FirmKey’s partners offer uplisting support—guiding companies from Pink Sheet to OTCQB/OTCQX or Nasdaq/NYSE with SEC reporting, financial statements, and compliance.
What Accounting Is Needed To Uplist: A 101 Guide
Uplisting can take different forms depending on your company’s goals and current trading status. The two primary uplisting pathways are:
1. Moving from Pink Sheets to OTCQB or OTCQX:
This process is generally less stringent than uplisting to Nasdaq or NYSE but still requires significant improvements in financial reporting, governance, and transparency.
2. Moving from OTC Markets to Nasdaq or NYSE:
This path is far more rigorous, requiring SEC registration, PCAOB-compliant audits, robust corporate governance, and ongoing financial reporting.
FirmKey’s network of accountants, CPAs, and CFOs is experienced in supporting companies on both paths. Whether you are seeking to enhance credibility by moving from Pink Sheets to OTCQB or OTCQX or preparing for a full Nasdaq or NYSE uplisting, FirmKey connects you with the right experts to guide you through each step of the process.
Below, we’ll walk you through the specific requirements and considerations for each type of uplisting. Note that listing and regulatory requirements can change, so always consult with an experienced accountant – like those in our network – before attempting to uplist.
Uplisting From Pink Sheets To OTCQB Or OTCQX
For smaller public companies, moving from Pink Sheets to OTCQB or OTCQX can be a critical step in enhancing credibility, transparency, and investor interest. While the requirements are less stringent than those for Nasdaq or NYSE, they are still rigorous enough to build credibility in the marketplace. Remember, Pink Sheets to OTCQX uplisting requirements and OTCQB uplisting requirements can change based on new rules and regulations, so always consult with an accountant before committing to any course of action.
Requirements for OTCQB Uplisting:
Minimum Bid Price:
Must maintain a bid price of at least $0.01.
Annual Verification & Certification:
Submit an annual certification and pay a fee to OTC Markets.
Current Information Reporting:
Must report through the SEC (if applicable) or through the OTC Alternative Reporting Standard.
Financial Reporting:
Reviewed financials are generally sufficient, but audited financials improve credibility and eligibility.
Governance & Disclosure:
Basic governance requirements, such as management certification of financial statements and adherence to disclosure rules.
Requirements for OTCQX Uplisting:
Audited Financial Statements:
Must be prepared in accordance with U.S. GAAP or IFRS (for foreign private issuers).
Corporate Governance Standards:
Companies must meet stricter governance requirements than OTCQB, including maintaining audit committees and adhering to best practices for board governance.
Verified Company Information:
Required through annual disclosure filings and audits.
Minimum Market Capitalization:
Companies must meet minimum market cap requirements set by OTCQX.
D&O Insurance:
Highly recommended to protect company leadership from investor lawsuits.
Uplisting to OTCQB or OTCQX is often a crucial step for companies seeking to build credibility before pursuing a national exchange listing. FirmKey’s network provides the expertise necessary to navigate this process efficiently and effectively.
Uplisting From OTC To Nasdaq Or NYSE
When companies are ready to take the next major step and uplist to Nasdaq or NYSE, the requirements become far more demanding. Companies must adhere to stringent SEC compliance, perform PCAOB-compliant audits, and maintain robust corporate governance structures. Nasdaq uplisting requirements and NYSE uplisting requirements often change based on new regulations or exchange rules, so always work with an experienced accountant!
Financial Reporting & Audit Readiness:
Audited Financial Statements:
Companies must prepare audited financials for two to three years, adhering to U.S. GAAP or IFRS (for foreign issuers).
PCAOB Public Company Audits:
A PCAOB-compliant audit is required to meet investor and regulatory standards.
Financial Reconciliation & Cleanup:
Historical financials must be accurately reconciled and aligned with GAAP standards.
Financial Schedules & Documentation:
Detailed schedules supporting revenue, expenses, equity transactions, and all financial reports are necessary.
SEC Reporting & Compliance:
Registration Filings:
Submit Form 10, S-1, or other relevant registration forms to the SEC.
Ongoing Reporting Requirements:
Prepare and file Form 10-Q (quarterly) and Form 10-K (annual) reports.
Disclosure Controls:
Establish procedures to ensure accurate and timely reporting of material financial information.
SOX Compliance (or SOX-Lite):
Developing internal controls over financial reporting to meet regulatory requirements. These are much stricter standards vs the OTC ones.
Governance & Compliance Readiness:
Board Structure & Governance:
Ensure proper board composition, including independent directors and audit committees.
Compliance Policies:
Implement corporate governance policies such as codes of conduct, ethics policies, and whistleblower protections.
Investor Relations Preparation:
Establish investor communication practices, manage earnings calls, and address shareholder inquiries.
Governance & Compliance Readiness:
Cap Table Management:
Ensure accurate records for all equity transactions, including stock issuances, options, and warrants.
Equity Cleanup:
Resolve discrepancies in equity records and prepare ownership schedules for SEC filings.
Valuation Support:
Prepare and document valuations for equity compensation plans and shareholder transactions.
Uplisting to a major exchange like Nasdaq or NYSE is a complex process that requires thorough preparation and experienced guidance. FirmKey’s network offers expertise in all areas of accounting, compliance, governance, and financial reporting necessary for a successful uplisting. For more information on related services, visit FirmKey’s OTC Pink Sheet Accounting page and FirmKey’s SEC Reporting page.
How FirmKey’s Uplisting Accounting Experts Can Help
From PCAOB audits to outsourced bookkeeping and CFOs, FirmKey’s accounting network has the experienced finance team to get your microcap company ready for the next step. Learn more about our specialized services:
PCAOB Audits To Uplist
Undergoing a PCAOB audit is typically one of the most critical steps for companies preparing to uplist. PCAOB-compliant audits are required to enhance investor confidence, ensure transparency, and meet the stringent requirements of regulators and exchanges. FirmKey’s network of CPA firms is equipped to guide companies through every aspect of the PCAOB audit process, ensuring comprehensive readiness for uplisting. Even if it is not required, an audit can enhance a public company’s investor relations.
PCAOB-Compliant Financial Audits:
Conducting or preparing for comprehensive audits that meet PCAOB requirements, including financial statement audits, internal controls assessments, and management reviews.
Audit Coordination & Planning:
Developing a detailed audit roadmap to ensure alignment with PCAOB standards. This includes scoping the audit, preparing schedules, and coordinating with auditors.
Mock Audits & Readiness Assessments:
Performing pre-audit evaluations to identify gaps and issues before the official PCAOB audit begins.
Audit Committee Coordination:
Providing guidance on structuring and managing audit committees, ensuring compliance with governance requirements.
Documentation Preparation:
Ensuring all necessary financial statements, reconciliations, and supporting schedules are accurately prepared and well-documented.
Financial Reconciliation & Cleanup:
Reviewing and adjusting historical financials to ensure compliance with U.S. GAAP or IFRS as required.
Coordination With PCAOB-Registered Firms:
Connecting companies with PCAOB-registered firms for official audits when necessary.
Post-Audit Compliance Support:
Assisting with addressing auditor findings, implementing remediation plans, and ensuring ongoing compliance.
FirmKey’s network partners understand the complexities of preparing for a PCAOB audit and provide tailored support for companies pursuing uplisting. Whether your company is aiming for Nasdaq, NYSE, or OTCQX, our experts can guide you through the entire process to ensure readiness and compliance.
Financial Statement & Compliance Readiness For Uplisting
FirmKey’s network of experts provides comprehensive financial statement preparation to ensure readiness for uplisting to OTCQB, OTCQX, Nasdaq, or NYSE. Our services include:
Monthly Financial Statement Preparation:
GAAP-compliant P&L, balance sheet, and cash flow statements to maintain consistent readiness for PCAOB audits and SEC filings.
SEC-Compliant Chart of Accounts Setup:
Structuring your financials to align with SEC reporting standards.
Historical Financial Reconciliation:
Addressing inconsistencies, particularly post-merger integrations or complex restructuring.
Internal Controls Implementation:
Establishing SOX-light controls or preparing for a full audit environment to meet uplisting requirements.
Restatement Services:
Addressing past errors to ensure clean, audit-ready financials.
Preparing & Filing Form 10-K, Form 10-Q, & Annual Reports For Uplisting
Accurate and timely filing of Form 10-K, Form 10-Q, and Annual Reports is critical for companies seeking to uplist to Nasdaq or NYSE, and for microcap public companies looking to improve their investor relations. FirmKey’s network ensures your financial reporting is prepared and filed correctly:
Form 10-K Preparation:
Comprehensive annual reports including audited financial statements, management’s discussion & analysis (MD&A), and disclosures of material events or risks.
Form 10-Q Preparation:
Timely quarterly reports with reviewed financials, MD&A, and updates on material changes.
Annual Report Filing:
Preparation and submission of detailed annual reports required for OTCQX, Nasdaq, or NYSE compliance.
EDGAR Filing Coordination:
Ensuring your Form 10-K, 10-Q, and other SEC-required filings are accurately formatted, tagged, and submitted through EDGAR.
Disclosure Controls & Compliance:
Implementing processes to ensure the accuracy and completeness of all filings, including internal controls documentation.
OTC/Pink Sheet Reporting Support For Uplisting
Navigating OTC Market requirements can be complex, particularly when preparing to uplist. FirmKey’s network assists with:
Quarterly & Annual Disclosures Preparation:
Tailored to meet OTC Pink, OTCQB, or OTCQX standards.
Edgarization & Filing Coordination:
Ensuring timely submissions and adherence to reporting standards.
Financial Schedules & MD&A Drafting:
Creating thorough, accurate documents to enhance investor confidence.
OTCQX & OTCQB Eligibility Documentation:
Ensuring compliance with bid price requirements, financial statement standards, and corporate governance policies.
Compliance Inquiry Response Support:
Guiding you through responses to FINRA or OTC Markets compliance questions
Historical Clean-Up & Reverse Merger Integration
Preparing your financials for uplisting often requires significant cleanup and integration work. FirmKey’s network provides:
Legacy Book Cleanup:
Resolving outdated or incorrect entries to prepare for audits or SEC reporting.
Cash-To-Accrual Conversion:
Ensuring compliance with GAAP standards required for uplisting.
Multi-Entity & Legacy LLC Consolidation:
Integrating financials for streamlined, accurate reporting.
Journal Entry Reclassification & Material Misstatement Resolution:
Ensuring clean, accurate financials ready for auditor scrutiny.
Controller and Fractional CFO Services
Experienced Controller and CFO support is essential for companies preparing to uplist. FirmKey offers:
Fractional CFO Services:
Preparing board, investor, and lender presentations, including financial modeling and reporting.
Controller Oversight:
Supervising accounting staff or vendors to maintain consistent compliance and quality control.
Budgeting & Forecasting:
Creating robust financial models to support uplisting requirements.
Uplisting Preparation Support:
Guidance on transitioning from Pink Sheets to OTCQB, OTCQX, or Nasdaq.
Cap Table & Equity Guidance:
Ensuring accurate tracking of stock issuances, options, and other equity instruments.
Valuation Support:
Preparing valuations for equity compensation plans or shareholder transactions.
Due Diligence & Capital Markets Support For Uplisting
Before uplisting, companies often undergo extensive due diligence and capital markets preparation. FirmKey’s network offers:
Pre-Raise & Pre-Transaction Due Diligence:
Performing QofE Lite to identify issues before investor scrutiny.
Monthly Reporting Package Development:
Ensuring consistent, accurate, and investor-ready reporting.
Bolt-On & M&A Support:
Assisting with financial integration during add-on or merger transactions.
Investor Data Room Preparation:
Creating and organizing due diligence materials for potential investors.
Pitch Deck & Financial Model Support:
Developing compelling presentations and financial models for prospective investors.
Ongoing Bookkeeping & Accounting Infrastructure
Maintaining accurate financial records is critical for companies pursuing an uplisting. FirmKey’s network provides:
Monthly Close Execution:
Timely and accurate month-end closes to maintain compliance readiness.
AP/AR Management & Payroll Entries:
Keeping your financials accurate and compliant.
QuickBooks/Xero Optimization:
Customizing your accounting software to fit uplisting needs.
Intercompany Transaction Handling:
Managing complex structures with precision.
Full GL Management & Reconciliations:
Ensuring accurate financial records ready for audits.
Tax Prep & Compliance
Effective tax planning and compliance are essential for public companies. FirmKey’s network offers:
Federal & State Income Tax Preparation:
Ensuring compliance for C Corps and S Corps.
Form 2553 (S-Corp Election) Assistance:
Filing and maintenance to meet IRS requirements.
Quarterly Estimated Tax Calculations:
Preventing penalties with accurate forecasting.
Support With Franchise Taxes, 1099s, & Sales Tax:
Keeping your company compliant at all levels.
Entity Structure Evaluation:
Optimizing your structure for tax efficiency during uplisting.
Public Company Readiness & Uplisting Preparation
Preparing to uplist to Nasdaq, NYSE, or OTCQX requires meticulous planning and expertise. FirmKey’s network provides:
Roadmap Creation For Uplisting:
Developing a detailed timeline and readiness assessment.
Auditor Introductions:
Connecting you with PCAOB-registered firms to meet uplisting standards.
Financial History & Cap Table Preparation:
Ensuring a clean financial record and accurate equity tracking.
GAAP & Internal Controls Evaluation:
Establishing a strong framework to meet uplisting requirements.
SEC Registration Support:
Assisting with Form 10, S-1, and other relevant filings.
Audit Committee & Governance Readiness:
Preparing your board structure and policies to meet SEC and exchange standards.
Work With Experts
FirmKey’s network partners are experienced in providing accounting services for uplisting from OTC to Nasdaq or NYSE, including SEC reporting, uplisting accounting checklist creation, and financial statement preparation. Their services are available on a fractional, project-based, or outsourced basis.
Connect with an expert in the FirmKey network today to get your company ready to uplist!