Small Digression: Law Schools – Time for Change

A major article in the New York Times recently has caused a flurry of chatter among the tweed and elbow patch crowd at prominent law schools. Basically the article suggests that law schools teach nothing about how to actually practice law (pretty much true) and that they should consider more dramatic changes than the around the edge ...

Report from SEC Forum on Small Business – Part II

Another panel in the AM at the SEC Small Business Forum talked about the dearth of small IPOs. Numerous explanations were given for this problem. Decimalization of trading. Regulation ATS and the order handling rules in 1997. Lack of liquidity for companies below $500 million in market value. Greater attractiveness of staying private. One speaker ...

Report from SEC Forum on Small Business – Part I

Last week, as I do most years, I went to Washington to attend the 30th SEC Government-Business Forum on Small Business Capital Formation. There are panels in the morning then breakout sessions in the afternoon where recommendations to the staff are developed. Some good things have come out of the conference each year that have ...

Sad Thoughts About Seasoning – Part III

Who are the losers in the new seasoning requirements? 1. As we have now learned, SPACs that trade on the OTC Bulletin Board will be subject to seasoning. We will see if the major underwriters who raise money for SPACs will seek some adjustment in the rule. 2. Most of the “two-step” deals involving a ...

Flash: SPACs on OTCBB Are Not Exempt from Seasoning

I need to amend my prior summary of the new requirements to “season” post-reverse merger companies on the over-the-counter markets for at least one year before uplisting to a major securities exchange. We all, SPAC-meisters included, thought the language in the proposals and final release exempted SPACs from the seasoning requirements. Since they conduct full ...

More Bad News Re Seasoning – It Can Be Two Years or More

Before we get back to my commentary on the new seasoning requirements for major exchanges, I’ve just confirmed something that was in the “devil in the details” category. The new requirement says the seasoning period must include one full year of periodic SEC reports including an annual report on Form 10-K. The language in the release ...

Sad Thoughts About Seasoning – Part II

Who loses and wins now that “seasoning” of reverse merger companies on the over-the-counter markets for at least one year is real? In this posting, let’s list the winners: 1. OTC Markets and the OTC Bulletin Board – more companies will list there, and will list longer, because they are being denied the right of ...

Sad Thoughts About Seasoning – Part I

The trailer for the great sequel Jaws 2 (1978) included the fearful tag, “Just when you thought it was safe to go back in the water…” There were many times in the last 20 years that those of us in reverse merger land thought it was safe. After 1992, when the SEC passed Rule 419 to limit ...

Is the China Comeback Commencing?

Here are the latest mixed signals from the headlines: - US officials charge Longtop Financial with failing to file accurate financial reports - Lashou to complete IPO on Monday and raise $80 million - Harbin Electric goes private for $800 million - NY Court throws out securities fraud claims against China North East Petroleum - VC ...

Flash: SEC Approves Seasoning of Reverse Merger Companies

Yesterday, the US Securities and Exchange Commission approved rule changes requested by the three major US stock exchanges, Nasdaq, the NYSE Amex and the New York Stock Exchange. In sum, companies completing reverse mergers with SEC-reporting shell companies will now have to “season” by trading on the over-the-counter markets or another national exchange for one ...