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Microcap Review
In Loving Memory of Our Precious
Daughter, and Sister, Sammi Kane Kraft ED iTor i aL
C
In Loving Memory of Our Precious
Published Since 2006 onsumer prices are higher across the board except for
Daughter, and Sister, Sammi Kane Kraft

A
www.SNN.Network one important category: stock prices! The post pandemic
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holdings
word is onin the
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buy, sell or hold? As investors we do need to decipher pertinent
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situation of high dollar versus low stock prices? Buy, Buy, Buy! Buy withis still
the noise of those trying to sell us their ideas. Picking up morsels of truth
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Executive relevant
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margin.
SNN Founder, Publisher Emeritus
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lane, picking sources we trust with a history of accuracy, doing this will do more
Shelly Kraft to protect
As microcap ourinvestors
self-made wedirectives
now have while
the resisting
opportunity a constant repetitive
that wealthy barrage
investors
Lynda Lou “Lulu”
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Publisher
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enjoy, buying low. Most fortunes are made during financial crisis’ when
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Lynda Lou “Lulu” Kraft equities sell off as investors run for the doors raising cash to cover margin
ASIAN
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PACIFIC &
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Richardson
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lkkraft@snnwire.com
Director
Pundits
calls, havein the microcap
more essential world oftenneeds
financial preachother
doingthan
yourtheir
homework, believe
portfolio’s or in
your own methods, stick to your plan, learn from your mistakes,
simply want to stop the bleeding in their portfolio holdings. Regardless of and build your
SNN
aSiaNCompliance and
paciFic corrESpoNDENT
due diligence
Leslie Richardsonadministration sensibility to maintain focus. I believe for the most part they are correct.
their reasons this rare opportunity presents itself in broad daylight. It’s a How-
Jack Leslie
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from one’s
stock own
picking mistakes.
since you haveFor been
example, for generations
tracking stocks to buy investors relied
in your on their
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circumstances, as an offer to sell or a solicitation to buy or effect
MicroCap Review Magazine is owned and operated by SNN Inc.
transactions in any securities. No investment advice is provided or
should be construed to be provided herein. Planet Microcap Review
own decisions rather than being led to slaughter and placing blame elsewhere.
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Like everything in the Stock Market, MicroCaps are down. As of EOD on June
statements” within the meaning of the Private Securities Litigation
Magazine and its owners, employees and affiliates are not, nor do
Reform Act of 1995, Section 27A of the Securities Act of 1933 and
any of them claim to be, registered broker-dealers or registered
Section 21E of the Securities Exchange Act of 1934. All statements
17, 2022, the MicroCap Review (MCRI), our proprietary MicroCap index tracking
investment advisors. This publication may contain “forward-looking
other than statements of historical fact are “forward-looking state-
statements” within the meaning of the Private Securities Litigation
ments” for purposes of federal and state securities laws, including,
Reform Act of 1995, Section 27A of the Securities Act of 1933 and
MicroCap performance, is down 26.73% YTD; the only index we track that is
but not limited to, any projections of earnings, revenue or other fi-
Section 21E of the Securities Exchange Act of 1934. All statements
nancial items; any statements of the plans, strategies and objectives
other than statements of historical fact are “forward-looking state-
of management for future operations; any statements concerning
doing worse is NASDAQ, which is down 31.36% YTD. I don’t want to spend time
ments” for purposes of federal and state securities laws, including,
proposed new services or developments; any statements regarding
but not limited to, any projections of earnings, revenue or other fi-
future economic conditions or performance; any statements of belief;
nancial items; any statements of the plans, strategies and objectives
in this editorial discussing why; I highly recommend tuning into Planet MicroCap
and any statements of assumptions underlying any of the foregoing.
of management for future operations; any statements concerning
Such forward-looking statements of or concerning the companies
proposed new services or developments; any statements regarding
mentioned herein are subject to numerous uncertainties and risk
future economic conditions or performance; any statements of belief;
Podcast to hear what my guests have to say about the matter. The real ques-
factors, including uncertainties and risk factors that may not be set
and any statements of assumptions underlying any of the foregoing.
forth herein, which could cause actual results to differ materially from
Such forward-looking statements of or concerning the companies
those stated herein. Accordingly, readers are cautioned not to place
tion is, well, now what? The summer is an opportune time to start reflecting on
mentioned herein are subject to numerous uncertainties and risk
undue reliance on such forward-looking statements. This publication
factors, including uncertainties and risk factors that may not be set
undertakes no obligation to update any forward-looking statements
forth herein, which could cause actual results to differ materially from
what your financial goals are for the near and long term using some of the data
that may be contained herein. Planet Microcap Review Magazine, its
those stated herein. Accordingly, readers are cautioned not to place
owners, employees, affiliates and their families may have investments
undue reliance on such forward-looking statements. This publication
in companies featured in this publication, may purchase securities of
enclosed in this issue of the magazine, as well as macro data/indicators. Few
undertakes no obligation to update any forward-looking statements
companies featured in this publication and may sell securities of com-
that may be contained herein. MicroCap Review Magazine, its own-
panies featured in this publication, at any time and from time to time.
ers, employees, affiliates and their families may have investments
things we are certain of right now: liquidity has dried up, interest rates have
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in companies featured in this publication, may purchase securities
will refrain from engaging in any pre-publication transactions in secu-
of companies featured in this publication and may sell securities of
rities of companies featured in this publication until two trading days
companies featured in this publication, at any time and from time to
gone up (and probably will continue to) in order to rein in inflation, high flying
following the publication date. This publication may contain company
time. However, it is the general policy of this publication that such
advertisements/advertorials indicated as such. Information about a
persons will refrain from engaging in any pre-publication transactions
company contained in an advertisement/advertorial has been fur-
growth names have taken it on the chin. There’s actually a bunch of things
in securities of companies featured in this publication until two trad-
nished by the company, the publisher has not made any indepen-
ing days following the publication date. This publication may contain
dent investigation of the accuracy of any such information and no
company advertisements/advertorials indicated as such. Information
that we’re now certain of, but at the end of the day, despite rising inflation, this
warranty of the accuracy of any such information is provided by this
about a company contained in an advertisement/advertorial has
publication, its owners, employees and affiliates. Pursuant to Section
been furnished by the company, the publisher has not made any
17(b) of the Securities Act of 1933, as amended, in situations where
may sound otherworldly these days, but CASH IS STILL CASH. Having cash to
independent investigation of the accuracy of any such information
the publisher has received consideration for the advertisement/ad-
and no warranty of the accuracy of any such information is provided
vertorial of a company or security, the amount and nature of such
by this publication, its owners, employees and affiliates. Pursuant to
deploy in times like these is where the greats have made names for themselves.
consideration will be disclosed in print. Readers should always con-
Section 17(b) of the Securities Act of 1933, as amended, in situations
duct their own due diligence before making any investment decision
where the publisher has received consideration for the advertise-
regarding the companies and securities mentioned in this publication.
ment/advertorial of a company or security, the amount and nature
At least for me, especially if we are going to continue to see declines, not just in
Investment in securities generally, and many of the companies and
of such consideration will be disclosed in print. Readers should al-
securities mentioned in this publication from time to time, are specu-
ways conduct their own due diligence before making any investment
lative and carry a high degree of risk. The disclaimers set forth at
MicroCaps, but overall markets, is when I’m reflecting on how I want to deploy
decision regarding the companies and securities mentioned in this
Planetmicropcap.com or SNN.Network - disclaimer are incorporated
publication. Investment in securities generally, and many of the com-
herein by this reference.
panies and securities mentioned in this publication from time to time,
cash that will set me up for financial independence in the next 10-15-20 years.
are speculative and carry a high degree of risk. The disclaimers set
forth at http://www.microcapreview.com/disclaimer/ - disclaimer are

We don’t have all the answers, however, by reading this issue of the magazine,
incorporated herein by this reference.

4 Planet MicroCap Review www.PlanetMicroCap.com


I hope that you’re able to walk away with a few nuggets that can help you on
4 MicroCap Review Magazine your path to financial independence. www.SNN.Network
price and market cap. Even the brightest stars have some good news: 29% of constituents had positive
fallen. Additionally, stock price drops suffering the quarterly stock performance in Q3 2022 vs. 18%
usual 3rd quarter doldrums of poor earnings expec- positive quarterly stock performance for Q2 2022.
tations which will add to poor stock performance. Healthcare was up 7.22% for the quarter lead by
Okay it might not be throwing the dart time but dust having four (4) companies in the top 10 performers,
off the dart board and get your focus on because it including Catalyst Biosciences, Inc., which was up

E D iTo r iaL
just might be around the corner! —Shelly Kraft 296.51%.

L
et’s beat around the bush, for Q3

A
2022 (and all of 2022), it’s been This is not our first go round, markets are cyclical
s we get bombarded
tough being with market information
a MicroCap investor. history verifies this. However, I always go back to
and intel in the news, social media, newsletters,
The stats tell it all: The Planet MicroCap insights that a friend of Planet MicroCap, Rick Rule,
TV ads, YouTube
index etc. we
was down have to
10.53%, keepfar
which our would always remind me: Bear Markets are authors of
wn perspective in mind,
outpaces thewhich
next is, how does
biggest loserwhat’s
for Bull Markets. I think about this (and the inverse) quite
ppening inthe thequarter
stock market
(DJIA affect microcap
was down 6.25%).stocks?
Year How do we manage
to date, a bit. the
Specifically, what areas of the market are people
ldings in our portfolio? How do we make our
MicroCaps are down 34.74% (according to the decisions of whether we should
disliking and avoiding and WHY? It’s abundantly clear
y, sell or hold?
PlanetAsMicroCap
investors we do need
index). Lookingto decipher
at thesepertinent
numbers, detailslooking
from at every statistic out there that MicroCap
e noise of those trying to sell us their ideas. Picking
it’s pretty clear, from a macro perspective, we’ve up morsels of truth is stillare the unchosen right now. If you’re reading
stocks
evant to our decision making which brings me to
been a risk-off environment. When you dive deeper the point of staying thisour
in editorial and this issue of the magazine, you prob-
ne, picking into
sources we trust with a history of accuracy,
individual sectors, sentiment has been negative doing this will do more
ably already know this. That’s why the main theme for
protect our self-made
across directives
the board while
(Mining andresisting
Cannabis a constant repetitive this
in particular) barrage
issue is about “Fallen Angels” - many stocks that
attemptedand paid influences.
capital has dried up. I’ve done a number of were once loved are now calling MicroCap their new
interviews with CEOs that are very VERY thankful home. There were already a ton of companies to look
ndits in the microcap world often preach doing your
they raised capital earlier this year because things homework, believe in now, there are even more. Do your homework,
at, and
ur own methods, stick to your plan, learn from
now are much more difficult. Every sector in the your mistakes, and build your
you’re in the right place to get started. —Bobby Kraft
nsibility toindex
maintainwasfocus. I believe
hit hard, for the
meaning down most>3%part(except
they are correct. How-
er, it’s quite difficult to more
Healthcare, locateon non-biased information
that in a second), butduring
thereour
is searching for
and even harder to interpret incoming information when it finds you.

though I am a market traditionalist and since I historically lean on using my


wn common sense, this method may be costly since it also embeds learning
om one’s own mistakes. For example, for generations investors relied on their
ockbroker or wealth advisor to “trust” their advice, timing, ideas, guidance
d performance. For better or for worse this marriage could have been a
WaiTiNg oN EDiToriaL
ry successful marriage, oh by the way, the Internet, social media, relentless
vertising, and regulatory intervention changed everything. The advent of dis-
unt brokering, and millennial DIY activity gave investors the power of making
cisions but added the need for discipline, research, and trial & error. As far as
m concerned and in my opinion, I would rather fail or succeed because of my
wn decisions rather than being led to slaughter and placing blame elsewhere.

ke everything in the Stock Market, MicroCaps are down. As of EOD on June


2022, the MicroCap Review (MCRI), our proprietary MicroCap index tracking
croCap performance, is down 26.73% YTD; the only index we track that is
oing worse is NASDAQ, which is down 31.36% YTD. I don’t want to spend time
this editorial discussing why; I highly recommend tuning into Planet MicroCap
odcast to hear what my guests have to say about the matter. The real ques-
n is, well, now what? The summer is an opportune time to start reflecting on
hat your financial goals are for the near and long term using some of the data
closed in this issue of the magazine, as well as macro data/indicators. Few
ngs we are certain of right now: liquidity has dried up, interest rates have
one up (and probably will continue to) in order to rein in inflation, high flying
www.PlanetMicroCap.com Planet MicroCap Review 5
owth names have taken it on the chin. There’s actually a bunch of things
at we’re now certain of, but at the end of the day, despite rising inflation, this
CONTENTS
Features
8 Fallen Angels: Devoting Time to
32 Fallen Angels: Can Beaten-Down
Companies that May Not Be Buyable at E-commerce and Software Stocks See a
the Moment by Ben Claremon, Cove Street Capital “Resurrection?” by William Duberstein, Stone Oak Capital
19 Fallen Angels: Pay Attention to Changes
44 Fallen Angels: When Optimistic
in Sector Money Flows
Projections and Growth Don’t Add Up
by Fadi Diab, @TheGladiatorHC
by Tim Travis, T&T Capital Management

Insig hts
14 The Utility of the Future 96 “An Exercise in Clear Thinking”
by Peter Londa, CEO, Tantalus (TSX: GRID) by Richard Revelins, Peregrine Corporate

24 The Case for Bridging the Gap Between 98 Ask Mr. Wallstreet: Shorts by Shelly Kraft
TradFi and DeFi by Caitlin Cook, Host, The 100 Imaging Biometrics, LLC, a subsidiary of
DeadCaitBounce Experience IQ-AI Limited (OTCQB: IQAIF) (LSE: IQAI)

26 Is Gold Losing Its Lustre? Or Are We Just by Dr. Kathleen Schmainda, PhD
Short-sighted? by Gavin Wendt, MineLife
102 Bear Market Blues?
30 Incorporating EOS into Succession
® by Roger Pondel, PondelWilkinson
Planning by Jackie Kibler 106 Investor Relations for Bear Markets
40 Understanding Blue Sky Laws by Mike Porter, Porter, LeVay & Rose
by Andy Kyzyk, OTC Markets Group 108 Inflation, Inflation, Inflation. But What’s
46 ESG for MicroCaps Going on With Gold & Silver?
by Dr. Tim Siegenbeek van Heukelom, Socialsuite by David Morgan and Jon Little, The Morgan Report

68 Market Maker Corner: Market Making 114 The Micro-Cap IPO & Uplisting Report: Q3
Explained by Eric Flesche, Glendale Securities by Lucosky Brookman LLP

72 On-demand Accounting and Finance


54 Overview of the Planet MicroCap Index
by Aaron Spool and Neil Reithinger, Eventus Advisory Group

74 Door Half Open by Drew Bernstein, CPA, Marcum, Profiled Companies


Bernstein & Pinchuk

80 Cannabis Corner: US Cannabis Valuations 10 Reliance Global Group, Inc.


Continue to Decline, As Does the Broader (NASDAQ: RELI, RELIW)
Market by Seth Yakatan, Katan Associates
22 Crexendo, Inc. (NASDAQ: CXDO)

82 Public Microcap Biotech Company Board
36 MamaMancini’s (NASDAQ: MMMB)
Issues by John Bonfiglio, PhD, Independent
Board Director 50 Thunderbird Entertainment

88 Legal Corner: Getting Started on ESG
(TSX-V: TBRD) (OTCQX: THBRF)

Disclosures by Jon Uretsky, Esq., PULLP 53 Meryllion Resources Corporation


92
(CSE: MYR)
Insurance Corner: Having the Right
Insurance Broker Matters by John Farris, Assurtrak 84 Boat Rocker Media (TSX: BRMI)
94 Asia Corner: Post-Pandemic Hong Kong
56-67 MCRI Q3 2022 Constituent List
Moves to Fortify Status as International
Financial Hub by Leslie Richardson
6 Planet MicroCap Review www.PlanetMicroCap.com
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www.PlanetMicroCap.com Planet MicroCap Review 7
Feature
// By Ben Claremon

Fallen Angels
Devoting Time to Companies that May
Not Be Buyable at the Moment

How would you define a company that is labeled a “Fallen Angel”? 

I
t occurs to me that just about every investor valuations just outside of what I consider reasonable,
will have a different definition of what he or she given the returns and growth profile of the company.
considers a fallen angel. To me, a simple definition These can be companies that have gone from being
would be a high return, growing company that insanely valued to merely expensive or cult-like
previously was held in high regard by the stock stocks that are always a little expensive. Build an
market, but whose price has fallen from previously intellectual history with these companies, set a
lofty levels. Markets vacillate between greed and reasonable price at which to buy them and then
fear and during times when people are fearful, there wait for the vicissitudes of the market to hand you
is the opportunity to buy really good businesses at opportunities when the whole market goes down or
much more reasonable valuations. Now, all of that when a stock has its own mini-recession.
makes for some nice bullet points within an investor
presentation but the important question is: how Do you have any recent or past examples
does an investor position himself or herself to be of a “Fallen Angel” that supports your
able to benefit from temporary to slightly longer definition? 
lasting dislocations? We were reminded in March
and April of 2020 that in times when markets are I have long admired Trimble (Ticker: TRMB). The
falling quickly, it is very hard to perform a deep company has very solid margins and has shown
diligence process on a brand new company. During impressive growth over the last 20 years. Trimble’s
such times, investors invariably have to engage in mission is to fundamentally change—via technology—
triage within their existing portfolios and prioritize some industries that have been quite slow to adopt
businesses they have researched in the past when new technology: engineering and construction,
deciding what to add to the portfolio. Ideally, what agriculture and transportation. These are verticals
I want during a market downturn is to have a list with huge TAMs so there is no reason to believe that
of wide moat businesses within secular tailwinds Trimble won’t be able to grow consistently for the
that I have done a fair amount of diligence on. If I foreseeable future. The problem for someone with
have done the work and established prices at which a value-bias is that the stock, which does have some
I would be excited to own such companies, it is end market cyclicality risk, is always “expensive.”
much easier to perform a small amount of additional Based on our standard deviation adjusted multiples,
diligence and then act swiftly. over the last 15 years the stock has traded at aver-
age EV/EBITDA and P/E multiples of 17.8x and 36.4x,
Again, all of that sounds great in theory. But, with respectively.
thousands of publicly traded securities within my
investment universe, how do you I decide to devote The stock has gone from being very rich to just ex-
my limited time to a company that may not be buy- pensive and that has made it a priority for me. I bring
able at the moment? It is always a tough decision up Trimble because I think the stock is emblematic of
and I know I don’t always get this right. However, my the type of situations I look for, as described above.  
strategy is to spend time on companies that trade at

8 Planet MicroCap Review www.PlanetMicroCap.com


In your opinion, is now the time to consider looking true growth profile can be quite challenging.
at companies considered by your definition to be
“Fallen Angels”? So, the short answer is yes, there are more interest-
ing companies showing up on our screens than in
I think investors need to be careful. To me, compar- early 2022. But, like during most of recent history
ing a stock’s current price to the 52-week high it outside of early 2020, it is prudent to be highly
hit in late 2021, for example, is potentially quite selective.
misleading and dangerous. In our office, I have
Ben Claremon joined Cove Street in 2011 as a research analyst. He also
recently heard the question “what in the world was
serves as a Co-Portfolio Manager for our Classic Value | Small Cap Plus
the market thinking when the stock was $X eight strategy. Previously he worked as an equity analyst on both the long and
months ago?” quite often. Anchoring to previous the short side for hedge funds Blue Ram Capital and Right Wall Capital
in New York. Prior to that, he spent four years with a family commercial
stock prices as if they represented anything but real estate finance and management business. Mr. Claremon was also the
noise is a good way to lose a lot of money. Also, proprietor of the value investing blog, The Inoculated Investor. He is now
the host of the Compounders podcast. His background includes an MBA
there are plenty of COVID beneficiaries that were from the UCLA Anderson School of Management and a BS in Economics
clearly over-earnings but the market—in my opin- from the University of Pennsylvania’s Wharton School.
ion—did not do a great job at recognizing that until Disclosure: Ben Claremon does not own any shares in Trimble.
recently. So, determining the core earnings power or

DISCLAIMER AND FORWARD-LOOKING STATEMENTS NOTICE: This article is provided as a service of SNN Inc. or an affiliate thereof (collectively “SNN”), and all information
presented is for commercial and informational purposes only, is not investment advice, and should not be relied upon for any investment decisions. We are not recommending
any securities, nor is this an offer or sale of any security. Neither SNN nor its representatives are licensed brokers, broker-dealers, market makers, investment bankers, investment
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effectuate any plan, and possess no actual knowledge of any specific company’s operations, capabilities, intent, resources, or experience. Any opinions expressed in this article
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Securities Exchange Act of 1934. Forward-looking statements are based upon expectations, estimates, and projections at the time the statements are made and involve risks and
uncertainties that could cause actual events to differ materially from those anticipated. Therefore, readers are cautioned against placing any undue reliance upon any forward-
looking statement that may be found in this article.
SNN does not receive compensation for, nor engage in, providing advice, making recommendations, issuing reports, or furnishing analyses on any of the companies, securities,
strategies, or information presented in this article. SNN recommends you consult a licensed investment adviser, broker, or legal counsel before purchasing or selling any securities
referenced in this article. Furthermore, it is encouraged that you invest carefully and consult investment related information available on the websites of the SEC at http://www.sec.
gov and the Financial Industry Regulatory Authority (FINRA) at http://finra.org.

Note: This article is not an attempt to provide investment advice. The content is purely the author’s personal opinions and should not be
considered advice of any kind. Investors are advised to conduct their own research or seek the advice of a registered investment professional.

www.PlanetMicroCap.com Planet MicroCap Review 9


Reliance Global Group, Inc. (NASDAQ: RELI, RELIW)

Q&A with Chairman


and CEO, Ezra Beyman
RK: Let’s start with a quick form alongside a custom white
label website. RELI Exchange is
overview of the business.
designed to give independent
agents an entire suite of business
EB: Reliance Global Group, Inc.
development tools, allowing them
(NASDAQ: RELI, RELIW) is an
to effectively compete and win
insurtech company combining
against national agencies.
advanced technologies, with
the personalized experience of
•• By implementing artificial
a traditional insurance agency
intelligence and robotic process
model. Reliance Global Group’s
automation (RPA) and, Reliance
growth strategy includes both
can:
an organic expansion, through
its InsurTech platforms, 5Minu-
teInsure.com, its business-to- o Dramatically reduce cost to
consumer platform, and RELI write new business and maintain
Exchange, its business-to- clients.
business platform for agency partners, as well as
acquiring well managed, undervalued and cash o Allow agents to focus on selling new policies
flow positive insurance agencies.
o Create a digitally empowered and scalable
•• Successful track record of acquiring cash flow insurance agency model
positive ‘offline’ home and auto agencies, and
utilizing technology to more cost effectively •• Ability to rapidly expand Reliance’s agency net-
service the acquired policies and enhance profit- work nationwide, driving margin expansion
ability

RK: How would you describe the


•• Capitalizing on consumer shift to ‘online’: more and
more customers search for insurance online, but company’s performance to this point
consumers prefer the personal touch of an agent (beginning of September 2022) in the year?
Have you reached the milestones and
o 5MinuteInsure.com is Reliance Global goals that you set for the company? 
Group’s online business-to-consumer plat-
form and utilizes artificial intelligence and EB: In the second quarter of 2022, we achieved a
data mining, to provide competitive insur- 92% year-over-year increase in revenue compared
ance quotes within 5 minutes, with minimal to the last year’s second quarter. This growth has
data input. been driven by our proven acquisition strategy and
the increasing successes of our recent acquisitions,
o RELI Exchange is Reliance Global Group’s JP Kush & Associates, Medigap Health Insurance
B2B InsurTech platform and agency partner Company and most recently, Barra & Associates,
network for insurance agents and agencies, which was subsequently relaunched as the highly
leveraging the 5 Minute Insure quoting plat- successful, RELI Exchange.

10 Planet MicroCap Review www.PlanetMicroCap.com


We were enthusiastic when we acquired Barra & EB:
Associates in April of this year. We viewed Barra as
a highly strategic acquisition, one that was extreme- •• The U.S. insurance broker and agency industry gen-
ly complementary to our existing offerings and, erated revenue of $182 billion in 2020. The market
more importantly, the perfect vehicle with which has grown steadily over the past 5 years due to
to support our nationwide expansion plans. This macroeconomic growth, beneficial legislation, and
was exactly the type of transaction we had been positive trends within the insurance sector.
searching for, as it added more than sixty agents
and agency partners to our existing agency partner •• The InsurTech industry is poised to disrupt the
network, and we believed we could scale the busi- insurance industry, in much the same way the fin-
ness both rapidly and cost-effectively. More impor- tech market has disrupted the financial services
tantly, Barra brought an advanced technology infra- industry. InsurTech refers to the use of technol-
structure that was well-aligned with our acquisition ogy innovations designed to squeeze out savings
strategy. By combining 5MinuteInsure.com, with and efficiency from the current insurance industry
the Barra technology infrastructure, we saw this model.
acquisition as an opportunity to create synergies
for growth, including the affiliated-agent business •• The industry itself is projected to grow to a
model. $11.2 billion global industry by the year 2027, as
per AllTheResearch. InsurTech is disrupting an
Barra was relaunched as RELI Exchange, a first industry once known for having to call individual
in class, business-to-business InsurTech platform agents with little price transparency, and much
and agency partner network that builds on the like its FinTech forefathers, streamlines the trans-
artificial intelligence and data mining backbone of action processes and provides significant eco-
5MinuteInsure.com, a platform that was designed nomic value for consumers.
to target the direct-to-consumer market. We are
proud to report that in just three short months, we •• Reliance Global brings its thirty plus years of
have aggressively grown our agency and partner insurance industry experience to 5MinuteInsure.
network by more 30% illustrating both the strength com and RELI Exchange. Reliance Global backs
of the platform as well as its popularity with our 5MinuteInsure.com and RELI Exchange with a
agency partners. The platform is designed to pro- combined blend of technology and insurance
vide instant and competitive insurance quotes from expertise, through advanced innovation, a net-
more than thirty insurance carriers nationwide in work of independent agents, and solid relation-
just a few minutes. In addition, it reduces an agent’s ships with top-rated insurance companies. As a
back-office burden and expenses by eliminating result, 5MinuteInsure.com literally brings its cus-
paperwork, thus providing the agent with more time tomers success in minutes, and RELI Exchange
to focus on their clients, selling policies, and building helps lead agents to similar success.
their businesses.
RK: 2022 has been a volatile year for
Unlike a franchise model, RELI Exchange was
MicroCaps and a number of macro trends
designed with both a low barrier to entry as well
as a compelling value proposition that we believe that you have to pay attention to as well
has contributed to the accelerated growth of our (War in Ukraine, supply chain, inflation,
agency partner network we are currently experienc- etc…). What has been your strategy to
ing. The response from agents using the platform, navigate through these challenges? 
whether our in-house agents now transitioning to
RELI Exchange, or our new, outside agency part- EB: On the business-to-business side of the busi-
ners that have embraced the platform, has been ness, while these macro trends do not have a
overwhelmingly positive. They are reporting to us direct impact on Reliance, the uncertainty they cre-
that they are experiencing a positive impact on their ate may cause people to try and find new ways
business since moving onto the RELI Exchange plat- to secure their financial futures and this may actu-
form. ally lead more people towards entrepreneurship.
In turn, this may result in an uptick in the number
of people looking to open up their own insurance
RK: Are there any industry tailwinds to business and become a part of the RELI Exchange
push forward some of the company’s network, which immediately provides them a plug-
goals and objectives? and-play solution, with the look and feel of a sig-
nificant agency.

www.PlanetMicroCap.com Planet MicroCap Review 11


Looking at it from the consumers point of view, dur- ance industry with the speed, or versatility of RELI
ing difficult economic times, people look to save Exchange. We look forward to continuing to aggres-
money where they can, and both 5MinuteInsure. sively add new agency partners to our network
com and the RELI Exchange platforms can help and believe this will have a multiplier effect on the
consumers do that as they are designed to provide growth of our business. Using the proprietary soft-
instant and competitive insurance quotes from more ware which we developed, the agency network we
than thirty insurance carriers nationwide. In addition, have built is highly scalable, and we believe it will
historically, in this type of macro environment, the provide us with the ability to grow our business line
insurance industry has typically been very strong. significantly with little additional costs. Our goal is to
build RELI Exchange into the largest agency partner
network in the country and we believe the results
RK: What are some of the company’s value
we have already experienced demonstrate that we
catalysts for the rest of 2022, going into
are, indeed, on the right path.
2023?
For more information about Reliance Global Group,
EB: We believe we have a best-in-class platform please visit: www.relianceglobalgroup.com
and are not aware of any other offering in the insur-

Thank you!

DISCLAIMER AND FORWARD-LOOKING STATEMENTS NOTICE: This article is provided as a service of SNN Inc. or an affiliate thereof (collectively “SNN”), and all information
presented is for commercial and informational purposes only, is not investment advice, and should not be relied upon for any investment decisions. We are not recommending
any securities, nor is this an offer or sale of any security. Neither SNN nor its representatives are licensed brokers, broker-dealers, market makers, investment bankers, investment
advisers, analysts, or underwriters registered with the Securities and Exchange Commission (“SEC”) or with any state securities regulatory authority.
SNN provides no assurances as to the accuracy or completeness of the information presented, including information regarding any specific company’s plans, or its ability to
effectuate any plan, and possess no actual knowledge of any specific company’s operations, capabilities, intent, resources, or experience. Any opinions expressed in this article
are solely attributed to each individual asserting the same and do not reflect the opinion of SNN.
Information contained in this presentation may contain “forward-looking statements” as defined under Section 27A of the Securities Act of 1933 and Section 21B of the
Securities Exchange Act of 1934. Forward-looking statements are based upon expectations, estimates, and projections at the time the statements are made and involve risks and
uncertainties that could cause actual events to differ materially from those anticipated. Therefore, readers are cautioned against placing any undue reliance upon any forward-
looking statement that may be found in this article.
The company profiled has paid consideration to SNN or its affiliates for this article. SNN does not engage in providing advice, making recommendations, issuing reports, or
furnishing analyses on any of the companies, securities, strategies, or information presented in this article. SNN recommends you consult a licensed investment adviser, broker, or
legal counsel before purchasing or selling any securities referenced in this article. Furthermore, it is encouraged that you invest carefully and consult investment related informa-
tion available on the websites of the SEC at http://www.sec.gov and the Financial Industry Regulatory Authority (FINRA) at http://finra.org.

12 Planet MicroCap Review www.PlanetMicroCap.com


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www.PlanetMicroCap.com MicroCap
Planet MicroCap
Review Magazine
Review 13
11
insi g hts
// By Peter Londa CEO, Tantalus

The Utility
of the Future
The utility of the future will face a perfect storm of operational and
environmental challenges.

I
t is a future in which demand for power threatens With the continued acceleration of this trend, the
to exceed supply, electric vehicles (“EVs”) and United States EIA expects global energy demand to
distributed energy resources (“DERs”) threaten to increase 47% in the next 30 years.
destabilize the grid with power generated at the grid
edge, and extreme weather events threaten to make The bottom line is, we need as much reliable electric-
power outages the new norm. It’s a future in which ity as possible. Because of electric vehicle adoption
utilities need more visibility, flexibility and control at alone, it is estimated that U.S. power production will
the edge than ever before. The only way to thrive in need to double by 2050.
this future is for electricity and data to flow together,
in parallel, all the way from SCADA to the edge. We are also living through the
Decarbonization of Everything
In short, the utility of the future needs to make
every kilowatt and kilobyte count. It’s the only way Because of government policy, increasing regula-
for utilities to achieve true sustainability across all tions and consumer demand, people everywhere are
core functions—finances, operations, environmental investing more in renewable energy and trying to
impact, regulatory compliance, and serving their move away from fossil fuels and coal. Renewables
communities. are becoming a greater share of total energy output
while traditional sources of power production are
We are living through the Electrification declining.
of Everything
In addition, consumer adoption of technologies such
It’s plain to see wherever we look—EV adoption, as rooftop solar, home battery storage and EVs
online shopping, cloud computing and server farms, is putting an even greater strain on a grid that is
computer chips embedded in every device and already outdated and in dire need of modernization.
appliance across all industries—virtually every aspect The traditional distribution grid was never designed
of daily life is becoming electrified and connected. to absorb consumer-generated electricity at this

14 Planet MicroCap Review www.PlanetMicroCap.com


level. Without additional visibility at the edge and trol at the edge than ever before. It is the only way
the ability to safeguard transformers, utilities face to safeguard the communities who rely on public
major safety issues and operational risks. power. There is no room for waste. There will be no
surplus ... and there is less room for error in the face
Meanwhile, Mother Nature is serving up of an emergency. At the same time, transformative
challenges of her own new data-driven technologies are emerging, making
it possible for utilities to deliver innovative services
Wildfires, hurricanes, heatwaves, winter storms to the community.
and other extreme weather events are impacting
the electric grid on a global scale, resulting in Fortunately, there is a way for utilities to not only
increasingly frequent outages that threaten lives become truly sustainable in the face of all this
and livelihoods. With an 83% increase in extreme change, but to become innovative change agents,
weather disasters from 2000 to 2020, grid resilience themselves. There are ways to improve reliability
has never been more important, nor has the need and resilience, offer valuable new services and
for more visibility, command and control at the edge. power the next generation of connected devices.
This is yet another reason we need kilowatts of But the only way to get there is with a direct line
electricity and kilobytes of data flowing seamlessly of sight into what is unfolding at every point along
together from headquarters to the edge and back in the distribution grid—from headquarters, to the
near real time. substation, to the meter and into the premise—and
that takes a truly interoperable and secure smart
Increased demand for power. New consumption pat- grid.
terns and consumer-generated power at the edge.
A reduced ability to scale. A world that is becoming The new mission: Become a Truly
more volatile with each passing year. These are just Sustainable Utility
a few examples of what we are dealing with today,
and it’s only getting more intense. The utility of the future needs to achieve true sus-
tainability along five critical vectors:
That is why the utility of the future will need more
visibility, which will enable more command and con-

www.PlanetMicroCap.com Planet MicroCap Review 15


and micro-grids are all now contributing to the flow
of power through EV and DER adoption.

With so much happening behind the meter, utilities


need visibility, command and control from headquar-
ters to the substation and straight into the home or
business. In short, utilities need SCADA all the way
to the edge.

But to create inherent sustainability for a utility’s


operations, finances, environmental impact, regula-
tory compliance and community empowerment,
it is critical to first reimagine the smart grid as an
intrinsically interoperable platform. It is a platform
that operates less like a one-way, analog delivery
grid and much more like a neural-network comput-
ing grid. It is a platform in which each kilowatt of
electricity is paired with contextual data about the This is a bold vision, yes—but it’s one Tantalus is
electricity itself. It is a platform in which granular already making a reality. This is a vision we must
data can be accessed, transported and analyzed continue to work towards if utilities are to continue
in real time along any point of the grid, including powering the next decade of prosperity for their
behind the meter, no matter the device or protocol. cities. Because managing electricity with up-to-the-
moment data is the only way utilities can achieve the
The new mandate: Modernize the utility visibility that enables the command and control they
and digitize the grid: need to adapt to an increasingly unpredictable future.

What was once a one-way flow of power ... Now, as with any data-driven platform, cybersecurity
is of paramount importance. Data interoperability
helps make the entire grid more resilient through bet-
ter supply-and-demand forecasts and responsiveness
to extreme weather events. But that kind of interoper-
ability comes with risks. One industry expert observed
that between 2018 and 2020, 10% of ransomware
attacks on industrial assets targeted utilities.

As the grid becomes increasingly digitized, we


should expect it to become more susceptible to
attacks from hackers. Still, there are many paths to
hardening the grid against cyberattacks, including
virtual private networks. Blockchain is another
technology that promises to offer unprecedented
levels of security against such threats. The point is,
… has become a multi-directional, decentralized with every new opportunity comes a new threat—
network of connected devices. Homes, businesses and vice versa.

16 Planet MicroCap Review www.PlanetMicroCap.com


The Utility of the Future isn’t just a •• Anticipate regulation: Utilities can no longer
power company—it’s a data company think like monopolies, and the best way for
utilities to get ahead of new regulations and
To make every kilowatt count, every kilowatt must requirements is to embrace the data and
be counted, and that requires robust and up-to-the- innovate.
moment data. Utilities everywhere must become as
proficient in the flow of data as they are in managing •• Harness new revenues: Fiber-to-the-Home
the flow of electrons. But to make the most of this creates a direct pipe into residences, making it
data, utilities need real-time awareness of their possible to deliver new value-added services.
entire grid—from HQ through the substation to the The digitized grid and behind-the-meter capa-
meter and into the premise. This is the only way to bilities allow utilities to deliver more power—not
boost reliability, enhance resilience, and innovate less—to those incorporating EV chargers and
new services. other elements of the Electrification of Every-
thing.
Some utilities are already starting to leverage
real-time data and interoperability to increase •• Leverage blockchain: A digitized grid empow-
efficiencies, reduce costs, increase security, get ers the use of blockchain to connect and
ahead of regulation, and harness new revenues and track the transactional aspects of the system,
technologies. Here are just a few examples of what including the use of cryptocurrency to prevent
is possible for the data-driven utility of the future: the waste of unused green energy. Blockchain
also promises to transform grid security in the
•• Increase efficiencies: Power generation at the future. In fact, many industry experts consider
edge can be more easily managed through AI- blockchain to be one of the most disruptive new
driven substation automation, reducing all the technologies on the horizon for utilities, second
functions of a substation to the software level. only to artificial intelligence.

•• Reduce costs: Automation enabled by real-time •• Embrace other disruptive technologies: A


data extends the life of substation transformers, digitized grid powered by multi-directional
while utilizing high- capacity battery storage to real-time data lets utilities not only power
backup older equipment. increasingly energy-intensive applications and
devices; it also allows utilities to incorporate
•• Increase security: Virtual Private Networks with transformative data-driven technologies into
advanced cybersecurity methodologies create their own operations, providing a platform for
a secure environment to access, transport, and continuous innovation.
deliver all real-time and near real-time data for
the utilities of the future; and future blockchain
applications hold even more promise for security.

www.PlanetMicroCap.com Planet MicroCap Review 17


Now is the time to embrace the future These trends are answered by a reliable, robust,
smart and truly interoperable smart grid network.
Tantalus is the ideal partner to give utilities the
visibility, command and control of their grids so they To proactively manage that kind of grid, every
can thrive in any future scenario. Our technology counted kilowatt needs a corresponding kilo-
platform— which includes hardware, software and byte—traveling in tandem and being made fluid
interoperable data-driven services— provides the and flexible by a smart grid platform that covers
ideal foundation for continuous adaptation, evolu- the enterprise to the edge, and from operations to
tion and innovation. the consumer. When every kilowatt counts, utilities
achieve an operational efficiency that enables them
For the nation’s utilities, the time is now to move to adjust to our shifting world.
beyond the one-directional, siloed mentality that
permeated electricity providers in the 20th Century.
No utility can simply buy power from generators
and then sell it to homes and businesses. Those that
continue down that path will find their operations
sputtering as their communities suffer from a lack of
investment and growth.

Increasing demand for energy, the rise in EVs and


DERs, extreme weather events, and the ongoing For more information about Tantalus and our solu-
demand for innovative, data-driven services—these tions, visit, www.tantalus.com
trends are not solved by the mere delivery of energy.

DISCLAIMER AND FORWARD-LOOKING STATEMENTS NOTICE: This article is provided as a service of SNN Inc. or an affiliate thereof (collectively “SNN”), and all information
presented is for commercial and informational purposes only, is not investment advice, and should not be relied upon for any investment decisions. We are not recommending
any securities, nor is this an offer or sale of any security. Neither SNN nor its representatives are licensed brokers, broker-dealers, market makers, investment bankers, investment
advisers, analysts, or underwriters registered with the Securities and Exchange Commission (“SEC”) or with any state securities regulatory authority.
SNN provides no assurances as to the accuracy or completeness of the information presented, including information regarding any specific company’s plans, or its ability to
effectuate any plan, and possess no actual knowledge of any specific company’s operations, capabilities, intent, resources, or experience. Any opinions expressed in this article
are solely attributed to each individual asserting the same and do not reflect the opinion of SNN.
Information contained in this presentation may contain “forward-looking statements” as defined under Section 27A of the Securities Act of 1933 and Section 21B of the Securities
Exchange Act of 1934. Forward-looking statements are based upon expectations, estimates, and projections at the time the statements are made and involve risks and uncertain-
ties that could cause actual events to differ materially from those anticipated. Therefore, readers are cautioned against placing any undue reliance upon any forward-looking
statement that may be found in this article.
The company profiled has paid consideration to SNN or its affiliates for this article. SNN does not engage in providing advice, making recommendations, issuing reports, or furnish-
ing analyses on any of the companies, securities, strategies, or information presented in this article. SNN recommends you consult a licensed investment adviser, broker, or legal
counsel before purchasing or selling any securities referenced in this article. Furthermore, it is encouraged that you invest carefully and consult investment related information
available on the websites of the SEC at http://www.sec.gov and the Financial Industry Regulatory Authority (FINRA) at http://finra.org.

18 Planet MicroCap Review www.PlanetMicroCap.com


Feature
// By Fadi Diab

Fallen Angels
Pay Attention to Changes in
Sector Money Flows

How would you define a company that is labelled a “Fallen Angel”?

F
or a micro-cap company to see significant needs some tailwinds to bring in broader market
share price appreciation, it needs two main support and money flow. As macro factors benefit
things to go its way. Firstly you obviously need a specific industry or natural resource, money
the management and board of directors to work starts flowing down into the smaller end of town,
together to achieve the specific objectives they set i.e. micro-cap stocks, as their propensity to achieve
out to achieve. With each milestone being met the substantial percentage gains are much higher than
company theoretically should see an increase in its large cap stocks. A fallen angel, in my opinion, is a
valuation and share price. Secondly the sector itself stock that benefited from these two factors and as

www.PlanetMicroCap.com Planet MicroCap Review 19


From my perspective, my is a natural resource explorer focussed specifically
on Kaolin assets. This sector had a magnificent run in
strategy is focussed on finding 2019-2020 and subsequently with ADN discovering
a very good asset, its share price rose from 0.5c to
unloved stocks, trading at a very over 40c during that period. Since that high in March
small enterprise value which the 2021 it has substantially decreased to a current
share price of about 5c. So you can see how easily
market has yet to pick up on. a sector moving out of favour with the market can
affect its share price.
So I personally very rarely buy
stocks that are considered to be In your opinion, is now the time to
consider looking at companies considered
‘fallen angels’. by your definition to be “Fallen Angels”?

From my perspective, my strategy is focussed on


finding unloved stocks, trading at a very small enter-
prise value which the market has yet to pick up on.
consequence enjoyed the share price increasing So I personally very rarely buy stocks that are con-
by many multiples which then had to deal with the sidered to be ‘fallen angels’. This doesn’t mean that
removal of one or both of these factors. Most of the considering fallen angels isn’t a viable strategy, rather
time the factor that changes is the money flow into my own strategy concentrates on looking forward to
that sector drying up which drags the share price a sector that hasn’t been re-rated yet because the
and valuations of these stocks down, regardless of trigger for that hasn’t happened yet. For example in
how much the management team have achieved. 2018/19 I was very bullish on the short-medium term
future of rare earths and as such I purchased a stock
Do you have any recent or past examples in my $50k challenge at 0.5c which met most of the
of a “Fallen Angel” that supports your criteria in my strategy. Off the back of the US/China
definition? trade wars the whole sector took off and my stock,
as well as many others in this industry, substantially
I recently conducted an exercise of reviewing 600+ re-rated. So using this strategy, if you can time the
micro-cap stocks with the intent of trying to find sector money inflows and outflows, you can purchase
hidden gems. The vast majority of these stocks were a stock before the market is aware of it and sell it
trading at a 50-80% discount to their highs prior to before it becomes a fallen angel.
the stock market correction starting at the end of
2021. Each of these companies suffered greatly with Fadi Diab is a MicroCap investor and educator with a predominantly Aus-
tralian (ASX) focus. From an education perspective I created two courses
the liquidity drying up in the micro-cap space as that discuss in detail my end to end investment strategy developed over
institutions and retail investors took a risk off mental- a 10 year period. I also am the owner of my website www.thespecinvestor.
com.au and a Non-Executive Director of CarbonXT Group Limited.
ity. To give an example I’ll use a company called
ADN or Andromeda Metals Ltd which is listed on the The author is not a shareholder of ADN.

ASX. For transparency sake, I have never owned this


stock nor do I intent on buying it in the future. ADN

DISCLAIMER AND FORWARD-LOOKING STATEMENTS NOTICE: This article is provided as a service of SNN Inc. or an affiliate thereof (collectively “SNN”), and all information
presented is for commercial and informational purposes only, is not investment advice, and should not be relied upon for any investment decisions. We are not recommending
any securities, nor is this an offer or sale of any security. Neither SNN nor its representatives are licensed brokers, broker-dealers, market makers, investment bankers, investment
advisers, analysts, or underwriters registered with the Securities and Exchange Commission (“SEC”) or with any state securities regulatory authority.
SNN provides no assurances as to the accuracy or completeness of the information presented, including information regarding any specific company’s plans, or its ability to
effectuate any plan, and possess no actual knowledge of any specific company’s operations, capabilities, intent, resources, or experience. Any opinions expressed in this article
are solely attributed to each individual asserting the same and do not reflect the opinion of SNN.
Information contained in this presentation may contain “forward-looking statements” as defined under Section 27A of the Securities Act of 1933 and Section 21B of the
Securities Exchange Act of 1934. Forward-looking statements are based upon expectations, estimates, and projections at the time the statements are made and involve risks and
uncertainties that could cause actual events to differ materially from those anticipated. Therefore, readers are cautioned against placing any undue reliance upon any forward-
looking statement that may be found in this article.
SNN does not receive compensation for, nor engage in, providing advice, making recommendations, issuing reports, or furnishing analyses on any of the companies, securities,
strategies, or information presented in this article. SNN recommends you consult a licensed investment adviser, broker, or legal counsel before purchasing or selling any securities
referenced in this article. Furthermore, it is encouraged that you invest carefully and consult investment related information available on the websites of the SEC at http://www.sec.
gov and the Financial Industry Regulatory Authority (FINRA) at http://finra.org.

Note: This article is not an attempt to provide investment advice. The content is purely the author’s personal opinions and should not be
considered advice of any kind. Investors are advised to conduct their own research or seek the advice of a registered investment professional.

20 Planet MicroCap Review www.PlanetMicroCap.com


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www.PlanetMicroCap.com Planet MicroCap Review 21


Crexendo, Inc. (NASDAQ: CXDO)

Q&A with President


and COO, Doug Gaylor
RK: Crexendo Business number represents all of the con-
Overview: tracted revenue that we have yet to
recognize and will benefit from as it
DG: Crexendo (NASDAQ:CXDO) is an converts to revenue monthly over the
award-winning premier provider of next 60 months.
Unified Communications as a Service
(UCaaS), Call Center as a Service With strong revenue growth, strong
(CCaaS), communication platform cost management, improving gross
software solutions, and collabora- margins that are close to 70% and a
tion services with video designed very strong balance sheet with virtually
to provide enterprise-class cloud no debt, we are positioned well for the
communication solutions to any size future.
business through our business part-
ners, software licensees, agents, and As we started 2022, we highlighted
direct channels. Our solutions currently to our shareholders that we would
support over 2.5 million end users globally and was recognize cost synergies from our acquisition of
recently recognized as the fastest growing UCaaS NetSapiens in 2021 which we have successfully
platform in the United States. We provide our ser- accomplished. We also committed to improving
vices through two divisions, our Telecommunications our gross margins and Non-GAAP income which we
Division, and our Software Solutions Division. have done as well. We are committed to continuing
our strong organic growth and continue to aggres-
RK: How would you describe the sively explore inorganic growth through acquisitions
company’s performance to this point within our existing licensee community.
(beginning of September 2022) in the year?
Have you reached the milestones and RK: Are there any industry tailwinds to
goals that you set for the company?  push forward some of the company’s
goals and objectives? 
DG: We are very pleased with Crexendo’s strong
performance for the first half of 2022. Coming off DG: Yes, the adoption of the Cloud for business
of fiscal year 2021 where we saw a 71% increase in communications continues at a very rapid pace. In
revenue and strong Non-GAAP earnings of $1.7M the US market, approximate 55% of businesses have
on total revenues of $28.1M, we have continued that yet to migrate to the Cloud for their communications.
strong momentum into the first half of 2022. YTD It is not a matter of “if” but rather “when” these
2022 revenue is up 65% year over year to $17M with businesses will convert their older, legacy telephone
Non-GAAP income of $917K and Adjusted EBITDA of systems to the Cloud. Covid hastened the migration
$928K YTD. of businesses to cloud communications due to the
benefits like mobility, work from anywhere, and
In addition, we increased our contractual backlog video collaboration that our solutions provide. Since
by 54% to $42.2M compared to Q2 of 2021. This businesses need more flexibility in their communica-

22 Planet MicroCap Review www.PlanetMicroCap.com


tion solutions, Crexendo’s solutions are the prefect navigate well through all of the supply chain issues
fit for them. Our solutions make businesses more with proper planning and product management
efficient, improves internal and external communica- that have allowed us to not be affected in this area
tions, and in most instances saves businesses money at all. We continue to execute on our game plans
over their less effective premise-based telephone as is evident by our continued growth and top and
systems. bottom line performance.

Since approximately 55% of businesses in the US RK: What are some of the company’s value
still need to migrate to the Cloud for their com- catalysts for the rest of 2022, going into
munications, this is the tailwind that will drive these 2023?
businesses to companies like Crexendo and ensure
our strong and continual growth. DG: We believe our company is significantly
undervalued and is a diamond in the rough in a very
RK: 2022 has been a volatile year for challenging equities market. With strong revenue
MicroCaps and a number of macro trends growth of 65% YTD and strong non-gaap earnings of
that you have to pay attention to as well $917K YTD, we are positioned nicely for continued
(War in Ukraine, supply chain, inflation, growth. Our gross margins have improved signifi-
etc…). What has been your strategy to cantly in 2022 and we expect those trends to con-
navigate through these challenges?  tinue. We have over $42M in contracted revenues
that will be recognized over the next 60 months
DG: Crexendo has had and always will have an which should be viewed very favorably. With a
inherent focus on fundamentals which we believe very strong balance sheet with virtually no debt, we
helps us weather any stormy challenges that arise. are not impacted by raising interest rates that has
With a focus on top line growth, cost management, crippled many of our competitors. On top of all of
and non-gaap income while maintaining a pristine these positives is a very strong pipeline for possible
balance sheet, we feel we are well positioned in acquisitions that will help our inorganic growth for
good times and bad. Our solutions, although not years to come as we look accretive acquisitions from
recession proof, are very suited for businesses within our existing base of over 200 UCaaS licensees
regardless of economic headwinds as all businesses that use our platform today.
need to communicate effectively and our solutions
make businesses more productive and efficient and For more information about Crexendo, Inc., please
typically saves businesses between 20-50% on older visit: www.crexendo.com
legacy telecom solutions. This is a very appealing
message to businesses regardless on the state of
the economy. In addition, we have been able to

DISCLAIMER AND FORWARD-LOOKING STATEMENTS NOTICE: This article is provided as a service of SNN Inc. or an affiliate thereof (collectively “SNN”), and all information
presented is for commercial and informational purposes only, is not investment advice, and should not be relied upon for any investment decisions. We are not recommending
any securities, nor is this an offer or sale of any security. Neither SNN nor its representatives are licensed brokers, broker-dealers, market makers, investment bankers, investment
advisers, analysts, or underwriters registered with the Securities and Exchange Commission (“SEC”) or with any state securities regulatory authority.
SNN provides no assurances as to the accuracy or completeness of the information presented, including information regarding any specific company’s plans, or its ability to
effectuate any plan, and possess no actual knowledge of any specific company’s operations, capabilities, intent, resources, or experience. Any opinions expressed in this article
are solely attributed to each individual asserting the same and do not reflect the opinion of SNN.
Information contained in this presentation may contain “forward-looking statements” as defined under Section 27A of the Securities Act of 1933 and Section 21B of the Securities
Exchange Act of 1934. Forward-looking statements are based upon expectations, estimates, and projections at the time the statements are made and involve risks and uncertain-
ties that could cause actual events to differ materially from those anticipated. Therefore, readers are cautioned against placing any undue reliance upon any forward-looking
statement that may be found in this article.
SNN does not engage in providing advice, making recommendations, issuing reports, or furnishing analyses on any of the companies, securities, strategies, or information
presented in this article. SNN recommends you consult a licensed investment adviser, broker, or legal counsel before purchasing or selling any securities referenced in this article.
Furthermore, it is encouraged that you invest carefully and consult investment related information available on the websites of the SEC at http://www.sec.gov and the Financial
Industry Regulatory Authority (FINRA) at http://finra.org.

www.PlanetMicroCap.com Planet MicroCap Review 23


insi g hts
// By Caitlin Cook

The Case for


Bridging the Gap
Between TradFi
and DeFi
Republican or Democrat? Still or sparkling? Cats or Dogs? No
matter how serious or insignificant the topic, society at large has
historically fallen prey to the simplicity of polarization. It’s a tale as
old as time that repeats itself over… and over… and over again.

I
take many issues with viewing the world strictly
through a lens of binary choice, but the biggest
one of all is the loss of much needed nuance.
Polarizing takes are nothing more than first order
thinking. It’s easy; the path of least resistance. Pick
a camp, and stick around people who will reinforce
what you’ve taught yourself to be true. It’s easier to
stubbornly pick a side than it is to take a thoughtful
and well researched approach. Polarizing takes
are often the ones that get air time. They can be
thoroughly entertaining. But that doesn’t make them
accurate. In fact, the truth rarely lies in the extremes.

Given the current state of the world, we see this play


out in nearly every aspect of life: people fight over
the extremes when, in reality, the answer lies some-
where in the middle. Within financial services, the
topic du jour is Crypto, and the crux of most argu-
ments can be boiled down to one simple question: day. BUT, what many people get wrong on the topic
are you willing to embrace change and the inherent of crypto is that we can blaze a new path forward
messiness that comes with it? and leave legacy systems behind in the process.

The history of the world is filled with countless The path forward cannot be paved without the
examples of innovations put into place to make our cooperation of legacy incumbents. Change is
lives easier. Faster. Cheaper. More efficient. Block- uncomfortable, but market innovation doesn’t
chain technology is, at its core, nothing more than happen in a bubble, it happens for a reason: we’ve
the latest in a long line of technological advances already started to see collaboration and targeted
brought about to improve the systems we use every efforts by some of the largest firms in the financial

24 Planet MicroCap Review www.PlanetMicroCap.com


world. This was not done in haste. The Blackrocks of this nascent industry should take it upon
and Fidelitys of the world see what I see: traditional themselves to help legacy firms cross the chasm.
and decentralized finance weren’t designed to be
mutually exclusive; the best of each system will TradFi participants who truly care about the
come together to build a better future. Progress long term growth and prosperity of the financial
requires collaboration from both sides. services industry should root for innovations that are
intended to improve the space. It won’t be smooth
For traditional finance (TradFi) participants, collabo- sailing; we are in the early days of innovation and
ration means the following (and much more): it will take many iterations to test and work out the
kinks. DeFi builders who truly care about the long
•• Ensuring regulatory bodies get educated and term growth and prosperity of this nascent industry
have open dialogue with top builders in the should take it upon themselves to help legacy firms
space to blaze a path forward that encourages cross the chasm.
responsible innovation rather than stifles it (this
is already happening!) When it comes to onboarding the lion’s share of
•• Looking at the financial system as it stands legacy financial participants, the most important
today, acknowledging its many flaws (inefficien- component today is education. High quality content,
cies, inequities, costs, and more), and thinking from well versed crypto participants, written in a
about how to solve or mitigate them. way that relates back to what traditional participants
•• Keeping an open mind and acknowledging the are familiar with (engineering jargon is intimidating
fact that innovation is always messy. There and a huge barrier to entry - cut through it). TradFi
will be scams, things will break, and it won’t all participants need to be willing to listen with an open
last, but out of the chaos will come progress. mind, and DeFi leaders need to be willing to put in
Traditional finance participants who truly care the time and effort to teach. We can all learn from
about the long term growth and prosperity of each other.
the financial services industry should root for
innovations that are intended to improve the All of this is to say: there are choices, and the one
space. you can make is to be progressive, innovate, and
learn. Stagnation is death - sharks die if they stop
For decentralized finance (DeFi) builders and lead- swimming, why would you? As someone with a
ers, collaboration means the following (and much background in traditional asset management who
more): has since made the transition to DeFi, I’ve made
my choice and want to help others make educated
•• Embracing the inevitable role of regulation choices as well.
in ensuring proper investor protections and
implementation of guardrails put in place for the My new podcast, the DeadCaitBounce Experience,
common good of all market participants was created with the sole purpose of helping TradFi
•• Not abusing the information asymmetries inher- onboard to DeFi. Listen in as I explore the relation-
ent with any up-and-coming technology for ships I’ve cultivated both in TradFi and DeFi, and how
personal gain, and rather creating new solutions they can better compliment each other to come up
with long-term viability. with something bigger than the sum of their parts. At
•• Willingness to learn from legacy financial partici- the end of the day, you don’t have to change your
pants - how can you improve a system without mind… just open it.
intimate knowledge of how the system works to
begin with? Caitlin Cook is Head of Communications and Marketing at Hxro Labs
and Host of the The DeadCaitBounce Experience Podcast. After starting
•• Chilling out on the over exuberant, maximalist her career in traditional asset management at Deutsche Bank, Caitlin
attitude that so often deters newcomers from transitioned to crypto in 2020 to spearhead the creation and develop-
ment of crypto education platform Onramp Academy. At Onramp, Caitlin
the space; patience, understanding, and educa- oversaw content creation and presentation development for RIAs, family
tion are necessary for onboarding the masses, offices and other institutional allocators to help bridge the educational
gap between traditional and decentralized finance. In June 2022, Caitlin
and leaders in the space should wield the power became Head of Communications and Marketing for Hxro Labs - a
they have for good. Crypto builders who truly Bermuda-based web3 development company and a core contributor to
Hxro.
care about the long term growth and prosperity
Note: This article is not an attempt to provide investment advice. The content is purely the author’s personal opinions and should not be
considered advice of any kind. Investors are advised to conduct their own research or seek the advice of a registered investment professional.

www.PlanetMicroCap.com Planet MicroCap Review 25


iinsi hts
NSi g HT S
// By
// By Gavin
Gavin Wendt
Wendt

Is gOlD
iS Gold lOSiNg
Losing iTS
Its
Lustre? OR
luSTRE? Or aRE
Are wE
We
Just ShORT-SighTED?
JuST Short-sighted?
“You have to choose between trusting to the natural stability of
gold and the natural stability of the honesty and intelligence of
the members of the government. And, with due respect to these
gentlemen, I advise you, as long as the capitalist system lasts, to
vote for gold.” —George Bernard Shaw

M
uch is
uch is being
being made
made of of gold’s
gold’s recent
recent priceprice the year
the year in
in US$
US$ terms
terms below
below $1700,
$1700, itit is
is nevertheless
nevertheless
performance, with
performance, with many
many questioning
questioning whether
whether outperforming most
outperforming most major
major asset
asset classes
classes -- including
including
the yellow
the yellow metal
metal can
can still
still fulfill
fulfill its
its traditional
traditional Treasury bonds,
Treasury bonds, U.S.
U.S. corporate
corporate bonds,
bonds, the the S&P
S&P
role as
role as aa safe-haven
safe-haven asset
asset inin turbulent
turbulent times,times, asas 500 and
500 and tech
tech stocks.
stocks. Gold
Gold has
has therefore
therefore effectively
effectively
well as
well as aa hedge
hedge against
against skyrocketing
skyrocketing inflation.
inflation. After
After fulfilled its
fulfilled its role
role as
as an
an insurance
insurance policy,
policy, by
by helping
helping
all, shouldn’t
all, shouldn’t developments
developments over over thethe past
past couple
couple of
of investors mitigate
investors mitigate losses
losses in
in other
other areas
areas of of their
their
years –– aa global
years global pandemic,
pandemic, unprecedented
unprecedented govern- govern- portfolio.
portfolio.
ment spending,
ment spending, European
European war,war, global
global uncertainty,
uncertainty,
and rampaging
and rampaging inflation
inflation -- provide
provide the the perfect
perfect spring-
spring- Furthermore, the latest report by the World Gold
board for
board for gold
gold to
to thrive?
thrive? Council (WGC) also makes the case that gold can
typically be a powerful investment in the face of a
The fact
The fact that
that questions
questions are are being
being asked
asked about
about gold’s
gold’s potential economic recession. The London-based
relevance is
relevance is not
not at
at all
all aa new
new phenomenon.
phenomenon. Indeed,
Indeed, group has compared the performance of a number
over recent
over recent decades
decades with
with the
the advent
advent of
of new-
new- of asset classes during the course of the past seven
fangled financial
fangled financial instruments
instruments and and the
the emergence
emergence ofof U.S. recessions going back to 1971, and it has found
cryptocurrencies, some
cryptocurrencies, some speculators
speculators have
have become
become that gold performed the best on average aside from
captivated by
captivated by these
these shiny
shiny new
new financial
financial market
market government and corporate bonds.
trinkets -- to
trinkets to the
the detriment
detriment of of gold.
gold.
The bottom-line therefore is that gold’s performance
But does
But does this
this necessarily
necessarily mean
mean that
that gold
gold isis losing
losing must not be viewed simply in terms of its US$ price
out in
out in terms
terms of
of performance?
performance? Gold’s
Gold’s relevance
relevance is is performance in isolation, but it must also be viewed
Figure 1: Gold versus other major asset classes over a 2-year
typically measured
typically measured and and interpreted
interpreted on on the
the basis
basis within the context of how well it has stacked up
period.
of its
of its US
US dollar
dollar price
price performance
performance -- butbut this
this should
should against other asset classes. On this basis, gold’s
not be
not be viewed
viewed inin perfect
perfect isolation
isolation -- as
as gold’s
gold’s perfor-
perfor- performance stacks up very well indeed.
mance must
mance must also
also be
be viewed
viewed inin the
the context
context of of how
how itit Furthermore, the latest report by the World Gold
has performed
has performed in in terms
terms of
of other
other currencies,
currencies, and and also
also Council
What we(WGC)
know also
aboutmakes thefar
gold so case that gold
in 2022 can
is that it
against other
against other asset
asset classes.
classes. typically
has be a powerful
struggled investment
in US$ price in the
terms since facedue
April, of a
potential
to economic
the combined recession.
strength The London-based
of a rampaging US dollar
Let’s begin
Let’s begin with
with an
an examination
examination of
of how
how gold
gold has
has that is at fresh 20-year highs, along with thenumber
group has compared the performance of a relent-
performed so
performed so far
far in
in 2022.
2022. Although
Although gold
gold is
is down
down for
for of asset
less march classes
of theduring the course
US Federal of therate
Reserve’s past seven
hike

26 MicroCap
22 Planet MicroCap
ReviewReview
Magazine www.PlanetMicroCap.com
www.SNN.Network
U.S. recessions going back to 1971, and it has found less mean that investors weigh up the opportunity
that gold performed the best on average aside from cost of holding gold bullion/futures - as neither
government and corporate bonds. generate any interest income. So a rising dollar can
be somewhat of a drain on gold’s appeal.

However, it’s also important to look more closely at


the performance of gold versus the US dollar over
different timeframes. If we look at a chart of gold
versus the US currency over the past 12 months,
as represented by Figure 4 below, we see clearly
that the dollar has outperformed, whilst gold has
underperformed.

Figure 2: Gold versus other major asset classes during seven


recessionary periods since 1971.

The bottom-line therefore is that gold’s performance


must not be viewed simply in terms of its US$ price
performance in isolation, but it must also be viewed
within the context of how well it has stacked up
against other asset classes. On this basis, gold’s
performance stacks up very well indeed.
Figure 4: Gold versus the US dollar index over the past 12 months.
What we know about gold so far in 2022 is that it
has struggled in US$ price terms since April, due
to the combined strength of a rampaging US dollar However, if we examine the respective performanc-
that is at fresh 20-year highs, along with the relent- es over a broader five-year period, we see that gold
less march of the US Federal Reserve’s rate hike has actually outperformed the US dollar, as shown in
program, which shows no signs of easing any time Figure 5 below.
soon. In fact, markets are anticipating an even more
aggressive tone from the Fed. This has seen US$
gold fall below $1700 per ounce.

Figure 5: Gold versus the US dollar index over the past five years.

We can even examine the relative performances over


Figure 3: Gold price Performance Since March 2022.
an even longer period, as shown in Figure 6 below,
which represents a +20-year timeframe.
Whilst gold is traditionally seen as a hedge against
inflation, rapidly escalating interest rates neverthe- So, the bottom-line is that to formulate a view on

www.PlanetMicroCap.com Planet MicroCap Review 27


Figure 6: Gold versus the US dollar index over the past 20 years.

Figure 7: Gold priced in yen, A$, euro and Brazilian real, compared with US dollar price, over the past 10 years.

28 Planet MicroCap Review www.PlanetMicroCap.com


gold’s underlying performance and relevance, we price terms, it is important to fully comprehend the
need to view it over meaningful timeframes, and also bigger picture. It is apparent that when we look past
against other asset classes. gold’s price performance solely within the context
of the US currency, we see that the yellow metal
It’s also worthwhile comparing the yellow metal’s has performed strongly against other major asset
performance not just within the context of the classes, it has performed strongly when priced in
US dollar price alone, but in terms of other major terms of other major world currencies, and it has
world currencies. This way, we can analyse gold’s even performed strongly in US$ terms.
performance away from the influence of the US
dollar, which as we know is trading at a 20-year high, Gold then appears not to have lost its lustre – rather,
thus hampering gold’s performance in terms of this it is sections of the market that appear to have
metric. become short-sighted.

Gavin is based in Sydney, Australia and has followed the fortunes of


Below we have four graphics that compare the
international resource markets for the past 25 years, covering both
respective performances of gold priced in four equities and commodities, as a research analyst. He believes that the most
different currencies – the Japanese yen, Australian interesting resource opportunities are typically found at the smaller end of
the market, which is his exclusive area of focus.
dollar, the Euro and the Brazilian real.
The resource sector is on an inexorable growth path, driven by an
ever-increasing world population and modernization of living standards
In all of the four examples above, gold priced in in emerging economies, as well as a significant shift in how we generate
these currencies outperformed the US dollar price energy. This will provide enormous growth in the demand for commodities
of all types.
of gold over the past 10-year period, to varying
degrees. Gavin is the Head of Mining & Metals with research group Independent
Investment Research (IIR) and he is the Founding Director and Senior
Resource Analyst with MineLife.
Conclusion

Whilst many might question gold’s relevance based


on an apparent underperformance in US dollar

Note: This article is not an attempt to provide investment advice. The content is purely the author’s personal opinions and should not be
considered advice of any kind. Investors are advised to conduct their own research or seek the advice of a registered investment professional.

www.PlanetMicroCap.com Planet MicroCap Review 29


insi g hts
// By Jackie Kibler

Incorporating EOS®
into Succession
Planning
At some point in building a business, succession planning becomes
an important topic of conversation.

E
very entrepreneur that views their business as
an institution separate from themselves should
think about what will happen when they’re
ready to move on—whether that means retiring,
selling the company, or just following a new idea.

Companies running on EOS already have the frame-


work for getting their succession planning started. It
starts from Gino Wickman’s basic idea: teams need
to devote time to working on the business, rather
than in it.

What does succession planning involve?

Succession planning is a long-term process that


is best guided by an expert who understands the
wrinkles and pitfalls a business can encounter. The
focus is on the most important positions in the
business that cannot be filled just by hiring someone
off the street. Usually that means the founder Vi-
sionary, who has a great deal of the company’s key
knowledge locked away in their brain.

Succession planning starts with the plan itself, decid-


ing important details like these:

•• Timeframe. Will the successor take over after


a few years, or will that date be left open? It’s
not unusual for succession planning to begin
without a fixed end date.
•• Cadence. How often will the succession plan-
ning team meet over the course of the succes-

30 Planet MicroCap Review www.PlanetMicroCap.com


sion process? What will their goals be? disagreements are often healthy, but they need
•• Who is the successor? Nominating a successor to be channeled through a decision process to
should be done with care. This is the person be productive. EOS tools like IDS can be used
who will “shadow” the most senior executive during those succession planning sessions to
in the organization. Their expectations need keep everyone on the same page.
to be clear from the start to avoid disastrous •• Include the Integrator. If the Visionary is groom-
misunderstandings. ing a successor, the Integrator will need to be
Once the plan is in place, it needs to be executed part of the conversation. This is both to support
with regular discipline. EOS businesses have a big the Visionary and ensure that the rest of the
advantage here, because they’re already used to organization is ready to move. Bear in mind that
regularly recurring, structured meetings. if the Visionary will be replaced, the Integrator
may need a succession plan, too.
How can EOS be of help to a succession Your EOS Implementer® is here to help.
plan?
If your business needs a succession plan I recom-
If your succession planning involves an outside mend talking about it with your EOS Implementer.
consultant, you’ll want that advisor involved at the Not every Implementer is qualified to lead a succes-
major touch points in the process. Quarterly reviews sion program, but all of us can provide guidance on
of progress and plans are essential for staying on how to begin tackling the challenge.
track.
What steps has your business taken to prepare for
The decision of whether to include these reviews its next generation of leadership? I’d love to hear
in the regular EOS quarterly meeting cadence will how the process has gone for you. Send me an email
depend on how well they can integrate with all the at Jackie.kibler@eosworldwide.com or give me a call
other important topics of those sessions. For many at (818) 649-1103.
businesses, the succession process involves just a
Jackie Kibler grew up in an entrepreneurial family with her father in the
few people. Including the entire leadership team may
music and entertainment business. Her father had a passion for music and
be counterproductive in some situations. like many entrepreneurs, wasn’t able to create a solid business infrastruc-
ture to grow the business. At a very early age, Jackie realized her passion
was to help business owners get more from their businesses.
As the succession plan unfolds, EOS provides sup-
port and systems for keeping the plan moving in the After college, Jackie worked for larger companies like Dun and Bradstreet,
Wells Fargo, Corporate Executive Board and Vistage Worldwide to learn
right direction. These are some tips I’ve picked up best practices. She progressed through the leadership ranks and over the
over time: next 25 years, quickly became known as the “go-to person” for underper-
forming offices, regions, or companies using a strategic mix of goal setting,
process development, and personal accountability.
•• Include EOS in the plan. For EOS businesses,
adopting a succession plan should include At Vistage Worldwide, and partnered with over 100 entrepreneurial
CEOs to help them improve their businesses. Within 12 months her region
bringing the successor into the EOS leadership improved in rankings from #10 to #2 nationally. It was there that she
team (if they aren’t already there). The succes- learned about EOS and when she read the book Traction, she immediately
aligned. It was everything she had done, in a proven process that
sor needs to be a full participant, with Rocks, a
place on the Accountability Chart, and so on.
•• Include the succession plan in EOS planning.
When setting Rocks for each quarter, be sure
the succession plan issues and to-dos are
included. The time needed to make the succes-
sion process work needs to be accounted for
to ensure the rest of the Rocks are S.M.A.R.T.
(specific, measurable, attainable, realistic, and
timely).
•• Use IDS™. Successions are never completely
smooth. Quite often the people who are next in
line for important positions have different ideas
about the direction to take the business. Those
Note: This article is not an attempt to provide investment advice. The content is purely the author’s personal opinions and should not be
considered advice of any kind. Investors are advised to conduct their own research or seek the advice of a registered investment professional.

www.PlanetMicroCap.com Planet MicroCap Review 31


Feature
// By William Duberstein

Fallen Angels
Can Beaten-Down E-commerce and
Software stocks see a “Resurrection?”

A “fallen angel,” denotes a former high-flyer whose stock has been


cut 70-90% in the new higher-rate regime.

T
he ultimate historical example of this was Like 2001-2002, many e-commerce and software
Amazon.com, which fell 90% back in the 2001- growth stocks that benefited during the pandemic
2002 dot-com crash. Even if you had invested are now down 70-90%. For the selective investor,
just before the downturn, you would have made these sectors could be where the next “resurrection”
great returns over the long-term; and if you bought stock find lies. If inflation begins falling in earnest,
near the bottom, you are probably retired! The issue beaten-down growth names could take off in 2023
is distinguishing future “Amazons” from the myriad or sooner.
dot-coms that went bust during that time.

32 Planet MicroCap Review www.PlanetMicroCap.com


We at Stone Oak recently bought shares of Farfetch London-based department store Browns in 2015. In
(Nasdaq: FTCH) in the low $9 range, and also sold 2019, Farfetch acquired Stadium Goods, a high-end
out-of-the money puts. Founded in 2008 with a 2018 sneaker platform, for $250 million, and New Guards
IPO, Farfetch is the leading-e-commerce market- Group, a brand incubator platform for up-and-
place for the global luxury goods industry. Farfetch, coming luxury brands, for $675 million.
which hit the public markets at $20 in 2018, peaked
in early 2021 at an intraday high of $73.87, before This may seem counter-intuitive for investors who
crashing to just over $9 per share today. would like a “pure play” ecommerce stock, but
these acquisitions have many benefits. With Browns,
We believe Farfetch is a unique opportunity because Farfetch bought a very cheap asset, and has
1) it has a strong and strengthening moat, 2) the expanded sales some 20-fold since 2015 through
headwinds it’s facing in 2022 should turn into the use of technology. Farfetch also uses Browns to
tailwinds next year, and 3) it has the cash and asset- experiment with its “Augmented Retail” vision, which
light business model to survive and take advantage combines online and in-store connected technology.
of the current downturn. Stadium Goods and New Guards are growth busi-
nesses themselves, and provide valuable data that
Farfetch was founded and run by owner-operator help inform Farfetch’s software, while also providing
Jose Neves, of Portuguese descent who now lives Farfetch an opportunity to acquire the next big
in London. Neves has a unique combination of skills, luxury brand. For instance, Farfetch acquired Palm
with mastery of both software engineering as well as Angels, one of New Guards’ brands, in 2021. Farfetch
the unique quirks of the global luxury goods industry. also acquired beauty retailer Violet Grey in 2022
and is just beginning to offer a curated selection of
Luxury brands are mostly family-owned businesses, beauty products on its marketplace.
historically skeptical of technology, with unique
concerns for prestige/legacy/quality that go Recently, Farfetch consummated a transformational
beyond maximizing this year’s P&L. Neves’ unique deal, in which it will acquire 47.5% of rival e-commerce
background both as a software engineer and luxury platform Yoox Net-a-Porter (YNAP) from Richemont,
clothing designer (one of his prior businesses even with an option of buy 100% in five years should YNAP
won British Fashion Retailer of the Year in 2001) reach certain profitability metrics. Richemont had
enabled him to gain the trust of luxury brands where already invested in Farfetch’s China JV with Alibaba
others couldn’t. Starting Farfetch on the eve of 2008 in 2020, and Richemont’s CEO Johann Rupert has
financial crisis was also lucky, as recession helped said publicly that Alibaba’s tech team told him even
nudged brands and retailers to adopt Farfetch’s they couldn’t replicate what Farfetch has built, calling
marketplace to expand their reach. The 2020 Farfetch’s software “truly remarkable” technology.
pandemic was another catalyst to build supply on
Farfetch and further strengthen its network effects, In the YNAP deal, Richemont will take a 10-11% stake
as e-commerce sales went from 9% of the $300-$350 in Farfetch, potentially rising to 15-16% if the acquisi-
billion luxury goods in 2018 market to over 20% today. tion goes through. The big part of the deal for Far-
fetch is that Richemont will bring its luxury maisons
Farfetch is essentially three different highly attractive onto the Farfetch marketplace, while also implement-
businesses. First, the Farfetch marketplace. Like Ama- ing FPS for its Maisons’ DTC websites. Richemont had
zon’s 3P business, Farfetch does not take possession more than $3 billion in digital GMV in 2021, nearly as
of inventory, but rather connects inventory from sup- much as Farfetch’s 2021 total, so this could essentially
pliers’ stores across the globe, creating an attractive double Farfetch’s business in short order. If Farfetch
tech-enabled, asset-light model helped along by a manages to turn around YNAP, so much the better.
rising advertising business. Second, Farfetch Platform If YNAP’s turnaround doesn’t succeed, Farfetch can
Solutions (FPS) is the “Shopify” to the luxury industry, offload to a strategic buyer or do an IPO.
in which Farfetch’s API-based software powers luxury
brands’ and retailers’ DTC websites. The important takeaway is that Farfetch has
acquired a major competitor and seems to have
Third, Farfetch has bought brick-and-mortar reached escape velocity in consolidating the luxury
retailers and luxury brands itself, beginning with e-commerce market for itself.

www.PlanetMicroCap.com Planet MicroCap Review 33


William Duberstein was born June 14, 1982 in White Plains, New York. He
With Farfetch’s 2021 GMV of $4.2 billion amounting received a Bachelor’s Degree in Music with a Minor in English Literature
from the University of Virginia, and a Masters of Business Administration in
to less than 2% of the luxury market and ~5% of the Financial Instruments & Markets and Strategy from New York University’s
luxury e-commerce market, Farfetch has a lot of Leonard N. Stern School of Business.

growth potential, and with contribution margins of Mr. Duberstein has extensive investing experience, having consulted on
31.2%, It should be highly-profitable once it scales. family office decisions across public equity portfolios, angel investing, real
estate, and asset-backed lending since 2004.

The recent discount has arisen because Farfetch In 2016, Mr. Duberstein was the #1-ranked analyst for trailing twelve-month
is enduring a perfect storm in 2022. Russia was its performance on the website Sumzero, a community of over 10,000
investment professionals which tracks investment performance based on
third-largest market, and is now zero. China, the combined metrics of alpha, risk aversion, and consistency.
second-largest market, has seen sales down 30-40%
That year, Mr. Duberstein formed Stone Oak Capital, LLC to leverage his
this year due to both demand destruction and sup- investing experience and training to manage investments for outside clients,
ply constraints. Farfetch reports in U.S. dollars, so under a concentrated value investing strategy.

the strong dollar is keeping a lid on top-line figures. Prior to setting up Stone Oak, Mr. Duberstein worked at hedge fund
Meanwhile, Apple’s IDFA changes have driven up Tiburon Capital Management, as part of their outsourced research team,
where he analyzed global investment opportunities under the firm’s BRACE
demand generation marketing expenses. Thus, Methodology (Bottom-up fundamental valuation, Revaluation catalysts,
FTCH projects just 0-5% GMV growth this year. Actors’ assessment of interested parties, Capital-structure agnostic, and
External factors analysis). Prior to Tiburon, Mr. Duberstein worked at
Wedbush Securities, performing associate duties for both the Ecommerce
Encouragingly, Farfetch is still targeting adjusted and Semiconductor analysts, including extensive modeling, proprietary
EBITDA breakeven, even in this “down” year. Neves research, and channel checks.

expects the company to return to his 30% growth At NYU, Mr. Duberstein studied valuation under Professor Aswath
target next year. Meanwhile, the company should Damodaran, Special Situations investing under Gary Claar (formerly of
JANA Partners), and Global Value Investing under James Rosenwald (of
either lap these headwinds or see them reverse in Dalton Investments). Mr. Duberstein was Vice President of Stock Pitch
2023. In addition, the new deal with Richemont, on Competitions at Stern, and won the Stern Stock Pitch Competition in his
first MBA year. He was later appointed Strategist for the Michael Price
top of other recently-announced partnerships with Student Investment Fund, which manages part of the NYU Endowment. In
Niemann Marcus, Reebok, and Salvatore Ferragamo, that position, Mr. Duberstein designed a new process for vetting investment
among others, should also come through the P&L ideas, and set a strict quantitative process for buy/ no buy decisions
based on a required margin of safety given a security’s risk profile, based
next year as well. on six qualitative and quantitative criteria.

Prior to business school, Mr. Duberstein studied the U.S. energy sector as
We view this slowdown is a mere “speed bump” that well as environmental regulations as a political researcher for Beehive Re-
will reaccelerate. Now trading at just 2x trailing sales, search, a Washington D.C.-based political research consultancy. Prior to
Beehive, Mr. Duberstein worked extensively in the media and entertainment
investors should take advantage of this downturn for industries across project development, production, and post-production
this very unique company. for various production companies, including Village Roadshow Pictures,
New Line Cinemas, Eyeworks TV, Morningstar Entertainment, and others.
In addition, Mr. Duberstein produced short films and documentaries under
Disclosure: Stone Oak Capital is Long Farfetch com- his own production company, both on spec and for clients. While initially
mon shares, as well as short $7 and $8 September drawn to the arts, Mr. Duberstein found his passion for financial markets in
the aftermath of the 2009 Global Financial Crisis.
2022 Puts, and Short $20 October 2022 Calls. 
Mr. Duberstein passed the Series 65 Uniform Investment Advisor Law Exam,
which focuses on topics that are important for an investment advisor
Send inquiries to this email address, and our website to know; these include Economic Factors & Business Cycles, Investment
is www.stoneoakcapitalllc.com Vehicle Characteristics, Client Investment Recommendations and Strategies,
and Laws, Regulations & Guidelines.

DISCLAIMER AND FORWARD-LOOKING STATEMENTS NOTICE: This article is provided as a service of SNN Inc. or an affiliate thereof (collectively “SNN”), and all information
presented is for commercial and informational purposes only, is not investment advice, and should not be relied upon for any investment decisions. We are not recommending
any securities, nor is this an offer or sale of any security. Neither SNN nor its representatives are licensed brokers, broker-dealers, market makers, investment bankers, investment
advisers, analysts, or underwriters registered with the Securities and Exchange Commission (“SEC”) or with any state securities regulatory authority.
SNN provides no assurances as to the accuracy or completeness of the information presented, including information regarding any specific company’s plans, or its ability to
effectuate any plan, and possess no actual knowledge of any specific company’s operations, capabilities, intent, resources, or experience. Any opinions expressed in this article
are solely attributed to each individual asserting the same and do not reflect the opinion of SNN.
Information contained in this presentation may contain “forward-looking statements” as defined under Section 27A of the Securities Act of 1933 and Section 21B of the
Securities Exchange Act of 1934. Forward-looking statements are based upon expectations, estimates, and projections at the time the statements are made and involve risks and
uncertainties that could cause actual events to differ materially from those anticipated. Therefore, readers are cautioned against placing any undue reliance upon any forward-
looking statement that may be found in this article.
SNN does not receive compensation for, nor engage in, providing advice, making recommendations, issuing reports, or furnishing analyses on any of the companies, securities,
strategies, or information presented in this article. SNN recommends you consult a licensed investment adviser, broker, or legal counsel before purchasing or selling any securities
referenced in this article. Furthermore, it is encouraged that you invest carefully and consult investment related information available on the websites of the SEC at http://www.sec.
gov and the Financial Industry Regulatory Authority (FINRA) at http://finra.org.

Note: This article is not an attempt to provide investment advice. The content is purely the author’s personal opinions and should not be
considered advice of any kind. Investors are advised to conduct their own research or seek the advice of a registered investment professional.

34 Planet MicroCap Review www.PlanetMicroCap.com


o Interact with our retail broker/dealer/banking network to o Develop plans for aggressive outbound media outreach, when
facilitate the Company to potential Media Networks and set up requested, including existing shareholders, potential institutional
small group Dinner. and retail shareholders to ingest companies media.

o Continue periodic meetings, with locations to be determined, o Work with management to develop a clear comparison of the
with Media Anchors and Producers. firm's results to those of similar companies or competitors;

o Leverage relationships with media and financial journalists to o Position the management to effectively demonstrate the
effectively communicate the Company’s message; Including but Company’s strategies and objectives so that companies
not limited to, Cheddar, Fox Business News, TD Ameritrade interviews are clear & effective.
Network, Yahoo Finance, Nasdaq Marketsite, Jane King Media,
Modern Wall Street o Pinpointing of the proper media outlets to meet – and even the
right individuals within those firms for maximizing interviews.
o Work with Company to develop a full release calendar, timing
releases and important press announcements for utmost o Monthly analysis of who is watching interviews, along with
effectiveness; commentary on the ‘why’ behind these moves.
o Coordinate additional relationships with the goal of creating o Context around effective interviews, i.e. how does it pertain to
media awareness for the company; what we are seeing amongst peers, the sector and the broader
market. The qualitative analysis that comes from this assessment
o 24 h
hour situational crisis management with a concise strategy. provides company with insight into why Media Networks are
Assist in addressing issues such as product recalls, contract losses, doing what they are doing within their respective sector, allowing
regulatory actions, litigation, loss of key employees, and all Major them to have more pointed conversations with these Media
Media actions. Professionals and be more efficient with their time spent.

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www.PlanetMicroCap.com Planet MicroCap Review 35
www.SNN.Network
MamaMancini’s (NASDAQ: MMMB)

Q&A with CEO,


Adam Michaels
RK: Let’s start with a quick overview of
the business for those new to the story.

AM: MamaMancini’s is a family business with a


storied history spanning back to when Anna Mancini
emigrated in 1921 from Italy with her original meatball
recipes. The Mancini mantra has always been to do
more with less, and we pride ourselves on utilizing
only the most high-quality and natural ingredients
when making our products.

Over time we’ve evolved to become a national


distributor for cleaner & fresher foods, leading to
great relationships with deli departments at grocers
nationwide. To meet the demands of today’s
shoppers, we’ve focused on innovation to create
more great tasting, high quality product lines, like
our Italian-themed, grab-n-go Meals for One, and
our new Meatballs in a Cup. To further build out
our product offering to deli departments, we’ve
embarked on a two-prong, organic and acquisi-
tive growth strategy and recently added a broad
range salads & pastas company as well as an olive
company to the MamaMancini’s family of brands. We
will continue to expand our products; however, that & Olive Branch) in December and invested in a
being said, quality and taste are non-negotiable! strategic sales partner (Chief Inspirational Foods) in
June, and have been working diligently to capture
RK: How would you describe the the synergies we laid out. We nearly doubled our
company’s year-to-date performance at manufacturing capabilities with the acquisitions,
this point? As CEO, what will your key significantly expanding product offerings and allow-
strategic focus be in the year ahead?  ing us to cross sell key customers on new products
across our growing family of companies. We like to
AM: Chairman and former CEO Carl Wolf has done a think of the platform as a one-stop-shop; you can
great job in laying the foundation for MamaMancini’s have a hearty piece of grilled lemon chicken from
to become a national platform company. With this MamaMancini’s paired with T&L’s pesto pasta salad
national infrastructure in place, it’s now time to along with some feta & olives mix from Olive Branch,
realize that vision. all at the same meal!

We acquired two companies (T&L Creative Salads On year-to-date performance, we all know the

36 Planet MicroCap Review www.PlanetMicroCap.com


market is tough right now. Commodities are at RK: What industry tailwinds are you
generational highs, transportation is challenging, and seeing to help push forward some of the
labor is tight. Our operations team is doing great company’s strategic goals? 
things with procurement and agile manufacturing
to control costs. On the flip side, our products have AM: It has never been a better time to be a deli-food
never been more in demand! Today’s consumer provider. Prepared deli foods, the largest and
wants a protein-dense, fresh, and healthy product fastest growing sub-category in Deli (where we
that is easy on prep work; and even more now with play), represents a $20B market, growing over 20%
inflationary pressures, they want “grandma quality” in the last 52 weeks, nearly twice the growth of
food at competitive prices. We meet these demands the overall Deli department, well ahead of the total
and as a result feel very good about margins follow- food and beverage industry. 93% of grocers have
ing the return to normalized costs. seen an increase in demand for fresh food. COVID
introduced significant pandemic-related lifestyle

Photo credit: www.mamamancinis.com

www.PlanetMicroCap.com Planet MicroCap Review 37


changes with consumers focusing more than ever AM: Well, I was excited to join MamaMancini’s on
on quick, clean and fresh meals – made with better September 6th of this year, so I hope that can be
ingredients – at a price more affordable than eating one catalyst. In addition, as we expand into a truly
out. For us there is a significant, growing opportunity national platform, I know the importance of a great
for an innovative, one-stop-shop prepared foods high performing team and we will be bringing in
offering in what is currently a fragmented market new capabilities to our leadership team. Look out for
without a clear leader. more news on that!

RK: 2022 has been a volatile year for I am also excited to supercharge our new acquisi-
MicroCaps amongst a number of macro tions as we fully integrate them on the platform. In
trends (War in Ukraine, supply chain, my last role at Mondelez, I helped to lead the acquisi-
inflation, etc…). What have affected tion and integration of four businesses over four
MMMB and what will your strategy be to years. I saw what worked and, more powerfully, what
navigate through these challenges?  didn’t. There is tremendous potential opportunity
with T&L and Olive Branch. Anthony, the CEO of T&L,
AM: As publicly disclosed, commodity costs have shares the same passion I do about high quality and
hit the hardest for our industry. We are passionate fresh ingredients. So much so, that their tagline is “if
about maintaining a high-quality product at afford- they were any fresher, they would get slapped”! You
able prices and will NEVER compromise on quality. are going to see lots of growth and cost efficiencies
We are seeing improvements on this front and have in 2023. 
secured better pricing with numerous retailers,
and as such expect to see our margins reflect this I am most excited about our innovation pipeline. For
improvement in the fiscal third quarter. example, when we heard from our consumers that
they wanted a high protein, on-the-go solution, it
Another focus for us is working on managing allowed us to innovate the optimal solution for the
our retailer customers better when it comes to high growth convenience store channel – Meatballs
customization. For example, we sell a 5lb bag of bulk in a Cup. We are VERY excited about this offering. Of
meatballs for the hot bar, but retailer B wants a 5.1lb course, it is high quality and great tasting using all
bag. In the past, we’ve said sure, but that means of the freshest ingredients. But even more exciting
having to possibly qualify a new supplier, carry more is that the sales of are 100% INCREMENTAL to our
inventory, increase production changeovers, etc. We existing portfolio. Meatballs in a Cup in just one of
are now more intentional with our decisions. We many innovations we’ve recently developed, watch
absolutely want to be responsive to our retailers and this space closely as we transition to becoming a
even more to our customers, but the ROI must be “one-stop-shop” for grocers!
there.
For more information about MamaMancini’s, please
RK: What are some catalysts investors visit: www.mamamancinis.com
should keep an eye out for as we move
through 2022 and into 2023?

DISCLAIMER AND FORWARD-LOOKING STATEMENTS NOTICE: This article is provided as a service of SNN Inc. or an affiliate thereof (collectively “SNN”), and all information
presented is for commercial and informational purposes only, is not investment advice, and should not be relied upon for any investment decisions. We are not recommending
any securities, nor is this an offer or sale of any security. Neither SNN nor its representatives are licensed brokers, broker-dealers, market makers, investment bankers, investment
advisers, analysts, or underwriters registered with the Securities and Exchange Commission (“SEC”) or with any state securities regulatory authority.
SNN provides no assurances as to the accuracy or completeness of the information presented, including information regarding any specific company’s plans, or its ability to
effectuate any plan, and possess no actual knowledge of any specific company’s operations, capabilities, intent, resources, or experience. Any opinions expressed in this article
are solely attributed to each individual asserting the same and do not reflect the opinion of SNN.
Information contained in this presentation may contain “forward-looking statements” as defined under Section 27A of the Securities Act of 1933 and Section 21B of the Securities
Exchange Act of 1934. Forward-looking statements are based upon expectations, estimates, and projections at the time the statements are made and involve risks and uncertain-
ties that could cause actual events to differ materially from those anticipated. Therefore, readers are cautioned against placing any undue reliance upon any forward-looking
statement that may be found in this article.
SNN does not engage in providing advice, making recommendations, issuing reports, or furnishing analyses on any of the companies, securities, strategies, or information
presented in this article. SNN recommends you consult a licensed investment adviser, broker, or legal counsel before purchasing or selling any securities referenced in this article.
Furthermore, it is encouraged that you invest carefully and consult investment related information available on the websites of the SEC at http://www.sec.gov and the Financial
Industry Regulatory Authority (FINRA) at http://finra.org.

38 Planet MicroCap Review www.PlanetMicroCap.com


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www.PlanetMicroCap.com Planet MicroCap Review 39
insi g hts
// By Andy Kyzyk

Understanding
Blue Sky Laws
A Company Guide

OTC Markets operates within a unique, often complex regulatory


environment.  While much of the securities industry focuses solely
on federal laws and regulation, the companies, broker-dealers, and
investors comprising the OTC Market must understand the impact of
state “Blue Sky” laws as well. 

A
s companies seek to access retail and High What are Blue Sky Laws?
Net Worth investors, Private Wealth Manage-
ment and Non-Institutional growth, Blue Sky Blue Sky laws are state laws that regulate the offering
compliance is an important consideration. Solving and sale of securities within individual states.  Each
state compliance issues start with ensuring that state has its own set of rules and regulations govern-
broker-dealers can recommend, solicit and advise ing the sale and solicitation of securities as well as the
investors on your company’s stock. distribution of research to retail investors. Blue Sky

40 Planet MicroCap Review www.PlanetMicroCap.com


laws were designed to help investors make informed What types of exemptions exist for
decisions and reduce securities fraud by mandat- companies?
ing that companies disclose accurate and current
information when offering or marketing securities. The two most common exemptions are the Foreign
The laws limit a broker’s ability to sell securities to Issuer exemption and the Manual Exemption. The
investors if the security is not compliant with the laws Foreign Issuer exemption typically applies to foreign
in the state in which the investor resides. securities that are part of the FTSE All World Index.
However, it should be noted that this exemption
Why is Blue Sky Compliance important? applies only to a Company’s Ordinary Shares and
not their American Depositary Receipts (ADRs). The
Blue Sky is important for companies as they embark Manual Exemption is used by many states and simply
on an investor relations strategy; this is especially grants Blue Sky status to a company so long as its
true for small and mid-cap companies where retail most recent financial disclosure is published “in a
investors make up a sizable portion of their investor recognized security manual.” There are however
base as well as for large cap companies that have a caveats, and they differ state by state. As an
retail strategy. If a company is not compliant with an example, some states allow for a manual exemption,
individual states’ securities laws, investors in those however they will not grant status based on certain
states will most likely be prohibited from buying their financial criteria (net tangible assets, shareholder
securities. This renders time and money spent on equity, etc). As financial information can change in
investor outreach wasted. real time, companies that are Blue Sky exempt on
one day, could lose it the next based on changes in
How do Blue Sky Laws impact Brokers and reported financials. It is important for companies to
Registered Investment Advisors? be able to monitor their status in real time to make
sure they remain in good standing.
While it is incumbent on the company to satisfy the
requirements of each states’ laws, enforcement How does joining the OTCQX or OTCQB
of these rules focuses on brokers and investment Markets Help Companies with Blue Sky
advisors. Blue Sky laws are part of the suitability re- Compliance? 
quirements brokers must look at before distributing
research or soliciting securities. If a security is not OTCQX and OTCQB are recognized as securities
Blue Sky compliant, they will not be able to advise, manuals by most of the states that have a securities
trade or distribute information about the security. manual exemption. This is based on the markets’
Additionally, while not limiting a broker’s ability to SEC recognition as established public markets and
take non-solicited orders, many firms will prohibit the nature of the disclosure requirements to be
these orders as well in order to limit potential liability traded on those markets.
and regulatory risk.
The OTCQX and OTCQB exemptions are based on
How Does a Company Become Blue Sky the breadth of information that these companies
Complaint? make available on the www.otcmarkets.com  website.   

Each state has its own laws and requirements for Both markets are widely used by investors, broker-
gaining Blue Sky compliance. In addition to the dealers and regulators as a trusted source of bona
50 states, there are also 4 jurisdictions (Guam, U.S. fide, readily accessible issuer financial information,
Virgin Islands, Puerto Rico and Samoa) that have which distinguishes these markets from legacy
their own set of rules. Many states provide a set of manual providers and other respective online reposi-
exemptions that make it easy to gain compliance, tories of company information. 
assuming you meet the requirements of the exemp-
tion, while others have their own individual rules that The OTCQX and OTCQB markets require a higher
require a more complicated registration process. It standard of disclosure, provide greater transparency
is important for companies to look at the jurisdic- and distribution of information, and have a recog-
tions in which they want to market their security and nized history of supporting regulatory enforcement
examine how that state grants Blue Sky compliance. efforts. 

www.PlanetMicroCap.com Planet MicroCap Review 41


Key factors that differentiate OTCQX and OTCQB How does the industry access information
company disclosure from traditional securities on a company’s Blue Sky status?
manuals and online information sources: 
OTC Markets Group feeds data directly to the
Established and Transparent Rules:  The OTCQX broker-dealer community. Many firms add this data
Rules and OTCQB Standards are posted publicly, giv- directly into their order entry systems. Which means
ing investors a transparent view into exactly what is if something is not Blue Sky eligible, brokers will see
required of an OTCQX or OTCQB company.  Similarly, it flagged.
we also publish Rule Amendments and maintain the
entire history of changes to the Rules and Standards Following the acquisition of Blue Sky Data Corp,
since the inception of each market.  OTC Markets is now the main provider of Blue Sky
secondary trading compliance data. We provide
Recognized Disclosure Standards:  We publish comprehensive data regarding state law compliance
the Reporting Standards applicable to each market, for over 100,000 equity and debt securities direct to
clearly outlining the type of disclosure required from broker-dealers. This additional information enhanc-
each company.  es issuer compliance, allows for greater automation
from broker-dealers, and benefits investors.
Wide Distribution to Investors, Broker-Dealers and
Regulators: All OTCQX and OTCQB company infor- In Conclusion
mation is available for free on the www.otcmarkets.
com website.  Our market data is distributed to over Corporate Issuers need to think about Blue Sky
43,000 professional and non-professional users, compliance as critical component of their Investor
through data providers including Bloomberg, FactSet Relations strategy and ensure the greatest number
and Refinitiv.  of investors can trade your stock.

Surveillance and Compliance Processes:  Our To learn more about the Blue Sky compliance and
Issuer Compliance team oversees each company’s how upgrading to OTCQX and OTCQB can help your
initial and ongoing compliance with the OTCQX company, reach out to andy@otcmarkets.com.
Rules and OTCQB Standards.  In addition, this team
designates certain securities as “Caveat Emptor” Andy Kyzyk
Senior Vice President, Advisor Relations
-placing a skull and crossbones icon next to the Andrew Kyzyk leads the Advisor Relations group at OTC Markets. Focused
stock symbol when we become aware of a public on outreach to the advisor community, Andy is dedicated to enhancing
existing relationships and nurturing new contacts, all in an effort to
interest concern.  raise awareness of OTC Markets’ core initiatives. Previously Andy ran
International Business Development. Prior to OTC Markets, Andy served as
Vice President/ Executive Director in the Equities division of Goldman Sachs
37 states now recognize OTCQX and 33 recog- and as Head of the American Depositary Receipts Group for the Goldman
nize the OTCQB Market for meeting the manual Sachs NYSE Specialist Division. Andy has an Executive MBA from the A.D.
Little School of Management and a BA from NYU.
exemption criteria. Importantly these states are
not the only states where our issuers are compli-
ant. The average OTCQX company is compliant in About OTC Markets Group Inc.
OTC Markets Group Inc. (OTCQX: OTCM) operates regulated markets for
43 states.   trading 12,000 U.S. and international securities. Our data-driven disclosure
standards form the foundation of our three public markets: OTCQX® Best
Market, OTCQB® Venture Market and Pink® Open Market.
In addition to the manual exemption, recent SEC
regulatory changes to Rule 15c2-11 have opened new Our OTC Link® Alternative Trading Systems (ATSs) provide critical market
infrastructure that broker-dealers rely on to facilitate trading. Our innova-
states for international issuers on the OTCQX and tive model offers companies more efficient access to the U.S. financial
OTCQB Markets, as OTC Markets now has regulatory markets.
responsibility for confirming a Company’s Foreign OTC Link ATS, OTC Link ECN and OTC Link NQB are each an SEC
Private Issuer exemption in real-time. This meets regulated ATS, operated by OTC Link LLC, a FINRA and SEC registered
requirements for certain states, for example Illinois, broker-dealer, member SIPC.

which does not have a manual exemption but allows To learn more about how we create better informed and more efficient
for international companies in compliance with the markets, visit www.otcmarkets.com.

new rule.

Note: This article is not an attempt to provide investment advice. The content is purely the author’s personal opinions and should not be
considered advice of any kind. Investors are advised to conduct their own research or seek the advice of a registered investment professional.

42 Planet MicroCap Review www.PlanetMicroCap.com


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Feature
// By Tim Travis

Fallen Angels
When Optimistic Projections and Growth Don’t Add Up

I would define a “fallen angel” investment, as a stock or bond that


was once one highly regarded with a high valuation, that has fallen
to earth due to mishaps, or a changing of sentiment in regard to its
future prospects.

O
ften these types of investments can be found based on sentiment and flows, which often leads to
after an industry or market has been bid up distortions between stock prices and intrinsic value.
over several years, due to extremely optimis- Taking advantage of Mr. Market’s temperamental
tic projections, but then growth doesn’t add up to the nature leads to fertile grounds for value investors. As
implied growth needed to warrant the extended valu- Horace said, “many shall be restored that now are
ation. So much of short-term market performance is fallen and many shall fall that now are in honor.”

44 Planet MicroCap Review www.PlanetMicroCap.com


One classic example of a “fallen angel” is the case This pessimism creates opportunities for long-term
of Microsoft (MSFT). In 2000, the stock traded at investors in that not a lot has to go right to make a
around $60 per share, or 170x earnings before the lot of money due to the ridiculously cheap valuations.
Tech Bubble burst. Just a year into the bust, the For example, Citigroup trades roughly 60% of tangible
stock had declined by 65% and it took 16 years book value per share and just 7x forward earnings,
before the stock saw $60 again. In the midst of despite seeing considerable net interest income
that decline, there were multiple opportunities to growth due to higher interest rates. At this valuation,
buy Microsoft and between 10-13x earnings and Citigroup should be a winner as long as the company
free cash flow, including most of 2009-2013. Market and the global economy simply doesn’t blow up as
participants had lost confidence in management, they did in 2008, which I think is extremely unlikely.
which had made some horrendous acquisitions and Banks have nearly double the capital and liquidity as
missed out on key opportunities such as mobile they had then, and they have dramatically reduced
phones. Many were worried that the shift towards the risky activities and underwriting that led to many
the cloud would relegate Microsoft’s dominant of those issues. My belief is that after they show their
software franchises into obscurity, but those fears improved strength and fortitude in the current eco-
were unfounded, as consumers adjusted to the nomic downturn, that market participants will begin
SAAS model. Satya Nadella’s elevation to CEO and giving a bit more credit to the industry via higher
his focus on expanding the Azure cloud platform put valuations, especially as the benefits from higher rates
Microsoft on a huge runway of accelerated revenue filters through the income statements.
and earnings growth, leading to the company once
Tim Travis is CEO/CIO of T&T Capital Management, a California-based regis-
again becoming a glamourous stock to own. Micro-
tered investment advisory. Tim is a deep value investor that performs exten-
soft has risen from trading at just over $20 per share sive research and analysis to identify securities trading at deep discounts to
in 2012, to a recent price of over $260. intrinsic value. In addition to traditional value investing and asset allocation
to stocks and bonds, T&T deploys income-generating options strategies such
as covered calls and cash-secured puts. These strategies are designed to
The bear market of 2022 has indeed opened up enhance income, reduce risk, and to instill a disciplined selling process, which
is quite unique in the industry of relatively cookie-cutter asset management.
opportunities to buy formerly glamorous stocks at Tim has written detailed research reports on investments for many years on
70-80% discounts to valuations seen just a year ago. sites such as Seekingalpha.com, while also appearing on various other media
outlets such as CNBC and Bloomberg. Tim graduated with a BA in Business
Many of these stocks will not recover their previous and Economics from the University of California Santa Barbara in 2004. He
price highs for many years, if ever, but others likely developed a solid understanding of the investment industry working at firms
present fantastic opportunities. Stocks such as such as Scottrade, Vanguard Group, and several smaller brokerages. Tim’s
lifelong appreciation for the rational and profitable investment philosophy’s
Alphabet (GOOG) and Meta (META) trade at around of Warren Buffett, Benjamin Graham, Martin Whitman, Seth Klarman etc.,
20- and 18-times forward earnings, respectively, have been immensely influential on the firm’s philosophy and Tim’s career.
T&T’s obsession is truly providing a boutique investment management offer-
which are some of their cheapest valuations in history, ing what we believe to be best-in-class strategies and security selection to
despite attractive long-term growth rates. While I retail investors, as opposed to many industry participants that are primarily
focused on raising assets.
wouldn’t classify financial stocks as being glamourous
over the last 13 years of zero interest rate policies, www.ttvalueinvesting.com
many of the highest quality banks and insurance The author owns Google and Meta but not MSFT.
companies trade at single-digit P/E ratios, and some
at material discounts to tangible book value per share,
despite being net beneficiaries of higher interest rates.

DISCLAIMER AND FORWARD-LOOKING STATEMENTS NOTICE: This article is provided as a service of SNN Inc. or an affiliate thereof (collectively “SNN”), and all information
presented is for commercial and informational purposes only, is not investment advice, and should not be relied upon for any investment decisions. We are not recommending
any securities, nor is this an offer or sale of any security. Neither SNN nor its representatives are licensed brokers, broker-dealers, market makers, investment bankers, investment
advisers, analysts, or underwriters registered with the Securities and Exchange Commission (“SEC”) or with any state securities regulatory authority.
SNN provides no assurances as to the accuracy or completeness of the information presented, including information regarding any specific company’s plans, or its ability to
effectuate any plan, and possess no actual knowledge of any specific company’s operations, capabilities, intent, resources, or experience. Any opinions expressed in this article
are solely attributed to each individual asserting the same and do not reflect the opinion of SNN.
Information contained in this presentation may contain “forward-looking statements” as defined under Section 27A of the Securities Act of 1933 and Section 21B of the
Securities Exchange Act of 1934. Forward-looking statements are based upon expectations, estimates, and projections at the time the statements are made and involve risks and
uncertainties that could cause actual events to differ materially from those anticipated. Therefore, readers are cautioned against placing any undue reliance upon any forward-
looking statement that may be found in this article.
SNN does not receive compensation for, nor engage in, providing advice, making recommendations, issuing reports, or furnishing analyses on any of the companies, securities,
strategies, or information presented in this article. SNN recommends you consult a licensed investment adviser, broker, or legal counsel before purchasing or selling any securities
referenced in this article. Furthermore, it is encouraged that you invest carefully and consult investment related information available on the websites of the SEC at http://www.sec.
gov and the Financial Industry Regulatory Authority (FINRA) at http://finra.org.

Note: This article is not an attempt to provide investment advice. The content is purely the author’s personal opinions and should not be
considered advice of any kind. Investors are advised to conduct their own research or seek the advice of a registered investment professional.

www.PlanetMicroCap.com Planet MicroCap Review 45


insi g hts
// By Dr. Tim Siegenbeek van Heukelom

ESG for MicroCaps


ESG. What is it, and why is it important?
Action on Environmental, Social and Governance Misconception 1: ESG is only for
(ESG) issues is no longer a ‘nice to have’. It’s es- sustainable businesses and industries.
sential if you’re seeking investor capital and social
license to operate. Socialsuite helps micro to medium ESG is about transparent and responsible operation
sized companies to create value through ESG report- and governance of your business and it’s industry-
ing. The initial reason to start ESG reporting is often agnostic. ESG helps identify critical business risks,
to respond to demands from stakeholders. However, but can also create business value – so it should be
in building ESG practices across their business, many central to every decision.
companies report an easier path to a much wider
investor base, risk mitigation, new market opportuni- Misconception 2: We need to have attained
ties, and long-term sustained value generation. ESG perfection before reporting on it.

Society, investors, consumers and employees are Simply starting to report and disclose ESG metrics
expecting companies to grow in a financially sustain- today demonstrates a commitment to ESG transpar-
able, yet environmentally viable way. ESG is used ency. Perfection is not required and metrics can be
by institutional and socially conscious investors to improved over time — there’s no reason to wait.
screen companies prior to investing. It’s also looked
at by consumers and employees when they’re mak- Misconception 3: My investors don’t care.
ing decisions about what companies to get behind.
The days of investors focusing solely on financial
What does ESG entail? statements are long gone. If you want to attract
retail investors, institutional investors or fund manag-
E - Environmental - can include things like resource ers, you’ll need to meet ESG criteria.
conservation and emissions
Since starting its ESG journey with Socialsuite, miner-
S - Social - can cover issues like equal pay, diversity als exploration company, Latin Resources (OTCQX:
and inclusion, health and safety LNRDY; ASX: LRS), has raised a transformational
G -Governance - looks at the board composition, A$35 million, anchored by A$15 million from a Cana-
and what rules do you play by. dian ESG fund.

ESG misconceptions of microcap Misconception 4: ESG does not align with


executives our core priorities.

Multinationals and large publicly listed companies know While you may not think of ESG as a priority, a
that ESG reporting is a must these days. But when it strong ESG proposition can safeguard a company’s
comes to microcaps, a number of common misconcep- long-term success. ESG is a global priority, so if ESG
tions still exist. Some executives discount the value of is not a priority for your business, ask yourself why?
ESG entirely, while some feel the pressure and urgency
around ESG but are unsure how to act on it. Socialsuite client, Minbos Resources (OTCPK:MNBRF;
ASX:MNB) for example, is attracting more capital,
As the leading ESG solution for micro to mid caps, better customers and top talent due to its unwaver-
Socialsuite speaks daily to executives about the ing commitment to zero-carbon projects. It’s no
misconceptions surrounding ESG reporting. These secret that investors are actively seeking to invest
include: in ESG-aligned companies and Minbos’ recent $25

46 Planet MicroCap Review www.PlanetMicroCap.com


million capital raise and continued set of opportuni- ESG is a continual journey of positive change. Report
ties has certainly shown that to be true. frequently, stakeholders want to see quarterly
updates on your ESG highlights and progress. Think
Getting Started with ESG: Five simple steps of ESG reporting as a roadmap – and know that your
investors, employees, customers and society will use
Socialsuite’s Chief Impact Officer, Dr. Siegenbeek it to hold you to account.
van Heukelom says the microcaps he works with
already have ESG data they publicly disclose – of- How Socialsuite can help
ten more than they realize, but they’ve never been
collated in one place before. “There could be much Socialsuite’s ESG platform is ideal for micro to mid
you’re already doing. This is about making it visible caps who are just starting their ESG journey and
to the market. Let’s find the quick wins. Then we can looking to report against the globally recognized
talk about how you can progress and improve your WEF Stakeholder Capitalism Metrics ESG framework.
ESG credentials over time.”
With this fit-for-purpose approach, smaller listed or
Many companies start ESG reporting in response to private companies no longer need large ESG teams
stakeholder demands. But it often turns out to hold to provide robust and transparent ESG reporting.
far more value. But how do you get started? They can share ongoing progress through quarterly
updates, publish investor relations reports, access
1. Set a baseline comprehensive ESG resources and make incremental
progress with the support of a dedicated ESG coach.
ESG frameworks allow companies to measure
responsible and sustainable corporate growth and Socialsuite’s cost-effective, action-oriented platform
business continuity in a structured and standardized is so simple you could build a baseline report within
way. Choose a global framework, such as the World an hour – and start reporting publicly in just 30 days.
Economic Forum (WEF) Stakeholder Capitalism
Metrics, and start populating it with the data you When getting started with Socialsuite, Neil Young,
already have. Think about the opportunities and the CEO of coal seam gas explorer Elixir Energy
risks that matter most to your company and its (OTC:ELXPF; ASX:EXR), said “Working with Social-
stakeholders. suite enabled us to quickly and easily identify where
there are gaps in our ESG strategy and how we can
2. Embed ESG into structures and processes improve our position. We also have a clear roadmap
Make sure ESG is on your Board’s agenda, and then for achieving ESG goals that will take more time.”
embed ESG into your everyday decision making and
operations. Chief Impact Officer
Dr. Tim Siegenbeek van Heukelom

3. Seek an external view Tim is Chief Impact Officer at Socialsuite. He is a Environmental, Social
and Governance (ESG) specialist passionate about aligning organisations’
overall purpose with delivering day-to-day social good while on the path
Working with expert partners can help you stay to profit. With global experience supporting small to large-cap companies,
Tim has focused on closing the gap between corporate prosperity and
accountable, build knowledge, help validate your sustainable development outcomes through identifying shared value
findings and identify opportunities for improvement. opportunities.

He sees a corporate commitment to building robust ESG credentials as only


4. Amplify your message the beginning; the real magic happens (and shared value is created) when
companies begin to see how corporate success can simultaneously deliver
social progress.
Once you have a regular reporting cycle of disclo-
sures, you can spread those messages to investors He has worked on ESG strategies and programs with organisations from
public, private, and social sectors in Europe, Africa, and Oceania. Tim holds
and other stakeholders. Make sure your reports are two law degrees (LLB and LLM), a degree in peace and conflict studies
clear – avoid technical ESG jargon, and visualize the (MA), and a doctorate in food security (PhD).

data. Tim is an impatient optimist. He takes a mission-driven approach to social


development. By designing comprehensive ways to think through potential
ESG problems, he helps find viable solutions that have material and
5. Maintain the momentum measurable plans with quantifiable business outcomes and positive societal
impacts.

Note: This article is not an attempt to provide investment advice. The content is purely the author’s personal opinions and should not be
considered advice of any kind. Investors are advised to conduct their own research or seek the advice of a registered investment professional.

www.PlanetMicroCap.com Planet MicroCap Review 47


48 Planet MicroCap Review www.PlanetMicroCap.com
Assurtrak Insurance Brokers
www.assurtrak.com

Charlotte, NC | Atlanta, GA | Chicago, IL


info@assurtrak.com

as·sur·trak
/əˈSHo͝or, trak/
noun
1. Focused Insurance Strategies.

We are a specialty insurance brokerage, built to


advocate for public companies.

Assurtrak was founded on the belief that starting with a great plan
is the only way to finish with the best result. We are experts in
specialty commercial insurance and we focus 100% of our
training, resources, and knowledge into providing the best
products, pricing, and service in the business.

Take the first step toward better risk management;


we’ve got your back.
www.PlanetMicroCap.com Planet MicroCap Review 49
Thunderbird Entertainment (TSX-V: TBRD) (OTCQX: THBRF)

Q&A with CEO and Director,


Jennifer Twiner McCarron
RK: Let’s start with a quick overview of
the business.

JTM: Thunderbird is a global content creation studio


that focuses on creating premium, award-winning
content with a focus on diversity and inclusivity,
headquartered in Vancouver, with studios in LA,
Ottawa and Toronto. Thunderbird is uniquely posi-
tioned to meet the ever-changing demands of the
content creation industry with thriving footholds in
both animation (Atomic Cartoons), unscripted (Great
Pacific Media) and scripted (Thunderbird Produc-
tions) content. The Company currently employs over
1,400 team members across North America.

Thunderbird’s mission is to create content that


contributes to the world, makes people happy and
provides a much-needed escape. A great example
of Thunderbird’s mission and style of content is Molly
of Denali, a show the team developed with PBS. It is
the first nationally distributed animated series in the
USA to feature a Native American lead and involved LA, and launched a division dedicated to consumer
Indigenous crew members in Alaska in all aspects of products and global distribution. The consumer
the production. Since its debut, this particular series products division offers additional revenue streams,
has been recognized with multiple awards that cel- and the ability to capitalize on our intellectual
ebrate its authentic representation and commitment property (“IP”). We have also attracted key industry
to diversity, including a 2020 TCA Award, a Kidscreen talent to our Company, and grown our teams to
Award for Best Inclusivity, and a prestigious Peabody more than 1400 people. Add to this, our growing
Award (2020), which is renowned for honoring production slate has expanded too. As of Q3 2022,
powerful, enlightening, and invigorating stories. the Company had 26 shows in production, 12 of
which are IP-owned or partner managed.
RK: How would you describe the
company’s performance to this point We are focused on mindfully growing the business
(beginning of September 2022) in the year? in stages, and our numbers reflect steady gradual
Milestones and goals? growth YOY. We are selective about the projects
we take on, and we always prioritize our company
JTM: We are incredibly pleased with our perfor- culture and people. We firmly believe that our
mance and progress to date - and there is so much people-first culture is not only a differentiator but is
to be proud about. Since we became a public com- also key to attracting and retaining top talent to cre-
pany, we have added a new studio in Ottawa and ate premium quality content. Creating an accepting,

50 Planet MicroCap Review www.PlanetMicroCap.com


safe work culture attracts some of the most talented JTM: While streamers and broadcasters are adapting
artists in the industry - we have employees who to the current landscape to better serve their audi-
have come to us from Pixar, Disney, DreamWorks ences and maintain their businesses, Thunderbird
and other major studios. Our working culture also remains a top content provider with a demonstrated
plays a key role in employee retention, which is ability to provide premium content and meet dead-
well-above the industry average. lines. We have developed long-standing, trusted
relationships with all of the major providers, who
Additionally, we are pleased to be celebrating many lean heavily on us for quality content - and will
highly-anticipated upcoming premieres this Fall, continue to do so as premium content is needed to
including Strays on CBC on September 13th, Dead- retain subscribers in a highly competitive market.
man’s Curse on History Canada on September 11th,
and Reginald the Vampire for SYFY on October 5th. A The industry is also poised for consolidation, and
two-part documentary, After the Storm, produced by we expect strategic M&A to play a part in growing
GPM, will also debut on Discovery Channel. We also our Company in the future. We have grown and are
shared news for some of our animation productions, building our Company with this in mind, and have
such as Princess Power and Oddballs on Netflix. the systems and infrastructure in place to nimbly
act on the right M&A when it arises. Our Company’s
RK: Are there any industry tailwinds to strong and prudent fiscal management - which is
push forward some of the company’s highlighted by zero corporate debt - will allow us to
goals and objectives? take advantage of great opportunities when they
present themselves.

www.PlanetMicroCap.com Planet MicroCap Review 51


RK: 2022 has been a volatile year for Above all, we remain committed
MicroCaps and a number of macro trends
that you have to pay attention to as well to creating premium quality
(War in Ukraine, supply chain, inflation,
etc…). What has been your strategy to content for our partners around
navigate through these challenges?
the world and pursuing the right
JTM: At Thunderbird, we have always valued the M&A opportunity when it arises.
importance of a long-term business strategy that
can withstand challenges that occur and are out of
our control. We recognize the importance of having
a fluid and adaptable business plan, and have made
adjustments where necessary to accommodate the a unique opportunity for value investors to buy the
impacts of current events. stock at a lower multiple, no debt, good cash position.

However, we avoid overreacting to macro trends, which Thunderbird is uniquely positioned within the industry
can hurt the Company long term, and do our best to to meet the changing needs of streamers, and
remain focused on strategic opportunities that support demands of viewers, through the Company’s thriving
sustainable growth while increasing shareholder value. animated (Atomic Cartoons) and unscripted (GPM)
For example, to offset inflationary pressures, we are divisions. These two types of content continue to be
looking at ways to increase our prices to a point where cornerstones of major streamers’ strategies to continue
both the Company and the client still benefit. gluing subscribers (and the key co-viewing audience).
We will also continue leveraging our global distribution
One constant remains while navigating through new and consumer products division in LA to commercialize
situations; we will never sacrifice on creating pre- our own IP while also acting as a third-party distributor
mium quality content. How? By putting people first. for other companies’ IP to increase revenues.
Our people and our company culture are a top prior-
ity. Ultimately, a happy workforce with motivated Above all, we remain committed to creating premium
team members is what helps us deliver the premium quality content for our partners around the world
content we are known for industry-wide - and it’s a and pursuing the right M&A opportunity when it
value we will never waver from. arises. As such, investors can expect to see contin-
ued and sustainable growth in the years to come.
RK: What are some of the company’s value
catalysts for the rest of 2022, going into For more information about Thunderbird Entertain-
2023? ment, please visit: www.thunderbird.tv

JTM: Heading into 2023, one key focus is to maintain


our profitability. Our lowered share price provides

DISCLAIMER AND FORWARD-LOOKING STATEMENTS NOTICE: This article is provided as a service of SNN Inc. or an affiliate thereof (collectively “SNN”), and all information
presented is for commercial and informational purposes only, is not investment advice, and should not be relied upon for any investment decisions. We are not recommending
any securities, nor is this an offer or sale of any security. Neither SNN nor its representatives are licensed brokers, broker-dealers, market makers, investment bankers, investment
advisers, analysts, or underwriters registered with the Securities and Exchange Commission (“SEC”) or with any state securities regulatory authority.
SNN provides no assurances as to the accuracy or completeness of the information presented, including information regarding any specific company’s plans, or its ability to
effectuate any plan, and possess no actual knowledge of any specific company’s operations, capabilities, intent, resources, or experience. Any opinions expressed in this article
are solely attributed to each individual asserting the same and do not reflect the opinion of SNN.
Information contained in this presentation may contain “forward-looking statements” as defined under Section 27A of the Securities Act of 1933 and Section 21B of the Securities
Exchange Act of 1934. Forward-looking statements are based upon expectations, estimates, and projections at the time the statements are made and involve risks and uncertain-
ties that could cause actual events to differ materially from those anticipated. Therefore, readers are cautioned against placing any undue reliance upon any forward-looking
statement that may be found in this article.
SNN does not engage in providing advice, making recommendations, issuing reports, or furnishing analyses on any of the companies, securities, strategies, or information
presented in this article. SNN recommends you consult a licensed investment adviser, broker, or legal counsel before purchasing or selling any securities referenced in this article.
Furthermore, it is encouraged that you invest carefully and consult investment related information available on the websites of the SEC at http://www.sec.gov and the Financial
Industry Regulatory Authority (FINRA) at http://finra.org.

52 Planet MicroCap Review www.PlanetMicroCap.com


Meryllion Resources Corporation
CSE:MYR Canadian Junior exploring in Australia

Highlights: Brief Resource Details:


•• Exploring for world class Mapped by QLD Government Geological Survey early 1970s, drilled by QLD
polymetallic mining Government in 1974. Ore grade MO not followed up. Listed by USGS as significant
projects in Australia Cu-Mo Target in 2009. In 1975 Esso Exploration reported 9km long U3O8 mineralized
structure and Pre-NI 43 101 resource of 344,500t @ 1.55% U3O8. Held by Mega Uranium
•• Mt Turner, Queensland, from 2000 to 2020 until staked by Essex Minerals in 2020. Recently completed
Copper-Moly Porphyry extensive IP Survey and surface sampling overlain over digitized historical exploration
and Gold drill ready has generated classic copper/moly porphyry targets available for immediate drilling.
targets High expectation of significant new discovery following initial drilling program.

•• Drill testing large, flat-lying Overview of Business


copper/moly porphyry
targets 100 meters from Meryllion is a CSE listed company exploring
surface for “world class” polymetallic mining
projects in Queensland and Western
Australia. The Company has a highly
•• Program designed
experienced management team and board
to generate an early with a strong record of discovery, success,
discovery. and company growth. The Company’s
flagship project is the Mt Turner Copper/
•• Current market Moly and Gold Project located in the
capitalization CND $ 2.8 Georgetown District approx. 380kms west
million of Cairns, northern Queensland. The region
contains over 1,000 mines, prospects and mineral occurrences, including the Kidston
Gold Mine, one of Australia’s largest ever gold mines (5.1m ozs Au mined from 1985
to 2001).

The area has received extensive historical exploration and some drilling. Much of this
activity was undertaken in the 1970s to 2000 with a predominant focus on uranium
exploration.

Essex Minerals (Meryllion’s Farm-In partner) compiled and digitized the vast amount
of historical data and devised an exploration strategy which included soil sampling
and an IP Survey. Meryllion recently completed this program at a cost of $450,000
and the results far exceeded the company’s expectations, generating multiple high
resistivity copper/moly porphyry drilling targets for immediate drilling.

DISCLAIMER AND FORWARD-LOOKING STATEMENTS NOTICE: This article is provided as a service of SNN Inc. or an affiliate thereof
(collectively “SNN”), and all information presented is for commercial and informational purposes only, is not investment advice, and
should not be relied upon for any investment decisions. We are not recommending any securities, nor is this an offer or sale of any
security. Neither SNN nor its representatives are licensed brokers, broker-dealers, market makers, investment bankers, investment
advisers, analysts, or underwriters registered with the Securities and Exchange Commission (“SEC”) or with any state securities
regulatory authority.
SNN provides no assurances as to the accuracy or completeness of the information presented, including information regarding any
Website: meryllionres.com
specific company’s plans, or its ability to effectuate any plan, and possess no actual knowledge of any specific company’s operations,
capabilities, intent, resources, or experience. Any opinions expressed in this article are solely attributed to each individual asserting the
Contact Info: Richard Revelins same and do not reflect the opinion of SNN.
CEO/Director Information contained in this presentation may contain “forward-looking statements” as defined under Section 27A of the Securities
Act of 1933 and Section 21B of the Securities Exchange Act of 1934. Forward-looking statements are based upon expectations,
rrevelins@peregrinecorporate.com estimates, and projections at the time the statements are made and involve risks and uncertainties that could cause actual events to
+1-310-405-4475 differ materially from those anticipated. Therefore, readers are cautioned against placing any undue reliance upon any forward-looking
statement that may be found in this article.
IR Individual: Graham Farrell SNN does not engage in providing advice, making recommendations, issuing reports, or furnishing analyses on any of the companies,
securities, strategies, or information presented in this article. SNN recommends you consult a licensed investment adviser, broker,
Harbor Access or legal counsel before purchasing or selling any securities referenced in this article. Furthermore, it is encouraged that you invest care-
Graham.farrell@harbor-access.com fully and consult investment related information available on the websites of the SEC at http://www.sec.gov and the Financial Industry
Regulatory Authority (FINRA) at http://finra.org.
+1-647-530-1430

Planet Microcap Review 53


OVERVIEW OF THE
PLANET MICROCAP
INDEX
The MCRI is as pure an index for microcap stocks as can be. We
believe the MCRI provides a much more accurate, in-depth,
benchmark of the microcap stock universe, with equal weighting
given across the board, regardless of size.

M
ost of the other microcap indices are market • On the final day of the quarter, all public com-
cap weighted, giving preference to larger panies:
companies with higher trading volumes, and º Between $10 and $300 million in Market
are reconstituted bi-annually or annually, versus Capitalization
quarterly. º Share price equal to or greater than $0.10
• Filed a 10Q or 10K in the preceding quarter
WHY MCRI

In my experience in the MicroCap space, the idea From there, the index comprises the Top 30
of “discovery” has been a singular driving force for companies from each sector based on 90-day share
me. Whether its helping folks discover new MicroCap price appreciation. At most, MCRI will consist of
investing strategies or discover new companies that 330 constituents, all equally weighted. While you
may not show on their screen. may expect most, if not all, the Top 30 for each
sector will have positive share price appreciation for
CRITERIA the quarter, but that’s not always the case, and in
my opinion what makes MCRI the purest index for
• U.S. (NYSE/AMEX, NASDAQ, OTCM) or Canada MicroCaps.
(TSX, TSX Venture, CSE, NEO)
• Primary Listing only (meaning, primary symbol
dual-listed companies

MICROCAP REVIEW INDEX


PLANET Microcap MICROCAP REVIEW INDEX
PLANET Microcap

40 Planet
54 MicroCap ReviewReview
MicroCap Magazine www.SNN.Network
www.PlanetMicroCap.com
Q3 2022 Key Data Points

GENERAL CRITERIA Select Data Points

Exchange Distribution Average Performance By Sector

PLANET Microcap INDEX PLANET Microcap INDEX

www.PlanetMicroCap.com Planet MicroCap Review 55


PLANET Microcap INDEX
Q3 2022 Constituent List

PLANET Microcap INDEX PLANET Microcap INDEX

AAN:CA Aton Resources Inc. AGIL AgileThought Inc.


Basic Materials Technology
https://www.atonresources.com/ https://agilethought.com/

ABIO ARCA biopharma, Inc. AGRI AgriFORCE Growing Systems Ltd.


Healthcare Consumer Defensive
https://arcabio.com/ https://agriforcegs.com/

ABOS Acumen Pharmaceuticals, Inc. AIRG Airgain Inc.


Healthcare Technology
https://acumenpharm.com/ https://airgain.com/

ABR:CA Arbor Metals Corp. ALCO Alico, Inc.


Basic Materials Consumer Defensive
https://metalsinc.com/ https://www.alicoinc.com/

ACD:CA Accord Financial Corp. ALV:CA Alvopetro Energy Ltd.


Financial Services Energy
https://accordfinancial.com/ https://alvopetro.com/

ACT:CNX Aduro Clean Technologies Inc. ALYA:CA Alithya Group Inc.


Industrials Technology
https://adurocleantech.com/ https://www.alithya.com/en

ACTG Acacia Research Corporation AMPY Amplify Energy Corp.


Industrials Energy
https://www.acaciaresearch.com/ https://www.amplifyenergy.com/home/default.aspx

ACU Acme United Corporation ANNX Annexon Inc.


Consumer Defensive Healthcare
https://www.acmeunited.com/ https://annexonbio.com/

ADN Advent Technologies Holdings Inc. APRN Blue Apron Holdings Inc.
Utilities Consumer Cyclical
https://www.advent.energy/ https://investors.blueapron.com/

ADW.A:CA Andrew Peller Limited APT Alpha Pro Tech Ltd.


Consumer Defensive Industrials
http://www.andrewpeller.com/ https://www.alphaprotech.com/

AEI Alset Ehome International Inc. AQB AquaBounty Technologies Inc.


Real Estate Consumer Defensive
https://www.alsetinc.com/ https://aquabounty.com/

AERC AeroClean Technologies, Inc. ARKR Ark Restaurants Corp.


Industrials Consumer Cyclical
https://aeroclean.com/ https://arkrestaurants.com/

AGFS AgroFresh Solutions Inc. ARL American Realty Investors Inc.


Consumer Defensive Real Estate
https://www.agrofresh.com/ http://www.americanrealtyinvest.com/

Note: As of rebalance date 07/04/2022, please see SNN’s criteria for inclusion in the Planet MicroCap Index here: https://snn.network/key-criteria

56 Planet MicroCap Review www.PlanetMicroCap.com


PLANET Microcap INDEX
Q2 2022 Constituent List

PLANET Microcap INDEX PLANET Microcap INDEX

ARR:CA Altius Renewable Royalties Corp. BRMI:CA Boat Rocker Media Inc.
Utilities Communication Services
https://www.arr.energy/ https://www.boatrocker.com/home/default.aspx

ASRT Assertio Holdings, Inc. BRW:CA Brunswick Exploration Inc.


Healthcare Basic Materials
https://www.assertiotx.com/ https://brwexplo.ca/

ASUR Asure Software Inc. BRY:CA Bri-Chem Corp.


Technology Energy
https://www.asuresoftware.com/ https://www.brichem.com/

AT:CA AcuityAds Holdings Inc. BSBK Bogota Financial Corp.


Communication Services Financial Services
https://www.acuityads.com/ https://www.bogotasavingsbank.com/

ATER Aterian, Inc. BSET Bassett Furniture Industries


Consumer Cyclical Consumer Cyclical
https://www.aterian.io/ https://investors.bassettfurniture.com/

AUVI Applied UV Inc. BTTR Better Choice Company Inc.


Consumer Cyclical Consumer Defensive
https://applieduvinc.com/ https://www.betterchoicecompany.com/

AVEO AVEO Pharmaceuticals Inc. BYRN Byrna Technologies Inc.


Healthcare Industrials
https://www.aveooncology.com/ https://ir.byrna.com/

AXL:CA Arrow Exploration Corp. CAAS China Automotive Systems, Inc.


Energy Consumer Cyclical
https://arrowexploration.ca/ http://www.caasauto.com/

BAU:CA Blue Star Gold Corp. CBIO Catalyst Biosciences Inc.


Basic Materials Healthcare
https://bluestargold.ca/ https://www.catalystbiosciences.com/

BBGI Beasley Broadcast Group Inc. CC:CNX Core Assets Corp.


Communication Services Basic Materials
https://bbgi.com/ https://coreassetscorp.com/

BKTI BK Technologies Corporation CCLP CSI Compressco LP


Technology Energy
https://www.bktechnologies.com/ https://csicompressco.com/

BRAG:CA Bragg Gaming Group Inc. CCNC Code Chain New Continent Ltd.
Communication Services Communication Services
https://bragg.games/ http://www.ccnctech.com/

BRBS Blue Ridge Bankshares Inc. CDMN:AQL Canadian Manganese Company Inc.
Financial Services Basic Materials
https://www.mybrb.com/ https://www.canadianmanganese.com/

Note: As of rebalance date 07/04/2022, please see SNN’s criteria for inclusion in the Planet MicroCap Index here: https://snn.network/key-criteria

www.PlanetMicroCap.com Planet MicroCap Review 57


PLANET Microcap INDEX
Q2 2022 Constituent List

PLANET Microcap INDEX PLANET Microcap INDEX

CECE CECO Environmental Corp. CSPI CSP Inc.


Industrials Technology
https://www.cecoenviro.com/ https://www.cspi.com/

CFF:CA Conifex Timber Inc. CVLY Codorus Valley Bancorp Inc.


Basic Materials Financial Services
https://conifex.com/ https://www.peoplesbanknet.com/

CHCI Comstock Holding Companies Inc. CVR Chicago Rivet & Machine Co.
Real Estate Industrials
https://comstock.com/ https://www.chicagorivet.com/

CIX CompX International Inc. CWCO Consolidated Water Co. Ltd.


Industrials Utilities
http://www.compx.com/ https://cwco.com/

CKX CKX Lands, Inc. CWL:CA Caldwell Partners International Inc.


Energy Industrials
https://www.ckxlands.com/ https://www.caldwell.com/

CLPR Clipper Realty, Inc. CXDO Crexendo, Inc.


Real Estate Communication Services
https://www.clipperrealty.com/ https://www.crexendo.com/

CLPT ClearPoint Neuro, Inc. CYAN Cyanotech Corporation


Healthcare Consumer Defensive
https://www.clearpointneuro.com/ https://www.cyanotech.com/

CMLS Cumulus Media Inc. CZFS Citizens Financial Services Inc.


Communication Services Financial Services
https://www.cumulusmedia.com/ https://www.citizensbank.com/HomePage.aspx

CMPX Compass Therapeutics Inc. DALN DallasNews Corporation


Healthcare Communication Services
https://www.compasstherapeutics.com/ https://investor.dallasnewscorporation.com/

CNCE Concert Pharmaceuticals Inc. DBTX Decibel Therapeutics Inc.


Healthcare Healthcare
https://www.concertpharma.com/ https://www.decibeltx.com/

CNL:CA Collective Mining Ltd. DC.A:CA Dundee Corporation


Basic Materials Consumer Defensive
https://www.collectivemining.com/ https://www.dundeecorporation.com/home/default.aspx

CPHC Canterbury Park Holding Corporation DIT AMCON Distributing Company


Consumer Cyclical Consumer Defensive
https://www.canterburypark.com/ https://www.amcon.com/#/

CPSS Consumer Portfolio Services, Inc. DLA Delta Apparel, Inc.


Financial Services Consumer Cyclical
https://www.consumerportfolio.com/ https://www.deltaapparelinc.com/

CRWS Crown Crafts Inc. DPSI DecisionPoint Systems


Consumer Cyclical Technology
https://www.crowncrafts.com/ https://www.decisionpt.com/
Note: As of rebalance date 07/04/2022, please see SNN’s criteria for inclusion in the Planet MicroCap Index here: https://snn.network/key-criteria

58 Planet MicroCap Review www.PlanetMicroCap.com


PLANET Microcap INDEX
Q2 2022 Constituent List

PLANET Microcap INDEX PLANET Microcap INDEX

DUETU DUET Acquisition Corp. FREE Whole Earth Brands, Inc.


Financial Services Consumer Defensive
https://duet-corp.com/ https://wholeearthbrands.com/

E:CA Enterprise Group Inc. FRGI Fiesta Restaurant Group, Inc.


Energy Consumer Cyclical
https://enterprisegrp.ca/ https://www.frgi.com/Home/default.aspx

EAGR:CA East Side Games Group Inc. FSEA First Seacoast Bancorp
Communication Services Financial Services
https://eastsidegamesgroup.com/ https://www.firstseacoastbank.com/

EEX Emerald Holding Inc. FTHM Fathom Holdings Inc.


Communication Services Real Estate
https://www.emeraldx.com/ https://www.fathomrealty.com/

ELA Envela Corporation GCL:CA Colabor Group Inc.


Consumer Cyclical Consumer Defensive
https://envela.com/ http://www.colabor.com/en/

EPIC:CNX Leviathan Natural Products, Inc. GDC:CA Genesis Land Development Corp.
Healthcare Real Estate
https://leviathan-naturals.com/ https://www.genesisland.com/

EPSN Epsilon Energy Ltd. GGE Green Giant Inc.


Energy Real Estate
https://epsilonenergyltd.com/ no good website or email

ESCA Escalade, Inc. GH:CA Gamehost Inc.


Consumer Cyclical Consumer Cyclical
https://escaladeinc.com/ https://www.gamehost.ca/

ESP Espy Mfg. & Electronics Corp. GHM Graham Corporation


Industrials Industrials
https://www.espey.com/ https://www.graham-mfg.com/

ESQ Esquire Financial Holdings, Inc. GIP:CA Green Impact Partners Inc.
Financial Services Utilities
https://esquirebank.com/ https://www.greenipi.com/

EVGN:CA Evergen Infrastructure Corp. GLRE Greenlight Reinsurance Ltd.


Utilities Financial Services
https://www.evergeninfra.com/ https://greenlightre.com/

FAT FAT Brands Inc. GMGI Golden Matrix Group Inc.


Consumer Cyclical Communication Services
https://www.fatbrands.com/ https://goldenmatrix.com/

FLXS Flexsteel Industries Inc. GMTX Gemini Therapeutics, Inc.


Consumer Cyclical Healthcare
https://www.flexsteel.com/ https://geminitherapeutics.com/

FPH Five Point Holdings, LLC GNE Genie Energy Ltd.


Real Estate Utilities
https://www.fivepoint.com/ https://genie.com/
Note: As of rebalance date 07/04/2022, please see SNN’s criteria for inclusion in the Planet MicroCap Index here: https://snn.network/key-criteria

www.PlanetMicroCap.com Planet MicroCap Review 59


PLANET Microcap INDEX
Q2 2022 Constituent List

PLANET Microcap INDEX PLANET Microcap INDEX

GNSS Genasys Inc. HME:CA Hemisphere Energy


Technology Energy
https://genasys.com/ https://www.hemisphereenergy.ca/

GNUS Genius Brands International Inc. HNRG Hallador Energy Company


Communication Services Energy
https://www.gnusbrands.com/ https://halladorenergy.com/overview/default.aspx

GRB:CA Greenbriar Capital Corp. HPS.A:CA Hammond Power Solutions Inc.


Utilities Industrials
https://greenbriarcapitalcorp.ca/ https://americas.hammondpowersolutions.com/

GRZ:CA Gold Reserve Inc. HUSA Houston American Energy Corporation


Basic Materials Energy
https://www.goldreserveinc.com/ https://houstonamerican.com/

GSQ:CNX GameSquare Esports Inc. HWBK Hawthorn Bancshares Inc.


Communication Services Financial Services
https://www.gamesquare.com/ https://www.hawthornbancshares.com/overview/corporate-
profile/
GURE Gulf Resources Inc.
Basic Materials IDG:CA Indigo Books & Music Inc.
http://www.gulfresourcesinc.com/ Consumer Cyclical
https://www.chapters.indigo.ca/en-ca/
GYRO Gyrodyne LLC
Real Estate IDW IDW Media Holdings
https://www.gyrodyne.com/ Communication Services
https://idwmediaholdings.com/
HBB Hamilton Beach Brands Holding
Company IEI:CA Imperial Equities Inc.
Real Estate
Consumer Cyclical
https://imperialequities.com/
https://www.hamiltonbeachbrands.com/home/default.aspx

HEM:CA Hemostemix Inc. IMMR Immersion Corporation


Technology
Healthcare
https://www.immersion.com/
https://hemostemix.com/

HEO:CA H2O Innovation Inc. IMPL Impel Pharmaceuticals Inc.


Healthcare
Utilities
https://impelpharma.com/
https://www.h2oinnovation.com/

HGBL Heritage Global Inc. INTZ Intrusion Inc.


Technology
Financial Services
https://www.intrusion.com/
https://hginc.com/

HHS Harte-Hanks, Inc. INUV Inuvo Inc.


Communication Services
Communication Services
https://inuvo.com/
https://www.hartehanks.com/

HIL Hill International Inc. INZY Inozyme Pharma Inc.


Healthcare
Industrials
https://www.inozyme.com/
https://www.hillintl.com/

Note: As of rebalance date 07/04/2022, please see SNN’s criteria for inclusion in the Planet MicroCap Index here: https://snn.network/key-criteria

60 Planet MicroCap Review www.PlanetMicroCap.com


PLANET Microcap INDEX
Q2 2022 Constituent List

PLANET Microcap INDEX PLANET Microcap INDEX

IPWR Ideal Power Inc. KWAC Kingswood Acquisition Corp.


Industrials Financial Services
https://www.idealpower.com/ https://kingswoodacquisition.com/

ISTR Investar Holding Corporation LCW Learn CW Investment Corporation


Financial Services Financial Services
https://www.investarbank.com/ https://www.learncwinvestmentcorp.com/

ITI Iteris Inc. LEE Lee Enterprises


Technology Communication Services
https://www.iteris.com/ https://lee.net/

JCTCF Jewett-Cameron Trading Company LFVN LifeVantage Corporation


Basic Materials Consumer Defensive
https://www.jewettcameron.com/ https://www.lifevantage.com/

JILL J. Jill Inc. LINC Lincoln Education Services Corporation


Consumer Cyclical Consumer Defensive
https://investors.jjill.com/Investors-Relations/Overview/default. https://investors.lincolneducationalservices.com/
aspx
LIO:CA Lion One Metals Limited
JOB GEE Group Inc. Basic Materials
Industrials https://liononemetals.com/
https://www.geegroup.com/
LME:CA Laurion Mineral Exploration Inc.
KAVL Kaival Brands Innovations Group, Inc. Basic Materials
Consumer Defensive https://www.laurion.ca/
https://kaivalbrands.com/
LMNR Limoneira Company
KBAL Kimball International, Inc. Consumer Defensive
Consumer Cyclical https://www.limoneira.com/
https://www.kimballinternational.com/
LNDC Landec Corporation
KEQU Kewaunee Scientific Corporation Consumer Defensive
Consumer Cyclical https://www.landec.com/
https://kewaunee.com/
LOAN Manhattan Bridge Capital Inc.
KFFB Kentucky First Federal Bancorp Real Estate
Financial Services https://manhattanbridgecapital.com/
https://ffsbky.bank/
LOV Spark Networks
KFS Kingsway Financial Services Inc. Communication Services
Consumer Cyclical https://www.spark.net/
https://kingsway-financial.com/
LYRA Lyra Therapeutics Inc.
KLTR Kaltura Inc. Healthcare
Technology https://lyratherapeutics.com/
https://investors.kaltura.com/
LYTS LSI Industries Inc.
KPT:CA KP Tissue Inc. Technology
Consumer Defensive https://www.lsicorp.com/
https://www.kptissueinc.com/home

Note: As of rebalance date 07/04/2022, please see SNN’s criteria for inclusion in the Planet MicroCap Index here: https://snn.network/key-criteria

www.PlanetMicroCap.com Planet MicroCap Review 61


PLANET Microcap INDEX
Q2 2022 Constituent List

PLANET Microcap INDEX PLANET Microcap INDEX

MAQC Maquia Capital Acquisition Corporation MOOO:CNX bettermoo(d) Food Corporation


Financial Services Consumer Defensive
https://maquiacapital.com/ https://www.bettermoo.com/

MAXX:CNX Max Power Mining Corp. MOVE:AQL PowerTap Hydrogen Capital Corp.
Basic Materials Utilities
https://maxpowermining.com/ https://powertapcapital.com/

MAYS J.W. Mays, Inc. MOX:CA Morien Resources Corp.


Real Estate Energy
http://www.jwmays.com/ https://morienres.com/

MBCN Middlefield Banc Corp. MXC Mexco Energy Corporation


Financial Services Energy
https://www.middlefieldbank.bank/ http://www.mexcoenergy.com/index.php

MCB:CA McCoy Global Inc. MXG:CA Maxim Power Corp.


Energy Utilities
https://www.mccoyglobal.com/ https://maximpowercorp.com/

MDV Modiv Inc. NAII Natural Alternatives International, Inc.


Real Estate Consumer Defensive
https://www.modiv.com/ https://www.nai-online.com/

MDVL MedAvail Holdings, Inc. NATH Nathan’s Famous Inc.


Healthcare Consumer Cyclical
https://medavail.com/ https://nathansfamous.com/

MEDS TRxADE Health, Inc. NC NACCO Industries, Inc.


Communication Services Energy
https://www.trxadehealth.com/ https://nacco.com/

MEOA Minority Equality Opportunities NECB NorthEast Community Bancorp Inc.


Financial Services
Acquisition Inc. https://www.necb.com/
Financial Services
https://www.meoaus.com/
NEN New England Realty Associates Limited
MITQ Moving iMage Technologies Partnership
Technology Real Estate
http://www.movingimagetech.com/ https://www.thehamiltoncompany.com/Investor-Relations.
aspx
MLP Maui Land & Pineapple Company Inc.
Real Estate NEV:CA Nevada Sunrise Gold Corporation
https://mauiland.com/ Basic Materials
https://nevadasunrise.ca/
MMLP Martin Midstream Partners L.P.
Energy NHHH:CA FuelPositive Corporation
https://mmlp.com/home/default.aspx Industrials
https://fuelpositive.com/
MMMB MamaMancini’s
Consumer Defensive NINE:CNX Nine Mile Metals
https://www.mamamancinis.com/ Basic Materials
https://ninemilemetals.com/

Note: As of rebalance date 07/04/2022, please see SNN’s criteria for inclusion in the Planet MicroCap Index here: https://snn.network/key-criteria

62 Planet MicroCap Review www.PlanetMicroCap.com


PLANET Microcap INDEX
Q2 2022 Constituent List

PLANET Microcap INDEX PLANET Microcap INDEX

NSYS Nortech Systems Incorporated ORRF Orrstown Financial Services Inc.


Technology Financial Services
https://www.nortechsys.com/ https://www.orrstown.com/

NUR:CNX NuRAN Wireless Inc. OSS One Stop Systems Inc.


Technology Technology
https://nuranwireless.com/en/ https://onestopsystems.com/

NVCT Nuvectis Pharma Inc. OVBC Ohio Valley Banc Corp.


Healthcare Financial Services
https://nuvectis.com/ https://www.ovbc.com/

NWPX Northwest Pipe Company PANL Pangaea Logistics Solutions Ltd.


Industrials Industrials
https://www.nwpipe.com/ https://www.pangaeals.com/

NWX:CA Newport Exploration Ltd. PATI Patriot Transportation Holding Inc.


Basic Materials Industrials
https://newport-exploration.com/ https://patriottrans.com/

OCN Ocwen Financial Corporation PCYO Pure Cycle Corporation


Financial Services Utilities
https://www.ocwen.com/ https://www.purecyclewater.com/

ODC Oil-Dri Corporation of America PEA:CA Pieridae Energy Limited


Basic Materials Energy
https://www.oildri.com/ https://pieridaeenergy.com/

OEG Orbital Energy Group Inc. PEX:CA Pacific Ridge Exploration Ltd.
Utilities Basic Materials
https://www.orbitalenergygroup.com/ https://pacificridgeexploration.com/

OLY:CA Olympia Financial Group, Inc. PFIE Profire Energy, Inc.


Financial Services Energy
https://www.olympiafinancial.com/ https://www.profireenergy.com/

OOMA Ooma Inc. PFSW PFSweb Inc.


Communication Services Industrials
https://www.ooma.com/ https://www.pfscommerce.com/pfsweb/

OPFI OppFi Inc. PHX PHX Minerals Inc.


Technology Energy
https://www.oppfi.com/ https://phxmin.com/

OPS:CA Opsens Inc. PKE Park Aerospace Corp.


Healthcare Industrials
https://opsens.com/ https://parkaerospace.com/

OPT:CA Optiva Inc. PKOH Park-Ohio Holdings Corp.


Technology Industrials
https://optiva.com/ https://pkoh.com/

OPTI:CNX Optimi Health Corp. PKT:CA Parkit Enterprise Inc.


Consumer Defensive Real Estate
https://www.optimihealth.ca/ https://www.parkitenterprise.com/
Note: As of rebalance date 07/04/2022, please see SNN’s criteria for inclusion in the Planet MicroCap Index here: https://snn.network/key-criteria

www.PlanetMicroCap.com Planet MicroCap Review 63


PLANET Microcap INDEX
Q2 2022 Constituent List

PLANET Microcap INDEX PLANET Microcap INDEX

PLAG Planet Green Holdings Corp. RBCN Rubicon Technology Inc.


Consumer Defensive Technology
http://planetgreenholdings.com/?lang=en http://www.rubicontechnology.com/

PMET:CNX Patriot Battery Metals Inc. RCMT RCM Technologies Inc.


Basic Materials Industrials
https://patriotbatterymetals.com/ https://www.rcmt.com/

PMT:CA Perpetual Energy Inc. RDI Reading International Inc.


Energy Communication Services
https://www.perpetualenergyinc.com/ https://www.readingrdi.com/

PMTS CPI Card Group Inc. REFI Chicago Atlatic Real Estate Finance Inc.
Financial Services Real Estate
https://www.cpicardgroup.com/ https://investors.refi.reit/

PNRG PrimeEnergy Resources Corporation RELL Richardson Electronics Ltd.


Energy Technology
http://www.primeenergy.com/ https://www.rell.com/

POE:CA Pan Orient Energy Corp. RGCO RGC Resources Inc.


Energy Utilities
https://www.panorient.ca/ https://www.rgcresources.com/

POWL Powell Industries, Inc. RGF The Real Good Food Company, Inc.
Industrials Consumer Defensive
https://www.powellind.com/Default.aspx https://realgoodfoods.com/

PPIH Perma-Pipe International Holdings RIBT RiceBran Technologies


Industrials Consumer Defensive
https://www.permapipe.com/ https://www.ricebrantech.com/

PQE:CA Petroteq Energy Inc. RMCF Rocky Mountain Chocolate Factory Inc.
Energy Consumer Defensive
https://www.petroteq.com/ https://www.rmcf.com/

PRPH ProPhase Labs, Inc. RNGR Ranger Energy Services Inc.


Healthcare Energy
https://www.prophaselabs.com/ https://www.rangerenergy.com/

QFOR:CA Q4 Inc. RNWK RealNetworks Inc.


Technology Communication Services
https://www.q4inc.com/home/default.aspx https://realnetworks.com/

QUIK QuickLogic Corporation ROOT:CA Roots Corporation


Technology Consumer Cyclical
https://www.quicklogic.com/ https://investors.roots.com/investor-home/overview/default.
aspx
RAVE Rave Restaurant Group Inc.
Consumer Cyclical RVIC Retail Value Inc.
https://www.raverg.com/ Real Estate
https://retailvalueinc.com/

Note: As of rebalance date 07/04/2022, please see SNN’s criteria for inclusion in the Planet MicroCap Index here: https://snn.network/key-criteria

64 Planet MicroCap Review www.PlanetMicroCap.com


PLANET Microcap INDEX
Q2 2022 Constituent List

PLANET Microcap INDEX PLANET Microcap INDEX

RVV:CNX Revive Therapeutics SM:CA Sierra Madre Gold and Silver Ltd.
Healthcare Basic Materials
https://revivethera.com/ https://sierramadregoldandsilver.com/

SAE:CA Sable Resources Ltd. SOTK Sono-Tek Corporation


Basic Materials Technology
https://sableresources.com/ https://www.sono-tek.com/

SALT:CA Atlas Salt Inc. SOU:CA Southern Energy Corp.


Basic Materials Energy
https://atlassalt.com/ https://southernenergycorp.com/

SBM:CA Sirona Biochem Corp. STRN Stran & Company Inc.


Healthcare Communication Services
https://www.sironabiochem.com/ https://www.stran.com/?hsLang=en

SBTX Silverback Therapeutics Inc. STRS Stratus Properties Inc.


Healthcare Real Estate
https://silverbacktx.com/ https://www.stratusproperties.com/

SCAN:CA Liberty Defense Holdings Ltd. STSA Satsuma Pharmaceuticals Inc.


Industrials Healthcare
https://libertydefense.com/ https://www.satsumarx.com/

SCOR Comscore, Inc. SVRA Savara Inc.


Communication Services Healthcare
https://www.comscore.com/ https://savarapharma.com/

SEII Share Economy International Inc. SWKH SWK Holdings Corporation


Technology Financial Services
https://www.seii.com/ https://www.swkhold.com/

SELF Global Self Storage Inc. TAAT:CNX TAAT Global Alternatives Inc.
Real Estate Consumer Defensive
https://www.globalselfstorage.us/ https://taatglobal.com/

SESN Sensen Bio Inc. TAIT Taitron Components Incorporated


Healthcare Technology
https://sesenbio.com/ https://www.taitroncomponents.com/

SGA Saga Communications Inc. TAST Carrols Restaurant Group, Inc.


Communication Services Consumer Cyclical
https://sagacom.com/ https://carrols.com/

SGC Superior Group of Companies Inc. TBRD:CA Thunderbird Entertainment


Consumer Cyclical Communication Services
https://superiorgroupofcompanies.com/ https://thunderbird.tv/

SGD:CNX Snowline Gold Corp. TCRT Alaunos Therapeutics, Inc.


Basic Materials Healthcare
https://snowlinegold.com/ https://alaunos.com/

SIDU Sidus Space Inc. TESS TESSCO Technologies Incorporated


Industrials Technology
https://sidusspace.com/ https://www.tessco.com/
Note: As of rebalance date 07/04/2022, please see SNN’s criteria for inclusion in the Planet MicroCap Index here: https://snn.network/key-criteria

www.PlanetMicroCap.com Planet MicroCap Review 65


PLANET Microcap INDEX
Q2 2022 Constituent List

PLANET Microcap INDEX PLANET Microcap INDEX

TIVC Tivic Health Systems Inc. UONE Urban One Inc.


Healthcare Communication Services
https://tivichealth.com/ https://urban1.com/

TLFA Tandy Leather Factory UTI Universal Technical Institute Inc.


Consumer Cyclical Consumer Defensive
https://tandyleather.com/ https://www.uti.edu/

TNY:CNX The Tinley Beverage Company Inc. VENA Venus Acquisition Corp.
Consumer Defensive Financial Services
https://drinktinley.com/ no good website, just email

TNZ:CA Tenaz Energy Corp. VERY Vericity, Inc.


Energy Financial Services
https://www.tenazenergy.com/ https://www.vericity.com/

TOC:CNX Tocvan Ventures Corp. VIA Via Renewables Inc.


Basic Materials Utilities
https://tocvan.com/ https://viarenewables.com/

TPHS Trinity Place Holdings Inc. VIRC Virco Manufacturing Corporation


Real Estate Consumer Cyclical
https://tphs.com/ https://virco.com/

TRON Corner Growth Acqusition Corp. 2 VIVK Vivakor, Inc.


Financial Services Energy
https://www.cornercapitalmgmt.com/ https://vivakor.com/

TRVI Trevi Therapeutics Inc. VLE:CA Valeura Energy Inc.


Healthcare Energy
https://www.trevitherapeutics.com/ https://www.valeuraenergy.com/

TSQ Townsquare Media Inc. VNCE Vince Holding Corp.


Communication Services Consumer Cyclical
https://www.townsquaremedia.com/ https://investors.vince.com/

TUSK Mammoth Energy Services Inc. VOXX VOXX International Corporation


Industrials Technology
https://ir.mammothenergy.com/ https://www.voxxintl.com/

TVA.B:CA TVA Group Inc. VUL:CA Vulcan Minerals Inc.


Communication Services Basic Materials
https://www.tva.com/ https://vulcanminerals.ca/

TWR:CA Tower Resources Ltd. VUX:CA Vital Energy Inc.


Basic Materials Energy
https://www.towerresources.ca/ https://www.vitalenergyoil.com/

TZOO Travelzoo WAM:CA Western Alaska Minerals Corp.


Communication Services Basic Materials
https://www.travelzoo.com/ https://westernalaskaminerals.com/

Note: As of rebalance date 07/04/2022, please see SNN’s criteria for inclusion in the Planet MicroCap Index here: https://snn.network/key-criteria

66 Planet MicroCap Review www.PlanetMicroCap.com


PLANET Microcap INDEX
Q2 2022 Constituent List

PLANET Microcap INDEX PLANET Microcap INDEX

WE.WS Wewards Inc. WSTG Wayside Technology Group Inc.


Real Estate Technology
https://wewards.io/ https://www.waysidetechnology.com/

WEYS Weyco Group, Inc. WTMA Welsbach Technology Metals


Consumer Cyclical
https://www.weycogroup.com/home/index.html
Acquisition Corp.
Financial Services
no good website or email
WFCF Where Food Comes From Inc.
Technology
https://www.wherefoodcomesfrom.com/
WVE Wave Life Sciences Ltd.
Healthcare
https://wavelifesciences.com/
WHLM Wilhelmina International Inc.
Industrials
https://www.wilhelmina.com/
WVM:CA West Vault Mining Inc.
Basic Materials
https://www.westvaultmining.com/
WLFC Willis Lease Finance Corporation
Industrials
https://www.willislease.com/
YGR:CA Yangarra Resources Ltd.
Energy
https://www.yangarra.ca/
WML:CA Wealth Minerals Ltd.
Basic Materials
https://wealthminerals.com/
ZVO Zovio Inc.
Consumer Defensive
https://www.zovio.com/

Note: As of rebalance date 07/04/2022, please see SNN’s criteria for inclusion in the Planet MicroCap Index here: https://snn.network/key-criteria

www.PlanetMicroCap.com Planet MicroCap Review 67


M
maarket
r k ET Ma
maker
kEr co
corner
rnEr
// By Eric Flesche

pAyment
Market Making
for
order
Explained
flow
At Glendale Securities, Inc., we mainly make markets in OTC
What is a Market Maker firm? Explain the process including “taking
securities for our customers. We charge our customers a
a house position”.
commission for execution and use our market making capabilities
to facilitate customer executions.

T
here are wholesale market makers, boutique

W
markete are
makers,
often and
asked other
whytypes
we don’t
of market
offer send your order to an exchange or ATS, but those
makers.
commission
Wholesale freemarket
trading makers
like some
obtain
of the often charge the broker on a net basis for execution.
order flowonline
from other
retail broker
brokerage dealers
firmswho
offer.
doWait,
not They can execute the order internally as a market
how
havecaninternal
a broker
marketdealer
making
offerdesks.
commission
Wholesale
free maker, but that requires staff, technology, and risk
trading?
market makers
The answer
profittobythat
the question
vast volumerequires
of orders
a capital that may be too cost prohibitive. Another
discussion
received by ontaking
the practice
the otherof side
paymentof from
of order
the orders
flow, option is to send customer orders to a wholesale
and
sentatoclarification
them by the onreferring
when payment
broker fordealers.
order The
flow market maker who pays the brokerage firm for its
is
positions
paid to that
brokers.
wholesale
Many large
market retail
makers
brokerage
take arefirms order flow. If you must choose between the three
including
usually heldthefor
online
a short
onesperiod
you areof time,
probably
possibly
familiar
even options outlined above, receiving payment for order
with
just for
do anot
fewmake
seconds.
markets Boutique
in stocks.
market
To fillmakers
your flow for sending orders to a wholesale market maker
order,
typically
brokerage
make markets
firms have
in securities
a coupletooffacilitate
options,their seems like it’s the smartest option for the brokerage
each
customer’s
with their
orders.
own When
cost/profit
a boutique
structure.
market
Theymaker
can firm. The brokerage firm eliminates costs, doesn’t
like Glendale takes a house position, it is often for a
longer period of time. There are some positions that
Glendale has held for over 2 years.

What services does Glendale offer


Companies?

Glendale makes markets in OTC securities, files


form 211 to begin or resume quotations on OTC from clients. Therefore, to facilitate our customer’s
companies, obtains DTC Eligibility for issuers, and orders we file for DTC Eligibility and file form 211
opens retail client accounts with a focus on custom- applications.
ers who would like to deposit OTC securities in their
account. Many broker dealers will not take OTC Can a retail investor open an account?
securities for deposit. Would you say that Glendale
is a full- service firm? If not, how would you describe Retail investors can open an account, deposit their
it? Boutique? Glendale is a boutique firm that spe- securities, and if applicable Glendale will make a
cializes in assisting clients in depositing and trading market in the security that they intend to trade in to
OTC and small cap listed securities. Part of the facilitate their orders.
process in assisting these transactions is the filing of
the form 211 and obtaining DTC Eligibility for issues Can investors buy and sell microcap
that our clients are depositing with us. If the issuer stocks at Glendale?
is not DTC Eligible, and there aren’t publicly avail-
able quotations, we cannot take orders or deposits yes

80
68 microcap
Planet MicroCap
reviewReview
magazine www.PlanetMicroCap.com
www.SNN.Network
Why is it so difficult for investors to In general, what factors determine your
trade microcap stock at any brokerage bid and ask price of a stock you make a
firm? Are there specific restrictions or is market in?
it at the discretion of the brokerage firm?
Client orders are the primary driver of bid and ask
The securities that are tradable is at the discretion prices. The firm will also represent its interest at
of each brokerage firm. Strict regulations on OTC certain levels, but typically we will be more active
trading and deposits have caused many broker when we have more orders to represent.
dealers to exit the business entirely, rather than deal
with the additional compliance requirements. How do market makers interact with one
another?
How has regulatory oversight and new
rules impacted microcap trading? It’s not uncommon to have 2-3 wholesale market
makers, a couple of boutique firms and a couple of
We think that microcap trading has been impacted ATS entities registered in an OTC security. An active
by heightened regulatory oversight over the past security will usually have over 5 MPIDs registered.
several years. Many brokerage firms have now
turned off all trading in OTC securities presumably What’s the difference between agency
due to the strict regulatory oversight. There are trades with commission or principal
large online firms that don’t allow any trading and trades with a markup/markdown?
large full-service firms that don’t allow any OTC
trading. Compliance departments at these firms As a dealer we can either send the order to another
claim that microcap stocks are illiquid and can be dealer or ATS for execution acting as an agent, or
easily manipulated for fraudulent purposes. While we can execute the trade as a principal internally.
this may be true in part, there are better ways than Some clients think that acting as agent is better
turning off trading to deal with these issues. Ironi- because the firm is not trading against the order.
cally, as more firms turn off OTC trading, it will likely However, its often misunderstood that regardless of
further decrease liquidity. Regulators should take how we execute the order, we are required to pro-
notice that if they overregulate this business, more vide best execution to the client. In addition, we are
and more brokerage firms will exit the business not allowed to trade for our own account at a price
instead of dealing with overburdensome compliance and size that could execute a client order unless we
requirements. simultaneously fill the client as well. Ultimately, we
are making markets to facilitate client orders, not to
How would you best describe the daily make more money off the same order.
activities of a market maker?
How does a market maker make money
Market makers directly represent quotations without trading stocks?
going through an intermediary, bids/offers for client
and firm interest in a security. During that quotation We make markets primarily to facilitate our cus-
process, market makers take positions both long tomer orders. We make commission or a markup/
and short in a security in the regular course of markdown (which is charged at the same rate as a
making a market. commission) on the trades we execute. Sometimes
we take positions in stocks that we make a market
What differentiates Glendale from its in and sometimes we profit or have a loss when the
peers? Are there any peers? security increases or decreases in price respectively.

There are surely peers depending upon the metrics For more information: www.GlendaleSecurities.com
one uses to compare dealers. However, Glendale
believes that it differentiates itself from other market
makers by taking a long-term interest in its client’s
securities when it facilitates the execution of orders.

Note: This article is not an attempt to provide investment advice. The content is purely the author’s personal opinions and should not be
considered advice of any kind. Investors are advised to conduct their own research or seek the advice of a registered investment professional.

www.PlanetMicroCap.com Planet MicroCap Review 69


Market Maker
DTC Eligibility
DWAC Deposits
Certificate Deposits
Form 211 Applications
OTCQB/OTCQB/OTC/Pink Sheets

818 - 907 - 1505


cs@GlendaleSecurities.com
www.GlendaleSecurities.com

Eric Flesche Brittany Kendziora Esmeralda Rivas

70 Planet MicroCap Review Member FINRA/SIPC www.PlanetMicroCap.com


www.PlanetMicroCap.com Planet MicroCap Review 71
insi g hts
// By Aaron Spool and Neil Reithinger

On-demand
Accounting and
Finance
5 Things for Microcaps to Consider

Being a public company is expensive. Regulatory and compliance


costs associated with accounting and finance rules can have a
major impact on a company’s EBITDA. Finding ways to better
manage these expenses can add significant value to a firm.

A
s former corporate finance executives and
current partners of an on-demand CFO
services provider, we have experienced the
search for good finance, accounting, and operations
support from both sides of the table. Choosing the
right finance and accounting staff solution for your
business is a matter of balancing your immediate
needs and future plans with your resources. In the
following article we explore a number of items to
consider as you explore your options to meet your
finance, accounting and compliance needs.

Is an on-demand solution right for you?

If you are open to alternatives to full-time staff and


focus on outcomes, there are huge opportunities to
find and utilize external, on-demand resources. You or budgeting, forecasting, and reporting?
just need to determine what kind of solution will •• As for talent, you need to align staff with the
work best for your needs. To understand your needs, problem your solving. Does your current staff
you need to 1) know what you are trying to solve for, meet your business needs today? Do they meet
and 2) align your talent to solve that problem. them into the future? Do you need leadership,
like a CFO, who will own the process for you?
•• What are you trying to solve, or what tasks
do you want undertaken? Are they one-time Where is the company in its growth
projects like cleaning up your accounts, getting trajectory?
help with a capital raise, or a first-time audit?
Are they ongoing – such as preparing SEC On-demand solutions are extremely flexible and can
filings, closing out monthly or quarterly books, adapt for any stage. From creating plans to reach

72 Planet MicroCap Review www.PlanetMicroCap.com


strategic milestones to implementing a new ERP approach to the problem. Often an outsourcing
system, or managing quarterly SEC filings, there are partner will identify issues you didn’t know were
many engagements well-suited for outsourcing to issues but need to be addressed.
an external vendor. Whether a project-oriented or
longer-term engagement makes sense will depend When thinking about costs consider the entire team.
on where your firm is in its lifecycle. What is the cost to build out or replace the entire
team you need to do the job – both the tasks and
Are your needs Operational or Strategic? the strategic management of the finance function? If
Are there industry specific issues? you hire in-house, is there enough work for them to
do to justify the comprehensive full-time employee
Your finance and accounting operations collect the cost – taxes, benefits, salary, bonus, etc.
data and information needed for reporting, analysis,
and decision making. As a publicly-traded company Is the expense based on a single function, a CFO,
you probably have the operational basics covered controller, or accountant – or will you need three roles
– it’s a requirement. But the difference between to meet your needs? You may need a CFO role 5% of
operational and strategic is the difference between the time, controller 20%, and accountant 40% – let
managing the close process vs. fixing the close pro- alone the SEC filing team which usually is needed the
cess – establishing systems, timing, quality assurance, most before a filing for a public company. Can you fill
and architecting the process from a forward-looking this need with one person? If current staff can do part
perspective. Financial strategy can also encompass of the job – but what about the other aspects?
a wide array of services from capital planning to
financial modeling of cashflows to secondary equity When analyzing costs, focus on the entirety of the
or debt offering planning. Prioritizing these needs needed team. An outsourced solution should save
can help determine how an outsourced solution can you 30-50% compared to hiring in-house full-time.
best support you. The better you know what you are The savings come with the added benefits of greater
looking for – the better the results will be. flexibility and more experienced professionals.

Engage any prospective outsourcing partner in The Relationship Matters


discussions about your requirements. Their outside
perspective can even suggest what you might With an outsourced solution, you need to have
need, and it is a big part of the relationship building confidence not only in the manager doing the work,
process. The experienced on-demand providers, but also the entire firm. It is a strategic vendor
like Eventus, have worked with many firms in similar relationship that, when successful, will make your
situations to yours and helped them overcome the firm better operationally, strategically, and profitably.
challenges they were trying to surmount.
The outsourced manager will be a member of your
Sometimes industry specific knowledge trumps gen- team and a part of your leadership. You want to get
eral accounting and finance skills. If your business to know them and trust them – like you would an
operates in a unique industry, can the differences be employee. This will help you get the most out of the
quickly learned by a finance and accounting general- relationship with the partner.
ist? Crypto is one example that comes to mind. The
current environment for managing the accounting With the leaders or owners of the firm get to know
of crypto is highly fluid. Experience and expertise in them as you would any trusted advisor. They are
crypto are difficult to find but needed if that is your there to add value to your business, as well as
business. accommodate new requests, changes to the team,
or address shortfalls in expectations.
Costs vs. Value
For more information about Eventus Advisory Group,
As always, when looking for vendors, shop around – please visit: www.eventusag.com
but avoid shopping on price alone. Many factors will
go into the pricing of an outsourced solution – from
actual tasks to the alternatives for a more strategic
Note: This article is not an attempt to provide investment advice. The content is purely the author’s personal opinions and should not be
considered advice of any kind. Investors are advised to conduct their own research or seek the advice of a registered investment professional.

www.PlanetMicroCap.com Planet MicroCap Review 73


insi g hts
// By Drew Bernstein, CPA

Door Half Open


Why I am Still Optimistic About China

It’s chic to be bearish about China these days. You don’t even need
to look at the stock charts. Just sample a few of the headlines.

“E
uropean businesses are rethinking their plans Strictest COVID Zero City.”  Business Insider informs
for a ‘closed’ China,’” states a recent report us that the next generation of Chinese has turned
from CNBC. “Tech Companies Slowly Shift its back on American education, “Chinese students
Production Away from China,” according to the have helped bankroll the US economy. Now fewer
New York Times. Bloomberg offers up a breathless want to study here, and it risks America’s position as
account, “This is What Life’s Like in the World’s a global leader.” While the Atlantic speculates that

74 Planet MicroCap Review www.PlanetMicroCap.com


the impending doom of China may be a good thing Those who remember their Chinese history will recall
for Americans, “China’s Mistakes Can Be America’s the “Open Door Policy” promulgated by U.S. Sec-
Gain.” retary of State John Jay in 1899. Jay declared that
this policy was “justly held” by America and Great
From the tone of these articles, one might imagine Britain as “the only one which will improve existing
China is declining into the economic equivalent of a conditions, enable them to maintain their positions in
zombie apocalypse. Of course, the fact that most the markets of China, and extend their operations in
of the reporters, editors, and pundits on the “China the future.”
beat” have not been able to set foot in the PRC
for nearly three years doesn’t engender nuanced But to Chinese ears, the “open door policy” invokes
reporting. images of gunboat diplomacy prying open the
Chinese market by blasting Chinese ships, the forced
So, with all this bad news, why do I remain a cock- mass addiction of Chinese to British opium, and a
eyed optimist about China and the potential for a hundred years of trampled sovereignty and humili-
fruitful transpacific partnership between China and ation. They will also recall that the “open door” to
the US? their markets was proclaimed after Congress had
slammed shut all future immigration from China with
Data Paints a Brighter Picture than the the Chinese Exclusion Act of 1882.
Headlines
Only by understanding this history of where our
As an accountant, I tend to focus on the numbers, and relationship has come from can we understand the
a different story emerges when you look at the data. oscillating policies of China toward engagement with
the outside world and the tensions embedded in our
China’s inbound foreign direct investment is up by relationship.
20% in the first eight months of 2022 —multination-
als aren’t abandoning China; they are doubling down. Engaging with China with a Door Half
60% plan to expand their operations in China this Open
year, per a PwC survey.
What does it mean to have a door that is “half-
China has dominated global equity listings this open?”
year, with six out of the world’s biggest IPOs on the
A-share market and far outstripping proceeds raised China has shifted from a full-throated embrace of
on the NYSE and NASDAQ, according to Bloomberg. globalization to the “dual circulation strategy.” This
new stance seeks to balance the global integration
China is the world’s new energy superpower, pro- that made China prosperous while hardening restric-
ducing over 80% of all solar panels and 56% of the tions on security-related sectors, reducing China’s
batteries required to power electric vehicles, per the dependence on critical technology inputs, and
IEA and Arena EV. promoting indigenous innovation.

China cannot be ignored as a force in the world. My China remains “open for business,” but only on
thesis is that the door to engagement with China China’s terms. MNCs still have very substantial
remains half open, not slammed shut. market opportunities, but only if their business
growth is aligned with China’s economic policy and
To frame this discussion, it is helpful to think about industrial planning goals and if they are willing to
the phrase “open door” and how it resonates differ- play by Chinese rules. Businesses that threaten
ently in American and Chinese ears. sectors deemed vital to core interests or offend
Chinese sensibilities, even if unwittingly, will face
To Americans, an “open door” to China suggests severe consequences.
free access to markets, rules-based trading systems,
market-based economics, and the chance, if we are Businesses must adapt and adjust their risk calcula-
honest, to reap immense riches from China’s massive tions for an era of sustained heightened geopolitical
consumer population and economic progress. tensions. The recent conflict in Ukraine has shown

www.PlanetMicroCap.com Planet MicroCap Review 75


Some brave investors and Given the factors above, companies are increasingly
considering hiving off their Chinese operations from
corporate teams have decided the rest of the world, from an operational and even a
capital markets perspective. Certain MNCs may even
that now when others have embrace an A-share or Hong Kong listing for their
thrown in the towel, is precisely China operations to anchor it with Chinese investors
and government, obtain growth financing in local
the right time to engage with currency, and monetize the value of a higher growth
business segment.
China.
Essential China Themes for Investors and
Management

Some brave investors and corporate teams have


how a regional hot war can upend global markets decided that now when others have thrown in the
overnight. But even ratcheting diplomatic tensions towel, is precisely the right time to engage with
may entail collateral casualties. Companies and China.
investors need to “thread the needle” between
Chinese preferential policies for domestic players, I would urge those seeking to deploy their capital
increasing U.S. sanctions regime, and unpredictable or talents to work in China to keep several critical
geopolitical events. themes in mind.

China Post-COVID First, the seemingly unstoppable growth of China’s


export machine is unsustainable and will revert to
Companies have also realized that the COVID-19 mean. As developed markets go into recession, their
era has drastically changed how we do business in ability to absorb limitless Chinese goods will be con-
China, perhaps forever. strained. The U.S. and Europe have become acutely
aware of the national security and supply chain risks
Companies’ global top management has been associated with their prior embrace of unadulterated
locked out of China since early 2020, given that globalization and the associated hollowing out of the
few can afford the extended quarantines and risk of industrial base. Expect a sustained period of strate-
getting locked down that a trip to China entails so gic industrial policy by advanced economies and a
long as the policy of “dynamic zero COVID” persists. strategic diversification of supply chains by MNCs.
In response, companies have had to develop digital These companies want to reduce their vulnerabilities
infrastructure and resilient local teams who can to future flares in regional tensions.
operate with a high degree of autonomy.
Second, cracks have appeared in China’s traditional
China is far less attractive to foreign talent. Most ex- model of driving top-down GDP growth based on
patriates find the combination of travel restrictions, speculative real estate and government-funded
legal risks, and enhanced security and surveillance infrastructure. China’s real estate developers are
unpalatable, meaning that companies must invest in severely wounded, apartment buyers are on strike,
and grow local talent who can interact with foreign bank balance sheets are stressed, and infrastructure
experts virtually. has reached the “bridge to nowhere” stage recalling
Japan in the 1990s.
The digital divide with China has become a chasm,
as many virtual platforms used to run collaborative Given this, it falls to the Chinese consumer to finally
digital businesses in the West have been walled off, “save the day” for China’s economy — place it on a
and China’s “great firewall” has become increasingly more sustainable footing with a lower overall GDP
impenetrable. China’s digital communications and growth rate but with a greater quality of growth and
business infrastructure are increasingly incompatible improved returns on invested capital. This is the path
with Western platforms, and Chinese platforms are taken by every “Asian Tiger” in the past, and China
opaque and inaccessible to non-Chinese users. is simply an Asian Tiger on Steroids.

76 Planet MicroCap Review www.PlanetMicroCap.com


These changes will create three essential themes for OPPORTUNITY #2: CHINA AND
investors to consider. DECARBONIZATION

OPPORTUNITY #1: PLAY GROWTH OF SOUTHEAST The issue of climate change cannot be solved
ASIA without China’s full engagement and leadership. A
complete break in relations with the West would
Southeast Asia is positioned to be a primary doom any chance of passing an inhabitable planet to
beneficiary of the quest for supply chain resilience. our children. According to the Rhodium Group, China
Countries like Vietnam, Indonesia, Malaysia, and the emits 27% of the world’s greenhouse gasses, more
Philippines tout their affordable labor forces, improv- than the entire developed world combined.
ing logistics and infrastructure, and favorable policy
orientation towards the U.S. and Europe. While none Fortunately, China is also the world’s leader in green
has the scale to displace China’s dominant position, energy production and installation, with wind and
they will all benefit from capital and western exper- solar installations forecast to jump by 25% in 2022,
tise inflows. to a record 156 Gigawatts, per the China Renewable
Energy Engineering Institute.
The IMF has forecast that China’s share of global
export growth will fall from #1 at 6.6% in 2016-21 China’s role will be essential in decarbonizing the
to #8 to 3.4% from 2022 through 2026. Over that global south and preventing them from adopting
same period, Southeast Asia’s share is forecast to the carbon-intensive development and consumption
rise to the #1 position with 5.6% growth between model of the US, Europe, China, and India. The
2022 and 2026. world’s best hope for limiting climate change is to
help the global south go green before they get rich.
Southeast Asia also has demographic tailwinds in
its favor, with a far younger population than North While developed economies have an essential
Asian countries and only 50% of the people living in role in this transition, only China has the operating
urban areas. Its consumers have a ravenous appetite scale and ability to deliver products at a price
for consumer goods and services that will support point to meet the demands of this remarkable
a more balanced economic development profile as industrial transformation. While Tesla may lead the
a more significant proportion move into the middle EV scoreboard in U.S. and Europe, they will never
class. Traveling to Vietnam today recalls China’s be more than a rounding error in sub-Saharan Africa.
hunger for progress and breakneck expansion 15 Chinese manufacturers have a far better chance of
years ago. producing products adapted to the local realities
and economics of the developing world. And that is
In addition, Southeast Asia is embracing digitization a massive opportunity over the next two decades.
at hyperspeed. Unlike China, Southeast Asia uses
the same core digital architecture and applications OPPORTUNITY #3: WILL CHINA’S CONSUMER
as Western businesses and consumers. But they CLASS TAKE UP THE SLACK?
also have a thriving ecosystem of localized digital
business models and applications and a younger The case for exploding Chinee consumer demand is
generation fully embracing start-up culture. not a matter of if but rather when.

According to a study by Google, Temasek, and Fundamentally, China’s economy cannot continue
Bain, the region’s digital economy is forecast to to grow without a profound rebalancing in GDP
grow from $170 billion in 2021 to $1 trillion by 2031. distribution. China’s consumers made up just 38.5%
Global venture firms have taken notice, pouring of the GDP in 2021, compared to 68% of the GDP
nearly $26 billion into the region in 2021, resulting in the U.S., per the CEIC. China’s gross domestic
in 25 new local “unicorns “in just one year. While savings rate is completely abnormal compared to
the pace of investment has slowed in 2022 as many traditionally thrifty North Asian neighbors, at 45%,
of these companies seek to demonstrate a path to versus 35% in Korea and 25% in Japan.
profitability, the level of innovation and energy is
undeniable. These excess savings have funded the ability of local

www.PlanetMicroCap.com Planet MicroCap Review 77


governments to fund non-productive infrastructure Far from the elegant “conscious uncoupling”
and development projects and for consumers to proposed by Gwyneth Paltrow when she divorced,
invest in apartments that sit empty for years. But the busted-up “Chimerica” family would end up
those chickens have come home to roost, and they living on the street, dining on scraps, and fearing for
are sick chickens. their lives. Given those stakes, a little optimism and
empathy can go a long way.
As China eventually backs away from its Zero COVID
Drew Bernstein, Co-Managing Partner Marcum Bernstein & Pinchuk (MBP)a
approach, we can expect that consumer demand will
leader in SEC audit accounting and consulting services to Chinese
be unleashed like a coiled spring – with frustrated companies seeking access to capital markets.
consumers’ pent-up demand for travel, dining out,
In 1983, Drew Bernstein co-founded Bernstein & Pinchuk. Additionally, he
entertainment, and luxury shopping flooding the co-founded MarcumBP, which is a member of the Marcum Group and an
economy. affiliate of Marcum LLP. a leading U.S. accounting and advisory firm. Both
firms have multiple offices within the United States and Asia.

On a longer-term basis, the outlook for growth in Bernstein is a distinguished expert with deep knowledge of the China and
U.S. financial ecosystem with experience extending across Asia. Europe
the services sector remains robust. China’s rapidly and Africa. Industry experience encompasses technology. retai l. manufac-
aging population and the rebalancing from capital turing, hospitality, pharmaceutical and real estate. Bernstein directs a
investment and exports will drive the share of global team, featuring highly trained PCAOB and SEC accounting experts
and financial consultants working in New York as well as Beijing. Tianjin.
GDP to services, as it has in every Asian tiger. This Shanghai. Shenzhen. Hangzhou. and Guangzhou.
transition will create enticing opportunities for savvy
Additionally, Bernstein is considered a valuable thought leader and news
global companies with robust localization strategies commentator. He has published articles for Forbes.com and China Daily
and teams that can sate the demand for high-quality and is a frequently called upon source by prominent media such as China
Global Television Network. CNBC. Bloomberg TV. The Financial Times.
services at a China price point. The South Chino Morning Post. The Wall Street Journal. Yahoo! Finance.
and more regarding Chinese IPOs. China’S economic growth. investment
appetite, innovation trends, corporate governance, SEC regulations and
Why I Am Still Optimistic? more.

In summary, the opportunities for engaging with Bernstein graduated from the University of Maryland with a B.S. in
Accounting. Currently, he resides in New York City with his wife and children.
China continue to be substantial. But the bar for
success is higher than ever before. About MBP
Marcum Bernstein & Pinchuk LLP (MBP) offers specialized audit and
advisory services to support SPAC sponsors and SPAC targets in Asia.
For my company MarcumAsia, doing business in MBP and its parent company, Marcum LLP. have been involved in more
SPAC transactions than any other audit firm. MBP is the only audit firm to
China has been an unmitigated success, with record have a dedicated SPAC team for Asia. MBP performs all audits for Marcum
revenues in each of the past five years despite all in Greater China. and MBP is a top-five auditor for Chinese companies
listed in the United States.
the political drama and regulatory conflict in our
industry. The dedicated SPAC team has worked with SPAC sponsors, underwriters,
and targets. MBP draws on wide-ranging experience with the initial publiC
offerings and subsequent business transactions forged by such companies.
On a personal note, marrying my wife, born and MBP has designed its audit platform to deliver the technical expertise.
raised in China, was the best decision I have made efficiency. and urgency required by SPAC IPOs. This includes high-quality.
PCAOB-compliant audits for private Asian companies that are contemplat-
in my life, providing me with years of joy and my ing entering a SPAC merger.
treasured youngest son. As a microcosm of the
Website: U.S.: https://www.marcumbp.com:
US-China relationship, we often disagree profoundly China: https://cn.marcumbp.com
about how we view the world. Still, we always find a
way to compromise and realize that our lives would
be deeply impoverished without each other.

As for those on either side of the ocean who preach


the need for a total decoupling between the U.S.
and China, I believe they profoundly underestimate
the enormous costs that such a sundering would
impose – in terms of economic prosperity, national
security, and the prospect of our children inheriting a
livable planet.

Note: This article is not an attempt to provide investment advice. The content is purely the author’s personal opinions and should not be
considered advice of any kind. Investors are advised to conduct their own research or seek the advice of a registered investment professional.

78 Planet MicroCap Review www.PlanetMicroCap.com


LUCOSKY BROOKMAN GIVES BACK

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back to the community through a hands-on approach to charitable activities. Since 2014, Lucosky Brookman,
together with its friends, clients and colleagues, has donated over $775,000 to charitable endeavors
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www.PlanetMicroCap.com Planet MicroCap Review 79


cannabis CORN E R
// By Seth Yakatan

US CANNABIS
valuations
continue to decline,
as does the broader
market
P
ost-pandemic new issues have arisen for between 1% and 2% so far in 2022. Canaccord Genu-
the sector, inflationary pressure on overall ity estimates the total legal cannabis sales in the US
consumer spending, multi-state wholesale are currently run rating at close to US$25B.
pricing declines, a mess in the overall California
landscape and a scarce number of investors with Rising Inflation and wholesale pricing declines
a never-ending rising cost of capital. However, we likely to remain: All operators throughout 2022
are staying pot committed as the long-term growth have been negatively impact that 40+ year high
prospects of the sector have never been better. inflation has had on consumer spending habits.
Most wholesale markets in the United States are
Overall market trends: continuing to experience price compression. In some
instances, this is a result of general market satura-
Macro sales are still strong and GROWING: Based tion mainly in California and the overall impact of
on retail-level sales data, macro sector sales have illicit sales in many states.
experienced average month over month growth of

80 Planet MicroCap Review www.PlanetMicroCap.com


2022 YTD US cannabis sales – top 13 markets

Cannabis Valuation Comparable Matrix

Top 5 MSOs are well positioned amid a slowed highs of early 2021 and >50% below the multiples
environment: The 5 largest MSOs are profitable, of more traditional CPG companies. Until the sector
have access to capital and are still operating with attracts more institutional capital or a change at
relatively attractive gross margins of close to ~50% the federal level, we believe valuations may still be
and adj. EBITDA contribution just under 25%. susceptible to downward pressure. MSOs still have
attractive risk/reward prospects, given that company
Sector valuations are low and require federal fundamentals.
legislative change. Overall sector valuations are
Seth Yakatan
particularly sensitive to the prospect of legislation
C-Level Corporate Finance Specialist
progressing at the Federal level. All participants in • Instituted a turn around at Eaze since 2019
the industry must plan that the likelihood of cannabis • Raised in excess of $300.0 million
• Culminating in Eaze acquiring multi-state retail leader Green Dragon,
becoming legalized or de-scheduled in the foresee- creating nation’s largest MSO Delivery operation and biggest California-
able future remains remote. headquartered MSO
• Over the past eighteen years as a co-founder of Katan Associates (KAI),
Seth has successfully structured and managed strategic alliances and deals,
Valuations are at all-time lows: Per Canaccord based on his insight and expertise in the US and Global Cannabis and Life
Science sectors
Genuity the average MSO currently trades at 4.4x its
2023 EV/EBITDA – over 70% lower from the sector
Note: This article is not an attempt to provide investment advice. The content is purely the author’s personal opinions and should not be
considered advice of any kind. Investors are advised to conduct their own research or seek the advice of a registered investment professional.

www.PlanetMicroCap.com Planet MicroCap Review 81


iinsi hts
NSi g HT S
// By John Bonfiglio, PhD

Public MiCROCap
puBliC Microcap
Biotech COMpaNy
BiOTECh Company
Board iSSuES
BOaRD Issues
A ShORT
a Short pRiMER
Primer

A few weeks ago, a colleague of mine suggested I share some


of my experiences over the last 20 years running public biotech
companies. A caveat to start - almost all my experiences were
with companies that were in trouble either financially, managerially,
or technologically. There are many well-run, well-funded biotech
companies where this primer would not apply. However, if you are
on the other side of the coin, read on.
Board oF
BoarD of DirEcTorS
Directors What iS
WHaT is THE
the aNNUaL
annual coMpENSaTioN
compensation For
for
Board MEMBErS?
BoarD members?
Boards should be your first line of defense and
should always have your back. This is not always the Some Board members view their membership as an
case. One of my Board members once told me he eternal annuity and retirement fund. They have no
was flying high cover for me -and he did -mostly. intention of radically helping the company as long
as they continue to get compensated, they maintain
If you are interviewing for the CEO position at a the status quo. I once had a situation where the
microcap biotech with a less than stellar past here company had about two months of capital and we
are a few items, you may want to address during were desperately trying to raise capital. I suggested
your due diligence: to the Board that senior management would be
willing to take a drastic pay cut for several months
How LoNg
HoW long HavE
have THE
the cUrrENT
current BoarD
Board to keep the company going. I asked if the Board was
members BEEN
MEMBErS been WiTH
with THE
the coMpaNy?
company? willing to do the same – it was soundly rejected. This
spoke volumes as to their real motivation.
If the company is in dire straits and the same Board
has been in place for the entire time this could be a Have the Board members participated in any of the
red flag. One Company I was involved with had a past financings and how much company stock do
Board that hadn’t changed in membership for ten they own?
years and the Company was struggling to survive
but if the Board continued to get compensated (see If you are being recruited to raise capital, it is
next section below) there was no impetus to resign important to know if the Board believes enough in
or bring in new members. the Company and its future to invest in its future. If
there is no skin in the game for the Board it does not

82 MicroCap
52 Planet MicroCap
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www.SNN.Network
create the enthusiasm or creativity needed to raise As I mentioned at the beginning of this article, Boards
capital or create a viable strategy. A corollary to this are critical to the success of biotech companies. In
statement is whether Board members have brought theory, they should work with the CEO and senior
in investors to help finance the company. I once had management to help move the company forward
a new Board member who thought the company both strategically and financially. Sadly, this is not
was on the verge of getting a breakthrough drug always the case. Self-interest, greed and incom-
approved for a very important indication. During the petence are among the most common reasons for
interview process he bragged about his net worth failure in this regard. Many times, the issues listed
but when it came time to help finance the company, above may be mitigated by a CEO willing to put in the
he did not participate because he realized the drug time to communicate and develop relationships with
was not going to FDA for at least two years. individual Board members. I tried to accomplish this
with weekly calls when needed or occasional lunches
What are the Board dynamics? with local Board members. It is important to realize
that in most cases it is extremely difficult to change
You can learn a great deal by talking with individual Board members as a senior manager. Most Boards
Board members and if possible senior managers are voted in at annual Board meetings. I encourage
about Board members interactions with one another. you to look at the difference between a plurality vote
One time I was interviewing with a Board member, or a majority vote for Board membership to see how
and he called a fellow Board member a glorified difficult it can be to vote someone off a Board.
paint salesman! That should have been enough of
a red flag to have me question taking the position. In summary, completing due diligence on the
Also, the flip side is also important. In a different Board you will be working with is a critical piece in
situation, I was brought in as the new CEO because determining your success with your new company.
the former CEO was being sued by investors. When Obviously, it is not the only factor but be assured a
I arrived at my first Board meeting the individual was competent and helpful Board will go a long way on
still on the Board! He was a friend of the Chairman of your journey.
the Board. It took me six months to have him resign
John N. Bonfiglio PhD MBA and has over 30 years’ experience in the
from the Board.
biotech/pharmaceutical industry Including over 20 years as a C-level execu-
tive in the biotech industry.
What skill sets do individual Board
Dr. Bonfiglio started his career with 11 years at Allergan pharmaceuticals.
members possess? He spent 3 years at Baxter HealthCare before starting a career in small
biotech companies. He rose to the position of CEO at Peregrine Pharma-
ceuticals where he turned around the financially strapped public company.
Board memberships sometimes have interesting
histories. The composition of membership may have Dr. Bonfiglio was named COO at Cypress Bioscience while the company
was reinventing itself as neuro-pharmaceutical company. He then joined the
been shaped by personal friendship, financings, Immune Response Corporation as CEO and was responsible for raising over
founders, or politics. A strong Board should have $50M and restarting clinicals in the HIV and MS areas.
members that know biotech, drug development and/
As CEO at Argos Therapeutics a privately held oncology company, he
or financing public companies. Having members that raised $35M through a series C financing. His tenure at Argos produced
have no experience in any of these areas makes clinical data which led to an IPO and subsequent financings.

for a difficult board for management. I once had a Following Argos, he became President and CEO at Oragenics in Tampa, Fl.
Board member who was skilled CPA accountant. Here he completed two strategic deals with Intrexon Corporation, raised
$29M relisted the company on the NYSE:MKT and refocused the company
He had been on several Boards of companies that on new novel and proprietary antibiotics
actually had a revenue stream, and he knew the
Dr. Bonfiglio was the COO at TapImmune where he was responsible for
audit process and public company filing processes starting a clinical program, raising capital and relisting the company on
exceptionally well. He was completely unaware of Nasdaq. The company is now known as Marker Therapeutics (MRKR
the risk profile of biotech companies. Every financing -Nasdaq).

opportunity I presented he balked at because he Dr. Bonfiglio has held independent Board positions at GT BioPharma
couldn’t understand the cost of capital for a biotech (GTBP), Microlin and Genprex (GNPX).

company with no products approved. This led to He recently joined Sequella a private company developing new therapies
delays, much aggravation and a divided Board. If for Multi Drug Resistant tuberculosis as an executive Board director.

possible, determine if the Board is open to adding a To reach Dr. Bonfiglio:


new member(s) with a defined skill set. bonfiglio.john@gmail.com

Note: This article is not an attempt to provide investment advice. The content is purely the author’s personal opinions and should not be
considered advice of any kind. Investors are advised to conduct their own research or seek the advice of a registered investment professional.

www.PlanetMicroCap.com Planet MicroCap Review 83


Boat Rocker Media (TSX: BRMI)

Q&A with CEO,


John Young
RK: Let’s start with a quick overview of
the business…

JY: Boat Rocker (TSX: BRMI) is the home for creative


visionaries. An independent, integrated global
entertainment company, Boat Rocker’s purpose is to
tell stories and build iconic brands across all genres
and mediums. With offices in seven cities globally,
Boat Rocker’s creative and commercial capabilities
include Scripted, Unscripted, and Kids & Family
television production, distribution, brand & franchise
management, a world-class animation studio, and
talent management through Untitled Entertainment.

RK: How would you describe the


company’s performance to this point
(beginning of September 2022) in the year?
Have you reached the milestones and
goals that you set for the company? 

JY: For 2022, we have seen continued momentum


across our business in the first half of the year with
more than 40 shows in various stages of production. We expect Adjusted EBITDA for the year to fall at the
Currently we have seven premium scripted series on lower end of our previously stated range of $40 mil-
our FY 2022 slate. The expansion of our premium lion to $50 million, but still be reflective of significant
scripted slate from two shows in 2021 to seven this year growth over the prior year at 25% at the lower end.
underscores our focus on creating and delivering high For 2022, we anticipate lower revenue compared
quality shows to a wide range of leading streamers and with last year, but improved Adjusted EBITDA margin
broadcasters globally and investing in owned IP. in line with our previously stated expectations. As
we have said before, annual Adjusted EBITDA is the
This quarter (Q2) we began to deliver on the antici- most important measure of our performance, as well
pated ramp in Adjusted EBITDA, which we expect as Adjusted EBITDA growth over multiple years given
will continue in the second half of the year. Although the length of production cycles.
revenue was up only modestly over the prior year
period, driven by a 61% increase in Kids & Family and 2022 share performance has been disappointing, off
12% in Representation, Adjusted EBITDA grew by the back of a significantly weakened overall global
185%, which speaks to our ability to improve Adjusted stock market. Management believes the current
EBITDA margins as we forecasted previously. share price does not reflect the intrinsic value of
the Company and for that reason started a Normal

84 Planet MicroCap Review www.PlanetMicroCap.com


Course Issuer Bid, or NCIB, beginning September 1st, to hold or grow. According to Morgan Stanley analysts,
as the repurchase of stock represents an attractive the top streamers are projected to spend upwards of
ROI and appropriate use of funds. $140 billion across sports and entertainment content in
2022 alone. Boat Rocker’s goal since the start, close to
RK: Are there any industry tailwinds to 20 years ago, has been to tell stories and build iconic
push forward some of the company’s brands across all genres and mediums with a focus on
goals and objectives?  quality. By partnering with some of the biggest stream-
ing and broadcasting names in the business, including
JY: We continue to see strong demand for content Netflix, Disney+, ROKU, Apple TV+, BBC, Amazon
from streamers and broadcasters in general. While Prime Video and more, we hope to bring our content
there has been meaningful consolidation amongst our to a wide and global audience to enjoy.
buyers such as Warner Media with Discovery, Amazon
with MGM Studios, Viacom and CBS, we are also see- RK: What are some of the company’s value
ing new players enter the market, like Amazon Freevee catalysts for the rest of 2022, going into 2023?
and ROKU– so the landscape is changing frequently.
What isn’t changing, however, is the demand for, and JY: It has been a very busy year so far! Certainly, a big
volume of, new content that platforms need to popu- part of what success looks like for 2022 is executing
late their channels and grow and retain –Boat Rocker and delivering on all our shows across each of our divi-
continues to benefit from that need. The trend to date sions. Doing so will position us well for 2023 in beyond,
has shown total budgets from big streamers continues as success in 2022 should catalyze subsequent season

www.PlanetMicroCap.com Planet MicroCap Review 85


And of course we are always winner Jeff Daniels and Golden Globe winner
Maura Tierney for Amazon Freevee.
invested in developing our slate •• Premium scripted series Slip, created, written
and directed by Zoe Lister-Jones and produced
so we have new projects to with our partners at TeaTime Pictures, Dakota
bring to market next year – this Johnson and Ro Donnelly, for The Roku Channel.
•• Invasion Season 2 and Mrs American Pie for
means focusing on in-house Apple TV+.
•• Downey’s Dream Cars, (working title), featuring
development, optioning stellar Robert Downey Jr.for the Warner Bros. Discov-
ery streaming platform.
existing IP, and partnering with •• Drag Me to Dinner, a new cooking series cre-
creative talent through first look ated and executive produced by and featuring
Neil Patrick Harris and David Burtka for Hulu.
deals. •• Dino Ranch, our pre-school series which airs on
Disney Junior in the US, remains the #1 pre-
school U.S. cable show for kids aged 2 to 5 in
its 7pm time slot and is now available to view in
170 countries worldwide. Online toy sales have
renewals, international sales of our owned shows, and performed well so far this year, and we are
for our franchise brands like Dino Ranch, further ex- excited to have the brand featured in Walmart’s
ploitation of merchandise and licensing opportunities. upcoming 2022 Holiday Toy Catalog and on
And of course we are always invested in developing shelves across big name stores like Target and
our slate so we have new projects to bring to market Amazon as well as other global stores. We now
next year – this means focusing on in-house develop- have a total of 45 licensees.
ment, optioning stellar existing IP, and partnering with
creative talent through first look deals. Some of the
projects we are currently working on include: We are expecting great things from Dino Ranch not
only from a viewership perspective, but also from a
•• The 2nd season of sci-fi series Beacon 23 for merchandise and licensing opportunity perspective.
Spectrum and AMC. While it takes many years to create a super brand
•• Orphan Black: Echoes, the highly anticipated like Peppa Pig or PJ Masks, we are encouraged by
spin-off series of international hit show Orphan the groundwork we continue to lay, and the results
Black, featuring Krysten Ritter. to date. Boat Rocker will continue to focus on build-
•• Near-fi scripted series Robyn Hood  for Corus, ing our pipeline of IP as we see that as an important
created by and directed by Director X and written part of our growth and future profitability.
by award winning screenwriter, Chris Roberts
(Orphan Black). For more information about Boat Rocker Media,
•• Season 2 of Boat Rocker’s premium scripted please visit: www.BoatRocker.com
drama series, American Rust, starring Emmy

DISCLAIMER AND FORWARD-LOOKING STATEMENTS NOTICE: This article is provided as a service of SNN Inc. or an affiliate thereof (collectively “SNN”), and all information
presented is for commercial and informational purposes only, is not investment advice, and should not be relied upon for any investment decisions. We are not recommending
any securities, nor is this an offer or sale of any security. Neither SNN nor its representatives are licensed brokers, broker-dealers, market makers, investment bankers, investment
advisers, analysts, or underwriters registered with the Securities and Exchange Commission (“SEC”) or with any state securities regulatory authority.
SNN provides no assurances as to the accuracy or completeness of the information presented, including information regarding any specific company’s plans, or its ability to
effectuate any plan, and possess no actual knowledge of any specific company’s operations, capabilities, intent, resources, or experience. Any opinions expressed in this article
are solely attributed to each individual asserting the same and do not reflect the opinion of SNN.
Information contained in this presentation may contain “forward-looking statements” as defined under Section 27A of the Securities Act of 1933 and Section 21B of the Securities
Exchange Act of 1934. Forward-looking statements are based upon expectations, estimates, and projections at the time the statements are made and involve risks and uncertain-
ties that could cause actual events to differ materially from those anticipated. Therefore, readers are cautioned against placing any undue reliance upon any forward-looking
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SNN does not engage in providing advice, making recommendations, issuing reports, or furnishing analyses on any of the companies, securities, strategies, or information
presented in this article. SNN recommends you consult a licensed investment adviser, broker, or legal counsel before purchasing or selling any securities referenced in this article.
Furthermore, it is encouraged that you invest carefully and consult investment related information available on the websites of the SEC at http://www.sec.gov and the Financial
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www.PlanetMicroCap.com microcap
Planet review
MicroCap Review 87
magazine 27
L E ga
G AL co
CORrN
NEr
ER
//
// By
By Jon
Jon Uretsky,
Uretsky, Esq.
Esq.

gETTiNg
GETTING STaRTED
STARTED
ON ESg
ESG DiSClOSuRES
DISCLOSURES
ThE
The SEC’S
SEC’s NEw
New ENviRONMENTal,
Environmental, SOCial
Social aND
and gOvERNaNCE
Governance (“ESg”)
(“ESG”) RulES
Rules

T
he
he SEC
SEC recently
recently proposed
proposed aa series
series of
of new
new Task
Task Force
Force on
on Climate
Climate Related
Related Financial
Financial Disclosure
Disclosure
rules
rules which
which will
will significantly
significantly increase
increase disclosure
disclosure (“TCFD”)
(“TCFD”) and
and the
the Greenhouse
Greenhouse GasGas Protocol
Protocol (“GHG
(“GHG
requirements
requirements that
that relate
relate to:
to: (1)
(1) climate
climate related
related Protocol”)
Protocol”) emissions
emissions reporting
reporting framework.
framework. AsAs aa law
law
risks,
risks, (2)
(2) greenhouse
greenhouse gas gas emissions,
emissions, andand (3)
(3) climate-
climate- firm
firm focused
focused on
on providing
providing services
services and
and counsel
counsel toto
related
related financial
financial metrics.
metrics. The
The SEC
SEC partly
partly modeled
modeled the
the microcap
microcap space,
space, we
we fully
fully embrace
embrace the
the challenge
challenge
the
the proposed
proposed climate
climate disclosure
disclosure framework
framework on on the
the these
these new
new requirements
requirements pose
pose for
for the
the microcap
microcap

72
88 MicroCap
Planet MicroCap
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Magazine www.PlanetMicroCap.com
www.SNN.Network
space. These rules will apply to the public compa- proactively attempting to mitigate any potential risk
nies in the microcap space, along with the funds that their operations and suppliers use any forced/
that invest in these companies. If you don’t intend to bonded labor or child labor. This is usually monitored
read the rest of the article, here’s the takeaway: the by quarterly audits done by the company.
SEC is increasing your disclosure requirements by
adding an ESG requirement. The “Governance” factor is measured by how the
company is run by the board of directors and tends
What exactly are ESG disclosures? to be a bit broader than the previous two. When it
comes to governance, companies usually focus on
ESG is the acronym for the three required factors: making sure that their board is diverse, that they
environmental, social and governance. First, let’s have strong ethics and compliance programs in
discuss the “Environmental” factor. According to place, and that there is transparency. When it comes
the SEC, “The environmental factor usually focuses to board diversity, companies try to show that it is
on a company’s impact on the environment or the composed of people who bring a diversity of experi-
risks and opportunities associated with the impacts ence, expertise, and ethnicity to the table. Ethics
of climate change on the company, its business and and compliance programs also play a big role in
its industry”.1 Most companies approach this factor governance because they ensure that the company
by putting in place a plan for the near future and is complying with all applicable laws and regulations.
listing goals that they plan to reach by the desired These programs also limit the risk of bribery, cor-
date. One of the most common plans is to reach net ruption, and insider trading. To show transparency,
zero emissions by 2050. The environmental factor companies tend to disclose any lobbying expenses
is usually broken down into five categories: energy or political contributions, tax information, and execu-
consumption, water consumption, environmental tive compensation.
management, CO2 emissions, and waste. The most
common measurables that can be found across the How will ESG impact the microcap space?
board are scope 1 and scope 2 emissions, which
themselves are both direct and indirect GHG emis- While ESG hasn’t hit the Microcap space hard
sions respectively. just yet, it is the next wave. Larger companies are
already dealing with it. The trend is clear. First the
The “Social” factor usually focuses on a company’s rules, which we just discussed. That empowers
diversity and inclusion policies, health and wellbeing funds – for example, BlackRock has said it will use
of their employees, and human rights. Companies the power of institutional “votes” against boards of
tend to disclose statistics that show the percentage directors not aligned with its ESG imperatives. ESG
of their workforce that are minorities such as women focused hedge funds (yes, those already exist) have
or people of color, along with the percentage of them begun forcing board turnover through the proxy
that are in management positions. One of the ways process. Litigation has inevitably followed. Attorneys
that the health and wellbeing of employees is usually general have initiated lawsuits claiming companies
addressed is by aiming to have a safer workplace. misled shareholders by not appropriately disclosing
Companies typically accomplish this goal by having the companies’ understanding of climate change
safety measures in place and providing employees risks. Greenwashing claims have triggered state laws
with the appropriate amount of training needed to and the federal Lanham Act. Some public companies
complete their jobs efficiently and safely. Companies across various sectors have been sued for failing to
show how safe their workplace is by disclosing maintain diverse boards.
statistics that show work related injury and fatalities
rates. The second way that companies address health The good news is there is still time. The Rules have
and wellbeing of employees is by having zero- been proposed but haven’t gone into effect yet.
tolerance policies for harassment and by mandating There should be a grace period once they are in
harassment training for employees. Companies effect. But the time to act is now. In fact, some U.S.
show that they are proponents of human rights by companies may well have to report on ESG already.
The Council of the European Union and the Euro-
1 pean Parliament reached a provisional agreement on
https://www.investor.gov/introduction-investing/investing-basics/
glossary/environmental-social-and-governance-esg-investing
a corporate sustainability reporting directive (CSRD)

www.PlanetMicroCap.com Planet MicroCap Review 89


PULLP’s Microcap ESG Advisory is one of the only ESG Advisory groups
that would require more detailed reporting on specializing in ESG for the microcap space. Jon Uretsky is the founding
and managing partner of PULLP. Mr. Uretsky has a broad multidisciplinary
“sustainability issues such as environmental rights, practice that includes extensive experience in litigation and dispute
social rights, human rights and governance factors.” resolution, regulatory investigations (including FINRA and SEC matters
like those described above). In addition, he counsels corporate boards,
Many companies in the microcap space are players board committees (including special committees) as well as being a
in the EU, which is far ahead of the U.S. on ESG personal adviser to many entrepreneurs, business leaders and corporate
executives. He has counseled clients on significant litigation, regulatory and
reporting. PULLP’s advisory practice helps compa-
transactional matters across multiple industry sectors. Additionally, the
nies navigate the legal and business ramifications of PULLP team has extensive experience negotiated mergers and acquisitions
developing, reporting, and implementing ESG initia- (including reverse mergers); domestic and cross-border investments/
joint ventures; the representation of private equity; venture capital and
tives. We advise on matters such as sustainability, other private investment funds; securities offerings; and private and public
stakeholder engagement, corporate governance and financings.

social responsibility, crisis management, diversity Note:


and inclusion. PULLP also leverages our relation- 1. Special thanks to Jimi Akindele, Director of ESG at PULLP, and Rafael
De Leon, a Law Clerk at PULLP, for their assistance in researching and the
ships with environmental consulting and stakeholder preparation of this article, as well as their help in the many ESG matters
engagement firms to provide strategic guidance to PULLP handles.
our clients. We invite you to contact uretsky@pullp.
com or call 212.571.1164 for a complimentary ESG
analysis.

Note: This article is not an attempt to provide investment advice. The content is purely the author’s personal opinions and should not be
considered advice of any kind. Investors are advised to conduct their own research or seek the advice of a registered investment professional.

90 Planet MicroCap Review www.PlanetMicroCap.com


T H E M I C ROCA P L ITIG ATOR S

pullp.com

www.PlanetMicroCap.com Planet MicroCap Review 91


insurance CORNE R
// By John Farris

Having the Right


Insurance Broker
Matters
As a Micro or SmallCap public company, or a private company that
aspires to become publicly traded, the task of securing Directors
and Officers Liability Insurance (D&O) coverage can quickly mutate
into a journey, perhaps an odyssey, that is all too often addressed
last minute.

T
his leads to company executives feeling like out exception. Unlike your home or auto insurance,
they didn’t get a fair shake at the market, were and in some cases even your basic Businessowners
accept the terms of an insurance contract that package (e.g., general liability), you can’t create an
they don’t fully understand, and they feel like they efficient, effective, and competitive bidding process
paid way too much for it. via online quoting platforms, or by simply just asking
several different insurance professionals to provide
How it usually happens… quotes.

Most companies know that in order to attract high Next, you’ve got quotes, and all of them stink. Now
caliber board members and corporate officers what? Chances are, whomever you’re working
proper insurance coverage is, or will be, required. with is going to tell you they’ve submitted to every
Budgets are established for legal advice, accounting, insurance carrier there is, and “I’m sorry, but this is
transfer agents, Edgar filing, investor relations, public just how much it costs…”. Not surprisingly, getting
relations, travel, etc. Usually, insurance is a line item your company in front of the right insurance carriers
in that same budget, but often the estimated cost is is far more important than getting in front of “all” of
calculated using some technique akin to a “finger in them. In most cases, this is where the breakdown
the wind.” Eventually, the time comes to start the occurs, and naturally you’re relying on someone
process of getting quotes, and this is where the fun else’s advice. This is why having the right insurance
(and frustration) begins. broker is so important. For MicroCap and SmallCap
companies this can be a real challenge. This seg-
Where do you begin? Almost everyone knows an ment of the specialty insurance market is dominated
insurance broker or agent of some kind, so naturally by massive brokers whose priorities are elsewhere,
that’s a common starting point. The problem is, i.e., focusing on their larger clients where the
almost no one knows an insurance broker or agent premiums are higher (and the commissions). The
that actually understands the nuanced public alternative to one of these large providers is often a
company insurance market. This type of coverage much less experienced “generalist” insurance broker
is secured in a specialty marketplace and requires that might give you all the attention you deserve, but
experienced and qualified brokers and insurers, with- they’re walking into the market blindfolded.

92 Planet MicroCap Review www.PlanetMicroCap.com


It’s not your fault, you’re not alone, and it doesn’t next will make the decision seem simple.
have to be so painful (and expensive).
Take the first step toward better risk management,
Having the right insurance broker we’ve got your back. Whether you have a current
matters. policy in force, need to buy new coverage, or you
are just trying to plan for the future, we want to
Simply put, the directors and officers of public com- share what we know with you, and it would be our
panies often lack an effective voice in the specialty pleasure.
insurance market. Assurtrak Insurance Brokers was
built to fill this void. We have decades of specialty Contact Assurtrak Insurance Brokers
commercial insurance brokerage experience, and
we focus on companies like yours. Our passion is (704)771-1294
creating educated insurance buyers and making the info@assurtrak.com
buying process make more sense, overall. Having www.assurtrak.com
an advocate that knows the current state of the
About the Author:
insurance market, where the pressure points are for
an insurance underwriter, and the relationships to John D. Farris
get your company to the top of that underwriter’s Partner | Assurtrak Insurance Brokers
(704)771-1295
queue will ensure the best results. jfarris@assurtrak.com

Assurtrak Insurance Brokers is one of the only insurance providers focused


We don’t stop at a good price. The best price is a on specialty commercial insurance solutions specifically for microcap
great place to start, but too many insurance buyers public companies. John D. Farris is the founder and a partner at Assurtrak.
John focuses his efforts on advising companies through the insurance
stop there. Not all insurance policies are created procurement process for currently publicly traded companies across
equal, and it’s all in the details. We will take the multiple exchanges, as well as through uplistings, IPOs, SPAC transactions,
time to help you understand what your options are and dissolutions.

and what the contract your purchasing is intending


to cover, and what it is not. Having a broker that can
communicate the differences from one option to the

Note: This article is not an attempt to provide investment advice. The content is purely the author’s personal opinions and should not be
considered advice of any kind. Investors are advised to conduct their own research or seek the advice of a registered investment professional.

www.PlanetMicroCap.com Planet MicroCap Review 93


AS I A CO R N ER
// By Leslie Richardson

Post-Pandemic Hong
Kong Moves to Fortify
Status as International
Financial Hub
Over the past two years, Hong Kong’s economy has been crushed by
economic disruptions from the Covid pandemic and market volatility
fuelling speculations the SARs will end the year in a recession.

W
hile the majority of the world had already saw 47 IPOs raise US$8.8 billion, the lowest since
lifted their strict pandemic controls, Hong 2013. Homecoming listings continued to drive IPO
Kong only recently removed its strict quar- activity with eight US-listed Chinese companies listing
antine measures. The hesitancy to open up along with in Hong Kong in the first 9 months of the year. The
the rest of the world put extreme pressure on Hong homecoming listings have a combined market capi-
Kong’s status as an international financial centre. talisation of over HKD470.0 billion and contributed
Furthering these concerns is Hong Kong dropping to to more than 30% of total IPOs’ market capitalisation
fourth place in the 32nd edition of the semi-annual year to date. While 27 new listings in the third
Global Financial Centres Index while Singapore moved quarter raised a total of US$6.6 billion, almost three
up to the third position. As businesses faced a string times the funds raised in the first half, appetite for
of disruptions, tourism remained at a standstill and IPOs remains weak amid the market volatility.
mass international events were eliminated, the labor
force shrank to a decade low with top talent depart- Having a pipeline of more than 140 listing applications,
ing to rival economies such as Singapore, Thailand including China concept stocks, biotech companies,
and many other western markets. and a few potentially huge listings, Deloitte’s CMSG
forecasts that 70 IPOs will raise at least HKD110
Further weighing on the markets is an uncertain billion in Hong Kong by the end of 2022. Even as the
global economic outlook, rising interest rates, a recent debuts from electric-vehicle maker Zhejiang
dearth of big IPO offerings and continued Covid-19 Leapmotor and China Vanke’s property service unit,
concerns in China which pushed the Hang Seng Onewo, struggled to raise funds at the lower end of
Index down 26 percent for the year, as of the end of their pricing, companies set to list in the city include
September. The Hang Seng Index is currently sitting Betters Medical Investment Holdings, CALB, Flowing
at its lowest level since October 2011 and is one of Cloud Technology and AIM Vaccine.
the worst-performing major benchmarks globally.
Widely sought after by the market in Hong Kong and
Despite the challenging market conditions, Hong overseas, Flowing Cloud Technology, is highlighted
Kong was able to take fourth place in IPO funds as Hong Kong’s first metaverse stock. The company
raised in the first nine months thanks to renewed ranks first in China’s AR/VR content and services
activity in the third quarter and a blockbuster listing market, accounting for 13.5 percent of the market
from China Tourism Duty Free, the biggest IPO of the share. Its IPO officially launched on 29 September
year. For the first nine months of 2022, Hong Kong and is expected to raise around US$ 100 million. On

94 Planet MicroCap Review www.PlanetMicroCap.com


the first day of book building, the public offering
tranche was oversubscribed 5 times. Last summer, the city embarked on a new strategy
to drive fintech development within Hong Kong
China Aviation Lithium Battery (CALB), the country’s over the next three years when it launched “Fintech
third-largest electric vehicle battery maker, is pursu- 2025”. The city’s growing role in the field has
ing an IPO to raise US$1.3 billion after pricing at the already been recognized in the Global Startup
low end of its range of HK$38-HK$51 with the listing Ecosystem: Fintech Report with Hong Kong joining
date on October 6th. CALB’s Hong Kong share sale Silicon Valley, New York City, London and Singapore
follows the initial public offering by lithium ore miner as one of the top five fintech ecosystems. Ad-
and EV battery maker Tianqi Lithium, which raised ditionally, the Hong Kong Monetary Authority has
US$1.7 billion in July. moved into the forefront of CBDC innovation as it
begins to work with banks and technology firms to
Additional upcoming high-profile IPOs include test the e-HKD from the fourth quarter and pave the
4Paradigm which is the latest AI company to pursue way for a virtual currency the public can use in the
a Hong Kong listing. The company initially filed future to shop, dine out and make money transfers.
for a listing in 2021 to raise up to $500 million but
decided to postpone its listing. 4Paradigm provides In an effort to provide mainland investors easier
AI software that allows enterprises to develop their access to Hong Kong stocks and widen the Chinese
own decision-making AI applications in a range of currency’s worldwide usage, the HKEX is launching
industries such as banking, insurance, manufacturing, a system for yuan shares trading for southbound
healthcare, retail and agriculture. Asian insurer, Stock Connect in the first half of 2023. Currently,
FWD Group Holdings Ltd, also recently renewed its Mainland China traders face exchange rate risk
filing. The company originally sought to raise about as trading Hong Kong stocks under the Connect
$1 billion in an IPO but has not disclosed the final size scheme are only traded in Hong Kong dollars.
and timing of its current IPO. 
Despite pressures from its extended rigid quarantine
As Hong Kong moves into its post-pandemic era, and changing geopolitical landscape, Hong Kong con-
the government is taking initiative to revitalize its tinues to play a pivotal role in bridging East and West.
status as an international financial centre, cultivate The city remains a critical link between China and the
fresh talent and ensure it remains an attractive listing world to facilitate the integration of mainland and
destination.  Stepping up its role in attracting capital foreign capital as well as a destination for the next
and enhancing its ability to compete with other hubs growth engines and technological innovation. As part
to lure innovative startups, Hong Kong is reviewing of China’s Greater Bay Area along with Macau, and
reducing revenue requirements for hard-tech nine cities in Guangdong, it is benefiting from China’s
companies to list on the exchange.  Following the ambitious plan to create a hi-tech economic zone to
success of adding the 18A chapter to its main board rival the likes of Silicon Valley. With AR, VR, fintech
listing rules in 2018 to allow biotech companies and metaverse start-ups flourishing in the Hong
with no revenue or profits to be listed, the HKEX Kong market, the city is strengthening its position in
is preparing a new chapter 18C scheme to accom- emerging technologies. Most importantly, Hong Kong
modate companies in sectors ranging from artificial is overcoming the current challenges to move into the
intelligence and chips to autonomous vehicles and post-pandemic era which offers a brighter outlook for
smart manufacturing. The specific terms proposed the city as an international fundraising hub.
for the companies according to insiders are:  
Ms. Leslie Richardson has over 20 years of investment management and equity
research experience. She operates a boutique investor relations firm in Hong
•• Firms pre-commercialization: market value re- Kong for Asian companies listed in the U.S. and Hong Kong. She also assists
quirement for companies at the time of their initial private companies develop investment material and build an investor following
in preparation for a public listing. Additionally, she is the Asian Correspondent
public offering would be more than US$2 billion  for Micro-Cap Review, www.microcapreview.com, a financial magazine focused
•• Commercialized firms: Revenue requirement on mirco-cap companies. Previously, she worked for CCG Elite in assisting
Asian-based, U.S. listed clients formulate key communication strategies. Ms.
would be HK$200 million (US$25 million) to Richardson began her investment career at U.S. Trust Company then went on
HK$300 million, versus the current requirement to join Odyssey Advisors as a portfolio manager and Director of Research. Ms.
Richardson specialized in high growth sectors such as bio-tech, alternative
of HK$500 million; market value requirement energy, IT and telecommunications. She earned her M.B.A. from the University
would be at least US$1 billion  of Southern California. Ms. Richardson is based in Hong Kong. www.elite-ir.com.

Note: This article is not an attempt to provide investment advice. The content is purely the author’s personal opinions and should not be
considered advice of any kind. Investors are advised to conduct their own research or seek the advice of a registered investment professional.
Leslie Richardson does not own any of the stocks mentioned in this article
www.PlanetMicroCap.com Planet MicroCap Review 95
insi g hts
// By Richard Revelins

“An Exercise in
Clear Thinking”
Here’s an oldie but a goodie . . . What weighs more, a pound of
bricks or a pound of feathers?

M
ost people’s natural inclination is to say, successfully employed for generations to torment
“obviously bricks weigh more than feathers”. small children and semi-inebriated pub goers, dis-
This is true, a brick weighs more than a guised as an exercise in clear-thinking. In retrospect
feather, but a pound of anything is still a pound, so maybe the question should be “Would you rather
they weigh exactly the same. This question has been have a pound of bricks, or a pound of feathers?”

96 Planet MicroCap Review www.PlanetMicroCap.com


Considering that the average red house brick weighs Australians, and our Canadian cousins, are well
approximately 5 lbs it is probably easier to compare known for our love of penny stocks, the cheaper the
a brick to 5 lbs of feathers and yes, they would still better! Technically this should make no difference to
weigh exactly the same! If you wish to purchase said share price growth because the value of a company
house brick, rather than liberate it from your garden is based on the number of shares times the price,
wall, or purloin it from a local building site, this will however psychologically, experienced MicroCap
set you back around 50 cents. The same poundage investors know the leverage is always better with
of quality Canadian goose down feather stuffing low priced stocks and the volatility helps to create
can be purchased for $79.99 online and delivered an active trading environment.
free by Amazon. Accordingly, by making the astute
choice of selecting the feather option in preference With an increasing number ASX, TSX and CSE stocks
to house brick represents 160 times the value of the establishing dual trading on the Over-The-Counter
much-utilized building material. As a side by side, or markets, OTCQX, OTCQB and Pink Sheets in the
pound for pound, as the case may be, comparison of US this is creating opportunities for US investors to
utility, 5 lbs of fine Canadian goose fluff will insolate get down and dirty in Penny Stock Land and take
you from the chills of winter and/or provide a advantage of the leverage this can offer. Is it riskier,
comfortable pillow or cushion…try doing that with a in most instances absolutely it is, but perceived risk
house brick! No one is advocating however that you is relative to expected return. If the investor’s pri-
should build your house out of feathers, bricks still mary focus is asset protection or a steady dividend
have their place. income stream you are likely not seduced by the
MicroCap space to begin with, and specifically penny
So, unless you are planning to corner the brick or stock opportunities. For the rest of us we are up to
the feather market sometime soon what is the point? our necks in analysis and due diligence, trying to sort
I guess, in a somewhat convoluted and probably out the wheat from the chaff, the apples from the
obvious way, I am saying things are not always what oranges and the bricks from the feathers. I should
they appear to be at first glance. Let’s say there is a add that a pound of feathers has far more surface
stock trading at $10 and another stock trading at 10 area and far lower density that a pound of bricks, so
cents, which is the better company? Most people will I know which one I would prefer to land on my skull
gravitate to the $10 stock because there is a percep- from a high vantage point.
tion that stocks trading at higher prices have more
market credibility, whereas anything trading below To conclude, there is no substitute for research and
$3 and particularly below a dollar must be rubbish. analysis. The MicroCap sector can have its chal-
What if the $10 stock had been at $100 a week ago lenges, as it is usually bereft of quality independent
and the 10cent stock had been 1 cent. The $10 stock research. Investors therefore need to roll up their
is falling faster than a red brick in the ocean, whilst sleaves and do the research themselves, follow
the 10cent stock is a new market darling. The $10 successful management teams and/or the recom-
stock may only have 1 million shares on issue whist mendations of well-respected industry professionals.
the 10cent stock could have a billion shares on issue,
so we have a $10 million market cap company versus Wishing everyone success in their MicroCap
a $100 million market cap. investing and successfully turning their speculative
endeavors into solid “bricks and mortar” positions,
Barring a very rare, usually tech related “market although sometimes it will undoubtedly end up as
flyer”, when do you ever see $10 stocks instantly “tar and feathers”.
jump to $100? At the MicroCap end it is relatively
common to see stocks go from a penny to 10 cents Richard Revelins has worked as an international investment banker for over
30 years and specializes in listed public companies. He is a co-founder of
or even a dollar over a short timeframe. It is far Peregrine Corporate Limited based in Australia and is also a Managing
more prevalent in junior mining stocks, where a new Director at Cappello Group Limited based in Los Angeles, USA. He
currently resides in Venice, California and divides his time between the US
discovery can excite the market and exponentially and Australia.
increase share prices and market caps, but it hap-
pens in other sectors, like biotech and tech, where
positive or game changing news is disseminated and
rerates the investor appeal of certain companies.
Note: This article is not an attempt to provide investment advice. The content is purely the author’s personal opinions and should not be
considered advice of any kind. Investors are advised to conduct their own research or seek the advice of a registered investment professional.

www.PlanetMicroCap.com Planet MicroCap Review 97


iinsi
NSi g HT
htsS
//
// By
By Shelly
Shelly Kraft
Kraft

aSk
AsK MR.
Mr. wallSTREET
Wallstreet

IF
If SHORTS
shorts ARE
are THE
the ONLY
only NATURAL
natural
BUYERS…WHY
buyers…why DO
do THE
the MAJORITY
majority
OF
of INVESTORS,
investors, SHAREHOLDERS,
shareholders,
C
c LEVEL
level MANAGERS,
managers, AND
and BANKERS
bankers HATE
hate
SHORTS
shorts SO
so MUCH?
much?

I definitely
definitely have
here
here goes:
have my
it goes:
my own
own opinion
opinion about
about shorts
shorts and
and

Since
Since my
my early
early days
days on on Wall
Wall Street
Street “shorts”
“shorts” have have
been
been hated,
hated, feared,
feared, disrespected,
disrespected, reviled reviled and and forfor mi-mi-
crocap
crocap & & smallcap
smallcap CEOsCEOs and and their
their boards,
boards, simply
simply the the
bane
bane ofof their
their existence.
existence. Shorts
Shorts get get blamed
blamed by by CEOs
CEOs
for everything wrong with their underperforming
for everything wrong with their underperforming
stocks.
stocks. Poor
Poor performing
performing CEOs CEOs conveniently
conveniently blame blame
price
price drops
drops on on “the
“the shorts”
shorts” and and farfar too
too many
many times
times
investors
investors areare willing
willing to
to accept
accept this this excuse
excuse hook hook lineline
and sinker. “The illegal naked shorts
and sinker. “The illegal naked shorts are killing myare killing my
stock”,
stock”, II wish
wish II had
had aa buck
buck for for every
every timetime II heard
heard that that
said
said by
by aa pressured
pressured CEO.CEO. How How about
about CEOs CEOs during
during
interviews
interviews withwith analysts
analysts trying
trying to to defend
defend how how great
great
aa job they’re doing while sitting with a
job they’re doing while sitting with a giant reported giant reported
short
short by
by sellers
sellers who
who have
have legally
legally borrowed
borrowed shares. shares.
Most
Most CEOs
CEOs hate
hate toto answer
answer questions
questions about about their
their
stock
stock being
being shorted.
shorted. Many
Many CEOsCEOs go go to to great
great lengths
lengths
spending serious money hiring
spending serious money hiring consultants orconsultants or
numerous
numerous investor
investor relations
relations firms,
firms, oror lawyers
lawyers or or buy
buy
services
services specializing
specializing in in identifying
identifying the the shorts
shorts in in their
their ItIt has
has been
been my
my experience
experience thatthat short
short players
players
stocks.
stocks. Behind
Behind close
close doors
doors and and within
within the the board
board do
do deeper
deeper due
due diligence
diligence than
than longs,
longs, even
even more
more
room
room walls, identifying who is shorting stock leads
walls, identifying who is shorting stock leads to to than buy side analysts. Shorts have
than buy side analysts. Shorts have their own their own
ordering
ordering shareholder
shareholder listslists from
from DTC DTC andand NOBO
NOBO lists… lists… criteria
criteria beyond
beyond reading
reading company
company financials,
financials, press
press
How
How much
much timetime is
is actually
actually spent
spent watching
watching changeschanges releases,
releases, SEC SEC filings
filings and
and conducting
conducting interviews
interviews with
with
in
in shareholders?
shareholders? The The rallying
rallying crycry inin the
the board
board room:
room: management
management via via conference
conference calls
calls or
or in
in person.
person. In
In
Let’s
Let’s fight these shorts any way we can after all it’s
fight these shorts any way we can after all it’s particular
particular shorts
shorts read
read and
and track
track public
public press
press releases
releases
our
our responsibility,
responsibility, but but is
is it?
it? especially
especially onesones that
that include
include financial
financial projections,
projections,
references
references to to milestones,
milestones, or or reference
reference to to potential
potential
II ask
ask myself,
myself, what
what do
do shorts
shorts know
know that
that no
no one
one else
else corporate
corporate developments
developments that that have
have caused
caused stocks
stocks
knows?
knows? to
to hithit new
new highs.
highs. Stocks
Stocks that
that advance
advance in in price
price for
for
no
no apparent
apparent reason
reason often
often times
times make
make itit onto
onto the
the

86
98 MicroCap ReviewReview
Planet MicroCap Magazine www.SNN.Network
www.PlanetMicroCap.com
shorts radar and continue to be monitored. Shorts private placement with the company or find a block
traditionally follow big gainers with increasing for sale from an insider, or watch the market makers
liquidity. Shorts are diametrically opposite of longs until a block shows up. Most longs hit the bid or
in that longs buy low hoping to sell high while shorts use market orders to get out which in turns feeds
sell high hoping to buy low. Both can be profitable, stock for shorts to cover. So, there’s the outcome of
and both have varying degrees of risk but historically shorting and getting paid to wait for the inevitable.
when the “great news” press releases and buying Shorts are the only natural buyer in town, in many
dries up since profit taking occurred market support cases they are the market equalizer. It’s not that they
for buying the stock slows or disappears. Slowly but believe “long is wrong” but rather they continue to
surely the stock drops from its new highs therefore seek the justification for unwarranted price increases.
making it difficult for a stock to hold a strong bid. Furthermore, every time a short sell occurs the sale
Some say that shorts keep companies honest and provides cash to the seller which is available when
clearly bet against hype and promotion. necessary. Of course short players can get caught
and get squeezed by the longs as well, which is the
What happens when stocks lose their momentum, back and forth, give and take in the market between
and their price begins to fall? Some longs may cost longs and shorts! And that’s what I think about
average down and we know how that usually ends. shorts!
The shorts, patiently waiting for this moment, after
Ask Mr. Wallstreet is Shelly Kraft. He began on Wall Street in 1984 as a
having sold on the offer patiently into buying, can
penny stockbroker, investment banker, rising to President of Emanuel &
now sit and pick their spots and buy back to cover Company, a boutique IPO underwriter and microcap market maker.
their shorts on the bid or below, or even buy in a

Note: This article is not an attempt to provide investment advice. The content is purely the author’s personal opinions and should not be
considered advice of any kind. Investors are advised to conduct their own research or seek the advice of a registered investment professional.

www.PlanetMicroCap.com Planet MicroCap Review 99


insi g hts
// By Kathleen Schmainda PhD

Imaging Biometrics, LLC,


a subsidiary of IQ-AI Limited
(OTCQB: IQAIF) (LSE: IQAI)
MRI’s Central Role in Medicine

Though a relative newcomer to the field of radiology,


Magnetic Resonance Imaging (MRI) has been around
since the late 1970s with the first images produced by
Nobel Laureate Paul Lauterbur in 1971. Because MRI
provides images of soft tissue (e.g., muscles and or-
gans) that are far superior to other radiologic imaging
modalities, such as x-ray, PET, or CT, it is no surprise
that MRI plays a central role in diagnostic medicine.
Rarely does a patient pass through the doors of a
hospital without a visit to radiology, which frequently IBNeuro™ provides information about the distribution of blood
vessels throughout the brain (at right),which is not available
includes obtaining an MRI at some point during their
with standard MRI (at left).This information helps to inform the
treatment management. Approximately 30 million MRI
diagnosis and treatment management for this patient.
scans are performed each year in the US alone.

Advances in MRI to Evaluate Tissue Function ple. It is based on over twenty years of research and
development beginning at Massachusetts General
In the 1990s, advances in MRI technology made Hospital/Harvard Medical School and brought to
it possible to collect images fast enough to also fruition by Dr Kathleen Schmainda, Professor of
monitor tissue function in real time. For example, Biophysics at the Medical College of Wisconsin. IB
images can be collected every second while an MRI Neuro has been proven through its use in several
contrast agent is being administered. Using this multi-center clinical trials for brain tumor patients,
approach, the delivery of blood to brain tissue may the only MRI perfusion software used in this setting.
be monitored and abnormalities, such as stroke Moreover, IB Neuro is the only clinical (FDA cleared)
and aggressive brain tumors, evaluated, providing perfusion MRI software that provides quantitative
information not available with standard MRI scans results that have been validated with spatially-
of anatomy. Yet, while straightforward in principle, matched tissue biopsies. It is therefore no surprise
deriving accurate and quantitative measures of brain that head-to-head comparison of IB-generated
perfusion from the dynamic MRI signal is complex. perfusion images outperformed leading competitors
This is where Imaging Biometrics stepped in. as described in a recent peer-reviewed publication.

Imaging Biometrics, LLC (IB), a subsidiary of IQ-AI IB Products Address Healthcare


Limited (OTCQB:IQAIF, LSE:IQAI), develops and Disparities
provides visualisation and analytical software solu-
tions that enable clinicians to better diagnose and An additional feature that sets IB Products apart
treat disease with greater confidence. Through close from its competitors is its founding goal to make
collaboration with top researchers and clinicians, advanced methods available to all healthcare sys-
sophisticated advancements are efficiently trans- tems – both large and small. Community hospitals
lated for routine clinical use. in rural areas are able to provide the same level
of information to their patients as large academic
IB’s flagship product, IB Neuro™, is one such exam- centers with an elite team of physicists. This is made

100 Planet MicroCap Review www.PlanetMicroCap.com


possible because IB software products are designed the product line backbone is based on decades of
as platform-independent and automated software research, newer advances can be quickly incorpo-
plug-ins which can extend the base functionality of rated years ahead of larger administratively-laden
existing workstations, imaging systems, PACS, or vendors. For example, recent advances in artificial
medical viewers. By design, IB’s advanced visualisa- intelligence have been quickly leveraged to further
tion software seamlessly integrates into routine refine and automate IB processes. Using another
workflows with the option of processing that can be novel software plug-in, IB RadTech™, workflows can
made entirely automatic. be designed to address the latest understanding
in the diagnostic evaluation of brain tumors or key
Moving Toward a Standardized Protocol clinical questions such as determining response to
treatment. Answers to these questions are critical for
While MRI perfusion technology has been around for optimizing treatments and outcomes for each patient
several decades, not everyone did (or does) it the on an individual basis.
same way. Those different approaches led to conflict-
ing and inconsistent results from clinical studies An Ever-Growing Market
and, ultimately, general skepticism about the clinical
potential of MRI perfusion. The details are in the Given that patients with high-grade brain tumors
implementation of the model calculations. The foun- are monitored with MRI every 6-8 weeks, this offer-
dational work conducted by Professor Schmainda ing is not only critical to patient management but
and her colleagues, as well as IB’s implementation of represents a market much larger than one based
the model, paid close attention to the nuances of MRI on brain tumor incidence alone. Moreover, what has
perfusion. This attention to detail and scientific rigor been developed for primary brain tumors is now
has led to an ever-growing body of peer-reviewed being translated for use to all patients with brain
publications in high-impact medical journals. In 2020, metastases. Lung and breast cancers, the two most
a large multi-investigator study, led by Professor Sch- common cancers that spread to the brain, can also
mainda, produced a national consensus recommenda- benefit from the sophisticated analysis tools offered
tion for optimally collecting perfusion data from MRI by Imaging Biometrics.
scanners. And, in early 2022, Professor Schmainda
received a grant from the National Cancer Institute for Imaging Biometrics is committed to providing proven,
a multi-institutional study to identify the optimal way low-cost solutions to all patients who are suffering
to process the collected data (a grant that received a from brain cancer everywhere.
perfect score from the scientific reviewers). Not only
will these efforts prevent “garbage-in, garbage-out”, Dr. Schmainda is a Professor in the department of Biophysics at the
Medical College of Wisconsin. Her research involves the advancement of
they will define a common and consistent approach MRI technologies to improve the diagnosis, monitoring, and development
that can be adopted across all MRI scanners and of new treatments for brain and other cancers. This research includes
experience with software development, multi-center clinical trials, use of
become the industry standard. preclinical models, tissue banking, and clinical translation. Dr. Schmainda is
an internationally invited speaker on these research topics and has served
on numerous National Institutes of Health (NIH) grant review panels as well
Only the Beginning as several national advisory boards for clinical trials.

IB’s ability to quickly respond to new advances in the For more information about Imaging Biometrics,
field makes it a company that is here to stay. While please visit: www.imagingbiometrics.com

DISCLAIMER AND FORWARD-LOOKING STATEMENTS NOTICE: This article is provided as a service of SNN Inc. or an affiliate thereof (collectively “SNN”), and all information
presented is for commercial and informational purposes only, is not investment advice, and should not be relied upon for any investment decisions. We are not recommending
any securities, nor is this an offer or sale of any security. Neither SNN nor its representatives are licensed brokers, broker-dealers, market makers, investment bankers, investment
advisers, analysts, or underwriters registered with the Securities and Exchange Commission (“SEC”) or with any state securities regulatory authority.
SNN provides no assurances as to the accuracy or completeness of the information presented, including information regarding any specific company’s plans, or its ability to
effectuate any plan, and possess no actual knowledge of any specific company’s operations, capabilities, intent, resources, or experience. Any opinions expressed in this article
are solely attributed to each individual asserting the same and do not reflect the opinion of SNN.
Information contained in this presentation may contain “forward-looking statements” as defined under Section 27A of the Securities Act of 1933 and Section 21B of the
Securities Exchange Act of 1934. Forward-looking statements are based upon expectations, estimates, and projections at the time the statements are made and involve risks and
uncertainties that could cause actual events to differ materially from those anticipated. Therefore, readers are cautioned against placing any undue reliance upon any forward-
looking statement that may be found in this article.
The company profiled has paid consideration to SNN or its affiliates for this article. SNN does not engage in providing advice, making recommendations, issuing reports, or
furnishing analyses on any of the companies, securities, strategies, or information presented in this article. SNN recommends you consult a licensed investment adviser, broker, or
legal counsel before purchasing or selling any securities referenced in this article. Furthermore, it is encouraged that you invest carefully and consult investment related informa-
tion available on the websites of the SEC at http://www.sec.gov and the Financial Industry Regulatory Authority (FINRA) at http://finra.org.

www.PlanetMicroCap.com Planet MicroCap Review 101


insi g hts
// By Roger Pondel

Bear Market Blues?


Get Out and Tell Your Story!

A Q&A with PondelWilkinson’s Roger Pondel

E
very great public company story deserves that I believe management teams of public com-
an engaged audience, regardless of market panies should take in a bear market: 1) Keep doing
conditions. Particularly during bear markets, what you do best, namely, running the company to
astute investors are listening. They have their anten- the best of your ability, with long-term performance
nae up, looking for good companies whose share in mind. 2) As difficult and painful as it may be, do
values may have dropped because of the market, not be defensive about a falling stock price, particu-
but not because of company fundamentals and larly if the company is still performing well. Investors
performance. Gaining the attention of microcap know the reason, and it is not the CEO. The rational
and smallcap investors while valuations are low is a investor will stay calm and even become excited
strategy than works. by price declines, seeing opportunities rather than
losses.
SNN’s Shelly Kraft recently sat down with veteran
investor relations and public relations advisor Roger SK: How ‘bout specifically from a
Pondel, CEO of PondelWilkinson Inc., to ask a few communications perspective… should
questions about what microcap and smallcap public management teams of microcap and
companies should be doing to address the bear smallcap companies just lay low for a
market blues: while until market conditions clearly
improve?
SK: Why is it important that public
companies seek attention in the RP: Retreating or staying purposely quiet is not a
investment community during a bear strategy that works. Bear markets are principally
market? reflections of investor sentiment, rather than com-
pany specifics. More than ever during bear markets,
RP: For publicly traded companies, communicating companies should communicate widely. In so many
with existing and prospective shareholders during cases, the corporate story remains solid. And when
bear markets may at first seem counterintuitive. there is bad news to convey, doing so in a transpar-
Who is listening? But at a time when valuations ent manner instills integrity, trust and respect.
have dropped precipitously, investors are eager to Businesses that go silent just because they are not
discover and invest in solid companies at perceived seeing immediate valuation returns are essentially
bargain prices. It is also a time to communicate leaving it up to the court of public opinion to choose
and foster good relations with existing investors, their fate—but taking a proactive approach by filling
providing confidence in the company’s future and communications channels with the proper mes-
encouragement to stay the course. saging, including news content, will help overcome
negativity stemming from a communication vacuum.
SK: Cutting to the chase, is there any one
best course of action public companies SK: Is there any difference in bear market
should take during bear markets? communications tactics that microcap
and smallcap companies should pursue,
RP: While there is little companies can do to calm versus what bigger cap companies do?
market forces, I will give you two courses of action

102 Planet MicroCap Review www.PlanetMicroCap.com


RP: Communications tactics remain essentially the company communicates well, it will attract new
same in bear or bull markets, but for the microcap investors and retain current ones, helping them not
and smallcap company, there needs to be more to be overcome by emotion. Bear markets enable
proactivity than for bigger companies, which typi- investors to buy great companies for far below their
cally garner greater attention by virtue of their size. fundamental worth.
Identifying and issuing real news helps, as long as
that news has substance and is not being issued for SK: What should companies be messaging
the sake of “putting something on the wire.” Con- to the investment community during these
tinuing to tell the corporate story through non-deal times?
roadshows, conference presentations and social
media is imperative. RP: In my humble view, the fundamental corporate
messages remain largely the same during bear or
SK: What attracts investors the most to bull markets, and regardless of a company’s sector.
micro and smallcap companies during The ones that immediately come to mind include:
bear markets?
Discussing the company’s underlying strengths: cash
RP: Given current market conditions, investors focus flow and balance sheet; debt management; client/
on fundamentally sound assets to strengthen their customer relationships; resilience and history in prior
portfolios. Most investors stick to the decisions down markets.
that they already have made when they were in a
calm and rational state, and they will not typically Articulating if and how current economic conditions
deviate from their portfolio mix and their views of are creating change for the company, positive or
management teams and their companies. If a public negative, including decision-making.

www.PlanetMicroCap.com Planet MicroCap Review 103


the company’s financial performance, participating
in NDRs, presenting at conferences, issuing a steady
flow of real news, seeking and accepting speaking
opportunities, and judicious use of social media.

SK: I know you do not have a crystal ball,


but based on your experience, how long
do you think the current bear market will
last?

RP: Most of us have been through bear markets


before, and the good news is that it does not take
a crystal ball to know that bear markets eventually
end. But one thing is certain, there is no certainty
of when that end will come. The last official bear
market began in February of 2020, concurrent with
the pandemic, and it ended about six months later. It
was the 6th worst bear market since 1927, based on
the S&P 500 Index and predecessor indices, drop-
ping nearly 40% at its lowest point. It was, however,
the quickest bear market by far, followed by the S&P
500 attaining a new all-time high. During the dark
months of the 2007-08 financial crisis, when the S&P
sank nearly 52%, investors flocked to companies
in all size ranges with solid financials, established
track records and positive outlooks. The current
bear market in the S&P 500 was confirmed on June
13, 2022, but the broader market began its slide
on January 3, 2022. While the pandemic scare and
supply-chain challenges are abating, inflation and
Giving existing investors reasons to hold your shares interest rate hikes are still with us. But don’t take it
or buy more. from me, if history repeats itself, the average bear
market since 1928 lasted 349 days. Most analysts
Showing empathy regarding the loss of valuation, and others we know confirm that bear markets typi-
but also exuding confidence in the company and cally last between nine months and a year. So while
offering assurance that the good times will be back. we all should settle in for some continued volatility,
it bears repeating: Every great public company
Being certain that investors hear regularly from c- story deserves an engaged audience, regardless of
suite executives - sometimes more than the CEO and market conditions. And investors are listening.
CFO - on conference calls and non-deal roadshows
and at conference presentations. Roger Pondel is CEO of PondelWilkinson Inc., a full-service investor
relations and strategic public relations firm that has earned a national
reputation for innovative, aggressive, professional service. He can be
SK: Is it really possible to enhance reached at rpondel@pondel.com, or 310-279-5965.

valuation during a bear market?


For more information about PondelWilkinson, please
RP: A simple answer is yes. But it takes a strong visit: www.pondel.com
dose of patience, as well as performance. As in virtu-
ally any market environment, it’s up to the company
to perform financially and operationally - and tell its
story - for enhanced valuation to occur. The “telling”
part means proactively seeking to attract attention,
getting in front of the right investors, communicating
Note: This article is not an attempt to provide investment advice. The content is purely the author’s personal opinions and should not be
considered advice of any kind. Investors are advised to conduct their own research or seek the advice of a registered investment professional.

104 Planet MicroCap Review www.PlanetMicroCap.com


Relationship Focused. Results Driven.

Lucosky Brookman is a corporate law firm directly serving the small and middle markets. With
offices in New York, New Jersey and Philadelphia, we represent domestic and international clients
in a variety of sophisticated corporate and securities transactions, mergers and acquisitions, secured
and unsecured lending transactions, PIPEs, SPACs, commercial and securities litigation,
intellectual property, insurance coverage and defense, real estate and general corporate matters.

• NYSE, NASDAQ and NYSE Amex Listings • Mergers & Acquisitions


• Uplistings • General Corporate Matters & Governance
• Public Offerings • Term and Revolving Lending transactions
• Private Placements / PIPEs • Asset-based Lending transactions
• Recapitalizations (Reverse / Forward Splits) • Revolving Lines of Credit
• Rule 144 Matters • Bridge Loans
• Joint Ventures • Registration Statements (S-1, S-3, S-8, Form 10)
• SEC Compliance Matters • Commercial Litigation and Arbitration
• SPACs and De-SPACs • Regulatory Investigations (SEC / FINRA)

NEW YORK OFFICE NEW JERSEY OFFICE


111 Broadway, Suite 807, New York, NY 10060 101 Wood Avenue South, 5th Floor, Woodbridge, NJ 08830
Tel: (212) 417-8160, Fax: (212) 417-8161 Tel: (732) 395-4400, Fax: (732) 395-4401
www.PlanetMicroCap.com Planet MicroCap Review 105
info@lucbro.com | www. lucbro.com
insi g hts
// By Mike Porter

INVESTOR RELATIONS
FOR BEAR MARKETS
For more than half a century, PLR has been committed to the art of
investor relations and shareholder communications.

W
e craft informative releases that convey After more than five decades in the Investor Rela-
clients’ key messages with authority and tions business and having lived through a number
clarity, and we distribute them to a unique of bull and bear markets, I am often asked, “how
distribution list we build and maintain for each client. should I spend my PR-IR budget in response to vary-
We arrange media placements on behalf of our ing market conditions?” My response never varies:
clients, including “print” interviews, podcasts and “be aggressive in bringing your company’s story to
video interviews with management. the investment community.”

106 Planet MicroCap Review www.PlanetMicroCap.com


That said, any IR program must be credible, flexible unwise decision, especially today, when the slightest
and responsive enough to adjust to current market tremor in the market is trending on social media
conditions. Above all, a company should communi- before the ground, barely moving before the tremor,
cate and educate the market regardless of market stops moving.
conditions. This includes consistent distribution of
press releases, which Wall Street will appreciate Don’t stop communicating in a bear market. The
immensely – transparency is your best strategy and best thing you can do is work with an opportunistic
communicating significant corporate events and IR agency that will help you remain consistent and
milestones will build your credibility. transparent with your audience – one that will help
you develop and implement a communications
In down markets, you need to keep investors in- program and help you stay with it throughout
formed so they can make decisions based on mean- down markets. There are many opportunities every
ingful news; the same releases should of course quarter to reach out to shareholders and potential
be provided to shareholders. In both instances, investors; you have a website, social media, podcast
research has shown individual investors, particularly opportunities, byline opportunities…you can even
retail, have the power to affect trading volume and shoot quality video of your corporate presentation,
share price. or host video conferences, so the market sees you
continue to execute regardless of market turbulence.
Our philosophy has always been that an educated Whatever you do, you will drive more traffic to your
investor and/or shareholder will more than likely site and increase your following.
hold onto his position if he or she is kept informed.
It is especially important to maintain consistent A bear market is the perfect time to meet face to
communication during bear markets, so as to face with Wall Street, both your current sharehold-
demonstrate your responsiveness to adverse condi- ers and potential investors, who will hopefully gain
tions and to burnish your credibility. Today, thanks confidence after meeting – hopefully, the former will
to the Web, there are myriad sources of up-to-the enlarge their positions while the latter will be con-
minute corporate and trading information – buy and/ vinced of the merit of your story and begin building
or sell decisions often hinge on the full and timely positions in the stock. Zoom, MS Teams and similar
disclosure of important corporate developments to applications are excellent tools for virtual meetings
regulatory agencies. and immensely cost effective for your company,
as are national investment conferences and trade
It’s beneficial for any company to learn not to make shows. It is our experience that these sorts of activi-
the mistake many companies make during down ties always inspire new investment in a company
markets: by cutting budgets and taking a “passive” while giving management the chance to interact with
approach to your communications, this lack of existing investors.
information, especially from a small- or mid-cap
stock, will cause selling. This is because the market A consistent communications program will always be
can absorb good news and bad news, but a lack of beneficial to a company, regardless of the vagaries
news inspires selling, which results in a lower share of the market – the mistake is to reduce your com-
price, and we can show you far too many examples munication with investors during a down market.
of this phenomenon over the past half-century of This is the perfect time to ramp up your efforts and
market cycles. bring your story far and wide.

In 90 percent of cases, companies that slash their For more information about Porter, LeVay & Rose,
investor relations budgets during down markets see please visit: www.plrinvest.com
a reduction in share price and a significant loss of
value. We have always advised our clients to focus
on performance; they are usually successful when
they do, but as soon as they find themselves in a
bear market, they forget the importance of this
metric and, instead of staying a successful course,
they try to “disappear.” Time and again it’s an
Note: This article is not an attempt to provide investment advice. The content is purely the author’s personal opinions and should not be
considered advice of any kind. Investors are advised to conduct their own research or seek the advice of a registered investment professional.

www.PlanetMicroCap.com Planet MicroCap Review 107


insi g hts
// By David Morgan and Jon Little

Inflation,
Inflation,
Inflation. But
What’s Going on
With Gold & Silver?
Gold and silver have been around since the beginning of time. Gold
is a noble metal, and silver is on the periodic chart of elements.

B
oth are extremely hard to obtain. Both have The conventional wisdom is that gold and silver
intrinsic value. This article aims to convey should be performing better. So what’s going on?
thoughts on how gold and silver perform in
times of inflation.

Graphic from Underground-Finance

108 Planet MicroCap Review www.PlanetMicroCap.com


Glossary of confusing terms So, being conservative, if we divide this 2.5 trillion
USD by 16 billion USD (the value of all mined silver in
The “spot price” of gold and silver is a confusing 2021), we get 156. This means that for every ounce of
concept. Let us call it the “spurious derivative price,” physical silver, there’s an additional 156 paper oz for
because a derivative sets the physical metal price. COMEX alone.

A derivative is a financial instrument that derives COVERAGE


value from an underlying asset. For example, when
precious metals are valued, it is essential to remem- If all these paper ounces needed to be covered with
ber that people are referring to the paper price. physical ounces, we would find it impossible. To mine
92 billion oz would take around 100 years.
PHYSICAL SILVER MARKET 2021
Inflation should be called DEBASEMENT.
According to the World Silver Survey 2022, around
823 million oz of silver were mined in 2021. At a spot Politicians employ economists. Together their narra-
price (19 USD,) this would value the physical silver tive is fed to the media. The media reports that infla-
market at approximately 16 billion USD. tion is expected, or a natural market phenomenon.
The truth is that inflation is entirely a political act.
PAPER SILVER MARKET Inflation is not caused by the butcher, the baker, the
farmer, or the energy producers. Foreign scapegoats
The COMEX and the LBMA are where “not actual like Putin do not cause inflation either. The govern-
physical silver” is traded, but a paper derivative ment is responsible for inflation with its monopoly
product is exchanged instead. This allows parties to over the currency. Governments borrow money from
hedge against possible future price movement, i.e., the Central Bank at interest on your behalf to “spend
betting silver prices will go higher or lower. ourselves rich.”

But these derivatives are abused. Hedging, deriva- Governments inflate the currency to generate more
tives, leverage, and financial instruments are polite money than they could obtain through taxation. Infla-
words. Unfortunately, what is happening is fraudu- tion is a covert and insidious “tax” that the govern-
lent acts are becoming normalized. ment takes from the citizens without their consent.

It isn’t easy to find actual numbers for the value Inflation is nothing new. Even in ancient times, gov-
of the paper market. The only way to do so is to ernments would resort to debasing their currency by
extrapolate or draw some inferences from clues. introducing copper to silver, or clipping coins. Un-
fortunately, modern central banks and governments
The 2022 World Silver Survey mentions this: perform the same deception on a much grander
scale. From the founding of the U.S., it took over 227
“ ... annual turnover for the main COMEX contract fell years to print its first $26 trillion. But in just months,
below 100bn oz (-25% y/y) for the first time since the U.S. Government printed more than $6 trillion.
2016.”
Why did we keep interest rates at zero
For 2021 this was around 98 billion ounces. This well past the Global Financial Collapse
means that the value of silver derivatives related of 2008?
to COMEX amounts to approximately 98 billion oz
multiplied by the average silver price of 25 USD (in Because the banks needed easy money and a
2021). riskless trade.

This yields around 2.5 trillion USD, and then there’s Who gets to borrow at the Federal funds rate?
the LBMA itself with 92 billion oz (almost another 2.5 Nobody but the banks. The U.S. Treasury, ECB, and
trillion USD) and others like the Shanghai Futures Bank of Japan have an enormous problem: massive
Exchange. amounts of debt. They can’t restructure this debt
quickly because no one wants to take the other side

www.PlanetMicroCap.com Planet MicroCap Review 109


The market capitalization of Bitcoin (BTC) from April 2013 to August 8, 2022 (in billion U.S. dollars)

of the trade. The Japanese and Chinese are selling banks, and the banks were handing out bonuses to
U.S. Treasuries. managers who went on this miraculous run of NO
NEGATIVE TRADING DAYS.
The government can’t default on the debt or
politicians would lose their jobs. So, the only choice Meanwhile, the mega-corporations entered another
remaining is to devalue the debt. The Fed only has sweetheart deal. They were the beneficiary of crazy
the remaining tool to print money or downgrade and unfair tax legislation. The scheme went, “We
the debt. At the same time, they kept interest rates will cut your taxes, and you can then buy back your
ridiculously low for too long. This means the only stocks” (which increased the price of the stock even
buyers of debt have been the central banks. though their earnings were flat).

Let’s look closely at this transaction. Banks have This has led to all sorts of distortions. This has turned
been borrowing at zero, then they buy Treasuries the stock market into a derivative of the global debt
and lever them up 11 or 12 times. This is a riskless market. Where does the money go? Mainly in these
trade. JP Morgan had zero negative trading days last five areas:
year. Think of that—an entire year of perfect trading!
1. Equities, Taking a beating
They are not trading; they arbitrage by borrowing
near zero and buying Treasuries. 2. Currency, Inflated

Banks have been refortifying their balance sheets 3. Real Estate, Beginning to tumble
after being rescued. The Fed was happy with the

110 Planet MicroCap Review www.PlanetMicroCap.com


4. Bonds, Unsafe The value of the global crypto market cap on Janu-
ary 1, 2022, was $2.188 trillion, but since that date, it
And the emergence of domino #5, Crypto has lost more than 60% of its value. Many precious
metals analysts believe that a healthy part of these 2
Bitcoin is one of 20,000 crypto products on the trillion dollars would have resulted in bidding up the
market. Crypto is a new phenomenon since the last price of precious metals.
time we saw record inflation (45 years ago).

www.PlanetMicroCap.com Planet MicroCap Review 111


Housing, food, and energy are the three most critical on a swimming pool of ignited gasoline. Six trillion
parts of the everyday consumer’s diet. Now let’s in money printing is astronomical money creation.
look at a few of these priced in gold. We have experienced these miraculous and riskless
trades by banks, stock buybacks galore, and war
In 1971 the average home price could be purchased profiteers in conspiracy with Congress to steal tax
with 997 ounces of gold. dollars. This level of corruption is unprecedented,
plus we have the emergence of crypto.
Nine years later, that same home could be pur-
chased with only 115 ounces of gold. Gold and silver are not reacting as expected for
another reason—lack of education. The monetary
Today, homes are relatively “cheap” when priced in system is a mystery better left to the banks, so most
gold. That sounds insane, but it makes sense upon people alive today have no idea how devastating a
closer inspection. On this Shiller Index shown above, high level of inflation is to the physical (real) econo-
there is no dollar component in the ratio itself. As my. A quick look at what has happened in Germany,
a result, inflation drops out of the picture, so we Zimbabwe, or any of a thousand fiat currencies will
are left with the value of two of the most popular prove they all fail. The U.S. dollar will die or get so
tangible investments relative to each other. close that a new monetary system will replace it.

A gram or an ounce of gold buys essentially the Finally, I want to write something specific to the silver
same crude oil today as it has over the past seven market. There have been multiple class-action suits
decades. I have chosen oil because the energy it against banks and financial institutions for charging
provides is essential to our standard of living, but storage fees on “phantom” silver. This means that
other commodities have a similar result. silver was purchased, but it never made it to the
vault; it was merely a bookkeeping entry. How big
Conclusions could the silver market be if this was the case?

We have been told that gold and silver should do A suit was filed in 2007 against Morgan Stanley.
well in inflationary environments, and no one dis- In that case, investors were frauded into an unal-
putes that we live in inflationary times. Unfortunately, located metals storage program. The bank defended
this last round of money printing (justified by the itself and stated it was simply following standard
Covid War) has unleashed the inflation beast. industry practices. What if this bank was telling the
truth? Morgan Stanley did settle by paying a fee.
However, we want to make the case that gold has The silver was not delivered to the silver investors.
preserved wealth, which is the mantra of the brutal
money camp. The oil chart is an objective way to This dirty secret is seldom mentioned, and specific
demonstrate this fact. In terms of performance, gold banks and investment houses play by the rules, but
has had an annual compounded rate of return of ten some do not.
percent since 2000. This outperforms both the U.S.
stock and bond markets for the past 22 years. If you are looking for a safe storage facility, send an
email to our company, support@themorganreport.
Part of the problem is perception. Investors enjoyed com, and put STORAGE in the subject line.
a “forever” gold market for 11 straight years, from
the year 2000-2011. The past ten years have seen David Morgan is the publisher of the Morgan Report, found at www.
TheMorganReport.com. This website offers three levels of service for
the market wallow back and forth without a clear investors in the resource sector. Although considered a leading voice in
direction. However, we have reached an inflection the silver industry, TMR focuses on the entire sector having been first in
rare earths, cobalt, and cyanide free recycling. Visit the About tab on the
point. Gold is currently undervalued and will surpass website and view The Four Horsemen film for free. This documentary is
the price needed to accurately price it for the must viewing for people during these fast changing times.

currency debasement of the past several years. Jon Forrest Little resides in Pittsburgh PA. He is the publisher of The
What is that price? It would be $5000 minimum and PickAxe and a market strategist for The Morgan Report. His professional
background is in clay mining and architectural sales. He studied anthropol-
$10,000 is not an unreasonable expectation. ogy at the University of New Mexico and economics at Georgetown
University. Jon is also a contributor on Palisades Gold Radio, Arcadia
The derivatives system is like a house of cards built Economics and writes for Money Metals.

Note: This article is not an attempt to provide investment advice. The content is purely the author’s personal opinions and should not be
considered advice of any kind. Investors are advised to conduct their own research or seek the advice of a registered investment professional.
David Morgan does not own any of the stocks mentioned in this article.
112 Planet MicroCap Review www.PlanetMicroCap.com
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www.PlanetMicroCap.com E TMicroCap
Planet S . Review 113
MICRO-CAP IPO &

UPLISTING

MARKET UPDATE

Q3

114 Planet MicroCap Review www.PlanetMicroCap.com


LUCOSKY BROOKMAN LLP

Lucosky Brookman is the industry leader in micro-cap IPOs and in


uplisting domestic or foreign quoted OTC companies and foreign
exchange listed companies to the Nasdaq or NYSE.

Each month, Lucosky Brookman publishes The Uplisting Report and


The Micro-Cap IPO Report - the most comprehensive resources
dedicated to the Uplist, cross-list and micro-cap IPO marketplaces.
The reports bring powerful and in-depth market data and analytics
to help issuers, management teams, boards of directors, consultants
and others involved in the IPO, uplisting and cross-listing processes
make better decisions.

Placing a particular emphasis on issuers operating in the micro-cap


space (issuers with up to $300 million market cap), the following is a
synopsis of our Uplisting and Micro-IPO Reports for the third quarter
of 2022 (Q3).

To view current monthly and archived Reports, please visit:


https://www.lucbro.com/our-firm/uplisting-monthly
https://www.lucbro.com/our-firm/micro-cap-ipo

Please contact us at uplist@lucbro.com if you would like to discuss


your company's IPO, uplisting or cross-listing prospects, if you would
like to better understand the IPO, uplisting and cross-listing
marketplace, or if you would like to receive a comprehensive 7-8 page
listing Analysis of your company.

Lucosky Brookman LLP


www.lucbro.com
uplist@lucbro.com

www.PlanetMicroCap.com Planet MicroCap Review 115


MICRO-CAP 2022

Q3 SUMMARY
While the larger capital markets continued to slow, the micro-cap marketplace
remained active during the third quarter of 2022 (Q3). Micro-cap uplisted and
cross-listed companies raised approximately $222 million in Q3, while companies
completing micro-cap IPOs raised approximately $423 million.

UPLISTING/CROSS-LISTING

A total of 21 micro-cap companies which operate in 10 different sectors made up


the 2022 Q3 class of uplisted and cross-listed companies. Five (5) of the newly
exchange traded companies were listed organically, meaning they did not require a
simultaneous underwritten public offering in order to consummate the uplisting
or cross-listing to a Senior U.S. Exchange. Sixteen (16) of the uplists and cross-lists
included simultaneous underwritten public offerings, ranging from approximately
$3,300,000 to $40,000,000.

MICRO-CAP IPOs

A total of 25 micro-cap issuers, operating in 8 different sectors completed their


IPOs in Q3, with offerings ranging from approximately $6,000,000 to
$89,000,000. Ten (10) micro-cap foreign private issuers (FPIs) from 4 different
jurisdictions completed their IPOs in the U.S. during Q3.

UPLISTS & CROSS-LISTS MICRO-CAP IPOs

21 4 25 10
MICRO-CAP ISSUERS FOREIGN PRIVATE MICRO-CAP IPOs
UPLISTING AND MICRO-CAP IPOs COMPLETED BY
ISSUERS CROSS-
CROSS-LISTING IN COMPLETED IN Q3 FOREIGN PRIVATE
LISTING IN Q3
Q3 ISSUERS IN Q3

16 5 4 95%
UPLISTS AND CROSS- ISSUERS LISTED ON ISSUERS FROM FOUR OF ISSUERS
LISTS ASSISTED BY A SENIOR U.S. JURISDICTIONS COMPLETING MICRO-
INVESTMENT EXCHANGE COMPLETED MICRO- CAP IPOs IN Q3
BANKERS ORGANICALLY CAP IPOs IN Q3 LISTED ON NASDAQ

$222M $13.9M $423M $13.6M


RAISED BY
AVERAGE OFFERING
UPLISTING AND MEDIAN OFFERING
SIZE FOR UPLISTING RAISED IN MICRO-
CROSS-LISTING SIZE FOR MICRO-CAP
AND CROSS-LISTING CAP IPOs DURING Q3
MICRO-CAP IPOs IN Q3
MICRO-CAP ISSUERS
ISSUERS IN Q3

116 Planet MicroCap Review www.PlanetMicroCap.com


UPLISTS & CROSS-LISTS

During Q3, 21 micro-cap uplisting and cross-listing issuers listed on a Senior U.S.
Exchange, a decrease of 22 issuers compared to the same period in 2021.
Micro-cap uplisting and cross-listing issuers raised, in a total of 16 offerings, a
combined $222 million, representing a decrease of $238 million from the combined
$460 million raised in a total of 43 offerings during Q3 of 2021.
The average offering size in Q3 was $13.9 million, a decrease of $3.4 million from the
$17.3 million average offering size in Q3 2021.
A total of 5 issuers listed organically during Q3, a decrease of 6 issuers when
compared to the same period in 2021.

Dollars Raised
$250M
$200M
$150M
$100M
Q3
25

$50M
20

2022 $0M
15

10
50

40
Q3 Jul Aug Sep
30 2021
5
20 Q3 2022 Q3 2021
0
10
21 16 5 4
0

43 32 11 5
Uplists & Cross-Lists
20
15
10
Total Listings Organic Listings
5
Offerings Cross-ListingS
0
Jul Aug Sep

MICRO-CAP IPOs

In Q3, 25 micro-cap issuers completed their IPOs, a decrease of 3 issuers compared


to the same period in 2021.
Such issuers raised a total of $423 million, representing a decrease of $440 million
from the combined $863 million raised during Q3 of 2021.

The median capital raise in Q3 was $13.6 million, a decrease of $11.4 million from the
$25 million median offering size in Q3 of 2021.
Ten (10) of the offerings in Q3 came from foreign private issuers, an increase of 5
when compared to the same period in 2021.

Dollars Raised
$600M IPOs

$400M FPIs

$200M

$0M
$423M
Raised
Q3
Jul Aug Sep $13.6M
Median 2022
Q3 2022 Q3 2021

Micro-Cap IPOs $25M


20 Median

Q3
15
$863M
Raised
10
5 2021 FPIs

0
Jul Aug Sep IPOs

www.PlanetMicroCap.com Planet MicroCap Review 117


MARKET UPDATES
Nasdaq Imposes a Temporary Pause on All Micro-Cap
IPOs:

On September 20, 2022, a temporary pause was imposed by Nasdaq on


all Micro-Cap IPOs.

The pause appeared to be tied to the recent trading of certain IPOs with
extreme high and low post-listing trading swings. Nasdaq was reviewing
certain deals in the interest of “market integrity” and will be
implementing new rules related to vetting the actual offerings and its
participants. Like many of you, we have recently seen an uptick in
comments from Nasdaq during the listing process related to road show
meetings, syndicate members and shareholder lists etc.

The definition of Micro-Cap was also unclear in this regard. It appeared


that the larger the amount of capital raised by an issuer, the more
amenable Nasdaq was to approving the deal on a case by case basis.

This temporary pause on microcap IPOs should not affect issuers


looking to Uplist from the OTC or cross-list from a foreign exchange so
long as the issuer is trading with “reasonable volume”.

Lucosky Brookman Prices First Fully Syndicated and


Widely Distributed Micro-Cap IPO Since the Pause:

On September 30, 2022, our client, Laser Photonics Corporation,


(Nasdaq: LASE) received approval from Nasdaq and priced its IPO on
the Exchange in what was the first widely syndicated micro-cap IPO to
gain approval from the Exchange following the adoption of the new
rules.

For a more in-depth discussion and analysis on this topic, please feel
free to reach out to Lucosky Brookman at info@lucbro.com.

Note: This article is not an attempt to provide investment advice. The content is purely the author’s personal opinions and should not be
considered advice of any kind. Investors are advised to conduct their own research or seek the advice of a registered investment professional.

118 Planet MicroCap Review www.PlanetMicroCap.com


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