Somebody messaged me re my last post, saying he was confused - he thought being on the pinks was a bad thing.
So,my answer:
In 2014-2015, depending on a companies fiscal year, otcmarkets.com - a for profit public corp which gets much of its profit from filing etc fees associated with its otcmarkets.com site-
initiated new requirements-part of a process
(partly political -designed to eliminate stocks below 1c pps- thus stocks which get into certain regulatory troubles and want to be part of otcqb are required to r/s to be listed- to rise above 1c pps on otcqb)
to require companies to have a bid price of 1c and pay a surcharge of $10,000 to be listed on otcqb.
Thus, all companies which fail to meet either of those requirements (including WOLV,when pps fell below 1c) were relegated to otcmarkets.com "pink current" designation, even though they are SEC reporting and have audited financials (a requirement for SEC reporting),as WOLV does.
This has created a lot of confusion among those who dont follow these otc changes on a regular basis.
E.g. all SEC reporting co's used to be OTCQB or higher and pink current used to be for non-audited non-SEC reporting companies (until ca 2009 otcqb itself was simply called 'fully reporting' (meaning sec reporting) as compared to pink stocks -none of which at that time were sec reporting).
Then ca 2009, the 'fully reporting' designation was changed to the moniker of 'otcqb'
and a new higher classification of 'OTCQX' was created-which approaches the qualitative requirements of big boards without the higher fees (e.g., 150k /yr to be listed on 1 of four levels of the Nasdaq) of big boards -and thus many foreign blue chips reside on the OTCQX,which now has over 400 stocks.
Many brokers are totally ignorant of penny stocks and these classifications.
E,.g in one conversation with a broker the broker disparaged penny stocks, as they almost always do, and falsely said penny stocks have no reporting requirements.
I said of course they do-I've spent [to help my best friend who was trading such stocks and had dragged me into penny stocks] countless hours reading thousands of penny stocks financial statements and 10q's etc.
I mentioned the OTCQX ca 7 or 8 times in the lengthy conversation but he didnt know what that was and finally he paused to look it up and came back and said "otcqx is a mutual fund"!!
Well, its hard to change the minds of the ignorant,especially when penny stocks have changed so much. Oldtimers (and the broker wasnt even an oldtimer) are thinking of the pre-2000 days when penny stocks were reportedly part of the unregulated wild west- not so anymore.
Now a great many SEC reporting companies are pink current because of the new pps and surcharge rules-this has depleted the ranks of otcqb companies. People who are not aware of these changes and the political purposes behind them will be confused, if not misled,since many SEC reporting co's are now pink current!!
So the line between pink current and otcqb is no longer between SEC reporting and audited financials- but often between a pps of 1c and companies willing and able to pay the otcqb "news and reporting service" surcharge of $10,000 vs those who can't.
Thus, many former otcqb stocks -like WOLV- are now listed as 'pink current'. Those who are not aware of the changes and the purposes for such will make erroneous investor decisions based on the old 'pink current' vs 'otcqb' paradigm.
The important thing for investor confidence is audited financials and SEC reporting- not whether a stock is otcqb or pink current-under the new regimen.
Before the recent 10q, because WOLV was late in its 10q for the first time in my recent memory- otc had temporarily listed WOLV as ''no info'' (an obvious misnomer- these rules have also been tightened by otc,both as to classification and the timing of the grace period for delayed financials, over the years).
OTC always advertises its purpose as transparency-and thats true- the otc.markets.com cite is a tremendous benefit for those looking up otc and nasdaq stocks etc
but otc's (OTCM- otcmarkets.com) bottom line also plays a role-
and otc gets more fees the higher a companies classification -so part of the purpose is to promote otc's for profit bottom line by encouraging companies- by whip or carrot- to upgrade to a higher otcmarkets.com classification.
For companies which cannot afford to comply with those tightened rules, this works against transparency.
Shell companies and other companies with no income are unlikely to pay the 10k surcharge to be listed on otcqb,even if pps is above 1c,so that inveighs against otcqb fraud. So there are conflicting purposes and results.
the price for pink current reporting and news service -as otcmarkets.com calls it- is only $4200/year (last i knew-instead of the otcqb $10,000/yr surcharge).
So,my answer:
In 2014-2015, depending on a companies fiscal year, otcmarkets.com - a for profit public corp which gets much of its profit from filing etc fees associated with its otcmarkets.com site-
initiated new requirements-part of a process
(partly political -designed to eliminate stocks below 1c pps- thus stocks which get into certain regulatory troubles and want to be part of otcqb are required to r/s to be listed- to rise above 1c pps on otcqb)
to require companies to have a bid price of 1c and pay a surcharge of $10,000 to be listed on otcqb.
Thus, all companies which fail to meet either of those requirements (including WOLV,when pps fell below 1c) were relegated to otcmarkets.com "pink current" designation, even though they are SEC reporting and have audited financials (a requirement for SEC reporting),as WOLV does.
This has created a lot of confusion among those who dont follow these otc changes on a regular basis.
E.g. all SEC reporting co's used to be OTCQB or higher and pink current used to be for non-audited non-SEC reporting companies (until ca 2009 otcqb itself was simply called 'fully reporting' (meaning sec reporting) as compared to pink stocks -none of which at that time were sec reporting).
Then ca 2009, the 'fully reporting' designation was changed to the moniker of 'otcqb'
and a new higher classification of 'OTCQX' was created-which approaches the qualitative requirements of big boards without the higher fees (e.g., 150k /yr to be listed on 1 of four levels of the Nasdaq) of big boards -and thus many foreign blue chips reside on the OTCQX,which now has over 400 stocks.
Many brokers are totally ignorant of penny stocks and these classifications.
E,.g in one conversation with a broker the broker disparaged penny stocks, as they almost always do, and falsely said penny stocks have no reporting requirements.
I said of course they do-I've spent [to help my best friend who was trading such stocks and had dragged me into penny stocks] countless hours reading thousands of penny stocks financial statements and 10q's etc.
I mentioned the OTCQX ca 7 or 8 times in the lengthy conversation but he didnt know what that was and finally he paused to look it up and came back and said "otcqx is a mutual fund"!!
Well, its hard to change the minds of the ignorant,especially when penny stocks have changed so much. Oldtimers (and the broker wasnt even an oldtimer) are thinking of the pre-2000 days when penny stocks were reportedly part of the unregulated wild west- not so anymore.
Now a great many SEC reporting companies are pink current because of the new pps and surcharge rules-this has depleted the ranks of otcqb companies. People who are not aware of these changes and the political purposes behind them will be confused, if not misled,since many SEC reporting co's are now pink current!!
So the line between pink current and otcqb is no longer between SEC reporting and audited financials- but often between a pps of 1c and companies willing and able to pay the otcqb "news and reporting service" surcharge of $10,000 vs those who can't.
Thus, many former otcqb stocks -like WOLV- are now listed as 'pink current'. Those who are not aware of the changes and the purposes for such will make erroneous investor decisions based on the old 'pink current' vs 'otcqb' paradigm.
The important thing for investor confidence is audited financials and SEC reporting- not whether a stock is otcqb or pink current-under the new regimen.
Before the recent 10q, because WOLV was late in its 10q for the first time in my recent memory- otc had temporarily listed WOLV as ''no info'' (an obvious misnomer- these rules have also been tightened by otc,both as to classification and the timing of the grace period for delayed financials, over the years).
OTC always advertises its purpose as transparency-and thats true- the otc.markets.com cite is a tremendous benefit for those looking up otc and nasdaq stocks etc
but otc's (OTCM- otcmarkets.com) bottom line also plays a role-
and otc gets more fees the higher a companies classification -so part of the purpose is to promote otc's for profit bottom line by encouraging companies- by whip or carrot- to upgrade to a higher otcmarkets.com classification.
For companies which cannot afford to comply with those tightened rules, this works against transparency.
Shell companies and other companies with no income are unlikely to pay the 10k surcharge to be listed on otcqb,even if pps is above 1c,so that inveighs against otcqb fraud. So there are conflicting purposes and results.
the price for pink current reporting and news service -as otcmarkets.com calls it- is only $4200/year (last i knew-instead of the otcqb $10,000/yr surcharge).
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