Innovation Pharmaceuticals Inc (IPIX)

[PJ007]

Companies whose securities are traded only on the Pink Sheets are subject to very little
regulation and no governance requirements. They do not have to be current in their SEC filings
even if they are subject to SEC filing requirements. Essentially, the only federal regulatory
oversight is Rule 15c2-11 under the Exchange Act which requires broker-dealers to have certain
information in their possession before they can initiate quotes in the company’s securities. The
Committee is recommending that Rule 15c2-11 be amended to provide that the information the
broker-dealer has be available to the public, which is not the case now