The Over the Counter (OTC) market is a platform for trading securities that are not listed on a major exchange. OTC stocks are often referred to as “penny stocks” due to their low price. The OTC market is divided into 3 tiers, with OTC Pink Current, OTCQB and OTCQX being the most commonly used.
OTC Pink Current companies are the lowest tier of OTC stocks, and are typically the most risky. These companies are not required to file regular financial statements with the SEC, making it difficult to ascertain the financial health of the company. OTC Pink Current companies can also be highly volatile, making them unsuitable for long-term investment.
In contrast, OTCQB companies are required to meet certain criteria in order to qualify. These include filing financial statements with the SEC on a regular basis, having a minimum share price of $0.01 and having a minimum market capitalization of $500,000. OTCQB companies are considered to be more reliable than OTC Pink Current companies, and may be suitable for long-term investment.
In conclusion, OTC Pink Current companies are the lowest tier of OTC stocks and are generally considered to be the riskiest. OTCQB companies, on the other hand, are more reliable and may be suitable for long-term investment.
Should I go public as an OTC Pink Current company or an OTCQB company and why?
It depends on your goals and the size of your company. If you are looking for greater visibility and more liquidity, then going public as an OTCQB company is the better option. OTCQB companies are required to meet higher disclosure standards than OTC Pink Current companies and must be up-to-date with their periodic filings, making them more attractive to investors. Additionally, OTCQB companies are eligible to be quoted on the OTC Markets platform, further increasing their visibility. On the other hand, it may be cheaper and easier to go public as an OTC Pink Current company, as they have fewer requirements. Ultimately, the decision of which one to go public as depends on your company’s goals and size.
What is the difference in costs to trade as an OTC Pink Current company vs an OTCQB company?
The cost to trade as an OTC Pink Current company is typically lower than the cost to trade as an OTCQB company. The OTCQB requires companies to meet higher standards of financial reporting and disclosure, and they generally require higher listing fees and annual fees. OTC Pink Current companies typically have less stringent financial requirements, but they are more susceptible to regulatory scrutiny.