Under Nasdaq Rule 5810(c)(3)(A)(ii), a company that has not regained compliance with the $1.00 minimum bid price during the initial 180-day compliance period may be eligible for an additional 180-day extension. However, this second compliance period is not automatic. Nasdaq will grant it only if all of the following conditions are met:
Market Value of Publicly Held Shares (MVPHS) Threshold Compliance
Your company must meet the continued listing requirement for Market Value of Publicly Held Shares (MVPHS), which is at least US$1,000,000.
This condition replaces the standard continued listing financial criteria for purposes of determining eligibility for a second compliance period.
Conformity with Initial Listing Standards (Excluding Minimum Bid Price)
To qualify for the second 180-day extension, your company must meet all applicable initial listing standards for the Nasdaq Capital Market under Rule 5505, excluding only the minimum bid price requirement.
This means Nasdaq will look at factors such as:
- Shareholders’ Equity
- Market Value of Listed Securities (MVLS)
- Number of Public Holders
- Market Makers
- Corporate governance requirements
These are the same standards used when your company first applies to list on the Nasdaq Capital Market.
Mandatory Notification of Intent to Remedy the Deficiency
Your company must formally notify Nasdaq of its intention to cure the deficiency within the second compliance period. This notification should outline:
- Proposed remedial actions (e.g., market-driven recovery, reverse stock split consideration)
- Timeline for execution
- Supporting documentation or evidence as requested by Nasdaq
Failure to submit such notice will result in no extension being granted.
Nasdaq Discretionary Assessment and Evaluation Criteria
Even if the above conditions are satisfied, the granting of a second 180-day compliance period remains fully discretionary.
Nasdaq may consider multiple qualitative and quantitative factors, including:
- Trading volume and liquidity
- Public float distribution and shareholder base
- Price volatility and stability
- Market support and investor engagement
- Company’s financial position and remedial plan feasibility
If Nasdaq determines that the company’s recovery is unlikely to achieve sustainable compliance, a delisting determination may be issued.
Conclusion
Eligibility for an additional 180-day period requires meeting the MVPHS threshold, satisfying all applicable initial listing requirements under Rule 5505 (other than the bid price), and notifying Nasdaq of your company’s plan to cure. These conditions align with Nasdaq Rule 5810(c)(3)(A)(ii) and represent the governing standards for the second compliance window.
Reach out to Hexcellence Consulting today. We provide full-spectrum support in capital markets, including IPO advisory, compliance management, and investor relations. Our services help companies strengthen market confidence, maintain listing eligibility, and build long-term credibility in U.S. capital markets, driving sustainable growth in corporate value.
