$1 Minimum Bid Price Required for Common and Preferred Stock
Common and preferred stock must have a minimum bid price of $1. The $1 bid price requirement provides a safeguard against certain market activity associated with low-priced securities, and also
enhances the credibility of the market. Nasdaq is the only market that has a stated minimum bid price requirement.
Increase in the Quantitative Requirements
Increases to the quantitative
requirements are detailed in the attached table. These increases will strengthen the financial criteria in a manner consistent with the goal of increasing the quality and stability of Nasdaq companies,
while preserving the ability of qualified companies to raise capital.
Adoption of Market Capitalization Alternative
The adoption of a market capitalization test will help foster capital formation
for Nasdaq National Market caliber companies that would otherwise not qualify due to accounting conventions associated with certain business combinations and specialized industries under the heading
"Initial Listing 3." The attached table outlines the specific requirements.
Adoption of Peer Review Requirement
All independent auditors for Nasdaq-listed companies must be subject to
practice monitoring under a program such as the AICPA SEC Practice Section peer review program. Such a program must provide that an accounting firm's quality control system be peer reviewed every three
years.
Nasdaq believes that the new requirements will further the protection of investors while enhancing the quality of The Nasdaq Stock Market. Companies failing to satisfy the new continued
listing requirements will be allowed until February 23, 1998 to meet the new requirements. Companies should initiate appropriate corporate action necessary to achieve full compliance by February 23,
1998.
