Monster Arts Inc (APPZ)

[Raggedy Man]

I do not believe it will have an affect on Appz, but no one can be 100% sure that nothing will change. IMO, we will now just be a pinky. I believe that the company will have to figure out the new rules, see how it plays out and adjust accordingly.
IMO



Szaferman Lakind Securities: OTCQB Eligibility Standards May 1, 2014

OTCQB MARKETPLACE TO CHANGE ELIGIBILITY STANDARDS STARTING ON MAY 1, 2014

Gregg E. Jaclin, Partner
Eric M. Stein, Of Counsel

Effective May 1, 2014, OTC Markets Group (OTCQX: OTCM) will change its eligibility requirement for companies seeking to be listed on the OTCQB® Venture Stage Marketplace (“OTCQB”). In order to be listed on the new OTCQB, which will now add features such as Level 2 Quotes and the OTC Disclosure & News Services, companies will be required to meet a new initial and ongoing “bid price test”, provide additional information, and submit an initial application and annual OTCQB certification signed by the company CEO or CFO, along with the appropriate annual fee. Companies that are not eligible for either the new OTCQB or the OTCQX® (“OTCQX”) are expected to be traded by broker-dealers on the OTC Pink® Marketplace (“OTC Pink”).

Background Information
OTC Markets Group operates three public marketplaces for U.S. and global securities: OTCQX, OTCQB and OTC Pink. OTCQX, the top tier, is created primarily for established global and high-growth domestic companies that can meet high financial standards, requiring companies to provide shareholders with more timely disclosure, demonstrate compliance with U.S. securities laws and be sponsored by a professional third-party advisor. Because of its strict standards, many companies have used OTCQX as a springboard to achieve an exchange listing. OTCQX can be further broken down to three smaller marketplaces: 1) “OTCQX US” for smaller and high-growth domestic companies that meet high financial, operating and disclosure requirements, 2) “OTCQX International” for global companies that are already listed on an international stock exchange; and 3) “OTCQX Banks”, which could be an cost-effective marketplace for established SEC and non-SEC reporting regional and community banks that are well managed and strongly capitalized.

In the middle is OTCQB which has become the preferred marketplace for broker-dealers to electronically trade in companies that are at their early and developmental stage, but are not yet qualified for OTCQX. Lastly, OTC Pink offers an open marketplace for broker-dealers to trade in all types of securities requiring minimum involvement of the company.

New OTCQB Eligibility Standards
Bid Price Test
As part of the initial application, both currently listed and prospective companies, regardless of its reporting standard (e.g. SEC Reporting, Bank Reporting, or International Reporting), must have a bid price of $0.01 as of the close of business for each of the previous thirty calendar days. For instance, for a company to maintain or gain its OTCQB status on May 1, the company must first have a minimum bid price of $0.01 per share as of the close of business each day between April 1 and April 30, 2014. Once the company is listed on OTCQB, the company also must meet the minimum bid price of $0.01 per share as of the close of business for at least one of every thirty consecutive calendar days. In other words, upon obtaining OTCQB status, a company cannot be traded below $0.01 for more than twenty-nine consecutive calendar days.

Initial & Annual OTCQB Certification
Each company is required to post an initial and annual OTCQB Certification signed by its CEO or CFO on the OTC Markets website. The certification must identify the company’s reporting standard, describe company’s registration status, state that the company is in compliance with reporting obligations and such information is complete and available on either EDGAR or the OTC Markets website, verify company’s profile on OTC Markets website, disclose information on management, board of directors, and beneficial shareholders, indicate attorneys involved in the preparation of its Annual Report or 10-K, and confirm the total shares outstanding and in the public float as of the most recent fiscal year end, among others.

Current OTCQB Companies
Starting on March 31, 2014 and completing on March 30, 2015, OTC Markets will apply the new standards for current OTCQB companies over the course of a year. In addition to the minimum bid test, each current OCTQB company is expected to comply with the new standards, including staying current with periodic reporting obligations, submission of annual certification and posting current SEC disclosure, within 120 days after its current fiscal year end; failure to do so will result in the downgrading to OTC Pink. Companies with a March 31 fiscal year end will be the first group of currently listed companies subject to the new procedures and will be required to comply by July 31, 2014, whereas the last group (with fiscal year end of March 30) are required to comply by July 30, 2015.

During 2014, companies may opt to comply with the new standards prior to their required compliance date to obtain a discounted pricing.

International Reporting Companies
Under the new standards, international reporting companies that are in compliance with SEC Rule 12g3-2(b) and listed on a qualified foreign stock exchange may apply to trade on OTCQB. In addition to passing the initial bid-price test and submitting an initial application and applicable fees, such companies also need to provide a Letter of Introduction from a qualified Principal American Liaison (“PAL”) which states that the PAL has a reasonable belief that the company is in compliance with Rule 12g3-2(b), is listed on a qualified foreign exchange and has posted on the OTC Markets website all necessary and proper disclosure documents, including disclosure required under Rule 12g3-2(b) in English for the previous two fiscal years and initial certification by company’s CEO or CFO. Once listed on OTCQB, such companies will have ongoing obligations to pass the bid-price test, post disclosure documents, including Quarterly Reports and audited Annual Reports, and update officer certification annually.

Bank Reporting Companies
Similar to all of other companies applying to OTCQB, bank reporting companies also need to pass the initial and ongoing bid-price test and submit initial OTCQB application and applicable fees, along with an officer certification each year. In addition, such companies also need to post any disclosure that is filed with the company’s bank regulator, except for information deemed non-public.

For Further Information
If you have any questions regarding the information in this alert, please contact Szaferman Lakind Securities Attorneys Gregg E. Jaclin and/or Eric Stein.

Disclaimer: This Alert has been prepared and published for informational purposes only and does not constitute advertising, a solicitation, or legal advice. Transmission of the materials and information contained herein is not intended to create, and receipt thereof does not constitute formation of, an attorney-client relationship.

http://www.szaferman.com/otcqb_may_2014/