SEATTLE, Jan. 26 /PRNewswire-FirstCall/ -- Cell Therapeutics, Inc. (CTI) (Nasdaq and MTA: CTIC) announced today that the Company received an Additional Staff Determination letter (the "Determination Letter") from the Listing Qualifications Staff (the "Staff") of The NASDAQ Stock Market indicating that the Company did not comply with Marketplace Rule 4350(i)(1)(C) when the Company amended the acquisition agreement with Systems Medicine, Inc. ("SMI") and issued additional common shares to SMI shareholders. Marketplace Rule 4350(i)(1)(C) requires shareholder approval for the issuance of common stock in connection with an acquisition if the issuance is greater than 20 percent of the pre-acquisition shares outstanding.
On January 6, 2009, as disclosed in the Company's Form 8-K filed with the SEC on January 8, 2009, the Company entered into the First Amendment to Acquisition Agreement (the "Amendment"), which amended the Acquisition Agreement with SMI, dated as of July 24, 2007, whereby the Company acquired SMI in a stock-for-stock merger. Pursuant to the Amendment, the "earn-out" provision of the Acquisition Agreement was amended to provide that the Company shall pay accredited SMI stockholders an immediate substitute "earn-out" payment of $5 million, to be paid in common stock at a value of $0.13 per share (the closing market price on the date of the Amendment), in lieu of the former potential milestone payments of $5 million and $10 million tied to certain FDA milestones for Brostallacin. As a result, the Company issued 38,186,911 shares of its common stock to SMI stockholders, which is in excess of 20% of the Company's pre-transaction shares outstanding as of July 24, 2007, the date of the original Acquisition Agreement.
The violation was inadvertent and unintentional. Upon learning of the
Staff's position that the issuance of shares resulting from the Amendment
violated Marketplace Rule 4350(i)(1)(C)
|SOURCE Cell Therapeutics, Inc.|
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