8-K: Direct Selling Acquisition Corp. to Delist from NYSE, Moves to OTCQX After Nasdaq Rejection

Direct Selling Acquisition Corp. will be delisted from the NYSE due to not meeting market capitalization requirements and will move to the OTCQX market after its application to list on Nasdaq was rejected.

Summary

• Direct Selling Acquisition Corp. (DSAQ) received a delisting notice from the New York Stock Exchange (NYSE) because it failed to maintain an average aggregate global market capitalization of at least $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 has the right to appeal the delisting decision within ten business days.
• The company's securities are expected to begin trading on the OTC Markets Pink Market on April 30, 2024, under the symbols DSAQ and DSAQ.U.
• DSAQ has applied to have its securities quoted on the OTCQX Marketplace, but there is no guarantee that trading will commence or continue.
• The company previously intended to move its listing to Nasdaq but withdrew its application after Nasdaq determined the securities were not eligible for listing.
• DSAQ is still subject to the periodic reporting requirements of the U.S. Securities Exchange Act of 1934.

Sentiment

Score: 3

Explanation: The document conveys negative sentiment due to the delisting from the NYSE, the rejection from Nasdaq, and the move to the OTC market. The uncertainty surrounding the business combination and future trading also contributes to the low score.

Positives

• The company's securities are expected to continue trading on the OTC Markets Pink Market with minimal disruption.
• DSAQ will remain subject to the periodic reporting requirements of the U.S. Securities Exchange Act of 1934.
• Shareholders are not required to exchange any securities.

Negatives

• DSAQ failed to meet the NYSE's continued listing standard regarding market capitalization.
• The company's securities were delisted from the NYSE.
• DSAQ's application to list on Nasdaq was rejected.
• There is no guarantee that the securities will commence or continue to trade on the OTCQX market.

Risks

• There is a risk that the securities may not commence or continue to trade on the OTCQX market.
• There is a risk that broker-dealers may not continue to provide public quotes for the securities.
• The trading volume of the securities on the OTCQX market may not be sufficient to provide for an efficient trading market.
• The proposed business combination with Hunch Mobility and related entities is subject to various risks and uncertainties.
• The company's ability to complete any private placement financing is uncertain.
• The company faces risks related to the rollout of its business strategy, including the use of electrical vertical aircraft.
• The company has a limited operating history and a history of net losses.
• The company is subject to cybersecurity risks and data breaches.
• The company faces competition in its industry.
• The company is subject to domestic and international political and macroeconomic uncertainty.

Future Outlook

The company expects its securities to trade on the OTC Markets Pink Market and has applied to have them quoted on the OTCQX Marketplace, but there is no guarantee of continued trading or sufficient trading volume. The company is also pursuing a business combination with Hunch Mobility and related entities, which is subject to various risks and uncertainties.

Management Comments

• The company announced that it has received a delisting notice from the New York Stock Exchange.
• The company stated that it has submitted an application to have its securities quoted on the OTCQX Marketplace.
• The company previously announced its intention to voluntarily delist its Securities from NYSE and to move the listing of its Securities from NYSE to the Nasdaq Stock Market (Nasdaq).
• The company's decision to withdraw its Nasdaq listing application and to apply to have its Securities quoted on OTCQX was made in consideration of Nasdaqs review of the listing application and determination that the Companys Securities were not eligible for listing on Nasdaq.

Industry Context

This announcement reflects the challenges faced by special purpose acquisition companies (SPACs) in maintaining listing requirements, particularly in a volatile market. The move to the OTC market is not uncommon for companies that fail to meet the listing standards of major exchanges. The company is also pursuing a business combination, which is a common strategy for SPACs.

Comparison to Industry Standards

• Many SPACs have struggled to maintain their listing on major exchanges due to market volatility and difficulty in completing successful mergers.
• The delisting of DSAQ from the NYSE and its move to the OTC market is similar to other SPACs that have failed to meet listing requirements.
• The rejection of DSAQ's Nasdaq listing application highlights the increased scrutiny that exchanges are applying to SPACs.
• The company's proposed business combination with Hunch Mobility is a common strategy for SPACs to create value for shareholders.

Stakeholder Impact

• Shareholders will experience a change in the trading venue of their securities.
• Shareholders may experience increased volatility and reduced liquidity in the OTC market.
• Shareholders face uncertainty regarding the success of the proposed business combination.
• Employees may be impacted by the uncertainty surrounding the company's future.

Next Steps

• The company's securities are expected to begin trading on the OTC Markets Pink Market on April 30, 2024.
• The company will pursue its application to have its securities quoted on the OTCQX Marketplace.
• The company will continue to work towards completing the proposed business combination with Hunch Mobility and related entities.
• The company may appeal the delisting decision within ten business days.

Key Dates

Keywords

delisting, NYSE, OTCQX, market capitalization, trading suspension, OTC Markets, listing application, business combination, Hunch Mobility, securities, stock exchange