Moving On Up To The OTC Pink Current

Securities Lawyer 101 - Form S-1

Companies quoted on the OTC Markets with an OTC Pink tier fall into one of three categories. These are identified on www.otcmarkets.com as current information, limited information or no information based upon the amount of information provided.

An OTC Pink Stop Sign indicates that companies do not provide adequate public information to the public markets. A company may provide disclosure to the OTC Pink marketplace through a selected U.S. regulatory agency (such as the SEC or a Banking regulator), a qualified foreign stock exchange.

The OTC Markets Stop Sign   

Securities and Exchange Commission (“SEC”) reporting companies should be aware that information published through the OTC Disclosure & News Service will not be considered when determining the placement of the stop sign and the marketplace by which they trade. The marketplace designation for reporting companies is based solely on information filed with the SEC’s EDGAR system. Delinquent filers must deregister with the SEC in order to remove the stop sign and upgrade their marketplace using the OTC Disclosure & News Service as described below.

OTC Pink Current Information Qualification

Companies that make the information described below publicly available on a timely basis (90 days after fiscal year end for Annual Reports; 45 days after each fiscal quarter end for Quarterly Reports) qualify for OTC Pink Current Information.

Initial Qualification:

  1. Subscribe to the OTC Disclosure & News Service on www.OTCIQ.com to publish financial reports and material news.
  2. Create the following documents, save them in PDF format and upload them via www.OTCIQ.com:
  • Annual Financial statements (Document must include: Balance Sheet, Income Statement, Statement of Cash Flows, Notes to Financial Statements) for the previous two fiscal years. If these reports are audited, please attach the audit letter from the PCAOB registered audit firm. Each year’s Annual Financial statements should be posted separately under the report type “Annual Report” on www.OTCIQ.com
  • Any subsequent Quarterly Reports since the most recent Annual Report
  • The most recent fiscal period end report should also include information in accordance with the OTC Pink Basic Disclosure Guidelines
  • Financial reports must be prepared according to U.S. GAAP, but are not required to be audited to qualify for OTC Pink Current Information
  1. If financial reports are not audited by a PCAOB registered audit firm:
  • Submit a signed Attorney Letter Agreement (first two pages of the Attorney Letter Guidelines)
  • After following the appropriate procedures with a qualified attorney, upload an Attorney Letter complying with the Attorney Letter Guidelines through the www.OTCIQ.com account

Ongoing Qualification:

  1. For each Fiscal Quarter End, upload a Quarterly Report via www.OTCIQ.com within 45 days of the quarter end. (A separate quarterly report is not required for the 4th quarter.) The Quarterly Report should include:
  • Information in accordance with the OTC Pink Basic Disclosure Guidelines
  • Quarterly financial statements (Balance Sheet, Income Statement, Statement of Cash Flows, Notes to Financial Statements). Financial reports must be prepared according to U.S. GAAP, but are not required to be audited
  • No Audit Letter or Attorney Letter is required
  1. For each Fiscal Year End, upload an Annual Report within 90 days of the fiscal year end. The Annual Report should include:
  • Information in accordance with the OTC Pink Basic Disclosure Guidelines
  • Annual financial statements (Balance Sheet, Income Statement, Statement of Cash Flows, Notes to Financial Statements, and Audit Letter, if the financial statements are audited). Financial reports must be prepared according to U.S. GAAP, but are not required to be audited
  1. If financial reports are not audited by a PCAOB registered audit firm, upload an Attorney Letter via www.OTCIQ.com complying with the Attorney Letter Guidelines within 120 days of the fiscal year end.

Financial Report Timeline for Maintaining Current Information (FY 12/31 Filers)

Fiscal Period End DateReport Type – Due Date

12/31/2013

Annual Report – 4/1/2014
Attorney Letter – 5/1/2014

3/31/2014

Quarterly Report – 5/15/2014

6/30/2014

Quarterly Report – 8/14/2014

9/30/2014

Quarterly Report – 11/14/2014

12/31/2014

Annual Report – 3/31/2015
Attorney Letter – 5/1/2015

OTC Pink Limited Information Qualification  

Companies that make the information described below publicly available within the prior 6 months qualify for the OTC Pink Limited Information.

  1. Subscribe to the OTC Disclosure & News Service on www.OTCIQ.com to publish financial reports and material news.
  2. Create a Quarterly Report or Annual Report for a fiscal period ended within the previous 6 months, save it in PDF format and upload it via www.OTCIQ.com. The Quarterly Report or Annual Report includes:
  • Balance Sheet
  • Income Statement
  • Total Number of Issued and Outstanding Shares

Financial statements must be prepared in accordance with US GAAP, but are not required to be audited. (Please note that Cash Flow Statements are not required to qualify for OTC Pink Limited Information; however, unless the financial statements include a Cash Flow Statement, no financial data will be included in the OTC Financials Data Service via EDGAR Online, which distributes company financial data to online investor portals and makes the data available on the Financials tab on the company’s quote page on www.otcmarkets.com.

A company on OTC Pink Limited Information, may, but is not required to, include information in accordance with the OTC Pink Basic Disclosure Guidelines.

For further information about sponsoring market makers, please contact Brenda Hamilton, Securities Attorney at 101 Plaza Real S, Suite 202 N, Boca Raton, Florida, (561) 416-8956 or [email protected] .  This securities law blogpost is provided as a general informational service to clients and friends of Hamilton & Associates Law Group and should not be construed as, and does not constitute legal advice on any specific matter, nor does this message create an attorney-client relationship.  Please note that the prior results discussed herein do not guarantee similar outcomes.

Hamilton & Associates | Securities Lawyers
Brenda Hamilton, Securities Attorney
101 Plaza Real South, Suite 202 North
Boca Raton, Florida 33432
Telephone: (561) 416-8956
Facsimile: (561) 416-2855
www.SecuritiesLawyer101.com