Shareholding Requirements


in addition to, or instead of, providing these disclosures on its registration statement or annual report

4 Shareholding Requirements

4.1 Public Float

There is no percentage requirement, however a company must maintain 1.1 million publicly held shares.

Publicly held shares are shares not held by persons who are officers, directors or beneficial owners of 10% or more of the total shares outstanding.

4.2 Restrictions on Major Shareholders

Anyone who acquires 5% or more of any equity security must file a disclosure with the SEC and any exchanges on which the security is listed under SEC Rule 13d.

4.3 Post IPO Lock-up

Lock-up agreements are commonly used to prevent company insiders (e.g., officers, directors, employees, friends, family, and venture capitalists) from selling their shares for a set period of time after listing. The federal securities laws do not govern the actual terms of lock-up agreements, but they require a company employing a lock-up to disclose the terms in its registration documents, including its prospectus. At the same time, some states
require lock-up agreements under their “blue-sky” laws, but these state laws may vary.

The terms of lock-up agreements may vary, but most prevent insiders from selling their shares for a period of 180 days. Lock-ups may also limit the number of shares that can be sold over a designated period of time.

Although the securities laws do not govern lock-up agreements, Rule 144 of the Securities Act requires owners of restricted securities to hold them for a certain period of time prior to selling them in the marketplace. Restricted securities are securities acquired in unregistered, private sales from the issuer or from an affiliate of the issuer. If the company that issued the securities is subject to the reporting requirements of the Securities Exchange Act of 1934, then the owner must hold the securities for at least six months.

5 Listing Procedure and Timetable

A company can seek a preliminary listing eligibility review by NASDAQ Listing
Qualifications prior to applying. Pursuant to this review, the Listing Qualifications staff will review the company’s public filings to determine if it meets the numerical listing requirements. In addition, to the extent questions are raised by the company, the Listing Qualifications staff will consider compliance with the corporate governance requirements
of Rule 4350, such as board and board committee structure, and regulatory concerns, such as may be raised under IM-4300. In considering whether any such questions exist, the company may find it helpful to review the information necessary to be submitted with Part IV of the Listing Application.

The Listing Qualifications staff will, if necessary, meet with a prospective applicant to discuss any preliminary conclusions reached during this review. Once completed, staff will

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s