Vermillion, Inc. (NASDAQ:VRML) Files An 8-K Entry into a Material Definitive Agreement

Item 1.01.Entry into a Material Definitive Agreement.

On February 17, 2017, Vermillion, Inc. (the Company) completed
its previously announced private placement (the Private
Placement) to the terms of the Securities Purchase Agreement,
dated February 13, 2017 (the Purchase Agreement), by and among
the Company and the investors listed on Schedule I thereto
(collectively, the Investors).At the closing of the Private
Placement, the Company sold an aggregate of 3,747,125 shares of
its common stock, par value $0.001 per share (Common Stock), at a
per share price of $1.40, which is the closing price of the
Common Stock quoted on the NASDAQ Capital Market on February 10,
2017.

In addition, the Investors received warrants (the Warrants) to
purchase up to an aggregate of 2,810,338 shares of Common Stock
at an exercise price of $1.80 per share (the Exercise Price),
subject to customary anti-dilution adjustments.The Warrants were
sold at a price of $0.125 per share of Common Stock underlying
the Warrants.The Warrants may be exercised from time to time
beginning six months following the date of issuance and expire on
the fifth anniversary of the date of issuance or, if earlier,
five business days after the Company delivers notice that the
closing price per share of its Common Stock exceeded the Exercise
Price for 20 consecutive trading days during the exercise
period.The terms of certain of the Warrants prohibit the holder
of such Warrants from exercising the Warrants to the extent that
the exercise would result in the holder beneficially owning more
than 19.99% of the outstanding shares of Common Stock.

At the closing, the Company received $5.6 million in gross
proceeds.If all of the Warrants are exercised, the Company would
receive an additional $5.1 million in gross proceeds, resulting
in total proceeds from the Private Placement of up to $10.7
million before transaction costs.The Company intends to use the
net proceeds from the Private Placement for general corporate and
working capital purposes.

The Purchase Agreement contains customary terms regarding, among
other things, representations and warranties and
indemnification.Additionally, under the Purchase Agreement, the
Company grants certain registration rights to the Investors.The
Company is obligated to use commercially reasonable efforts to
file, no later than April 18, 2017, a registration statement on
Form S-3 to register the resale of the shares of Common Stock
issued in the Private Placement and the shares of Common Stock
issuable upon exercise of the Warrants (collectively, the
Registrable Shares) and to effect the registration no later than
90 days after the filing date.With certain exceptions, the
Company is obligated to keep the registration statement effective
until the later of February 17, 2019, the date by which all
Registrable Shares may be sold without volume or manner of sale
restrictions which may be applicable to affiliates under Rule 144
or the date by which all the Registrable Shares are sold. The
Company will be responsible for all of its fees and expenses
incurred in connection with registering the Registrable Shares.

The Investors include Valerie Palmieri, the Companys President
and Chief Executive Officer, Fred Ferrara, the Companys Chief
Operating Officer, Eric Schoen, the Companys Senior Vice
President, Finance and Chief Accounting Officer, Robert Schroder,
the Companys Vice President for Global Business Development and
Managed Markets, James T. LaFrance, Chairman of the Companys
Board of Directors, directors James Burns and Veronica Jordan,
Oracle Partners, LP, the Jack W. Schuler Living Trust, certain
trusts of which H. George Schuler is the Trustee and Birchview
Fund LLC.Larry Feinberg is the Managing Member of Oracle
Associates, LLC, which is the general partner of Oracle Partners,
LP and, prior to the closing of the Private Placement,
beneficially owned more than 15.0% of the issued and outstanding
shares of Common Stock.Jack Schuler is the Trustee of the Jack W.
Schuler Living Trust and, prior to the closing of the Private
Placement, beneficially owned more than 15.0% of the issued and
outstanding shares of Common Stock.Prior to the closing of the
Private Placement, H. George Schuler beneficially owned more than
10.0% of the issued and outstanding shares of Common Stock.
Matthew Strobeck is the beneficial owner of Birchview Fund LLC
and, prior to the closing of the Private Placement, beneficially
owned more than 5.0% of the issued and outstanding shares of
Common Stock.

In addition, to the Stockholders Agreement, dated as of May 13,
2013, by and among the Company, Mr. Schuler, Oracle Partners, LP
and Oracle Ten Fund Master, LP (together, Oracle) and the other
purchasers named therein (the Stockholders Agreement), Mr.
Schuler and Oracle are each entitled to designate one individual
to be nominated by the Company to serve on the Companys board of
directors.

The foregoing summary does not purport to be complete and is
qualified in its entirety by reference to the

full text of the Purchase Agreement, a copy of which is attached
hereto as Exhibit 99.1 and is incorporated herein by reference.

This report contains forward-looking statements, as that term is
defined in the Private Litigation Reform Act of 1995, that
involve significant risks and uncertainties, including statements
regarding the use of proceeds from the Private Placement. Words
such as may, expects, intends, anticipates, believes, estimates,
plans, seeks, could, should, continue, will, potential, projects
and similar expressions are intended to identify forward-looking
statements. The forward-looking statements contained in this
report are based on the Companys expectations as of the date of
this report. A variety of factors could cause actual results and
experience to differ materially from the anticipated results or
other expectations expressed in such forward-looking statements,
including delays in satisfying or failure to satisfy closing
conditions for the private placement, changes to interpretations
of existing laws and regulations and other factors that are
described in the Companys Form 10-K for the year ended December
31, 2015 and Form 10-Q for the quarter ended March 31, 2016 as
filed with the Securities and Exchange Commission. The Company
expressly disclaims any obligation to update, amend or clarify
any forward-looking statements to reflect events, new information
or circumstances occurring after the date of this press release,
except as required by law.

Item 3.02. Unregistered Sales of Equity Securities.

The information set forth under Item 1.01 of this report is
incorporated by reference herein. The securities were offered in
reliance upon exemptions from registration under the Securities
Act of 1933, as amended (the Securities Act), afforded by Section
4(a)(2) of the Securities Act and rules promulgated thereunder
and corresponding provisions of state securities laws.Each of the
Investors is an accredited investor as defined in Rule 501(a)
under the Securities Act.

Item 7.01. Regulation FD Disclosure.

On February 14, 2017, the Company issued a press release
announcing the Private Placement, a copy of which is furnished as
Exhibit 99.2 to this report.

Item 9.01.Financial Statements and Exhibits.

(d)Exhibits

About Vermillion, Inc. (NASDAQ:VRML)

Vermillion, Inc. is a diagnostic service and bio-analytic solutions provider. The Company is engaged in the business of developing and commercializing diagnostic tests for gynecologic disease. It sells OVA1 risk of malignancy test for pelvic mass disease (OVA1). OVA1 is a blood test designed to, in addition to a physician’s clinical assessment of a woman with a pelvic mass, identify women who are at risk of having a malignant ovarian tumor prior to planned surgery. It developed OVA1 through pre-clinical studies in collaboration with various academic medical centers encompassing over 2,500 clinical samples. OVA1 is validated in a multi-center clinical trial encompassing approximately 30 sites reflective of the diverse nature of the clinical centers, at which ovarian adnexal masses are evaluated. Its ASPiRA LABS is a laboratory that provides diagnostic services using a biomarker-based diagnostic algorithm to inform clinical decision making and personalized treatment plans.

Vermillion, Inc. (NASDAQ:VRML) Recent Trading Information

Vermillion, Inc. (NASDAQ:VRML) closed its last trading session up +0.01 at 1.75 with 75,117 shares trading hands.