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The Classifications System
As mentioned before, the Pink Sheets system has a classification for each of the
companies that trade using it. This makes it easier to determine whether a
company is high risk or low risk and you can make your decisions based on this.
Some of the tiers that are found inside of the classification system include:
Trusted Tier
Inside the 
trusted tier
in Pink Sheets, you will find the international as well as
American companies that are considered trustworthy and investor friendly. The
companies that are from other countries are going to be on the international
exchange, but they can still fit into this trusted tier. The companies that are in
this tier have not met the requirements to be on the regular Stock Exchange, but
this is usually because of one or two small issues since the Stock Exchange is so
strict.
However, even though these companies were not able to get onto the Stock

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Exchange, they were able to pass an independent audit. This list sometimes does
include companies in American that pass the standards needed for NASDAQ but
they aren’t submitting SEC reports and so they would be moved over to Pink
Sheets instead.
Transparent Tier
This is a tier that will send in SEC reports and sometimes will also include those
that are in Over-the-Counter Bulletin Boards. These are highly trusted
companies because you will be able to see some of their financial reports as well
as other information that is required for them to be good with the SEC. You will
be able to do your research on these companies because it is provided to you and
can save a lot of guesswork and hassle when choosing the Penny Stocks you
want to work with.
Distressed Tier
Companies that are inside of this tier of Pink Sheets are ones that provide limited
information for the investor to look at and often they are not following the
guidelines that are set out by Pink Sheets. These companies may not even send
out updated information to the SEC like they should, but some them will work
with the OTC disclosures. Not all of these are bad to work with, but sometimes
you need to be wary because they aren’t sending out the right information and
some of them have gone bankrupt.
Dark Tier
This is the tier that you will really need to watch out for because it could cause
some issues. Companies that are inside of this particular tier aren’t sending in
any information about their business. They aren’t filing information with either
the SEC or the OTC Disclosure service and they haven’t done so over at least
the last six months, making it really hard for the investor to have any idea how
this Stock is doing. There are some companies that get into this tier that are also
failing with transparency in the market or they don’t have a market marker.
Toxic Tier

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As a new investor or any investor for that matter, it is best to stay out of the toxic
tier. Companies that are in this tier will often rely on marketing strategies that
are fraudulent such as using promotions that are questionable or sending out a lot
of spam to name a few. These can also include some companies that are
subjected to large corporate events that disrupt them or they may have a
suspension by the government. In some cases, these will not actually have their
own business operations and can be really dangerous to send your money to.
Taking a look at these different types of tiers inside this system can help you to
make a more informed choice when it comes to working the Pink Sheets. You
will be able to see these rankings with any of the companies that you choose to
go with and if you pick the one with the highest reputation, it becomes easier to
get good returns on investments.