Pink Sheet Attorneys

May 13th, 2015 by Laura Anthony, Esq.

Pink Sheet Attorneys

The OTC Pink, which includes the highest-risk, most speculative securities, is further divided into three tiers: Current Information, Limited Information and No Information, based on the level of disclosure and public information made available by the company either through the SEC or posted on OTC Markets. There are no qualitative standards beyond disclosure for OTC Pink companies, which include companies in all stages of development as well as shell and blank check entities.

Companies with Limited Information status on OTC Markets are delineated by a “yield” sign and post some financial and basic information about the company on the OTC Markets website, but either do not report to the SEC or do not include enough information to satisfy the Current Information requirements. The minimum disclosure requirements necessary to maintain Limited Information status include:

  • Posting quarterly and annual reports that are no older than 6 months and that include a balance sheet, income statement and total number of issued and outstanding shares;
  • Financial statements must be prepared in accordance with GAAP; and
  • The company profile page on OTC Markets website must be current and accurate.

In addition, to maintain Limited information status, a company must subscribe to the OTC Disclosure & News Service with an annual fee of $4,200 and a one-time set-up fee of $500.

Because of the aforementioned criteria, details determine diligence, and it is highly advisable for Issuers to retain an OTC securities attorney or a small-cap law firm to stay in compliance with Pink Sheet Attorney.

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