Precipio (PRPO) Enters Into $20M At-The -Market Financing Arrangement

Specialty diagnostics company Precipio, Inc. (NASDAQ: PRPO), announces a new “At-The-Market” (ATM) financing arrangement that improves its financing flexibility. As provided in the Company’s prospectus supplement filed on April 2, 2021, Precipio will be able to sell shares from time to time through the ATM offering, up to an aggregate of $20M. The Company anticipates that this will be its primary financing method going forward.

The ATM will be managed by Alliance Global Partners, an investment bank with which Precipio has been working since 2017. This arrangement will be used in an ongoing manner to finance Precipio’s operations and provide the resources the Company needs to fuel its growth, particularly for its new HemeScreen offering for physician offices.

As the Company continues to grow, having the most cost-effective, flexible financial tools at its disposal is critical to financing in the least dilutive manner. The ATM structure provides Precipio’s management with more control over the timing, pricing, and proceeds it receives from selling shares into the market.

Mechanism of the ATM

The ATM is structured to enable the Company to sell shares directly into the market, at its discretion. At no time are these shares held by any individual fund or single investor, nor can they be purchased by such an investor. When the Company decides to increase its cash position, it instructs the bank (AGP) to begin to sell a specified number of shares into the market at a predetermined minimum share price that is supported by the market on that day.

If the market provides demand for shares at that price (or higher), the Company (via AGP) will proceed to sell those shares into individual shareholders’ hands at or above that predetermined price. If the market does not provide demand for shares at that price, the shares will remain “on the shelf” and not be sold. This control over the selling price, which impacts the proceeds to the Company and the subsequent dilution, was not available under the previous equity line.

The Company can also monitor the process of the shares being sold throughout the day and the impact of that process on the share price. Because the Company provides a minimum sale price that essentially creates a “floor” for the transaction, management has more control over the process. Furthermore, management can decide to stop the selling process at any time during the day. This flexibility and management’s ability to control the process throughout the day to ensure that there is no “flooding” of the market with shares that might depreciate the share price, are major advantages.

The transactions are handled by Precipio’s bank Alliance Global Partners who charges a fee of 3% of the gross proceeds of the sale. This lowers our cost of capital and makes it an extremely attractive financing vehicle.

“As our business growth in pathology and products gradually moves us towards breakeven and cash flow positive position, it has never been more important to focus on our cost of capital,” said Ilan Danieli, Precipio’s Chief Executive Officer. “Improving our position through the utilization of less dilutive, more cost-efficient tools that are also likely to reduce the volatility of the Company’s stock price - are critical to us achieving those goals.”

A prospectus supplement and accompanying prospectus relating to the offering have been filed with the SEC. Prospective investors should read the prospectus, the prospectus supplement and other documents the Company has filed with the SEC (some of which are incorporated by reference into the prospectus and prospectus supplement) for more complete information about the Company and the ATM. Copies of the prospectus, the prospectus supplement and the registration statement may be obtained, without charge, by visiting the SEC’s website at www.sec.gov or on the Company's website www.precipiodx.com.

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