With the threat of being removed from Nasdaq's listing, Frederick Brewing Co. said yesterday that it will ask shareholders to approve a 5 to 1 reverse stock split. The Frederick-based brewer would go from about 14.2 million outstanding shares to 2.8 million.
Frederick shares have traded at $1 or less since late July, and Nasdaq officials said they must reach a closing price of at least $1 per share for 10 consecutive days by Dec. 14 or be delisted.
The company -- whose lines include Blue Ridge and Hempen -- hasn't posted a profit since going public in March 1996. Frederick reported sales of $1.41 million in the third quarter with a net loss of $740,000, compared with a loss of $1.21 million on sales of $930,000 in the third quarter of 1997.
Kevin Brannon, chairman and chief executive, said he doesn't want the company listed on the OTC Bulletin Board.
"Nasdaq-listed companies are governed by more stringent corporate governance standards," he said. "Liquidity is much better, and pricing information more reliable."
Frederick shares closed yesterday at 46.875 cents, down 3.125 cents.
Pub Date: 12/05/98