Transgenomic, Inc. (TBIOD: OTCQB) | Precipio Diagnostics and Transgenomic Complete Merger

OTC

Precipio Diagnostics and Transgenomic Complete Merger

Jun 30, 2017

OTC Disclosure News Service

Precipio Diagnostics, LLC and Transgenomic Inc. (OTCQB: TBIOD) today
announced the closing of their previously announced merger. In
connection with the transaction, Transgenomic has changed its name to
Precipio, Inc. Precipio’s common stock is expected to commence trading
on The NASDAQ Stock Market under the new ticker symbol “PRPO” upon the
opening of trading on June 30, 2017, or soon thereafter.

The company will operate under the leadership of Ilan Danieli, Chief
Executive Officer; Carl Iberger, Chief Financial Officer; and Steve
Miller, Chief Commercial Officer. The Board of Directors of Precipio
will initially be comprised of five directors: Robert Patzig will remain
as Chairman of the Board, together with Michael Luther, one of
Transgenomic’s existing board members. Samuel Riccitelli, Mark Rimer and
Ilan Danieli together comprise the remaining members of the board.
Precipio’s corporate headquarters is in New Haven, Connecticut.

“The union of Precipio and Transgenomic enables us to fulfill our vision
of a world-class, innovative company dedicated to eradicating the
pervasive problem of disease misdiagnosis,” said Ilan Danieli, CEO of
Precipio. “We believe that the combination of Precipio and Transgenomic
can transform medical care by leveraging Precipio’s unique diagnostic
platform with Transgenomic’s enabling technology for DNA liquid biopsies
to deliver better and more accurate diagnostic information to physicians
and their patients worldwide.”

Terms of the merger include the initial closing on a $1.2 million
private placement of preferred and convertible securities, out of a
total authorized amount of up to $7 million in preferred equity.
Simultaneous with the merger, holders of more than $14 million in
secured debt have converted into equity, providing the combined company
with a stronger balance sheet.

“Completion of our merger marks an exciting new chapter in the history
of our companies. Precipio and Transgenomic’s teams have already
accomplished a great deal in our shared drive to ensure that the new
Precipio is primed for growth. We look forward to sharing more details
on our plans and milestones in the coming weeks,” Mr. Danieli concluded.

Over the course of the past few months, in anticipation of the
contemplated merger, both companies have undertaken a rigorous
cost-cutting project to reduce the combined companies’ historical burn
rate. Post-merger, management anticipates the new organization will be a
leaner, more capital-efficient organization. These efficiencies are
expected to reduce the combined entity’s operating expenses by
approximately $1 million or more per quarter, an anticipated annualized
reduction of expenses of about $4-$5 million compared to 2016. The
majority of the cost reductions will be achieved immediately
post-closing and are related to reductions in administrative headcount
and the consolidation of lab operations and facilities, with a focus on
eliminating redundancies and realizing efficiencies.

Transgenomic’s Omaha CLIA-certified laboratory operations will move to
Precipio’s New Haven location, thereby reducing the substantial costs
associated with operating two fully-certified CLIA laboratories,
including but not limited to reductions in staff, equipment and the
total amount of leased space. In addition, Transgenomic recently
completed a move from its existing 30,000 square foot facility in Omaha
to a nearby smaller 5,000 square foot facility, reducing facility costs
by more than 75%. The new location is well-suited to serve as the
company’s RD center.

To accelerate commercial activities Precipio recently added a number of
new salespeople to its sales team, and anticipates adding more by year
end. The combined sales team has been cross-trained on both Precipio’s
pathology services and Transgenomic’s ICE COLD-PCR (ICP) technology to
enable immediate cross-selling opportunities.

The company also intends to invest in further development of its ICP
technology to define specific clinical applications, as well as
simplifying the adaptability and implementation of ICP technology for
its customers.

Paul Kinnon, President and CEO of Transgenomic, said, “We believe that
this merger with Precipio is an excellent strategic fit for Transgenomic
that provides the opportunity to realize the clinical and commercial
potential of our ICE COLD-PCR technology for DNA liquid biopsies, within
the merged company’s broad focus on precision medicine. We are pleased
to move forward as a combined entity to bring transformative solutions
in medical diagnostics to physician and patients alike.”

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, Precipio offers a new
standard of diagnostic accuracy enabling the highest level of patient
care. For more information, visit precipiodx.com.

Forward-Looking Statements

Certain statements in this press release constitute “forward-looking
statements,” within the meaning of federal securities laws, which
involve known and unknown risks, uncertainties and other factors that
may cause actual results to be materially different from any future
results, performance or achievements expressed or implied by such
statements. Forward-looking statements include, but are not limited to,
those with respect to management’s current views and estimates of
company performance and financial results, including the ability of the
Company to reduce expenses and cash burn, its ability to accelerate the
Company’s growth and generate revenue, and its ability to reduce the
problem of disease misdiagnosis. The known risks, uncertainties and
other factors affecting these forward-looking statements are described
in Transgenomic’s definitive proxy statement filed on May 12, 2017,
Transgenomic’s prior filings and from time to time in Precipio’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 Precipio does not undertake any duty to
update this information, including any forward-looking statements,
unless required by law.

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