Reduction of Approximately $6M in Current Vendor Liabilities, of Which $5M Converted into Long Term Settlements of $2.5M, to Be Paid Out Over 4½ Years
NEW HAVEN, CT / ACCESSWIRE / November 1, 2017 / Precipio, Inc. (NASDAQ: PRPO) announced today that it has completed a substantial restructuring of its vendor accounts payable liabilities. The negotiations include a reduction of approximately $5M in currently due vendor liabilities in total. These liabilities will be restructured into approximately $2.5M in secured, long-term vendor obligations with payments beginning July 2018; the vendor obligations will be paid down over 48 months, with an accrued interest rate of 10% per annum, together with an aggregate of warrants to purchase approximately 86,000 shares of Precipio common stock at an exercise of $7.50 per share. Furthermore, another $1.1M in additional vendor liabilities have been reduced to approximately $150,000, representing a reduction of 83% for those liabilities.
"The merger between Transgenomic and Precipio resulted in a balance sheet with vendor liabilities of over $17M at the time of the merger, which were subsequently reduced to approximately $12M following the merger. Today, management has completed a follow-on debt restructuring of $6M in vendor liabilities, which significantly reduces our liability burden, and will enable us to manage our cash flow to ensure our resources are appropriately directed towards the growth of the company," said Ilan Danieli, President and Chief Executive Officer. "I'd like to thank the vendors who have demonstrated flexibility and their willingness to work with the Company while agreeing to significant reductions in the balances owed, in order to allow the company to maximize its value."
The new debt structure will provide the company with an 8 month period until it begins making payments to those vendors in July 2018. The total monthly payments are estimated at less than $75,000 per month. Management believes that by then, the company will have reached revenue levels that will enable the company to make those payments without hindering growth.
"Having a balance sheet with a significant dollar amount in current vendor liabilities created a major burden on the company and adversely affected our ability to finance growth," said Carl Iberger, Precipio's Chief Financial Officer. "The ability to both reduce payables and convert them into a managed, scheduled and structured payment plan over a long period of time, gives the company a higher level of control and certainty around its cash outlays. This is a huge step in building a strong financial foundation for the Company," Mr. Iberger concluded.
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. Through its collaborations with world-class academic institutions specializing in cancer research, diagnostics, and treatment, initially the Yale School of Medicine, Precipio offers a new standard of diagnostic accuracy enabling the highest level of patient care. For more information, please visit www.precipiodx.com.
Forward-Looking Statements
Certain statements in this press release constitute "forward-looking statements," within the meaning of federal securities laws, including statements related to Precipio's merger with Transgenomic, consolidation of laboratory operations, reductions of accounts payable, 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 Report on Form 10-Q for the quarter ended June 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.
Contacts:
Precipio Investor Relations:
John Marco
Managing Director
Core IR
377 Oak Street
Garden City, NY 11530
516 222 2560
johnm@coreir.com
www.coreir.com
SOURCE: Precipio, Inc.
ReleaseID: 479922
