I know that some of the stockholders are under the impression that a new company can swoop in and everything will be incredible. The fact is that a new owner can't simply take over an OTC-listed company that has failed to file financial reports or pay outstanding legal judgments.
The key points are:
Companies on the OTC Pink tier must still provide a minimum level of information disclosure to investors, even if they are not required to file full quarterly/annual reports. The sand in the hourglass has just about finished in order to be able to file. Companies with "no information" disclosure are considered the most speculative.
Regardless of the OTC tier, companies generally cannot be in bankruptcy or have other major legal/financial issues to maintain their listing. Failing to pay court-ordered judgments would likely be seen as a major financial issue.
The OTC markets have rules and standards that companies must adhere to in order to be quoted and traded. Simply not filing reports or having outstanding legal judgments does not allow another party to take over the company without following proper procedures.
Therefore, the new owner would likely be responsible for resolving the previous company's outstanding millions of dollars of legal judgments and financial obligations, as they cannot simply be ignored.
The new owner would also need to ensure the company files ANY missing financial reports and meets the OTC Pink tier's minimum disclosure requirements BEFORE being able to trade the company's stock. There isn't a way to bypass these reporting requirements.
A new owner can't simply take over an OTC-listed company that has failed to file reports or pay legal judgments. The company would need to resolve those issues and meet the OTC market's listing requirements BEFORE any change in ownership could occur.
Bearish
