EFFECTIVE INTERNAL CONTROL Definition

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EFFECTIVE INTERNAL CONTROL is reasonable assurance that operational objectives are achieved, that published financial statements are reliably prepared, and that the entity complies with applicable laws and regulations.

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PENNY STOCKS are those securities that are not listed on a national securities exchange and are priced under $5. There are exclusions for securities of issuers that have net tangible assets greater than $2 million if they have been in operation at least three years or greater than $5 million if in operation less than three years. Securities of issuers with average revenue of at least $6 million for the last three years are also not considered penny stocks. For a complete definition of a Penny Stock, see SEC Rule 3a51-1. OTCBB securities are considered penny stocks unless they qualify for one of the exclusions.

AVERAGE LIFE, in securities, is the weighted average retirement date of a bond issue or preferred stock; the average amount of time each dollar of principal amount will be outstanding.

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