Company: KWIK
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001683168-25-002055
Chunk: 356

Company: KwikClick, Inc.
Filing Date: 2025-03-31
Form: 10-K
Item: Item 2
Chunk 356
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400 South Suite 200, Salt Lake City, Utah 84111 with a telephone of (801)
571-8844.

 24 

Penny Stock Regulations

The Securities and Exchange Commission has adopted
regulations which generally define “penny stock” to be an equity security that has a market price of less than $5.00 per share.
Our Common Stock is currently within the definition of a penny stock and will be subject to rules that impose additional sales practice
requirements on broker-dealers who sell such securities to persons other than established customers and accredited investors (generally
those with assets in excess of $1,000,000, or annual incomes exceeding $200,000 individually, or $300,000, together with their spouse).

For transactions covered by these rules, the broker-dealer
must make a special suitability determination for the purchase of such securities and have received the purchaser’s prior written
consent to the transaction. Additionally, for any transaction, other than exempt transactions, involving a penny stock, the rules require
the delivery, prior to the transaction, of a risk disclosure document mandated by the SEC relating to the penny stock market. The broker-dealer
also must disclose the commissions payable to both the broker-dealer and the registered representative, current quotations for the securities
and, if the broker-dealer is the sole market-maker, the broker-dealer must disclose this fact and the broker-dealer’s presumed control
over the market. Finally, monthly statements must be sent disclosing recent price information for the penny stock held in the account
and information on the limited market in penny stocks. Consequently, the “penny stock” rules may restrict the ability of broker-dealers
to sell our Common Stock and may affect the ability of investors to sell their Common Stock in the secondary market.

In addition to the “penny stock” rules
promulgated by the Securities and Exchange Commission, the Financial Industry Regulatory Authority (“FINRA”) has adopted rules
that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment
is suitable for that customer. Prior to recommending speculative low-priced securities to their non-institutional customers, broker-dealers
must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and
other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low-priced securities
will not be suitable for at least some customers. The FINRA requirements make