Company: DVAX
Filing Date: 2025-08-07
Form Type: 10-Q
Source: 0001029142-25-000117
Chunk: 455

Company: DYNAVAX TECHNOLOGIES CORP
Filing Date: 2025-08-07
Form: 10-Q
Item: Part I, Item 2
Chunk 455
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 Notes for cash upon the occurrence of a fundamental change (as defined in the applicable indenture governing the Convertible Notes) and, in certain circumstances, to increase the conversion rate of the applicable series of Convertible Notes for a holder that converts such Convertible Notes in connection with a make-whole fundamental change (as defined in the applicable indenture governing the Convertible Notes). A takeover of us may trigger the requirement that we repurchase the Convertible Notes and/or increase the conversion rate, which could make it more costly for a potential acquirer to engage in such takeover. Such additional costs may have the effect of delaying or preventing a takeover of us that would otherwise be beneficial to investors.

The Capped Calls may affect the value of the Convertible Notes and our common stock.*

In connection with the issuance of the 2026 Notes, we entered into capped call options with the option counterparties totaling $27.2 million (the "Capped Calls") in 2021. The Capped Calls cover, subject to customary adjustments under the terms of the Capped Calls, the number of shares of common stock that initially underlie the Capped Calls. The Capped Calls are expected to offset the potential dilution to our common stock as a result of any conversion of the 2026 Notes, subject to a cap based on the cap price. As part of the Refinancing Transaction completed in March 2025, 

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we unwound a portion of the Capped Calls and received $46.6 million in cash. Following the partial unwind, Capped Calls covering approximately 3,841,222 shares of common stock remain outstanding as of June 30, 2025.

In connection with establishing their initial hedges of the Capped Calls, we have been advised that the option counterparties and/or their respective affiliates entered into various derivative transactions with respect to our common stock concurrently with or shortly after the pricing of the 2026 Notes and/or purchased shares of our common stock concurrently with or shortly after the pricing of the 2026 Notes. In addition, the option counterparties and/or their respective affiliates may modify their hedge positions by entering into or unwinding various derivatives with respect to our common stock and/or purchasing or selling our common stock or other securities of ours in secondary market transactions following the pricing of the 2026 Notes and prior to the maturity of the 2026 Notes (and are likely to do so on each exercise date of the Capped Calls, which are expected to occur during the 30 trading day period