when is it not a penny stock 
multiple events can trigger the transition of a penny stock to a regular stock the company can issue new securities in an offering that is registered with the sec or it can register an existing class of securities with the regulatory body both types of transactions automatically require the firm to adhere to periodic reporting including disclosures to investors about its business activities financial conditions and company management unless there is an exemption these filings also mandate 10 q quarterly reports the annual form 10 k and periodic form 8 k reports which detail unexpected and significant events in some instances there are additional conditions that will require a company to file reports with the sec reports must be filed if a company has either at least 2 000 investors more than 500 investors that can t be categorized as accredited investors and possesses more than us 10 million in assets usually companies with no more than 10 million in assets and fewer than 2 000 recorded shareholders don t have to adhere to reporting guidelines under the sec 9 interestingly enough some companies opt for transparency by filing the same types of reports that other perhaps more reputable firms are required to do example of a penny stockmost penny stocks don t trade on major market exchanges however there are some large companies based on market capitalization that trade below 5 per share on the main exchanges like the nasdaq one example of a penny stock listed on the nasdaq is catalyst pharmaceuticals inc cprx a small biopharmaceutical company based in coral gables florida as of jan 7 2021 the stock price is 3 55 per share in the last 12 months the share price has fluctuated between 2 and 5 on aug 10 2020 the stock closed at 4 26 however the next day the price fell to 3 34 a drop of nearly 22 10although there can be sizable gains in trading penny stocks there are also equal or larger risks of losing a significant amount of an investment in a short period 