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.

May 2020,

we notified the holders of our Series E Convertible Preferred Stock of our election to convert the outstanding shares of Series E Stock into common stock effective on

June 13, 2020

pursuant to the terms of the Series E Stock. Prior to the conversion, there were

207.7

shares of Series E Stock outstanding. Each share of Series E Stock converted into

0.056857%

of the issued and outstanding shares of common stock immediately prior to conversion; therefore, the

207.7

outstanding shares of Series E Stock on

June 13, 2020

converted into

1,257,416

shares of common stock equal to

11.8%

of the outstanding shares of common stock as of

June 12, 2020.

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

six

months ended

June 30, 2020,

the Company issued

943,000

shares of common stock valued at

$1,869,899

pursuant to the equity line. As of

June 30, 2020,

there was

$12,810,907

remaining available balance under the equity line.

March 2020

Private Placement

March 18, 2020,

we issued sold and issued to private investors (i)

260,000

shares of common stock, at a sale price of

$2.121

per share; (ii) prefunded warrants to acquire

1,390,166

shares of common stock, sold at

$2.12

per share and exercisable at an exercise price of

$0.001

per share; (iii) Series A warrants to acquire

1,650,166

shares of Common Stock at

$1.88

per share, exercisable immediately and terminating

five

and

one

-half years after the date of issuance; and (iv) Series B warrants to acquire

1,650,166

shares of Common Stock at

$1.88

per share, exercisable immediately and terminating

two

years after the date of issuance.

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 during the period from purchase through to exercise during the

second

quarter

2020.

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

–– 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.

Schwartz Note Exchange

Effective as of

April 21, 2020,

the Company and Carl Schwartz, entered into an exchange agreement relating to a promissory note of the Company dated

January 31, 2020

issued by the Company in the principal amount of

$2,115,000.

Pursuant to the exchange agreement, Dr. Schwartz was issued

1,533,481

shares of newly issued common stock at an exchange rate of

$1.43

per share.

See Note

– Notes Payable.

May 2020

Registered Direct Offering and Concurrent Private Placement of Warrants

During

May 2020,

the Company entered into a securities purchase agreement with certain accredited investors for a registered direct offering of

1,396,826

shares of common stock, par value

$0.01

per share. In a concurrent private placement, the Company also issued such investors warrants to purchase up to an aggregate of

1,396,826

shares of common stock. The shares and the warrants were sold at a combined offering price of

$1.575

per share and associated warrant. Each warrant is exercisable immediately upon issuance at an exercise price of

$1.45

per share and will expire

five

and

one

-half years from the issue date. The sale of the offering shares and associated warrants resulted in gross proceeds of

$2,200,001

and net proceeds of

$1,930,101

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

May 8, 2020.

Acquisition from Soluble Therapeutics and BioDtech

May 27, 2020,

the Company entered into an Asset Purchase Agreement with InventaBioTech, Inc. (“InventaBioTech”) and

two

of its subsidiaries, Soluble Therapeutics, Inc. (“Soluble”), and BioDtech, Inc. (“BioDtech”), and simultaneously completed the acquisition of substantially all of Soluble's and BioDtech's assets. In exchange, the Company issued

125,000

shares of common stock and waived all existing claims that the Company has or

may

have against InventaBioTech (f/k/a CytoBioscience, Inc.). All of the shares issued in the acquisition were deposited into escrow, with

25,000

to be released upon the

six

month anniversary of the closing,

25,000

to be released upon the

nine

month anniversary of the closing, and the remaining shares to be released on the

one

year anniversary of the closing. Notwithstanding the foregoing, all or some of the escrow shares

may

be released and returned to the Company for reimbursement in the event that the Company suffers a loss against which InventaBioTech, Soluble, and BioDtech have indemnified the Company pursuant to the Agreement. The Company is also entitled to reclaim

10,000

of the shares if, within

six

months of the closing, the Company is unable to successfully obtain ownership of all of Soluble's interest under its license agreement with the UAB Research Foundation. As a result of the acquisition which was treated as an asset acquisition, the Company recognized fixed assets of

$1,492,500.

June 2020

Warrant exercise and issuance

During

June 2020,

the Company entered into an agreement with certain accredited institutional investors to immediately exercise for cash an aggregate of

1,396,826

of the warrants issued in connection with the

May 2020

Registered Direct Offering, exercisable immediately at the exercise price of

$1.45

per share of common stock plus an additional

$0.125

for each new warrant to purchase up to a number of shares of common stock equal to

100%

of the number of shares issued pursuant to the exercise of the existing warrants. The new warrants are exercisable immediately and have a term of

five

and

one

-half years and an exercise price per share equal to

$1.80.

The Company received

$2,130,701

in gross proceeds and net proceeds of

$1,865,800

after deducting the placement agent fees and offering expenses payable by the Company. The Company expects to use the net proceeds of these transactions for general corporate and working capital purposes.

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		76,862			1.93		7,992,706			1.54
Forfeited		(25,169	)		7.58		(119,441	)		6.47
Exercised		-			-		(2,786,992	)		0.79

Outstanding at June 30, 2020		818,117		$	10.54		7,257,883		$	5.83

Stock-based compensation expense recognized for

three

months ended

June 30, 2020

and

June 30, 2019

was

$134,939

and

$1,380,620,

respectively. Stock-based compensation expense recognized for

six

months ended

June 30, 2020

and

June 30, 2019

was

$422,777

and

$1,644,220,

respectively. The Company has

$59,210

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

months.