American Fusion Inc (AMFN)

[BigBadWolf]

FINRA treats a 15c2-11 $application and a $Reverse $Split as two completely separate operational pipelines that do not block one another. A company can clear a 15c2-11 review and begin trading with two-sided proprietary market-maker quotes before executing the reverse split required to fulfill the merger's equity allocations. (after If & when a MM/Broker will first sign off on filing the 211 more on this issue below) FINRA will greenlight the 15c2-11 because the current disclosures satisfy the checklist of Rule 15c2-11. They will not hold up the Form 211 just because the company's capital structure faces an inevitable crunch to meet that 89.7% Kepler ownership target. Under the old pre-2021 framework, brokers often treated Form 211 as a checklist exercise. Today, one had better believe it is a high-stakes liability trap. If a market maker signs a Form 211 for an issuer whose disclosures contain a structural mathematical contradiction, the broker exposes themselves to, SEC Enforcement Actions for failing to maintain adequate policies and procedures or executing a false 15c2-11 certification. Then there would be the FINRA Rule 2010 Violations aka Standards of Commercial Honor and Principles of Trade. Thus exposing themselves to $Severe $Civil $Liability should the market collapse and retail investors prove the broker sponsored a structurally flawed vehicle. I will tell you a sophisticated broker-dealer's compliance attorney or CPA looking at AMFN's Form 10 and recent Q1 10-Q will zero in on the exact Kepler Shareholders' ownership % disparity I have already mentioned multiple times. They will have no choice but to evaluate it across two distinct (liability defense) lenses/viewpoints. First The Technical Compliance Defense as if the broker-dealer does decide to proceed and file the Form 211, their compliance team is relying on a strict interpretation of the rule's language. That attempted defense language being Full Disclosure is Not a Guarantee of Performance. The broker's defense is that the Form 10 explicitly states the Kepler shareholders are entitled to 89.7%, and explicitly notes the current issued share counts. Because the financial footnotes lay out the structural friction plainly, the broker argues they are not certifying that the merger is a good deal or smoothly executed, they are merely certifying that the current numbers are accurately disclosed under GAAP to date. (A bit risky as the 90 day clock ends today) The more likely $attempted🤔 $defense (if) would surely be using the SEC's No Review. As the broker will lean heavily on the fact that the SEC allowed the Form 10 to go effective automatically without an active stop-order or comment letter loop. For many clearing firms, an active SEC reporting status acts as a baseline regulatory green light. Second On the other hand, a conservative or highly reputable market maker (GTSM as one example) might look at the Day 90 threshold, look at the unexchanged minority Kepler cap table, and completely freeze the process. Why? as their internal audit will flag a massive operational inconsistency. Thoughts why? & to consider... a) If we clear this stock for proprietary market-making today based on a 1.316B share outstanding framework, but the definitive filings mandate an unexecuted capital restructuring that will either dilute the common equity into oblivion (via an unauthorized share expansion) or drastically alter the float (via a 1-for-50 split), then the current market price we are quoting will be inherently distorted. Then there is the thought process that b) If the broker suspects that management is utilizing the 15c2-11 window purely to create artificial liquidity before addressing the structural breakdown of the merger covenants, the broker's clearing firm will refuse to execute the Form 211 to insulate themselves from fraud on the market exposure.

Have a bit more a bit later but it's now lunchtime so tacos & longnecks are on deck. Most likely will have some from both sides of view liking some of the aforementioned & not liking some. Yet what is true is neither side will be able to refute any of...

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