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June 19, 2017
 
 
OTC Markets Group Acquires theOTC.today
 

In May, OTC Markets acquired theOTC.today, an independent website that monitors and analyzes stock promotion campaigns.  Since its launch in April 2011, theOTC.today has tracked and published data on stock promotion schemes and raised public awareness of fraudulent promoters in OTC and exchange listed securities.

As a result of this acquisition, OTC Markets Group has obtained access to valuable research and historical data on stock promotions that will be used to enhance OTC Markets' issuer compliance processes and compliance data product offerings. In addition, key promotion data about exchange listed and OTC securities will be publicly-available through www.otcmarkets.com.

This acquisition continues our strategy of increasing the quality and availability of unique market data to help investors, broker-dealers and regulators make better informed decisions. Read more about the acquisition.

 
 
 
OTC Compliance Analytics Product Awarded "Most Innovative Market Data Project"
 

The OTC Compliance Analytics Product received the award for "Most Innovative Market Data Project (Vendor)" at the 2017 Inside Market Data/Inside Reference Data Awards. By quantifying compliance data points, the Analytics Product helps broker-dealers, banks and asset managers quickly automate risk processes and identify opportunities. Read more.

 
 
 
 
Blue Sky Recognition
 

Indiana and West Virginia recognize the OTCQX and OTCQB markets for Blue Sky Compliance for the purposes of the Blue Sky Manual Exemption. 23 states now recognize OTCQX and 20 states recognize OTCQB. Read more about Blue Sky Laws.

 
 
 
Stock Promotion – Context, Concerns & Potential Solutions
 

In this post, we provide context around the scope of promotion, common misconceptions, the practical concerns for investors and issuers, as well as some potential solutions. We also welcome feedback from our community on this very important issue. Read the full post.

 
 
 
Update on the Tick Size Pilot
 

There is much debate on how to improve small cap trading in today's market structure.

One theory is that the decimalization of price quotes in 2001 harmed liquidity in smaller companies. With that in mind, in October 2016, the SEC launched the Tick Size Pilot, which widened the minimum quoting and trading increment from $0.01 to $0.05 for smaller exchange listed companies with a goal of evaluating the effect on liquidity.

With six months of data now available on the Tick Size Pilot, KCG recently published an analysis of the initial impact of the program, finding "investors are seeing higher costs, more fragmentation and less transparent trading".

We would also point out that despite some "experts" predictions, the Tick Size Pilot has not created a resurgence in small company research coverage.

While the Tick Size Pilot may still yield some other results, improving liquidity for smaller companies and investors has several components. Our market structure and market standards are designed to support small companies and investors.

  1. A dealer model vs. matching engine: Small companies need market makers. The competing dealer model supports trading in securities that are less actively traded by allowing brokers to facilitate trades
  2. Streamlined compliance requirements, which lower cost, time and complexity, while enabling companies to provide current public information investors need to analyze, value and trade securities
  3. Support for online capital raising, including developing a Regulation A+ on-ramp for OTCQX and OTCQB companies, filing a petition for rulemaking with the SEC to extend Regulation A+ to SEC Reporting companies and allowing public companies to sell shares as easily as they buy them back
  4. Facilitating access to independent equity research for small cap companies by providing a platform for companies to find research providers tailored to meet their specific needs. Independent equity research provides investors with an independent view of a company's performance, valuation estimates, and analysis of their financials, operations and management
 
 
Community Spotlight
 

Markus Georgi,
Senior Vice President - Head of Investor Relations

Fresenius SE & Co. KGaA (OTCQX:
FSNUY, FSNUF)

"2016 was an extraordinarily successful year for Fresenius, and that is reflected in our business results. In fact, we are looking back on another record year, our 13th straight! Sales reached €29.1 billion, a year-over-year increase of 5 percent. Our operating profit increased 9 percent to €4.3 billion and our net income, at almost €1.6 billion was 12 percent higher than in the previous year."

 

Read the full interview.

OTC Markets Group (OTCM): Tell us about Fresenius SE & Co. KGaA

Markus Georgi: Fresenius is a global healthcare group offering high-quality products and services for dialysis, hospitals, and outpatient treatment. With over 250,000 employees in more than 100 countries around the globe, and annual sales of roughly €30 billion, Fresenius is one of the world’s leading healthcare companies. Fresenius shares are listed in the DAX, a blue chip stock market index consisting of the 30 major German companies trading on the Frankfurt Stock Exchange. Furthermore Fresenius is included in the EURO STOXX50, which tracks the share price development of 50 large publicly traded companies, representing various economic sectors, from twelve Eurozone countries.

The Fresenius Group includes four independently operated business segments, each one active in a major growth area of healthcare. Fresenius Medical Care is the world leader in treating people with chronic kidney failure. Fresenius Helios is Europe’s leading private hospital operator. The company comprises HELIOS Kliniken in Germany and Quirónsalud in Spain. Fresenius Kabi supplies essential drugs, clinical nutrition products, medical devices and services to help critically and chronically ill patients, while Fresenius Vamed plans, develops and manages healthcare facilities worldwide.

At Fresenius, the patient always comes first. For more than 100 years now we have been working to save lives and improve the quality of life of our patients. A clear focus on innovation and efficiency has helped us to make high-quality healthcare accessible to a steadily increasing number of people. Yet we never get complacent about our successes, and never stop looking for better solutions. This is how Fresenius is contributing to medical progress and better patient care.

At Fresenius, “Forward Thinking Healthcare“ captures our commitment to the future: better medicine for more people.

OTCM: What were your major accomplishments in 2016?

Mr. Georgi: 2016 was an extraordinarily successful year for Fresenius, and that is reflected in our business results. In fact, we are looking back on another record year, our 13th straight! Sales reached €29.1 billion, a year–over–year increase of 5 percent. Our operating profit increased 9 percent to €4.3 billion and our net income, at almost €1.6 billion was 12 percent higher than in the previous year. So all in all outstanding results that show: Even in politically and economically unstable times, Fresenius achieves stable – and dynamic – growth.

A milestone was the acquisition of the Spanish hospital operator Quirónsalud by Fresenius Helios. Based on the purchase price, this was the largest acquisition in Fresenius’ history. Quirónsalud is Spain’s leading private hospital operator. Its network comprises 43 hospitals, 39 outpatient centers and about 300 occupational risk prevention centers, located in every metropolitan region of Spain. With Quirónsalud and Germany–based Fresenius Helios, we combine two leaders in terms of quality and size.

OTCM: What is your future growth strategy?

Mr. Georgi: The course is also set for growth in 2017. We made an excellent start in the new business year. In the first quarter we have achieved a double–digit increase in sales, operating profit and net income. This should continue and we are expecting our 14th consecutive record year. We forecast sales to increase by 15 to 17 percent, and net income by even more – 19 to 21 percent.

At Fresenius, our focus is on organic growth. It has been that way in the past, and it will remain that way in the future. But we also move Fresenius forward with major, strategic acquisitions. Last year it was Quirónsalud, and at the beginning of this year we announced an important strategic step to prepare Fresenius Kabi for the next decade: the acquisitions of Akorn and Merck’s biosimilars business.

Akorn is a major U.S. provider of generic pharmaceuticals. The company has plants in the United States, Switzerland and India, and employs about 2,000 people. The purchase price is almost US$5 billion. With Akorn, we are getting access to new distribution channels, at first in the United States, where in future we will be also present in retail pharmacies. Akorn adds growth potential in attractive adjacent segments such as ophthalmology and clinical dermatology. The company’s complementary product portfolio and pipeline diversifies Fresenius Kabi’s IV generics offering. And while Akorn is mainly active in the U.S. market Fresenius Kabi has worldwide operations. That will be an additional growth area – gradually introducing Akorn’s products into new markets.

With the acquisition of the biosimilars business of Germany’s Merck KGaA we are entering the field of so-called biological drugs. It is the ideal time to enter biosimilars! The importance of biological drugs has been growing for years. They can be used to very effectively treat serious diseases, including a large number of cancers and rheumatism and other illnesses that afflict millions of patients around the world. Key regulatory and reimbursement rules have been clarified, and there are many parallels to our generics business.

So all in all bright growth prospects for Fresenius in 2017 and beyond!

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

Mr. Georgi: Fresenius has a strong footprint in North America. With approximately €14 billion almost 50% of Fresenius Group sales were generated in North America in 2016.

All three major rating agencies are rating Fresenius “investment grade“. We have a clear dividend policy which aims to align dividends with earnings per share growth. Fresenius therefore increased the dividend for 2016 by 13 percent, our 24th consecutive dividend increase.

Fresenius has clear communicated mid-term growth targets: We are aiming for sales of between €43 and €47 billion, with net income of €2.4 to €2.7 billion. That means we want to increase both sales and net income by about 50 percent – in only 4 years!

Clearly these are very ambitious targets – a marathon run at the pace of a sprint! It is in the DNA of Fresenius that we never let ourselves become complacent, or satisfied with the tried and tested. That is true for products and services, and it’s true for the company as a whole!

OTCM: Fresenius celebrates 4 years on OTCQX this year. How have you used OTCQX as part of your U.S. IR program?

Mr. Georgi: The U.S. market is very important for the Fresenius Group and the U.S. investor base historically plays a significant role. Consequently, we launched our ADR program to reach an even broader investor base by enabling direct investing in Fresenius via an U.S. traded instrument.

Our U.S. IR program comprises regular roadshowing and attendance on conferences in different U.S. regions. The ADR ticker is included on all presentation materials to highlight our ADR program. The OTCQX platform complements our strategy by improving visibility and awareness for Fresenius in the ADR investor community. Upgrading to OTCQX led to a substantial increase in ADR volume.

Click to close.

 
 
 
Community Spotlight
 

John McCann, President & CEO
Mace Security International, Inc. (
OTCQX: MACE)

"Since 1970, Mace® has been the original trusted brand for personal defense sprays, while continuously adding high quality security products to the brand line through the years. Mace® supports their products by providing warranty and educational programs for all of their products and services."

 

Read the full interview.

OTC Markets Group (OTCM): Tell us about Mace Security International:

John McCann: Mace Security International, Inc, located in Cleveland, Ohio, is a diversified manufacturer and provider of personal defense and security products to consumer and business market segments under the world-renowned Mace® brand. Since 1970, Mace® has been the original trusted brand for personal defense sprays, while continuously adding high quality security products to the brand line through the years. Mace® supports their products by providing warranty and educational programs for all of their products and services. Mace® directly distributes and supports its branded products and services through strategically targeted customer channels that include mass market retailers, wholesale distributors, independent dealers, e-commerce marketers, and installation service providers.

OTCM: What were your major accomplishments in 2016?

Mr. McCann: In 2016, we have:

  • Increased distribution – domestically and world-wide
  • Expanded our range of Tactical products – and our sales reach in law enforcement
  • Protected our #1 position in defense sprays
  • Launched stun guns – huge success, with domestic and international distribution Profitable year for the company
  • Imitated a tender offer to acquire Washington Labs

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

Mr. McCann: We continue to promote the Mace® brand and have a 52% market share. Mace® brand means confidence for consumers which means profitable sales for our customers.

We acquired Washington Labs which gives us more efficiencies, formulas, registrations and customers.

Customer service and logistics – being centrally located in Ohio we can deliver to our customers in 1-2 days which is important for products that can be impulse and event driven purchases.

New products – we have entered into the following categories with unique offerings: Knives, Batons (Law Enforcement), Stun Guns, and Handcuffs

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

Mr. McCann: OTCQX does a great job of partnering with companies so we want to leverage the power of the OTCQX. We feel that the OTCQX visibility initiatives can be an extension of our IR work which helps tell the Mace® Brand story to investors and potential investors.

OTCM: What else do you want investors to know about Mace?

Mr. McCann:

  • Positive Trends in the Personal Security, Outdoor Recreation and Law Enforcement Markets
  • Iconic, Original, American Brand Name
  • Transition and Turnaround Complete
  • Dramatically Improving Financial Performance
  • Significant Potential Synergistic Savings Opportunities
  • Strengthened and Expanded Distribution Channels
  • Product-Related Organic Growth Drivers
  • Identified Acquisition Targets

Click to close.

 
 
 
Research Marketplace: Edison
 

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 Edison Investment Research
Edison Investment Research, one of the largest independent research platforms globally, talks to us about what makes quality research and what companies should look for when selecting an equity research firm.

OTCM: Why should a small cap company consider issuer paid research?

Edison: The primary motives for a company to engage issuer paid research are:

1) consistency of coverage – particularly where a lack of liquidity or capital raising activity means there simply isn't enough of an economic incentive for an investment bank to take up coverage;

2) accuracy of equity story – research companies such as Edison have the freedom to take a much longer term and balanced perspective when assessing an investment case rather than sell-side research which is often trying to drive the reader to a near term investment decision;

3) the unrestricted and international distribution of research by a company like Edison, in contrast to sell-side research which is normally restricted to a small, local investor client base only.

OTCM: What criteria should a company use when selecting an equity research firm?

Edison: To summarize: experience and knowledge of analysts, adequate internal processes and distribution capabilities (trusted brand and reach). Badly written research is actually more damaging for an issuer than no research. So the starting point is to ensure the potential research provider has an analyst who can fully understand a company and its industry, and is able to articulate that knowledge into an accurate and balanced equity story.

Good analysts are only part of the equation though. A professional research organization will have a team of editors and supervisory analysts providing the checks and balances to ensure consistently well written and accurate research.

Good research is then only of value if it is generally accessible by all interested parties. For this to happen the research company must have a trusted brand that investors are willing to read, and a strategy to distribute their research through as many channels as possible.

OTCM: What sets Edison apart from other research providers?

Edison: Edison is one of the largest independent research platforms globally with 80 analysts providing coverage of over 500 companies. Edison arguably has the most recognized and trusted brand of any issuer paid research provider. Our clients are able to leverage further our research platform through our Edison Advisors brand encompassing investor relations and strategic consulting practices.

Our clients have come to expect from Edison a research product that is consistently high quality and very widely read. We pride ourselves on our integrity and financial rigor, and our attention to providing the best service to our clients.

 
 
 
 

OTCQX Video Series: Stanley Martinez, VP of Investor Relations, Deutsche Telekom (OTCQX: DTEGY; DTEGF), a world leading integrated telecommunications company with one of the largest market caps on OTCQX discusses how Deutsche Telekom continues to grow in what is often considered to be a stable to declining industry. Watch now.

 
 
 

OTCQX Video Series: Peg Smith, EVP of Investor Relations and Communications for Experian (OTCQX: EXPGY; EXPGF), the leading global information services company, explains the diversification of the company's business lines and geographies. Peg also discusses the company's outlook for 2017. Watch now.

 
 
Monthly Trade Summary - May 2017
 
 
Market Designations Number
of Securities*
Monthly
$ Volume
Monthly $ Volume
per Security
YTD $ Volume*
 
OTCQX 409 $4,121,061,704 $10,075,945 $17,722,418,133
OTCQB 949 $1,352,574,671 $1,425,263 $10,600,566,860
Pink 8,226 $14,174,908,569 $1,723,183 $62,354,619,927
Total 9,584 $19,648,544,945 $2,050,140 $90,677,604,922
 

*Data as of May 31, 2017

 
 
Events
 

NIRI Annual Conference – Orlando, FL (June 4-7, 2017)

The 7th Annual LD Micro Invitational Conference – Los Angeles, CA (June 6-7, 2017)

OTC Markets Small-Cap Day – New York, NY (June 14, 2017)

2017 Marcum Microcap Conference – New York, NY (June 15-16, 2017)

IR Magazine Awards – Europe – London, U.K. (June 21, 2017)

Attracting U.S. Investors Breakfast Forum – London, U.K. (June 22, 2017)

Community Bank Forum by FIG Partners – Nashville, TN (June 26 - 27, 2017) 

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

Please contact events@otcmarkets.com for more information.

 
 
News
 

IMD/IRD Awards 2017 – All the Winners and Highlights from the Evening – WatersTechnology (May 25, 2017)

Brief: OTC Markets Group acquires theOTC.today – Reuters (May 31, 2017)

Here's How to Go Public Without Wall Street – Wall Street Journal (June 1, 2017)

OTC Markets Acquires Watchdog theOTC.today – Benzinga (June 2, 2017)

OTC Markets Survey: Increasing Liquidity is Top Concern for Small Cap Stocks – Crowdfund Insider (June 14, 2017)

Small Caps Failing to Target Small Investors, Survey Shows – IR Magazine (June 14, 2017)

Small-Caps are Missing Key Ways to Attract New Investors and Raise Capital – Traders (June 14, 2017)

 
 
New OTCQX and OTCQB Companies
 

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

The OTCQX Best Market
Forbes Energy Services Ltd. (OTCQX: FLSS)
FTE Networks, Inc. (OTCQX: FTNW)
Hooper Holmes, Inc. (OTCQX: HPHW)
Online Vacation Center Holdings Corp. (OTCQX: ONVC)
Petrus Resources Ltd. (OTCQX: PTRUF)
Sandspring Resources Ltd (OTCQX: SSPXF)
SilverCrest Metals, Inc. (OTCQX: SVCMF)

The OTCQB Venture Market
Altiplano Minerals Ltd (OTCQB: ALTPF)
Breaking Data Corp (OTCQB: BKDCF)
Canadian Bioceutical Corp (OTCQB: CBICF)
Chaparral Energy Inc (OTCQB: CHPE)
Collplant Holdings Ltd (OTCQB: CQPTY)
Euromax Resources Ltd. (OTCQB: EOXFF)
First Cobalt Corp (OTCQB: FTSSF)
GEX Management, Inc. (OTCQB: GXXM)
HealthLynked Corp. (OTCQB: HLYK)
Kenadyr Mining Holdings Corp (OTCQB: KNDYF)
Makh Group Corp (OTCQB: MKKH)
MOBI724 GLOBAL SOLUTIONS INC (OTCQB: MOBIF)
Novateqni Corp (OTCQB: NVTQF)
NRG Metals NC (OTCQB: NRGMF)
Ocean Thermal Energy Corp. (OTCQB: TDYSD)
OneSoft Solutions, Inc. (OTCQB: OSSIF)
OrangeHook, Inc. (OTCQB: ORHK)
Siyata Mobile, Inc. (OTCQB: SYATF)
StrikePoint Gold, Inc. (OTCQB: STKXF)
Titan Medical Inc. (OTCQB: TITXF)
Vilacto Bio Inc.  (OTCQB: VIBI)
Windtree Therapeutics, Inc. (OTCQB: WINT)
Zeecol International, Inc. (OTCQB: AMOO)

 
 
Graduates to an Exchange Listing
 

Congratulations to the following companies that graduated to an exchange listing in May 2017.

 

Graduated from the OTCQX Best Market
Celsius Holdings, Inc. (Nasdaq: CELH)
Farmers & Merchants Bancorp Inc. (Nasdaq: FMAO)
Nexgen Energy Ltd. (NYSE MKT: NXE)
Swift Energy Company (NYSE: SBOW)
Vistra Energy Corp. (NYSE: VST)