Egalet Corporation (NASDAQ:EGLT) Files An 8-K Results of Operations and Financial ConditionItem 2.02 Results of Operations and Financial Condition.
The information set forth in Item 3.01 below under the heading “Fundamental Change under 5.50% Convertible Notes Indenture” with respect to Egalet Corporation’s (the “Company”) cash and cash equivalents, restricted cash and marketable securities as of June30, 2018 is incorporated into this Item 2.02 by reference.
Item 2.04. Triggering Events That Accelerate or Increase a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement
The information set forth in Item 3.01 below under the heading “Fundamental Change under 5.50% Convertible Notes Indenture” is incorporated into this Item 2.04 by reference.
Item 3.01. Notice of Delisting or Failure to Satisfy a Continued Listing Ruleor Standard; Transfer of Listing
On July9, 2018, the Company received notice from The Nasdaq Stock Market LLC (“Nasdaq”) that the Nasdaq Hearings Panel has approved the transfer of the listing of the Company’s common stock from The Nasdaq Global Market to The Nasdaq Capital Market effective at the open of business on July11, 2018 (the “Transfer”). The continued listing on The Nasdaq Capital Market is subject to (i)the fulfillment of certain conditions and milestones and (ii)the Company’s evidencing a market value of the Company’s common stock of over $35 million for at least 10 consecutive trading days not later than November20, 2018.The Company is working to meet such conditions and milestones and to demonstrate compliance with the requirements for continued listing on The Nasdaq Capital Market.
As previously disclosed, the Company received a deficiency notice, dated November24, 2017, from Nasdaq indicating that the Company was not in compliance with The Nasdaq Global Market continued listing requirement set forth in Nasdaq’s Listing Rule5450(b)(2)(A)(the “Minimum Market Value Rule”), as the minimum market value of the Company’s common stock had been below $50 million for 30 consecutive business days. In accordance with Nasdaq Listing Rule5810(c)(3)(C), the Company was provided an initial grace period of 180 calendar days, or until May23, 2018, to regain compliance with the Minimum Market Value Rule.The Company did not regain compliance with the Minimum Market Value Ruleby May23, 2018, and on May30, 2018, the Company requested a hearing before a Nasdaq Hearings Panel, which stayed the potential delisting of the Company’s common stock pending the issuance of the Nasdaq Hearings Panel’s decision and the expiration of any extension granted by the Nasdaq Hearings Panel.
Also, as previously disclosed, on March8, 2018, the Company received a notice from Nasdaq that the Company was not in compliance with Nasdaq’s Listing Rule5450(a), as the closing bid price of the Company’s common stock had been below $1.00 for the previous 30 consecutive business days.The Company was provided with an initial grace period of 180 calendar days, or until September4, 2018, to regain compliance with the minimum bid price requirement.
Fundamental Change under 5.50% Convertible Notes Indenture
Under the indenture (the “Indenture”) governing the Company’s 5.50% convertible senior notes due 2020 (the “5.50% Notes”), the Company’s common stock ceasing to be listed on the Nasdaq Global Market as a result of the Transfer will constitute a “Fundamental Change.” In accordance with the Indenture, the Company is required, on or before the 20thcalendar day following the Transfer, to give notice of the Fundamental Change to the holders of the approximately $24.6 million in aggregate principal amount of 5.50% Notes outstanding and to make an offer to purchase all or any portion (equal to $1,000 or an integral multiple of $1,000) of each holder’s 5.50% Notes on the terms set forth in the Indenture. In such offer, the Company is required to repurchase the 5.50% Notes for a price in cash equal to 50% of the aggregate principal amount of 5.50% Notes repurchased plus accrued and unpaid interest thereon, if any, to the date of repurchase, which date is to be no less than 20 business days and no more than 35 business days from the date on which such notice is mailed. As of June30, 2018, the Company had cash and cash equivalents, restricted cash and marketable securities of approximately $70 million. This information is preliminary,