Support for Listed Trading
Many OTC companies aim to list on domestic exchanges such as Nasdaq and NYSE Amex, and our firm supports you in achieving these goals.
Promotion to Nasdaq
Nasdaq reviews listing applications differently than IPOs. In addition to meeting the initial listing requirements, the listing and upgrade process for OTC market companies has its own unique rules.
In particular, except when a company’s securities are listed on Nasdaq in connection with a public offering of $4 million or more through a guaranteed underwriting, the average daily trading volume during the 30 days prior to listing at the filing date is at least 2,000 shares. Transactions must be conducted on more than half of those 30 days.
This also includes trading volumes in the issuance market related to ADRs. The NYSE does not have similar requirements.
Seasoning Rules
Nasdaq and NYSE/NYSE American apply the “seasoning rule” to companies listed through reverse mergers with shell firms.
Nasdaq defines an inverted merger as a transaction in which an operating company merges with Shell Corporation, which is a securities law reporting company, resulting in a securities reporting company.
Under this rule, companies that have completed reverse mergers with listed shell companies cannot apply for listing for at least one year after submitting all necessary information related to the reverse merger transaction, including audited financial statements (usually including Super 8-K).
Furthermore, the reverse merger company is required to submit an annual report for one year, including the required audited financial statements.
Additionally, the reverse merger company is required to maintain a closing price equivalent to the stock price requirements applied to the new listing criteria for which the company has listing eligibility for a certain period.
As an exception, companies that have raised more than $40 million in net proceeds through defined contribution offerings or have submitted at least four annual reports including the required audited financial statements within one year are excluded.
Furthermore, the exchange may, as needed, impose stricter requirements than the above provisions, such as when the trading market for the reverse merger company is inactive, there are few restricted public shares, or there are significant weaknesses in internal controls.
Experienced Advice on Listing Upgrade Transactions
Listing and upgrading require considerable time, effort, and cost. Because this process is long, complex, and prone to confusion, it is essential to have a lawyer who is well-versed in securities law and understands the technical aspects of the process and its impact on decision-making.
Contact Us
To contact our office, please call 877-541-3263 or contact us by email.
Our experienced team of attorneys will fully support your company’s listing and promotion.