NEW YORK (GenomeWeb) – Molecular diagnostics firm Precipio has been sued for more than $2 million by Crede Capital Group over an alleged violation of a securities agreement between the investment group and Transgenomic, which Precipio acquired last year.
According to the suit, which was filed in the Supreme Court of the State of New York, Crede had previously invested $5 million into Transgenomic in exchange for stock, as well as warrants convertible into stock and cash. According to Crede, it made multiple attempts to exercise the warrants in 2016 and 2017, receiving stock from Transgenomic but no cash. Crede said it again tried to exchange warrants following Transgenomic's merger with Precipio, but received neither cash nor stock.
"Under the terms of [their] merger, Precipio assumed all debts owed by Transgenomic," Crede stated in its lawsuit, "Thus, the debts owed to Crede by Transgenomic became Precipio's debts, which Precipio has not paid."
Crede is seeking approximately $2.2 million, as well as $3,737,32 per day starting on Feb. 20 — the date the suit was filed — to the date when judgement is entered, plus interest.
In a filing with the US Securities and Exchange Commission, Precipio said it is evaluating Crede's claims. It added that an adverse outcome in the lawsuit could have a "material effect" on its financial condition and liquidity.
Earlier this month, Precipio issued more than 1.8 million shares of its common stock to cancel $1.9 million in debt.