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  • Medical device company GI Dynamics (GID) has asked the Australian Securities Exchange (ASX) for advice regarding a potential delisting from the official list
  • For some time, GI’s Board of Directors have been considering whether it is in the best interest of the company and its stockholders to remain listed on the ASX
  • GI’s biggest shareholder, the Crystal Amber Fund, and a number of private investors, have independently expressed their belief that the company will be better off as a private entity
  • New potential investors have also shown their interest in investing if the company was no longer listed on the ASX
  • As announced by the company on a number of occasions, GI will need to raise additional funds in order to continue
  • If the funds are not raised, the company may need to cease business operations
  • GI has filed a draft preliminary proxy statement and a notice of a special meeting to obtain stockholder approval
  • On market close, GI is down 33.3 per cent and is trading for 0.2 cents per share

Medical device company GI Dynamics (GID) has asked the Australian Securities Exchange (ASX) for advice regarding a potential delisting from the official list.

Background

For some time, the Board of Directors of GI have been considering whether it is in the best interest of the company and its stockholders to remain listed on the ASX.

In looking to raise additional capital, the company has encountered a number of challenges.

These challenges include potential investors having investment restrictions that prevent them from investing in any listed entities, restrictions that prevent them from investing in listed entities that are in the precommercial development stage, and restrictions that prevent them from investing in a U.S. incorporated company that is not listed on a U.S.-based stock exchange.

In addition, GI’s biggest shareholder, the Crystal Amber Fund, and a number of private investors have independently expressed their belief that the company will be better off as a private entity.

New potential investors have also shown their interest in investing if the company was no longer listed on the ASX.

The ASX in-principal advice

For this reason, the company has turned to the in-principal advice from the ASX on the potential delisting of the company.

The ASX has responded and has agreed to the removal of the company from the official list if it comes to it. However, a potential date for delisting has not yet been reached, as the company will need to tick a couple of boxes first.

These requirements include obtaining shareholder approval, voting by a special resolution of shareholders and organising a timetable of events.

Funding arrangements

As announced by the company on a number of occasions, GI will need to raise additional funds in order to continue to implement its business plan and to continue to carry on business.

If the funds are not raised, the company may need to cease business operations.

Prior to delisting, GI may seek to issue a convertible note or a debt instrument to one or more lenders as an interim measure before seeking to secure a larger amount of equity funding, which may include the potential financing.

“There is no guarantee that the company will be able to secure any form of debt or equity funding, and as a result may be required to cease business operations and be wound up,” the company told the market.

Next steps

GI has filed a draft preliminary proxy statement and a notice of a special meeting to obtain stockholder approval of delisting with the U.S. SEC ( Securities and Exchange Commission) and ASX for their mandatory reviews.

During the review period, the company intends to continue discussions in relation to potential financing and also with existing investors.

“Following completion of the relevant review periods and depending on the status of any discussions with investors, the company expects that it will issue a final version of the Draft Delisting Proxy to stockholders, which will set out in detail all of the prescribed information required in connection with the delisting proposal and associated matters,” the company said.

On market close, GI is down 33.3 per cent and is trading for 0.2¢ per share.

GID by the numbers
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