Precipio Restructures Capitalization Table
March 22 2018 - 7:37AM
Specialty diagnostics company Precipio, Inc. (NASDAQ:PRPO), in an
8-K issued today announced an agreement with investors in certain
2017 underwritten and registered direct offerings, to convert their
preferred shares and exercise a substantial portion of their
warrants.
The benefit to common stockholders of the restructuring is the
elimination of the preferred class and the bulk of warrants along
with accompanying preemptive rights including ratchets, which
restricted access to capital.
Preferred capital raises
In August 2017 Precipio completed its first post-merger capital
raise of $6 million of preferred shares, with a follow on raise of
$2.75 million of the same preferred shares in November 2017. As
disclosed, these preferred shares had a full anti-dilution ratchet
price protection, as well as 100% warrant coverage.
Each subsequent raise conducted by Precipio triggered the
repricing of those shares and warrants, resulting in further
dilution to shareholders.
Restructuring Opportunity
On Tuesday, March 20th, Precipio issued an announcement that led
to a substantial one-day closing share price appreciation from
$0.49 to $0.90 (an increase of approximately 87%), as well as
significant volume exceeding 26 million shares.
This created conditions favorable for Precipio and investors to
enter into an agreement to discharge the preferred shares and
exercise corresponding warrants which will leave the company with a
cleaner cap table, unlocking access to lower cost capital due to
the absence of a conversion or exercise price ratchet
adjustment.
“The news release of an exciting product followed by today’s
transaction eliminates a significant overhang resulting from
financings in 2017, and allows us greater financial flexibility in
commercializing our industry-leading pathology and diagnostics
products and services,” comments CEO Ilan Danieli. “A streamlined
balance sheet is critical to growing the company and creating
shareholder value to our common stockholders; this agreement could
not have come at a better time.”
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 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.
Forward-Looking Statements
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.
Inquiries
investors@precipiodx.com
+1-203-787-7888
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