>>GERMANTOWN, Md., May 9 /PRNewswire-FirstCall/ -- Advancis Pharmaceutical Corporation (Nasdaq: AVNC - News), a pharmaceutical company focused on developing and commercializing novel anti-infective products, today announced that it has closed its previously announced private placement of common stock and warrants to purchase common stock, resulting in the receipt of $27.25 million in gross proceeds. The newly issued shares were priced at $3.98, the closing price of the Company's common stock on April 25, 2005. As part of the offering, investors also received warrants to purchase approximately 2.4 million shares of common stock, exercisable within five years at a price of $4.78 per share.
Following the completion of the offering, Advancis was advised by The Nasdaq Stock Market that the offering was completed at a price determined by Nasdaq to be less than market value. Nasdaq determined that the market value of the transaction was $4.03375 per share. As a result, Nasdaq determined that the offering required stockholder approval because it represented 20 percent or more of the Company's total outstanding shares and included an affiliate of two directors of the Company.
In response to this notice of deficiency by Nasdaq, the Company intends to seek stockholder approval for the offering. A special meeting of stockholders will be held as soon as practicable. The Company believes that stockholder approval is assured because the holders of a majority of its common stock have agreed to vote in favor of the transaction. Based on conversations with representatives of Nasdaq, the Company believes that the proposed stockholder approval will resolve the deficiency.
The sale of the shares in the private placement and the shares issuable upon the exercise of the related warrants has not been registered under the Securities Act of 1933, as amended, or state securities laws, and no securities may be offered or sold in the United States without the sale being registered under the Securities Act and the securities laws of any other jurisdiction or through a valid exemption from the Securities Act and the securities laws of any other jurisdiction. The shares and warrants were offered and sold only to institutional and accredited investors. The Company has agreed to file a registration statement with the SEC covering the resale of the common stock issued in the private placement and issuable upon the exercise of the warrants.
In the notice of deficiency dated May 6, 2005, Nasdaq states that it determined that the private placement did not comply with Nasdaq Rules 4350(i)(1)(A) and 4350(i)(1)(D).<<
After Acadia, another patch of a botched IPO, but even the patch is botched. Sheesh. The stock closed at ~$5.25 today. Shareholders may not like this deal. Could be an interesting meeting.
Cheers, Tuck |
