Joe posted this on Yahoo today about uplisting requirements that went into effect on 7/5/19 from why I gather. Not sure why he didn’t post it here.
On July 5, 2019, the SEC approved recent Nasdaq proposal to revise its initial listing standards to improve liquidity in the market. Under the new Nasdaq Rule 5005(a)(37) “Restricted Securities” are now defined as “securities that are subject to resale restrictions for any reason, including, but not limited to, securities: (1) acquired directly or indirectly from the issuer or an affiliate of the issuer in unregistered offerings such as private placements or Regulation D offerings; (2) acquired through an employee stock benefit plan or as compensation for professional services; (3) acquired in reliance on Regulation S, which cannot be resold within the United States; (4) subject to a lockup agreement or a
similar contractual restriction; or (5) considered ‘restricted securities’ under Rule 144.” Nasdaq has also adopted a new definition of “Unrestricted Securities” at Rule 5005(a)(46), which are “securities that are not Restricted Securities,” and added a new definition of “Unrestricted Publicly Held Shares” at Rule 5005(a)(45), defined as “Publicly Held Shares that are Unrestricted Securities.” The reason for these changes is that Nasdaq believed that, because illiquid securities trade infrequently, they could be more volatile, more susceptible to price manipulation and have a wider bid-ask spread, all of which could lead to market prices that do not accurately reflect market value.
How does this affect a company looking to uplist to NASDAQ? In order to uplist, the company is required to have $15m in public float. Under the previous rule, public float included all shares not held by affiliates. Under this new rule, the shares must be “unrestricted” in order to count as part of the public float.
Nasdaq is also adding a new requirement that at least 50% of the required amount of shareholders for listing must each hold Unrestricted Securities with a market value of at least $2,500. Prior to the amendment, a shareholder could be considered a round lot holder by holding exactly 100 shares, which, in the case of a stock that is trading at the minimum bid price of $4 per share, would be worth only $400. Nasdaq believes that this amendment will “help ensure that a majority of the required minimum number of shareholders hold a meaningful value of unrestricted securities and that a company has sufficient investor interest to support an exchange listing.”
How does this affect a company looking to uplist to NASDAQ? The Company will need to carefully review its NOBO list to ensure that at least 150 of their shareholders own stock that has at value of least $2,500. This is a significant change from all round lot shareholders only needing to own 100 shares each.
NASDAQ has also added a new listing requirement for a minimum average daily trading volume over the 30 trading days prior to listing of at least 2,000 shares a day, with trading occurring on more than half of those 30 days. Nasdaq believes this change “will help ensure a liquid trading market, promote price discovery and establish an appropriate market price for the listed securities.” Nasdaq adopted an exemption from the ADTV requirement for securities listed in connection with a firm commitment underwritten public offering of at least $4 million.
How does this affect a company looking to uplist to NASDAQ? Most companies need to undertake a reverse split in order to uplist. These companies will now need to show trading volume of at least 2,000 shares a day for the previous 30 days and calculate it as if the reverse split had occurred 30 days earlier. If not they will need to undertake a $4m firm commitment underwritten registered offering.
At Uplisting.com, we can assist you with addressing these new rules. Please contact us at http://www.Uplisting.com or email: info@Uplisting.com to discuss how these rules affect your specific company.
On July 5, 2019, the SEC approved recent Nasdaq proposal to revise its initial listing standards to improve liquidity in the market. Under the new Nasdaq Rule 5005(a)(37) “Restricted Securities” are now defined as “securities that are subject to resale restrictions for any reason, including, but not limited to, securities: (1) acquired directly or indirectly from the issuer or an affiliate of the issuer in unregistered offerings such as private placements or Regulation D offerings; (2) acquired through an employee stock benefit plan or as compensation for professional services; (3) acquired in reliance on Regulation S, which cannot be resold within the United States; (4) subject to a lockup agreement or a
similar contractual restriction; or (5) considered ‘restricted securities’ under Rule 144.” Nasdaq has also adopted a new definition of “Unrestricted Securities” at Rule 5005(a)(46), which are “securities that are not Restricted Securities,” and added a new definition of “Unrestricted Publicly Held Shares” at Rule 5005(a)(45), defined as “Publicly Held Shares that are Unrestricted Securities.” The reason for these changes is that Nasdaq believed that, because illiquid securities trade infrequently, they could be more volatile, more susceptible to price manipulation and have a wider bid-ask spread, all of which could lead to market prices that do not accurately reflect market value.
How does this affect a company looking to uplist to NASDAQ? In order to uplist, the company is required to have $15m in public float. Under the previous rule, public float included all shares not held by affiliates. Under this new rule, the shares must be “unrestricted” in order to count as part of the public float.
Nasdaq is also adding a new requirement that at least 50% of the required amount of shareholders for listing must each hold Unrestricted Securities with a market value of at least $2,500. Prior to the amendment, a shareholder could be considered a round lot holder by holding exactly 100 shares, which, in the case of a stock that is trading at the minimum bid price of $4 per share, would be worth only $400. Nasdaq believes that this amendment will “help ensure that a majority of the required minimum number of shareholders hold a meaningful value of unrestricted securities and that a company has sufficient investor interest to support an exchange listing.”
How does this affect a company looking to uplist to NASDAQ? The Company will need to carefully review its NOBO list to ensure that at least 150 of their shareholders own stock that has at value of least $2,500. This is a significant change from all round lot shareholders only needing to own 100 shares each.
NASDAQ has also added a new listing requirement for a minimum average daily trading volume over the 30 trading days prior to listing of at least 2,000 shares a day, with trading occurring on more than half of those 30 days. Nasdaq believes this change “will help ensure a liquid trading market, promote price discovery and establish an appropriate market price for the listed securities.” Nasdaq adopted an exemption from the ADTV requirement for securities listed in connection with a firm commitment underwritten public offering of at least $4 million.
How does this affect a company looking to uplist to NASDAQ? Most companies need to undertake a reverse split in order to uplist. These companies will now need to show trading volume of at least 2,000 shares a day for the previous 30 days and calculate it as if the reverse split had occurred 30 days earlier. If not they will need to undertake a $4m firm commitment underwritten registered offering.
At Uplisting.com, we can assist you with addressing these new rules. Please contact us at http://www.Uplisting.com or email: info@Uplisting.com to discuss how these rules affect your specific company.
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Disclaimer: Of course, all of this is my opinion and you should not make any investment decisions based on my opinion. I have not received any non-public information.
