OTCQB Fees & Listing Requirements

OTCQB l Securities Lawyer 101

OTC Markets Group has announced it is making significant changes to its OTCQB.  Companies seeking to be quoted on the OTCQB will be required to meet eligibility standards and pay an initial listing fee of $2,500 to the OTC Markets if not listed on the OTCQB and pay annual fees of $10,000 per year.  Issuers currently listed are exempt from the one-time applicationOTCQB fee and the annual fee for the first two years is $7,500.  The new rules significantly increase going public costs.

Each issuer will be required to comply with the new OTCQB procedures 120 days after its fiscal year end.  Issuers not complying with the new procedures within the required timeframe will be downgraded to OTC Pink Sheets. Companies with a March 31 fiscal year end will be the first companies subject to the new requirements and will be required to comply with the new OTCQB standards by July 31, 2014.

The phase in of all issuers will be complete when the last group of current OTCQB companies with a fiscal year end of March 30 are required to comply on July 30, 2015.

The OTC Markets published a Fact Sheet providing details of the new requirements and a phase in schedule.

OTCQB Changes for SEC Reporting Domestic Issuers

SEC reporting issuers must meet the listing criteria below:

• Initial bid price of $0.01 as of the close of business for each of the previous 30 calendar days

• Complete and submit OTCQB Application and pay applicable fees

• Be current in all of the SEC’s periodic reporting requirements (or for companies not required to file on EDGAR, post SEC disclosure on the OTC Markets website)

• Post OTCQB Initial Certification Form (described below)

Ongoing OTCQB Reporting Requirements

 • Meet an ongoing minimum bid price test of $0.01 as of the close of business for at least one of every 30 calendar days

• Post current SEC disclosures, or for companies that do not file on EDGAR, post current SEC disclosure on the OTC Markets website

• Post OTCQB Annual Certification

OTCQB Certification Form

 Each issuer listed on the OTCQB must post initial and annual certification on the OTC Markets website, signed by its Chief Executive or Chief Financial Officer stating the following:

• The issuer’s reporting standard (e.g. SEC Reporting, Bank Reporting, or International Reporting) and briefly describe the registration status of the issuer

• That the issuer is current in its SEC reporting obligations to its regulator and such information has been posted either on EDGAR or the OTC Markets website

• Identify the law firm and/or attorneys involved in helping the issuer prepare its Annual Report or 10-K

• Confirm that the issuer profile on the OTC Markets website is current and complete

• Confirm the total shares outstanding and in the public float as of the most recent fiscal year end

• Names and shareholdings of all officers and directors, as well as beneficial shareholders who hold more than 5% of the issuer’s outstanding shares

For further information about this securities law blog post, please contact Brenda Hamilton, Securities Attorney at 101 Plaza Real S, Suite 202 N, Boca Raton, Florida, (561) 416-8956, by email at [email protected] or visit  www.securitieslawyer101.com.   This securities law blog post 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