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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Precipio Inc | NASDAQ:PRPO | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
-0.2982 | -4.99% | 5.68 | 5.59 | 6.20 | 6.10 | 5.75 | 5.96 | 3,723 | 00:59:59 |
☐
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to §240.14a-12
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Precipio, Inc.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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Sincerely yours,
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/s/ ILAN DANIELI
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Ilan Danieli
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Chief Executive Officer
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(1)
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To elect Douglas Fisher, M.D., Jeffrey Cossman, M.D. and Richard Sandberg as Class II directors for terms to expire in 2023 (“Proposal 1 – Election of Directors”);
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(2)
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To approve, for purposes of complying with applicable Nasdaq Listing Rules, the potential issuance and sale of more than 20% of the Company’s common stock pursuant to the Company’s purchase agreement with Lincoln Park Capital Fund, LLC (“LPC”) pursuant to which LPC has agreed to purchase from us, from time to time, up to $10,000,000 of our common stock, (the “LP Transaction”) (“Proposal 2 – Nasdaq Limit Proposal in relation to the LP Transaction”).
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(3)
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To approve, for purposes of complying with applicable Nasdaq Listing Rules, the potential issuance of more than 20% of the Company’s common stock which may be issued by the Company to certain investors in connection with an amendment agreement (the “March 2020 Amendment”) amending the terms of that certain 8% Senior Secured Convertible Promissory Notes issued to the investors on April 16, 2019 and May 14, 2019 (the “Convertible Note Transaction”) (“Proposal 3 – Nasdaq Limit Proposal in relation to the Convertible Note Transaction”).
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(4)
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To approve an amendment and restatement of the Company’s 2017 Stock Option and Incentive Plan (the “2017 Plan”) to (i) increase the aggregate number of shares authorized for issuance under the 2017 Plan by 250,000 shares from 913,586 shares to 1,163,586 shares; (ii) increase the maximum number of shares that may be granted in the form of stock options or stock appreciation rights to any one individual in any one calendar year and the maximum number of shares underlying any award intended to qualify as “performance-based compensation” to any one individual in any performance cycle, in each case to 250,000 shares of common stock; (iii) amend the “evergreen” provision, pursuant to which the aggregate number of shares authorized for issuance under the 2017 Plan will be automatically increased each year beginning on January 1, 2021 by 8% of the number of shares of common stock issued and outstanding on the immediately preceding December 31, or such lesser number of shares determined by our Board of Directors or Compensation Committee (the “2017 Plan Amendment Proposal”); and (“Proposal 4 – 2017 Stock Option Plan Amendment Proposal”);
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(5)
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To ratify the appointment of Marcum LLP as our independent registered public accounting firm for the year ending December 31, 2020 (“Proposal 5 – Appointment of Public Accounting Firm”); and
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(6)
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To transact such other business as may properly come before the Annual Meeting or any adjournment or postponement thereof.
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By Order of the Board of Directors
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/s/ ILAN DANIELI
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Ilan Danieli, Chief Executive Officer
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•
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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.
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•
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By Internet. www.proxyvote.com.
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•
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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/PRPO2020 for instructions on how to attend and participate in the Annual Meeting. If your shares are held in “street name” (held in the name of a bank, broker or other nominee), you must provide the bank, broker or other nominee with instructions on how to vote your shares and can do so as follows:
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•
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By Internet or by telephone. Follow the instructions you receive from your broker to vote by Internet or telephone.
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•
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By mail. You will receive instructions from your broker or other nominee explaining how to vote your shares.
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•
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“FOR” for the election of the Board nominees as directors;
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•
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“FOR” for Nasdaq Limit Proposal in relation to the LP Transaction;
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•
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“FOR” for Nasdaq Limit Proposal in relation to the Convertible Note Transaction;
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•
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“FOR” for 2017 Stock Option Plan Amendment; and
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•
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“FOR” ratification of the selection of Marcum LLP as our independent public accountant for the fiscal year ending December 31, 2020.
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•
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signing a new proxy card and submitting it as instructed above;
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•
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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;
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•
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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
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•
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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.
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Proposal 1:
Election of Directors |
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The nominees for director who receive the greatest number of votes FOR election (also known as a plurality) will be elected as 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 or more of the nominees. Votes that are withheld will not be included in the vote tally 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. Broker non-votes will have no effect on the results of this vote.
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Proposal 2:
Nasdaq Limit Proposal in relation to the LP Transaction |
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Approval of this proposal requires the affirmative vote of a majority of the outstanding shares of our Common Stock present virtually at the meeting or by proxy at the Annual Meeting and entitled to vote thereon as of the Record Date. You may vote “FOR,” “AGAINST” or “ABSTAIN” from voting on this proposal. For purposes of determining whether this proposal has passed, abstentions will have the effect of a vote AGAINST the proposal. Broker non-votes will have no effect on the proposal.
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Proposal 3:
Nasdaq Limit Proposal in relation to the Convertible Note Transaction |
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Approval of this proposal requires the affirmative vote of a majority of the outstanding shares of our Common Stock present virtually in the meeting or by proxy at the Annual Meeting and entitled to vote thereon as of the Record Date. You may vote “FOR,” “AGAINST” or “ABSTAIN” from voting on this proposal. For purposes of determining whether this proposal has passed, abstentions will have the effect of a vote AGAINST the proposal. Broker non-votes will have no effect on the proposal.
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Proposal 4:
2017 Stock Option Plan Amendment |
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Approval of this proposal requires the affirmative vote of a majority of the outstanding shares of our Common Stock present virtually in the meeting or by proxy at the Annual Meeting and entitled to vote thereon as of the Record Date. You may vote “FOR,” “AGAINST” or “ABSTAIN” from voting on this proposal. For purposes of determining whether this proposal has passed, abstentions will have the effect of a vote AGAINST the proposal. Broker non-votes will have no effect on the proposal.
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Proposal 5:
Ratification of the Appointment of Marcum LLP as our Independent Public Accountant for the Fiscal Year Ending December 31, 2020 |
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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. 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 authority to vote customers’ unvoted shares held by the firms in street name on this proposal. If a broker does not exercise this authority, such broker non-votes will have no effect on 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 LLP as the Company’s independent public accountant for the fiscal year ending December 31, 2020, the Audit Committee of the Board may reconsider its appointment.
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Stockholders whose shares are registered in their own name should contact our transfer agent, EQ Shareowner Services, 1110 Centre Pointe Curve Suite 101, Mendota Heights, MN 55120, Tel: 855-217-6361.
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Stockholders whose shares are held by a broker or other nominee should contact such broker or other nominee directly and inform them of their request. Stockholders should be sure to include their name, the name of their brokerage firm and their account number.
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1)
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This proxy statement.
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2)
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The accompanying proxy.
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3)
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Our 2019 Annual Report.
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Name of Beneficial Owner
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Number of Shares
Beneficially Owned |
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Percent of Class
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Executive Officers and Directors:
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Ilan Danieli(1)
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61,194
|
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*
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Carl R. Iberger(2)
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21,068
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*
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Jeffrey Cossman, M.D.(3)
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14,644
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*
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David S. Cohen(4)
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872,663
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7.8%
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Richard Sandberg(3)
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5,021
|
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*
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Mark Rimer(5)
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97,101
|
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*
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Douglas Fisher, M.D.(3)
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14,644
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*
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Kathleen D. LaPorte(3)
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13,223
|
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*
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All executive officers and directors as a group (8 persons)(6)
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1,099,558
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9.7%
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*
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Represents beneficial ownership of less than 1% of the shares of Common Stock.
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(1)
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Consists of 11,314 shares of Common Stock owned by IDP Holdings, LLC. (Mr. Danieli is the sole member and manager of IDP Holdings, LLC.), 2,727 shares of Common Stock owned by Mr. Danieli and 47,153 shares of Common Stock issuable to Mr. Danieli upon the exercise of stock options that are exercisable or will become exercisable within 60 days after the Record Date.
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(2)
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Consists of 1,137 shares of Common Stock owned by Mr. Iberger and 19,931 shares of Common Stock issuable to Mr. Iberger upon the exercise of stock options that are exercisable or will become exercisable within 60 days after the Record Date.
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(3)
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Consists solely of 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.
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(4)
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Consists of (i) 110,139 shares of Common Stock; (ii) 88,564 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 of April 28, 2019; (iii) 14,618 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; and (iv) 659,342 shares of common stock issuable upon conversion of our Senior Secured Convertible Promissory Notes based on an assumed conversion price of $0.50 . Based on information provided to the Company by the stockholder and disclosed in a Schedule 13G filed on July 11, 2017. The business address for David S. Cohen is 299 Bishop Avenue, Bridgeport, Connecticut 06610.
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(5)
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Consists of (i) 45,791 shares of Common Stock held by Chenies Investor LLC; (ii) 22,727 shares of Common Stock held by Chenies Management LLC; (iii) 278 shares of Common Stock held by Mr. Rimer; (iv) warrants to purchase 11,692 shares of Common Stock held by Chenies Investor LLC; (v) warrants to purchase 1,969 shares of Common Stock held by Chenies Management LLC; and (vi) 14,644 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 held directly by Mr. Rimer. Mr. Rimer is managing member of Chenies Investor LLC and Chenies Management LLC. Based on information provided to the Company by the stockholder and disclosed in a Schedule 13D/A filed on October 17, 2017.
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(6)
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Includes shares which 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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Director Qualification
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Description
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Financial Literacy
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Directors and candidates should be “financially literate” as such qualification is interpreted by the Board in its business judgment.
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Leadership Experience
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Directors and 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.
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Commitment to Our Values
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Directors and candidates shall be committed to promoting our financial success and preserving and enhancing our business and ethical reputation, as embodied in our codes of conduct and ethics.
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Absence of Conflicting Commitments
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Directors and candidates should not have commitments that would conflict with the time requirement commitments of a director.
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Reputation and Integrity
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Directors and 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.
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Knowledge and Experience
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Directors and candidates should possess knowledge and experience that will complement that of other directors and promote the creation of stockholder value.
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Name
|
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Age
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Position
|
| |
Board member
since year |
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Term
expiry |
Douglas Fisher, M.D.
|
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44
|
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Interim Chairman, Chair of the Compensation Committee and Member of the Audit Committee
|
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2017
|
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2020
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Ilan Danieli
|
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48
|
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Chief Executive Officer and Director
|
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2017
|
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2022
|
Kathleen LaPorte
|
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58
|
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Director, Chair of the Audit Committee
|
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2018
|
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2021
|
David S. Cohen
|
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61
|
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Director, Member of the Nominating and Corporate Governance Committee
|
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2017
|
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2022
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Richard Sandberg
|
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77
|
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Director
|
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2019
|
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2020
|
Jeffrey Cossman, M.D.
|
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73
|
| |
Director, Chair of the Nominating and Corporate Governance Committee
|
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2017
|
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2020
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Mark Rimer
|
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39
|
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Director, Member of the Compensation Committee, the Nominating and Corporate Governance Committee and Audit Committee
|
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2017
|
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2021
|
•
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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;
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•
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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
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•
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Reviewed the Company’s related party transactions and Policy for Related Party Transactions
|
|
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Kathleen LaPorte, Chairman
|
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Douglas Fisher, M.D.
|
|
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Mark Rimer
|
•
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junk mail and mass mailings;
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•
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resumes and other forms of job inquiries;
|
•
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surveys; and
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•
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solicitations and advertisements.
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•
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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 prior to that time;
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•
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convicted in a criminal proceeding or is subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);
|
•
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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;
|
•
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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;
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•
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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
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•
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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.
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Name and Principal Position
|
| |
Year
|
| |
Salary ($)
|
| |
Bonus ($)
|
| |
Option Awards
($)(1) |
| |
All Other
Compensation ($)(2) |
| |
Total ($)
|
Ilan Danieli,(3)
Chief Executive Officer |
| |
2019
|
| |
250,000
|
| |
—
|
| |
34,000
|
| |
13,556
|
| |
297,556
|
|
2018
|
| |
250,000
|
| |
—
|
| |
650,000
|
| |
13,797
|
| |
913,797
|
||
Carl R. Iberger,(4)
Chief Financial Officer |
| |
2019
|
| |
200,000
|
| |
—
|
| |
34,000
|
| |
10,671
|
| |
244,671
|
|
2018
|
| |
200,000
|
| |
—
|
| |
195,000
|
| |
8,160
|
| |
403,160
|
||
Ahmed Zaki Sabet,(5)
Chief Operations Officer |
| |
2019
|
| |
150,000
|
| |
10,000
|
| |
34,000
|
| |
13,758
|
| |
207,758
|
|
2018
|
| |
150,000
|
| |
—
|
| |
178,750
|
| |
13,687
|
| |
342,437
|
||
Stephen Miller,(6)
Chief Commercial Officer |
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2019
|
| |
200,000
|
| |
36,891
|
| |
47,600
|
| |
15,323
|
| |
299,814
|
|
2018
|
| |
200,000
|
| |
—
|
| |
97,500
|
| |
13,797
|
| |
311,297
|
(1)
|
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 officer. The fair value calculation of options granted during 2019 used the following assumptions: risk free interest rate of 2.47% based on the U.S. Treasury yield in effect at the time of grant; expected life of six years; and volatility of 133% based on historical volatility of the Company’s common stock over a time that is consistent with the expected life of the option. For 2019 option grants, the assumptions we used to calculate fair value are included in Note 13 to our audited consolidated financial statements for fiscal 2019, included in our annual report on Form 10-K for the fiscal year ended December 31, 2019 filed with the SEC on March 27, 2020. 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.
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(2)
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Represents health insurance premiums paid by the Company.
|
(3)
|
Mr. Danieli was appointed our Chief Executive Officer effective as of June 29, 2017. Prior to that, Mr. Danieli was the Chief Executive Officer of Precipio Diagnostics, Inc. since November 2011. An employment agreement with Mr. Danieli was executed by the Company and Mr. Danieli on August 7, 2018.
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(4)
|
Mr. Iberger was appointed our Chief Financial Officer effective June 29, 2017. Prior to that, Mr. Iberger was the Chief Financial Officer of Precipio Diagnostics, Inc. since October 1, 2016. An employment agreement with Mr. Iberger was executed by the Company and Mr. Iberger on August 7, 2018
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(5)
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Mr. Sabet was appointed our Chief Operations Officer effective June 29, 2017. Prior to that, Mr. Sabet was the Chief Operations Officer of Precipio Diagnostics, Inc. since November 2011. An employment agreement with Mr. Sabet was executed by the Company and Mr. Sabet on August 7, 2018.
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(6)
|
An employment agreement with Mr. Miller was executed by the Company and Mr. Miller on August 7, 2018.
|
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) |
| |
|
| |
|
| |
|
| |
|
|
3/18/2019
|
| |
16,667
|
| |
2.25
|
| |
34,000
|
||
|
| |
|
| |
|
| |
|
| |
|
Carl R. Iberger
Stock options(3) |
| |
|
| |
|
| |
|
| |
|
|
3/18/2019
|
| |
16,667
|
| |
2.25
|
| |
34,000
|
||
|
| |
|
| |
|
| |
|
| |
|
Ahmed Zaki Sabet
Stock options(3) |
| |
|
| |
|
| |
|
| |
|
|
3/18/2019
|
| |
16,667
|
| |
2.25
|
| |
34,000
|
||
|
| |
|
| |
|
| |
|
| |
|
Stephen Miller
Stock options(4)(5) |
| |
|
| |
|
| |
|
| |
|
|
3/18/2019
|
| |
23,334
|
| |
2.25
|
| |
47,600
|
(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 2019 used the following assumptions: risk free interest rate of 2.47% based on the U.S. Treasury yield in effect at the time of grant; expected life of six years; and volatility of 133% based on historical volatility of the Company’s common stock over a time that is consistent with the expected life of the option. 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)
|
The award vests over a four year period. Twenty-five percent (25%) of the options vest on the first anniversary of the grant and thereafter the reminder shall vest by 36 equal monthly installments and so long as the executive officer remains an employee of the Company or a Subsidiary on such dates.
|
(4)
|
Includes 6,667 stock options which were performance based and have been forfeited or canceled as of December 31, 2019.
|
(5)
|
Includes 16,667 stock options which vest over a four year period. Twenty-five percent (25%) of the options vest on the first anniversary of the grant and thereafter the reminder shall vest by 36 equal monthly installments and so long as the executive officer remains an employee of the Company or a Subsidiary on such dates.
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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 ($) |
| |
Option
Expiration Date |
Ilan Danieli
|
| |
9/26/2017
|
| |
2,500
|
| |
1,945
|
| |
28.05
|
| |
9/26/2027
|
|
2/16/2018
|
| |
30,556
|
| |
36,111
|
| |
10.65
|
| |
2/16/2028
|
||
|
3/18/2019
|
| |
—
|
| |
16,667
|
| |
2.25
|
| |
3/18/2029
|
||
|
| |
|
| |
|
| |
|
| |
|
| |
|
Carl Iberger
|
| |
9/26/2017
|
| |
2,500
|
| |
1,945
|
| |
28.05
|
| |
9/26/2027
|
|
2/16/2018
|
| |
9,167
|
| |
10,833
|
| |
10.65
|
| |
2/16/2028
|
||
|
3/18/2019
|
| |
—
|
| |
16,667
|
| |
2.25
|
| |
3/18/2029
|
||
|
| |
|
| |
|
| |
|
| |
|
| ||
Ahmed Zaki Sabet
|
| |
2/16/2018
|
| |
8,403
|
| |
9,931
|
| |
10.65
|
| |
2/16/2028
|
|
3/18/2019
|
| |
—
|
| |
16,667
|
| |
2.25
|
| |
3/18/2029
|
||
|
| |
|
| |
|
| |
|
| |
|
| |
|
Stephen Miller
|
| |
11/18/2013
|
| |
138
|
| |
—
|
| |
2,700.00
|
| |
11/18/2023
|
|
2/18/2014
|
| |
11
|
| |
—
|
| |
2,490.00
|
| |
2/18/2024
|
||
|
4/1/2014
|
| |
15
|
| |
—
|
| |
2,055.00
|
| |
4/1/2024
|
||
|
4/1/2015
|
| |
133
|
| |
—
|
| |
645.00
|
| |
4/1/2025
|
||
|
9/26/2017
|
| |
1,875
|
| |
1,459
|
| |
28.05
|
| |
9/26/2027
|
||
|
2/16/2018
|
| |
4,583
|
| |
5,417
|
| |
10.65
|
| |
2/16/2028
|
||
|
3/18/2019
|
| |
—
|
| |
16,667
|
| |
2.25
|
| |
3/18/2029
|
(1)
|
The award vests over a four year period. Twenty-five percent (25%) of the options vest on the first anniversary of the grant and thereafter the reminder shall vest by 36 equal monthly installments and so long as the executive officer remains an employee of the Company or a Subsidiary on such dates.
|
Name
|
| |
Fees Earned
or Paid in Cash ($)(5) |
| |
Option
Awards ($)(1)(4) |
| |
All Other
Compensation ($) |
| |
Total ($)
|
Samuel Riccitelli(2)
|
| |
24,708
|
| |
10,200
|
| |
—
|
| |
34,908
|
David S. Cohen
|
| |
21,458
|
| |
10,200
|
| |
—
|
| |
31,658
|
Douglas Fisher
|
| |
26,500
|
| |
10,200
|
| |
—
|
| |
36,700
|
Mark Rimer
|
| |
25,000
|
| |
10,200
|
| |
—
|
| |
35,200
|
Jeffrey Cossman
|
| |
25,667
|
| |
10,200
|
| |
—
|
| |
35,867
|
Kathleen LaPorte
|
| |
26,000
|
| |
21,286
|
| |
—
|
| |
47,286
|
Richard Sandberg(3)
|
| |
1,667
|
| |
14,480
|
| |
—
|
| |
16,147
|
(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. The fair value calculation of options granted during 2019 used the following assumptions: risk free interest rates of 1.60% to 2.47%, based on the U.S. Treasury yield in effect at the time of grant; expected life of six years; and volatility of 133% to 139% 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.
|
(2)
|
Mr. Riccitelli resigned from the Board effective December 1, 2019. Any vested option awards as of Mr. Riccitelli’s resignation date may be exercised up until three months following his resignation date. Unvested option awards as of the resignation date were canceled or forfeited as of such date.
|
(3)
|
Mr. Sandberg was elected a director of the Company on December 3, 2019.
|
(4)
|
The aggregate outstanding options for each non-employee director as of December 31, 2019 are:
|
Name
|
| |
Aggregate Options
Outstanding (#) |
Samuel Riccitelli
|
| |
9,329
|
David S. Cohen
|
| |
12,707
|
Douglas Fisher
|
| |
12,707
|
Mark Rimer
|
| |
12,707
|
Jeffrey Cossman
|
| |
12,707
|
Kathleen LaPorte
|
| |
12,240
|
Richard Sandberg
|
| |
7,240
|
(5)
|
Includes the following amounts for being a chairperson of a committee; Mr. Riccitelli $5,333; Mr. Fisher $4,000; Mr. Cossman $4,000; and Ms. LaPorte $2,667.
|
(1)
|
Includes shares of our common stock issuable upon exercise of options to purchase common stock awarded under our 2006 Plan and 2017 Plan.
|
(2)
|
All shares of our common stock available for future issuance are from our 2017 Plan.
|
•
|
1,163,586 shares of Common Stock have been initially reserved for the issuance under the 2017 Plan, plus on January 1, 2021 and each January 1 thereafter, the number of shares of Common Stock reserved and available for issuance under the 2017 Plan will be cumulatively increased by 8% of the number of shares of Common Stock outstanding on the immediately preceding December 31 or such lesser number of shares of Common Stock determined by the Administrator (as defined in the 2017 Plan);
|
•
|
Shares of Common Stock that are forfeited, cancelled, held back upon the exercise or settlement of an award to cover the exercise price or tax withholding, reacquired by the Company prior to vesting, satisfied without the issuance of Common Stock or otherwise terminated (other than by exercise) under the 2017 Plan are added back to the shares of Common Stock available for issuance under the 2017 Plan. Shares of Common Stock reacquired by the Company on the open market will not be added to the reserved pool under the 2017 Plan;
|
•
|
The award of stock options (both incentive and non-qualified options), stock appreciation rights, restricted stock awards, restricted stock units, unrestricted stock awards, cash-based awards, performance share awards and dividend equivalent rights is permitted under the 2017 Plan;
|
•
|
No dividends or dividend equivalents may be paid on full value awards (restricted stock, restricted stock units and performance share awards) subject to performance vesting until such shares are actually earned upon satisfaction of the performance criteria;
|
•
|
The value of all equity awards made under the 2017 Plan and all other cash compensation paid by the Company to any non-employee director in any calendar year may not exceed $500,000;
|
•
|
Any material amendment to the 2017 Plan is subject to approval by our stockholders; and
|
•
|
The term of the 2017 Plan will expire on the tenth anniversary of the date on which our stockholders approve the 2017 Plan.
|
|
| |
Option Awards
|
|||
Name
|
| |
Weighted Average
Exercise Price Per Share |
| |
Number of
Shares |
Ilan Danieli, Chief Executive Officer and Director
|
| |
$2.25
|
| |
16,667
|
Carl Iberger, Chief Financial Officer
|
| |
$2.25
|
| |
16,667
|
All current executive officers, as a group
|
| |
$2.25
|
| |
90,002
|
All current directors who are not executive officers, as a group
|
| |
$2.43
|
| |
39,216
|
All current employees and consultants who are not executive officers,
as a group |
| |
$2.42
|
| |
163,386
|
|
| |
2018
|
Audit fees
|
| |
$466,969
|
Audit-related fees
|
| |
—
|
Tax fees
|
| |
—
|
All other fees
|
| |
—
|
Total fees
|
| |
$466,969
|
|
| |
2019
|
Audit fees
|
| |
$278,335
|
Audit-related fees
|
| |
—
|
Tax fees
|
| |
—
|
All other fees
|
| |
—
|
Total fees
|
| |
$278,335
|
•
|
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 the 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.
|
|
| |
By Order of the Board of Directors of
|
| |
|
|
| |
Precipio, Inc.
|
| |
|
|
| |
|
| ||
|
| |
Sincerely,
|
| |
|
|
| |
|
| ||
|
| |
/s/ Ilan Danieli
|
| |
|
|
| |
Ilan Danieli
|
| |
|
|
| |
President and Chief Executive Officer
|
| |
|
1.
|
CERTAIN DEFINITIONS.
|
2.
|
PURCHASE OF COMMON STOCK.
|
3.
|
INVESTOR'S REPRESENTATIONS AND WARRANTIES.
|
4.
|
REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
|
5.
|
COVENANTS.
|
6.
|
TRANSFER AGENT INSTRUCTIONS.
|
7.
|
CONDITIONS TO THE COMPANY'S RIGHT TO COMMENCE SALES OF SHARES OF COMMON STOCK.
|
8.
|
CONDITIONS TO THE INVESTOR'S OBLIGATION TO PURCHASE SHARES OF COMMON STOCK.
|
9.
|
INDEMNIFICATION.
|
10.
|
EVENTS OF DEFAULT.
|
11.
|
TERMINATION
|
If to the Company:
|
| |||||
|
| |
Precipio, Inc.
|
|||
|
| |
4 Science Park
|
|||
|
| |
New Haven, CT 06511
|
|||
|
| |
Telephone:
|
| |
203-787-7888
|
|
| |
E-mail:
|
| |
ciberger@precipiodx.com
|
|
| |
Attention:
|
| |
Carl Iberger
|
With a copy to (which shall not constitute notice or service of process):
|
||||||
|
| | ||||
|
| |
New York, NY 10036
|
|||
|
| |
Telephone:
|
| |
212-930-9700
|
|
| |
Facsimile:
|
| |
212-930-9725
|
|
| |
E-mail:
|
| |
trose@srf.com
|
|
| |
Attention:
|
| |
Thomas A. Rose, Esq.
|
If to the Investor:
|
||||||
|
| |
Lincoln Park Capital Fund, LLC
440 North Wells, Suite 410 Chicago, IL 60654 |
|||
|
| |
Telephone:
|
| |
312-822-9300
|
|
| |
Facsimile:
|
| |
312-822-9301
|
|
| |
E-mail:
|
| |
jscheinfeld@lpcfunds.com/jcope@lpcfunds.com
|
|
| |
Attention:
|
| |
Josh Scheinfeld/Jonathan Cope
|
With a copy to (which shall not constitute notice or service of process):
|
||||||
|
| | ||||
|
| |
New York, NY 10017
|
|||
|
| |
Telephone:
|
| |
(212) 692-6267
|
|
| |
Facsimile:
|
| |
(212) 983-3115
|
|
| |
E-mail:
|
| |
ajmarsico@mintz.com
|
|
| |
Attention:
|
| |
Anthony J. Marsico, Esq.
|
If to the Transfer Agent:
|
||||||
|
| |
EQ Shareowner Services
1110 Centre Pointe Curve, Suite 101 Mendota Heights, MN 55120 |
|||
|
| |
Telephone:
|
| |
855-217-6361
|
|
| |
E-mail:
|
| |
WFSSRelationshipManagement@eg-us.com
|
|
| |
THE COMPANY:
|
| |||||
|
| |
|
| |
|
| ||
|
| |
PRECIPIO, INC.
|
| |||||
|
| |
|
| |
|
| ||
|
| |
By:
|
| |
/s/ Ilan Danieli
|
| ||
|
| |
Name: Ilan Danieli
|
| |||||
|
| |
Title: CEO
|
| |||||
|
| |
|
| |
|
| ||
|
| |
INVESTOR:
|
||||||
|
| |
|
| |
|
| ||
|
| |
LINCOLN PARK CAPITAL FUND, LLC
|
| |||||
|
| |
BY: LINCOLN PARK CAPITAL, LLC
|
| |||||
|
| |
BY: ROCKLEDGE CAPITAL CORPORATION
|
| |||||
|
| |
|
| |
|
| ||
|
| |
By:
|
| |
/s/ Josh Scheinfeld
|
| ||
|
| |
Name: Josh Scheinfeld
|
| |||||
|
| |
Title: President
|
|
1.
|
Capitalized Terms. Except as may be expressly provided herein, all capitalized terms used herein shall have the meanings assigned to them in the Original Notes.
|
2.
|
Amendments to the Original Notes:
|
a.
|
The Parties desire to extend the due date of the Original Notes with a due date April 16, 2020 by three (3) months thereby the Original Notes will become due on July 16, 2020.
|
b.
|
The Parties desire to amend the definition of “Floor Price” and as such the definition shall hereby be amended and read as follows: “Floor Price means $0.40 per share”.
|
c.
|
Section 2 (Interest) of the Original Notes shall be amended to read “ The Company shall pay interest to the Holder on the aggregate principal amount of this Note at the rate of 8% per annum, with eighteen (18) months of interest guaranteed, which amount shall be payable in full regardless of how long the this Note remains outstanding.
|
3.
|
Conforming Changes. All provisions in the Original Notes and any amendments, attachments, schedules or exhibits thereto in conflict with this Amendment shall be and hereby are changed to conform to this Amendment.
|
4.
|
Representations and Warranties. The Company hereby represents and warrants as follows:
|
a.
|
The Representations and Warranties made in the securities purchase agreement dated April 20, 2018 (as amended from time to time) and the securities purchase agreement dated May 14, 2020 (jointly the “Purchase Agreements”) pursuant to which Purchase Agreements the Original Notes have been issued to the Holder were true and correct as of the date made and are also true on and as of the date hereof and with the same force and effect as it made on and as of such date (or, if any such representation or warranty is expressly stated to have been made as of a specific date, as of such specific date).
|
b.
|
No Default or Event of Default has occurred and is continuing.
|
c.
|
Authority, Etc. The execution and delivery by the Company of this Amendment and the Company’s performance of this Amendment (i) are within the Company’s powers, (ii) have been duly authorized by all necessary action on the part of the Company, (iii) do not contravene, or constitute a default under, any provision of any Applicable Law, the Charter Documents of the Company and/or any agreement, judgment, injunction, order, decree or other instrument binding upon the Company.
|
d.
|
Enforceability of Obligations. This Amendment has been duly executed and delivered by the Company. This Amendment and the Original Notes as amended constitutes the valid and legally binding agreement of the Company, in each case enforceable in accordance with their terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors’ rights generally and general principles of equity (regardless of whether enforcement is sought in equity or at law).
|
e.
|
The holding period of the Original Notes for purposes of Rule 144 remains unchanged and unaffected by this Amendment
|
f.
|
The Company shall publicly disclose the substance of this Amendment no later than the Company’s filing of its annual report on form 10-K which is expected to be filed on or about March 27th 2020. None disclosure pursuant this item (f) shall render this Amendment null and void.
|
5.
|
Full Force and Effect. The Original Notes is not amended hereby and shall remain in full force and effect, except as otherwise set forth in this Amendment. The parties hereby ratify and confirm the terms and conditions of the Original Notes, as supplemented and amended by this Amendment.
|
6.
|
Applicable law. The substantive laws of the applicable state, as well as terms regarding forum and jurisdiction, as originally provided in the Original Notes shall govern the construction of this Agreement and the rights and remedies of the parties hereto.
|
7.
|
Counterparts. This Amendment may be executed in counterparts (including by means of facsimile or electronic transmission), each of which shall be deemed an original but all of which, when taken together, will constitute one and the same agreement.
|
PRECIPIO, INC.
|
| |
|
|||
|
| |
|
| |
|
By:
|
| |
|
| |
|
Name: Ilan Danieli
|
| |
|
|||
Title: CEO
|
| |
|
Name of Investor:
|
| |
|
|
| |
|
Signature of Authorized Signatory of Holder
|
| |
|
|
| |
|
Name of Authorized Signatory:
|
| |
|
|
| |
|
Title of Authorized Signatory:
|
| |
|
|
| |
|
Email Address of Authorized Signatory:
|
| |
|
|
| |
|
Address for Notice to Investor:
|
| |
|
Holder
|
| |
Amount
|
|
| |
|
Holder
|
| |
Amount
|
|
| |
|
Exhibit A
|
| |
Form of Officer’s Certificate
|
Exhibit B
|
| |
Form of Resolutions of Board of Directors of the Company
|
Exhibit C
|
| |
Form of Secretary’s Certificate
|
Exhibit D
|
| |
Form of Letter to Transfer Agent
|
1.
|
I am the of the Company and make the statements contained in this Certificate;
|
2.
|
The representations and warranties of the Company are true and correct in all material respects (except to the extent that any of such representations and warranties is already qualified as to materiality in Section 4 of the Purchase Agreement, in which case, such representations and warranties are true and correct without further qualification) as of the date when made and as of the Commencement Date as though made at that time (except for representations and warranties that speak as of a specific date, in which case such representations and warranties are true and correct as of such date);
|
3.
|
The Company has performed, satisfied and complied in all material respects with covenants, agreements and conditions required by the Transaction Documents to be performed, satisfied or complied with by the Company at or prior to the Commencement Date.
|
4.
|
The Company has not taken any steps, and does not currently expect to take any steps, to seek protection pursuant to any Bankruptcy Law nor does the Company or any of its Subsidiaries have any knowledge or reason to believe that its creditors intend to initiate involuntary bankruptcy or insolvency proceedings. The Company is financially solvent and is generally able to pay its debts as they become due.
|
|
| |
|
|
| |
Name:
Title: |
|
| |
|
|
| |
Secretary
|
|
| |
|
|
| |
Secretary
|
|
| |
|
PRECIPIO, INC.
|
| |
|
|||
|
| |
|
| |
|
BY:
|
| |
|
| |
|
|
| |
[name]
|
| |
|
|
| |
[title]
|
| |
|
SECTION 2.
|
ADMINISTRATION OF PLAN; ADMINISTRATOR AUTHORITY TO SELECT GRANTEES AND DETERMINE AWARDS
|
DATE APPROVED BY BOARD OF DIRECTORS:
|
| |
April 27, 2020
|
|
| |
|
DATE APPROVED BY STOCKHOLDERS:
|
| |
|
1 Year Precipio Chart |
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