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With Cash Down to $3M, Sequenom Urges Stockholders to Approve $33M Placement, Reverse Stock Split

NEW YORK, April 11 (GenomeWeb News) - Sequenom's cash holdings stood at $3 million as of March 31 --- putting its survival at risk if it can't raise additional cash by June, the company disclosed in a filing with the US Securities Exchange Commission yesterday.

 

In a preliminary proxy statement filed with the SEC yesterday outlining the agenda for the company's May 31 annual meeting, Sequenom urged stockholders to vote in favor of a private placement worth $33 million that it proposed earlier this month.

 

"If we were unable to secure adequate alternative funding quickly, we could be forced to wind down and cease operations or sell or merge the company at a distressed valuation," the company said in the filing. 

 

"Without additional capital, meeting our working capital needs under a continuation of the current business model would prove difficult beyond June 2006," the filing said.

 

As of March 31, the company had unrestricted cash, cash equivalents, and investments of approximately $3.0 million. As of Dec. 31, 2005, it had $8.7 million in cash, cash equivalents, short-term investments, and restricted cash.

 

Sequenom also disclosed in the proxy statement that it has been granted an April 12 hearing with Nasdaq to appeal a delisting notice it received in March due to its noncompliance with the exchange's $1.00 minimum closing bid price requirement.

 

Sequenom's board of directors is also proposing a reverse split of the company's stock, according to the filing, which it expects to "increase the market price of our common stock so that we are able to regain compliance with the Nasdaq minimum bid price listing requirement."

 

The proposed reverse split, "when implemented at an exchange ratio between 1-for-2 and 1-for-6, will result in the market price of our common stock rising to the level necessary to satisfy the $1.00 minimum bid price requirement," the company said.

 

Sequenom shares were trading at $.80 at midday.

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