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Microcap & Penny Stocks : American MultiPlexer (AMUT) -- Cheap Now, But for How Long
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To: Harmony who wrote (24)5/22/1998 12:37:00 PM
From: Crossy  Read Replies (1) of 64
 
Harmony,
ok there are 2 kinds of stocks trading on the OTC. First are first-stage upstarts: they don't have to be "reporting" companies. This will change during the year but as of now it's still not a requirement for OTC/BB stocks.

OTOH on all major exchanges You have "reporting" as a requirement. The term refers to the fact that the company has to file with the SEC all material events, 10Q, 10K and so forth. That's the difference.

AMUT as an upstart isn't yet a reporting entity. Another stock I have in telcos - where I started a thread (OTC: HICO - Hitcom) just recently became a reporting company. The process is as follows:

You conduct an audit thru a CPA-firm (like Arthur Andersen LLP p.e.). Then Your CFO files with the SEC the necessary forms in order to be eligible for voluntary reporting status (OTC = voluntary reporting). Once You do that You are bound by actually the same rules (reg. SEC disclosure) as the big boys. This form is called 10-SB.

This is a major effort. You have to have in-house expertise with regard to corporate finance (mostly the CFO). AMUT has that. I checked their website. Mr. Tan says that the audit is in progress. Remember 2 years audit have to be conducted.

Major funds only invest in reporting status companies. Lends credibility and accountability. They can't produce dilution easy when they are a reporting entity. More security for shareholders..

CROSSY
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