Sagaliam Acquisition said its units and underlying securities will be delisted from the Nasdaq effective March 8. There were several reasons for the Nasdaq’s decision, including delinquent SEC filings, falling below the minimum $50 million market cap and the minimum shareholder threshold, as well as issues with the SPAC’s business combination with Virogentics and Biogenysis.
At the time of the acquisition, the company had 1,471,337 shares outstanding. Nasdaq staff notes that beyond the disclosure included in the SPAC’s 8-K filed Sept. 15, 2023, announcing the business combination, Sagaliam failed to disclose the closing of the transaction and issuance of shares either to Nasdaq or to the public.
Sagaliam said it intends to work with OTC Markets to facilitate the continued trading of its shares.
According to the Nasdaq, the business combination violated:
Listing Rule IM-5101-2(d) due to the Company’s failure to seek shareholder approval for the Business Combination, allow for shareholders to redeem shares in connection with the vote, and demonstrate compliance with Nasdaq initial listing requirements upon closing of the Business Combination;
Listing Rule 5635(a)(1) due to the Company’s failure to obtain shareholder approval in connection with an acquisition of stock or assets of another company where the issuance or potential issuance is greater than 20% of the total shares outstanding or voting power outstanding;
Listing Rule 5635(c) due to the Company’s failure to obtain shareholder approval in connection with an issuance resulting in a change of control;
Listing Rule 5250(b)(1) due to the Company’s failure to disclose material information; specifically, the closing of the Business Combination and issuance of more than 47 million shares;
Listing Rule 5250(e)(1) due to the Company’s failure to notify Nasdaq no later than 10 days after the increase of greater than 5% of the shares outstanding; and
Listing Rule 5250(e)(2) due to the Company’s failure to file the Notification Form: Listing of Additional Shares for an issuance of greater than 10% of the pre-transaction shares outstanding.
Finally, under Listing Rules 5101 and IM-5101-1, Nasdaq may “suspend or delist particular securities based on any event, condition, or circumstance that exists or occurs that makes initial or continued listing of the securities on Nasdaq inadvisable or unwarranted in the opinion of Nasdaq.”
In light of the SPAC’s disregard for Nasdaq rules, the exchange noted, as evidenced by multiple violations of Nasdaq’s shareholder approval rules, ongoing failure to disclose material information and timely file periodic reports, and failure to comply with Nasdaq’s SPAC rule, “Nasdaq has determined that the continued listing of the company’s securities on the exchange is inadvisable and believes the delisting is appropriate to protect investors and the public interest.”
The SPAC raised about $116 million in a December 2021 IPO, but lost almost 92% to redemptions in December 2022. Read more.
