NEW HAVEN, Conn., Oct. 03, 2023 (GLOBE NEWSWIRE) -- Specialty cancer diagnostics company Precipio, Inc. (NASDAQ: PRPO), announces that the combination of revenue growth and cost cutting initiatives has reduced Cash Burn From Operations (CBFO) by 59% compared to the same quarter last year, from approximately $2.5M/quarter to $1M/quarter.
Management has set a target of reaching financial independence with its current cash reserves, meaning that the company will no longer need to conduct capital raises to fund cash burn. For the purpose of measuring success against that goal, we have selected the term Cash Burn From Operations (CBFO).
CBFO is a non-GAAP term calculated by using our total net change in cash (as reported in our financial statements), less net proceeds from any sale of shares through equity raises or use of the ATM. Continued revenue growth, alongside further implementation of cost reduction initiatives, drives down the company CBFO, ultimately towards reaching zero - which means the company has reached breakeven.
Following our news of $1.2 million Pathology revenues in August, which is our breakeven target for the Pathology division, September revenues are expected to exceed $1.4M, positioning the division to continue to exceed its breakeven target and generate cash, which lowers the company CBFO.
As recently announced, the Products division has received several new orders from new customers, and continues to make strides towards its breakeven target.
Given the current visibility to the pipeline in both the pathology and products division, the reduced threshold of products breakeven result, as well as the continued impact of the cost reduction initiatives, management anticipates that it has sufficient cash to reach breakeven, avoiding any significantly dilutive capital raise transactions.
"We are rapidly moving towards our goal of financial independence. Our business needs to stand on its own feet, unsupported by external cash raises, and generate a profit. It's as simple as that." said Ilan Danieli, CEO. "Once we achieve this, I'm confident the market will reward us with increased shareholder value, as appropriate to a cash-positive company with IP-protected leading products, a huge TAM, and significant impact on the healthcare system and patient's lives."
About Precipio
Precipio has built a platform designed to eradicate the problem of misdiagnosis by harnessing the intellect, expertise and technology developed within academic institutions and delivering quality diagnostic information to physicians and their patients worldwide, as well as proprietary products that serve laboratories worldwide. Through its collaborations with world-class academic institutions specializing in cancer research, diagnostics and treatment, Precipio offers a new standard of diagnostic accuracy enabling the highest level of patient care. For more information, please visit www.precipiodx.com.
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Forward-Looking Statements
This press release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including, among others, including other financial projections and potential market opportunity, plans and prospects. Except for historical information, statements about future volumes, sales, growth, costs, cost savings, margins, earnings, earnings per share, diluted earnings per share, cash flows, plans, objectives, expectations, growth or profitability are forward-looking statements based on management's estimates, beliefs, assumptions and projections. Words such as "could," "may," "expects," "anticipates," "will," "targets," "goals," "projects," "intends," "plans," "believes," "seeks," "estimates," "predicts," and variations on such words, and similar expressions that reflect our current views with respect to future events and operational, economic and financial performance, are intended to identify such forward-looking statements. These forward-looking statements are only predictions, subject to risks and uncertainties, and actual results could differ materially from those discussed. We caution investors not to place undue reliance on the forward-looking statements contained in this press release. You are encouraged to read our filings with the SEC, available at www.sec.gov, for a discussion of these and other risks and uncertainties Important factors that could affect performance and cause results to differ materially from management's expectations, or could affect the company's ability to achieve its strategic goals, includes factors that are described in the sections entitled "Risk Factors" and "Management's Discussion and Analysis" in the company's Annual Report on Form 10-K for the fiscal year ended December 31, 2022, as updated from time to time in the company's Securities and Exchange Commission filings. The company's forward-looking statements in this press release are based on management's current views, beliefs, assumptions and expectations regarding future events and speak only as of the date of this release. The company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by the federal securities laws.
