RE: RE: AZ to invest $3 million in Nubaru15 Apr 2024 14:15
The Nasdaq listing rules allow companies to qualify under one of four sets of standards, based on the criteria listed above.
Standard 1: Earnings
A company’s earnings are a reflection of its profitability. To qualify for listing on the Nasdaq based on earnings alone, a company must be able to show:
• Aggregate pre-tax earnings of $11 million or more for the three prior fiscal years
• Earnings of $2.2 million or more for the two most recent fiscal years
• Zero net losses for each of the three prior fiscal years
For a company to be included under this standard, they have to be able to check off all three of these boxes. If they can meet two criteria but not a third, they won’t be able to qualify for listing.
Standard 2: Capitalization with Cash Flow
Capitalization is a measure of a company’s size in relation to the rest of the market. Cash flow tracks the movement of cash in and out of a company. To qualify for Nasdaq listing under the capitalization with cash flow standard, the following rules apply:
• Aggregate cash flow of $27.5 million or more in the prior three fiscal years
• Zero negative cash flow for the prior three fiscal years
• Average market capitalization of $550 million or more over the prior 12 months
• Revenue of $110 million or more for the previous fiscal year
Again, all four of those conditions have to be met to qualify for Nasdaq listing using this standard.
Standard 3: Capitalization with Revenue
The third Nasdaq listing standard focuses on company size and revenue, which is a measure of income. The minimum requirements for both are as follows:
• Average market capitalization of $850 million or more over the prior 12 months
• Revenue of $90 million or more for the previous fiscal year
Larger companies may opt to take this route if they can’t meet the cash flow requirements under Standard 2.
Standard 4: Assets with Equity
In lieu of earnings or market capitalization, companies can use their assets and the value of shareholders’ equity to qualify for listing on the Nasdaq. There are three specific thresholds companies have to meet:
• Market capitalization of $160 million
• Total assets of $80 million
• Stockholders’ equity of $55 million
Regardless of which standard a company uses to qualify for listing, they have to maintain them continually. Otherwise, the company could be delisted from the Nasdaq exchange