly related to our financial performance and stockholder value.

We recommend that our stockholders review the application of our compensation philosophy and the elements of compensation provided to each named executive officer as reflected in the discussion and tables included in the “Executive Compensation” section of this Proxy Statement below.

We believe our executive compensation policies are designed appropriately and are functioning as intended to produce long-term value for our stockholders. Accordingly, we are asking our stockholders to approve the overall application of our compensation policies to our named executive officers through this advisory vote. The vote on this resolution is not intended to address any specific element of compensation, but rather the overall compensation of our named executive officers and the policies and procedures described in this Proxy Statement.

For the reasons stated above, the Board recommends that our stockholders vote “for” the following advisory resolution at our Annual Meeting:

“RESOLVED, that the compensation paid to the Company’s named executive officers, as disclosed in the proxy statement for the 2024 Annual Meeting of Stockholders of the Company according to the compensation disclosure rules of the Securities and Exchange Commission, including the Executive Compensation, compensation tables, and related narrative discussion, is hereby APPROVED on an advisory, non-binding basis.”

The affirmative vote of a majority of the voting power present in person or represented by proxy held by the holders of our common stock at the Annual Meeting is required to approve this advisory resolution. Because this proposal is advisory, the results of the vote on this proposal will not be binding on our Board, Compensation Committee, or our management. To the extent there is any significant vote against the compensation of our named executive officers as disclosed in this Proxy Statement, however, the Compensation Committee will evaluate whether any actions are necessary for the future to address those concerns.

Vote Required

The affirmative vote of the holders of a majority of the shares present and entitled to vote on the proposal at the Annual Meeting is required to approve this proposal. Abstentions will have the same effect as voting against the proposal and broker non-votes will not affect the proposal.

Recommendation of the Board of Directors

THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “FOR” PROPOSAL TWO.

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PROPOSAL THREE

RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED

PUBLIC ACCOUNTING FIRM

Our Audit Committee has appointed Marcum LLP (“Marcum”) as our independent registered public accounting firm for the fiscal year ending December 31, 2024. The Board recommends that stockholders vote for the ratification of such appointment. In the event of a negative vote on such ratification, the Board and Audit Committee will reconsider the selection, though a change will not necessarily be made. Even if the appointment is ratified, the Audit Committee may, at its discretion, direct the appointment of a different independent registered public accounting firm at any time during the year if it determines that such a change would be in our stockholders’ best interests.

On July 9, 2017, the Audit Committee, acting on behalf of the Board, appointed Marcum as the Company’s independent registered public accounting firm. Marcum has served as our independent registered public accounting firm since 2017.

The Audit Committee is solely responsible for selecting our independent registered public accounting firm for the fiscal year ending December 31, 2024. Stockholder approval is not required to appoint Marcum as our independent registered public accounting firm. However, the board of directors believes that submitting the appointment of Marcum to the stockholders for ratification is good corporate governance. If the stockholders do not ratify this appointment, the audit committee will reconsider whether to retain Macrum. If the selection of Marcum is ratified, the audit committee, at its discretion, may direct the appointment of a different independent registered public accounting firm at any time it decides that such a change would be in the best interest of Precipio Inc. and its stockholders.

We expect a representative of Marcum to be present in person or by telephone at the Annual Meeting and available to respond to appropriate questions. Marcum will also have the opportunity to make a statement if they desire to do so.

The following table shows information about fees that were billed or were expected to be billed by Marcum for the fiscal years ended December 31, 2022 and 2023:

	2022
Audit fees	$305,539
Audit-related fees	—
Tax fees	—
All other fees	—
Total fees	$305,539

	2023
Audit fees	$300,753
Audit-related fees	—
Tax fees	—
All other fees	—
Total fees	$300,753

Audit Fees. Audit fees consist of services rendered for the audit of our consolidated financial statements.

Audit-Related Fees. Audit-Related Fees consist of fees for assurance and related services that are reasonably related to the performance of the audit and the review of our consolidated financial statements and which are not reported under Audit Fees.

Tax Fees. Tax services consist primarily of planning, advice and compliance, or return preparation, for U.S. federal, state and local, as well as international jurisdictions.

All Other Fees. None.

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Pre-Approval of Audit and Non-Audit Services

Under the Audit Committee Charter, the Audit Committee is required to pre-approve all audit and non-audit services to be provided to us by our independent registered public accounting firm and its member firms. All services provided by our independent registered public accounting firm in the fiscal year ended December 31, 2023, were pre-approved by the Audit Committee.

Assessment

The Audit Committee assessed Marcum’s performance as an independent registered public accounting firm during the fiscal year ended December 31, 2023. The Committee assessed the performance of Marcum’s lead audit engagement partner and the audit team. The Committee reviewed a variety of indicators of audit quality including:

• The quality and candor of Marcum’s communications with the Audit Committee and management;

• How effectively Marcum maintained its independence and employed its independent judgment, objectivity, and professional approach;

• The depth and expertise of Marcum’s audit team; and

• Marcum’s tenure as the Company’s independent registered public accounting firm and safeguards in place to maintain its independence.

As a result of its evaluation, the Audit Committee concluded that the selection of Marcum as the independent registered public accounting firm for our fiscal year ending December 31, 2023, is in the best interest of the Company and its stockholders.

Vote Required

The affirmative vote of a majority of the votes cast for this proposal is required to ratify the appointment of Marcum as our independent public accountant. Abstentions will be counted towards the tabulation of votes cast on this proposal and will have the same effect as a negative vote. Brokerage firms have the authority to vote for customers’ unvoted shares held by the firms in the street name on this proposal. If a broker does not exercise this authority, such broker non-votes will not affect the results of this vote. We are not required to obtain the approval of our stockholders to appoint the Company’s independent accountant. However, if our stockholders do not ratify the appointment of Marcum as the Company’s independent public accountant for the fiscal year ending December 31, 2024, the Audit Committee may reconsider its appointment.

THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “FOR” RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM AS SET OUT IN PROPOSAL THREE.

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REPORT OF THE AUDIT COMMITTEE

The Company’s management is responsible for the preparation of the Company’s consolidated financial statements and for maintaining an adequate system of internal controls and processes for that purpose. Marcum LLP (“Marcum”) acts as the Company’s independent registered public accounting firm and they are responsible for conducting an independent audit of the Company’s annual consolidated financial statements in accordance with auditing standards of the Public Company Accounting Oversight Board (“PCAOB”), and issuing a report on the results of their audit. The Audit Committee is responsible for providing independent, objective oversight of both of these processes.

The Audit Committee has received the written disclosures and the letter from Marcum required by applicable requirements of the PCAOB regarding Marcum’s communications with the Audit Committee concerning its independence and has discussed with Marcum its independence from the Company and its management. The Audit Committee has reviewed and discussed the Company’s audited consolidated financial statements for the fiscal year ended December 31, 2023, with management of the Company and with representatives of Marcum. The Audit Committee’s discussions with Marcum also included the matters required to be discussed by the applicable requirements of the PCAOB and SEC.

Based on the reviews and discussions described above, the Audit Committee recommended to the Board that the audited consolidated financial statements be included in the Company’s 2023 Annual Report, for filing with the SEC.

Kathleen D. LaPorte, Chairperson

Douglas Fisher, M.D.

Richard Sandberg

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HOUSEHOLDING

Some banks, brokers, and other nominee record holders may be participating in the practice of “householding” proxy statements and annual reports. This means that only one copy of our documents, including the annual report to stockholders and the proxy statement, may have been sent to multiple stockholders in your household. We will promptly deliver a separate copy of either document to you upon written or oral request to Precipio, Inc., 4 Science Park, New Haven, Connecticut 06511, Attention: Corporate Secretary, telephone: (203) 787-7888. If you want to receive separate copies of the proxy statement or annual report to stockholders in the future, or if you are receiving multiple copies and would like to receive only one copy per household, you should contact your bank, broker, or other nominee record holder, or you may contact us at the above address and phone number.

STOCKHOLDER PROPOSALS

A stockholder who would like to have a proposal considered for inclusion in our 2025 proxy statement must submit the proposal per the procedures outlined in Rule 14a-8 of the Exchange Act so that it is received by us no later than December 30, 2024. However, if the date of the 2025 Annual Meeting of Stockholders is changed by more than 30 days from the date of the previous year’s meeting, then the deadline is a reasonable time before we begin to print and send our proxy statement for 2025 Annual Meeting of Stockholders. SEC rules set standards for eligibility and specify the types of stockholder proposals that may be excluded from a proxy statement. Stockholder proposals should be addressed to Precipio Inc., 4 Science Park, New Haven, Connecticut 06511, Attention: Corporate Secretary.

If a stockholder wishes to propose a nomination of persons for election to our board of directors or present a proposal at an annual meeting but does not wish to have the proposal considered for inclusion in our proxy statement and proxy card, our bylaws establish an advance notice procedure for such nominations and proposals. Stockholders at an annual meeting may only consider proposals or nominations specified in the notice of meeting or brought before the meeting by or at the direction of the board of directors or by a stockholder of record on the record date for the meeting, who is entitled to vote at the meeting and who has delivered timely notice in proper form to our corporate secretary of the stockholder’s intention to bring such business before the meeting.

The required notice must be in writing and received by our corporate secretary at our principal executive offices not later than the close of business on the 90th day nor earlier than the close of business on the 120th day before the first anniversary of the preceding year’s annual meeting. However, if the date of the annual meeting is convened more than 30 days before or more than 60 days after the first anniversary of the preceding year’s annual meeting, or if no annual meeting was held in the preceding year, a stockholder’s notice must be so received not later than the close of business on the later of (A) the 90th day before the scheduled date of such annual meeting or (B) the tenth day following the day on which public announcement of the date of such annual meeting was first made. For stockholder proposals to be brought before the 2025 Annual Meeting of Stockholders, the required notice must be received by our corporate secretary at our principal executive offices no earlier than February 13, 2025, and no later than March 14, 2025. Stockholder proposals and the required notice should be addressed Precipio, Inc., 4 Science Park, New Haven, Connecticut 06511, Attention: Corporate Secretary.

To comply with the universal proxy rules stockholders who intend to solicit proxies in support of director nominees other than the Company’s nominees must provide notice that sets forth the information required by Rule 14a-19 under the Exchange Act no later than 60 days prior to the anniversary of the Annual Meeting, or April 14, 2024.

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OTHER MATTERS

As of the date of this proxy statement, the Board knows of no other business that will be presented at the Annual Meeting. If any other business is properly brought before the Annual Meeting, it is intended that proxies in the enclosed form will be voted in respect thereof in accordance with the best judgment and in the discretion of the persons voting the proxies.

By Order of the Board of Directors of

Precipio Inc.

Sincerely,

Ilan Danieli

President and Chief Executive Officer

New Haven, Connecticut

 

April 29, 2024

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