Shareholder Opposes ADLS New Issue
Advanced
Life Sciences (NDAQ: ADLS) wants to issue millions of new shares that could significantly
dilute existing shareholders. Groundworks of Palm Beach, which owns approximately
5.74% of the firm, opposed this proposal in letter to the board found in a
Schedule
13D filing with the SEC. Here's a copy of that letter:
As a material stockholder of Advanced Life Sciences Holdings, Inc. (the
“Company”), I am requesting that you either amend or withdraw your unwarranted proposal
to increase by 300% the authorized common stock of the Company. I currently beneficially
own, directly and indirectly through my corporation Groundworks of Palm Beach County,
Inc. (“Groundworks”), approximately 5.74% of the common stock of the Company, and
have, therefore, made a significant financial investment in the survival and eventual
growth of the Company. Consequently, it was with dismay that I reviewed the Company’s
request to increase by 300% the authorized common stock.
As disclosed in the Schedule 13D I filed today with the SEC, I acquired my Company
shares over a period of approximately ten months for investment purposes. However,
upon review of the Company’s preliminary proxy statement filed with the SEC on February
6, 2009 (the “Preliminary Proxy Statement”), I have significant objections to the
proposal pursuant to which the Company intends to seek approval of an amendment to
its Amended and Restated Articles of Incorporation to increase the number of authorized
shares from 65,000,000 to 185,000,000, including an increase in the number of authorized
shares of common stock from 60,000,000 to 180,000,000 (the “Proposal”). Based on the
objections that I fully explain in this letter, I, on behalf of myself and Groundworks,
hereby request that the Company remove or amend the proposal.
I have significant concerns regarding this proposal stemming from both the size of
the increase and the fact that the Board has not provided sufficient information as
to how it intends to use this exorbitant amount of shares. I believe that a proposal
seeking an increase of 120,000,000 additional new shares underlies the problematic
issues that the Company is facing. While I understand that the current economic conditions,
combined with delays in the NDA filing, have placed the Company in a difficult liquidity
situation, I do not believe that you have justified the necessity of increasing by
300% the Company’s authorized common stock.
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