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.
FINANCIAL TREND ANALYSIS is the process of analyzing financial statements of a company for any continuing relationship. Generally, an analysis is made to find out what direction a concern is going, how rapidly, and whether there are enough resources to complete proposed projects.
CONVERTIBLE DEBT is a debt instrument which can be exercised into the security of the debtor in accordance with the conditions set forth in the debt instrument.
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