Page 107 - Initial Public Offering - An Introduction to IPO on Wall Street

 Equity compensation.

 Private assignments
where the issue is
equal to or greater
than 20% of the
remaining pre-
transaction securities
at a price lower than
the higher book or
market value.

Voting Rights The voting rights of current 5640
shareholders should not be
disproportionately
diminished or limited by
corporate acts or issuances.
Seasoning Rules

In 2011, NASDAQ introduced 'seasoning rules' preventing organizations that have undergone
reverse mergers with a public shell from applying until 1) the organization has listed on an
over-the-counter market, another domestic stock exchange or a controlled foreign exchange
or 2) one year has elapsed since the submission of all the information requested from the
merger. Firms must also submit all relevant paperwork, including a yearly report, for the
merger.

The reverse merger business must also keep its closing price stock equivalent to the original
listing requirement that is applied to the stock price of the organization for a minimum of
thirty days before the filing of the application. There is an exemption for businesses that meet
a firm promise with net proceeds of at least $40 million. The SEC also reserves the right, if
they feel it is warranted, to place further conditions on an organization.

Application Requirements

There are 12 separate NASDAQ listing procedures, based on the situation of an organization,
intended to cover scenarios where there has been a transfer in control, a business has
undergone an IPO, etc.

All applications are almost 7 pages long and require organizations to send general details in
addition to knowledge on a specific security. In the 10 years before the submission,
businesses must also report any inquiries or litigation involving the organization.

An organization is required to submit the following under a formal NASDAQ application:

 Symbol Reservation Form
 Logo Submission Form
 Listing Application
 Initial Application Fee (see below)
 Corporate Governance Certification
 Listing Agreement

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