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The OTC Equity Markets provides a transparent and secure platform / market for the sale of unlisted equity securities for companies preparing for an IPO on the NASDAQ or New York Stock Exchange. 

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Who Can Invest in the Pre-IPO Offerings:

  • In the States of California & New York - "Qualified Investors"

    • a natural person who, either individually or jointly with his/or her spouse, has a minimum net worth of $500,000, or a minimum net worth of $250,000, and, during the last taxable year had, and during the current year expects to have, a minimum gross income of $100,000 (net worth shall be determined exclusive of home, home furnishings and automobiles);

    • a self-employed individual retirement plan or an individual retirement account (IRA), if the investment decisions are made solely by persons who are qualified purchasers.

    • any organization described in section 501(c)(3)of the Internal Revenue Code, a corporation, Massachusetts or similar business trust, or a partnership, not formed for a specific purpose of acquiring the securities offered, with total assets in excess of $5,000,000; or

    • any entity in which all the equity owners are “Qualified Investors” as defined above.

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  • All 50 States & Canada - "Accredited Investors":

    • An individual net worth, or joint net worth with the person’s spouse, that exceeds $1,000,000. USD at the time of the purchase, excluding the value of the primary residence of such person; or

    • Earned income exceeding $200,000 USD in each of the two most recent years, or joint income with a spouse exceeding $300,000 USD for those years and a reasonable expectation of the same income level in the current year.

    • If not a natural person, one of the following:

    • An employee benefit plan within the meaning of Title I of the Employee Retirement Income Security Act of 1974 (“ERISA”) (a) if the investment decision is made by a plan fiduciary, as defined in section 3(21) thereof, which is (i) a bank; (ii) a savings and loan association, (iii) an insurance company or (iv) a registered investment advisor, or (b) if the employee benefit plan has total assets in excess of $5 Million USD, or (c) if the employee benefit plan is a self-directed plan, with investment decisions made solely by persons that are accredited investors;

    • A trust, with total assets in excess of $5 Million USD, not formed for the specific purpose of acquiring the securities of the company being offered, whose purchase is directed by a sophisticated person as described in Rule 506(b)(2)(ii) of Regulation D of the Securities Act;

    • A bank as defined in section 3(a)(2) of the Securities Act, whether acting in its individual or fiduciary capacity, or a savings and loan association or other institution as defined in section 3(a)(5)(A) of the Securities Act, whether acting in its individual or fiduciary capacity;

    • A broker or dealer registered pursuant to section 15 of the Securities Exchange Act of 1934;

    • An insurance company as defined in section 2(a)(13) of the Securities Act;

    • An investment company registered under the Investment Company Act of 1940 (the “Investment Company Act”) or registered pursuant to the laws of a state; any investment adviser relying on the exemption from registering with the SEC under section 203(l) or (m) of the Investment Advisers Act of 1940 (the “Advisers Act”);

    • A business development company as defined in section 2(a)(48) of the Investment Company Act;

    • A Small Business Investment Company licensed by the U.S. Small Business Administration under section 301(c) or (d) of the Small Business Investment Act of 1958;

    • Any rural Business Investment Company as defined in section 384A of the Consolidated Farm and Rural Development Act;

    • A private business development company as defined in section 202(a)(22) of the Advisers Act;

    • A corporation, a Massachusetts or similar business trust, partnership, limited liability company or an organization described in section 501(c)(3) of the Internal Revenue Code of 1986, as amended (the “Code”), not formed for the specific purpose of acquiring the securities of the issuer being offered, with total assets in excess of $5 Million USD;

    • A plan established or maintained by a state or its political subdivisions or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees, if such plan has total asses in excess of $5 Million USD;

    • Any entity not formed for the specific purposes of acquiring the securities offered, owning investments in excess of $5 Million USD;

    • Any natural person holding in good standing one or more professional certifications or designations or credentials from an accredited educational institution that the SEC has designated as qualifying an individual for accredited investor status;

    • Any natural person who is a “knowledgeable employee,” as defined in rule 3c-5(a)(4) under the Investment Company Act, of the issuer of the securities being offered or sold where the issuer would be an investment company, as defined in section 3 of such act, but for the exclusion provided by either section 3(c)(1) or section 3(c)(7) of such act;

    • Any “family office,” as defined in rule 202(a)(11)(G)-1 under the Advisers Act (i) with assets under management of $5 Million USD, (ii) not formed for the specific purpose of acquiring the securities offered, and (iii) whose prospective investment is directed by a person who has such knowledge and experience in financial and business matters that such family office is capable of evaluating the merits and risks of the prospective investment;

    • Any “family client,” as defined in rule 202(a)(11)(G)-1 under the Advisers Act, of a family office that qualifies as an accredited investor pursuant to subsection (xvi) above, whose prospective investment in the issuer is directed by such family office;

    • Any director or executive officer of the company; or

    • An entity in which all the equity owners are accredited investors

    • NOTE: For purposes of determining whether a potential investor is an “Accredited Purchaser”, annual income and net worth should be calculated as provided in the “Accredited Investor” definition under Rule 501 of Regulation D. In particular, net worth in all cases should be calculated excluding the value of an investor’s home, home furnishings and automobiles.

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  • International Investors in the following Countries via Regulation S:​

    • Austria

    • Australia

    • Bahrain

    • Belgium

    • Bermuda

    • Cayman Island

    • China

    • Denmark

    • Finland

    • France

    • Germany

    • Hong Kong

    • Israel

    • Italy

    • Japan

    • Korea

    • Luxembourg

    • Netherlands

    • Poland

    • Singapore

    • Spain

    • Saudi Arabia

    • Sweden

    • Switzerland

    • Taiwan​​

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  • Investor Relations Distribution (as of July 1, 2024):

    • 400,000 - Registered Investment Advisors (40K Firms)

    • 250,000 - Retail Investors (primarily CA & NY)

    • 122,250 - Investment Managers / Asset Managers / Fund Managers

    • 58,100 - Plan Sponsors

    • 33,000 - Penson Fund Managers

    • 31,750 - Family Office Executives 

    • 25,000 - Bank / Trust (key executives)

    • 16,750 - Insurance Company Asset Managers

    • 14,000 - Venture Capital Firm Members

    • 100+ - NYSE / NASDAQ / OTC - Market Makers & Broker Dealers

 

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