Tuesday, April 06, 2021 4:28:05 PM
Listing Requirements for All Companies
Each company must have a minimum of 1,250,000 publicly traded shares outstanding upon listing, excluding those held by officers, directors, or any beneficial owners of more than 10% of the company.
The regular bid price of shares of the company's stock at the time of listing must be at least $4.00. However, a company may qualify under a closing price alternative of $3.00 or $2.00 if the company meets varying requirements.
There must be at least three (or four depending on the criteria) market makers for the stock. For companies using the $3 or $2 criteria, only two market makers may be required. Each listing firm is also required to follow NASDAQ corporate governance rules 4350, 4351, and 4360.
Companies must also have at least 450 round lot (i.e., 100 shares or more) shareholders, 2,200 total shareholders, or 550 total shareholders with 1.1 million average trading volume over the past 12 months.
As of 2020, a company must pay a $25,000 application fee before its stock can even be considered for listing, and it can expect to pay between $150,000 and $295,000 in entry fees if successful.
In addition to these requirements, companies must meet all of the criteria under at least one of the following standards.2?
Standard No. 1: Earnings
The company must have aggregate pre-tax earnings in the prior three years of at least $11 million, in the previous two years at least $2.2 million, and no single year in the prior three years can have a net loss.
Standard No. 2: Capitalization With Cash Flow
The company must have a minimum aggregate cash flow of at least $27.5 million for the past three fiscal years, with no negative cash flow in any of those three years. Also, its average market capitalization over the prior 12 months must be at least $550 million, and revenues in the previous fiscal year must be $110 million, minimum.
Standard No. 3: Capitalization With Revenue
Companies can be removed from the cash flow requirement of the second standard if its average market capitalization over the past 12 months is at least $850 million and revenues over the prior fiscal year are at least $90 million.
Standard No. 4: Assets With Equity
Companies can eliminate the cash flow and revenue requirements, and decrease its marketing capitalization requirements to $160 million if their total assets total at least $80 million and their stockholders' equity is at least $55 million.
To stay listed on the Nasdaq, a company must continue to meet the minimum listing requirements or risk being delisted and removed from the Nasdaq exchange.
The Bottom Line
A company has four ways to get listed on the NASDAQ, depending on the underlying fundamentals of the company. If a company does not meet certain criteria, such as the operating income minimum, it has to make it up with larger minimum amounts in another area, like revenue. This helps to improve the quality of companies listed on the exchange.
After a company gets listed on the market, it must maintain certain standards to continue trading. Failure to meet the specifications set out by the stock exchange will result in its delisting. Falling below the minimum required share price, or market capitalization is one of the major factors triggering a delisting. The exact details of delisting depend on the exchange.
Recent NIHK News
- Form 10-Q - Quarterly report [Sections 13 or 15(d)] • Edgar (US Regulatory) • 05/20/2024 05:18:21 PM
- Form NT 10-Q - Notification of inability to timely file Form 10-Q or 10-QSB • Edgar (US Regulatory) • 05/13/2024 03:54:08 PM
- Form 10-Q - Quarterly report [Sections 13 or 15(d)] • Edgar (US Regulatory) • 11/13/2023 06:12:34 PM
- Form 4/A - Statement of changes in beneficial ownership of securities: [Amend] • Edgar (US Regulatory) • 09/25/2023 09:23:19 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 09/25/2023 09:13:05 PM
- Form 10-Q - Quarterly report [Sections 13 or 15(d)] • Edgar (US Regulatory) • 08/21/2023 03:44:15 PM
- Form NT 10-Q - Notification of inability to timely file Form 10-Q or 10-QSB • Edgar (US Regulatory) • 08/14/2023 02:20:17 PM
- Form 10-K/A - Annual report [Section 13 and 15(d), not S-K Item 405]: [Amend] • Edgar (US Regulatory) • 08/08/2023 09:17:08 PM
Glidelogic Corp. Becomes TikTok Shop Partner, Opening a New Chapter in E-commerce Services • GDLG • Jul 5, 2024 7:09 AM
Freedom Holdings Corporate Update; Announces Management Has Signed Letter of Intent • FHLD • Jul 3, 2024 9:00 AM
EWRC's 21 Moves Gaming Studios Moves to SONY Pictures Studios and Green Lights Development of a Third Upcoming Game • EWRC • Jul 2, 2024 8:00 AM
BNCM and DELEX Healthcare Group Announce Strategic Merger to Drive Expansion and Growth • BNCM • Jul 2, 2024 7:19 AM
NUBURU Announces Upcoming TV Interview Featuring CEO Brian Knaley on Fox Business, Bloomberg TV, and Newsmax TV as Sponsored Programming • BURU • Jul 1, 2024 1:57 PM
Mass Megawatts Announces $220,500 Debt Cancellation Agreement to Improve Financing and Sales of a New Product to be Announced on July 11 • MMMW • Jun 28, 2024 7:30 AM