NOTE

– STOCKHOLDERS’ EQUITY

, STOCK OPTIONS AND WARRANTS

Series D Preferred Stock

April 2019,

the Company issued

3,500,000

shares of Series D preferred stock to Helomics as part of the acquisition. Each share of Series D preferred stock is subject to automatic conversion, whereby each such share converts automatically on a

10:1

basis into a share of the Company’s common stock upon the earlier of (

) the consummation of any fundamental transaction (e.g., a consolidation or merger, the sale or lease of all or substantially all of the assets of Predictive or the purchase, tender or exchange offer of more than

50%

of the outstanding shares of voting stock of Predictive,) or (

) the

one

-year anniversary of the issuance date. On

April 4, 2020,

3,500,000

shares of Series D convertible preferred stock were converted into

350,004

shares of common stock.

Series E Convertible Preferred Stock

June

through

September 2019,

the Company entered into a private placement securities purchase agreement with investors for shares of Series E convertible preferred stock. The Company issued

258

preferred shares. Each preferred shareholder had the right to convert each Series E convertible preferred share into

0.056857%

of the issued and outstanding shares of common stock immediately prior to conversion for each share of Series E convertible stock, beginning

six

months after the initial close date of

June 13, 2019.

On the date that is

months after the initial closing date, the Company has the option to convert the preferred shares into common stock upon the same terms and limitations as the above optional conversion. The preferred shares included a contingent beneficial conversion amount of

$289,935,

representing the intrinsic value of the shares at the time of issuance. The Company determined the Series E convertible preferred stock should be classified as permanent equity and the beneficial conversion feature amount was accreted through the earliest redemption date of

December 13, 2019.

During the

three

-month period ended

March 31, 2020,

shares of Series E convertible preferred stock were converted into

141,191

shares of common stock.

Equity Line

October 24, 2019,

the Company entered into an equity purchase agreement with an investor, providing for an equity financing facility. Upon the terms and subject to the conditions in the purchase agreement, the investor is committed to purchase shares having an aggregate value of up to

$15,000,000

of the Company’s common stock for a period of up to

three

years. The Company issued to the investor

104,651

commitment shares at a fair market value of

$450,000

for entering into the agreement. From time to time during the

three

-year commitment period, provided that the closing conditions are satisfied, the Company

may

provide the investor with put notices to purchase a specified number of shares subject to certain limitations and conditions and at specified prices, which generally represent discounts to the market price of the common stock. During the

three

-month period ended

March 31, 2020,

the Company issued

943,000

shares of common stock valued at

$1,869,899

pursuant to the equity line. As of

March 31, 2020,

there was

$12,810,907

remaining available balance under the equity line.

March 2020

Private Placement

March 2020,

the Company entered into a securities purchase agreement with certain accredited investors for the sale in a private placement of

260,000

shares of the Company’s common stock at

$2.12

per share. For each offering share an investor purchases, the investor received: (

) a warrant to purchase

one

share of common stock, exercisable immediately and terminating

five

and

one

-half years after the date of issuance and (

) a warrant to purchase

one

share of common stock, exercisable immediately and terminating

two

years after the date of issuance. All such warrants issued are exercisable at a price of

$1.88

per share.

In addition, and in lieu of common shares, the investors also purchased prefunded warrants to purchase

1,390,166

shares of common stock at a purchase price of

$2.12

per prefunded warrant, which represents the per share offering price, minus the

$0.0001

per share exercise price of each such prefunded warrant. As a result of the prefunded warrants exercise price being of a nominal amount, these warrants were included as outstanding shares within our earnings per share calculation. See

Note

– Loss per share

The sale of the offering shares, prefunded warrants and A and B warrants resulted in gross proceeds of

$3,498,612

and net proceeds of

$3,127,818

after deducting the placement agent fees and estimated offering expenses payable by the Company. The Company agreed to use the net proceeds from the offering for general corporate purposes. The offering closed on

March 18, 2020,

subject to the satisfaction of customary closing conditions. See

Note

– Notes Payable – Derivatives

for discussion of A, B and agent warrants accounted for as derivative liabilities.

Equity Incentive Plan

The Company has an equity incentive plan, which allows issuance of incentive and non-qualified stock options to employees, directors and consultants of the Company, where permitted under the plan. The exercise price for each stock option is determined by the Board of Directors. Vesting requirements are determined by the Board of Directors when granted and currently range from immediate to

three

years. Options under this plan have terms ranging from

three

ten

years.

The following summarizes transactions for stock options and warrants for the periods indicated:

	Stock Options					Warrants
	Number of Shares			Average Exercise Price		Number of Shares			Average Exercise Price
Outstanding at December 31, 2018		366,928		$	17.03		362,664		$	41.67

Issued		423,295			6.53		1,869,299			9.25
Forfeited		(23,799	)		13.30		(653	)		3,249.28
Exercised		-			-		(59,700	)		0.10

Outstanding at December 31, 2019		766,424		$	11.34		2,171,610		$	15.26

Issued		38,350			2.37		5,001,591			1.42
Forfeited		(10,736	)		9.20		(119,441	)		6.47
Exercised		-			-		-			-

Outstanding at March 31, 2020		794,038		$	10.90		7,053,760		$	4.57

Stock-based compensation expense recognized for the

three

-month periods ended

March 31, 2020

and

March 31, 2019

was

$287,838

and

$263,600,

respectively. The Company has

$110,628

of unrecognized compensation expense related to non-vested stock options that are expected to be recognized over the next

months.