CombiMatrix to buy back series E 6% convertibles to avoid dilution

Company pays $300 for right to buy back convertibles at $1,000 each

By Angela McDaniels

Tacoma, Wash., Feb. 5 – CombiMatrix Corp. entered into a repurchase agreement on Feb. 4 with the holders of its outstanding series E 6% convertible preferred stock, according to an 8-K filing with the Securities and Exchange Commission.

The company agreed to pay each holder $300 per preferred share in consideration for the right to repurchase that holder’s preferred shares at a price of $1,000 per preferred share, which was the original price paid by the holders in February 2015.

The company must repurchase the preferred shares within one business day after closing its underwritten public offering.

In connection with entering into the repurchase agreement, the company was granted some consents and waivers related to the public offering.

If the public offering is not completed by the date noted in the repurchase agreement, the repurchase agreement will terminate and the company will not be obligated to repurchase the preferred shares.

The company said the repurchase agreement allows it to avert the potentially significant dilution that would have occurred from the full ratchet of the conversion price of the preferred shares upon closing of the public offering.

CombiMatrix is a biotechnology company based in Irvine, Calif.

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