Fresh Tracks Therapeutics Announces Delaware Petition Filed Seeking Appointment of Custodian for Eventual Dissolution of Company

Rhea-AI Summary

Fresh Tracks Therapeutics (OTC: FRTX) has filed an answer to a petition requesting the appointment of a custodian, seeking the eventual dissolution of the company. The petition, initiated by stockholder and former company official David R. McAvoy, proposes appointing CEO Albert N. Marchio, II as custodian to oversee the dissolution process. The dissolution plan includes asset liquidation, liability payments, and pro-rata cash distributions to stockholders. The Delaware Chancery Court has yet to schedule a hearing date. Fresh Tracks will continue to update investors as the process progresses.

Positive

• Company is taking structured steps towards dissolution, ensuring an orderly wind-down.
• Plan includes clear provisions for asset liquidation and liability payment.
• Stockholders will receive pro-rata cash distributions from non-reserved funds.
• Unclaimed funds after 10 years will be distributed to stockholders, potentially offering future financial returns.

Negative

• The company is facing dissolution, indicating a cessation of business operations.
• Uncertainty regarding the hearing date and finalization of the dissolution process.
• Possibility of financial losses for investors if asset liquidation does not cover liabilities.
• Extended 10-year period for claim payments may introduce long-term uncertainties for stockholders.

Company filed an answer in overall agreement with petition on June 14, 2024 and awaits a hearing date from the Delaware Chancery Court

BOULDER, Colo., June 17, 2024 (GLOBE NEWSWIRE) -- Fresh Tracks Therapeutics, Inc. (OTC: FRTX) (“Fresh Tracks” or the “Company”) announced today that it has filed an Answer (the “Answer”) to a Verified Petition for Appointment of a Custodian Pursuant to 8 Del. C. § 226 (the "Delaware Petition") that was filed with the Court of Chancery of the State of Delaware (the “Court”) on May 17, 2024 by a stockholder and former General Counsel, Chief Compliance Officer, and Secretary of the Company, David R. McAvoy (the “Petitioner”).

The Delaware Petition, to which the Answer outlines the Company is in overall agreement with, specifically requests that the Court issue an order appointing Albert N. Marchio, II, the Company’s Chief Executive Officer, Chief Financial Officer and sole director, to serve as custodian of Fresh Tracks and authorizing Mr. Marchio to, among other actions:

1. Dissolve Fresh Tracks by filing a certificate of dissolution for Fresh Tracks with the Delaware Secretary of State;
2. Wind down Fresh Tracks’ affairs by marshalling assets and paying liabilities;
3. Implement a plan of dissolution for Fresh Tracks pursuant to 8 Del. C.§ 281(b) that reserves an amount for claims that are not known to Fresh Tracks or that have not arisen but that, based on facts known to Fresh Tracks, are likely to arise or become known to Fresh Tracks within 10 years after the date of dissolution;
4. Distribute the non-reserved portion of Fresh Tracks’ cash to its stockholders of record at the time of distribution in a pro rata manner;
   
5. Make payments from the retained cash to consultants and claimants who present valid invoices to, and claims against, Fresh Tracks during the 10-year post-dissolution period; and
6. At the end of the 10-year post-dissolution period, distribute any portion of the retained cash or cash arising from future assets dispositions that has not been paid to consultants and claimants to Fresh Tracks’ stockholders of record at that future time and do so pro rata.

The Court has not yet set a hearing date with respect to the Delaware Petition. The Company intends to keep investors updated on the Delaware Petition process through future press releases.

Cautionary Note Regarding Forward-Looking Statements

Any statements made in this press release relating to future financial, conditions, plans, prospects, impacts, shifts, trends, progress, or strategies and other such matters, including without limitation, the timing and outcome of the Delaware Petition filed by Petitioner, the appointment of a custodian for Fresh Tracks, the potential dissolution of Fresh Tracks, and any assets that might be available for distribution to stockholders, and similar statements, are forward-looking statements. In addition, when or if used in this press release, the words “may,” “could,” “should,” “might,” “seek,” “distribute,” “dissolve,” “announce,” “anticipate,” “believe,” “estimate,” “expect,” “intend,” “plan,” “potential,” and similar expressions and their variants, as they relate to Fresh Tracks, may identify forward-looking statements. Fresh Tracks cautions that these forward-looking statements are subject to numerous assumptions, risks, and uncertainties, which change over time, often quickly, and in unanticipated ways. Important factors that may cause actual results to differ materially from the results discussed in the forward-looking statements or historical experience include any delays in the resolution of the Delaware Petition; any disagreement by the Court with the actions proposed in the Delaware Petition and the Answer; the availability, timing and amount of any distributions being different than expected; the amounts that will need to be set aside as reserves by Fresh Tracks being higher than anticipated; the possible inadequacy of such reserves to satisfy Fresh Tracks’ obligations; potential unknown contingencies or liabilities, and Fresh Tracks’ potential inability to favorably resolve them or at all; the amount of proceeds that might be realized from the sale or other disposition of any remaining Fresh Tracks assets; the application of, and any changes in, applicable tax and other laws, regulations, administrative practices, principles and interpretations; the incurrence by Fresh Tracks of expenses relating to its dissolution being different than estimated; the Company’s ability to settle, make reasonable provision for or otherwise resolve its liabilities and obligations, including the establishment of an adequate contingency reserve; and the uncertain macroeconomic and political environment. Further information on the factors and risks that could cause actual results to differ from any forward-looking statements are contained in Fresh Tracks’ prior filings with the SEC, which are available at https://www.sec.gov (or at https://www.frtx.com). The forward-looking statements represent the estimates of Fresh Tracks as of the date hereof only. Fresh Tracks specifically disclaims any duty or obligation to update forward-looking statements.

Fresh Tracks Therapeutics, Inc.
Investor Contact:
Dan Ferry
LifeSci Advisors
(617) 430-7576
daniel@lifesciadvisors.com

FAQ

What is the recent petition filed for Fresh Tracks Therapeutics (FRTX)?

A petition has been filed requesting the appointment of a custodian to oversee the dissolution of Fresh Tracks Therapeutics (FRTX).

Who filed the petition for Fresh Tracks Therapeutics (FRTX)?

The petition was filed by stockholder and former company official David R. McAvoy.

When did Fresh Tracks Therapeutics (FRTX) file its answer to the petition?

Fresh Tracks Therapeutics filed its answer to the petition on June 14, 2024.

Who is proposed to be the custodian for Fresh Tracks Therapeutics (FRTX)?

The petition proposes appointing Albert N. Marchio, II, the company's CEO and CFO, as custodian.

What does the dissolution plan for Fresh Tracks Therapeutics (FRTX) include?

The plan includes asset liquidation, liability payments, and pro-rata cash distributions to stockholders.

When will the Delaware Chancery Court hear the petition for Fresh Tracks Therapeutics (FRTX)?

The hearing date has not yet been set by the Delaware Chancery Court.

How will stockholders be affected by the dissolution of Fresh Tracks Therapeutics (FRTX)?

Stockholders will receive pro-rata cash distributions from non-reserved funds and may receive future distributions from unclaimed retained cash after 10 years.