There are two main issues to look for in OTC / Pink Sheets.
The first is whether the company has a product, revenues and cash flows that can enable them to get a higher valuation.
Secondly, does that valuation warrant the company to be able to get to "escape velocity."
In the case of ReachOut Technology, they have a service being sold to multiple vertical industries. CEO also has a strong track record. Again, the company has $12 M in annual revenues and is already cash flow positive even though they only have a $3 M market cap. That doesn't mean they never raise capital.
Assuming the stock has escape velocity, then the next issue is how to attract investors.
In any OTC stock, you need the company to have a great story, institutional sponsorship and a management team that will sell that story. Companies with great fundamentals still need to attract investors to get liquidity.
Institutional sponsorship really gets to how will a financier make money from supporting a company in the public markets. One is to help the company raise capital in either debt or equity markets. Even a cash flowing company may need to raise capital to grow rapidly.
There's nothing wrong with a financier making money getting good companies in front of investors - key word is good companies. Not all financiers are scrupulous. Accept it and move on rather than debating ethics and morality.
News 
Market Data 
Discover 
