Pink sheets

Pink sheets are listings for stocks that trade over-the-counter rather than on the US stock exchanges or Nasdaq or do not meet the listing requirements. Pink sheet securities are 「unlisted securities」, including:

1. securities that are delisted from Nasdaq or the stock exchanges because they no longer meet the listing requirements;

2. securities of which the companies quit the OTCBB to avoid becoming a "Reporting Company";

3. other securities which at least one market maker is willing to quote. As a matter of fact, most pink sheet stocks were forced to be delisted because their companies failed to file financial reports or major event reports on a regular basis.

As a result, these companies are generally called "shell" companies, and their stocks are "junk stocks".

Pink companies are subject to no special listing requirements nor obligations of continuous disclosure of financial and other information. It is worth mentioning that it is free to trade pink sheet stocks.