NYSE American Places Higher Gross Proceeds Thresholds for IPOs
Author: Destiny Aigbe
September 6, 2024
Recently, members of our firm have been informed by representatives of the NYSE American Exchange (“NYSE American”) of a significant policy change regarding initial public offerings (“IPOs”). According to this update, NYSE American will no longer accept listings for IPOs unless the gross proceeds from the offering meet a minimum threshold of $10 million. Although no formal public announcement has been made, our sources at NYSE American indicate that this change is being implemented due to concerns over volatility in the trading of smaller IPO companies.
For decades, our firm has served as counsel to both issuers and underwriters for numerous IPOs, with a recent focus on smaller operating company IPOs, including those with proceeds under $10 million. Based on our expertise in this area, we have outlined key considerations for issuers and underwriters navigating this policy change:
1. Issuers with Current Applications on File
For issuers that have already submitted a listing application with NYSE American, our understanding is that the $10 million threshold will not apply, provided that:
- The IPO is priced no later than September 15, 2024, and
- The company's securities begin trading on the NYSE American no later than September 16, 2024.
If you are involved in a sub-$10 million IPO, we recommend closely assessing the status of your transaction to determine whether these deadlines can be met. If not, the offering will need to be upsized to meet the new $10 million minimum.
2. Issuers Planning Future Listings on NYSE American
For issuers that will miss the grandfathered dates or are planning future IPO listings on NYSE American, it is essential to ensure that your deal teams prepare for an IPO with gross proceeds of $10 million or greater. Failing to meet this new threshold will prevent your company from listing on NYSE American.
Important Note:
These observations are based on the latest communications we have received from representatives of NYSE American. As of now, no formal or public rule changes have been announced by the exchange, and the policy could be subject to further modification. Additionally, it is uncertain whether The Nasdaq Stock Market or other exchanges will adopt a similar minimum proceeds requirement. We are closely monitoring these developments and will provide updates as new information becomes available
About the Author
Destiny Aigbe
Managing Partner
Aigbe Law PLLC | Dark Alpha Capital
A Corporate and Securities Law Firm
With a robust foundation in law and finance, Destiny Aigbe has carved a distinguished career, underpinned by his pivotal role in orchestrating and managing complex transactions that have propelled companies to significant growth and market prominence. As a seasoned attorney and strategic advisor, Destiny has been instrumental in facilitating over $75 million in capital raises, demonstrating a keen acumen for securing funding and fostering investor confidence.
Destiny's leadership in the execution of six successful public listings, through meticulously structured reverse mergers and registration statements, showcases his adeptness in navigating the intricacies of the public markets and his capacity to guide companies through transformative growth phases. His involvement in five mergers as an operator further illustrates his versatile skill set, extending beyond legal expertise to include hands-on management and operational strategy, though these ventures did not involve funding.
Destiny's professional journey is marked by a commitment to excellence and a diverse range of experiences, from representing a wide spectrum of clients including public and private companies, and investment firms, to holding significant roles within the US government. His tenure with the US Department of State and the National Institutes of Health highlights his adaptability and his contribution to the advancement of entrepreneurial ventures in sectors like biotechnology and nanotechnology through strategic funding initiatives.
An alumnus of Vanderbilt University Law School, Destiny focused on Finance and Mergers & Acquisitions, further honing his expertise with a certificate in Law and Business. His foundational education in Finance was obtained with honors from the University of Maryland's Robert H. Smith School of Business, which laid the groundwork for his subsequent achievements in investment banking and legal practice.
Residing in the Washington, D.C. area, Destiny Aigbe continues to leverage his extensive experience and insightful leadership to drive innovation, growth, and success for his clients and the ventures he is involved with.
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