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We provide all-inclusive services related to OTC market compliance. Offering comprehensive legal counsel for companies that aim to get their stocks quoted on the pink stock exchange, or already there. Our attorneys stay abreast of regulatory changes and trends in the over-the-counter stocks industry. Take advantage of our experience in working with small to mid-size publicly traded companies. Get in touch with us to learn more about our services for Microcap Securities.

On the United States stock markets, a publicly traded company that has a market value somewhere between $50 million and $300 million is considered a microcap security. As they are not measured as large, or even medium sized, corporations, microcap securities are traded almost exclusively on the over-the-counter bulletin board (OTCBB) with other “penny stock” companies. Just like any stocks quoted on the pink sheets, there is typically a great potential for gain if the business grows and an equally likely chance of total loss should it collapse.

SEC Guide for Investors defines microcap securities as follows:

“The term “microcap stock” applies to companies with low or “micro” capitalizations, meaning the total value of the company’s stock. A typical definition would be companies with a market capitalization of less than $250 or $300 million. The smallest public companies, with market capitalization of less than $50 million, are sometimes referred to as ‘nanocap stocks.’ This guide will use the term ‘microcap stock’ to refer to both microcaps and nanocaps.

Microcap companies typically have limited assets and operations. Microcap stocks tend to be low priced and trade in low volumes.

Where Do Microcap Stocks Trade?

Many microcap stocks trade in the “over-the-counter” (OTC) market, rather than on a national securities exchange such as the New York Stock Exchange or NASDAQ. They are quoted on OTC systems, such as the OTC Bulletin Board (OTCBB) or OTC Link LLC (OTC Link).

  • OTC Bulletin Board The OTCBB is an electronic inter-dealer quotation system that displays quotes, last-sale prices, and volume information for many OTC equity securities that are not listed on a national securities exchange. Under the OTCBB’s eligibility rule, companies that want to have their securities quoted on the OTCBB must seek sponsorship by a market maker firm that is a registered broker-dealer as well as file current financial reports with the SEC or with their banking or insurance regulator. The OTCBB operated by the Financial Industry Regulatory Authority (FINRA). The OTCBB is not part of The Nasdaq Stock Market. Fraudsters may claim that an OTCBB company is a Nasdaq company to mislead investors into thinking that the company is bigger than it is.
  • OTC Link LLC OTC Link is an electronic inter-dealer quotation system that displays quotes, last-sale prices, and volume information in exchange-listed securities, OTC equity securities, foreign equity securities and certain corporate debt securities. In addition to publishing quotes, OTC Link provides, among other things, broker-dealer subscribers the ability to send and receive trade messages, allowing them to negotiate trades. OTC Link is registered with the SEC as a broker-dealer and as an Alternative Trading System, and is a member of FINRA.OTC Link organizes securities into three marketplaces based, in part, on the amount and quality of available information:
    • OTCQB – includes the securities of companies that are current in their reporting to the SEC or a U.S. bank, thrift or insurance regulator;
    • OTCQX – reserved for the securities of companies that are current in their reporting to the SEC or a U.S. bank, thrift or insurance regulator, or, in the case of companies that are not required to report to the SEC, meet and remain current in their reporting obligations to OTC Link under its proprietary Alternative Reporting Standard; meet certain eligibility requirements; have audited financial statements; and partner with a third-party securities attorney or investment bank that reviews disclosure and acts as a professional advisor; and
    • OTC Pink – an open marketplace for a broad spectrum of equity securities, with no financial standards or reporting requirements. “

Sound Legal Advice from a Team with Experience

Any time you are going to delve into trading stocks and investing in other companies, you need to take the right steps to ensure you are leaving nothing to chance. OTC markets in particular can cause complicated legal issues if not every step is followed to exact specifications. When you consult a professional OTC lawyer from our firm, you can expect clear and concise results that benefit you and your business. We are also proud to say that we have earned the respect of both our clients and our peers, as evidenced in testimonials.

PROGRESSIVE. PROVEN. TRUSTWORTHY.

Adam S. Tracy, J.D., M.B.A.

Attorney Adam Tracy has a strong background in all facets of commercial law and extensive experience in litigating complex commercial disputes, and is able and willing to help. He is also a well-versed legal scholar in the United States copyright law. A former competitive rugby player and serial entrepreneur, Adam Tracy has a wealth of experience on both sides of the table. He has advised many companies with regards to legal issues, law compliance and capital markets matters.

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