Where are we going to fit in these new categories?
Pink Sheets Categories
Pink Sheets has created a new issuer classification system in order to provide more transparency to investors about the ability and willingness of individual issuers to provide adequate public disclosure in a credible and timely manner.
Beginning in May 2007, each Pink Sheet quoted security will be put into one of the new categories described below. The categories are based on the level, quality and timeliness of a company's disclosure.
As a quotation, disclosure, and trading venue that is driven by OTC market trading demand instead of the traditional exchange listing process, we believe categorizing securities by their level of disclosure will greatly enhance the capital formation process.
OTCQX
Companies that have substantial operating businesses and provide credible disclosure to the public qualify for the premium tier OTCQX, which commences trading on March 5th, 2007. For more information on OTCQX, please see www.otcqx.com. Approximately 20% of the current Pink Sheets or OTC Bulletin Board traded companies could qualify for an OTCQX listing.
Category Descriptions:
All Pink Sheet quoted securities of issuers that are not able or willing to meet the high standards of OTCQX will be placed in one of the following categories and labeled as such on www.pinksheets.com effective May 1, 2007:
Emerging Equities List
Who is Eligible?
The Emerging Equities List is for companies quoted on Pink Sheets or OTC Bulletin Board that provide credible disclosure, including GAAP audited financials, but do not yet have sufficient business operations to qualify for OTCQX. This category is appropriate for issuers that are in development stage and are actively raising capital, or companies that wish to distinguish themselves as issuers with reputable managements and audited disclosure.
What is Required?
To qualify for the Emerging Equities List, a company must either:
Be SEC reporting and current in its reporting requirements as posted on the SEC's EDGAR system; or
Meet Pink Sheets' Guidelines for Providing Adequate Current Information and post such required disclosure, including GAAP audited annual financial reports, on pinksheets.com.
To be considered current, a company must post interim reports within 45 days after each quarter ended and annual reports within 90 days after each fiscal year ended.
In addition, the company must post a letter from an attorney on pinksheets.com each quarter regarding the completeness and adequacy of the company's disclosure. In lieu of an attorney letter posted on pinksheets.com, however, a company may submit a letter to Pink Sheets each quarter from an OTCQX Designated Advisor for Disclosure (DAD) regarding the completeness and adequacy of its disclosure, which will be used solely by Pink Sheets and not made publicly available.
Finally, a company must submit a Personal Information Form for each executive officer, director, or control person to Pink Sheets, which includes a detailed history of the persons directing the company. The Personal Information Forms will not be posted for public view.
What Are the Benefits?
An Emerging Equities List logo will be displayed next to the company's name on its quote page on pinksheets.com, which will allow a company to stand out from the other issuers that do not provide GAAP audited disclosure. Investors will also be able to search by Emerging Equities List companies only.
In addition, companies will receive:
OTCIQ secure logins with FOB keys;
Access to post an unlimited number of financial reports on pinksheets.com;
Access to post an unlimited number of news releases on pinksheets.com;
Access to company's real-time Level II quotes via OTCIQ (does not include real time quotes for investors on pinksheets.com);
Weekly market summary report of company's security sent via email or fax;
Company-moderated forums for shareholders and investors on pinksheets.com; and
OTCquote.com quotation and venue history.
How Much Will It Cost? Initial One-Time Application Fee $5,000
Maintenance Fee $7,500/year*
* Fees may differ depending on the Premium Services that companies want to choose. For additional information, please submit all inquiries by contacting Issuer Services at 212-896-4420
How Does A Company Get Included?
Companies must submit an initial application to Pink Sheets to be included in the Emerging Equities List. The application will include information about the company as well as a Personal Information Form for every executive officer, director, and control person. In addition to meeting the ongoing disclosure requirements of Emerging Equities List, companies will be responsible for keeping the Personal Information Form current for each required person and immediately submit a new Form for any new executive officer, director, or control person. The Personal Information Forms are not posted for public view.
SEC Current
Who is Eligible?
Companies that are quoted on Pink Sheets that are SEC registered and current in their SEC financial reporting requirements.
What is Required?
Companies must post their disclosure on the SEC's EDGAR system, be current in their filings, and file their quarterly reports (10Q or 10QSB) within 45 days after the quarter ended and file their annual reports (10K or 10KSB) within 90 days after the fiscal year ended. There are no grace periods.
What Are the Benefits?
Companies that stay current with SEC reporting requirements are recognized for their disclosure efforts. An SEC Current label will be displayed on the company's quote page on pinksheets.com.
How Much Will It Cost?
No Charge
How Does A Company Get Included?
Pink Sheets will monitor SEC reporting companies and will determine their status as current or not current.
Current Information
Who is Eligible?
Non SEC-reporting companies quoted on Pink Sheets that do not have GAAP audits but are able to conform to Pink Sheets' Guidelines for Providing Adequate Current Information.
What is Required?
Must meet Pink Sheets' Guidelines for Providing Adequate Current Information and post such required disclosure on pinksheets.com, including management certified or non-GAAP audited annual and interim financial disclosure. Annual GAAP audits are not required.
In addition, the company must post a letter from an attorney on pinksheets.com each quarter regarding the completeness and adequacy of the company's disclosure.
What Are the Benefits?
An Adequate Current Information label will be displayed on the company's quote page on pinksheets.com alerting investors that the company has made adequate and current disclosure available to the public.
In addition, companies will receive:
One OTCIQ secure login with FOB key;
Access to post an unlimited number of financial reports on pinksheets.com;
Access to post news releases on pinksheets.com for $99.95 per release;
Access to company's real-time Level II quotes via OTCIQ (does not include real time quotes for investors on pinksheets.com);
Ability to sign up for weekly market report, real time quotes, moderated forums, and OTCquote.com quotation and venue history (additional fees apply).
How Much Will It Cost? Initial One-Time Application Fee $500 *
Maintenance Fee $1,500
Attorney Letter Fee $1,000 for the first letter posted, $500 for subsequent letter
* Fees may differ depending on the Premium Services that you choose. For additional information, please submit your inquiries by contacting Issuer Services at 212-896-4420
How Does A Company Get Included?
Companies must subscribe to OTCIQ (currently www.otcstockinfo.com) in order to post required disclosure on pinksheets.com. Pink Sheets will verify that a current attorney letter regarding completeness of disclosure has been posted within 45 days after each quarter ended and within 90 days after each fiscal year ended. If such letters have not been posted, companies will have either a "Limited Information" or "No Information" label displayed on their quote page.
Current Information - For Banks and International Issuers
Who is Eligible?
Non-SEC reporting federal or state regulated banks, insurance companies, and non-U.S. companies listed on an international stock exchange.
What is Required?
Banks and insurance companies must post on pinksheets.com the information they supply to their regulator; foreign issuers must post on pinksheets.com the disclosure that is required of their home country exchange. Disclosure may be in a non-U.S. currency, but it must be clearly labeled, it must be in English, and it must be posted in a timely manner. Pink Sheets, in its sole discretion, will determine if disclosure is posted in a timely manner. Banks and foreign issuers will also have to provide audited annual financials.
No attorney letter is required.
What Are the Benefits?
An Adequate Current Information label will be displayed on company's quote page on pinksheets.com alerting investors that the company has made adequate and current disclosure available to the public.
In addition, companies will receive:
One OTCIQ secure login with FOB key;
Access to post an unlimited number of financial reports on pinksheets.com;
Access to post news releases on pinksheets.com for $99.95 per release;
Access to company's real-time Level II quotes via OTCIQ (does not include real time quotes for investors on pinksheets.com);
Ability to sign up for weekly market report, real time quotes, moderated forums, and OTCquote.com quotation and venue history (additional fees apply).
How Much Will It Cost? Initial One-Time Application Fee $500
Maintenance Fee $1,500/yr *
* Please be advised that our categories system is currently in a development stage and that fees may vary.
How Does A Company Get Included?
Companies must subscribe to OTCIQ (currently www.otcstockinfo.com) in order to post required disclosure on pinksheets.com. Pink Sheets will monitor disclosure of banks and international issuers to determine category status.
Limited Information
Which Companies Get This Label?
Economically distressed or bankrupt companies quoted on Pink Sheets that have posted some information in the last six months, either through the SEC's EDGAR system or on OTCIQ (currently www.otcstockinfo.com), but whose disclosure is not current or complete. Also, companies that are making an effort to provide adequate current information and have posted disclosure in the last six months but have not yet met the minimum requirements for the Adequate Current Information category.
Companies in bankruptcy should post substantive filings (including monthly financial operations reports) made with the bankruptcy court on pinksheets.com in a timely manner.
What is Displayed on the Quote Page?
Companies deemed to have limited information will have a Yield sign displayed on their quote page on pinksheets.com with a notice to investors that adequate current information is not available to the public.
How Does A Company Get Out of This Category?
SEC-registered companies must become current in their disclosure as posted on the SEC's EDGAR system. Non-SEC reporting companies must meet Pink Sheets' Guidelines for Providing Adequate Current Information and post on pinksheets.com a current letter from an attorney stating the completeness and adequacy of the company's disclosure.
No Information
Which Companies Get This Label?
Speculative, distressed, or thinly traded companies quoted on Pink Sheets that have not posted any information in over six months, either through the SEC's EDGAR system or on OTCIQ (currently www.otcstockinfo.com).
What is Displayed on the Quote Page?
Companies deemed to have no information will have a Stop sign displayed on their quote page on pinksheets.com with a notice to investors that adequate current information is not available to the public and that the company has not made any attempt to make disclosure available to the public in over six months.
How Does A Company Get Out of This Category?
SEC-registered companies must become current in their disclosure as posted on the SEC's EDGAR system. Non-SEC reporting companies must meet Pink Sheets' Guidelines for Providing Adequate Current Information and post on pinksheets.com a current letter from an attorney stating the completeness and adequacy of the company's disclosure. Or, if a company posts some disclosure on EDGAR or on OTCIQ but does not yet meet the requirements of the SEC Current or Adequate Current Information categories, the company will have the Limited Information notice displayed on its quote page.
Public Interest Concern
For stocks with unsolicited spam, questionable promotion or other public-interest concerns, a Skull and Crossbones icon will be displayed next to the symbol on the company's quote page on pinksheets.com. If there is no current information available for a company that is the subject of unsolicited spam, the company's quotes will also be blocked.
Companies are known by the level of disclosure they provide to the public, and we hope that by creating these new categories, companies who disclose information to the public will clearly stand apart from those companies that are of lesser quality.
