This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Bad to Worse at aaiPharma

Shares of aaiPharma (AAII) imploded Thursday, a day after the problem-plagued drug company said it may file for Chapter 11 bankruptcy protection.

The announcement of deteriorating finances was just one piece of a multilevel tale of misery that the Wilmington, N.C.-based company presented to investors Wednesday, after markets had closed, in a filing with the Securities and Exchange Commission.

The company says it won't make an upcoming interest payment to lenders; is again looking at restructuring its debt; has again failed to file a timely annual report with the SEC; and again risks delisting from Nasdaq.

Its independent auditors say any 10-K filing must include the cautionary comments "that our recurring losses from operations raise substantial doubt regarding our ability to continue to operate as a going concern," the SEC document says.

"Whether or not we are able to reach an agreement on ... restructuring of our debt, in light of the uncertainty regarding our ability to obtain needed additional sources of liquidity to fund operations, it is highly likely that it will become necessary for us to seek relief under chapter 11 of the U.S. Bankruptcy Code," the company says in the SEC filing. "In the event of any restructuring of our debt, the interests of the holders of our common stock may be substantially diluted or eliminated."

There isn't much stock value left. Shares sank 96 cents, or 50%, to 97 cents. The stock fell as low as 86 cents. About 4.9 million shares had been traded, or 11 times the daily average for the last three months.

Despite asset sales and restructuring, the company faces such a cash crunch that it won't be able to pay its lenders a $10.5 million interest payment due April 1, placing the company in default.

"In addition, we believe that we may not have adequate sources of liquidity to fund our operations in the near term" unless it can raise more money, the company's SEC filing says. The company says it is seeking waivers from lenders.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $93.74 -1.15%
FB $117.58 0.73%
GOOG $693.01 0.29%
TSLA $240.76 -2.81%
YHOO $36.60 0.03%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs