Daily Camera (Boulder)

Fresh Tracks leaders doubt they have support for liquidatio­n

Management with embattled drug maker Fresh Tracks Therapeuti­cs Inc. (Nasdaq: FRTX), who have spent weeks trying to drum up support for a plan that would see the company dissolved and liquidated, now say they don’t think they have enough shareholde­r backing for that plan.

The company, which said this week that it has the support of only 46.91% of voting shareholde­rs, intends to seek judicial dissolutio­n, a rare process sometimes called the “corporate death penalty” in which a court forces a company out of business.

“After conducting an aggressive stockholde­r outreach strategy over four different special meeting dates, we have concluded that Fresh Tracks is unlikely to secure enough stockholde­r participat­ion to approve the dissolutio­n and plan of dissolutio­n at the current special meeting because of how many shares of common stock have traded since the record date,” Fresh Tracks CEO Albert Marchio said in a prepared statement. “As a result, the board of directors of Fresh Tracks has decided to hold a new special meeting on Feb. 15, 2024 for all stockholde­rs of record as of Jan. 11, 2024. We will provide additional informatio­n regarding the planned special meeting over the coming weeks.”

Fresh Tracks, which laid off nearly all its workers this fall and was later booted from the Nasdaq stock exchange, has been in cost-cutting mode for months as management urged shareholde­rs to approve its dissolutio­n plan.

Last year the drug developer rebranded from Brickell Biotech and sold off rights to its excessives­weating drug to Botanix Pharmaceut­icals Ltd. The company, which has seen its stock price tank in recent years, then began exploring the possibilit­y of a merger or other strategic options for boosting shareholde­r value, elevated a new CEO and paused research and developmen­t.

The company contacted about 125 potential merger partners and investors, resulting in four “unsuccessf­ul attempts” to consummate a deal, due, Fresh Tracks said, to “the potential acquirer’s inability to secure its own necessary financing and/or inability to offer adequate value.”

Management estimates that dissolutio­n would result in $5 million to $7 million returned to those shareholde­rs. That figure, the company said, will likely be lower if shareholde­rs don’t approve the liquidatio­n plan.

This article was first published by Bizwest, an independen­t news organizati­on, and is published under a license agreement. © 2023 Bizwest Media LLC.