According Ciphergen, the Nasdaq said the company did not file a listing notification and obtain shareholder approval for its July 22, 2005, stock sale to Quest Diagnostics. As GenomeWeb News reported at the time, a part of an R&D alliance between the two companies called for Ciphergen to sell Quest around 6.2 million shares of stock along with a warrant to purchase 2.2 million additional shares. The combined sale would give Quest a 17-percent stake in Ciphergen.
Ciphergen said the Nasdaq indicated that it believes the Quest deal "constituted a change of control which required shareholder approval because the number of shares purchased by Quest, together with the number of shares potentially issuable upon exercise of the warrant, could exceed 20 percent of the total number of outstanding shares of common stock" of Ciphergen.
Ciphergen said that the arrangement provides that Quest will not own more than 19.9 percent of Ciphergen.
Ciphergen said it has until Jan. 17 to present its opinion on the matter to Nasdaq.