Dec 28 2010
Discovery Laboratories, Inc. (Nasdaq:DSCO) today announced that it has filed a Certificate of Amendment to its Amended and Restated Certificate of Incorporation (the "Amendment") to effect a 1-for-15 share consolidation, or reverse stock split ("reverse split"), effective at 12:01 a.m. on December 28, 2010 (the "Effective Time"). In addition, the Amendment reduces the number of shares of common stock, par value $0.001 per share, authorized under the Certificate of Incorporation from 380 million to 50 million. Because the Amendment does not reduce the number of authorized shares of common stock in the same proportion as the reverse split, the effect of the Amendment is to increase the number of shares of common stock available for issuance relative to the number of shares issued and outstanding. The stockholders of Discovery Labs approved proposals authorizing the Board of Directors, in its discretion, to implement the reverse split and reduce the number of authorized shares of common stock at the Annual Meeting of Stockholders held on December 21, 2010.
The Board of Directors of Discovery Labs has determined to implement the reverse split at this time to enable the market price per-share of its common stock to close above $1.00, which is a continued listing requirement of The NASDAQ Capital Market® ("Nasdaq"). On November 30, 2010, Discovery Labs received a Staff Determination letter from Nasdaq indicating that it had not established compliance with Nasdaq Listing Rule 5550(a)(2) ("Minimum Bid Price Rule") because its common stock had not closed above $1.00 per share over a period of 10 consecutive business days ending on or prior to November 29, 2010, and that its stock is subject to delisting. Discovery Labs has requested a hearing with Nasdaq to review the Staff Determination and believes that implementation of the reverse split will support its continued listing on Nasdaq. Discovery Labs believes that continued listing on Nasdaq, combined with the increase in shares available for issuance, will enhance its ability to secure necessary capital from potential strategic partners and prospective investors to achieve its key business objectives, including potentially gaining U.S. Food and Drug Administration (FDA) approval for its lead product, Surfaxin®, for the prevention of respiratory distress syndrome (RDS) in premature infants.
Source:
Discovery Laboratories, Inc.