Listing Requirements of the NASDAQ Stock Market

– * last updated August 30, 2015 –

NASDAQ Stock Marketwas officially recognized as a stock exchange by the U.S. Securities and Exchange Commission as of June 1, 2006.  Over the last twenty years NASDAQ has evolved into the preferred trading market for technology and bio-technology companies.  NASDAQ is split into three tiers; the Global Select Market, Global Market and Capital Market.  All  tiers of NASDAQ are much more volatile than the trading markets of traditional stock exchanges.  This volatility results in more shares being traded per day on NASDAQ than any other US exchange.

The attached charts provide a summary of the listing requirements of NASDAQGSM, NASDAQGM and NASDAQCM:

Nasdaq Global Select Market Listing Requirements

Requirements Standard 1: Earnings Standard 2: Capitalization with Cash Flow Standard 3: Capitalization with Revenue Standard 4: Assets with Equity
Pre-Tax Income Aggregate in prior 3 fiscal years ≥$11,000,000 and Each of the 2 most recent fiscal years ≥$2,200,000 and Each of the prior 3 fiscal years ≥$0 N/A N/A N/A
Cash Flows N/A Aggregate in prior 3 fiscal years ≥$27,500,000 and each of the prior 3 fiscal years ≥ $0 N/A N/A
Revenue N/A Previous fiscal year ≥ $110,000,000 Previous fiscal year ≥ $90,000,000 N/A
Net Tangible Assets N/A N/A N/A $80,000,000 (in last completed fiscal year)
Market Value of Listed Securities N/A Average ≥$550,000,000 over prior 12 months Average ≥$850,000,000 over prior 12 months $160,000,000
Market Value of Publicly Held Securities(1) $45,000,000 $45,000,000 $45,000,000 $45,000,000
# of Shares Publicly Held(2) 1,250,000 1,250,000 1,250,000 1,250,000
# Public Board Lot Holders 450 450 450 450
Trading Price of Listed Securities(2) $4.00 $4.00 $4.00 $4.00
Shareholders Equity N/A N/A N/A $55,000,000
Market Makers 3 or 4 3 or 4 3 or 4 3 or 4
Operating History N/A N/A N/A N/A

Notes:

  1. Seasoned companies currently trading on another market are required to have a market value of publicly held shares of $110,000,000 or a market value of publicly held shares of $100,000,000 and $110,000,000 in shareholders’ equity.
  2. Issuers listing concurrently with an initial public offering or as a spin-off may alternatively have 2,200 total shareholders. Seasoned companies currently trading on another market or affiliated companies of listed on Nasdaq Global Select Markets may alternatively have 2,200 total shareholders or 550 total shareholders and 1,100,000 average monthly trading volumes over the last 12 months

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Nasdaq Global Market Listing Requirements

Requirements Income Standard Equity Standard Market Value Standard(3) Total Assets/Total
Revenue Standard
Pre-Tax Income Last Year (In latest fiscal year or in 2 of last 3 fiscal years) $1,000,000 N/A N/A N/A
Total Assets and Total Revenue (In latest fiscal year or in 2 of last 3 fiscal years) N/A N/A N/A $75,000,000 and $75,000,000
Market Value Publicly Held Stock(1) $8,000,000 $18,000,000 $20,000,000 $20,000,000
Market Value of Listed Securities(2) N/A N/A $75,000,000 N/A
# of Shares Publicly Held 1,100,000 1,100,000 1,100,000 1,100,000
# Public Board Lot Holders 400 400 400 400
Trading Price of Listed Securities $4.00 $4.00 $4.00 $4.00
Shareholders Equity $15,000,000 $30,000,000 N/A N/A
Market Makers 3 3 4 4
Operating History N/A 2 years N/A N/A

Notes:

  1. Publicly held shares is defined as total shares outstanding, less any shares held directly or indirectly by officers, directors or any person who is the beneficial owner of more than 10% of the total shares outstanding of the company. Entities in which an officer, director, or 10% owner has voting and/or dispositive power, such as a typical Employee Stock Option Plan, are excluded from publicly held shares.
  2. The term, “listed securities”, is defined as “securities listed on NASDAQ or another national securities exchange.”
  3. Seasoned companies (those companies already listed or quoted on another marketplace) qualifying only under the Market Value Standard must meet the market value of listed securities and the bid price requirements for 90 consecutive trading days prior to applying for listing.

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Nasdaq Capital Market – NASDAQCM Listing Requirements

Requirements Equity Standard Market Value of Listed Securities Standard(3) Net Income Standard
Net Income from Continuing Operations(In latest fiscal year or in 2 of last 3 fiscal years) N/A N/A $750,000
Net Tangible Assets N/A N/A N/A
Market Value Publicly Held Stock(1) $15,000,000 $15,000,000 $5,000,000
Market Value of Listed Securities(2) N/A $50,000,000 N/A
# of Shares Publicly Held 1,000,000 1,000,000 1,000,000
# Public Board Lot Holders 300 300 300
Bid price or Closing price(4) $4.00 $3.00 $4.00 $3.00 $4.00 $3.00
Shareholders Equity $5,000,000 $4,000,000 $4,000,000
Market Makers 3 3 3
Operating History 2 years N/A N/A

Notes:

  1. Publicly held shares is defined as total shares outstanding, less any shares held directly or indirectly by officers, directors or any person who is the beneficial owner of more than 10% of the total shares outstanding of the company. Entities in which an officer, director, or 10% owner has voting and/or dispositive power, such as a typical Employee Stock Option Plan, are excluded from publicly held shares.
  2. The term, “listed securities”, is defined as “securities listed on NASDAQ or another national securities exchange.”
  3. Seasoned companies (those companies already listed or quoted on another marketplace) qualifying only under the Market Value Standard must meet the market value of listed securities and the bid price requirements for 90 consecutive trading days prior to applying for listing.

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    Alixe Cormick is the founder of Venture Law Corporation in Vancouver, British Columbia and a member of Commercialization Advisory Board of the Life Science Institute at the University of British Columbia, the Advisory Board of the National Crowdfunding Association and two private tech companies. She is also a member of the Pacific Northwest Keiretsu Forum, an association of accredited private equity angel investors, venture capitalists and corporate/institutional investors, and Vantech Angel Technology Network, a Vancouver angel group. You can reach Alixe by phone at 604-659-9188, by email at acormick@venturelawcorp.com, on twitter @AlixeCormick or on Google+.

    Listing Requirements of NASDAQ Private Market

    – * last updated August 30, 2015 –

    nasdaq-private-marketNASDAQ Private Market a joint effort between NASDAQ and SharesPost to provide a secondary trading market for high quality private issuers who want to remain private , but yet provide a trading forum for their founders, private investors and employees. It also provides other support services to client companies.

    Securities related services are offered through NASDAQ Private Market affiliate, NPM Securities, a FINRA registered broker-dealer, member of SIPC and SEC-registered alternative trading system.

    The listing requirements of NASDAQ Private Market are greater than a number of full stock exchanges.

    Listing Requirements of NASDAQ Private Market

    Members must meet at least one of the following:
    Funding received(1) $30,000,000 within last 2 years
    Enterprise value(1) $50,000,000
    Total assets(2) $50,000,000
    Total annual revenue(2) $50,000,000
    Annual net income $750,000
    Shareholders’ equity $5,000,000 and 2 year operating history
    Sponsorship(3) Yes by recognized and experienced financial investor(s) with prior success in venture investments
    Continuous Disclosure Requirements
    Financial statements Audited annual financial statements and unaudited quarterly financial statements
    Annual disclosures Management bios, detailed description of business (any significant developments, operations, competition and risks) and capital structure
    Insider trading policy Adopt and enforce an insider trading policy

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    Other Articles You May Find of Interest:

      _________

      Alixe Cormick is the founder of Venture Law Corporation in Vancouver, British Columbia and a member of Commercialization Advisory Board of the Life Science Institute at the University of British Columbia, the Advisory Board of the National Crowdfunding Association and two private tech companies. She is also a member of the Pacific Northwest Keiretsu Forum, an association of accredited private equity angel investors, venture capitalists and corporate/institutional investors, and Vantech Angel Technology Network, a Vancouver angel group. You can reach Alixe by phone at 604-659-9188, by email at acormick@venturelawcorp.com, on twitter @AlixeCormick or on Google+.