Completes Restructuring of close to 95% Transgenomic Liabilities
NEW HAVEN, CT, (March 13th, 2018) - Specialty cancer diagnostics company Precipio, Inc. (NASDAQ: PRPO), announced today it has settled its lawsuit with Crede Capital Group LLC, restructuring the final substantial liability of legacy payables inherited as part of the merger with Transgenomic in June 2017. These liabilities have been reduced from approximately $19 million at the merger, to approximately $7 million (a reduction of close to 65%).
As part of the settlement, Precipio will pay to Crede a total of $1.925 million over a period of 15 months, with most payments payable at Precipio’s option either in cash, stock, or as a combination of both.
TWith this settlement, close to 95% of the $19 million in legacy liabilities inherited as part of the merger with Transgenomic in June 2017 will have been settled.
Purchase Price of the Merger
Prior to the merger, Transgenomic had in excess of $19 million in legacy liabilities, which was owed to approximately 300 creditors. Because the merger was executed as a stock swap, the $19 million of liabilities comprised the largest portion of the purchase price of Transgenomic, which was assumed by the surviving entity, Precipio, Inc.
Resumption of Business Growth
Following considerable negotiation, the predominance of the debt has been restructured with a remaining balance of approximately $7 million, a substantial portion of which will be paid over the next four years.
Precipio’s management has been adamant about addressing these legacy liabilities in a manner equitable both to creditors and to Precipio’s shareholders, to enable Precipio’s long term growth.
Precipio and the vast majority of those creditors have successfully reached settlements that enabled the company to balance paying off the cash component of the merger, while preserving resources to complete the merger and grow the business. Q4-2017 represented a turning point for the Company when it was able to resume business growth after a post-merger restructuring period.
“This is an important milestone because it signifies an end to the restructuring phase and a return to focus entirely on business growth. I would like to thank all the creditors for their willingness to work with us to arrive at settlements that enable them to receive some form of recovery, while enabling the company to grow.” commented Ilan Danieli, Precipio’s CEO. “Furthermore, our financial team has worked diligently to achieve settlements that have significantly reduced the inherited liabilities from the merger. Arriving at successful settlements such as this one will allow management to fully focus time and resources on growth of the business.” concluded Mr. Danieli.
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. Through its collaborations with world-class academic institutions specializing in cancer research, diagnostics and treatment such as the Yale School of Medicine and Harvard's Dana-Farber Cancer Institute, Precipio offers a new standard of diagnostic accuracy enabling the highest level of patient care. For more information, please visit www.precipiodx.com.
Certain statements in this press release constitute “forward-looking statements,” within the meaning of federal securities laws, including statements related to ICP technology, including financial projections related thereto and potential market opportunity, plans and prospects and other statements containing the words “anticipate,” “intend,” “may,” “plan,” “predict,” “will,” “would,” “could,” “should,” and similar expressions, constitute forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995. The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors. Factors that could cause future results to materially differ from the recent results or those projected in forward-looking statements include the known risks, uncertainties and other factors described in the Company’s definitive proxy statement filed on May 12, 2017, the Company’s Quarterly Reports on Form 10-Q for the quarters ended June 30, 2017 and September 30, 2017, the Company’s prior filings and from time to time in the Company’s subsequent filings with the Securities and Exchange Commission. Any change in such factors, risks and uncertainties may cause the actual results, events and performance to differ materially from those referred to in such statements. All information in this press release is as of the date of the release and the Company does not undertake any duty to update this information, including any forward-looking statements, unless required by law.