Alliqua files to increase the number of authorized shares.
Now why is this? Are they preparing for a merger? Or have they been approached by another company and they want to prevent a hostile takeover? This is the explanation they are giving:
The Increase in the Number of Authorized Shares of our Common Stock
We are seeking to increase the number of authorized shares of our common stock from 500,000,000 to 2,000,000,000 in order to allow for flexibility with respect to future transactions, including raising additional capital, acquisitions, stock splits and other general corporate purposes. Following the amendment, if approved, each additional share of our common stock authorized by the amendment to the articles of incorporation will have the same rights and privileges as each share of common stock currently authorized or outstanding. The holders of common stock have no preemptive rights. Authorized but unissued shares of our common stock may be issued at such times, for such purposes and for such consideration as our Board of Directors may determine to be appropriate without further authority from our shareholders, except as otherwise required by applicable law or stock exchange policies.
The adoption of this proposed amendment to our articles of incorporation will result in a greater number of shares of common stock available for issuance. There are no current plans to issue additional shares of common stock (other than those shares of common stock issuable if current outstanding warrants or options issued under and outside of our 2001 Incentive Stock Purchase Plan and 2011 Long-Term Incentive Plan are exercised). If additional shares of common stock are issued in the future, shareholders would experience a proportionate reduction in their shareholders’ interest with respect to earnings per share, voting, liquidation value and book and market value per share if the additional authorized shares are issued other than through a proportional issuance such as a stock split or stock dividend.
Another effect of such increase may be to enable our Board of Directors to render more difficult or to discourage any attempt to obtain control of us by means of a merger, tender offer, proxy contest, or otherwise, and thereby protect the continuity of present management. Our Board of Directors has no such plans at this time. However, the increase in the number of authorized shares of our common stock will allow our Board of Directors to have additional shares of common stock available to effect, unless prohibited by applicable law or other arrangements or restrictions, a sale of shares (either in public or private transactions), merger, consolidation or similar transaction in which the number of our outstanding shares would be increased and would thereby dilute the interest of a party attempting to obtain control of us.
So far they are saying they don't have any plans to issue more common stock but this is an attempt to be prepare in case a good opportunity comes along. I believe we will be hearing soon about the lidocaine study, and more likely revenue for Q3 and Q4 will surprise all of us. More contracts will be signed and possibly a partner to continue with phase III OF HAPAMATE.
AI
