Updates to the OTC Markets Pink Disclosure and Attorney Agreement Guidelines

In anticipation of changes to the Securities and Exchange Commission’s Rule 15c2-11, which sets forth requirements under which broker-dealers must comply before they can publish quotations for securities in the over-the-counter (“OTC”) markets, OTC Markets group has recently updated their Pink Disclosure Guidelines (v2.1 December 2019) and their Attorney Letter Agreement and Guidelines.

Updated Pink Disclosure Guidelines

• Corporate History – Name of issuer and predecessors since inception (previously limited to last 5 years)

• Debt Securities, Including Promissory and Convertible Notes – changed required disclosure from debt instruments issued in the previous two fiscal years and subsequent periods to any outstanding convertible, promissory, or similar debt instruments as of the period end date of the report

• Financial Statements – must now include Statement of Changes in Shareholders’ Equity.  All financial statements for a particular period end date must be compiled in one document

• Officers, Directors, and Control Persons – clarification that disclosure of individuals holding at least 5% of any class of the issuers’ securities as of the period end date of the report is required

• Verified Profile – the Company must verify the Company Profile through OTCIQ to qualify for the Pink Current and Limited Information tiers. Look for the “Verified Profile” icon on the company’s quote pages on otcmarkets.com.

Updated Attorney Letter Agreement Guidelines

• Secure Electronic Submission of the Attorney Letter Agreement  – to better protect your personal information, these agreements will be submitted through Docusign

• Amended item #5 in the Attorney Letter Guidelines with regard to the disclosure of regulatory proceedings. See: https://www.otcmarkets.com/files/Attorney_Letter_Agreement_Watermarked.pdf

The above changes became effective December 19, 2019 and must be used when preparing upcoming quarterly or annual reports and submitting Attorney Letters for Pink Companies.

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