Progenity, Inc. (“Progenity”) (NASDAQ:PROG), an innovative biotechnology company, today announced that it has entered into privately negotiated agreements with certain non-affiliated holders of its existing 7.25% convertible senior notes due 2025 (the "Notes") to exchange an aggregate of $20,175,000 principal amount of Notes for an aggregate of approximately 8,513,850 shares of its common stock, which number of shares of common stock includes shares in respect of the interest make-whole provisions of the indenture under which the Notes were issued. The exchange transactions are expected to close on or about October 26, 2021, subject to customary closing conditions. Progenity will not receive any cash proceeds from the exchange transactions.

The reduction in debt achieved by this exchange transaction represents approximately 38% of the company’s non-affiliated debt. Following the closing of the exchange transactions, approximately $137,125,000 in aggregate principal amount of Notes will remain outstanding, with terms unchanged, of which $103,500,000 is held by an affiliated holder, Athyrium Capital Management, LP.

Progenity also agreed to issue an aggregate of approximately 427,804 shares of common stock (the “waiver shares”) to certain investors in consideration for a waiver of certain contractual lock-up provisions to which Progenity agreed in connection with prior offerings of its securities. Progenity will not receive any cash proceeds from the issuance of the waiver shares. The waiver shares are being offered and sold pursuant to the Company’s shelf registration statement (File No. 333-258301), which was filed with the Securities and Exchange Commission (“SEC”) on July 30, 2021 and was declared effective on August 6, 2021. The offering of the waiver shares is being made only by means of a prospectus, including a prospectus supplement, forming a part of an effective registration statement. A final prospectus supplement and accompanying prospectus relating to the waiver shares being offered will be filed with the SEC. Electronic copies of the final prospectus supplement and accompanying prospectus may be obtained, when available, on the SEC's website at http://www.sec.gov.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.