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  Listing Council Decision 2013-4
Identification Number 1112
Quantitative Listing Standards
Rule 5505(a)(3): a company must meet have at least 300 Round Lot Holders to list on the Capital Market.
Rule 5505(b): a company must meet one of the following standards to list on the Capital Market:
(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 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
(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.
Prior to its conversion from a special purpose acquisition company ("SPAC") to an operating company, the Company did not comply with:
Rule 5550(a)(3): which requires a company to have a minimum 300 public holders for continued listing on the Capital Market.
Rule 5550(a)(4): which requires a company to have a minimum 500,000 publicly held shares on the Capital Market.
Issue: Should the Company, which is a SPAC, be granted an extension to remain listed on Nasdaq, notwithstanding a Panel decision that affirmed Staff’s determination to delist the Company based on its non-compliance with the Capital Market continued listing standards, and which, post-acquisition, does not meet Capital Market initial listing standards? [1]
Determination: Affirm the decision to suspend and delist the Company.
The Company has not complied with continued, and now initial, listing standards. It has repeatedly requested extensions of time to conclude transactions to regain compliance with continued listing standards or to meet initial listing standards, yet each time failed to fully carry out what was promised to regain compliance. Now the Company requests that the Listing Council grant it additional time to regain compliance with initial listing standards. For the reasons stated below, the Listing Council denies the Company’s request.
Companies applying for listing on Nasdaq must meet initial listing standards before being approved. For the vast majority of companies, Staff’s denial of initial listing may be appealed and the company remains unlisted on Nasdaq during the appellate process. SPACs, by contrast, may remain listed on Nasdaq while pending an appellate review of Staff and subsequent Panel determinations regarding such a company’s eligibility for initial listing. The Company does not dispute that it is currently ineligible for initial listing and it has not presented any compelling reason to grant it continued listing until such a time that it can meet initial listing standards. As noted by Staff in its brief to the Listing Council, the Company’s solution remains unchanged, namely that it is working diligently to complete transactions that will allow it to meet Nasdaq’s initial listing standards. The Listing Council does not find the Company’s plan of compliance adequately definitive to find that compliance is imminent. The Listing Council notes that the Company is not precluded from reapplying to list on Nasdaq once it determines that it meets initial listing standards.
[1]A SPAC must meet continued listing standards upon listing on NASDAQ. Once the SPAC completes its conversion to an operating company, it must meet initial listing standards.
Publication Date*: 5/6/2014 Mailto Link Identification Number: 1112
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