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Filters:   Shareholder Approval,Voting Rights; All
 
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Frequently Asked Questions
  When a company completes a private placement to finance an acquisition, is the analysis of whether shareholder approval is required made, pursuant to Listing Rule 5635(d), the private placement rule, or Listing Rule 5635(a), the acquisition rule?
Identification Number 187
Generally, a private placement used to finance an acquisition will be considered under Listing Rule 5635(a), the acquisition rule. For example, if a private placement is consummated in close proximity to the acquisition of stock or assets, Nasdaq may determine that the private placement financed the acquisition, and thus the private placement shares would be aggregated with any other shares issued in connection with the acquisition in determining whether the threshold has been or will be exceeded under Listing Rule 5635(a), the acquisition rule. In making this determination, Nasdaq will consider the particular facts and circumstances including, but not limited to:
    • The proximity of the financing to the acquisition;
    • The stated use of the proceeds;
    • The timing of board authorization for the financing and the acquisition, respectively; and
    • Any stated contingencies in the financing or acquisition documents, which relate the transactions to one another.
However, any portion of the private placement proceeds specifically designated for uses other than the acquisition would be evaluated under the private placement rule.  
 
Publication Date*: 7/31/2012 Mailto Link Identification Number: 187
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