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U.S. Pink Sheet listed Companies
Pink sheet refer to a listing service for stocks that trade via over the counter ("OTC"). Pinks sheet listings are companies that are not listed on a major exchange like New York Stock Exchange ("NYSE") or Nasdaq. Stocks listed on the pink sheets are usually small penny stocks that trade for less that five dollars per share. Pink sheet is also a private company that works with broker-dealers to market the shares of OTC equities they represent. Trading in pink sheet securities is seen as highly speculative.

Historically, the pink sheets receive theirs name fro the color of paper on which quotes of share price were published. Today, the trades are no longer paper but electronic quotes. However, the name still refers to OTC stocks as pink sheet listings.

Not all companies list on the primary stock exchanges for variety reasons. OTC refers to the process of how securities of unlisted companies trade. These investments trade via a broker dealer network as opposed to a centralised exchange like the Nasdaq and NYSE. Shares listed on the OTCBB carry an "OB" suffix, and must file financial statements with the Securities and Exchange Commission ("SEC"). These shares trading on the pink sheet platform have a "PK" suffix and no requirements from the SEC to file from the SEC to file financial information, and for this reason, are seen as higher risk securities.

Pink sheet listings usually consist of even smaller company stocks called penny stocks. These companies do not need to file the required documentation with the SEC. To list on the pink sheet a business must file Form 211, which includes some financial information, with the OTC compliance unit. Companies are not obligated to make their financial situation transparent to investors or the broker dealers who market their products.

Due to their highly speculative nature, there are a variety of SEC restrictions, regulations and requirements governing how brokers trade penny stocks. The majority of these requirements focus on consumer protection and education. Usually, stocks wind up on the pinks sheet for failure to meet SEC requirements for listing on larger stock exchanges, such as lacking financial information or their stock price below one dollar.

The situation for investors has shifted significantly to the negative over the past 2 years, where stocks which are listed on the pink sheet with a stock price of a couple cents or even below one cent won't be booked anymore into the client's bank account. Share certificates issued in physical form in the name of the client are held at the company's transfer agent, from where the client has no possibilities to sell them.

Through our partner company Silver Rock Management Ltd. we act as off-shore, non-U.S. entity and acquire the convertible notes or shares under a share purchase agreement and start selling the entire position. The business model is to keep 20% - 30% of the sales proceeds and wire back the balance to the client.

U.S. shares can be either delivered in physical or electronic form. Deposit/withdrawal at custodian ("
DWAC") is a method of electronically transferring new shares or paper share certificate to and from the depositary trust company ("DTC") using a fast automated securities transfer ("FAST") service transfer agent as the distribution point. The DWAC is one of the two ways of transferring between brokers/dealers and the DTC, the other being the direct register system ("DRS") method. Both enable investors to hold securities in registered form on the books of the transfer agent, rather than in physical form. DRS is different from DWAC in that shares in DRS have already been issued and are held electronically on the books of the transfer agent.

As an electronic system, DWAC allows for immediate transfer to a brokerage account. There is no time needed for physical delivery so the settlement process is made more efficient and significantly accelerated. The broker must be a DTC participant and the issuer must be DWAC eligible.

Shareholders can deposit their stock into a brokerage account by either sending their physical stock certificate to their broker or by having the transfer agent send the shares directly to the broker through the DWAC system. To deposit the shares to the broker via DWAC, shareholders must provide original stock certificate(s), the DWAC deposit form, and application fees.

We are currently working through Weiser Global Capital Markets in the Bahamas.
Modus Operandi
In general we need to execute the following steps:

  1. subscription agreement;
  2. conversion notice with calculations and pricing;
  3. conversion notice executed with issuance resolution;
  4. legal opinion;
  5. non-affiliate representation;
  6. corporate resolution;
  7. settlement report;
  8. share purchase agreement.
In order to speed-up the settlement process and avoid the medallion guarantee as follows:

  • the owner is selling the convertible note and/or signing to to us in exchange for a percentage of the proceeds.
  • we then convert the note and have the legal opinion issued under our entity name.
  • delivery would be made directly from the transfer agent to our entity.
That avoids to transfer forth and back the certificate and shorts the process by approximately 10 days.
Transactions in Process

4'000'000 shares of Full Alliance Group Inc. (Symbol: FAGI) traded at around USD 0.0900 - Agreed profit split 25/75 with a initial downpayment of USD 25'000.

Share purchase agreement on FAGI click here …