OTC CAPITAL MARKET

Introduction to the U.S. Nasdaq OTC Capital Market

The Over-The-Counter (OTC) Capital Market in the United States provides an alternative trading platform for companies that are not listed on major exchanges like NASDAQ or the NYSE. It allows smaller, international, and emerging companies to raise capital, gain visibility, and build investor confidence while operating under flexible reporting and compliance standards.

The OTC market is operated by the OTC Markets Group, which categorizes companies into three main tiers based on their financial performance, level of transparency, and regulatory compliance. Each tier offers different levels of investor trust and exposure, providing companies a path to grow and eventually move to larger exchanges if desired.

1. OTCQX – The Premier Tier

• Designed for well-established and financially strong companies.

• Requires the highest level of disclosure, transparency, and corporate governance.

• Companies must meet strict financial standards and follow U.S. securities laws.

• Often used by international firms seeking credibility and broader investor access in the U.S. market.

• No penny stocks or shell companies are allowed on this tier.

Example: Large foreign companies or U.S. firms with proven track records that aim to enhance investor confidence.

2. OTCQB – The Venture Market

• Targeted at developing and growth-stage companies.

• Must maintain a minimum share price of $0.01 and comply with basic governance standards.

• Requires regular financial reporting to the SEC or OTC Markets.

• Serves as a stepping stone for companies progressing toward higher tiers or national exchange listings.

• Attracts investors looking for emerging opportunities with regulated transparency.

Example: Expanding tech startups or mid-sized firms seeking increased liquidity and U.S. investor attention.

3. OTCID– The Open Market

• The most flexible and least regulated tier of the OTC system.

• Suitable for startups, distressed firms, or foreign companies not ready for higher compliance levels.

• Offers minimal disclosure requirements and no obligation to file with the SEC.

• Provides an entry point for companies with limited resources but high growth potential.

• Includes a wide range of securities, from legitimate small businesses to speculative investments.

Example: Early-stage or restructuring companies exploring market access with limited reporting capacity.

Conclusion

The U.S. OTC Market provides a structured yet flexible environment for companies at various stages of growth. Whether a firm seeks maximum transparency and investor trust (OTCQX), is in its growth phase (OTCQB), or just beginning its market journey (OTCID), the OTC platform serves as a gateway to U.S. capital markets and global investor exposure.

Key Benefits:

• Access to U.S. Investors and Capital

• Increased Brand Visibility and Credibility

• Flexible Regulatory Requirements

• Enhanced Liquidity for Shares

• Growth Pathway to Major Exchanges