ARQULE, INC. (NASDAQ:ARQL) Files An 8-K Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of ListingItem 3.01.
As described below, ArQule, Inc., a Delaware corporation (the "Company"), has been communicating with The Nasdaq Stock Market LLC ("Nasdaq") regarding an issue of inadvertent non-compliance with Nasdaq Listing Rule 5635(c) (Shareholder Approval of Equity Compensation). Nasdaq has confirmed that the Company has regained compliance with the rule, and the matter is now closed.
As disclosed in the Company’s annual proxy statements, a portion of each independent director’s annual compensation includes a grant of stock options under the Company’s Amended and Restated 1996 Director Stock Option Plan (the “1996 Plan”). In June 2017, after a full investigation, the Company determined that stock options covering 250,000 shares were issued under the 1996 Plan after its stated expiration date. The Company found that, while stockholders had approved an increase in the number of shares available for grants under the 1996 Plan as recently as May 2014, the Company inadvertently did not seek stockholder approval of an amendment to extend the expiration date of that Plan beyond May 2016. The Company also concluded that at no time did it award options in excess of amounts approved by stockholders and that the same awards could have been made under the Company’s 2014 Equity Incentives Plan (“2014 Plan”).
On July 11, 2017, the Company voluntarily notified Nasdaq of this administrative oversight and discussed its proposed remediation plan. On September 19, 2017, the Company’s board of directors unanimously approved resolutions to ratify the issuance of stock options to directors under the 1996 Plan, as well as the other acts discussed below, in accordance with the Delaware General Corporation Law and to reduce the number of shares reserved for issuance under the Company’s 2014 Plan by the number of shares underlying the directors’ stock options that were ratified. The board also agreed that the directors’ stock options ratified by the vote would be governed by the terms of the 2014 Plan.
In response to the Company voluntarily notifying Nasdaq of the administrative oversight described above, by letter dated September 27, 2017, Nasdaq notified the Company that, as a result of the Company’s granting options under the 1996 Plan after its termination date, Nasdaq had determined that the Company did not comply with Nasdaq’s stockholder approval requirement with respect to the 1996 Plan as set forth in Listing Rule 5635(c). Nasdaq further determined that, as a result of the remedial action taken, the Company has regained compliance with the Rule and that this matter is now closed.
The information set forth in Item 3.01 is incorporated by reference herein.
In addition to the findings and actions discussed above, in conjunction with its investigation, the Company determined that (i) grants of options for the purchase of 36,399 shares of common stock, and issuances of 36,399 shares of common stock upon the exercise of those options under the Company’s Amended and Restated 1996 Employee Stock Purchase Plan (an employee plan intended to satisfy the requirement of Section 423 under the Internal Revenue Code) and (ii) issuances of 64,696 shares of common stock to directors (upon each director’s election in lieu of cash fees) under the Company’s 2005 Director Stock Compensation Plan were issued after the expiration dates of such plans. On September 19, 2017, the board adopted resolutions ratifying any potential “defective corporate acts” under both plans. In no instance were the options granted or shares issued under these plans in excess of those approved by the Company’s stockholders.
The statutory notice required by Section 204 of the Delaware General Corporation Law to the Company’s stockholders is set forth in Exhibit 99.1 hereto and incorporated by reference herein.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits.
ARQULE INC ExhibitEX-99.1 2 v476237_ex99-1.htm EXHIBIT 99.1 Exhibit 99.1 NOTICE OF RATIFICATION OF POTENTIALLY DEFECTIVE CORPORATE ACTS BY THE BOARD OF DIRECTORS OF ARQULE,…To view the full exhibit click here
About ARQULE, INC. (NASDAQ:ARQL)
ArQule, Inc. is a biopharmaceutical company. The Company is engaged in the research and development of therapeutics to treat cancers and rare diseases. These drugs focuses on the biological pathways implicated in a range of cancers and certain non-oncology indications. Its clinical-stage pipeline consists of over four drug candidates, all of which are in targeted patient populations. The Company’s lead product candidate is tivantinib (ARQ 197), an orally administered, small molecule inhibitor of the c-Met receptor tyrosine kinase (MET) and its biological pathway. The Company’s product candidates include ARQ 092, designed to inhibit the AKT serine/threonine kinase; ARQ 087, a multi-kinase inhibitor designed to inhibit the fibroblast growth factor receptor (FGFR) family, and ARQ 761, a Beta lapachone analog being evaluated in investigator-sponsored testing as a promoter of NQO1-mediated programmed cancer cell necrosis.