With the global economy continuing to show signs of improvement, many “micro-cap” and “small cap” companies – i.e. publicly-traded companies with market capitalizations between $50 - $300 million and $300 million - $2 billion, respectively – are seeking opportunities to expand in the U.S. capital markets.

One potential avenue for such growth is uplisting to a major exchange.  However, as Partner Eric Hellige – Co-Chair of Pryor Cashman’s Corporate Group – and Corporate Associate Francesca Djerejian explain in a recent article in MicroCap Review’s “Ask the Legal Experts,” issuers should carefully consider the attendant costs and requirements before uplisting from the OTC markets to exchanges such as the Nasdaq Capital Market or NYSE MKT.

Benefits of Uplisting From OTC Markets to Nasdaq or NYSE MKT

Listing on a national exchange can allow for greater liquidity, access to capital markets to fuel growth, research coverage, market recognition and increased prestige.  Additionally, in the context of merger or acquisition negotiations, stocks that are listed on national or global exchanges are deemed more attractive than those that are not listed on major exchanges.  Uplisting can also provide a foundation for developing stock option-based incentive plans that in turn may attract key personnel. 

Requirements For Uplisting to Major Exchanges 

Along with the opportunities uplisting affords are certain listing, disclosure and governance rules, with which issuers must comply.  These requirements include:

• Minimum financial and nonfinancial standards with respect to total market, stock price and the number of publicly-traded shares and shareholders;
• Filing and obtaining approval of a listing application with the appropriate exchange;
• Payment of entry fees for the various Nasdaq tiers and the NYSE MKT;
• Disclosure of annual and interim reports to shareholders;
• Conducting annual shareholder meetings;
• Distribution of annual and quarterly financial statements; and
• Compliance with various corporate governance mandates.

To learn more about uplisting from the OTC markets to a major exchange, please find the full MicroCap Review article here.

More About Pryor Cashman’s Corporate Finance Practice

Experienced in representing issuers, underwriters, placement agents and investors from diverse industries, Pryor Cashman’s Corporate Finance attorneys have the insight to advise on all aspects of capital markets equity and debt offerings.  Our group structures offerings, creates and negotiates deal documentation, conducts due diligence, prepares and reviews offering materials and public disclosures, and handles Financial Industry Regulatory Authority (FINRA) filings.

Additionally, our familiarity with various capital markets transactions enables us to navigate issues related to federal and state securities laws, stock exchanges, the Securities and Exchange Commission (SEC) and FINRA.

To learn more about our experience in these areas and how we can help you reach your business goals, please visit our practice page.