Rule 415 Guidelines - Stick a fork in it...
It's done. As I understand it, the SEC staff has now completed their internal guidelines under Rule 415. I believe Marty Dunn will talk about it today in Chicago, and I understand there will be a meaningful media presence, so hopefully we'll hear something even by tomorrow. Also, David Lynn, as previously indicated, is appearing at the PIPE conference here in New York on Friday morning (my partner Joe Smith is speaking at that conference tomorrow). I am confident he will go into detail at that appearance.
My prediction: some percentage of float (ie nonaffiliate stock), similar to other predictions maybe 30-33%, in most PIPE transactions, but with a facts and circumstances test that can go higher, in particular in reverse merger situations. I do not believe there will be a separate reverse merger rule per se, but rather we will do trial and error on a few deals and get a sense. We already know of one company that finally got approved in recent weeks with almost 50% of the outstanding stock following a reverse merger. I also believe Marty and David will talk about how quickly a second registration can get completed. Stay tuned!
My prediction: some percentage of float (ie nonaffiliate stock), similar to other predictions maybe 30-33%, in most PIPE transactions, but with a facts and circumstances test that can go higher, in particular in reverse merger situations. I do not believe there will be a separate reverse merger rule per se, but rather we will do trial and error on a few deals and get a sense. We already know of one company that finally got approved in recent weeks with almost 50% of the outstanding stock following a reverse merger. I also believe Marty and David will talk about how quickly a second registration can get completed. Stay tuned!
posted by David N. Feldman at
1/24/2007 11:12:00 AM
3 Comments:
Seems like good news. It would be great if they shortened the 144 period to 6 months, too. BTW, congrats on closing one of your recent closings. (Picked it up on Reverse Merger Wire) My compliments on the LOI you had those guys sign. Loved the put provision---good idea, and fair, too. Good luck on the close.
If the SEC stance is "positve," do you see this as favoring 10-SB's or trading OTCBB shells? Or would it be a positive for the entire industry regardless of shell type?
Truthfully I think the ills they are concerned about, namely a rapid and significant dilution to those with publicly tradeable shares with virtually no notice, apply rather intensely to trading shells and not at all to virgins, since no one has a trading share prior to the initial registration.
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