About Paulson Investment Company

Founded in 1970 in Portland, Oregon, Paulson Investment Company, LLC ("Paulson") has earned national distinction as a premier boutique investment bank. Focusing on the small to mid-cap markets, we have participated in more than 175 public and private offerings while raising over $1.2 billion in the financings. Though historically we offered a full range of financial products and services to our clients, in an effort to better serve those clients, Paulson recently reorganized and have concentrated our efforts on limited access private equity offerings. We assess all prospective opportunities utilizing our management team's combined 100+ years of experience. Paulson has chosen RBC Correspondent Services, a division of RBC Capital Markets, LLC, as our clearing firm. RBC has worked with independent broker-dealers since 1979, offering comprehensive clearing, custody and execution services. We have found that RBC Capital Markets' range of services, dedicated support and extensive experience allow us to provide the best experience possible to our clients. When considering Paulson, please evaluate us by our depth of experience, our diligence, and unwavering commitment to the future.


Financial Industry Regulatory Authority (FINRA), National Investment Bankers Association (NIBA), Securities Investor Protection Corporation (SIPC), National Traders Association (NTA).

Pursuant to Rule 2267 of the FINRA Rules, Paulson would like to direct you to an important brochure offered by FINRA regarding investing and its associated risks. You may request the FINRA Investor Brochure by calling the FINRA hotline at (800) 289-9999 or visiting their website at www.finra.org. Information regarding the process of verifying registration and disclosure information related to registered representatives and broker/dealer entities is also available through these sources.

Compliance Department

Paulson's Compliance department is staffed by professionals experienced in all aspects of the securities industry. Their well-established policies and procedures assure both broker and investor that all activities conducted by the firm conform to established rules and regulations, and meet the highest standards.

Firm's Relationship with RBC CS

Our firm has a contractual agreement with RBC Correspondent Services ("RBC CS") to serve as our clearing firm. This fully-disclosed agreement states the responsibilities of each party. Prior to the agreement becoming effective, RBC CS is responsible for making all disclosures to our firm's designated examining authority as required by NYSE Rule 382. Each client of our firm is notified of the relationship via a disclosure letter. The disclosure letter details the responsibilities that our firm (the introducing broker-dealer) and RBC CS (the clearing firm) have to the client. Although client assets are held by RBC Capital Markets, LLC, neither RBC Capital Markets, LLC, nor RBC CS has responsibility for the financial condition or performance of our firm or our Financial Advisors.

SIPC & Additional Coverage for Client Accounts

Our clearing firm, RBC Correspondent Services, is a division of RBC Capital Markets, LLC. RBC Capital Markets, LLC, is a member of the Securities Investor Protection Corporation (SIPC). SIPC is a nonprofit membership corporation funded by its member security broker-dealers. SIPC protects the securities clients of its members in the event of the failure of a member firm. Member of SIPC, which protects securities customers up to $500,000 (including $250,000 for claims for cash). Explanatory brochure available upon request or at www.sipc.org.

RBC Capital Markets, LLC, has purchased an additional policy that offers coverage in excess of the protection provided by SIPC. This coverage covers additional securities and cash protection up to $99.5 million per client, of which $900,000 may be in cash. A $400 million aggregate limit applies to this additional coverage.

RBC Capital Markets, LLC, also offers protection if a client's securities are missing because of theft by an outsider, computer fraud or theft by an employee for personal gain. In such cases, the firm's CAN $310 million Financial Institution Bond coverage would cover the client's losses, subject to that policy's terms, conditions and limits.

Note: Neither SIPC protection, nor protection in excess of that offered by SIPC, covers a decline in the value of a client's assets due to market loss.

Legal Notices - DISCLAIMER

The contents of this site are for informational purposes only and are not to be construed as an offer to sell or a solicitation to buy any securities. Such offers can only be made where lawful under applicable law. The contents of this site have been compiled from sources which we believe to be reliable, but are not guaranteed. Paulson does not warrant, guarantee or make any representations, or assume any liability with regard to financial results based on the use of information in the site.

Paulson may make a market in certain securities in this site. These markets may, however, be discontinued without notice. Individuals associated with Paulson, its officers and/or directors may hold shares in certain securities mentioned on this site and may increase or decrease such holdings without notice. Persons mentioned in this site may only transact business in states in which they have been properly registered or are exempt from registration. U.S. investors should be advised that not all investments discussed in this site might be available in all states. In no event shall party for any damages of any kind arising out of or relating to the use of this site or its contents, including, but not limited to, any lost profits, lost opportunity, special, incidental, indirect, consequential or punitive damages, even if Paulson has been advised of the possibility of such damages.

Paulson is not liable for any harm caused by the transmission, through accessing the services or information in this site, of a computer virus, or other computer code or programming device that might be used to access, delete, damage, disable, disrupt or otherwise impede in any manner, the operation of the site or of any user's software, hardware, data or property.

The use of this website is at your own risk.

Account Management

Your account is a self-directed account and, as such, you are responsible for making sure your orders are correct, your account has enough funds, and your trades do not violate securities regulations.

Know and understand your own risk tolerance and the risks involved in each of your investments.

You are responsible for all market risk, liabilities, and account deficiencies.

The SEC and FINRA have additional information available at the websites listed below:


The security of your information is important to us at Paulson. We work hard to safeguard your accounts. We cannot do so alone. Only you can protect your personal computer from identity theft. Below are key steps you can take to cut your online risks.

Safeguard Passwords

Make your passwords as obscure or abstract as possible. Avoid obvious numbers and words, such as a maiden name, birth date, or an anniversary, which would be easy to guess. Never give your passwords to anyone, including family or friends.

Protect Yourself from Phishing Scams

Phishing is the mass emailing of messages that falsely claim to come from a legitimate business. These messages often provide links to phony websites, where you are asked to supply personal information such as passwords, credit card numbers, social security numbers or bank account numbers. Never enter personal information unless you are sure the website is legitimate. You should also be sure the site is encrypted. Look for the letter "s" at the end of "https" at the beginning of the URL address. An example of such a URL address is "https://secure.penntrade.com." This ensures that the site is running in secure mode. Finally, know that PennTrade will never email you requesting that you confirm your personal information or password.

How to Spot Phishing Email

Phishing messages evolve constantly, and they are often difficult to recognize. Sometimes they incorporate realistic company logos and graphics, provide links to the real company's privacy policies, and even include legal disclaimer language at the bottom. To help decide if an email is part of a phishing scam, ask yourself the following: Do I have a relationship with this company? Would I expect this company to contact me this way? Would I expect this company to make this request? If you are uncertain, contact the company by phone. Regarding any email message from PennTrade, you can always contact us at 1-800-953-2860 for verification.

Don't Email Sensitive Data

Most email is not secure or encrypted and should not be trusted to send personal or financial information.

How to Report a Phishing Scam

If you suspect you have received a fraudulent email from PennTrade or Paulson, please call 1-800-953-2860 immediately. Additional information about phishing can be found at www.antiphishing.org or http://www.consumer.gov/section/scams-and-identity-theft.

Don't Be a Victim of Session Stealing

Online fraud can happen without ever being noticed by the victim. Cross-Site Request Forgery occurs when you are logged into a website and move to another website without first explicitly logging out of the previous site. It is recommended that you take the following action to help protect your account: Always remember to terminate your PennTrade session by clicking Log Out. If you fail to log out or close your browser, your current session may remain active and your account might be targeted for theft. If you want to go to another website while you are logged in, you should open a different type of browser-not just a new window-to navigate to that site.

Install Up-to-Date Anti-Virus Software

Up-to-date anti-virus software protects your computer against current virus threats. Most commercially available virus protection programs offer automatic weekly and emergency downloads of the latest updates. Scan all your files for viruses at least once per month; more often is better. For the best protection, set up your anti-virus software to scan every file you open.

Install Up-to-Date Anti-Spyware Software

Spyware runs on your computer and can gather private information such as passwords and credit card numbers, deliver unwanted advertising, and monitor your browsing patterns. Spyware is typically hidden in an otherwise harmless program, often in freeware or shareware you download. Before downloading any free software, make sure you know and trust the provider. Some internet service providers ("ISPs" offer assistance in finding and removing spyware. The maker of your anti-virus software may also offer anti-spyware protection. Make sure you are protected against this growing threat.

Have a Personal Firewall

Firewalls serve as protective barriers between your computer and the Internet. They prevent unauthorized access to your computer when you're online. Be sure to set up a firewall around your computer. Some ISPs offer firewall software to their customers, and you can buy firewall software or hardware at many computer stores.

Get Security Updates Regularly

Most major software companies regularly release updates or patches to their operating systems to repair security problems. Some websites, such as Microsoft and Apple, offer the ability to scan your computer for missing updates. Check your computer for missing updates at least monthly. For the best protection, set up your computer to receive updates automatically whenever possible.

Protect Your Wireless Home Network

The default configuration of most wireless ho e networks is not secure. Contact your wireless software vendor for specific information about enabling encryption and strengthening the overall security of your wireless home network.

Be Careful with Wireless Hotspots

The safest action is to avoid using public wireless hotspots. However, if you need to use one, taking a few simple precautions can help protect your computer:

Safeguard Your Personal Information

A few simple steps can boost protection. For example, shred sensitive documents instead of simply throwing them away. Also, be absolutely sure you know who you are dealing with before giving any personal or financial information. OnGuard Online, a site created by the U.S. Federal Trade Commission, offers additional information on preventing identity theft.

Avoid Using Your Social Security Number

Ask companies and government agencies you do business with if you can create an alternate customer identifier.

Carefully Review Your Financial Statements

Promptly read any account or credit card statements or correspondence when they arrive. Make sure there are no changes or transactions you did not initiate. If a bill arrives unusually late or not at all, call the company.

Also, be sure to monitor your credit for inaccuracies. As of September 1, 2005, all US residents are entitled to receive one free credit report every 12 months from each of the three nationwide consumer credit reporting agencies: Equifax, Experian and TransUnion. You can request your report at www.annualcreditreport.com.

Learn the Warning Signs of Identity Theft

Identity theft warning signs include:

Act Quickly If You Suspect Identity Theft

If you suspect that your personal information has been used wrongfully, immediately:


Online Customer Agreement (Updated June 1, 2016)


A. This website is operated by Paulson Investment Company, LLC, a FINRA broker-dealer.

B. You use this site with the understanding that any information provided here does not constitute legal, accounting, investment or other professional advice and is not an offer or solicitation of an offer to sell or buy specific securities. This website has been compiled in good faith by Paulson and information herein is obtained from sources considered to be reliable, but is not guaranteed to be complete or accurate, and no representation or guarantee is made as to the completeness or accuracy of the information the site contains. Paulson and any third party information provider(s) accept no responsibility or liability for any damages incurred by visitors to the site as a result of incorrect, delayed or omitted information arising from any cause whatsoever, including error or negligence, except their own willful tortious misconduct or gross negligence. Paulson reserves the right to add, modify or delete any information at any time.

C. Any links in this site that allow you to leave the site are provided as a service to you and the linked sites are not under the control of Paulson, except in the single instance of the Paulson website. Other than that single site, Paulson has no control over and is not responsible for the contents of any linked site or any links contained in a linked site and the inclusion of any link on this site does not imply endorsement Paulson of the linked-to site.


E. With respect to trading at Paulson, we advise you and you acknowledge your understanding and agreement that response times may vary significantly due to a variety of factors that include trading volumes, market conditions, system performance and other factors and that delays may therefore sometimes be encountered.

F. By your use of this site, you agree to hold harmless Paulson and its affiliates and officers, directors, employees and agents from any and all claims for losses of any kind arising from your use in any way, including by way of illustration and not limitation lost profits, lost opportunities, indirect, special, incidental, consequential, punitive, or other damages arising from any cause whatsoever, except when arising from their own willful tortious misconduct or gross negligence.

G. DISCLOSURE STATEMENT REGARDING ORDER FLOW: The Securities and Exchange Commission ("SEC") requires all registered broker-dealers to disclose their policies regarding their receipt of "payment for order flow." The commission defines "payment for order flow" as "any monetary payments, services, property, or other benefits that result in remuneration, compensation, or consideration to a broker or dealer from any broker or dealer, national securities exchange, registered securities association or exchange member in return for the routing of customer orders by such broker or dealer to any broker or dealer, national securities exchange, registered securities association, or exchange member for execution, including but not limited to research, clearance, custody, products or services, reciprocal agreements for the provision of order flow adjustment of a broker or dealer's unfavorable trading errors, effort to participate as underwriter in public offerings; stock loans or shared interest accrued thereon; discounts, rebates, or any other reductions of or credits against any fee to, or expense or other financial obligation of, the broker or dealer routing a customer order that exceeds that fee, expense or other financial obligation. By letter dated June 22, 2001, the SEC notified Richard Romano, Chair of the Small Firms Advisory Board, of the SEC's decision to grant an exemption from Rule 605 (then known as Rule 11 Ac1-5) for small market centers that do not focus their business on the most actively traded securities. This exemption exempts any market center that reported fewer than 200 transactions per trading day on average over the preceding six month period in securities that are covered by the Rule (that is, national market system securities that do not qualify for the inactively traded security exemption), but only if more than 90% of such transactions were in securities that are not included in the Nasdaq-100 Index or the S&P 500 Composite Stock Price Index. Paulson, effects sufficiently few transactions to fit within this exemption. Accordingly, the firm is not required to report pursuant to Rule 605.

H. SEC RULE 606 DISCLOSURE: This Rule requires all broker-dealers that route orders in equity and option securities to make available quarterly reports that present a general overview of their routing practices. The reports must identify the significant venues to which customer orders were routed for execution during the applicable quarter and disclose the material aspects of the broker-dealer's relationship with such venues. Paulson's reports under this rule may be viewed at:


A written copy will be furnished on request without charge to customers of disclosure of the identity of the venue to which the customer's orders were routed for execution in the six months prior to the request, whether the orders were directed orders or non-directed orders, and the time of the transactions, if any, that resulted from such orders.

Paulson Privacy Policy

Paulson has been protecting customer privacy for many years. Paulson's Privacy Policy, may be viewed at:


Anti-Money Laundering Requirements


The USA PATRIOT Act, signed by President Bush, is designed to detect, deter, and punish terrorists in the United States and abroad. The Act imposes new anti-money laundering requirements on brokerage firms and financial institutions. By April 24, 2002, all brokerage firms were required to have new, comprehensive anti-money laundering programs. To help you understand these efforts, we want to provide you with some information about money laundering and our steps to implement the USA PATRIOT Act.

What is money laundering?

Money laundering is the process of disguising illegally obtained money so that the funds appear to come from legitimate sources or activities. Money laundering occurs in connection with a wide variety of crimes, including illegal arms sales, drug trafficking, robbery, fraud, racketeering, and terrorism.

How big is the problem and why is it important?

The use of the U.S. financial system by criminals to facilitate terrorism or other crimes could well taint our financial markets. According to the U.S. State Department, one recent estimate puts the amount of worldwide money laundering activity at $1 trillion a year.

What are we required to do to eliminate money laundering?

Under new rules required by the USA PATRIOT Act, our anti-money laundering program must designate a special compliance officer, set up employee training, conduct independent audits, and establish policies and procedures to detect and report suspicious transactions and ensure compliance with the new laws. As part of our required program, we may ask you to provide various identification documents or other information. Until you provide the information or documents we need, we may not be able to open an account or effect any transactions for you. We thank you for your patience and hope that you will support us in our efforts to deny terrorist groups access to America's financial system.

Paulson Business Continuity Plan

As a FINRA broker-dealer, Paulson maintains a business continuity plan ("BCP") designed to help us keep operating during emergencies. Paulson's BCP can be found at:


If you chose to receive your brokerage statements, confirms and other documents electronically, the following will apply.

Electronic Notification Agreement:

To receive electronic notification that documents are available for you to view online in an electronic format rather than receiving paper documents through the U.S. Mail, you must confirm your consent by reviewing and agreeing to the terms and conditions of this Agreement and by indicating your selection(s) on the Web site page provided to you.

Please be sure to read this Agreement in its entirety as it contains important information that is required by law to be provided to you. Currently, certain documents are not included in the electronic notification program and will continue to be delivered to you via U.S. Mail. However, in the future some or all of these documents may be made available for you to view online in accordance with this Agreement.

Notification of Availability of Documents:

Paulson or RBC Correspondent Services or their agents will notify you by e-mail or other electronic means when an account statement, possibly with related inserts, trade confirmation, or other documentation is available for online viewing. Related inserts may include, but are not limited to, marketing documentation and documentation required to be provided to you pursuant to regulatory rules, such as privacy policies and other important information regarding your account.

Accessing Documents:

The electronic notification you receive will include a link or Internet address (URL) where the document(s) can be accessed, viewed and printed.

Changing Selections or Revoking Consent:

You generally may revoke your consent to receive electronic notification or change your document delivery preferences at any time subject to certain conditions and limitations that may impact or delay your ability to do so. Unless revoked by you, your consent to receive electronic notification is effective until further notice by your Broker/Dealer, RBC, or their agents. Your Broker/Dealer, RBC and/or their agents reserve the right to revert any documents you have chosen to view online back to paper delivery at any time. You may revoke your consent, change or verify your preferences and update your email address of record by visiting the Web site page provided to you. Please note that if you revoke your election(s), this will result in such document(s) being mailed to you in paper form through the U.S. Mail and you will no longer receive electronic notification when new documents are available to be viewed online.

Accounts in a Household:

If you, as part of a household, have consented to electronic notification, such documents will be available online only and will no longer be included within the envelope you currently receive through U.S. Mail containing any other householded documents. However, the account values for all household accounts will continue to be provided on the Consolidated Summary of Accounts statement which will continue to be provided via U.S. Mail and online. In the event that all accounts in the household choose electronic notification, then no documents will be provided via U.S. Mail, including the Consolidated Summary of Accounts statement, which will be available online.

Combined Statements:

If you have elected to receive a combined statement, including both your brokerage account information and your bank account information (whether through your Broker/Dealer, investment representative or bank representative), by consenting to electronic notification, herein, you are consenting to view your combined statement through the Internet at the Internet address (URL) provided by your Broker/Dealer. You will no longer receive paper copies of your bank or brokerage account statement by U.S. mail.

E-mail Address of Record for Accounts with Joint and/or Multiple Owners:

You are able to provide an e-mail address for each account owner at the time of new account set up or during maintenance on the account. Only one account owner's authorization is required to enroll in or initiate electronic notification. For purposes of electronic notification, you will need to designate one of the existing e-mail addresses associated with a joint or multiple owner account as the "e-mail address of record." The e-mail address of record will be the only e-mail address that electronic notification will be sent to when documents are available for viewing.

The e-mail address of record must be the e-mail address of an account owner who has authority to make transactions and act on behalf of the account. For example, you may not designate the e-mail address of a minor, incompetent or deceased individual as the e-mail address of record.

Interested Parties:

If you have designated one or more interested parties to receive copies of your account statements, trade confirmations or other documents, they will continue to receive copies of such documents via U.S. Mail.

Information on Systems Requirements:

To participate in the electronic notification program you must have a valid e-mail address on record and Internet access via a browser that is Javascript.-enabled. Your internet service provider may apply a charge. Documents are currently provided in Portable Document Format (PDF). In order to access PDF documents, you must have Adobe "Acrobat Reader" software. This software is available for download at no cost at www.adobe.com. Downloading time may be slow. In the event that any documents exceed the maximum data capacity for online viewing and are unable to be provided to you in an electronic format, your Broker/Dealer, RBC and/or their agents will revert such documents you have chosen to view online back to paper delivery. You will continue to be enrolled in the electronic notification program and, when possible, future documents will continue to be provided to you electronically. In the event, however, that it is not feasible or possible to make future documents available for you to view online, your Broker/Dealer, RBC and/or their agents reserve the right to unenroll you from the electronic notification program at any time and revert any documents you have chosen to view online back to paper delivery.

If you do not have the ability to access, print and/or retain PDF documents, do not consent to this Electronic Notification Agreement. By electing to participate in the electronic notification program, you confirm that your personal computer is equipped with the Adobe Acrobat Reader and that you have the ability to access, print and/or retain PDF documents.

If you have difficulty viewing documents electronically, you will need to contact your Broker/Dealer and/or their agents to have them address any such issues. In addition, if at any time after consenting to the electronic notification program you wish to receive a paper copy of a document made available to you for online viewing, you will need to request such paper copy from your Broker/Dealer and/or their agents, who may charge you a fee for such copy. If you have provided a correct e-mail address of record and you experience difficulty in receiving the e-mail notification electronically, it may be necessary for you to contact your internet service provider for further assistance.

Acceptance and Consent:

To consent to the terms of electronic notification program as described above, please read the following statement carefully before acceptance: I have read, understand and agree to be bound by the terms and conditions described above. By clicking the "I Agree" button below I consent to receive electronic documents according to the process described above. I understand that I may incur costs, including but not limited to online time and other charges from my internet service provider, in accessing and/or viewing such document(s).

I understand and agree that: (i) certain documents will continue to be delivered to me via U.S. Mail that are not included in the electronic notification program and that in the future some or all of these documents may be made available for me to view online in accordance with this Agreement; (ii) my consent to view documents electronically does not automatically expire and is not limited as to duration; (iii) my Broker/Dealer, RBC and/or their agents may revoke my participation in the electronic notification program at any time at their discretion; (iv) neither my Broker/Dealer, RBC, nor their agents will be liable for any loss, liability, cost, expense, or claim for acting upon this authorization or arising from my use of the product or services provided pursuant to this Agreement; and (v) inserts that may be provided along with my account statements contain important information or disclosures concerning my account and I agree to review such inserts in a timely manner.


Canadian issuers may merge, acquire, restructure and take other actions that may require notice to shareholders. They may also sometimes accelerate the expiry date of warrants, another action that generally requires notice. Regulatory notifications of such actions are not conveyed to this firm in real time, but instead are disseminated through an international intermediary system that may delay receipt. We do not control this system, so we cannot guarantee how much, if any, advance notice this firm can provide in various situations involving Canadian regulatory notices.

While we endeavor to advise customers promptly of regulatory notices we receive from Canada, we are not otherwise responsible for searching out developments about customers' individual holdings. It is important for customers themselves to monitor news affecting their Canadian stocks and warrants.

There are a number of sources where such news may be available. For instance, issuers must file important information with Canadian securities regulators and these filings are online at www.sedar.com. Companies also publish news releases about these actions, and business publishers often distribute them to sites like Yahoo! Finance and others. Issuing companies normally post such news on their own websites as well. The Toronto Stock Exchange and the TSX Venture Exchange also post information (www.TMX.com) and there are a number of other sites and services that carry news of Canadian securities.

Trade orders for Canadian-traded securities generally are routed for execution directly to the trading desks of Canadian financial institutions. This includes those stocks that may also be quoted or shown in the U.S. on the OTCBB or OTC Markets (formerly Pink Sheets), since market liquidity and prices are generally more favorable for the customer in Canada. However, where Canadian-traded stocks are also listed on the NYSE, AMEX or NASDAQ prices are generally more favorable for the customer in the U.S. and thus such orders will usually be executed in this country. The Canadian financial institutions charge an agency fee for various services in connection with executing orders, settling trades and converting currency; this is generally 1.125% of the value of the trade, or US$ 0.02 per share, whichever is less, although it may vary under some circumstances, and this fee is in addition to commissions charged by Paulson. Agency fees are automatically included in the exchange rate used to convert from U.S. dollars to Canadian dollars and/or from Canadian dollars to U.S. dollars.

Important Information on Penny Stocks and Risk Disclosure

When firms or brokers make recommendations to customers on certain low priced stocks called "penny" stocks, they're required to give the customer a statement from the SEC.

PennTrade is an online brokerage that makes no recommendations on any stock trades of any sort.

In using PennTrade, you choose to carry out your own due diligence and to make your own investment decisions.

Because we don't make stock recommendations, we may not be required to furnish the SEC statement if you should decide to trade a penny stock.

However, we believe it's important for you to know the risks involved.

So although it may not be required, we've decided to publish this information here anyway.

Penny Stock Discloscure

Penny stocks can be very risky. This disclosure contains additional information regarding the characteristics and risks associated with trading small-cap or penny stocks.

Penny stocks are low-priced shares of small companies. They generally trade on the OTC Bulletin Board or Pink Sheets. They are historically more volatile and less liquid than other equities. For these and other reasons, penny stocks are considered speculative investments and customers who trade them should be prepared for the possibility that they may lose their entire investment. Before trading a penny stock, you should thoroughly review the company issuing the penny stock. You should also be aware of the overall risks associated with trading in penny stocks.

You Can Lose All or Much of Your Investment Trading Penny Stocks:

All investments involve risk but penny stocks are among the most risky and are generally not appropriate for investors with low risk tolerance. Many penny stock companies are new and do not have a proven track record. Some penny stock companies have no assets, operations or revenues. Others have products and services that are still in development or have yet to be tested in the market. Penny stock companies therefore have a greater risk of failure and those who invest in penny stocks have a greater risk that they may lose some or all of their investment.

Lack of Publicly Available Information:

Most large, publicly-traded companies file periodic reports with the SEC that provide information relating to the company's assets, liabilities and performance over time. In addition, these companies provide their financial information and operational results online. In contrast, information about penny stock companies can be extremely difficult to find, making them more likely to be the subject of an investment fraud scheme and making it less likely that quoted prices in the market will be based on full and complete information about the company.

No Minimum Listing Standards:

Companies that offer shares of their stock on exchanges can be subject to stringent listing standards that require the company to have a minimum amount of net assets and shareholders. Most penny stock companies do not list their shares on exchanges and are not subject to these minimum standards.

Risk of Lower Liquidity:

Liquidity refers to the ability of market participants to buy and sell securities. Generally, the more demand there is for a particular security, the greater the liquidity for that security. Greater liquidity makes it easier for investors to buy or sell securities so investors are more likely to receive a competitive price for securities purchased or sold if the security is more liquid. Penny stocks are often traded infrequently and have lower liquidity. You may therefore have difficulty selling penny stocks once you own them. Moreover, because it may be difficult to find quotations for certain penny stocks, they may be difficult, or even impossible, to accurately price.

Risk of Higher Volatility:

Volatility refers to changes in price that securities undergo when they are being traded. Generally, the higher the volatility of a security, the greater its price swings. Due to their lower liquidity, penny stocks are subject to greater volatility and price swings. A customer order to purchase or sell a penny stock may not execute or may execute at a substantially different price than the prices quoted in the market at the time the order was placed. In addition, the market price of any penny stock shares you obtain can vary significantly over time.

Penny Stocks Can Be Subject to Scams:

Penny stocks are frequent vehicles for scams and/or market manipulation due to their generally lower prices and less stringent listing requirements. You should be wary of advertisements, unsolicited e-mails, newsletters, blogs or other promotional reports that emphasize the potential for large profits in penny stocks generally or certain penny stocks. These promotional materials are often used to manipulate or "pump up" the price of penny stocks before selling a large volume of shares. Customers are therefore strongly encouraged to do their own due diligence with respect to any penny stock company they invest in and to not rely on any outside promotional reports or newsletters.

Further information concerning penny stocks and the risks involved in trading them is available on the SEC's website at http://www.sec.gov/investor/pubs/microcapstock.htm.