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May 26, 2017
 
 
OTCQB Celebrating 3 Years This Month
 

It has been 3 years since we introduced higher eligibility standards for our OTCQB Venture Market. Today, close to 900 OTCQB companies have undergone the enhanced OTCQB company verification and management certification process and provide high-quality disclosure to investors.

With the launch of the OTCQX Best Market in 2007 and the changes to OTCQB, we have reshaped the quality of companies and transparency of information available on the U.S. OTC equity markets. With the introduction of higher OTCQB standards in 2014, we removed more than 2,000 companies from OTCQB for failing to meet the new requirements because they did not pass the minimum bid price test, were delinquent in their financial filings, bankrupt, or unwilling to provide background information. These companies continued to trade on the Pink Open Market.

As part of our ongoing mission to create better informed and more efficient financial markets, we continue to introduce new initiatives to provide a strong baseline of transparency for investors and to make being public less painful for companies. We are pleased to share some recent market news and highlights:

  • 11 Transfer Agents participate in the Transfer Agent Verified Shares Program, an initiative launched in October 2016 designed to improve the timeliness and reliability of OTC company share information.
  • 21 states recognize OTCQX and 18 states recognize OTCQB for the purposes of their "Blue Sky Manual Exemption" for secondary trading. Recognition from regulators further enables OTCQX and OTCQB to provide companies with robust public markets.
  • As of May 2017, companies that follow the Alternative Reporting Standard can now qualify for OTCQB. These companies would be required to make public disclosure available pursuant to the Alternative Reporting Standard Disclosure Guidelines for OTCQX and OTCQB and meet certain corporate governance requirements.
 
 
 
Community Spotlight
 

Andreas Hagenbring, Head of Investor Relations 
Deutsche Lufthansa AG (OTCQX: 
DLAKY, DLAKF)

"Lufthansa Group differentiates itself from many competitors through its well-diversified set-up. The unique portfolio of airlines and aviation services companies constitutes a key strength of the Lufthansa Group. It creates synergies between the individual companies and makes the Group less cyclical than most peers."

 

Read the full interview.

OTC Markets Group (OTCM): Tell us about Deutsche Lufthansa.

Andreas Hagenbring: Lufthansa Group is one of the largest aviation groups in the world. It is based on three strategic pillars: Network Airlines, Point–to–Point Airlines and Aviation Services. Altogether, Lufthansa Group generates annual revenues of more than 32bn EUR and has close to 130,000 employees.

The flag carriers Lufthansa German Airlines, Swiss International Airlines and Austrian Airlines form the Network Airline segment. They operate from four hubs: Frankfurt, Munich, Zurich and Vienna. Given the attractiveness of their home markets, they are successfully adopting a premium strategy with very strong brands.

The Point–to–Point Airlines focus on profitable growth. With its lead brand Eurowings, the Lufthansa Group has an innovative and competitive offering in the European point-to-point segment.

The Aviation Service companies are market leaders in their respective industries. Lufthansa Cargo is the biggest European cargo airline. Lufthansa Technik is the largest independent MRO provider in the world. And LSG is the number one global airline catering company. The vast majority of these companies’ revenues is external and their high margin and less volatile earnings profile supports the development of the Lufthansa Group.

OTCM: What were your major accomplishments in 2016?

Mr. Hagenbring: Last year, we again delivered one of the best results in the more than 60 year history of the Lufthansa Group. In a year that was marked by some terrorist attacks in Europe and geopolitical uncertainties, we have managed to keep our results at the same record level as in 2015.

The Network Airlines have made further progress in the implementation of our strategy. We have concluded commercial joint ventures with Air China and Singapore Airlines in Asia. We have also progressed with our comprehensive fleet renewal program, which will provide for sustainably 20% lower cash operating costs for each aircraft we are replacing. And most importantly, we have now agreed with all unions at Lufthansa German Airlines to modernize existing tariff agreements and move away from legacy pension systems.

In the Point–to–Point segment, we have concluded a major wet-lease agreement with our largest German competitor Air Berlin that will see us consolidate our home market and at the same time lower our cost of operations for the future. At the end of 2016, we have acquired the remaining shares in Brussels Airlines, thus strengthening the leading position in our home markets and becoming the clear number three in European point-to-point traffic.

The Service companies have all grown on external revenues and implemented important efficiency measures. The group organization is being renewed and a full layer of management has been eliminated.

We are financially healthy and investment grade rated, paying annual dividends according to a fixed dividend policy.

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

Mr. Hagenbring: Lufthansa Group differentiates itself from many competitors through its well-diversified set-up. The unique portfolio of airlines and aviation services companies constitutes a key strength of the Lufthansa Group. It creates synergies between the individual companies and makes the Group less cyclical than most peers.

In many respects, the segments of the Lufthansa Group are innovation leaders. We are a founding partner of the Star Alliance, the world’s largest airline alliance. We were the first to introduce mobile boarding and internet on board both on long-haul and short-haul flights in Europe. At the moment, our Network Airlines are implementing a next-generation distribution strategy that will allow us to personalize products and services beyond a level currently seen in the industry.

In 2017, our Network and Point–to–Point Airlines will grow their capacity by more than 12%. Most of this comes from the acquisitions made in 2016. The Aviation Services grow organically in existing business areas, but also in adjacent markets. Expanding partnerships is of particular importance in this respect.

OTCM: Lufthansa celebrates 6 years on OTCQX this year. How have you used OTCQX as part of your U.S. IR program?

Mr. Hagenbring: Next to holding or joining conferences, roadshows, webcasts and other activities to communicate with our investors, being on OTCQX is an opportunity for us to present ourselves to a bigger community. Lufthansa uses OTCQX as a platform to inform ADR holders of news releases and financial reports on Lufthansa. Furthermore, Lufthansa regularly updates its Company Profile to present its latest development to ADR holders. OTCQX is also a useful and helpful tool to obtain and analyze news on the trading flows of Lufthansa ADRs.

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

Mr. Hagenbring: The Lufthansa Group is a company with subsidiaries and bases all over the world. They all strive for our traditional values of safety, quality and innovation. Since the company’s foundation, we have seen several transformations (from state to private-owned, changing from a German to a European airline group, etc.) and challenges (oil crisis in the 70s, strikes, etc.). Yet, all this has made Lufthansa Group stronger. We have the right skills and the right culture to drive change in the aviation industry and will continue to do so in the future.

Click to close.

 
 
 
Community Spotlight
 

Michael F. Beckwith, President and CEO
First Security Inc. (
OTCQX: FIIT)

"Our Company underwent a significant transformation in 2016, including a completely new executive management team that was put into place in late 2015 and early 2016.  We used 2016 as a time to evaluate our operations to ensure that we had the right foundation in place.  One critical aspect of that planning was the development of a five year strategic plan that will position us for growth and success."

 

Read the full interview.

OTC Markets Group (OTCM): Tell us about First Security Inc.

Michael F. Beckwith: First Security, Inc., a Kentucky corporation, is the holding company for First Security Bank, Inc. The Company operates through 11 branch offices in four major markets including Owensboro, Bowling Green, and Lexington, Kentucky and Evansville, Indiana. The Bank offers internet banking through its website at firstsecurity.net. The Company has $600 million in assets and is headquartered in Owensboro, Kentucky.

OTC Markets Group (OTCM): What were your major accomplishments in 2016?

Mr. Beckwith: Our Company underwent a significant transformation in 2016, including a completely new executive management team that was put into place in late 2015 and early 2016. We used 2016 as a time to evaluate our operations to ensure that we had the right foundation in place. One critical aspect of that planning was the development of a five year strategic plan that will position us for growth and success.

We focused on developing full customer relationships, which resulted in deposit growth. We also redesigned many loan processes and rebuilt our credit administration function. We completely rebuilt our Compliance and CRA processes, and have seen significant improvements in those areas. We worked very hard to change the culture of our Company with a new culture statement of "Be truthful, have courageous conversations, stay positive, and remember we are accountable to each other". We empowered our staff to lead, and to live that statement.

2016 was a year of transition for us, but we feel that the time was well spent to set the stage for the future of the Company.

OTC Markets Group (OTCM): What is your growth strategy for 2017?

Mr. Beckwith: We recently unveiled a new brand, a new look and feel for our Company, and we are excited about what that means for us moving forward. One of the first steps with this new brand was an updated website, which can be viewed at firstsecurity.net. This new brand will be rolled out across all lines of business and markets as it is another critical piece of our transformation as a Company. Brand is not marketing or advertising, it is who we are and what we believe. Customers can then identify with us and feel a desire to be associated with First Security Bank.

We are now directing our efforts to sales and building a true sales culture. We have established well defined roles for our employees and have implemented specific goals and incentive programs. We continue to focus on developing full relationships with our customers, knowing that those relationships and the resulting growth are imperative to our progress moving forward.

OTC Markets Group (OTCM): First Security upgraded to the OTCQX market in July 2016. How are you leveraging OTCQX as part of your IR program?

Mr. Beckwith: We are using OTCQX to disseminate our financial information and press releases, which allows us to communicate our story with more potential investors. We refer people to the site frequently, as it is a repository of Board and Executive Officer information, as well as financial information and news about the Company.

OTC Markets Group (OTCM): What else do you want investors to know about First Security Inc.?

Mr. Beckwith: We are proud of what we have accomplished in 2016 and 2017 and are excited about what the future holds for us as a Company, for both our employees and our shareholders.

Click to close.

 
 
 
 

OTCQX Video Series: Henk Jan ten Brinke, SVP Investor Relations, Koninklijke Ahold Delhaize N.V., (OTCQX: ADRNY, AHODF), one of the world's largest food retail companies, updates us on the company's recent merger and plans for 2017. Watch now.

 
 
 

OTCQX Video Series: Gary Atkinson, CEO of The Singing Machine Company (OTCQX: SMDM), the North American leader in consumer karaoke products, talks to us about the expansion of its product line and its new subscription based song offering. Watch now.

 
 
Research Marketplace: ACF Equity Research
 

Each month, we will 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 ACF Equity Research
In our first profile, ACF Equity Research, an independent equity research house with global distribution, specializing in institutional research, tells us more about their equity research services and the value of research for small cap companies. 

OTCM: Why should a small cap company consider issuer paid research?
ACF: Liquidity is the life blood of any publicly traded company. The right research gets results. As research coverage of smaller issuers continues to decline, issuer paid research provides a credible third party voice to share your company's story or defend against detractors.

OTCM: What criteria should a company use when selecting an equity research firm?
ACF: Companies should consider a few key points when evaluating and selecting a research firm:

  1. As independent as possible. This comes through in the firm's process, reputation and clients.
  2. As high quality as possible. Analysts who understand small and mid-cap businesses and their challenges, from the inside as well as the outside.
  3. Made up of dynamic individuals, who can capture and tell your company's story.

OTCM: What can a company expect when they select ACF?
ACF:
We get results for our clients. It starts with high quality work combined with bespoke thinking.  Our team generates a sophisticated independent and credible product. Great story-telling skills provide a third-party voice for professional investor analysis. Finally, our global distribution capacity provides for the broadest reach.

OTCM: What sets ACF apart from other research providers?
ACF:
We lead the research market in innovation. Our partners benefit from a boutique-feel service backed and underpinned by a forceful platform offering. Our analysts are sector specialists with long, relevant and rounded experience in both small/mid-cap and large companies – and they can bring excellent insight and understanding.  And, we take pride in our global distribution capabilities.

 
 
Monthly Trade Summary - April 2017
 
 
Market Designations Number
of Securities*
Monthly
$ Volume
Monthly $ Volume
per Security
YTD $ Volume*
 
OTCQX 413 $3,017,167,362 $7,305,489 $13,601,356,429
OTCQB 974 $1,433,545,949 $1,471,813 $9,247,992,189
Pink 8,211 $10,624,101,736 $1,293,886 $48,179,711,357
Total 9,598 $15,074,815,048 $1,570,620 $71,029,059,977
 

*Data as of April 30, 2017

 
 
Q1 2017 Quarterly Index Performance
 
 
Index Symbol Performance
OTCQX Composite OTCQX 9.8%
OTCQX Billion+ OTCQXBIL 9.9%
OTCQX Dividend OTCQXDIV 9.9%
OTCQX Banks OTCQXBK 9.4%
OTCQX International OTCQXINT 9.9%
OTCQX Canada OTCQXCAN 6.1%
OTCQX U.S. OTCQXUS 2.0%
OTCQB Venture OTCQB -2.6%
OTCM QX ADR 30 Index OTCQX30 8.6%
OTCM ADR OTCDR 8.2%

 

 

 
 
Join us at the NIRI 2017 Annual Conference
 

We are excited to announce the inaugural Small Cap IR Summit at the NIRI 2017 Annual Conference, June 4th - 7th in Orlando, Florida.  This summit is the result of our work with the NIRI team to include dedicated sessions on cutting-edge IR strategies specifically tailored to small-cap IROs.

This panel discussion will include a buy-side small cap investor, an IRO from a small cap company, and an IR advisor with 20 years of small-cap experience for insight on achieving small-cap IR success. OTC Markets Group's Jason Paltrowitz, EVP – Corporate Services, will moderate the panel focused on strategies to generate visibility, target investors, develop relationships with analysts and more effectively communicate using new technologies.

Register and learn more: https://www.niri.org/professional-development/annual-conference/2017-annual-conference/agenda/sessions/concurrent-session-small-cap-ir-summit-new-idea

 
 
Events
 

Corporate Governance Best Practices and Communication Strategies – Webinar (May 25, 2017)

4th Annual OTCQX Senior Executive & Issuer's Forum – Vancouver, Canada (May 31, 2017)

J.P. Morgan Corporate Challenge – New York, NY (May 31, 2017)

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)

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

Please contact events@otcmarkets.com for more information.

 
 
News
 

How To Take the Pain Out of Being a Public Company – Equities.com (April 12, 2017)

CEO Chat: Cromwell Coulson, OTC Markets – Markets Media (April 26, 2017)

OTC Markets Releases Q1 Results as Revenue Increases 5% versus Year Prior – Crowdfund Insider (May 3, 2017)

Three Ways to Increase Shareholder Value – BankDirector.com (May 3, 2017)

INTERVIEW-OTC Markets hopes number of Israeli listings can double this year – Reuters (May 17, 2017)

Island Stock Transfer Joins OTC Markets' Transfer Agent Verified Shares Program – press release (May 22, 2017)

 
 
OTCQX Virtual Investor Conference
 

In case you missed our May 11th Virtual Investor Conference for International Companies, you can view company presentations here: http://www.virtualinvestorconferences.com/agenda-may2017.html

Presenting Companies:

Akbank (Istanbul Stock Exchange: AKBNK; OTCQX: AKBTY)
Balfour Beatty plc (LSE: BBY; OTCQX: BAFYY)
Excelsior Mining Corp. (TSE: MIN; OTCQX: EXMGF)
GreenPower Motor Company Inc. (TSX-V: GPV; OTCQX: GPVRF)
Grupo Financiero Banorte, S.A.B. De C.V. (BMV: GFNORTE; OTCQX: GBOOY)
Implanet (EPA: IMPL; OTCQX: IMPZY)
Interconexión Eléctrica S.A. E.S.P. (Bolsa de Valores de Colombia: ISA; OTCQX: IESFY)
Lion One Metals Limited (CVE: LIO; OTCQX: LOMLF)
Mason Graphite Inc. (TSX-V: LLG; OTCQX MGPHF)
Opsens Inc. (TSX-V: OPS; OTCQX: OPSSF)
Poydras Gaming Finance Corp. (TSX-V: PYD; OTCQX: PYDGF)
Profound Medical (TSX-V:PRN; OTCQX PRFMF)
The Trendlines Group Ltd.  (SGX: 42T; OTCQX TRNLY)
Turkiye Garanti Bank A.S. (Istanbul Stock Exchange: GARAN; OTCQX: TKGBY)

 
 
New OTCQX and OTCQB Companies
 

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

The OTCQX Best Market
CannaRoyalty Corp. (OTCQX: CNNRF)
Condor Gold PLC (OTCQX: CNDGF)
Fortress Paper Ltd. (OTCQX: FTPLF)
Loop Industries, Inc. (OTCQX: LLPP)
Rasna Therapeutics, Inc. (OTCQX: RASP)

The OTCQB Venture Market
BlackStar Enterprise Group, Inc. (OTCQB: BEGI)
California Nanotechnologies Corp (OTCQB: CANOF)
Drone Aviation Holding Corp. (OTCQB: DRNE)
Eyecarrot Innovations Corp. (OTCQB: EYCCF)
Focus Graphite, Inc. (OTCQB: FCSMF)
Graphite One Resources, Inc. (OTCQB: GPHOF)
IC Potash Corp (OTCQB: ICPTF)
IDM Mining Ltd (OTCQB: IDMMF)
Jade Global Holdings, Inc. (OTCQB: JADG)
Kalytera Therapeutics Inc. (OTCQB: KALTF)
LED Medical Diagnostics Inc (OTCQB: LEDIF)
Liberty Leaf Hldgs Ltd. (OTCQB: LIBFF)
Linn Energy Inc (OTCQB: LNGG)
Micromem Technologies, Inc. (OTCQB: MMTIF)
MYM Nutraceuticals Inc (OTCQB: MYMMF)
Nightfood Hldgs Inc. (OTCQB: NGTF)
Quaterra Resources Inc. (OTCQB: QTRRF)
STR Holdings, Inc. (OTCQB: STRI)
Tetra Bio-Pharma Inc. (OTCQB: TBPMF)

 
 
Graduates to an Exchange Listing
 

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

 

Graduated from the OTCQX Best Market
Goodrich Petroleum Corporation (NYSE MKT: GDP)

Yangtze River Development Limited (Nasdaq: YERR)

 

Graduated from the OTCQB Venture Market
Catasys Inc. (Nasdaq: CATS)

FNB Bancorp (Nasdaq: FNBG)
SilverSun Technologies, Inc. (Nasdaq: SSNT)