Cancer Genetics Inc (CGIX) stock has been soaring 265.86% pre-market today. The price of biotechnology form’s shares was hovering at $21.11 as of 5:28 a.m. EST. News of amendment into its previously announced merger agreement is likely to be taking the stock price higher.
What causing the stock surge?
Cancer Genetics provides proprietary preclinical tests to pharmaceutical companies and biotechnology companies through its subsidiary vivoPharm for early-clinical development, making them an essential tool for their research. In addition to conducting studies tailored for drug development, the vivoPharm conducts studies tailored for guiding drug discovery and novel therapies. The Company conducts each study in accordance with In Vitro and In Vivo data and reporting, as needed for Investigational New Drug filings. vivoPharm operates in facilities that are GLP-accredited and accredited by the Association for Assessment and Accreditation of Laboratory Animal Care International (AAALAC).
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Cancer Genetics entered into Amendment No. 1 of the Merger and Reorganization Arrangement and Plan with StemoniX, Inc. and CGI Acquisition, Inc., a wholly-owned affiliate of the company, on February 8, 2021, amending the previously negotiated merger agreement dated August 21, 2020. CGI Acquisiiton will merge with and into StemoniX as part of the deal reached last year. After the merger, StemoniX will become a wholly-owned subsidiary of Cancer Genetics.
The Series C Funding and the purchasers in a private placement (PIPE) of CGIX, as amended, do not impact the ‘Exchange Ratio’ as specified in the Original Proposed Transaction and are proportionately dilutive to the historical equity holders of CGI and StemoniX at the close of the merger, and each is not taken into account in the evaluation of the overall amount of CGI Common Stock shares to be distributed to the historical securities at the time of the merger.
The amendment also provided that for the exchange of Convertible Note Warrants of StemoniX for warrants to buy a number of CGI Common Stock units will only be allowed equal to 20% of the principal amount of Convertible Notes acquired in the Merger.