CombiMatrix Corporation (NASDAQ:CBMX). To quote myself shamelessly -"This is another occasion where we can examine the effect on market price of secondary offerings as well as take a closer look at the financing employed by corporations and their investment bankers vis-à-vis the public and their shareholders to gain a better understanding of the investing process." See previous Blog on Acastic Pharma regards dilution.
Dec. 17, 2013 (GLOBE NEWSWIRE) -- CombiMatrix Corporation (CBMX), a molecular diagnostics company specializing in DNA-based testing services for developmental disorders and cancer diagnostics, today announced that it has priced a firm commitment underwritten public offering of 12,000 units of Series D convertible preferred stock and warrants at a price to the public of $1,000 per unit for gross proceeds of $12 million, prior to deducting underwriting discounts and commissions and offering expenses payable by the Company. Each unit consists of one share of Series D convertible preferred stock, which is convertible into 485.4369 shares of common stock at a conversion price of $2.06 per share, and one warrant to purchase 485.4369 shares of common stock at an exercise price of $3.12 per share. The net proceeds from the sale of the units, after deducting underwriting discounts and commissions and offering expenses payable by the Company, are anticipated to be approximately $10.8 million. The offering is expected to close on or about December 20, 2013, subject to satisfaction of customary closing conditions.
Ladenburg Thalmann & Co. Inc., a subsidiary of Ladenburg Thalmann Financial Services Inc. (LTS), served as the sole underwriter on the transaction.
Description Profile for CBMX
CombiMatrix Corporation, a molecular diagnostics company, operates primarily in the field of genetic analysis and molecular diagnostics. The company, through its subsidiary, CombiMatrix Molecular Diagnostics, Inc., operates a diagnostics reference laboratory that provides DNA-based clinical diagnostic testing services to physicians, hospitals, clinics, and other laboratories in the areas of prenatal and postnatal development disorders, and hematology/oncology genomics. Its developmental disorder suite of array tests focus on the prenatal and postnatal application of microarrays in diagnosing genomic syndromes associated with developmental delays, autism spectrum disorders, dysmorphic features, and/or birth defects. The company's oncology diagnostic tests include a series of diagnostic microarray tests that additional genomic information to physicians through the genetic analysis of blood, tissue, or biopsy samples. The microarray testing addresses various common hematological malignancies primarily chronic lymphocytic leukemia. The company's customers include commercial insurance companies, healthcare institutions, government payors, and individuals. CombiMatrix Corporation was founded in 1995 and is headquartered in Irvine, California.
CombiMatrix Corporation traded over $4 earlier this year based on the promise of the application of its diagnostic genetic screening processes. There was no forewarning to investors until today, December 17th, 2013, when the shareholders work up to find that the company diluted its shareholder interests by 100%. Effectively increasing the number of outstanding shares to a forward- adjusted 20 million from a previous 10 million shares. Yahoo finance on CBMX market capitalization Prices per share closed down 19.8% at $2.30 in only one day of trading with 2.7 million shares trading in today's market session. Average volume for the last month is approximately 700,000. Traders could not unload shares or sell additional shares short fast enough.
With an effective per share loss of .80 cents per share for a total of $7.95 million in the last reporting period, this additional $12,000,000 keeps the insiders afloat in a sinking ship for approximately 18 more months, after which they will be looking for work, or need to a new platform.
I am sure they won't have too difficult a time locating an investment banker willing to issue stock to some unsuspecting members of the stock buying public. Let's see how long it takes Ladenburg Thalmann & Co. Inc to issue a positive report in a PR wire news release that they arrange and pay for, to attract a new wave of uninformed public buyers back into the fray. Sounds like the same old monkey cage that was built so that when the monkey entered the box containing a nice moist banana, and subsequently grabbed the banana ended up getting got caught in the cage.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.