By Josh Beckerman

Timber Pharmaceuticals shares were recently down 69% to 45 cents following the company's chapter 11 filing and a delisting notice from NYSE American.

On Friday, shares were up 17% to $1.46 when they were halted because of news pending. Timber said in a securities filing that it didn't have sufficient stockholder votes for its sale to LEO Pharma.

Timber said later Friday that LEO terminated the merger agreement, and also said it filed for bankruptcy with an agreement to sell its assets to LEO. In addition to the stalking horse bid from LEO, Timber is re-engaging with "parties that previously expressed interest in pursuing a transaction" and other parties.

NYSE American said Tuesday that Timber has the right to appeal the delisting determination and noted the company mentioned that common stockholders could experience a complete loss.

Timber, which focuses on treatments for rare and orphan dermatologic diseases, previously warned that there was substantial doubt about its ability to continue as a going concern, and it would likely need to file for bankruptcy if the merger wasn't completed. According to a declaration from Chief Executive John Koconis, the company has "incurred significant operating losses since inception."

Timber adjourned its shareholder meeting twice after it didn't receive enough votes. While most of the votes cast were in favor, many stockholders didn't vote. Koconis said in the declaration that "It was determined, after discussions with our proxy solicitor, that achieving the required 50%+ majority vote would be very challenging given the spread of voters holding a very low amount of shares."

Write to Josh Beckerman at josh.beckerman@wsj.com

(END) Dow Jones Newswires

November 21, 2023 15:37 ET (20:37 GMT)

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