Friday, September 23, 2016 8:34:59 AM
There's always the possibility that DTC may place a temporary chill on certain transactions, effectively closing the books and stabilizing existing positions until a merger or other reorganization (RS) has been completed. DTC chills has more to do with FINRA Rule 6490 than anything else.
I've found myself in a few of these scenarios during a RM, including the company I used as an example where I demonstrated they properly followed protocol. So no one with any certainty can say it won't happen with VTCQ, especially considering the current delays.
In addition to passing muster on reorganization of common and executive shares, there are affiliate shares for compensation, but most importantly there's a share exchange agreement involving another public company - that being MCIG, and add to that an executive of that company (MCIG) holding control securities. I'd say these factors alone could raise some questions with regulators.
Stats are if companies choose to skip the proper route of going public via a registration statement and opt for a reverse merger, then a vast majority of those companies can expect a temporary chill until any issues that arises from FINRA Rule 6490 can be resolved.
It would certainly help to have an update as to what the problem is with the merger -- I don't know if Hawkins will be willing to comment on it during the upcoming CC, but it should be asked anyways.
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