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July 18, 2017
 
 
 
One Step Closer to Achieving National Blue Sky Recognition
 

OTCQX Reaches 25 State Milestone at
One Year Mark

This month marked a pivotal milestone for OTC Markets Group, reaching the halfway mark with 25 states that now recognize our premium OTCQX market for the purposes of their "Blue Sky Manual Exemption" for

 

secondary trading. Effective July 1, 2016, Vermont became the first state to recognize the OTCQX market.  Just one year later, Utah marks the latest addition to the growing list of states that recognize the OTCQX and OTCQB markets, following the recent additions of Delaware, West Virginia, Indiana and Maine.

Since the recognition by the SEC that OTCQX and OTCQB are established public markets, OTC Markets Group has  fostered an ongoing dialogue with state regulators to apprise them of the easily accessible, free, public online disclosure of current information offered by companies traded on the OTCQX and OTCQB markets. Results have been overwhelmingly positive and we remain committed to building upon this momentum to achieve our goal of nationwide Blue Sky recognition for public companies traded on OTCQX.

 
 
 
Challenges Faced by Small-Caps: The Results are in
 

We recently surveyed 117 CEOs and CFOs of small cap U.S. and international companies that trade on the OTCQX and OTCQB markets on the challenges they face when trying to increase investor interest in their stock. The results of the survey showed small cap companies have key opportunities to attract new investors and raise capital. 

 
 
 
 
OTC Markets Blog: 5 Takeaways from our Small-Cap IR Summit
 

As part of this year's NIRI conference, OTC Markets Group worked with the team to organize and moderate a panel of industry experts dedicated to addressing the needs of small cap IR professionals. We overview key take-aways from our panel on New Ideas for Creating Interest & Value. Read the full post.

 
 
 
Community Spotlight
 

André Cazotto, IR Manager
Cielo SA (OTCQX:
CIOXY)

"Cielo is a tech retail services company, leading the electronic payments sector in Latin America as one of the top 10 Brazilian corporations in terms of market value. In 2016, we captured over 6.7 billion transactions and R$ 585 billion in financial volume through our platform. We believe the payment process is the gateway to accessing intelligent and interconnected services."

 

Read the full interview.

OTC Markets Group (OTCM): Tell us about Cielo.

André Cazotto: Cielo is a tech retail services company, leading the electronic payments sector in Latin America as one of the top 10 Brazilian corporations in terms of market value. In 2016, we captured over 6.7 billion transactions and R$ 585 billion in financial volume through our platform. We believe the payment process is the gateway to accessing intelligent and interconnected services. We offer a portfolio of ideas to meet the needs of 1.7 million active clients, comprising individual entrepreneurs and large retailers spread across the country. In addition to a massive infrastructure that ensures business operations have state-of-the-art technology, efficient logistics and the highest safety standards, we are a "machine of ideas" that pushes the market towards the future. We offer connectivity through terminals, internet and cell phones. We believe that no business was born to stand still and our vocation is to help realize this vision for each of our clients.

OTCM: What were recent major accomplishments for the company?

Mr. Cazotto: In November 2014, the Company entered into an association agreement with BB Elo Cartões Participações S.A. ("BB Elo Cartões"), a wholly owned subsidiary of Banco do Brasil, for the creation of Cateno in order to manage payment accounts transactions from credit cards operations and purchase functionality via debt with the Ourocard Payment Arrangement. This initiative is in line with the Company's strategic planning which pursues creation of value for shareholder by means of growth, revenue diversification in businesses related to electronic payments and higher operating efficiency. Cateno was created on February 27, 2015 and its capital stock is 30.00% for BB Elo Cartões and 70.00% for the Company.

OTCM: How does Cielo differentiate itself from its competitors and what is your growth strategy for 2017?

Mr. Cazotto: The differentiation of Cielo from its competitors are the tailor-made solutions and the premium services we offer our clients.

Over the years, Cielo developed solutions and partnerships to diversify the business related to electronic payments. Nowadays, the Company can offer their clients electronic capture equipment rental such as POS, PIN Pad, Cielo Mobile, Cielo LIO and solutions such as Co-Branded Private Label Cards, Purchase of Receivables, Crediário – Debit in Installments, Prepaid Cards, Acceptance of the BNDES Card, Agrocard, Telephone Prepaid Airtime, Correspondent Banks, Cielo e-Commerce, E-commerce gateway, Cielo Promo, Big Data, Technological solutions and support for fraud reduction, Flex Car, Booklets and Invoice Payment, Pre-authorization, Construcard Elo, Card payment in Foreign Currency and Membership channels.

OTCM: Cielo celebrates six years trading on OTCQX in the U.S. this year. What has been your experience on OTCQX?

Mr. Cazotto: Our experience on the OTCQX program for the last 6 years has been very good since it provides Cielo a greater exposure on the U.S market with a quality stamp.

Cielo's IR program includes attendance on roadshows, conferences and meetings, which allows the manager and the IR team to reach our investors in the U.S market and other regions on the world. Being on the OTCQX trading platform is part of the Company strategy to connect with the ADR investors.

OTCM: What else do you want U.S. investors to know about Cielo?

Mr. Cazotto: Cielo has High Cash generation, low capex requirements (∼400mm BRL in POS terminals), a focus on innovation and differentiation and a strong dividend policy.

Click to close.

 
 
 
Community Spotlight
 

Arun Menawat, CEO
Profound Medical Corp. (
OTCQX: PRFMF)

"Our technology is based on a powerful platform which is based on the combination of real-time Magnetic Resonance (MR) guidance as the imaging platform and ultrasound as the energy source for delivering non-invasive ablative technology to clinicians. These key technology pillars, linked with intelligent software and robotics, have the potential to fulfill various unmet needs of patients and clinicians in many anatomies and disease states."

 

Read the full interview.

OTC Markets Group (OTCM): Tell us about Profound Medical.

Arun Menawat: At Profound, we see a world where patients no longer need to choose between living well and living long, or between undergoing clinically effective procedures and returning quickly to their normal lives. By leveraging MR-guidance and ultrasound to deliver incision-free, safe, personalized, precise, fast and cost-effective therapeutic solutions, Profound intends to change the standard of care in the treatment of cancerous and benign diseased tissue.

Our technology is based on a powerful platform which is based on the combination of real-time Magnetic Resonance (MR) guidance as the imaging platform and ultrasound as the energy source for delivering non-invasive ablative technology to clinicians. These key technology pillars, linked with intelligent software and robotics, have the potential to fulfill various unmet needs of patients and clinicians in many anatomies and disease states.

Profound is commercializing a novel technology, TULSA-PRO®, which combines real-time Magnetic Resonance Imaging with transurethral, robotically-driven therapeutic ultrasound and closed-loop thermal feedback control that is designed to provide precise ablation of the prostate while simultaneously protecting critical surrounding anatomy from potential side effects. TULSA-PRO® is CE Marked and Profound is sponsoring a multicenter, prospective FDA-registered clinical trial, TACT.

Profound also recently entered into a definitive agreement to expand the existing collaboration between the two companies and acquire Royal Philips' Sonalleve MR-HIFU business. Sonalleve MR-HIFU is an innovative therapeutic platform that combines real-time MR imaging and thermometry with thermal ultrasound to enable precise and incision-free ablation of diseased tissue. Sonalleve MR-HIFU is CE marked and has historically been marketed by Philips primarily for non-invasive ablation of uterine fibroids. MR-HIFU, as a technology, has also been shown to have clinical application in other medical conditions, including non-invasive ablation of abdominal cancers, hyperthermia for cancer therapy and palliative pain treatment of bone metastases.

OTCM: What were recent major accomplishments for the company?

Mr. Menawat: 2017 has been a transformative year in Profound's history, building on the momentum we established in 2016.

Q1 2017 was the first quarter that the company recorded revenue.

On June 30th, we announced the aforementioned definitive agreement with Philips to expand our collaboration and acquire the SONALLEVE MR-HIFU business, establishing Profound as a market leader in MR-Ultrasound therapy.

OTCM: How does Profound Medical differentiate itself from its competitors and what is your growth strategy for 2017?

Mr. Menawat: Via the Philips agreement, Profound will become the only company to provide a therapeutics platform that provides the precision of real-time MR imaging combined with the safety and ablation power of directional (inside-out) and focused (outside-in) ultrasound technology for the incision-free ablation of diseased tissue.

Profound is currently conducting a pilot commercial launch of TULSA-PRO® in key European and other CE mark jurisdictions.

The strategic acquisition of SONALLEVE, a more commercially mature product, will further accelerate our revenue generation in the second half of the year. It will have a transformative impact on our reach and influence. The increased relevance and influence in hospitals will enable us to capture synergy opportunities and drive further clinical adoption of our technologies.

OTCM: Profound Medical joined OTCQX this year. How do you plan to use OTCQX as part of your U.S. IR program?

Mr. Menawat: The United States is a key target market for the TULSA-PRO® system and many of our shareholders are U.S.-based. Trading on OTCQX is a natural evolution for Profound, which should increase our visibility and complement our efforts to broaden our U.S. shareholder base.

OTCM: What else do you want U.S. investors to know about Profound Medical?

Mr. Menawat: Once completed, the SONALLEVE acquisition will establish Profound as a market leader in MR-Ultrasound Ablation. The transaction also represents an opportunity for Profound to immediately transition from a development-stage to a growth-stage company. Philips will also be a minority shareholder of Profound.

Click to close.

 
 
 
Kingfisher plc
 

OTCQX Video Series: Sarah Levy, Group Investor Relations Director for Kingfisher plc, (OTCQX: KGFHY, KGFHF), a home improvement company with nearly 1,200 stores in 10 countries across Europe, discusses the company's 5-year transformation plan: Watch Now.

 
 
The Trendlines Group Ltd.
 

OTCQX Video Series: Judith Kleinman, Director of Investor Relations for The Trendlines Group Ltd. (OTCQX: TRNLY) explains how the company runs a successful incubator in Israel, the startup nation. Judith also provides an update on its newest incubator in Singapore: Watch Now.

 
 
Research Marketplace: Sidoti & Company
 

Each month, we feature an equity research firm that is part of our Research Marketplace, our platform which provides a single point-of-reference for OTCQX and OTCQB companies when investigating equity research providers.

Interview with Sidoti & Company
This month, we speak with Sidoti & Company, an equity research provider generally focused on companies with market capitalizations under $3 billion.

 

OTCM: Last September you began providing company sponsored research (CSR) in addition to your traditional coverage.  Why?

Sidoti: It has become challenging for the brokerage industry to cost-effectively provide micro- and small-cap companies with equity research. The investment community is having an increasingly difficult time compensating research providers for their services due to a number of factors, including:

  • ETFs, quantitative funds and other passive investment vehicles are taking market share from active money managers, causing a substantial decline in the traditional source of funding for research.
  • Trading commissions, which have traditionally covered the cost of research, have dramatically shrunk. Institutions that once paid $0.07 a share or more to execute orders can now transact at less than $0.01 a share. As well, trading volumes are no longer as robust as they once were and trading spreads for market makers are narrowing.

Although industry economics are causing a decline in micro- and small-cap research, coverage remains critical for these companies as it generates increased visibility, enhanced trading liquidity and lower cost of capital. Sidoti's company sponsored research enables these companies to receive credible research coverage, utilizing the same analysts with the same high quality and virtually the same content as our traditional research.

Read more on managing conflicts, the impact of MiFID II and where to find Sidoti research.

OTCM: Is issuer paid research conflicted?

Sidoti: Potential conflicts are inherent in securities research. The cost of running a research department is substantial and most brokerages cannot afford to bear them unless the provision of research leads to lucrative banking fees. This is especially true for micro- and small-cap, where trading commissions are often no longer sufficient to cover the cost of research, increasing reliance on a banking relationship.

The investment community is well-aware that conflicts exist in equity research, whether the research is "indirectly" paid for through banking or directly paid for by the issuer. Investors judge the research based on how well they believe the research provider is maintaining independence and managing the potential conflict.

Sidoti undertakes strong measures to maintain the integrity of our company sponsored research. Sidoti does not generally engage in investment banking and never with those who are covered under CSR, nor does it accept stock in the company as compensation. Sidoti also has a CSR "Selection" Committee with two independent members to ensure that we are accepting quality candidates. Also, as a registered broker deal, Sidoti fully discloses the nature of its relationship with each covered company.

OTCM: What impact will MiFID II have on research in the U.S.?

Sidoti: MiFID II, new regulations that go into effect in the European Union on January 3, 2018, requires investors to pay directly for investment research provided by brokerage houses. EU brokerages that supply both research and execution (i.e. trading) services must provide and price these services separately, ending the "soft dollar" funding of research.

While these regulations technically only impact European fund managers, we believe it is unlikely that major global investment firms will operate different payment models for research in different regions of the world. As the MiFID model makes it way to the U.S., the enhanced scrutiny of the research will cause asset managers to further pare the funds they allocated to securities research providers. Research departments will continue to contract and micro- and small-cap companies are likely to see the diminishing quantity of research coverage drop even more dramatically over the next 3 years.

OTCM: What sets Sidoti apart from other research providers?

Sidoti: Since 1999 research has been the core business of Sidoti and we have become Wall Street's preeminent provider of research covering small-cap equities. We use the same experienced analysts to cover company sponsored research with virtually the same content, ensuring high quality coverage.

Our CSR estimates are carried by the major data platforms such as First Call, FactSet and Bloomberg and our distribution reaches nearly 500 institutional clients through our 15+ team of institutional salespeople. The Sidoti brand is associated with quality and credibility and we have taken measures to assure that our approach to company sponsored research is consistent with that, keeping the standards high while minimizing potential conflicts.

Click to close.

 
 
 
Monthly Trade Summary - June 2017
 
 
Market Designations Number
of Securities*
Monthly
$ Volume
Monthly $ Volume
per Security
YTD $ Volume*
 
OTCQX 413 $4,948,596,254 $11,982,073 $22,671,014,388
OTCQB 969 $1,103,097,838 $1,138,387 $11,703,664,699
Pink 8,157 $14,808,224,484 $1,815,400 $77,162,844,411
Total 9,539 $20,859,918,578 $2,186,803 $111,537,523,500
 

*Data as of June 30, 2017

 
 
Understanding How Limit Order Display Works on OTC Markets
 

Limit or Market Orders: Investors can choose to take displayed liquidity by placing a Market Order to immediately buy or sell a security at the best available current price, or they can try to get a better price by placing a Limit Order with specific price, size and time limit instructions.  Limit orders may not be executed if the price does not become marketable while the order is open.

Limit Order Display (FINRA Rule 6460): The Real-Time Best Bid & Ask represents competing market maker firm quotes and customer limit orders.   FINRA Rules for OTC Equity Securities require that broker-dealers must display the price and full size of non-marketable customer limit orders that improve or are equal to the price of the broker-dealers' proprietary quote. Qualifying customer limit orders must be displayed when the size is at or above the minimum quote size prescribed by FINRA Rule 6433. Requiring broker-dealers to display quotes from customer limit orders tightens spreads.  For public companies, having a good mix of competing market maker quotes and investor Limit Orders will improve liquidity in their securities.

The best strategy: When to use Marketable Orders or Limit Orders is both an art and a science, depending on the security's trading activity and the investors desires.  Electronic market maker KCG has recently collected a lot of data in "Adverse Selection is Not Always Bad" that outlines for investors the pros and cons of aggressive and passive orders.

For more insight into trading strategies, see KCG's latest whitepaper

 
 
IR Magazine Awards Winners
 

EUROPE

adidas AG (OTCQX: ADDYY; ADDDF) - Best in Sector: Consumer Discretionary; Best in Region: Germany

BASF SE (OTCQX: BASFY; BFFAF) - Best in Sector: Materials

Deutsche Telekom AG (OTCQX: DTEGY; DTEGF) - Best in Sector: Telecommunications Services

BRAZIL

Kroton Educacional SA (OTCQX: KROTY) - Carlos Lazar, Best Investor Relations Officer (large cap) and Rodrigo Galindo, Chief Executive, Best IR by a CEO or CFO

 
 
 
 
Events
 

West Virginia Bankers Association – White Sulfur Springs, West Virginia (July 23-26, 2017)

2017 STANY Golf Classic – Summit, NJ (July 24, 2017)

37th Annual Growth Conference – Boston, MA (August 9-10, 2017)

TS Partners User Conference 2017 – Atlantic City, NJ (September 5-7, 2017)

CrowdInvest Summit – Los Angeles, CA (September 6-7, 2017)

IR Magazine Conference – Small Cap 2017 – New York, NY (September 13, 2017)

STA National Market Structure Conference – Washington, D.C. (September 13-15, 2017)

Please contact events@otcmarkets.com for more information.

 
 
News
 

OTC Markets Group Acquires theOTC.today – Traders Magazine (June 15, 2017)

OTC Issuer Survey Shows Increasing Interest in Reg A+ Option – Growth Capitalist (June 15, 2017)

Most Innovative Market Data Project (Vendor): OTC Markets – Waters Technology (June 20, 2017)

TRADING THE WEEK: A Tale of Two Markets – Markets Media (June 26, 2017)  

Wall Street Wins Round in Fight With Exchanges Over Audit System – Bloomberg (July 6, 2017)

New & Improved: Reg A+ May Soon Be Available for Publicly Traded Firms – Crowdfund Insider (July 6, 2017)

OTC Markets Moves Closer to Achieving National Blue Sky Recognition – Crowdfund Insider (July 12, 2017)

17 Issuers Uplist From The OTC in Q2, 5 in June! – PubCoCEO (July 12, 2017)

 
 
New OTCQX and OTCQB Companies
 

Welcome to the companies that joined the OTCQX Best Market and the OTCQB Venture Market in June 2017.

The OTCQX Best Market
Amplify Energy Corp. (OTCQX: AMPY)
Creative Realities, Inc. (OTCQX: CREX)
Eastmain Resources Inc. (OTCQX: EANRF)
Emerald Health Therapeutics Inc. (OTCQX: EMHTF)
Ocean Yield ASA (OTCQX: OYIEF)
Overstock.com, Inc. (OTCQX: OSTBP)
Standard Lithium Ltd. (OTCQX: STLHF)
Theralase Technologies Inc. (OTCQX: TLTFF)
Virginia Partners Bank Fredericksburg VA (OTCQX: PTRS)

The OTCQB Venture Market
92 Resources Corp. (OTCQB: RGDCF)
Bagger Dave's Burger Tavern, Inc. (OTCQB: BDVB)
Crystal Exploration Inc. (OTCQB: CYRTF)
Diagnos Inc. (OTCQB: DGNOF)
Enviroleach Tech (OTCQB: EVLLF)
Freedom Leaf Inc. (OTCQB: FRLF)
Golden Valley Mines Ltd. (OTCQB: GLVMF)
Goviex Uranium Inc (OTCQB: GVXXF)
Hartford Retirement Network Corp. (OTCQB: HFRN)
Imagination Pk Entmt Inc. (OTCQB: IPNFF)
KaloBios Pharmaceuticals, Inc. (OTCQB: KBIO)
Kerr Mines Inc. (OTCQB: KERMF)
KeyStone Solutions, Inc. (OTCQB: KSSN, KSSNU, KSSNP, KSSNW)
Liberty One Lithium Corp. (OTCQB: LRTTF)
Medibio Ltd. (OTCQB: MDBIF)
ML Gold Corp. (OTCQB: MLGCF)
Mojo Organics, Inc. (OTCQB: MOJO)
Nemaura Medical, Inc. (OTCQB: NMRD)
Osprey Gold Development Ltd. (OTCQB: OSSPF)
Q2Power Technologies, Inc (OTCQB: QPWR)
REGI U.S., Inc. (OTCQB: RGUS)
Reign Sapphire Corp (OTCQB: RGNP)
Safe-T Group Limited (OTCQB: SFTTY)
Security Devices International, Inc. (OTCQB: SDEV)
Sleepaid Hldg Co (OTCQB: SLPA)
Standard Diversified Opportunities Inc. (OTCQB: SDOIA)
Targeted Microwave Solutions Inc. (OTCQB: TGTMF)
Traqer Corp. (OTCQB: TAQR)
Viking Energy Group, Inc. (OTCQB: VKIN)

 
 
Graduates to an Exchange Listing
 

The following companies graduated to an exchange listing in June 2017.

 

Graduated from the OTCQX Best Market
Boston Omaha Corporation (NASDAQ: BOMN)
Checkpoint Therapeutics Inc (NASDAQ: CKPT)
Youngevity International, Inc. (NASDAQ: YGYI)

 

Graduated from the OTCQB Venture Market
Precipio, Inc. (NASDAQ: PRPO)