The Nasdaq Capital Market (Nasdaq-CM) is a listing tier on the Nasdaq exchange for companies that are looking for a way to raise capital. According to Nasdaq’s official website, companies that list on the Nasdaq-CM are “usually small companies” that need to fund their growth or shell corporations that want to raise capital in the public market to acquire entities.

In order to qualify for the Nasdaq-CM listing, companies must meet certain requirements, such as a net income standard of at least $750 thousand, a share bid price of at least $4, and a minimum public float of 1 million shares. Additionally, these companies must also have at least 300 shareholders.

However, there are some exceptions to these requirements. For example, companies that are funded by venture capital are not required to meet the stringent net income standard. Furthermore, the Nasdaq-CM also includes over-the-counter securities that are not necessarily traded on any other exchange.

Companies that list on the Nasdaq-CM are usually smaller than those listed on the Nasdaq Global Market, but may still be subject to the majority of Nasdaq rules. For instance, Nasdaq-CM companies must still provide quarterly financial information and file necessary documents with the Securities and Exchange Commission (SEC), such as the 10-K and 10-Q.

Overall, the Nasdaq Capital Market is an essential listing tier targeted towards small- and medium-sized companies. Through this platform, such companies are able to access the capital they need to finance their growth by allowing them to list on the Nasdaq exchange. Even though the listing requirements are stringent, the Nasdaq-CM gives struggling businesses the opportunity to increase their visibility and raise the funds required for their operations.