TheCorporateCounsel.net

Nasdaq recently published Issuer Alert 2025-01, which is focused on Rule 5250(e)(7) notification requirements for reverse stock splits that changed as of January 30th. Here’s more detail:

On January 30, 2025, the deadline for a listed company to notify Nasdaq about a reverse stock split will change from five (5) business days to ten (10) calendar days in order to conform to the requirements of SEC Rule 10b-17 of the Securities Exchange Act of 1934. Nasdaq is not amending the existing requirement to provide public disclosure of the reverse stock split at least two (2) business days (no later than 12 p.m. ET) prior to the anticipated market effective date.

Under the amended rules, a listed company conducting a reverse stock split must:

• Notify Nasdaq of certain details of the reverse stock split no later than 12 p.m. ET at least ten (10) calendar days prior to the anticipated market effective date (rather than our current rule requiring five (5) business days notice); and

• Publicly disclose the reverse stock split by 12 p.m. ET at least two (2) business days prior to the anticipated market effective date (unchanged from current requirement).

Nasdaq notes that it won’t process a reverse stock split unless the above requirements have been satisfied, and it will halt trading in the security of any issuer that effects a reverse stock split without meeting these requirements. The notification form requires the company to include the new CUSIP number, the date that board and shareholder approval was obtained (if required), and the date that DTC made the new CUSIP eligible. The submission must also include a copy of the company’s draft public disclosure.

– Liz Dunshee