Page 104 - Initial Public Offering - An Introduction to IPO on Wall Street

Organizations must satisfy all the requirements under at least one of the three requirements
below.

Requirements Equity Standard Market Value of Net Income
Listed Securities Standard
Standard
Listing Rules 5505(a) and 5505(a) and 5505(a) and
5505(b)(1) 5505(b)(2) 5505(b)(3)
Stockholders’ $5 million $4 million $4 million
Equity
Market Value of $15 million $15 million $5 million
Unrestricted
Publicly Held
Shares
Operating History 2 years --- ---
Market Value of --- $50 million ---
Listed Securities
Net Income from --- --- $750,000
Continuing
Operations (in the
latest fiscal year or
in two of the last
three fiscal years)
Unrestricted 1 million 1 million 1 million
Publicly Held
Shares
Unrestricted Round 300 300 300
Lot Shareholders**
Market Makers 3 3 3
Bid Price OR $4 $4 $4
Closing Price*** $3 $2 $3

For 90 straight trading days before filing, currently traded entities eligible exclusively under
the Market Value provision must comply with the $50 million Market Value of Listed Shares
and the applicable bid price minimum.

A business must have: (i) an average yearly sales of $6 million for three years, or (ii) $5
million worth net tangible asset, or (iii) $2 million worth net tangible asset, and a three-year
operating history, in addition to meeting the other financial and liquidity conditions
mentioned above to be eligible for an alternate closing price.

Other than the above criteria, the security must have at least an average regular trading
volume of two thousand shares (that includes the security’s trading volume on the main
market concerning the ADR) over the thirty trading day period leading up to listing if trading
occurs on more than fifty of those 30 days unless the security is listed on the Exchange in
relation with a strong commitment of a minimum $4 million underwritten public offering.

Corporate Governance Requirements

As set out in Listing Rule 5600 Series, organizations listed on the NASDAQ Stock Exchange
are expected to follow high corporate governance practices. Certain exceptions and phase-ins

Page 104