425: Direct Selling Acquisition Corp. Faces NYSE Delisting, Plans Move to OTCQX

Direct Selling Acquisition Corp. (DSAQ) has received a delisting notice from the NYSE due to not meeting the minimum market capitalization requirement and will move to the OTCQX marketplace.

Summary

• Direct Selling Acquisition Corp. (DSAQ) received a delisting notice from the New York Stock Exchange (NYSE) because it did not meet the continued listing standard requiring a minimum average aggregate global market capitalization of $40 million over 30 consecutive trading days.
• Trading of DSAQ's Class A common stock and units on the NYSE was suspended, effective at the close of trading on April 29, 2024.
• DSAQ plans to have its securities quoted on the OTCQX Marketplace and has submitted an application.
• The company's Class A Common Stock and Units are expected to open on the OTC Markets Pink Market on April 30, 2024, under the symbols DSAQ and DSAQ.U, respectively.
• DSAQ had previously intended to move its listing to the Nasdaq Stock Market but withdrew its application after Nasdaq determined the securities were not eligible.
• The company is still pursuing its proposed business combination with FlyBlade (India) Private Limited (Hunch Mobility).
• DSAQ and PubCo intend to file a registration statement on Form F-4 with the SEC in connection with the proposed business combination.
• The company cautions that forward-looking statements are subject to risks and uncertainties.

Sentiment

Score: 3

Explanation: The sentiment is negative due to the delisting from the NYSE and the withdrawal of the Nasdaq application, indicating financial distress and uncertainty about the company's future.

Positives

• The company is taking steps to have its securities quoted on the OTCQX Marketplace, which could provide continued trading opportunities for investors.
• Electronic trading is expected to be available without any material disruption.
• Shareholders are not required to exchange any securities.
• The company will remain subject to the periodic reporting requirements of the U.S. Securities Exchange Act of 1934.

Negatives

• The company received a delisting notice from the NYSE.
• The company did not meet NYSE's continued listing standard requiring a minimum average aggregate global market capitalization of $40 million.
• Trading of the company's securities on the NYSE has been suspended.
• The company withdrew its Nasdaq listing application after Nasdaq determined the securities were not eligible.
• There is no assurance that the securities will commence or continue to trade on the OTCQX market.

Risks

• Risks associated with the delisting from NYSE.
• The company's ability to successfully transfer to OTCQX.
• Market conditions and the impact of these changes on the trading and price of the company's securities.
• The inability of the parties to successfully or timely consummate the proposed business combination.
• The risk that any required regulatory approvals are not obtained, are delayed or are subject to unanticipated conditions.
• The inability to acquire and maintain the listing of PubCo's securities on a stock exchange.
• The inability to complete any private placement financing, or the completion of any private placement financing with terms unfavorable to you.
• The risk that the proposed business combination disrupts current plans and operations.
• The failure to realize the anticipated benefits of the proposed business combination and related transactions.
• Risks related to the rollout of Hunch Mobility, IndiaCo and PubCo's business strategy and the timing of expected business milestones.
• Hunch Mobility's limited operating history and history of net losses.
• The evolution and growth of the markets in which PubCo operates.
• Changes in applicable laws or regulations.
• The ability of PubCo to adhere to legal and regulatory requirements and to receive any needed regulatory approvals or licenses.
• Cybersecurity risks, data loss and other breaches of PubCo's network security and the disclosure of personal information.
• The effects of competition on Hunch Mobility, IndiaCo and PubCo's business.
• Risks related to domestic and international political and macroeconomic uncertainty.
• Risks related to PubCo's third party aircraft operators.
• PubCo's reliance on technology leased from Blade Air Mobility, Inc.
• The limited geographic scope of PubCo's operations to the Indian sub-continent.
• The outcome of any legal proceedings that may be instituted against Hunch Mobility, IndiaCo, DSAQ, PubCo or any of their respective directors or officers, following the announcement of the proposed business combination.
• The amount of redemption requests made by DSAQ's public stockholders.
• The ability of DSAQ to issue equity, if any, in connection with the proposed business combination or to otherwise obtain financing in the future.
• Risks related to Hunch Mobility, IndiaCo and PubCo's industry.

Future Outlook

The company intends to have its securities quoted on the OTCQX Marketplace and is pursuing its proposed business combination with FlyBlade (India) Private Limited. The company cautions that forward-looking statements are subject to risks and uncertainties.

Industry Context

The delisting highlights the challenges faced by SPACs (Special Purpose Acquisition Companies) in maintaining listing requirements, particularly in volatile market conditions. Many SPACs have struggled to find suitable targets and complete mergers, leading to poor performance and eventual delisting.

Comparison to Industry Standards

• Many SPACs have struggled to maintain listing requirements, especially those that have not completed a business combination or have experienced significant declines in market capitalization after a merger.
• Comparable companies that have faced similar delisting challenges include those in the electric vehicle and technology sectors, where market sentiment has shifted rapidly.
• The move to OTCQX is a common step for companies facing delisting, but it often results in lower trading volume and reduced investor interest.

Stakeholder Impact

• Shareholders may experience reduced liquidity and potentially lower stock prices due to the delisting from the NYSE and transfer to the OTC market.
• Employees may face uncertainty regarding the company's future prospects.
• The proposed business combination with FlyBlade (India) Private Limited could be affected by the delisting.

Next Steps

• The company will transfer its securities to the OTC Markets Pink Market.
• The company will pursue its application to have its securities quoted on the OTCQX Marketplace.
• The company will continue to work towards completing its proposed business combination with FlyBlade (India) Private Limited.

Key Dates