Thursday, June 9, 2011
NASDAQ filed with the SEC a proposed rule change requiring additional disclosure about companies that become public through reverse mergers. NASDAQ explained that because of the extraordinary level of public attention in listed companies that went public via a Reverse Merger, where an unlisted operating company becomes a public company by merging with a public shell, Nasdaq staff has adopted heightened review procedures for Reverse Merger applicants. However, Nasdaq also believes that additional requirements for listing Reverse Merger companies are appropriate to discourage inappropriate behavior on the part of companies, promoters and others. Accordingly, Nasdaq proposes to adopt certain “seasoning” requirements for Reverse Mergers.