Full Press Release Details
Labs Receives Nasdaq Delisting Notification
to Minimum Bid Price and Plans to File Request for Hearing
Proposal at Annual Meeting of Stockholders supports plan for
continued listing on The NASDAQ Capital Market
Warrington, PA - December 3,
Laboratories, Inc. (Nasdaq: DSCO), announced today that, on November 30,
2010, the Company received a Staff Determination letter from The Nasdaq Stock
Market indicating that the Company has not established compliance with Nasdaq
Listing Rule 5550(a)(2) ("Minimum Bid Price Rule") because the Company's common
stock did not maintain a minimum closing bid price of $1.00 per share over a
period of 10 consecutive business days ending on or prior to November 29,
2010. As a result, the Company's common stock is subject to delisting
from The NASDAQ Capital Market (Nasdaq Capital Market). The Company
plans to request a hearing before a Nasdaq Listing Qualifications Panel to
review the Staff Determination, which request will stay the delisting of the
Company's common stock pending the Panel's decision. At the hearing,
the Company will present a plan for achieving compliance with the Nasdaq listing
requirements. There can be no assurance that the Panel will grant the
Company's request for continued listing on the Nasdaq Capital
Company is currently in compliance with all Nasdaq listing requirements other
than the Minimum Bid Price Rule. In that regard, the Company has
presented to its stockholders for approval at the upcoming Annual Meeting of
Stockholders to be held on December 21, 2010, a proposal (Proposal 3) to provide
the Company's Board of Directors with authority to effect a share consolidation,
or reverse split, of the Company's common stock at a ratio of 1-for-15, on the
terms described in the Company's proxy statement. In presenting
Proposal 3 for approval, the Board considered, among other things:
Proposal 3 is not approved by the Company's stockholders at the Company's Annual
Meeting of Stockholders, the Company may be unable to maintain the listing of
its common stock on the Nasdaq Capital Market, which could jeopardize the
Company's ability to continue to fund its operations, gain FDA approval for
Surfaxin, and continue investing in its research and development programs,
including Surfaxin LS , a lyophilized (dry powdered) formulation, and Aerosurf ,
the Company's initial aerosolized KL4
surfactant. Such a result could have a material adverse effect on the
Company, its financial condition and its business operations.
Panel were to deny the Company's request for continued listing, the liquidity
and marketability of the Company's common stock would be adversely
affected. Following delisting, the Company's common stock would be
eligible for quotation on the Over-The-Counter ("OTC") Bulletin Board, another
over-the-counter quotation system or the "pink sheets," but only after a market
maker, not the Company, made application for that purpose.
December 2, 2009, the Company received a delisting notification from The NASDAQ
Global Market (Global Market) indicating that the Company's common stock failed
to achieve a minimum closing bid price of $1.00 per share for more than 30
consecutive trading days and, as a result, the Company was not in compliance
with the Minimum Bid Price Rule. The delisting notification also
granted the Company 180 calendar days, or until June 1, 2010, to regain
compliance with the Minimum Bid Price Rule, which would occur if the Company's
common stock closed above $1.00 per share for 10 consecutive trading
days. Subsequently, on June 2, 2010, the Company transferred the
listing of its common stock to The Nasdaq Capital Market and, under applicable
rules, was afforded an additional period of 180 calendar days, or until
November 29, 2010, to regain compliance with the Minimum Bid Price
Rule. The Nasdaq Capital Market operates in substantially the same
manner as the Global Market. The Company's trading symbol continued
to be "DSCO" and the trading of the Company's common stock was unaffected by the
discussion in this press release of the Company's Proposal 3 to authorize a
reverse split is modified in its entirety be the description of Proposal 3 and
the related Proposal 4 contained in the Company's proxy statement, which was
filed with the SEC on November 15, 2010, and can be viewed, together with other
materials related to the Annual Meeting of Stockholders, at www.ezodproxy.com/discoverylabs/2010. The
reader is encouraged to read the entire description of Proposal 3 and Proposal 4
in the proxy statement, including the sections titled "Certain Risks Associated
with a Reverse Split" and "Effects of a Reverse Split." A stockholder
with questions or needing assistance in voting shares of the Company's common
stock is urged to call the firm assisting the Company in the solicitation of
Laboratories, Inc. is a biotechnology company developing surfactant therapies
for respiratory diseases. Surfactants are produced naturally in the lungs
and are essential for breathing. Discovery Labs' novel proprietary KL4 surfactant
technology produces a synthetic, peptide-containing surfactant that is
structurally similar to pulmonary surfactant and is being developed in liquid,
aerosol or lyophilized formulations. In addition, Discovery Labs'
proprietary capillary aerosolization technology produces a dense aerosol, with a
defined particle size that is capable of potentially delivering aerosolized
surfactant to the lung without the complications currently associated with
liquid surfactant administration. Discovery Labs believes that its
proprietary technology platform makes it possible, for the first time, to
develop a significant pipeline of surfactant products to address a variety of
respiratory diseases for which there frequently are few or no approved
therapies. For more information, please visit our website at www.Discoverylabs.com.
the extent that statements in this press release are not strictly historical,
all such statements are forward-looking, and are made pursuant to the safe
harbor provisions of the Private Securities Litigation Reform Act of
1995. These forward-looking statements, including with respect to the
potential continued listing of the Company's common stock on the Nasdaq Capital
Market, the potential approval in the United States of Surfaxin for the
prevention of RDS in premature infants and the potential advancement of the
Company's other KL4 surfactant
programs, the impact of stockholder voting on Proposal 3 at the upcoming Annual
Meeting of Stockholders, and the ability of the Company to fund its activities,
through registered financings or otherwise, are subject to certain risks and
uncertainties that could cause actual results to differ materially from the
statements made. Examples of such risks and uncertainties are
described in the Company's filings with the Securities and Exchange Commission
including the Company's proxy statement on Schedule 14A and the most recent
reports on Forms 10-K, 10-Q and 8-K, and any amendments thereto.
Cooper, President and Chief Financial Officer