Vision Sensing Acquisition Corp. Responds to NASDAQ Letter and Hopeful of Expedient Resolution
- None.
- Non-compliance with Nasdaq market value and total holders requirements
- Deficiency in filing the Form 10-Q for the period ended September 30, 2023
Insights
Examining the recent update from Vision Sensing Acquisition Corp. (VSAC), a few critical financial and regulatory aspects must be considered. The company's non-compliance with Nasdaq's Market Value Requirement suggests a valuation challenge, which can be a red flag for investors as it indicates that the market may not have sufficient confidence in the SPAC's potential or current operations. The Total Holders Requirement is another indicator of market breadth and investor base, which, if not met, can lead to liquidity issues and reduced market stability for the company's securities.
The planned business combination with Mediforum Co., Ltd. appears to be a strategic move to address these deficiencies. Such transactions can significantly alter a SPAC's valuation and shareholder structure, potentially leading to a positive reassessment by the market. However, investors should be aware of the inherent risks in business combinations, including integration challenges and the possibility that anticipated synergies may not materialize as expected.
Furthermore, the delay in filing the Form 10-Q raises concerns about the company's internal financial controls and reporting procedures. Timely financial reporting is crucial for maintaining investor confidence and ensuring transparency. The company's ability to quickly resolve this issue and regain compliance will be a key factor in restoring investor trust and maintaining its listing status.
From a legal standpoint, the compliance issues faced by VSAC with Nasdaq listing rules are significant. The Nasdaq Listing Rule 5250(c)(1) is a mandate for timely financial disclosures, which are fundamental to the functioning of a transparent and efficient market. Failure to meet this requirement could lead to legal repercussions and loss of investor confidence. Moreover, the appeal process and the submission of a detailed Compliance Plan to a Hearings Panel indicate the company's proactive approach to addressing these challenges. It is essential to recognize that the legal processes involved in such appeals are complex and require careful preparation and execution.
The mention of alternative solutions, such as converting Series B shares into Series A shares, reflects a strategic legal maneuvering to meet the Market Value Requirement. This, coupled with the move to the Nasdaq Capital Market, could provide more lenient listing standards suitable for smaller, growth-oriented companies. Additionally, the engagement with outside agencies to increase the number of Total Holders is a legal tactic to ensure broader market participation and compliance with the Total Holders Requirement.
Market dynamics for SPACs, such as VSAC, are often volatile and subject to rapid changes. The company's acknowledgment that the deficiencies related to the Market Value Requirement and the Total Holders Requirement are common for SPACs at their stage indicates an industry trend. However, investors should conduct thorough market research to understand the specific circumstances of each SPAC, including management's track record and the viability of their proposed business combinations.
The upcoming business combination with Mediforum has the potential to significantly impact VSAC's market position. Market research would focus on evaluating Mediforum's market presence, product pipeline and financial health to assess the potential value this merger could bring to VSAC. It's also crucial to analyze the broader market sentiment towards SPACs and business combinations in the current economic climate, as this can influence investor behavior and the success of the transaction.
NEW YORK, Jan. 26, 2024 (GLOBE NEWSWIRE) -- Vision Sensing Acquisition Corp. (NASDAQ: VSACU, VSAC, VSACW) (the “Company” or “VSAC”), a special purpose acquisition company, issues an update regarding the previously announced staff determination letter (the "Letter") received on January 17, 2024, from the Listing Qualifications Department of The Nasdaq Stock Market LLC ("Nasdaq") notifying the Company of the determination from the Nasdaq Staff (the "Staff").
As stated, the Letter was issued to the Company as the Company is not in compliance with the market value requirement as set forth Listing Rule 5450(b)(2)(A) (the “Market Value Requirement”), and the minimum 400 total holders requirement, as is required by Listing Rule 5450(a)(2) (the “Total Holders Requirement”). The Letter also states that the Company has not yet filed its Form 10-Q for the period ended September 30, 2023 (the “Filing”) and is therefore not in compliance with Listing Rule 5250(c)(1).
On January 23, 2024, the Company submitted an appeal to the appeal Staff’s determination to a Hearings Panel (the “Panel”), pursuant to the procedures set forth in the Nasdaq Listing Rule 5800 Series. This submission included a detailed Compliance Plan, to present to the Panel, to regain compliance with the Listing Rules and also requested a stay of the suspension of the Company’s securities. The Hearing request has stayed the suspension of the Company’s securities and the filing of the Form 25-NSE with the Securities and Exchange Commission (the "SEC"). On January 24, 2024, the Company was notified, by the Nasdaq Hearings Advisor, that the hearing is scheduled to be held on April 4, 2024. The Company's securities are still eligible to trade on Nasdaq.
VSAC noted that the deficiencies related to the Market Value Requirement and the Total Holders Requirement are common for SPACs at the Company's current stage of completing a planned transaction. In its Compliance Plan submitted to Staff, VSAC has noted that the recently announced business combination with Mediforum Co., Ltd. (“Mediforum”) will automatically resolve these deficiencies. The Company also noted that, if necessary, it can also consider implementing alternative solutions to the deficiencies to regain compliance with (a) the Market Value Requirement, by converting its Series B shares into Series A shares coupled with moving the company’s listing to the Nasdaq Capital Market and (b) the Total Holders Requirement, by working with outside agencies to increase the number of Total Holders to above the minimum requirement.
Regarding the deficiency in the Filing, the Company has commenced work on completing the outstanding Quarterly Report on Form 10-Q and expects to be in a position to file this very soon. The filing of such would automatically resolve this deficiency.
Noted George Peter Sobek, CEO of VSAC, “While we appreciate the importance of compliance with Nasdaq listing rules, we also understand that the situation of VSAC is relatively common occurrence for SPACs in today’s market. VSAC has taken the necessary steps toward an expedient resolution. We also note that the Mediforum shareholders and investors are fully protected as any transaction with Mediforum will only be completed on the resolution of all VSAC listing deficiencies, and completion of the transaction will remain subject to compliance by the parties with all terms and conditions contained in the Business Combination Agreement. We are highly confident of the successful resolution of these matters and the completion of an exciting transaction with Mediforum.”
The press release shall not be deemed “filed” for any purpose, including for the purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that Section. The information in this Item 7.01, including Exhibit 99.1, shall not be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act regardless of any general incorporation language in the filing.
About Vision Sensing Acquisition Corp.
Vision Sensing Acquisition Corp. (“VSAC”) is a Special Purpose Acquisition Company (“SPAC”) that has been established to focus on the acquisition of vision sensing technologies (“VST”) including hardware solutions (chips / modules / systems), related application software, artificial intelligence and other peripheral technologies that assist to integrate and/or supplement VST applications. For more information visit www.vision-sensing.com.
Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. the Company’s actual results may differ from its expectations, estimates and projections and consequently, you should not rely on these forward-looking statements as predictions of future events. Words such as “expect,” “estimate,” “project,” “budget,” “forecast,” “anticipate,” “intend,” “plan,” “may,” “will,” “could,” “should,” “believes,” “predicts,” “potential,” “might” and “continues,” and similar expressions are intended to identify such forward-looking statements. These forward-looking statements include, without limitation, risks and uncertainties described in reports and other public filings with the SEC by the Company, including the Company’s Form 10-K for the year ended December 31, 2022 as filed with the SEC on March 24, 2023 and its most recent Forms 10-Q, as filed with the SEC on May 15, 2023 and August 28, 2023. These risk factors are not exclusive. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated or anticipated by such forward-looking statements. There may be additional risks that the Company does presently know, or that the Company currently believes are immaterial, that could cause actual results to differ from those contained in the forward-looking statements. Readers are cautioned not to place undue reliance upon any forward-looking statements, which speak only as of the date made. These forward-looking statements should not be relied upon as representing the Company’s assessments as of any date subsequent to the date of this press release. The Company undertakes no obligation to update forward-looking statements to reflect events or circumstances after the date they were made except as required by law or applicable regulation.
SOURCE: Vision Sensing Acquisition Corp.
FAQ
What are the deficiencies noted in the staff determination letter from Nasdaq?
When is the hearing scheduled for regarding the staff determination letter?
How does Vision Sensing Acquisition Corp. plan to regain compliance with the Nasdaq listing rules?
What is the recently announced business combination with Mediforum Co., Ltd. expected to do?
Who is the CEO of Vision Sensing Acquisition Corp.?
