Item 3.01. Notice of Delisting or Failure to Satisfy a Continued Listing Rule or
Standard; Transfer of Listing.
As previously disclosed, on November 22, 2022, ContraFect Corporation (the
"Company") received a letter (the "Nasdaq Staff Deficiency Letter") from The
Nasdaq Stock Market LLC ("Nasdaq") indicating that the Company's stockholders'
equity as reported in its Quarterly Report on Form 10-Q for the period ended
September 30, 2022 (the "Form 10-Q"), did not satisfy the continued listing
requirement under Nasdaq Listing Rule 5550(b)(1) for the Nasdaq Capital Market,
which requires that a listed company's stockholders' equity be at least
$2.5 million. As reported on its Form 10-Q, the Company's stockholders' equity
as of September 30, 2022 was approximately $(3.1) million. The Company is also
not currently in compliance with the Nasdaq continued listing requirement that
the Company maintain a bid price for the Company's common stock of above $1.00
per share (the "Bid Price Requirement"). Subsequent to the receipt of the Nasdaq
Staff Deficiency Letter, and prior to the deadline set forth in such letter, the
Company submitted a plan to regain compliance with Nasdaq Listing Rule
5550(b)(1) to Nasdaq.
On January 20, 2023, the Nasdaq staff ("Staff") informed the Company that the
Staff had determined to deny the Company's request for continued listing on the
Nasdaq Capital Market (the "Staff Determination") and that, unless the Company
requests an appeal of such determination, trading of the Company's common stock
will be suspended at the opening of business on January 31, 2023 and a Form
25-NSE will be filed with the Securities and Exchange Commission (the "SEC"),
which will remove the Company's securities from listing and registration on the
Nasdaq Capital Market. In reaching its decision, the Staff indicated that its
determination was based on concerns that the Company's ability to raise
additional capital through the exercise of recently issued warrants to purchase
the Company's common stock or other capital raising transactions, in order to
cure the Company's non-compliance with Nasdaq Listing Rule 5550(b)(1), were not
within the Company's control and such funds may be insufficient to sustain
compliance over the long term.
The Company intends to request a hearing before a Nasdaq Hearings Panel
("Panel") to appeal the Staff Determination. The Staff Determination letter
indicates that the Company's hearing request will stay the suspension of trading
and delisting of the Company's common stock pending the conclusion of the
hearing process. Consequently, the Company's common stock will remain listed on
the Nasdaq Capital Market at least until the Panel renders a decision following
the hearing. There can be no assurance that the Panel's decision will grant the
Company's request for continued listing on The Nasdaq Capital Market.
The Company continues to evaluate various alternative courses of action to
regain compliance with the Nasdaq Capital Market listing requirements. However,
there can be no assurance that the Company will be able to satisfy the Nasdaq
Capital Market's continued listing requirements, regain compliance with the
minimum stockholders' equity requirement or the Bid Price Requirement, or
maintain compliance with the other listing requirements.
Forward-Looking Statements
This current report contains "forward-looking statements" within the meaning of
the U.S. federal securities laws. Forward-looking statements can be identified
by words such as "projects," "may," "will," "could," "would," "should,"
"believes," "expects," "anticipates," "estimates," "intends," "plans,"
"potential," "promise" or similar references to future periods. Examples of
forward-looking statements in this current report include, without limitation,
statements regarding the Company's intent or ability to regain compliance with
the minimum stockholders' equity requirement or Bid Price Requirement, the
Company's intention to appeal the Staff Determination, the Company's expectation
that a request for a Panel hearing would stay delisting of its common stock
pending the conclusion of the hearing process, the outcome of the Panel's review
of any Company appeal of the Staff Determination, and any courses of action to
regain compliance with the Nasdaq Capital Market's continued listing
requirements. Forward-looking statements are statements that are not historical
facts, nor assurances of future performance. Instead, they are based on the
Company's current beliefs, expectations and assumptions regarding the future of
its business, future plans, strategies, projections, anticipated events and
trends, the economy and other future conditions. Because forward-looking
statements relate to the future, they are subject to inherent risks and
uncertainties, and actual results may differ materially from those set forth in
the forward-looking statements. Important factors that could cause actual
results to differ include, without limitation, there can be no assurance that
the Company will meet the stockholders' equity requirement or the bid price
requirement during any compliance period or otherwise in the future, otherwise
meet Nasdaq compliance standards, that Nasdaq will grant the Company any relief
from delisting as necessary or whether the Company can agree to or ultimately
meet applicable Nasdaq requirements for any such relief, that the Company has
and expects to continue to incur significant losses, the Company's need for
additional funding, which may not be available, the occurrence of any adverse
events related to the discovery, development and commercialization of the
Company's product candidates such as unfavorable clinical trial results,
insufficient supplies of drug products, lack of regulatory approval, or
unsuccessful attainment or maintenance of patent protection, and the other
important factors described under the caption "Risk Factors" in the Company's
Quarterly Report on Form 10-Q filed with the
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Securities and Exchange Commission (the "SEC") on November 14, 2022 and its
other filings with the SEC. Any forward-looking statement made by the Company in
this current report is based only on information currently available and speaks
only as of the date on which it is made. Except as required by applicable law,
the Company expressly disclaims any obligation to publicly update any
forward-looking statements, whether written or oral, that may be made from time
to time, whether as a result of new information, future developments or
otherwise.
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