Is an exception from the shareholder approval requirements available for a company in financial distress?
Yes. Pursuant to Listing Rule 5635(f), an exception for a specified issuance of securities may be made upon prior written application to NASDAQ when the delay in securing stockholder approval would seriously jeopardize the financial viability of the company. Generally, this is a difficult standard to meet. A company must convincingly demonstrate that the delay in closing a transaction due to the time that it would take to seek shareholder approval would have a significant detrimental impact on its financial viability.
Related Questions
- What details must a company include in the press release disclosing its reliance upon the shareholder approval exception for an inducement grant?
- What is required for a company to rely on the exception from the shareholder approval requirement for an equity compensation inducement award?
- Is an exception from the shareholder approval requirements available for a company in financial distress?
