On February 13, 2018, Nasdaq proposed to amend its listing requirements so that shareholder approval will no longer be required for private issuances of more than 20% of common stock. The rule currently requires shareholder approval for any issuance or potential issuance (other than a public offering) of common stock or securities that may be converted or exercised for common stock for less than the greater of book or market value if either (a) the issuance equals 20% of the outstanding common stock or common stock voting power or (b) if a smaller issuance coupled with sales by the officers, directors or substantial security holders meets the 20% threshold. Nasdaq also proposes to change the “market value” definition (currently defined as the closing bid price) to the lower of the stock's closing price and its average closing price for the five trading days immediately preceding the binding agreement's signing, because it believes that the bid price may not reflect an actual price at which the security has traded. In addition, Nasdaq proposes to remove the references to book value from the rule because it is not an appropriate measure of a potential transaction's dilutive effect.
For more information, see https://www.sec.gov/rules/sro/nasdaq/2018/34-82702.pdf.