For a reverse split to occur, a Company’s legal Counsel needs the following:
A corporate resolution authorizing the reverse stock split and the terms.
The completion of the 2 page verification form (see attachment).
A copy of the CUSIP number (note your legal counsel will need Points 1, 2 and 5 before they can apply)
The completion of a letter for NASD stating the terms of the split and
Confirmation of the State of Incorporation, the par value and the shares authorized after the split.
General Note: Upon receiving the above, a Company’s Legal Counsel then will notify the NASD / FINRA / NASDAQ of the reverse split with the TA Verification Resolution. They request (note this is not a requirement at this time just a request) for 10 business days notice of any corporate action before this takes effect but often this can do this within a week if you prefer.
The following is a list of steps required to effect the reverse split.
Most of these steps will be effected by your Legal Counsel and will not require the Company’s involvement. There are a few forms that Legal Counsel will be forwarding to the Company for execution.
Obtain new CUSIP number.
Deliver corporate resolution authorizing the reverse stock split and the terms to Transfer Agent.
The completion of the Transfer Agent Verification Form.
Deliver new CUSIP number to Transfer Agent.
Confirm state of incorporation, the par value and the shares authorized after the split to Transfer Agent.
Deliver Transfer Agent Verification Form to OTCBB.
Deliver old and new CUSIP number to OTCBB.
Obtain new symbol from OTCBB.
Effect split on - - -- (Date) 2008. To confirm with OTCBB whether trading must halt.
File amendment to Certificate of Incorporation with the respective State on ------- (Date) 2008 and
Deliver instruction letter to Transfer Agent regarding issuance of shares.
To actually effect a reverse split, the NASDAQ sends to the Company a standard letter, as noted below, covering seven key points:
The instructions below outline the information required by the Corporate Data Operations Department of The NASDAQ OMX Group, Inc. to process a name change, split or merger for an issuer on the OTCBB or Other OTC markets.
A cover letter briefly describing the transaction must be sent to by email from the company or attorney that includes the following details:
· Please include a certified stamped copy of the articles/amendments filed.
· If unavailable at the time the document was filed, please forward a copy upon receipt from the Secretary of State or Registrar. Note: NASDAQ OMX cannot process any reorganization for an Other-OTC company without receipt of the certified stamped copy.
· If amendments are not a requirement at the Secretary of State or other Registrar please confirm in your correspondence.
· If a merger please include any terms or consideration given in shares or cash to shareholders.
· Please be advised that the applicable term for a record date is “effective date” for reverse splits and forward splits that are paid upon surrender.
· Please specify the ratio and effective date of the stock split.
· Please indicate the payment method if a forward stock split: payable upon surrender of old certificates or are new shares being mailed direct to shareholder.
· Please note that reverse and forward splits may not have an effective date on bank holidays that the stock market remains open such as Columbus Day and Veterans Day.
· Name of Agency, contact person, address, phone number, email address
· Please provide the date the transfer agency was appointed as agent.
· If changing transfer agents please provide date of termination of transfer agent.
· Please pass on the attached Transfer Agent Verification Form to your transfer agent. The transfer agent must fill out this form and submit it directly to NASDAQ OMX.
Please remit your request by email to email@example.com. Once your documentation has been reviewed, the NASDAQ OMX will contact you with any additional inquiries or requests.
Most corporate actions will require a symbol change; such as a change in name, reverse split or forward split paid upon surrender. Unfortunately, symbols may not be reserved for Over the Counter or Over the Counter Bulletin Board markets, nor can the NASDAQ honor requests for specific issue symbols. Additionally, once a symbol is assigned, NASDAQ OMX reserves the 'right' to change the symbol. There can be no guarantee that an OTC issuer will retain their symbol indefinitely.For questions one should call (203) 375-9609 (NASDAQ OMX Group, Inc.). Their Email Address: firstname.lastname@example.org and Fax Number: 203-502-5480.