Let\'s discuss: Do we really need the 90 day closing value of
Post# of 36537
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Posted On: 10/21/2019 12:55:45 AM
Ok... correct me if I'm wrong here, but I've been combing over the NAZ Capital Mkts listing rules, and I feel like we've made a false assumption on the 90 day $2 closing price requirement...
Open the listing guide and play along... feel free to correct me if I'm wrong:
http://nasdaq.cchwallstreet.com/NASDAQTools/P...tyrules%2F
(CAPS are mine):
"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)."
We meet all of the requirements in 5505(a), except possibly the minimum price bullet. Look at 5505 (a)(1)(
"...$2 per share, if the Company meets the requirements of the Market Value of Listed Securities Standard under Rule 5505(b)(2), provided that in either case the Company must also demonstrate that it has net tangible assets (i.e., total assets less intangible assets and liabilities) in excess of $2 million, if the issuer has been in continuous operation for at least three years..."
As of the last 10Q, we don't meet the Net Tangible Assets >$2MM, by my calcs: Total assets: $54MM, less Intangible Assets: ($48.3MM), less Liabilities: ($40.2MM) = ($34.5MM). So we assume that to be one of the items needing to be proven with the upcoming 10K, as it affects both the $3 and the $2 listing... or maybe I'm wrong with these #s?
We meet the other requirements of part (a)... 1,000,000 shares, 300 round lot holders, 3+ MMs, and avg daily trading volume 2,000+ shares.
So, if we have success on Net Tangible Assets w the 10K, that would be success on part (a). Let's look at part (b), which, as 5505 says, we must meet "AT LEAST ONE OF the Standards in Rule 5505(b)". There are 3 Standards.
It looks to me like we meet Standard (1) Equity Standard... Equity >$5MM, Mkt value of unrestricted shares >$15MM, and 2 year operating history.
(We may or may not meet Standard (3) Net Income Std... NI >$750k in last fiscal year (upcoming 10K?), Equity >$4MM, and Mkt value of unrestricted shares >$5MM.)
Now we come to Standard (2) Market Value of Listed Securities. "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)".
We meet the $50MM Market Value of Listed Securities... and it says we only have to meet the 90 consecutive trading days "if qualifying to list ONLY UNDER THE MARKET VALUE OF LISTED SECURITIES STANDARD". As I've just shown, it looks like we AT LEAST meet ONE OTHER listing standard. So would that not mean the 90 days does not apply, and we only need to meet the 5 day price standard stated in part (a) above??? (Note we do meet the other 2 parts of Standard 3: Equity >$5MM, Mkt Value of Unrestricted Shares >$15MM).
Thoughts???
Open the listing guide and play along... feel free to correct me if I'm wrong:
http://nasdaq.cchwallstreet.com/NASDAQTools/P...tyrules%2F
(CAPS are mine):
"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)."
We meet all of the requirements in 5505(a), except possibly the minimum price bullet. Look at 5505 (a)(1)(
"...$2 per share, if the Company meets the requirements of the Market Value of Listed Securities Standard under Rule 5505(b)(2), provided that in either case the Company must also demonstrate that it has net tangible assets (i.e., total assets less intangible assets and liabilities) in excess of $2 million, if the issuer has been in continuous operation for at least three years..." As of the last 10Q, we don't meet the Net Tangible Assets >$2MM, by my calcs: Total assets: $54MM, less Intangible Assets: ($48.3MM), less Liabilities: ($40.2MM) = ($34.5MM). So we assume that to be one of the items needing to be proven with the upcoming 10K, as it affects both the $3 and the $2 listing... or maybe I'm wrong with these #s?
We meet the other requirements of part (a)... 1,000,000 shares, 300 round lot holders, 3+ MMs, and avg daily trading volume 2,000+ shares.
So, if we have success on Net Tangible Assets w the 10K, that would be success on part (a). Let's look at part (b), which, as 5505 says, we must meet "AT LEAST ONE OF the Standards in Rule 5505(b)". There are 3 Standards.
It looks to me like we meet Standard (1) Equity Standard... Equity >$5MM, Mkt value of unrestricted shares >$15MM, and 2 year operating history.
(We may or may not meet Standard (3) Net Income Std... NI >$750k in last fiscal year (upcoming 10K?), Equity >$4MM, and Mkt value of unrestricted shares >$5MM.)
Now we come to Standard (2) Market Value of Listed Securities. "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)".
We meet the $50MM Market Value of Listed Securities... and it says we only have to meet the 90 consecutive trading days "if qualifying to list ONLY UNDER THE MARKET VALUE OF LISTED SECURITIES STANDARD". As I've just shown, it looks like we AT LEAST meet ONE OTHER listing standard. So would that not mean the 90 days does not apply, and we only need to meet the 5 day price standard stated in part (a) above??? (Note we do meet the other 2 parts of Standard 3: Equity >$5MM, Mkt Value of Unrestricted Shares >$15MM).
Thoughts???
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