By VentureVest | January 13, 2016 at 05:47 PM EST | No Comments
January 13, 2016
Desk Reference: 2016 SEC Filing Deadlines
We are pleased to send you a link to our Client Desk Reference Chart entitled "2016 SEC Filing Deadlines" which outlines the calendar dates by which Large Accelerated, Accelerated and Non-Accelerated/Smaller Reporting Companies must file their annual and quarterly reports with the SEC. Should you have any questions about the Client Desk Reference Chart, please feel free to contact the Lucosky Brookman attorney with whom you regularly work. Lucosky Brookman regularly publishes reference materials covering a variety of legal topics. To download copies and search our archive, click here.
By VentureVest | July 14, 2015 at 08:16 PM EDT | No Comments
VentureVest Capital Corp. cautions against purchasing a Pink Sheet company that is not filing full reports with the SEC. The company could be suspended on any given day.
Over the past couple of years the SEC has suspended trading on hundreds of dormant Pink Sheet “shell” companies. Why is that?
According to anSEC News Release, the following are the reasons that hundreds of Companies, usually trading in the “Pink Sheets” are being suspended.
"The Securities and Exchange Commission today suspended trading in the securities of 379 dormant companies before they could be hijacked by fraudsters and used to harm investors through reverse mergers or pump-and-dump schemes." (News Release) This action is pursuant to section 12(k) of the Securities Act of the 1939.
It is important to note that "hijacked by fraudsters" and "pump-and-dump" are the problems and that reverse mergers are only the means.
Above-board reverse mergers are a perfectly legitimate way for a private company to go public more quickly than the usual red-tape bound process affords. (see Article)
To hijack a dormant company (one that has simply stopped filing and essentially gone away) an individual must take it before a judge and claim to have tried to reach the principles to no avail. The company is then awarded to the individual--a perfectly legal process.
...Except when it is not. We consulted with a business owner who had had his company hijacked and sold out from under him without his even knowing it. It took some legal work to undo the transaction and the ruling.
How do you Know??
The best indicator whether a company has been hijacked is whether the seller can produce books and records for the company since inception. For our clients, records since the ruling is just not good enough--too much risk, Skeletons in the closet like old debt; disgruntled employees, shareholders, vendors; leans, judgments, etc; all could come out of hiding once a strong company takes over the company and share prices begin to climb.
According to theNews Release from last year The SEC's Microcap Fraud Working Group (MFWG) via Operation Shell-Expel "utilizes various agency resources including the enhanced intelligence technology of the Enforcement Division's Office of Market Intelligence" to uncover stocks that might be ripe for potential fraud.
But what happens when the SEC's MFWG is wrong?
We just had the experience where a delinquent company, duly notified of their potential of being delisted, were prohibited by the SEC to reconcile. Letters were sent calls were made; offers to file an 8-K, explanations of the efforts they were making to work a deal and get current were dismissed and the company was delisted as dormant.
The action of delisting killed the only chance the company had to survive. Selling their only real remaining asset--the public entity--would have allowed them to pay some debts and move their investors over to a potential growth company. Now the investors are left holding the bag--the very thing the SEC claims they are out to prevent.
So now what?
There are currently nearly 3,000 securities that are delinquent in their filings for some reason or other. (Usually it is the cost of keeping current--audit charges, XBRL charges, filing charges, listing fees.) Are they dormant? Many are not. Will filing a Form 15 protect a company from being delisted? Who can tell?
If yours is one of those delinquent companies, you are at risk of being delisted at any time, and the SEC appears to be on the hunt.
It may be time to seriously consider your options before no options are left to you.
By VentureVest | June 19, 2015 at 06:41 PM EDT | No Comments
A letter from a resident Agent in Nevada - June 16, 2015
Greetings from The Corporate Place, Inc. We want to make you aware of changes that the Nevada Secretary of State is making with respect to annual filings for businesses, effective July 1, 2015. These are a result of some bills passed at the close of Nevada's legislative session the end of May.
Firstly, the Annual List filing fee is increased by $25 for all entities. This means that the Annual List for LLC’s and LP’s will be $150 instead of $125. The filing fee for Corporations is based on the capital amount which is based on stock. The base amount will be $150 and, as in the past, will be more if your authorized stock Stated or Par Value is more than $75,000.
Next, for corporations only, the Business License is increasing from $200 to $500 annually. For all other entities the Business License will remain at $200. Note: if your entity is not public (listed on the Exchange) you should be able to circumvent these higher fees by converting your corporation to an LLC and then filing IRS form 8832 to classify your entity to be taxed as a corporation. There could be some tax and legal implications with this so we advise you to seek competent professional help on this prior to making any changes. We can serve you to file the necessary paperwork with the Nevada Secretary of State's office. Call us for filing details.
Also, the Nevada Secretary of State is now requiring all businesses formed or registered in Nevada (incorporated or not) to file a tax statement reporting their gross revenue (receipts) for the period from July 1st to June 30th each year. This report will be due on August 14th each year no matter when you are incorporated. The first "Commerce Tax Return" will be due August 14, 2016. While all must file the report, only businesses with gross receipts in excess of $4 million will have to pay the 2% tax; and gross receipts not deemed directly connected to Nevada are not subject to the tax. For example, if your gross revenue directly connected to Nevada is $4.5 million, you will only be taxed on $500,000. (How "directly" is interpreted has yet to be outlined.)
Finally, for those of you who have Nevada payroll (and thus paying the Modified Business Tax), you will be allowed to offset half of the Commerce Tax against future years' Modified Business Tax (i.e. 50% of what you pay in 2016 will be credited towards your 2017 Modified Business Tax (MBT) amount. The amount you pay for MBT depends on your business type. (This has no application for those who do not have Nevada payroll.)
We've just received word that any Annual or Initial List or State Business License application due by the end of August, 2015 or earlier, received prior to July 1, 2015 will be assessed the pre-July fees. The Annuals List attached reflects the pre-July fee schedule. You can file online at www.nvsilverflume.gov.
NEW PRICES EFFECTIVE JULY 1, 2015 FOR CORPORATIONS
Filling Annual List of Officers and Directors$150.00
Paying for a an annual Corporate Business License$500.00
By VentureVest | November 19, 2014 at 06:35 PM EST | No Comments
In an unpublicized move, FINRA owned Over the Counter Bulletin Board (OTCBB) is closed for good. The Financial Industry Regulatory Authority (FINRA), a non-profit organization, had been trying unsuccessfully to sell the OTCBB since 2009. On July 27, 2014, FINRA quietly filed with the SEC a proposal to delete rules relating to OTCBB thus ceasing OCTBB operations. The OTCBB was retired on November 17, 2014.
An announcement at finra.org claims that “information currently available on OTCBB.com will become available on the Finra.org website.” Our investigation found no individual stock trade or reporting information available. When pressed, an un-named source at FINRA confirmed that the OTCBB is out of business for good.
Sources indicate the SEC release of October 7, 2014 states: “FINRA proposed to adopt rules: (1) governing the treatment of quotations in OTC equity securities by member inter-dealer quotation systems and addressing fair and non-discriminatory access to such systems; (2) requiring member inter-dealer quotation systems to provide FINRA with a written description of quotation-related data products offered and related pricing information, including fees, rebates, discounts and cross-product pricing incentives; (3) expanding the reporting requirements related to quotation information in OTC equity securities; and (4) deleting the Rule 6500 Series and related rules and thereby ceasing operation of the OTCBB.” (See SEC Release No. 34-72575; File No. SR-FINRA-2014-030)
The FINRA rule release request succeeded in eliminating the OTCBB and imposes governing regulations on the remaining inter-dealer quotation system namely, the OTC Markets comprised of the OTCQX, OTCQB, and Pinksheets.(www.otcmarkets.com).
While NYSE functions as auction markets, the OTC market is dealer-driven. The OTCBB and OTC Markets Group’s OTCQX, OTCQB and OTC Pink marketplaces fall into the latter category, and all stocks trade there as a result of broker-dealers quoting a company’s stock. This compares to the exchanges, where companies must apply and qualify to be listed with the exception of OTCQX, OTC Markets Group's highest marketplace, for which there are qualification requirements.
History The stock market segment that was traditionally referred to as the “Pink Sheets” has undergone many changes over the years. It began with the National Quotation Bureau (NQB) in 1913 and chiefly comprised penny stocks and high-risk offerings that were listed on sheets of pink paper (or yellow paper for bonds), which were distributed to brokers and investors. This continued for decades until the internet boom in the 1990s facilitated widespread electronic dispersion of quotes. NQB introduced its real-time electronic quotation service in 1999 and changed its name to Pink Sheets the following year. Electronic messaging was introduced in 2003. It was then renamed Pink OTC Markets in 2008 and took its present name of OTC Markets Group in 2010. In 2007, it reorganized all stocks previously traded in the Pink Sheets into three separate marketplaces. These marketplaces are based on the quality of the companies’ disclosure, so that investors can more easily access and analyze companies and make informed trading decisions:
By VentureVest | March 28, 2014 at 05:45 PM EDT | No Comments
With overwhelming support, the House Financial Services Committee approved bipartisan legislation that would remove the XBRL requirement on SEC filings for smaller companies. If passed, companies earning less than $250,000 in annual revenue will be exempt from the XBRL requirement for 5 years.
By VentureVest | March 26, 2014 at 06:47 PM EDT | No Comments
In an announcement reportedly emailed to all brokers, transfer agents and OTC Markets participants, the public was made aware of sweeping changes to the OTCQB beginning March 1, 2014. Changes include:
A one penny ($0.01) bid price requirement
A $2,500 application fee.
A $10,000 annual fee.
Annual OTCQB Certification.
These changes are designed to "improve transparency and exclude companies that are most likely to be associated with stock promoters and other nefarious operators."
Justification for the action cites a survey of OTCQB participating companies. The reasons given are that "low priced shells and stock promoters make OTCQB a less attractive marketplace and hinder their ability to attract a wider group of potential shareholders."
"For companies that do not wish to be fully transparent or engage with their public market, we will continue to operate a marketplace for brokers to trade in these securities on the OTC Pink," the announcement read.
By VentureVest | July 12, 2013 at 06:03 PM EDT | No Comments
SEC Approves JOBS Act (Jumpstart Our Business Startups Act) Requirement to Lift General Solicitation Ban,
July 10, 2012 - A major step in the JOBS act has been taken by the SEC in lifting the ban on general solicitation on general advertising for certain private securities offerings. This means that under certain circumstances, a company raising money can reach out to many individuals and actually advertise that they are raising capital.
The SEC adopted section 201(a) of JOBS Act, which overturns 80-year-old rules banning the general solicitation on private offerings by companies. And while that means companies are now allowed to use advertising to raise unlimited amounts of capital the accredited investor stipulation remains in place.
Accredited Investors, under rule 506/Regulation D, are investors with over $1 million in investable assets or $200,000 in annual income for the previous two years ($300,000 for joint income) are considered "sophisticated" and eligible for accreditation.
The two options that private placement issuers have to verify whether an investor is “accredited” is to either review federal-tax documents to check an investor’s income or have a registered broker, investment adviser, licensed attorney or CPA confirm clients’ income and overall net worth.
The SEC also adopted rules that disqualify felons and other bad actors from participating in certain securities offerings as required by the Dodd-Frank Act.
See the links below for more information.
SEC Approves JOBS Act Requirement to Lift General Solicitation Ban
By VentureVest | July 12, 2013 at 06:02 PM EDT | No Comments
SEC Microcap Fraud-Fighting Initiative Expels 379 Dormant Shell Companies to Protect Investors From Potential Scams
Massive Trading Suspension Is Largest in Agency History
FOR IMMEDIATE RELEASE 2012-91
Washington, D.C., May 14, 2012 — The Securities and Exchange Commission today suspended trading in the securities of 379 dormant companies before they could be hijacked by fraudsters and used to harm investors through reverse mergers or pump-and-dump schemes. The trading suspension marks the most companies ever suspended in a single day by the agency as it ramps up its crackdown against fraud involving microcap shell companies that are dormant and delinquent in their public disclosures.
Microcap companies typically have limited assets and low-priced stock that trades in low volumes. An initiative tabbed Operation Shell-Expel by the SEC's Microcap Fraud Working Group utilized various agency resources including the enhanced intelligence technology of the Enforcement Division's Office of Market Intelligence to scrutinize microcap stocks in the markets nationwide and identify clearly dormant shell companies in 32 states and six foreign countries that were ripe for potential fraud.
"Empty shell companies are to stock manipulators and pump-and-dump schemers what guns are to bank robbers — the tools by which they ply their illegal trade," said Robert Khuzami, Director of the SEC's Division of Enforcement. "This massive trading suspension unmasks these empty shell companies and deprives unscrupulous scam artists of the opportunity to profit at the expense of unsuspecting retail investors."
Thomas Sporkin, Director of the SEC's Office of Market Intelligence, added, "It's critical to assess risks to investors in the capital markets and, through strategic planning, develop ways to neutralize them. We were able to conduct a detailed review of the microcap issuers quoted in the over-the-counter market and cull out these high-risk shell companies."
The SEC's previously largest trading suspension was an order in September 2005 that involved 39 companies. The federal securities laws allow the SEC to suspend trading in any stock for up to 10 business days. Subject to certain exceptions and exemptions, once a company is suspended from trading, it cannot be quoted again until it provides updated information including accurate financial statements.
Pump-and-dump schemes are among the most common types of fraud involving microcap companies. Perpetrators will tout a thinly-traded microcap stock through false and misleading statements about the company to the marketplace. After purchasing low and pumping the stock price higher by creating the appearance of market activity, they dump the stock to make huge profits by selling it into the market at the higher price.
The existence of empty shell companies can be a financial boon to stock manipulators who will pay as much as $750,000 to assume control of the company in order to pump and dump the stock for illegal proceeds to the detriment of investors. But with this trading suspension's obligation to provide updated financial information, these shell companies have been rendered essentially worthless and useless to scam artists.
"This mass trading suspension is an effective and novel way for the SEC to neutralize potential threats to investors," said Chris Ehrman, Co-National Coordinator of the SEC's Microcap Fraud Working Group. "With the ability to leverage staff expertise throughout the agency's offices and divisions, the Working Group is uniquely positioned to take on risk-based matters like these and focus resources where they are needed most." This SEC enforcement effort has been led by Mr. Ehrman, Robert Bernstein, Jessica P. Regan, Leigh Barrett, and Megan Alcorn in the Office of Market Intelligence along with Microcap Fraud Working Group staff from each of the SEC's regional offices: Tanya Beard, David Berman, Sharon Binger, Melissa Buckhalter-Honore, Lisa Cuifolo, Tracy Davis, Elisha Frank, Kurt Gottschall, Lucy Graetz, Jennifer Hieb, C.J. Kerstetter, Victoria Levin, Aaron Lipson, Michael Paley, Farolito Parco, Jonathan Scott, and Lauchlan Wash. The SEC appreciates the assistance and cooperation of the Federal Bureau of Investigation's Economic Crimes Unit.
By VentureVest | July 12, 2013 at 05:56 PM EDT | No Comments
Crowdfunding - Not What its Thought to Be...Yet
On April 5, 2012, President Obama has signed H.R. 3606 referred to as the “Jumpstart Our Business Startups (JOBS) Act” or the “Crowdfunding Act."
Oddly enough, in the United States a person can gamble away all of their money at a casino or donate to countless flakey charities, but it has been very difficult for an American citizen to invest $10 in another person’s startup business, regardless of how dynamic the business might be. H. R. 3606 may change that.
The Act, passed by both houses of Congress and signed into law by the President, is designed to ease some significant regulatory restraints on small business or “emerging growth companies” in their process of raising capital. Some of the rules of the bill went into effect immediately, while other parts of the bill are still in the drafting process. The Jobs Act directs the SEC to amend its rules to meet the intent of the Act. The SEC has been tasked to establish the rules and regulations pertaining to the law...and has 270 days to do so. Therefore, many part of the law may not be effective for nine months, if even then. Much depends on what the SEC deems their charter to be and how their ruling may affect the law. The difficult part of creating a final Act will be for the SEC to create final rules that will still meet the intent of Congress. The SEC and FINRA were the major opponents of the Act.
However, the SEC is taking an excellent approach to the task assigned to it. They are asking for public input and comments, including drafting the rules and allowing the public to see and comment on the comments. Comments can be submitted on the SEC website –
While the pros and cons of the H. R. 3606 are still being debated and defined and kinks being worked out, it has been signed into law and, as currently written, there does seem to be some dramatic differences in how companies may raise working capital.
On April 16, 2012, the SEC issued guidance on Title 1 of the JOBS Act which affects “Emerging Growth Companies” (“EGC”) An EGC is defined in both the Securities Act of 1934 and Exchange Act of 1934 as an issuer with “total annual gross revenues” of less than $1 billion during its most recently completed fiscal year. Title 1 of the JOBS Act provides scaled-down disclosures for EGG’s, now treating them as small business issuers. Some changes that have been made is that EGCs now only need to provide two years of audited financials instead of three for an IPO registration and an EGC will be treated as small business for the reporting of executive compensation; have no Sarbanes-Oxley Act 404(b) auditor attestation requirements and are able to test the waters with communications to QIBs and institutional accredited investors prior to an offering. There is much that a company and their legal counsel must know about and EGC to move forward. Many decisions are still being made as to what changes will be made in fundraising for an EGC.
The full text of this guidance is available on the SEC website. Title 1 of the JOBS Act provides scaled- down business disclosure for Emerging Growth Companies (EGC’s)
For smaller and startup companies, the Act could have very significant changes for raising needed capital.
The Act most dramatically affects Rules 505 and 506 under Regulation D.
The JOBS Act allows for so-called (“Crowdfunding”).
“CROWDFUNDING” – This title may be cited as the “Capital Raising Online While Deterring Fraud andUnethical Non-Disclosure Act of 2012” or the “CROWDFUND Act of 2012”.
Some possible changes are listed below, however some may not be firm yet:
The Bill ends the ban on general solicitation or advertising in regulation D, Rule 506 offerings, but only if the purchasers are accredited investors. For example, under the Act, private placements of capital per Regulation D Rule 506 could now be solicited via general advertising provided that all purchasers are accredited investors. (see “Accredited Investors” U. S. Securities and Exchange Commission.) There may no longer be a limit to the number of such investors.
And crowd funding investors do not count against the threshold number of shareholders that triggers mandatory periodic reporting to the SEC. In a nut shell, while strictly prohibited in the past, the Act allows companies to bypass former rules and raise up to $1 million from large pools of small investors by directly soliciting them, from a present data base, over the internet, Facebook, local newspaper, billboards or even junk mail.
Crowdfunding opens up equity investment in non-public start-up entities to everyone and anyone on some level providing that the
A company can raise up to $1,000,000 in a 12 month period.
Each investor can only invest the greater of $2,000 or 5% of the annual income or the net worth off the investor is less than $100,000.
Investors with more than $100,000 in annual income or net worth may invest up to 10% of their annual income or net worth not to exceed $100,000
WE ARE STIL ATTEMPTING TO GET MORE CONCRETE INFORMATION AS DECISIONS ARE MADE.
By VentureVest | April 07, 2011 at 06:59 PM EDT | No Comments
So what is up with the Bulletin Board???
As we deal daily with market makers and more particularly, small business owners, we get an earful of concerns, complaints and confusion over the way the OTCBB is dropping fully reporting companies. (See more about this at:
The relatively new OTC Markets owned OCTQB is rapidly becoming the trading market of choice for mid-line reporting companies by those in the know.
The problem is that OTC Markets also continues to own and operate the well know Pink Sheets Market. Therefore the BB, when they de-list a company, erroneously indicate it as a "Pink" and add a .pk to the symbol, giving investors the wrong impression. An OTCQB company is still fully reporting and trading on the higher market tier than Pink Sheets.
In fact, the buzz is that the OTCBB is "dead" and for many it is "good riddance"
For more about the OTC QB and the other OTC Market's, see their own white paper: