AXM Pharma Provides Financing Plan to AMEX and Receives Notification of Noncompliance with AMEX Corporate Governance Requiremen
2006年3月8日 - 10:45PM
ビジネスワイヤ(英語)
On March 3, 2006, AXM Pharma, Inc. (AMEX:AXJ), (the "Company") a
manufacturer of proprietary and generic pharmaceutical and
nutraceutical products for the Chinese and other Asian markets,
submitted a letter to the American Stock Exchange ("Amex")
outlining the Company's plans to strengthen its financial condition
and bring itself into compliance with Amex's continued listing
standards. The Company's strategy is to raise sufficient funds to
support operational activities at its Shenyang facility in China.
The Company is looking primarily to raise this capital in China. As
previously disclosed, the Shenyang Municipal Government has
commenced the process of providing the Company approximately RMB 10
Million loan ($1.2 Million US). (Please note that any funds
provided by the Shenyang Municipal Government would be in the form
of an interest-free loan, not a grant as previously reported.) In
addition, the Company has obtained an agreement in principle with a
Chinese company to receive a three year loan of RMB 50-100 Million
($6.2-12.4 Million US), subject to receiving a first lien on the
Shenyang facility. The Shenyang facility is currently subject to a
lien securing a $3 Million loan from another Chinese company.
Finally, the Company's CEO and members of her immediate family are
prepared to sell or pledge as many as 5 million shares of their
common stock holdings in the Company in order to raise funds for
loans they would provide AXM Pharma. No assurance can be given that
the foregoing potential sources of funding will result in the
Company receiving any new financing. All are subject to
finalization of legal terms and fulfillment of various conditions.
Moreover, any financing received may prove insufficient to meet the
Company's cash requirements.. On February 28, 2006, Thomas P.
Carson and Montgomery Simus notified the Company of their decision
to resign from their positions on the Board of Directors, effective
immediately. On March 2, 2006, Mark J. Bluer submitted a letter of
resignation informing the Company of his decision to resign from
his position on the Board of Directors. Mssrs. Bluer, Carson and
Simus constituted three of the Company's four independent
directors. Mr. Carson also served as the chairman and financial
expert for the audit committee. Mr. Simus and Mr. Bluer were
members of the audit committee. In their resignation letters,
Mssrs. Bluer, Carson and Simus did not identify any material
disagreement with the Company's operations, policies or practices,
nor were any questions raised regarding the financial statements
filed by the Company with the Securities and Exchange Commission.
"Mssrs. Bluer, Carson and Simus have made important contributions
to the company and to the work of the board, for which we are
thankful," said Wang Weishi, CEO of the Company. "We have benefited
greatly from their collective wisdom, insight and experience and
wish them continued success." On March 6, 2006, the Company
received a letter from Amex informing the Company that it was in
noncompliance with certain Amex rules related to corporate
governance. Specifically, the Amex letter cited the Company's
failure to (i) have a majority of independent directors, (ii)
maintain an Audit Committee with at least three independent
directors, (iii) have at least one financially sophisticated
director on the Audit Committee, (iv) have a Nominating Committee
composed solely of independent directors and (v) maintain a
Compensation Committee comprised solely of independent directors.
The Company must submit a plan to the Amex no later than March 20
advising Amex of its plans to correct these corporate governance
deficiencies. The Board of Directors of the Company met to consider
these matters and has identified potential candidates to fill the
vacancies resulting from the three resignations. While no
assurances can be given that the Company will be successful in
recruiting new independent directors, candidates are currently
being interviewed. About AXM Pharma, Inc. AXM Pharma, Inc., through
its wholly owned subsidiary, AXM Pharma Shenyang, Inc. ("AXM
Shenyang"), is a manufacturer of proprietary and generic
pharmaceutical products, which include injectables, capsules,
tablets, liquids and medicated skin products for export and
domestic Chinese sales. AXM Shenyang is located in the City of
Shenyang, in the Province of Liaoning, China. AXM Shenyang has an
operating history of approximately 10 years. For additional
information on AXM Pharma Inc., please visit
http://www.axmpharma.com. Safe Harbor Statement under the Private
Securities Litigation Reform Act of 1995: The statements contained
in this news release include certain predictions and projections
that may be considered forward-looking statements under securities
law, including the statements regarding the Company's opportunities
for future growth. These statements involve a number of important
risks and uncertainties that could cause actual results to differ
materially including, but not limited to, the performance of joint
venture partners, obtaining regulatory approvals to market the
Company's products, the uncertainties associated with distributing
products in a developing country such as China, the availability of
cash to meet near term requirements as well as other economic,
competitive and technological factors involving the Company's
operations, markets, services, products and prices. With respect to
AXM, except for the historical information contained herein, the
matters discussed in this news release are forward-looking
statements involving risks and uncertainties that could cause
actual results to differ materially from those in such
forward-looking statements. Potential risks and uncertainties
include, but are not limited to, AXM's extremely limited operating
history, uncertainties related to the Company's access to
additional capital, competition and dependence on key management.
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