Date: March 15，2025
Source:
https://www.sec.gov/files/rules/sro/nasdaq/2025/34-102622.pdf
On March 12, 2025, the SEC approved to modify certain liquidity requirements for companies initially listing on Nasdaq Capital Market and Nasdaq Global Market in conjunction with a public offering. These new requirements will be effective for companies listing on or after April 11, 2025. This change will raise the bar for the liquidity requirements that apply to IPO listings and OTC uplistings in connection with a public
offering.
Key Changes:
- Stricter Liquidity Requirements for New Listings and Uplisting Companies Offering Proceeds Requirement: Companies listing on the Nasdaq Global Market or Nasdaq Capital Market in connection with an IPO must now satisfy the applicable minimum “Market Value of Unrestricted Publicly Held Shares” requirement solely from the proceeds of the offering. Companies uplisting to the Nasdaq Global Market or Nasdaq Capital Market from the OTC market using the Public Offering Alternative (defined below) are subject to the same requirement. Previously issued unrestricted shares can no longer be counted toward this requirement.
- Increased Offering Size for Uplisting Companies:
Prior to the New Liquidity Rules, if the shares of a company were trading on the OTC market as of the date of application, such shares must have had a minimum average daily trading volume of 2,000 shares over the 30 trading day period prior to listing, with trading occurring on more than half of those 30 days (the Trading Volume Requirement), unless such shares were listed on the Nasdaq in connection with a firm commitment underwritten public offering of at least $4 million (the Public Offering Alternative). Under the New Liquidity Rules, the Public Offering Alternative is amended to increase the size of the offering from $4 million to $8 million for the Nasdaq Global Market and to $5 million for the Nasdaq Capital Market. In addition, the Public Offering Alternative is amended to require companies to satisfy the applicable Market Value of Unrestricted Publicly Held Shares requirement solely from the offering proceeds.
Impact: Higher IPO or Public Offering Threshold
The new rules significantly raise the bar for companies trying to list on the Nasdaq through an IPO or an uplisting via the Public Offering Alternative. Companies using the equity standard or market value of listed securities standard for a Nasdaq Capital Market IPO must now raise at least $15 million to meet the Market Value of Unrestricted Publicly Held Shares requirement. Under the net income standard, the threshold is at least $5 million.
