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Small Sigh of Relief – Nasdaq “Seasoning” Proposal Exempts Underwritten Deals

Well you can never accuse me of being a good newsman! A short report in our industry trade publication surprised all. Nasdaq apparently was requesting a 6-month wait for all post-reverse merged companies to uplist to Nasdaq. During the 6 months they must trade over the counter at least at $4.00 a share, and the company must have completed several periodic filings with the SEC. Well they are indeed requesting this, and one friend has already dubbed it the "seasoning" requirement. However, I have finally gotten a copy of the actual proposal, and while I haven't finished it, I stopped to report to you when I saw that the 6-month wait will not be necessary if a company is proposing to move to Nasdaq through a firm commitment, underwritten public offering. This is the method by which WRASP or "re-IPO" transactions are completed, and so it appears those would be able to continue as currently.

I still feel strongly that this proposal is ill-advised and frankly does not even serve the interests it appears Nasdaq is trying to protect.  But if it permits uplisting in the manner that most have pursued in recent years, that is some solace. I will try to get through the rest of the proposal and report soon. And to make clear to the many who have been calling, emailing and telexing me, this is just a proposal currently, is not in force and will not be unless the SEC approves it.

For additional insights on reverse mergers, SPACs, other alternatives to traditional initial public offerings, the small and microcap markets and the economy, visit the Reverse Merger and SPAC Blog  by David N. Feldman, Esq., Partner of Richardson & Patel LLP.

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