QualTek Services Inc (fka QTEKQ)

[Cassandra]

Nadendla: An miniscule percentage of OTC companies that have been suspended by the SEC have ever become qualified under Rule 15c2-11 to resume being quoted on OTC Link (fka Pink Sheets), the OTCQB or the OTCBB. The few that have done so had actual operations, three years of audited financial reports, a market maker willing to sponsor them, etc. I do not believe it's even possible for an empty shell to meet the qualifications.

Quintek has not issued any SEC reports since Nov. 2007 when they issued some 8-Ks regarding resignations of officers and customers. OTC Markets has a warning that they can't confirm the location or telephone number of the company, which appears to be completely abandoned.

Dormant shells like QTEK that are long deliquent in reporting are ripe for pump and dump fraud and are a specific target of the SEC Microcap Fraud Working Group, which recently did a mass suspension of similar shells.

See: SEC Microcap Fraud-Fighting Initiative Expels 379 Dormant Shell Companies to Protect Investors From Potential Scams

QTEK missed being including among the 379, but likely came to the SEC's attention due to the extremely unusual trading volume that began in mid April. In the current regulatory environment, shells that are significantly delinquent in filing or long dark with OTC reports are very risky plays due to the substantial potential for suspension.

Shells only have value if they have piggy-back qualification under SEC Rule 15c2-11. Quintek has lost that qualification. Additionally, an SEC Administrative Law Judge will be deciding if the stock should be revoked, which would eliminate the potential for any trading whatsoever. The ALJ has 120 days from the official "service" of the Order to issue a decision, which could come sooner. IMO, revocation of QTEK stock is extremely likely.

Sorry that I haven't been able to provide a hopeful response, but the reality of the situation is bleak. Money lost in this stock can be considered tuition regarding the added risks of trading long delinquent or dark shells given the current efforts to prevent them from being used to perpetrate fraud. A suspension can happen at any time.

The momentum that traders desire in such plays can itself bring the scrutiny of the SEC and a suspension. I believe that is what happened here. OTC Markets issued a Caveat Emptor (CE) warning before the suspension due to the unusual activity.