The first complication: reach the threshold. The shares must be at a minimum bid of $4. At .001, it would take 4000/1 r/s to reach the $4. That means that 4,000,000 shares become 1,000 shares. There could be a r/s/f/s where after the 4000/1 split there was a 1/4 split giving that shareholder 4 shares for each one. That would be a final result of 4,000 shares at $1 each.
The remainder of uplisting to NASDAQ is plainly stated in their rules listed, in pertinent part, below.
Rule 5500. The Nasdaq Capital Market
This section contains the initial and continued listing requirements and standards for listing a Company’s Primary Equity Security on The Nasdaq Capital Market. This section also contains the initial and continued listing requirements for Rights and Warrants; Preferred and Secondary Classes of Common Stock; and Convertible Debt, Rights and Warrants on the Capital Market.
In addition to meeting the quantitative requirements in this section, a Company must meet the requirements of Rule 5100, the disclosure obligations set forth in Rule 5200, the Corporate Governance requirements set forth in Rule 5600, and pay any applicable fees in Rule 5900. A Company’s failure to meet any of the continued listing requirements will be processed in accordance with the provisions set forth in the Rule 5800 Series.
Companies that meet these requirements, but are not listed on the Nasdaq Global Market, are listed on the Nasdaq Capital Market.
5505. Initial Listing of Primary Equity Securities
A Company applying to list its Primary Equity Security on the Capital Market must meet all of the requirements set forth in Rule 5505(a) and at least one of the Standards in Rule 5505(b).
(a) Initial Listing Requirements for Primary Equity Securities:
(1) Minimum bid price of $4 per share;
(2) At least 1,000,000 Publicly Held Shares;
(3) At least 300 Round Lot Holders;
(4) At least three registered and active Market Makers;
(5) In the case of ADRs, at least 400,000 issued.
(b) Initial Listing Standards for Primary Equity Securities:
(1) Equity Standard
(A) Stockholders’ equity of at least $5 million;
(B) Market Value of Publicly Held Shares of at least $15 million; and
(C) Two year operating history.
(2) Market Value of Listed Securities Standard
(A) Market Value of Listed Securities of at least $50 million (current publicly traded Companies must meet this requirement and the $4 bid price requirement for 90 consecutive trading days prior to applying for listing if qualifying to list only under the Market Value of Listed Securities Standard);
(B) Stockholders’ equity of at least $4 million; and
(C) Market Value of Publicly Held Shares of at least $15 million.
(3) Net Income Standard
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(A) Net income from continuing operations of $750,000 in the most recently completed fiscal year or in two of the three most recently completed fiscal years;
(B) Stockholders’ equity of at least $4 million; and
(C) Market Value of Publicly Held Shares of at least $5 million.
5510. Initial Listing Requirements for Preferred Stock and Secondary Classes of Common Stock
(a) When the Primary Equity Security is listed on the Capital Market or is a Covered Security, a Company’s preferred stock or secondary class of common stock must meet all of the requirements in Rules (1) through (5) below in order to be listed.
(1) Minimum bid price of at least $4 per share;
(2) At least 100 Round Lot Holders;
(3) At least 200,000 Publicly Held Shares;
(4) Market Value of Publicly Held Shares of at least $3.5 million; and
(5) At least three registered and active Market Makers.
(b) In the event the Company’s Primary Equity Security is not listed on the Capital Market or is not a Covered Security, the preferred stock and/or secondary class of common stock may be listed on the Capital Market so long as it satisfies the initial listing criteria for Primary Equity Securities set forth in Rule 5505.
5515. Initial Listing Requirements for Rights, Warrants, and Convertible Debt
The following requirements apply to a Company listing convertible debt, rights or warrants on The Nasdaq Capital Market.
(a) For initial listing, rights, warrants and put warrants (that is, instruments that grant the holder the right to sell to the issuing company a specified number of shares of the Company’s common stock, at a specified price until a specified period of time) must meet the following requirements:
(1) At least 400,000 issued;
(2) The underlying security must be listed on Nasdaq or be a Covered Security; and
(3) At least three registered and active Market Makers.
(b) For initial listing, a convertible debt security must meet the requirements in (1) through (3), and one of the conditions in (4) must be satisfied:
(1) Principal amount outstanding of at least $10 million;
(2) Current last sale information must be available in the United States with respect to the underlying security into which the bond or debenture is convertible;
(3) At least three registered and active Market Makers; and
Rule 5515 Page 34 of 140
(4) (A) the issuer of the debt must have an equity security that is listed on Nasdaq, the American Stock Exchange or the New York Stock Exchange;
(B) an issuer whose equity security is listed on Nasdaq, the American Stock Exchange or the New York Stock Exchange, directly or indirectly owns a majority interest in, or is under common control with, the issuer of the debt security, or has guaranteed the debt security;
(C) a nationally recognized securities rating organization (an “NRSRO”) has assigned a current rating to the debt security that is no lower than an S&P Corporation “B” rating or equivalent rating by another NRSRO; or
(D) if no NRSRO has assigned a rating to the issue, an NRSRO has currently assigned: (1) an investment grade rating to an immediately senior issue; or (2) a rating that is no lower than an S&P Corporation “B” rating, or an equivalent rating by another NRSRO, to a pari passu or junior issue.
(c) In the case of Index Warrants, the requirements established in Rule 5725 for Nasdaq Global Market securities apply.
5550. Continued Listing of Primary Equity Securities
A Company that has its Primary Equity Security listed on the Capital Market must continue to meet all of the requirements set forth in Rule 5550(a) and at least one of the Standards set forth in Rule 5550(b). Failure to meet any of the continued listing requirements will be processed in accordance with the provisions set forth in the Rule 5800 Series.
(a) Continued Listing Requirements for Primary Equity Securities:
(1) At least two registered and active Market Makers, one of which may be a Market Maker entering a stabilizing bid;
(2) Minimum bid price of at least $1 per share;
(3) At least 300 Public Holders;
(4) At least 500,000 Publicly Held Shares; and
(5) Market Value of Publicly Held Shares of at least $1 million.
(b) Continued Listing Standards for Primary Equity Securities:
(1) Stockholders’ equity of at least $2.5 million;
(2) Market Value of Listed Securities of at least $35 million; or
(3) Net income from continuing operations of $500,000 in the most recently completed fiscal year or in two of the three most recently completed fiscal years.
5555. Continued Listing Requirements for Preferred Stock and Secondary Classes of Common Stock
(a) When the Primary Equity Security is listed on the Capital Market or is a Covered Security, a Company’s preferred stock or secondary class of common stock must meet all of
Rule 5555 Page 35 of 140
the requirements in (1) through (5) below in order to be listed. Failure to meet any of the continued listing requirements will be processed in accordance with the provisions set forth in the Rule 5800 Series.
(1) Minimum bid price of at least $1 per share;
(2) At least 100 Public Holders;
(3) At least 100,000 Publicly Held Shares;
(4) Market Value of Publicly Held Shares of at least $1 million; and
(5) At least two registered and active Market Makers, one of which may be a Market Maker entering a stabilizing bid.
(b) In the event the Company’s Primary Equity Security is not listed on the Capital Market or is not a Covered Security, the preferred stock and/or secondary class of common stock may be listed on the Capital Market so long as the security satisfies the continued listing criteria for Primary Equity Securities set forth in Rule 5550.
5560. Continued Listing Requirements for Rights, Warrants, and Convertible Debt
(a) For rights, warrants, and put warrants (that is, instruments that grant the holder the right to sell to the issuing company a specified number of shares of the Company’s common stock, at a specified price until a specified period of time), the underlying security must remain listed on Nasdaq or be a Covered Security, and there must be at least two registered and active Market Makers, one of which may be a Market Maker entering a stabilizing bid.
(b) A convertible debt security must meet the following requirements for continued listing:
(1) A principal amount outstanding of at least $5 million;
(2) At least two registered and active Market Makers, one of which may be a Market Maker entering a stabilizing bid; and
(3) Current last sale information must be available in the United States with respect to the underlying security into which the bond or debenture is convertible.
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