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Interpace Biosciences to Sell $20M in Preferred Stock, Plans Reverse Stock Split

NEW YORK — Interpace Biosciences said on Monday that it has signed an agreement to sell $20 million in Series B preferred stock and that it is planning a one-for-10 reverse stock split.

According to the Parsippany, New Jersey-based company, 1315 Capital will purchase $19 million worth of the preferred stock, with the remaining $1 million being sold to existing investor Ampersand Capital Partners. The preferred stock is convertible into common stock at a conversion price of $.60 per share prior to the planned reverse stock split.

Ampersand has also agreed to exchange its existing $27 million of Series A preferred stock, which has a conversion price of $.80 per share, for newly issued Series B preferred stock in consideration of eliminating all past and future accrued dividends and all anti-dilution price adjustments, Interpace said. The Series B preferred stock will not accrue dividends or have anti-dilution price adjustments.

The planned reverse stock split, which is intended to boost Interpace's share price in order to meet the Nasdaq's minimum bid price requirement for continued listing will take place upon closing of the Series B preferred stock sale and is expected to be effective within one week, Interpace noted.

During early morning trading, Interpace shares were up around 2 percent at $.6611.

"We believe this proposed change in capital structure can benefit our stockholders and make our stock more attractive to institutional and other investors," Interpace President and CEO Jack Stover said in a statement.

The company recently changed its name from Interpace Diagnostics as it expands its focus beyond diagnostics to include drug discovery and development services in cancer and, potentially, other disease areas. It said the Series B preferred stock sale will help it achieve cash flow break even and accelerate its growth and acquisition strategy.