PARSIPPANY, N.J., March 23, 2017 /PRNewswire/ -- Interpace
Diagnostics Group, Inc. (NASDAQ: IDXG) (the "Company"), a fully
integrated commercial company that provides clinically useful
molecular diagnostic tests and pathology services, today announced
that it has entered into agreements to successfully restructure its
secured debt with the former RedPath Shareholders ("RedPath") and
concurrently terminate its royalty and milestone obligations.
The Company's outstanding secured debt to RedPath amounting to
$9.34 million is being acquired for
approximately $8.9 million (95% of
face value) by an institutional investor. Subsequently, the
institutional investor has agreed to exchange such debt for an
approximately $5.32 million secured
convertible note with a fixed conversion price of $2.44 ("fixed conversion price") and an
approximately $3.55 million secured note issued by the
Company. The new notes will bear nominal interest at the Federal
interest rate and, along with interest, will mature on June 22, 2018 at 125% of face value, if not
previously converted to common stock. Further, upon conversion
and/or redemption of 55% of the balance of each of the notes, all
secured liens on the Company's assets will be terminated. If the
Company's common stock trades above 135% of the fixed conversion
price for five consecutive trading days, the Company will have the
option to convert the convertible note into shares of its common
stock at the fixed conversion price. The Company also will have the
right to redeem the notes prior to their maturity at prices ranging
from 115% to 125% of the principal amount of the notes depending on
the time of redemption.
In addition the Company will issue to RedPath 5-year warrants to
acquire an aggregate of 100,000 shares of its common stock at
$4.69 per share. RedPath agreed to
terminate all future royalty and milestone obligations as a result
of the Company's acquisition of RedPath.
The restructuring transaction is expected to close on or about
March 23, 2017, subject to customary
closing conditions.
Jack Stover, President and CEO of
the Company, stated: "The objective of this restructuring is to
reduce our principal obligation, initially by approximately
$460,000, eliminate our quarterly
repayment obligations in 2017 by approximately $4 million, eliminate future royalty and
milestone obligations that will result in an immediate positive
impact on our balance sheet of approximately $6 million and provide an opportunity to
completely eliminate all liens and security interests in our assets
with either the conversion or redemption of 55% of each of the new
notes."
"With this restructuring, we will have a cleaner, stronger
balance sheet," said Mr. Stover, "This is another key step in
positioning our Company for long-term success. Including the gross
proceeds from public offerings of approximately $14 Million, we have increased our stockholder's
equity by over $17 million since
December 2016."
Maxim Group acted as the sole agent for the transaction.
About Interpace Diagnostics Group, Inc.
Interpace is a fully integrated commercial company that provides
clinically useful molecular diagnostic tests and pathology services
for evaluating risk of cancer by leveraging the latest technology
in personalized medicine for better patient diagnosis and
management. The Company currently has three commercialized
molecular tests: PancraGEN®, for the evaluation of pancreatic cysts
and assessment of risk of concomitant or subsequent cancer;
ThyGenX®, for the diagnosis of thyroid cancer from thyroid nodules
utilizing a next generation sequencing assay; and ThyraMIR®, for
the diagnosis of thyroid cancer from thyroid nodules utilizing a
proprietary gene expression assay. Interpace's mission is to
provide personalized medicine through molecular diagnostics and
innovation to advance patient care based on rigorous science. For
more information, please visit Interpace Diagnostics' website at
www.interpacediagnostics.com
About Thyroid Nodules, ThyGenX and ThyraMIR
testing
According to the American Thyroid Association,
approximately 15% to 30% of the 525,000 thyroid fine needle
aspirations (FNAs) performed on an annual basis in the U.S. are
indeterminate for malignancy based on standard cytological
evaluation, and thus are candidates for ThyGenX and ThyraMIR.
ThyGenX and ThyraMIR reflex testing yields high predictive value
in determining the presence and absence of cancer in thyroid
nodules. The combination of both tests can improve risk
stratification and surgical decision-making when standard
cytopathology does not provide a clear diagnosis for the presence
of cancer.
ThyGenX utilizes state-of-the-art next-generation sequencing
(NGS) to identify more than 100 genetic alterations associated with
papillary and follicular thyroid carcinomas, the two most common
forms of thyroid cancer. ThyraMIR is the first microRNA gene
expression classifier. MicroRNAs are small, non-coding RNAs
that bind to messenger RNA and regulate expression of genes
involved in human cancers, including every subtype of thyroid
cancer. ThyraMIR measures the expression of 10 microRNAs.
Both ThyGenX and ThyraMIR are covered by both Medicare and
Commercial insurers.
About Pancreatic Cysts and PancraGEN
PancraGEN is a pancreatic cyst molecular test that, by using a
small sample of pancreatic cyst fluid, can aid in pancreatic cancer
risk assessment. PancraGEN is 90% accurate, according to clinical
studies, enabling effective risk stratification of patients.
Pancreatic cancer is often difficult to diagnose in early stages
and typically spreads rapidly with signs and symptoms appearing
when the cancer is significantly advanced. Because of this, and
that complete surgical removal of the pancreas is not possible,
pancreatic cancer is considered a leading cause of cancer
deaths.
Forward Looking Statements
This press release contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, Section
21E of the Securities Exchange Act of 1934 and the Private
Securities Litigation Reform Act of 1995, relating to the Company's
future financial and operating performance. The Company has
attempted to identify forward looking statements by terminology
including "believes," "estimates," "anticipates," "expects,"
"plans," "projects," "intends," "potential," "may," "could,"
"might," "will," "should," "approximately" or other words that
convey uncertainty of future events or outcomes to identify these
forward-looking statements. These statements are based on current
expectations, assumptions and uncertainties involving judgments
about, among other things, future economic, competitive and market
conditions and future business decisions, all of which are
difficult or impossible to predict accurately and many of which are
beyond the Company's control. These statements also involve known
and unknown risks, uncertainties and other factors that may cause
the Company's actual results to be materially different from those
expressed or implied by any forward-looking statement. Known and
unknown risks, uncertainties and other factors include, but are not
limited to, the Company's ability to adequately finance the
business, its ability to restructure its debt and other
obligations, the market's acceptance of its molecular diagnostic
tests, its ability to secure additional business and generate
higher profit margins through sales of its molecular diagnostic
tests, in-licensing or other means, projections of future revenues,
growth, gross profit and anticipated internal rate of return on
investments and our ability to maintain our NASDAQ listing.
Additionally, all forward-looking statements are subject to the
risk factors detailed from time to time in the Company's filings
with the SEC, including without limitation, the Annual Report on
Form 10-K filed with the SEC on March 30,
2016, as amended on April 29,
2016 and June 14, 2016, the
Quarterly Report on Form 10-Q filed with the SEC on November 17, 2016, and the prospectus supplements
and accompanying prospectuses related to our recent public
offerings that were filed with the SEC. Because of these and other
risks, uncertainties and assumptions, undue reliance should not be
placed on these forward-looking statements. In addition, these
statements speak only as of the date of this press release and,
except as may be required by law, the Company undertakes no
obligation to revise or update publicly any forward-looking
statements for any reason.
CONTACTS:
Interpace Diagnostics
Investor Relations:
Paul Kuntz
Redchip
Paul@Redchip.com
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SOURCE Interpace Diagnostics Group, Inc.