Would NASDAQ consider the effect of an “earn-out” or similar provision when calculating the maximum potential share issuance in connection with the acquisition of stock or assets of another company?
Yes. Since “earn-out” provisions can result in future issuances of shares if certain targets are met, such as earnings or revenue, NASDAQ will include the shares which could be issued under such provisions in determining whether the potential share issuance associated with an acquisition can exceed the shareholder approval thresholds. What factors does NASDAQ consider when determining whether to aggregate the shares issued in separate acquisition transactions for purposes of determining whether the threshold for shareholder approval has been triggered?
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