GI Dynamics® Board considering potential ASX Delisting


GI Dynamics® Inc (ASX: GID) is a company from the health care sector, developing EndoBarrier® (not approved for sale and limited by federal law to investigational use only) for patients with type 2 diabetes and obesity.

On 4 June 2019, GI Dynamics® Inc provided the below-mentioned updates regarding the 2019 Annual Meeting of Stockholders (Annual Meeting).

Annual Meeting Details:

The company expects the Annual Meeting to be held by June 2019 end.

A preliminary proxy statement along with the notice of the Annual Meeting will soon be filed with ASX as well as the U.S. Securities and Exchange Commission for the purpose of review. Depending on the completion of the relevant review periods, all the stockholders will be mailed a final proxy statement along with the announcement of notice of Annual Meeting.

Further, the company will put forward multiple proposals for approval at the Annual Meeting along with stockholders’ approval for the potential delisting of the Company from the official list of ASX as per listing rule 17.11.

Potential Delisting:

Based on the current financial position of the company as well as the stage of development, the Board is considering for some time whether it is best in the interest of the shareholders of the company to stay listed on the Official List or not. As a result, ASX has provided the company with the in-principle advice regarding the potential removal of the Company from the Official List.

Upon receiving the formal request from GI Dynamics®, ASX has confirmed that it is likely to agree to remove the Company from the Official List which will depend on GI Dynamics® complying with certain conditions apart from obtaining stockholder approval for the Delisting.

Below are the reasons for the Board considering a Delisting:

  • The company experiences significant direct and indirect costs in order to comply with the filing and reporting requirements imposed on it as a result of being listed on the Official List. The Professional fees incurred by the company are huge to fulfil the reporting and compliance requirements. In case the company becomes a non-listed company, the costs of an annual financial statement audit by a public accounting firm will decline. The company estimates that it needs to bear a cost of $300k per annum to remain listed on ASX.
  • Apart from the cost of a continued listing on the Official List, the company is unable to utilize the benefits that are linked with listing on Official List.
  • At present, the company is not conducting any clinical trials in Australia. The current clinical trials & studies are due to occur in the US and India. Majority of recent investment is from UK-based and US-based investors. Hence it is difficult for the company to attract Australian and foreign investors with no business presence in Australia.
  • The required disclosures of business information (some of which are proprietary) to the public, may result in a financial/competitive disadvantage, as per the company. On disclosure, this information could be accessed by the company’s competitors, vendors and lender which could create difficulty for the company in negotiating favourable terms with them.
  • The company intends to divert management time and efforts in more productive areas, than on ASX listing related matters.

GID is trading at A$0.012, down by 36.842%,(AEST: 3:35 pm, 4 June 2019).


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