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The cutting out the middleman model
Cutting out the middleman is a business model that involves reducing costs by removing layers from a distribution network. Cutting out the middleman may become possible as a result of better technology or economies of scale. This is sometimes referred to as 'disintermediation'. It reduces transaction costs, processing time and brings the producer or manufacturer of the product/service that much 'closer' to the customer, arguably making them more responsive to the customers' needs both by delivering the products/services faster and more accurately to meet the customers' tastes and preferences.
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The monopolistic business model
In economics, a monopoly (from the Greek monos, one + polein, to sell) is defined as a persistent market situation where there is only one provider of a kind of product or service. Monopolies are characterized by a lack of economic competition for the good or service that they provide and a lack of viable substitute goods.
Monopoly should be distinguished from monopsony, in which there is only one buyer of the product or service; it should also, strictly, be distinguished from the (similar) phenomenon of a cartel. In a monopoly a single firm is the sole provider of a product or service; in a cartel a centralized institution is set up to partially coordinate the actions of several independent providers (which is a form of oligopoly).
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The network effects business model
The network effect causes a good or service to have a value to a potential customer dependent on the number of customers already owning that good or using that service. Metcalfe's law states that the total value of a good or service that possesses a network effect is roughly proportional to the square of the number of customers already owning that good or using that service.
One consequence of a network effect is that the purchase of a good by one individual indirectly benefits others who own the good - for example by purchasing a telephone a person makes other telephones more useful. This type of side-effect in a transaction is known as an externality in economics, and externalities arising from network effects are known as network externalities. This is also an example of a positive feedback loop.
Network effects were used as justification for some of the business models for dot-coms in the late 1990s. These firms operated under the belief that when a new market comes into being which contains strong network effects, firms should care more about growing their market share than about becoming profitable. This was believed because market share will determine which firm can set technical and marketing standards and thus determine the basis of future competition.
A good example of this strategy was that deployed by Mirabilis, the Israeli start-up which pioneered instant messaging ("IM") and was bought by America Online. By giving away their ICQ product for free and preventing interoperability between their client software and other products, they were able to corner the market for instant messaging. Because of the network effect, new IM users gained much more value by choosing to use the Mirabilis system (and join its large network of users) than they would using a competing system. As was typical for that era, the company never made any attempt to generate profits from their dominant position before selling out.
Network effects become significant after a certain subscription percentage has been achieved, called critical mass. At the critical mass point, the value obtained from the good or service is greater than or equal to the price paid for the good or service. As the value of the good is determined by the user base, this implies that after a certain number of people have subscribed to the service or purchased the good, additional people will subscribe to the service or purchase the good due to the positive utility:price ratio. Until this point has been achieved, however, only early adopters will subscribe.
The increasing number of subscribers cannot continue indefinitely. After a certain point, most networks become either congested or saturated, stopping future uptake. Congestion occurs due to overuse. The applicable analogy is that of a telephone network. While the number of users is below the congestion point, each additional user adds additional value to every other customer. However, at some point the addition of an extra user exceeds the capacity of the existing system. After this point, each additional user decreases the value obtained by every other user. In practical terms, each additional user increases the total system load, leading to busy signals, the inability to get a dial tone, and poor customer support. The next critical point is where the value obtained again equals the price paid. The network will cease to grow at this point, and the system must be enlarged. The congestion point may be larger than the market size. New Peer-to-peer technological models may always defy congestion. Peer-to-Peer systems, or "P2P," are networks designed to distribute load among their user pool. This theoretically allows true P2P networks to scale indefinitely. But market saturation will still occur.
Network effects are commonly mistaken for economies of scale, which result from business size rather than interoperability (see also natural monopoly). To help clarify the distinction people speak of demand side vs. supply side economies of scale. Classical economies of scale are on the production side, while network effects arise on the demand side. Network effects are also mistaken for economies of scope.
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The multi-level marketing business model
Multi-level marketing (MLM) (also called network marketing (NM)) is a business model which utilizes a combination of direct marketing and franchising. Typically, individuals become associated with a parent company in an independent contractor relationship. Sellers are compensated based on their sales of a product or service, as well as the sales of those they bring into the business.
Multi-level marketing has a recognized image problem because of difficulties in making a clear distinction between legitimate network marketing and illegal "pyramid schemes" or Ponzi schemes. Nonetheless, many NM/MLM businesses operate legitimately in all fifty U.S. states and more than 100 foreign countries. Because of this image problem many new NM/MLM businesses do not use the words "multi-level marketing" or "network marketing" and instead use terms like "affiliate marketing," "home-based business franchising," etc. See List of network marketing companies for more information.
In a legitimate MLM company, commissions are only earned on the sale of products or services to the end consumer who, in many cases, is also a distributor. No money may be earned on a "sign up fee" or for recruiting alone. Critics contend that some companies produce revenue primarily by attracting new participants, as opposed to selling products. Analysis of the compensation plan is often required to determine whether participants are paid based on actual sales of products to customers versus new recruit bonuses and sales of business support materials.
Distributors of Amway in particular often receive criticism for generating considerable revenue from selling instructional and motivational materials to its participants. The FTC filed suit against Amway in 1976 (FTC v. Amway) but lost the case, paving the way for many companies to adopt a multi-level distribution system.
A major shift in MLM occurred during the 1980s when companies began allowing their members to focus solely on marketing rather than handling the tasks of stocking/distributing products as well as taking care of commission payments to their sales organizations. Today, most MLM companies act as fulfillment companies by taking orders, shipping products, calculating and paying commissions, etc.
Often, victims of fraudulent or illegal MLM schemes are required to purchase expensive inventories of products. These schemes are often quick to collapse, when the merchandise cannot be resold, leaving all but those at the top of the pyramid with sometimes staggering financial losses.
Over the course of decades, companies have devised various MLM compensation plans:
Stairstep Breakaway plan or Unilevel Plan. The oldest and most popular plan features two types of distributors: managers and non-managers and three types of pay:
1. Baseshop overrides are overrides of managers from their subordinate non-managers, collectively called a baseshop. This is no different from any sales organisation.
2. Generational overrides are overrides of managers from the baseshop of managers who were previously their subordinate. Most plans compensate at least three generations of such managers.
3. Executive bonuses. Additional commission to managers who exceed a sales quota. For example, 2% of the total company sales revenue goes to a bonus pool which is shared monthly pro-rata to managers who exceed $10,000 in that month.
Matrix Plan. This plan limits the width of each level in a distributor's group, hereby forcing strong distributors to pile ("spillover") their recruits over people who did not sponsor them.
Binary plan. This plan limits the width of each level to two legs. Commissions are based on "cycles" where a distributor is paid a fixed amount whenever both legs achieve a certain number of sales units each. Commissions are paid incrementally when the sales volume in each leg matches.
Matrix scheme or Elevator scheme. This plan features a game board or a list where each distributor would pay in one or more product units to participate. When a certain number of units have been paid in, the structure splits and the earlier participant receives consideration.
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The pyramid scheme business model
A pyramid scheme is a non-sustainable business model that involves the exchange of money primarily for enrolling other people into the scheme, usually without any product or service being delivered. Pyramid schemes have existed for at least a century. In addition, other methods of conducting business known as multi-level marketing (MLM) and as "matrix schemes" often closely resemble pyramid schemes (although unlike pyramid schemes, which are almost always frauds, MLM and matrix schemes are in many cases regarded — at least legally — as legitimate business methods).
Most pyramid schemes are attempts to confuse potential consumers into complicated but convincingly fool-proof money making scams. The essential idea behind each scam is that the individual only makes one payment, but somehow they are promised to receive exponential benefits from other people as a reward. A common example might be that a victim is enticed with an offer that, for a fee, allows them to sell the same offer to other people. Each sale includes a fee to the original seller. Clearly, the fundamental flaw is that there is no end benefit; the money simply travels up the chain, and only the originator wins in swindling his followers. Furthermore, the people in the worst situation are the ones at the bottom of the pyramid: those who subscribed to the plan, but were not able to accrue any followers themselves. To embellish the act, most such scams will have fake referrals, testimonials, and information.
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The razor and blades business model (bait and hook)
The razor and blades business model (also called the "bait and hook model" or the "tied products model") works by selling a "master" product at a subsidised price, and making the profit on high margin "consumables" that are essential to the use of the master product. The master product may actually be sold at a loss, in order to "capture" the customer into using the consumable product.
In effect, this is the same as offering a high-interest loan to the customer to offset the price of the master product, which is to be paid off in installments as they use the consumables.
This business model can be dated to King C. Gillette, who used this business model for his sales of razor handles and disposable razor blades. This business model continues to be used in the disposable razor blade business to this day. In 2004, The Gillette Company expanded this business model with the M3Power, a vibrating safety razor with both replaceable blades and batteries. Gillette owns the Duracell battery brand, allowing them to make money selling not only blades but also replacement batteries.
This model may be threatened if the price of the high margin consumables is in question. For example, computer printer manfacturers have gone through extensive efforts to make sure that inkjet printers are not compatible with cheaper aftermarket ink cartridges, such as designing the cartridges in a way that makes it possible to patent certain parts or aspects, or invoking the Digital Millennium Copyright Act. In Lexmark v. Static Control the U.S. Supreme Court ruled that that circumvention of Lexmark's ink cartridge lock does not violate the DMCA. In August 2005, Lexmark won a case in the U.S. that allows them to sue certain large customers for violating their boxwrap license. Or consumers may find other uses for the subsidised product and not utilize it for the company's intended revenue stream. This has happened to "free" personal computers with expensive proprietary internet service, as well as contributing to the spectacular failure of the CueCat barcode scanner.
In markets where all the major competitors follow this business model, there may be suspicions of the existence of cartels and violation of antitrust legislation. In some cases, notably auto parts in the United States, legislation exists specifically to prevent this business model from existing.
Examples include:
electric toothbrushes and their brushheads
computer printers and their ink cartridges
games consoles and the games they play
cell phones and air time costs
inexpensive cameras and prints
amusement park admission and concessions
satellite tv dishes/installation and subscription costs
floor cleaning mops with disposable pads
blood glucose meters and costly single-use test strips
DVD players and DVDs
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The subscription business model
The subscription business model is a business model that has traditionally been used by magazines and record clubs, but is increasingly being used by other businesses. Rather than selling products individually, a subscription sells periodic (monthly or yearly) use or access of a product or service. Thus a one-time sale of a product becomes a recurring sale.
In addition to magazines, book clubs, and record clubs, many other industries are using the subscription model. They include telephone companies, newspapers, cable television providers, cell phone companies, internet providers, pay-TV channels, software providers, business solutions providers, and financial services firms.
A discount pass is a form of subscription. There are passes for public transport, swimming pools, zoos, etc.
Renewal of a subscription may be automatic periodic where the cost of a new period is automatically paid for by a pre-authorized charge to a credit card or a checking account.
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Fantastic realistic post.We are looking for creative small business owners/investors that think "out of the box" to create wealth.That is where the large gains are made over time in both categories.Bob
The mere formulation of a problem is far more essential than its solution, which may be merely a matter of mathematical or experimental skills. To raise new questions, new possibilities, to regard old problems from a new angle requires creative imagination and marks real advances in science.
-Albert Einstein-
Business strategy, 3 step process:
Analysis / Strategy Formulation / Strategy Implementation
A dynamic strategy - It is a mistake to assume that a predictable path to the future can be paved from the experience of the past. Strategy cannot be taken as gospel. There are too many uncertain factors that no one can resolve. Even the BEST strategy is only a hypothesis.
Strategy Formulation - Strategy formulation is the process of determining appropriate courses of action for achieving organizational objectives and thereby accomplishing organizational purpose.
Organizational purpose. - Mission - What is my purpose? What do I want to accomplish?
Organizational objectives. - Strategy - Steps needed to get there? What roads will lead me to that point? How can I accomplish it?
Appropriate courses of action. - What activities do I need to involve myself with? What vehicles will I use? What tactics will I employ?
Strategy implementation - Statistics show that managers report around a 50% implementation rate, while actual implementation as measured by outside observers is only around 10%
Obviously a system of communication, documentation, and accountability, must be implemented as a means of measuring the effectivness of each phase of the 3 step process.
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Quick,Verified through email that to be quoted on the Pink sheets thier is no fee.One would only need to get one market maker to become active in the company.Here is the response I recieved(Companies are not “listed” on the Pink Sheets; therefore, you, the issuer, cannot apply to be listed. You will need a market maker to submit a Form 211 to the NASD to request posting quotes on the Pink Sheets). For more info contact Tim Ryan at
Pink Sheets in issuer services.
Here are the rules:How Does a Company Become Quoted on the Pink Sheets? http://www.pinksheets.com/otcguide/issuers_getquoted.jsp
To be quoted on the Pink Sheets, you need to find one market maker willing to quote your company's stock. Only SEC-registered broker-dealers (market makers) that are members of the National Association of Securities Dealers (NASD) can quote securities in the Pink Sheets.
There are three ways a market maker can initiate a quotation in a security that is not already quoted on the Pink Sheets:
Form 211 - SEC Rule 15c2-11 requires that, before a broker or dealer publishes proprietary quotes on a quotation medium, it must gather, review, and retain certain information about the issuer. The market maker must file a Form 211 with the NASD OTC Compliance Unit, along with two copies of the required issuer information. After a successful review, the NASD Compliance Unit will notify the market maker that it may enter a quotation on the Pink Sheets. Issuers may contact a registered broker-dealer for sponsorship of a security on the Pink Sheets. For more information on the 211 process, see:
Quoting Pink Sheet Securities
SEC Rule 15c2-11
211 Q & A
Unsolicited Quote - An exception to Rule 15c2-11 exists for Unsolicited Customer Orders. To avail itself of this exception, an NASD member firm must ensure that the quotation published or submitted: (1) is solely on behalf of a customer; (2) represents the customer's indication of interest; and (3) does not involve the solicitation of the customer's interest. For more information, see:
Unsolicited Quotes below.
Exemption to Rule 15c2-11 - If a market maker already quotes the security in another market center, the market maker may qualify for an exemption to Rule 15c2-11 and skip the review by the NASD OTC Compliance Unit. In this case, the market maker can contact the Pink Sheets and request to quote the security in the Pink Sheets immediately.
15c2-11 Exemptions
Finding A Market Maker to Sponsor Your Company
There are over 200 market makers that participate in the Pink Sheets. Only one market maker is required for a security to be in the Pink Sheets; however, not all market makers are willing to file a Form 211. Many market makers will begin to quote a security after it becomes "piggyback qualified" and they can do so without filing the Form 211.
Pink Sheets cannot recommend specific market makers. However, market makers listed in our Service Provider Directory welcome potential issuers to contact them to discuss making a market in their company's stock.
Listing Requirements and Fees
There are no listing requirements to be quoted on the Pink Sheets. Current financial information must be submitted with the Form 211. Current NASD rules do not require the financial statements of Pink Sheet issuers to be audited, but they should be prepared in accordance with GAAP or, for foreign issuers, in accordance with their home country's accounting standards.
While Pink Sheets does not have a requirement that the issuer continue to provide updated financial information to the Pink Sheets; federal securities law requires that adequate current information must be publicly available when an issuer's securities are traded in the OTC market under the following circumstances:
At the time of initial quotation in public markets;
At any time corporate insiders or other affiliates of the issuer are offering, buying or selling the issuer's securities in the OTC market;
During any period that the issuer or affiliates of the issuer are directly or indirectly engaged in promotional activities having the effect of encouraging trading of the issuer's securities in the OTC market; or
At the time securities initially sold in a private placement become freely tradeable in the OTC market. If any of the four above situations are occurring, issuers subject to Section 13 or 15(d) of the Securities Exchange Act of 1934 must be current in their reporting obligations to the SEC and we provide the Pink Sheets News Service for non-SEC reporting issuers to make their information publicly available. For more information on these services, please see Pink Sheets News Service.
Issuers pay no fees to be quoted on the Pink Sheets. Market makers pay a monthly fee to quote a security.
How a Company Can Help a Market Maker Quote Its Stock
A company can help a market maker quote its stock by providing the market maker with information. SEC Rule 15c2-11 requires a broker/dealer to obtain and keep in its files certain information about an issuer before initiating a quote for the issuer. The market maker must have a reasonable basis for believing that the information is accurate and obtained from reliable sources. The required information includes a general business description, location and contact information, officers, total shares outstanding, transfer agent, recent prospectus or offering circular, balance sheet, retained earnings and profit and loss statements.
The NASD monitors compliance with this rule by requiring market makers to file a Form 211 at least 3 days prior to quotation in the Pink Sheets. NASD review may take a considerable amount of time depending, among other things, on whether or not the NASD requests additional information from the market maker and the amount of time required to respond to requests for additional information.
Form 211 (pdf)
Quotation of a Delisted Security on the Pink Sheets
Because the Pink Sheets is a quotation medium for subscribing members and not an issuer listing service, a delisted issuer cannot "list" themselves in the Pink Sheets.
Delisted from Nasdaq
If an security has been delisted from The Nasdaq Stock Market because the Issuer has not maintained Nasdaq's listing requirements and the security meets the following criteria, then the security will be available for immediate quotation in the Pink Sheets only for those market makers quoting in the security during the 30-day period preceding its removal:
The security has been quoted continuously on Nasdaq during the 30 calendar days preceding its delisting, exclusive of any trading halt not exceeding one day to permit the dissemination of material news concerning the security's issuer.
The issuer must not be the subject of bankruptcy proceedings.
The issuer must be current in its filings with the SEC.
Upon delisting of a security meeting the above criteria, market makers that have quoted the security in Nasdaq during the 30-day period preceding its removal have 24 hours in which to register to quote the security in the Pink Sheets without submitting a Form 211. A delisted Nasdaq issuer that wishes to be quoted in the Pink Sheets should contact their market makers to request that they register to quote the security.
If the issuer does not meet all of the above criteria upon delisting, voluntarily delists from Nasdaq or if no market maker registers to quote the security on the Pink Sheets within 24 hours of delisting, the usual Form 211 filing and review process will apply. However, many Nasdaq-listed securities are already quoted in the Pink Sheets on an unpriced basis. This provides the market maker with an exemption to filing a Form 211 in the event the security is delisted from Nasdaq. In this case, any market maker that had been quoting the security in the Pink Sheets for the 30 days prior to delisting could continue to make a market in the Pink Sheets upon delisting. Then, approximately 30 days after delisting, the security may meet the frequency of quotation test. At this time, the security becomes "piggy-back qualified" and any other market maker can enter its quotes in the Pink Sheets without first submitting a Form 211 to the NASD. To find out if a Nasdaq listed security is being quoted on the Pink Sheets concurrently, please call Pink Sheets' Issuer Services Department at 212-896-4420 or email us at issuerservices@pinksheets.com.
Delisted from an Exchange
If a security is delisted from The New York Stock Exchange or from the American Stock Exchange, then the usual Form 211 filing and review process will apply. However, some exchange-listed securities are already quoted in the Pink Sheets on an unpriced basis. This provides the market maker with an exemption to filing a Form 211 in the event the security is delisted from the Exchange. In this case, any market maker that had been quoting the security in the Pink Sheets for the 30 days prior to delisting could continue to make a market in the Pink Sheets upon delisting. Then, approximately 30 days after delisting, the security may meet the frequency of quotation test. At this time, the security becomes "piggy-back qualified" and any other market maker can enter its quotes in the Pink Sheets without first submitting a Form 211 to the NASD. To find out if an Exchange-listed security is being quoted on the Pink Sheets concurrently, please call Pink Sheets' Issuer Services Department at 212-896-4420 or email us at issuerservices@pinksheets.com.
Unsolicited Quotes
SEC Rule 15c2-11 provides an exemption to filing a Form 211 with the NASD for brokers that wish to publish an unsolicited quote. An unsolicited quote represents a customer order and not a market maker's own position and must be removed from the system once the customer order is executed.
Federal securities laws require an issuer making a public offering of securities to file a registration statement with the Securities and Exchange Commission containing certain disclosures regarding the issuer and its securities. Pink Sheets has become increasingly concerned that the unsolicited quote exception in Exchange Act Rule 15c2-11 is being abused by unscrupulous individuals to engage in questionable and possibly fraudulent activities in violation of the federal securities laws. As a result, Pink Sheets has developed the following procedures, including requiring issuer disclosures, regarding the publication of unsolicited quotes.
Pink Sheets generally will publish unsolicited quotations in securities that meet one of the following six conditions:
The Issuer of the securities is subject to Section 13 or 15(d) of the Securities Exchange Act of 1934 and current in its filing obligations;
The securities were delisted from NYSE, AMEX, NASDAQ or the OTCBB;
The Issuer is a bank, savings and loan, or insurance company;
The securities were issued as part of a bankruptcy plan of reorganization;
The security being quoted is a foreign ordinary, which is listed on a foreign exchange, or an ADR representing such ordinaries; or
The Issuer is not subject to Section 13 or 15(d) of the Securities Exchange Act of 1934. If this condition is being relied upon, the of following prerequisites must be met prior to publishing an unsolicited quote in the Pink Sheets:
Adequate current information concerning the Issuer is publicly available via the Pink Sheets News Service. This information must be less than 90 days old and include a response to each item or sub-item listed in the Pink Sheets Guidelines for Providing Adequate Current Information, and provides all the information specified in paragraphs (a)(5)(i) to (xiii), inclusive, and paragraph (a)(5)(xvi) of Rule 15c2-113 under the Exchange Act or, if the issuer is an insurance company, the information specified in Section 12(g)(2)(G)(i) of the Exchange Act;
The Issuer's transfer agent is registered under the Exchange Act;
Counsel for the issuer has provided, and posted to the Pink Sheets News Service, a tradability opinion for the securities being quoted that meets Pink Sheets' requirements as specified in Pink Sheets letter to Attorneys Providing Tradability Opinions (7/20/2005);
The issuer is not a shell company within the meaning of Rule 405 under the Securities Act of 1933 (“Rule 405”). A shell company is defined within the meaning of such term under Rule 405 under the Securities Act of 1933 (“Rule 405”) whether or not the issuer is a registrant under Rule 405. It should be noted that a company with “nominal” operations is a “shell company” within the meaning of Rule 405. Moreover, a company that is technically not a “shell company” because it has some limited operations would nonetheless be considered a “shell company” for purposes of entering an unsolicited quote in the Pink Sheets, and “nominal” operations would include any operations for which the primary purpose is to avoid classification of a company as a “shel" company";
The security is DTC eligible; and
The firm publishing the unsolicited quote in the Pink Sheets must have submitted a Form 211 to the NASD prior to submitting the Pink Sheets Unsolicited Quote Entry Form. A copy of the Form 211 must be provided to Pink Sheets in conjunction with the request to enter an unsolicited quote.
Steps to Submit an Unsolicited Quote to Pink Sheets
Pink Sheets requires a broker/dealer to submit an Unsolicited Quote Entry Form (pdf) prior to publishing an unsolicited quote in a security that is not already quoted on the Pink Sheets. On the form, the broker must indicate which of the six conditions listed above that the security they wish to quote meets.
If the broker is entering a quote for an Issuer that meets conditions 1-5 above, then no further action is required. Pink Sheets will authorize the broker to publish the unsolicited quote.
If the broker is entering a quote for an issuer that meets condition #6 above, then the issuer must first make the required information available on the Pink Sheets News Service. To do this, the issuer must subscribe to the News Service by completing and returning the Issuer Services Subscription Form (pdf). Pink Sheets will then provide the issuer with access to a secure web portal to post the required information on pinksheets.com.
Pink Sheets will not accept an unsolicited quote under condition #6 above if the issuer's Transfer Agent is not registered with the U.S. Securities and Exchange Commission (SEC). You can request a list of SEC registered transfer agents by email at info@pinksheets.com.
Pink Sheets will not accept an unsolicited quote under condition #6 above if the issuer's counsel has not provided a Tradability Opinion that meets Pink Sheets requirements as specified in Pink Sheets letter to Attorneys Providing Tradability Opinions 7/20/2005. The issuer must publish the Tradability Opinion in the Pink Sheets News Service, and the attorney writing the opinion must fax/mail a copy of the opinion along with a signed copy of Pink Sheets Letter to Attorneys.
Pink Sheets will not accept an unsolicited quote under condition #6 above unless the issuer has published adequate current information via the Pink Sheets News Service. To assist issuers in preparing this disclosure, Pink Sheets has created Guidelines for Providing Adequate Current Information Pursuant to Rule 15c2-11 (pdf).
Once the broker has determined that adequate current information is publicly available on the Pink Sheets News Service, then the broker may submit the Unsolicited Quote Entry Form. The firm publishing the unsolicited quote in the Pink Sheets must have submitted a Form 211 to the NASD prior to submitting the Pink Sheets Unsolicited Quote Entry Form. A copy of the Form 211 must be provided to Pink Sheets in conjunction with the request to enter an unsolicited quote.
Once Pink Sheets receives the Unsolicited Quote Entry Form from a broker, we will review the issuer's disclosure. Provided it is both accurate and complete, Pink Sheets will authorize the broker to publish an unsolicited quote in the Issuer's security. If, however, the disclosure is materially lacking, Pink Sheets may decline to permit entry of unsolicited quotes until such time as the NASD clears a Form 211 for the Issuer's security.
For additional information on the Pink Sheets' policy regarding the publication of unsolicited quotes, and for further information on why Pink Sheets created a Guideline for Providing Adequate Current Information Pursuant to Rule 15c2-11, please read the Letter to Broker/Dealers announcing the new policy and the reasons for creating it.
What an Issuer Should Know about Unsolicited Quotes
If the Issuer ceases to provide current information, Pink Sheets may cease to allow broker/dealers to publish quotes in its securities.
Brokers cannot publish proprietary quotes (i.e. make their markets publicly available for viewing) in the Pink Sheets in securities that they quote on an unsolicited basis and are required to remove their quote when the unsolicited customer order is executed or expires. Compliance with this rule is monitored by the NASD.
For additional information on the Pink Sheets' policy regarding the publication of unsolicited quotes, and for further information on why Pink Sheets created a Guideline for Providing Adequate Current Information Pursuant to Rule 15c2-11, please read the Letter to Broker/Dealers announcing the new policy and the reasons for creating it.
Pink Sheet Forms for Unsolicited Quote Entry
Letter to Broker/Dealers Announcing Pink Sheets Policy Concerning Unsolicited Quotes (pdf)
Broker/Dealer Unsolicited Quote Entry Form (pdf)
Pink Sheet's Guidelines for Providing Adequate Current Information Pursuant to Rule 15c2-11 (pdf)
Pink Sheets News Service Subscription Form (pdf) - for Issuers
Pink Sheets’ Letter to Attorneys Providing Tradability Opinions (7/20/05) (pdf) – for Issuers’ Counsel
Federal Register (7/21/2005): Use of Form S-8, Form 8-K, and Form 20-F by Shell Companies (pdf)
Great question quick.Off the top of my head I believe the cost is in the 30k-40k range on the otcbb/pink sheets.I also remember speaking to someone about going into a clean shell that is already listed.I will do more research on it.
Large publicly traded companies do allow small business owners to get a piece of the pie.Companies such as nextel(nxtl),Verizon(vz)and other cell phone companies allow individuals to open kiosks/rmu's in malls.Also dish network(dish)is following this Shopping Mall trend.If anyone knows of others feel free to post.
Hey Trops. Nice board! I wonder how one would go about getting their company publically traded. :)
Hope to check in more often.
Here is a situation that may be beneficial to small business owners as they are a great wholesaler of sports products.They also are a listed company on the pink sheets trading under the symbol dgix.Bob
http://www.gap1.com/index.html
This will be a board where business knowledge is exchanged to help investors understand the dynamics of creating revenue and eventually profits for companies they are invested in.The topics discussed may also help small business owners achieve thier goals of success.Bob
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