Recce shares were trading 1.61% lower at 91.5 cents before being placed into a trading halt.
Let's get into the thick of it to understand what went down today.
What's happening with Recce Pharmaceuticals?
To understand what's led us to this point, we have to take a step back to the start of last month when Recce issued 10,000 ordinary shares upon the exercise of unlisted options.
Normally, if securities aren't listed, they can't be sold until 12 months after issue – but of course, there are exceptions to the rule. Companies can just submit a few forms to disclose the issue and sale of the shares, and everyone is on their way. It's routine practice on the ASX.
However, "due to an administrative oversight", the company forgot to lodge the cleansing notice forms that are required under section 708A(5)(e) of the Corporations Act 2001, when issuing and then on-selling its shares last month.
Under the legislature, companies are obliged to submit a cleansing notice within 5 business days of issuing shares in certain circumstances, such as when stock options are exercised.
The aim is to in effect 'cleanse' the market of any information that would have otherwise been undisclosed, that also may have a material impact on a share's price. It can also be used to lay false information to rest.
The company advised that it shortly intends to apply to the NSW Supreme Court for an extension on the time to lodge the cleansing notice. It intends to make the application on 11 October, according to the release.
Recce Pharmaceuticals share price snapshot
The Recce Pharmaceuticals share price has been swimming in a sea of red this year. It's fallen 15% in the last 12 months, 13% since January 1, and 11.5% in the past month.
These returns have lagged the S&P/ASX 200 index (ASX: XJO)'s return of around 20% this past year.