Planet MicroCap Review - Summer 2023 Issue

8
MicroCap is Always Full of Opportunities…and Risk

with Travis Prentice, CEO and CIO of EAM Investors
10 What Makes a Great MicroCap Investor with Chris 22 Immuron Limited (NASDAQ: IMRN) / (ASX: IMC)
Tessin, Partner and CIO at Acuitas Investments
24 Why 2023 is the Year of Artificial Intelligence “AI” with 40 VirTra, Inc. (NASDAQ: VTSI)
Chris Wood, Chief Investment Officer at RiskHedge
68 Xcel Brands, Inc. (NASDAQ: XELB)
30 Survival is Most Important in MicroCaps with Ian
Cassel, Founder of MicroCapClub 86 Pioneer Power Solutions, Inc. (NASDAQ: PPSI)
E ditorial
Microcap Review
In Loving Memory of Our Precious
Daughter, and Sister, Sammi Kane Kraft EDi Tor i aL
Y A
In Loving
Published Since ou know the phrase, “sell in May, and go away” - it’s a
2006 Memory of Our Precious
Daughter, and Sister, Sammi Kane Kraft
www.SNN.Network popular phrase in the investing world. In MicroCaps, this
Follow us: @StockNewsNow
Published Since 2006 s we get true,
has been especially bombarded
but it’s with
beenmarket
more likeinformation
“sell
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in November 2021, and never come back” - at least it’s felt as newsletters,
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U.S. going into a recession and almost every economicwhat’s
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the strength in
of the
thestock
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negative stocks?
sentimentHowin do we manage th
Micro-
PUBLISHER Los Angeles, CA 90066
Robert K. Kraft, MBA
www.SNN.network
holdings in our portfolio? How do we make
Cap (and even Small Cap) has now extended from 12 months to 18 monthsour decisions of whether we should
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Executive Editor &pUBLiSHEr
Director
buy, sell or hold? As investors
to 20-22 months with no real end in sight. we do need to decipher pertinent details from
rkraft@snnwire.comRobert K. Kraft, MBA the noise of those trying to sell us their ideas. Picking up morsels of truth is stil
SNN Chief Executive Officer,
Shelly Kraft Executive Editor & Director relevant to our
In all my conversations withdecision
qualitymaking
buy-side,which brings
family me to
offices thehigh-net
and point of staying in our
SNN Founder, Publisher Emeritus
skraft@snnwire.com
rkraft@snnwire.com
lane, picking sources we trust
worth retail, two key points we all agree on: with a history of accuracy, doing this will do mor
Shelly Kraft
Lynda Lou “Lulu” Kraft
to protect our self-made directives while resisting a constant repetitive barrage
SNN Founder, Publisher Emeritus
SNN President & Director
skraft@snnwire.com of attempted paid influences.
1. We have no idea when sentiment will turn, and
lkkraft@snnwire.com
Lynda Lou “Lulu” Kraft
ASIAN PACIFIC CORRESPONDENT
SNN President & Director
Leslie Richardson lkkraft@snnwire.com
Pundits
2. We went frominhaving
the microcap
a dearthworld often ideas
of quality preachindoing your homework,
November 2021, to anbelieve in
your own methods, stick to your
environment where there’s almost too many! plan, learn from your mistakes, and build you
SNN Compliance and paciFic corrESpoNDENT
aSiaN
due diligence administration
Leslie Richardson sensibility to maintain focus. I believe for the most part they are correct. How-
Jack Leslie
SNN coMpLiaNcE aND ever,on
I want to focus it’sthe
quite difficult
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chairman of snn DUE
Dr. Leonard Makowka
advisory
DiLigENcE
Jack Leslie
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it and even harder to interpret incoming information
mine regarding when sentiment will return. Anecdotally, I’ve interviewed when it finds
oryou.
ADVERTISING andcHairMaN
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had conversations with hundreds of management teams over the last 5-6
info@snnwire.comDr. Leonard Makowka months (since Although I am
our last a market
issue), and Itraditionalist
would argueand thatsince I historically
80-90% lean on using my
have reported
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to buyorormisrepresented
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any I’m
omissions
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MicroCap and in
investor my dry
with opinion,
powder I would
feelrather fail are
like they or succeed
kids in abecause of my
candy store. Companies that were liked are now loved with haircuts inblame
own decisions rather than being led to slaughter and placing stock elsewhere
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employees andand its contents
affiliates are not, arenornotdo to be construed, under any
prices across the board. I’ve been trying to interview as many of these
any of them claim to be,circumstances, as an offer toorsell
registered broker-dealers or a solicitation to buy or effect
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statements” within the meaning
Reform Act of 1995, SectionMagazine
any Exchange
Like everything in the Stock Market, MicroCaps are down. As of EOD on June
of the
27A ofand
of them claim
Private Securities
the its owners,Act
Securities employees
of 1933 and and affiliates are not, nor do
Section 21E of the Securities Act ofto1934. be, registered
All statements broker-dealers or registered
other than statements of investment
statements”
ments” for purposes of federal
17, 2022, the MicroCap Review (MCRI), our proprietary MicroCap index tracking
historical fact advisors.
and state within
This publicationstate-
are “forward-looking
the meaning
securities
may contain “forward-looking
of the Private Securities Litigation
laws, including,
Reform Act of of 1995, Section
revenue27A of thefi-Securities Act of 1933 and
but not limited to, any projections
Section
nancial items; any statements
other
MicroCap performance, is down 26.73% YTD; the only index we track that is
of the
earnings,
21Eplans,
of the
than statements
Securities
strategies and
or other
Exchange
of historical
objectives Act of 1934. All statements
fact are “forward-looking state-
of management for future operations; any statements concerning
proposed new services orments”
future economic conditions but
or not
doing worse is NASDAQ, which is down 31.36% YTD. I don’t want to spend tim
for purposes
developments;
limited to,any
performance;
of federal and
any statements
anystatements
projectionsofof
state securities laws, including,
regarding
earnings, revenue or other fi-
belief;
nancial items;
and any statements of assumptions any statements
underlying any of the offoregoing.
the plans, strategies and objectives
Such forward-looking statements
proposed
mentioned herein are subject
in this editorial discussing why; I highly recommend tuning into Planet MicroCa
of management
new services
to numerous
for future the
of or concerning operations;
uncertainties
companies
or developments;
any statements concerning
and riskany statements regarding
futureand economic conditions or performance;
not be set any statements of belief;
factors, including uncertainties
and any Podcast to hear what my guests have to say about the matter. The real ques-
risk factors
statements
Such forward-looking
of
that may
assumptions
forth herein, which could cause actual results to differ materially from
statements
underlying
ofplace
any of the foregoing.
or concerning the companies
those stated herein. Accordingly, readers are cautioned not to
undue reliance on such forward-looking
undertakes no obligation tofactors,
update
tion is, well, now what? The summer is an opportune time to start reflecting on
mentioned herein
including
are subject
statements. to numerous uncertainties and risk
This publication
uncertainties statements
any forward-looking and risk factors that may not be set
forth Planet
herein,Microcap
which could cause actual resultsits to differ materially from
that may be contained herein.
those
owners, employees, affiliates
undue
what your financial goals are for the near and long term using some of the dat
andstated herein. may
their families
reliance on such
Review
Accordingly,
Magazine,
forward-looking
readers are cautioned not to place
have investments
in companies featured in this publication, may purchase securities statements.
of This publication
companies featured in thisundertakes
that mayatbe
panies featured in this publication,
enclosed in this issue of the magazine, as well as macro data/indicators. Few
publication no andobligation
anycontained
time andherein.
to updateofany
may sell securities
from time MicroCap
com- forward-looking statements
to time.Review Magazine, its own-
ers, employees,
However, it is the general policy affiliatesthat
of this publication andsuchtheir families may have investments
persons
will refrain from engaging in
in any
of in
rities of companies featured
things we are certain of right now: liquidity has dried up, interest rates have
companies
companies
featuredtransactions
pre-publication
featured
this publication
in this publication,
untilintwothis trading
in secu- may purchase securities
publication daysand may sell securities of
companies featured in this publication, at any time and from time to
advertisements/advertorials 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,
indicated as it is the
such. general policy
Information aboutofa this publication that such
company contained in anpersons will refrain from engaging
advertisement/advertorial has been in any pre-publication transactions
fur-
nished by the company, the
dent investigation of the ing
growth names have taken it on the chin. There’s actually a bunch of things
in securities
publisherofhas
days following
accuracy
companies
of any such
not made featured
the publication
in this publication until two trad-
any indepen-
informationdate. and This
no publication may contain
company advertisements/advertorials
information is provided byindicated as such. Information
warranty of the accuracy of any such
about a and
publication, its owners, employees that we’re now certain of, but at the end of the day, despite rising inflation, this
company
affiliates.contained
Pursuantintoan
this
advertisement/advertorial has
Section
17(b) of the Securities Actbeen furnished
of 1933, as amended,by the incompany,
situationsthe publisher has not made any
where
independent
vertorial of a company orand
may sound otherworldly these days, but CASH IS STILL CASH. Having cash to
no warranty
security,
investigation
the publisher has received consideration for the advertisement/ad-
the amount of theand
of
accuracy
the
natureofof
accuracy
any
of any such information
such information is provided
such
by thisinpublication,
consideration will be disclosed print. Readers its owners,
should alwaysemployees con- and affiliates. Pursuant to
regarding the companies and

Section
duct their own due diligence
where
before deploy in times like these is where the greats have made names for themselve
17(b) of the
making
the publisher
securities
Securities
any
mentioned
investment
hasinreceived
Act decision
of 1933, as amended, in situations
consideration for the advertise-
this publication.
ment/advertorial of ofa company or security,
and the amount and nature
Investment in securities generally,
securities mentioned in this
ways conduct
At least for me, especially if we are going to continue to see declines, not just
ofpublication
and many
such consideration
from timewill
the companies
theirdisclaimers
be disclosed
to time,
own due diligence
are specu- in print. Readers should al-
before
lative and carry a high degree of risk. The set forth at making any investment
decision
MicroCaps, but overall markets, is when I’m reflecting on how I want to deploy
regarding the
Planetmicropcap.com or SNN.Network - disclaimer are incorporated companies and securities mentioned in this
herein by this reference. publication. Investment in securities generally, and many of the com-
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.
companies as possible for my podcast and feature analysis of the sector and answered my ques-
in the magazine because it confounds me. If you’re tioned with a resounding yes, that battery metal
reading the Planet MicroCap Review, surely you are stocks have transitioned from a fad to fashion.
aware of the sentiment in this asset class - it’s no
surprise. I’m only here to validate that if you even •• Where can investors find Hidden Gems in the
opened the magazine this far, you’re walking the numerous listings and noise/news in the market.
path of every legendary contrarian. Hopefully, you’ll Yale Bock’s article “Finding hidden gems”
find some actionable information in here and I wish answered many of the questions with thought
you all the best traveling down the rabbit hole(s) of provoking insights.
your choosing.
•• Regardless of market conditions, what do
Thank you for joining us on this journey, and please professionals do to successfully navigate
enjoy the Planet MicroCap Review Summer 2023 through headwinds, rough waters and promo-
Issue (ideally reading this on a beach somewhere tions picking stocks? Find it in: …..Other notable
with a nice cold one). Cheers! articles and Q&A’s cover topics such as updates
on SPACs by Doug Ellenoff, and the latest on
—Robert Kraft, Host & CEO ESG and sustainability today is covered by
Planet MicroCap Socialsuite’s Seth Forman.
o r ia Ls storytellers ourselves, we comb
A
•• Several features answer pertinent questions
through the micro & smallcap spec- on topics we all are pondering such as: Is AI a
get bombarded with market
trum information
of information, social media, threat or a financial bonanza?
tel in the news,
presssocial
releasesmedia,
andnewsletters,
even our own podcasts,
s, YouTubemagazine
etc. we have to keep
inserts, Indexour
and financial There’s insight in every article and we’d like to thank
ive in mind, which is, how does
conferences in our attempt what’sto provide the all our contributors and advertisers for their support
the stock market affect microcap
most poignant stocks? How
articles, thought do opinions,
leaders we manage andthe and sharing their views. We look forward to seeing
ur portfolio? How do we
suggestive make our
reasoning fordecisions
you our of whether we should
readers. you in person at either of our upcoming events,
ld? As investors we do need to decipher pertinent details from Planet MicroCap Showcase: VANCOUVER on Sep-
hose tryingWhento sellchoosing
us their ideas. Picking
content up morsels
for this issue weofasked
truth is still tember 6-7, 2023 or the Planet MicroCap Showcase:
ur decision ourselves
making which brings me to the point
a variety of questions such as: of staying in our VEGAS on April 30 - May 2, 2024.
sources we trust with a history of accuracy, doing this will do more
r self-made directives while resisting
•• Are battery a constant
metal stocks fad orrepetitive
fashion? barrage
Thank- —Shelly Kraft, Founder
paid influences.fully Gavin Wendt went the extra mile with his SNN Incorporated
microcap world often preach doing your homework, believe in

thods, stick to your plan, learn from your mistakes, and build your
maintain focus. I believe for the most part they are correct. How-
e difficult to locate non-biased information during our searching for
arder to interpret incoming information when it finds you.
m a market traditionalist and since I historically lean on using my

sense, this method may be costly since it also embeds learning
wn mistakes. For example, for generations investors relied on their
or wealth advisor to “trust” their advice, timing, ideas, guidance
nce. For better or for worse this marriage could have been a
WaiTiNg oN EDiToriaL
ul marriage, oh by the way, the Internet, social media, relentless
nd regulatory intervention changed everything. The advent of dis-
ng, and millennial DIY activity gave investors the power of making
added the need for discipline, research, and trial & error. As far as
d and in my opinion, I would rather fail or succeed because of my
s rather than being led to slaughter and placing blame elsewhere.
www.PlanetMicroCap.com Planet MicroCap Review 5

ng in the Stock Market, MicroCaps are down. As of EOD on June
MicroCap Review (MCRI), our proprietary MicroCap index tracking
CONTENTS
Features
8 MicroCap is Always Full of Opportunities… 24 Why 2023 is the Year of Artificial
and Risk Intelligence “AI”
Q&A with Travis Prentice, CEO and CIO of EAM Investors Q&A with Chris Wood, Chief Investment Officer at RiskHedge
10 What Makes a Great MicroCap Investor 30 Survival is Most Important in MicroCaps

Q&A with Chris Tessin, Partner and CIO at Acuitas Q&A with Ian Cassel, Founder of MicroCapClub
Investments
Insig hts
14 Next Generation of Retail Investors Care 90 Asia Corner: Hong Kong Hopeful to
Deeply About ESG by Seth Forman, Socialsuite Breakout of IPO Slump
19 The MicroCap Report 2023: Half Year
by Leslie Richardson, Elite IR
Review by Joseph Lucosky, Esq., Lucosky Bookman LLP 94 Making The IP Capital Model The Model
32 What Comes After the Epic SPAC
Of The Future by Robert Cote, Esq., Cote Capital
Hangover? by Drew Bernstein, CPA, MarcumAsia 96 Finding Hidden Gems in MicroCap Stocks
36 2023 Mid-point Check In - How Have We
by Yale Bock, CFA, Y H & C Investments
Fared and What is the Outlook for the 2nd 100 Awesome Aussies-Rarified Air
Half of 2023 by Richard Revelins, Peregrine Corporate Limited
102 ESG Investing 101 with ESGFIRE

by Kelly Anderson, CPA, CXO Executive Solutions
42 Legal Corner: Try Not to Give the by Filip Erhardt
106 Adding Public Relations to the IR Mix

Regulators a Head Start
by Jon Uretsky, Esq., PULLP
by Roger Pondel, PondelWilkinson

46 Q&A With Independent Investment
Research
by Claire Aitchison, Independent Investment Research
60 Battery Materials Outlook 48 Overview of the Planet MicroCap Index
by Gavin Wendt, Independent Investment Research

Profiled Companies
70 Don’t Confuse a Green Frog for a Guppy
by Pulak Prasad, Nalanda Capital 22 Immuron Limited
76 Current State of Play with SPAC IPOs (NASDAQ: IMRN) / (ASX: IMC)
Q&A with Douglas Ellenoff, Member, Ellenoff Grossman 40 VirTra, Inc. (NASDAQ: VTSI)
& Schole LLP
68 Xcel Brands, Inc. (NASDAQ: XELB)
80 Not All Broker/Dealers Are the Same 86 Pioneer Power Solutions, Inc.
by Erik Nelson, Coral Capital Advisors, LLC.
(NASDAQ: PPSI)
82 Cybersecurity Disclosure Is Just a Click
Away by Lance Jon Kimmel, Esq., SEC Law Firm 50-59 Planet MicroCap Index Q3 2023
Constituent List

www.PlanetMicroCap.com
www.SNN.Network microcap
Planetreview
MicroCap Review 27
magazine 7
Feature
MicroCap is
Always Full of
Opportunities…and Risk
Q&A with Travis Prentice, CEO and CIO of EAM Investors
1. Reflecting on the first seeing emerging trends and trends

half of 2023, what trends that were in place accelerating in all
have emerged in the world things related to AI.
of MicroCap stocks, and
how have they influenced No matter what might be happen-
the investment landscape? ing in the world economically, we
have found over the years that
The investment landscape was there are always companies doing
heavily influenced by macro well somewhere. Our systematic
events in what was a volatile first application of momentum investing
half of 2023. January started off allows us to find them, unbiased to
on a strong note; a bit of a relief the source of strength.
rally from a challenging 2022
across many sectors. However, 2. Can you highlight
the strength was concentrated in potential opportunities,
Travis Prentice
stocks that had underperformed risks, and key factors to
meaningfully in the prior year and those with the consider when investing in MicroCap
highest BETAs. January’s market dynamics had stocks in 2023 thus far?
all the hallmarks of a classic momentum crash. In
fact, by our calculation, January was the 10th worst Micro cap is always full of opportunity….and risk.
month going back to the late 1920’s for the Overall, we think it might be a good time to invest
momentum factor in US equities and the 17th worst in micro cap overall given its recent historic under-
in Non-US equities since the early 1990’s. performance relative to larger market caps and
tough sledding overall. We believe there could be a
Despite the volatility, we have still been able to good snap-back rally in both absolute and relative
find meaningful trends. One of the more surpris- terms in an equity market recovery scenario. From
ing sources of momentum in the US has been a stock specific perspective, we believe there will
homebuilders and building supply companies - not be massive opportunities for micro cap companies
an area that you would necessarily expect to be globally to pivot towards the strength in AI. We
strong given higher interest rates and the banking look at the opportunities from AI in three buckets:
crisis in March. Nevertheless, we are seeing better 1) enablers – those companies that can provide the
than expected performance and some green shoots building blocks that enable these giant AI workloads
of recovery in those industries. We have also seen from a technology infrastructure perspective and
momentum in biotech within US micro cap, espe- supply innovation to larger companies, 2) integrators
cially those related to breakthroughs in oncology – those companies that can integrate the power of
and liver disease. Of course, more recently we are AI into their products/services to gain market share

going forward, and 3) harnessers – those companies Given micro cap’s general
that can implement the power of AI to unlock mas-
sive productivity gains and earnings power in their
volatility, we have always
own businesses. We believe micro cap companies believed that you need a
globally can play in all three of these areas as it
relates to AI. disciplined approach to risk
Lastly, we believe there is opportunity in micro cap
management and a sufficiently
globally as supply chains move closer to home. diversified portfolio no matter
Micro cap companies tend to be more levered to
their local economies, so they should disproportion- the market conditions.
ately benefit from manufacturing and consumption
originating with a more domestic orientation.
3. How has macro news influenced your

current portfolio construction and momentum in their business and their stock prices.
when assessing new ideas? From there, we focus our research on those that
have clear rationale for that momentum. We only
From a portfolio construction standpoint, we haven’t invest in those companies with clear reasons as to
changed anything given the macro backdrop. Given why that momentum may persist long enough to
micro cap’s general volatility, we have always earn value-added returns. We have found that in
believed that you need a disciplined approach to risk overly macro-influenced markets, you tend to have a
management and a sufficiently diversified portfolio higher proportion of false positives, which is why the
no matter the market conditions. When assessing combination of momentum and rationale is extremely
new ideas in a volatile, macro-driven market, it is important.
even more important to focus on true alpha signals
through the noise. Systematically, our investment 4. For the rest of 2023, what are some key
process captures those companies with positive criteria, macro events, MicroCap events,
etc... that you are watching and what
actions will you take if those potential
occurrences happen?
Our investment approach will stay the same no

matter what may happen. We perpetually move
our portfolios to strength and away from weakness,
to new trends and away from old trends that are
breaking down. However, for micro cap in general,
we believe the macro economic cycle/path of inter-
est rates will be most important to watch. Historically
speaking, micro cap stocks are most sensitive to
changes in investor sentiment and economic cycles.
Micro cap tends to lead into the downdrafts and lead
out in the recoveries. Given the amount of money on
the sidelines and the relative lack of liquidity in micro
cap versus larger market caps, we think the eventual
rally in micro cap may be explosive in a recovery
scenario. As we like to say, come to micro cap for the
BETA in recoveries, but stay long term for the alpha
opportunities.
For more information about Travis Prentice and EAM

Investors, please visit: www.eaminvestors.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.

Feature
What Makes a Great

MicroCap Investor
Q&A with Chris Tessin, Partner and CIO at Acuitas Investments
1. Can you provide a quick passion or competitive fire is really

overview of Acuitas’ multi- key to generating powerful returns
manager strategy? over time. That said, it isn’t enough
on its own. It has to exist within the
Acuitas is a boutique multi-manager proper framework. Idea generation
investment firm based in Seattle, is important to us so we are always
WA. The firm is focused on small looking to find great microcap
and microcap markets. We investors and we look to form a
believe this exclusive focus on the view on them over time based on
inefficient corners of the market many conversations and a deep
offers the greatest opportunity for review of analytics.
absolute and excess returns. Ag-
gressive idea generation and deep 3. We’re about half-way
manager research are hallmarks through 2023, I’ve had
of our investment process and we Chris Tessin
multiple conversations
aim to find and evaluate investment with buy-side managers
managers before they hit the insti- that have been facing
tutional radar. We then draw from this pool of high redemption issues from their investors. In
confidence investment managers to build portfolios your opinion, why is this a real concern
where we seek to maximize excess returns. In the for buy-side managers? Especially, when
end we try to utilize our highest conviction manag- considering I chat with other investors
ers and pair them in complementary ways to build who have a ton of dry powder and too
custom portfolios for our clients. many quality MicroCap ideas to look at.
2. What makes a great Microcap investor? Active investment managers who focus on small and
microcap stocks have come through a very chal-
I think that great microcap investors employ a disci- lenging period. Prior to the pandemic, from 2009 to
plined process and combine that with an exceptional 2020, steadily rising markets made it easy for plan
focus on investing within a high-performance team. sponsors and individual investors to favor passive
We are looking for investment managers that can products. Just gaining market exposure seemed like
win through stock selection and we don’t believe enough for many. The characteristics of leadership
it is as simple as “knowing the names”. Acuitas also didn’t help. Large and growthy stocks led the
formally evaluates dozens of aspects of an invest- market. While the smallest stocks showed a return
ment manager’s process from portfolio construction advantage over the very long-term, it was easy for
to sell discipline and in the end, it is important the investors to ride the wave of mega cap dominance.
investment manager can articulate the keys to the The pandemic brought a wave of volatility to the
success of the investment process. If there is one market which brought some investors back to appre-
characteristic that is common from the investment ciating active management. This volatility can mean
managers that we employ it is a passion for invest- opportunity for stock pickers and we have seen a
ing that manifests within a disciplined process. This better overall active environment recently. Rising

interest rates put a degree of pause on the growthi- “If there is one characteristic that
est non-earners and brought back an environment
where valuation and quality mattered. This has been is common from the investment
good for long-only active managers. Finally, equity
microcap investors have had to face headwinds from
managers that we employ it
the rush toward private investments. We believe is a passion for investing that
at some point there are challenges for the private
equity/venture capital space due to higher rates, manifests within a disciplined
increased competition and tempered returns from
these strategies. In the end, many investors chase process.”
returns and rush toward what has worked. That said
there are always informed allocators that appreciate
the valuation opportunity present within the small
and microcap space. While stock opportunities
may be abundant for fund managers, it may take a
shift toward small cap leadership for plan sponsors fund, but raising capital is hard work. Of course
to appreciate broader opportunity in microcap and raising assets is also only one part of building an
allocate directly to the space. outstanding investment organization, but it is a
necessary one. Larger allocators often have hurdles
4. Why is it so difficult right now for buy- before allocating to small managers such as a
side managers to raise capital? five-year track record or wanting a critical mass of
assets. They may want long tenure from a product
The combination of large cap leadership and the or firm as well before they allocate. Of course it
perceived success of private investments has clearly results in a chicken and an egg problem for the
affected the ability of small investment managers to investment managers. That said, there are alloca-
raise capital. There always seems to be a headline tors like Acuitas. We pride ourselves on being early
highlighting the latest offshoot from a giant hedge adopters and are willing to evaluate strategies at the

beginning of their life-cycle. In fact, we believe that funds for microcap managers. Our firm is unique
there is a tangible positive impact to investing early in that we seek out early-stage, low asset base
with managers that have a smaller asset base and products that we feel have the potential to generate
are best able to implement their strategy. excess returns for our clients. Our process is lengthy,
and it is a high bar to reach funded status, but we
It is no secret that investors buy brand so I would are proud of our investment results and we continue
encourage any buy-side manager to carefully build to believe that deep fundamental research on this
their brand by working hard to generate strong inefficient corner of the market has the potential to
returns, networking and learning to communicate benefit clients. Our multi-manager offering creates
effectively about the strategy they employ. His- an efficiency for large plan sponsors and a source of
torically we have seen some of the most lucrative capital for smaller investment managers. We believe
environments for active management come after that there is currently a unique opportunity for the
extremely challenging periods and it takes diligent asset class as microcap remains cheap relative to
and sustained outreach to find allocators willing other cap tiers, most notably large cap. These types
to take advantage of valuation opportunities and of dislocations often provide lucrative opportunities
market dislocations like we are seeing today. for strong active microcap managers and we are
always looking to identify the next generation of
5. How can Acuitas help MicroCap buy-side great investors.
fund managers?
For more information about Acuitas Investments,
Acuitas can help by acting as a potential source of please visit: www.acuitasinvestments.com

THE SOPHISTICATED LEGAL
ADVICE YOU NEED WITHOUT
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insi g hts
// By Seth Forman
Next Generation
of Retail Investors
Care Deeply
About ESG
Four Steps To Get Started On your ESG Journey Today
Why Do Investors Care About Climate

Change?
“M
ost retail investors believe ESG invest-
ments will perform as well as or better
than the market as a whole” (Mottola, et
al.). Whether it’s physical impacts, decarbonization
incentives, or systemic risk to portfolio returns,
investors are not taking the topic of climate change
lightly; business will correlate to climate concerns.
For starters, their main goal is to provide returns

to their clients, and climate change can impact
their ability to do so. Professor David Larcker, of
Stanford’s Graduate School of Business, told The
Wall Street Journal that “fund managers need to
acknowledge that there is likely to be some trade-off
between ESG and financial returns, and that trade-
off may matter to individual investors” (Ward).
Although there is risk involved with climate change,

there is also a lot of opportunity for investors. It
is never too early for early action. Investors must
manage risk while also exploring opportunities.
Perhaps the most important from a capital stand-

point is that the younger generation of retail inves-
tors have an increased focus on climate change and
ESG issues. An IR Magazine survey from February
2023 found that “45% of retail investors find ESG parent about starting their ESG journey. Additionally,
important” (Distefano). Evidence shows that busi- the younger generation is more likely to invest in a
nesses can attract and retain the best talent if they company that cares about the environment.
are making an effort to be sustainable and are trans-

Focusing on Millennials and Gen Z How to Start Taking Climate Action
“For most retail investors, ESG investing is a natural It can be extremely difficult and overwhelming to
fit. A recent survey from the Finra Foundation found start focusing on climate change within a business.
that 57% of retail investors desire to align their Companies are encouraged to have high ambitions
finances with their values and view investing as an in this area. Tim Siegenbeek van Heukelom, Chief
opportunity to make a positive change in the world” Impact Officer at Socialsuite, and Duncan Paterson,
(Barbosa Vargas). Director of Investor Practice at Investor Group on
Climate Change, outline four steps as a good place
The Wall Street Journal survey, “How Investors Feel to start focusing on in their July 2023 webinar “Why
About ESG Initiatives,” details each age group’s Investors Care About Climate Change.”
willingness to invest in environmental, social, and
governance issues. Evidence finds that young Step One: Develop a statement, policy, or position
investors (18-41) feel positively about ESG, whereas on climate change for the company. This can be as
investors 58+ years old were the least likely to simple as having a page on the website. It’s impor-
support ESG objectives (Ward). tant to acknowledge the climate risks the companies’
management will have to deal with, so make a
As climate change becomes an increasingly critical statement that they can build off of.
global crisis, the trend of young retail investors
holding ESG investments will continue to grow. Step Two: Introduce practices for managing climate
risk. You can’t manage what you can’t measure. Try

Socialsuite is an ESG reporting Creating the company’s first ESG report can be
daunting. Where is the data coming from? What
platform geared toward framework should we follow? How much is this going
companies who are just to cost? How long will it take? Utilizing a platform like
Socialsuite can help with all of the unknowns that
beginning their ESG journey. A comes with ESG reporting.
designated ESG Coach guides Socialsuite is an ESG reporting platform geared

toward companies who are just beginning their
you through the process ESG journey. A designated ESG Coach guides you
and ultimately creates the through the process and ultimately creates the
company’s initial baseline report.
company’s initial baseline report.
ESG Disclosures are a great way to communicate
to your key stakeholders– the Board of Directors,
investors, employees, society at large– that your
organization is dedicated to creating a positive
impact.
to find quantitative data that reports can be gener-
ated from. Once a baseline has been established, Citations
implement changes and evaluate efficiencies. For
example, a company could measure their electricity Barbosa Vergas, Erica. “If You Care about Your
bills month over month to see where to cut usage Investment Bottom Line, You Care about ESG.” Nas-
and ultimately cut costs. daq, 18 Apr. 2023, www.nasdaq.com/articles/
if-you-care-about-your-investment-bottom-line-you-
Step Three: Transparency and reporting. The care-about-esg.
company must identify who the key stakeholders
are that they want to report out to. This could be Distefano, Noemi. “How Much Do Retail Investors
investors, employees, shareholders, the board, or Care about ESG Ratings?” IR Magazine, 10 Feb.
society at large. 2023, www.irmagazine.com/case-studies/how-much-
do-retail-investors-care-about-esg-ratings.
Step Four: Generating outcomes. Share outcomes
with key stakeholders. For the most part, this feels Mottola, Gary, et al. Investors Say They Can Change
largely investor driven. the World, If They Only Knew How: Six Things to
Know about ESG and Retail Investors, https://www.
It is understood that climate-related regulation and/ finrafoundation.org/sites/finrafoundation/files/
or ESG regulation is on the horizon. Hopefully, there Consumer-Insights-Money-and-Investing.pdf.
will be a global, unified framework but for now, we
must be on the forefront of standardized data. A Rosenfield, Josh, and Bruce Usher. “Author Talks: An
company who is transparent about starting their Investor’s Guide to the Net-Zero Transition.” McKin-
ESG journey may be more likely to attract investors, sey & Company, 23 Nov. 2022, www.mckinsey.com/
whether that’s institutional investors or Millennials featured-insights/mckinsey-on-books/author-talks-
and Gen Z retail investors. an-investors-guide-to-the-net-zero-transition.
Join the ESG Journey Ward, Lisa. “How Investors Feel about ESG Initia-
tives.” The Wall Street Journal, 2 Nov. 2022, www.
Every company’s ESG journey is going to look wsj.com/articles/esg-initiatives-investors-survey-
different. Each company may disclose different 11666975292?reflink=integratedwebview_share.
information or gear it toward different stakeholders,
but as time progresses we expect there will be
standardized regulations.

THE
MICRO-CAP
REPORT
2023
HALF YEAR REVIEW
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 First Half of
2023 (H1). To view current monthly and archived Reports, please visit:
https://www.lucbro.com/our-firm/uplisting-monthly, and
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
MICRO-CAP 2023
H1 SUMMARY
Like the larger capital markets, the micro-cap marketplace continued to be selective in
the first half of 2023 (H1). Micro-cap uplisted and cross-listed companies raised
approximately $56.7 million in H1, while companies completing micro-cap IPOs raised
approximately $441 million.
MICRO-CAP IPOs
A total of 39 micro-cap issuers, operating in 15 different sectors completed their IPOs in

H1, with offerings ranging from approximately $4,000,000 to $43,000,000. Twenty-
three (23) micro-cap foreign private issuers (FPIs) from 8 different jurisdictions
completed their IPOs in the U.S. during H1.
UPLISTING/CROSS-LISTING
A total of 9 micro-cap companies which operate in 5 different sectors made up the 2023
H1 class of uplisted and cross-listed companies. Five 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. Four of the uplists and cross-lists included simultaneous
underwritten public offerings, ranging from approximately $3,900,000 to $44,800,000.
MICRO-CAP IPOs UPLISTS & CROSS-LISTS
39 23 9 4
MICRO-CAP IPOs MICRO-CAP IPOs MICRO-CAP ISSUERS
FOREIGN PRIVATE
COMPLETED IN H1 COMPLETED BY UPLISTING AND
ISSUERS CROSS-
FOREIGN PRIVATE CROSS-LISTING IN
ISSUERS IN H1 LISTING IN H1
H1
8 92% 4 5
ISSUERS FROM EIGHT OF ISSUERS
UPLISTS AND CROSS- ISSUERS LISTED ON
JURISDICTIONS COMPLETING MICRO-
LISTS ASSISTED BY A SENIOR U.S.
COMPLETED MICRO- CAP IPOs IN H1
INVESTMENT EXCHANGE
CAP IPOs IN H1 LISTED ON NASDAQ
BANKERS ORGANICALLY
$441M $8.1M $56.7M $14M

RAISED BY
RAISED IN MICRO- MEDIAN OFFERING AVERAGE OFFERING
UPLISTING AND
CAP IPOs DURING SIZE FOR MICRO-CAP SIZE FOR UPLISTING
CROSS-LISTING
H1 IPOs IN H1 AND CROSS-LISTING
MICRO-CAP
MICRO-CAP ISSUERS
ISSUERS IN H1
$5.32 12 $4.70 3
AVERAGE PUBLIC ISSUERS REGISTERED AVERAGE PUBLIC ISSUERS REGISTERED
OFFERING PRICE PER SELLING OFFERING PRICE SELLING
SHARE IN H1 MICRO- STOCKHOLDERS IN PER SHARE IN H1 STOCKHOLDERS IN
CAP IPOS MICRO-CAP IPOS UPLISTS THE UPLIST

MICRO-CAP IPOs
While the number of micro-cap IPOs remained steady in H1, deal sizes and valuations were significantly
down. In H1, the median capital raise and the average public offering price were $8.1 million, and $5.32,
respectively, down 42% and 12% respectively, when compared to the same period in 2022.
In a bid to meet Nasdaq's and NYSE's $15 million "Public Float" requirement in such a selective market,
issuers began registering selling stockholders in their micro-cap IPOs, with 12 such issuers in H1, an
increase of 11 issuers (1100%) from the same period in 2022.
Our key takeaway from H1 is that less is more. Smaller deal sizes not only appear to be getting over the
goal line, but are also helpful in avoiding increased dilution at lower valuations. The strategy of
registering legacy shareholders in the IPO compliments this approach to the challenges of today's
market.
Dollars Raised IPOs

$200M
$150M FPIs
$100M
H1
$441M
$50M Raised
$0M
Jan Feb Mar Apr May Jun $8.1M
Median 2023
H1 2023 H1 2022
Micro-Cap IPOs $15.6M

15
H1
Median
10 $810M
2022 Raised
5
FPIs
0 IPOs
Jan Feb Mar Apr May Jun
UPLISTS & CROSS-LISTS

The market for Uplist/Cross-list is at its most selective point in years. During H1, 9 micro-cap uplisting
and cross-listing issuers listed on a Senior U.S. Exchange, a decrease of 21 issuers when compared to the
same period in 2022. A total of 5 issuers listed organically during H1, a decrease of 7 issuers.
A total of 4 offerings were completed by micro-cap uplisting and cross-listing issuers in H1 (down 71%),
raising a combined $56.7 million. This represented a significant decrease of $158.3 million from the
combined $215 million raised in a total of 18 offerings during the same period in 2022. The average
offering size in H1 was $14 million, however, 3 of the 4 offerings raised a combined $12.4 million ($4.1
million on average), with one offering raising a whopping $44 million.
Similarly to the micro-cap IPO market, with smaller deals issuers are relying more and more on legacy
shareholders to meet the "Public Float" requirement. In addition, certain other Nasdaq rules related to
reverse splits and simultaneous listing days are having a drag on the process.
Dollars Raised
$125M
$100M
$75M
$50M
H1
10
7.5
$25M
2023 $0M
5
30
H1 Jan Feb Mar Apr May Jun

2.5
20
2022
10 H1 2023 H1 2022
0
9 4 5 4
0
30 18 12
9
Uplists & Cross-Lists
8
6
4
Total Listings Organic Listings
2
Offerings Cross-ListingS
0
Jan Feb Mar Apr May Jun
Immuron Limited (NASDAQ: IMRN) / (ASX: IMC)
Q&A with Steven

Lydeamore, CEO of
Immuron Limited
Immuron Limited is commercializing earlier than second recurrence
and developing a novel class of could lead to higher uptake.
specifically targeted polyclonal
antibodies which are delivered C. difficile infection (CDI) can cause
within the gastrointestinal tract and life-threatening diarrhoea and is the
do not cross into the bloodstream. leading healthcare-related gastro-
intestinal infection in the world.1 The
Products in clinical development global CDI market was estimated to
have the potential to transform increase to $1.7B by 2026, accord-
standard of care for moderate to ing to a report by GlobalData.2
severe Campylobacteriosis, Clos-
tridioides difficile infections, Entero- 1. Australian Commission on
toxigenic Escherichia coli (ETEC) Safety and Quality in Health Care
infections and Traveler’s Diarrhea. 2. GlobalData via Pharmaceutical
Steven Lydeamore
Immuron markets Travelan® in Technology
Australia, Canada and the U.S. In
Australia, Travelan® is indicated to reduce the risk of
travelers’ diarrhea and to reduce the risk of minor We’re about half-way through 2023, what
gastro-intestinal disorders. In Canada, Travelan® is are some highlights for the company for
indicated to reduce the risk of travelers’ diarrhea. the first half of 2023?
In the U.S, Travelan® is a dietary supplement for
digestive tract protection. •• Global FY23 sales increased by 136% on FY22 to
A$1.8 million
Immuron’s clinical programs for IMM-124E and IMM- •• Two FDA approved INDs: Travelan (IMM-124E)
529 are the first steps in the pathway towards FDA and CampETEC
(US Food and Drug Administration) approval in the ºº Phase 2 clinical programs for each to com-
BLA process (Biologic License Applications). mence in collaboration with the Department
of Defense
Lumanity a leading lifescience consulting company •• Travelan randomized placebo controlled field
conducted an opportunity assessment of IMM-529. trial being conducted by Uniformed Services
Infectious disease experts reacted favourably to the University (USU) in active military personnel
IMM-529 mechanism of action, and its unique ability more than 35% recruited of a targeted 868
to target three elements of the CDI infection – the participants
spores, vegetative cells, and Toxin B. Base case
yearly revenue in USA for IMM-529 was estimated at Are there any industry tailwinds to push
US$92M for the target patient population (limited to forward some of the company’s goals
second recurrence and later). Positioning IMM-529 and objectives for 2023?

•• International travel continues to rebound follow- Travelan Phase 2 clinical study
ing removal of pandemic travel restrictions •• We anticipate ethics approval and initiation for
ºº 2022 travel to Caribbean, Asia, South one of the CampETEC Phase 2 clinical studies
America, Central America, Africa, Mexico was (two Phase 2 studies are planned; one in Cam-
83% of the peak 2019 US outbound travel pylobacter, another in ETEC)
ºº During the March quarter, US outbound •• We anticipate completion of recruitment for one
travel to these regions was up 6% on 2019 of the CampETEC Phase 2 clinical studies
ºº In Australia, Australian resident short term •• We anticipate cGMP manufacture of IMM-529
departures in April 2023 were 82% of those clinical product; IMM-529 has been developed
in April 2019 to prevent and treat clostridioides difficile (CDI)
•• Pandemic restrictions impacted our ability to •• We anticipate pre-IND (Investigational New
conduct clinical trials, especially for traveler’s Drug) application to the FDA (US Food and
diarrhoea Drug Administration) for IMM-529
ºº We anticipate strong recruitment for our •• We anticipate continued strong sales growth for
Phase 2 trials (Travelan, CampETEC) and Travelan® in both Australia and USA
USU’s field trial ºº Currently penetration in USA is low; based
on US annual travel numbers and a penetra-
From what you can tell us, what are some tion rate of 15%, USA market potential is
of the company’s value catalysts for the estimated at $83m
rest of 2023?
For more information about Immuron Limited, please
•• We anticipate completion of recruitment for visit: www.immuron.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.

Feature
Why 2023 is the

Year of Artificial
Intelligence “AI”
Q&A with Chris Wood, Chief Investment Officer at RiskHedge
1. I think it’s safe to say that video from a text prompt. So you
the sector/trend that by don’t need to be able to write code
almost every metric had the to take advantage of them.
most coverage, momentum,
you name it....was Artificial Like you can tell ChatGPT to write a
Intelligence “AI”: why do poem about shrimp po-boys in the
you think 2023 has been the style of Robert Frost.
year of AI?
Or you could tell DALL-E to create
I couldn’t agree more. It’s certainly a picture of the New York City
safe to say that. skyline in the style of Pablo Picasso.
And it’s really been a long time Pretty cool stuff.

coming.
The “transformer” neural network
Chris Wood
As you know, the term “artificial architecture first introduced by
intelligence” has been around since the mid-1950s. Google in 2017 allowed these consumer-facing
And businesses have been taking advantage of AI applications to materialize.
for years.
2. We’ve seen many exciting new
I wrote newsletters back in 2014 about how AI was industries/sectors/trends in the last 10
already changing the world in countless ways. But years (Cannabis, Psychedelics, Crypto),
every single application was for businesses. what makes AI different from other
“growth-y” trends?
What’s changed is that we’re now seeing consumer-
facing AI applications for the first time. Yeah, the main difference I see is that AI is a true
general purpose technology… like the personal
So regular folks are recognizing how AI can affect computer or the internet. But even more profound in
their everyday lives. That’s driven a lot of hype in the terms of the productivity gains that are possible.
space.
It’s these sorts of general purpose technologies that
And it’s thanks to the new generative AIs like Chat- really make a difference in the world by spreading
GPT and DALL-E. throughout all sectors of the economy and acceler-
ating the march of economic progress.
As you know these kinds of AIs can create unique
content in the form of text, images, audio, and even When a breakthrough general purpose technology

gets to the point where mass adoption is possible, Bing search engine, which allowed you to get up to
the growth that comes with it is mind blowing. date information beyond ChatGPT’s last “knowledge
update” in September 2021.
And that’s what we’ve seen with AI this year.
Unfortunately, OpenAI disabled the plug-in on July 3
3. From a research process perspective, because it “can occasionally display content in ways
can you leverage AI as part of the due we don’t want. For example, if a user specifically
diligence process? What AI tools out asks for a URL’s full text, it might inadvertently fulfill
there have you used? this request.”
Absolutely. OpenAI says it’s working to bring back this feature

“as quickly as possible.”
Now, you should always check the accuracy of what
these things spit out because of the “hallucination” Another option for now that works well is Bing Chat,
issue. That’s when a large language model (LLM), which is built into the Microsoft Edge browser’s
like what ChatGPT is built upon, essentially makes up sidebar. It lets you choose the tone, the format,
information. and the length of what you want it to write about.
I recommend playing around with it to see how it
In late June, for example, two New York lawyers could help you.
were sanctioned for submitting a legal brief that
included six fake case citations that were generated 4. From an investing perspective, many
by ChatGPT. companies are trying to capitalize on
the AI trend and coming out with their
So you must be careful. It’s best to treat these things “AI” tool - what are your criteria for
like a junior analyst that you need to check. But as separating the true AI contenders from
long as you take the hallucination issue into account, the pretenders?
these AIs can definitely help with the research
process. As a general rule, I tend to avoid stocks with AI in
their names…
Personally, I was using OpenAI’s ChatGPT Plus
Browse with Bing beta feature. It was superior to There is one tiny company with AI in its name that
regular ChatGPT because it used the most capable I recently recommended to my subscribers and I
model (GPT-4) and was essentially stitched onto the invested in personally. But this was a special case.

In general, I’d say stay away from the stocks with AI A company like NVIDIA would fit the bill here.
in their names.
As you know NVIDIA’s GPUs power most AI projects.
It’s like what we saw with blockchain craze when
stocks that added the word blockchain to their It’s important to be aware of the amazing run that
names or business descriptions saw their stocks pop. NVIDIA’s stock has been on… and the fact that it’s
Then reality set in and they fell hard. not an AI pure play. But I don’t see demand for its AI
chips declining anytime soon… quite the opposite in
Remember in January when BuzzFeed said it was fact.
going to use AI to create content and the stock
jumped more than 300% virtually overnight. It’s 5. Will 2023 continue to be the year of AI?
fallen 85% since then. Why/why not? And, how should we think
about AI’s evolution for the next 3-5
If you want to go back a little further it’s very similar years?
to the stocks that put “dot com” in their names in
the late 1990s… most of which fell apart. Well, we could definitely see a pullback in the
well-known AI pure plays like C3.ai (AI), BigBear.ai
I think a better way to look at the AI space is to Holdings (BBAI), and SoundHound AI (SOUN).
start with industries and companies that make sense
independent of AI. In fact, we’ve already seen that with BigBear.ai. It’s
fallen more than 65% from its February highs.
You know find fast growing cash generating compa-
nies solving problems in big markets… But AI itself is not just here to stay, it’s arguably the
biggest disruption in history. And it will continue
And then see how they’re taking advantage of AI to chugging along for decades to come.
grow revenue and improve efficiency and profitability.
There’s an important thing to keep in mind here:
So think of how Google used AI to provide the best This is the WORST AI is ever going to be. It’s only
search results and beat out the competition way going to get better from here. And it’s already quite
back when. impressive.
Or how Amazon used AI to provide the best product I’m not smart enough to be able to predict how AI
recommendations and essentially develop a new will evolve over the next 3 to 5 years… or even the
way to shop. next six months really. And I’m okay with that. I
mean how many folks could have predicted how the
I also think it’s smart to look for companies riding the internet and world wide web would evolve?
AI wave across all sectors of the economy. These are
companies that provide something fundamental that That’s what makes human beings exceptional… our
all AI needs. Picks and shovels type things. ability to create previously unimaginable products
and services once these kinds of general purpose
So they’ll benefit no matter who adopts AI. technologies are unleashed.
You know like how regardless of the electric vehicle But I am smart enough to know that if you’re not
company, they all need batteries. So if you find paying attention to AI and doing all you can to learn
the best EV battery company it’s probably a solid about it and leverage it, then you’re going to be left
investment. behind… whether you’re an individual or a business.
But applying that concept to AI. For more information about Chris Wood and
RiskHedge, please visit: www.riskhedge.com
So this would entail looking at the hardware and
infrastructure layers of AI rather than the application
layer.
The author does not own shares in any of the companies mentioned in the article.
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The Universal Review
Hop Museum is a registered 501(c)(3) not for profit charitywww.PlanetMicroCap.com
of New York State.
feature
Survival is Most
Important in
MicroCaps
Q&A with Ian Cassel, Founder of MicroCapClub
1. Reflecting on the first mance or even under performance.

half of 2023, what trends The longest period of mediocre
have emerged in the world performance lasted 19 years. The
of MicroCap stocks, and periods of outperformance can
how have they influenced be explosive, and they normally
the investment landscape? last 5-7 years. We are currently in
a 16-year period of underperfor-
Since 1927 value stocks have mance. The EV/EBIT value spread
outperformed growth stocks and which represents valuations of the
smallcap stocks have outperformed cheapest 10% of the market has
largecap stocks. It shouldn’t be historically never been cheaper.
surprising that smallcap value Smallcap value is cheaper than it
stocks were the best performing was during the DOT COM bubble
segment. In fact, since 1927 small- and the global financial crisis. This
cap value has outperformed the is all to say smallcap value is staged
Ian Cassel
S&P by 14x. MicroCapClub member to have a few good years. Perhaps
Mark Vonderwell mentioned on our even phenomenal years. In Q2
forum that during this ~100-year period, smallcap 2023 we are starting to see signs of smallcap value
value suffered long periods of mediocre perfor- turning out of the downtrend.

2. Can you highlight potential •• A leadership team and organization that show
opportunities, risks, and key factors signs of intelligent fanaticism ie Find manage-
to consider when investing in MicroCap ment teams that deserve to be running much
stocks in 2023 thus far? larger companies.
•• A valuation that can conservatively double in
Smallcap value stocks are a good opportunity, but three years.
the risks in microcap stocks don’t change year to
year. Microcap is for stock pickers. The key is finding Are there many companies that fit these four quali-
the ones that can both grow and survive. Some fications? No. It screens out 99% of the microcap
investors only focus on growth (growth investors). investment universe. This is fine. I’m a stock picker.
Some investors only focus on survival (value inves- I can be selective. If I’m successful in finding busi-
tors). I like to find both attributes in a business. nesses that fit these four parameters, I don’t have to
Growth is rather easy to identify. The hard part of worry about the macro.
growth is finding a business that can sustain growth
over a 5–10-year period. Does the business have 4. For the rest of 2023, what are some key
the leadership, people, processes, culture that can criteria, macro events, MicroCap events,
scale? These are the growth questions you need to etc... that you are watching and what
answer. actions will you take if those potential
occurrences happen?
Survival is more important. As microcap investors,
our biggest risk is dilution. It’s hard for a company to I’m 100% focused on the micro. Are the businesses I
create shareholder value when they need to con- own executing or am I making excuses for them not
sistently sell equity to survive. It’s hard for manage- executing? The businesses that are executing make
ment to make long-term decisions when they must it look easy. I don’t stress over the stocks that move
constantly worry about their short-term stock price. up and grow into big pieces of my portfolio. They’ve
In general, being an unprofitable microcap company earned that right. I stress over the small ones I’ve
is a big disadvantage. If you do invest in unprofitable been holding and justifying “let’s wait another
companies, you must have confidence in their ability quarter”. It’s those “wait another quarter” stocks
to hit short-term milestones and catalysts and also that are like death by a thousand cuts. Holding
you are hoping/praying the market will reward the losers is easier than holding winners. Why? Because
company with a higher stock price. losers always look cheap.
A much easier way to win is to focus on the 18% If you invest in microcaps you will have turnover. You
of microcap companies that operate profitable must have turnover. 20% of what you own today will
businesses or have large cash positions that can get likely deserve to be owned 5 years from today. This
them to profitability. means that 80% of what you own today will deserve
to be sold. My intention with every purchase is to
3. How has macro news influenced your hold forever but very few will earn that right.
current portfolio construction and
when assessing new ideas? In a recent article I wrote titled, “Conviction Invest-
ing,” I mentioned that successful stock picking isn’t
I can’t control the macro situation. The best macro just picking winners. It also means picking out the
strategists in the world are right 50% of the time. We losers in your portfolio. Warren Buffett wasn’t a
are all better off flipping coins if we want to predict coffee can investor. Most of the stock pickers you
the future. The way I handle the macro is the handle admire are conviction investors. They focus on
the micro. Focus on what you have control over, finding the best opportunities, knowing them better
finding and holding great investments. My primary than most, holding the ones that are worth holding,
hurdles for new investments: and selling mediocrity.
•• A business that can grow through a recession. For more information about MicroCapClub, please
•• A balance sheet that can weather a storm and visit: www.MicroCapClub.com
act with occasional boldness.

insi g hts
// By Drew Bernstein, CPA
What Comes After

the Epic SPAC
Hangover?
For two years, the SPAC market threw an epic party. Now it’s
wrestling with an awful hangover.
A
s they sweep up the broken glass, market
participants are asking what comes next. Will
SPACs return to being a niche alternative ap-
proach to going public? Or could new approaches to
structuring deals reignite excitement among quality
private companies and public market investors?
To rewind a bit, SPACs first caught the attention

of average investors and the media back in 2020.
While SPACs had existed for several decades, they
surged in popularity during the pandemic lockdown
as ample liquidity and couch-bound speculators
fueled an explosion in deals. That year, 248 SPAC
IPOs raised over $83 billion in proceeds, exceed-
ing the number of traditional IPOs. The largest
investment banks embraced the format, and many
established private equity funds and hedge funds
rushed to launch their own vehicles. In 2021, the
market doubled as 613 new SPAC IPOs raised over
$162 billion.
SPACs are, in essence, public shell companies that

load up with cash and go out searching for a private
target company to merge with. In those heady days,
many deals soared above their $10 offer price as
soon as a target was announced. As competition
for targets increased, SPAC managers began to
embrace earlier-stage companies with visionary Unfortunately, not all these management teams were
promises of flying taxis and space tourism. Aspira- able to deliver the hockey stick forecasts contained
tional valuations were supported by heroic financial in the SPAC merger slide presentations. Sharehold-
forecasts stretching many years into the future. In ers were reminded that venture-stage companies
addition to the shareholder money held in the SPACs do not always gain market traction on a predictable
trust fund, many deals lined their war chests with timetable. And some never gain it at all.
significant PIPE investments by institutional investors.

As interest rates began to rise and the prospect of a down to 100 or less.
recession appeared on the horizon, investors began
to lose their taste for more speculative SPAC merg- The Future of SPACs
ers. Rather than receive shares in the new company
when the deal closed, investors increasingly elected What does the future hold for the SPAC market?
to receive their share of the cash held in trust
instead. Companies that missed their forecasts saw In the near term, SPAC IPOs will likely be smaller
market caps wither. SPACs went from white hot to and fewer than during the boom. In 2023, most new
stone cold. SPAC IPOs have been under $100 million, down
from over $300 million in 2020. Smaller, specialized
The Great SPAC Crash of 2023 investment banks are underwriting these deals. And
to entice investors, sponsors are offering a higher
What is the state of the SPAC market in 2023? guaranteed rate of return by overfunding the trust
account or adding on additional warrants or rights to
Just 19 new SPAC IPOs have gone public thus far sweeten the deal.
in 2023, raising $2.3 billion. That said, SPACs have
accounted for half of the total IPOs in what has been These features make SPACs more attractive to
an anemic market for new issues. credit-oriented investors and arbitrage funds. But
unfortunately, they also increase the probability that
Over that same period, 131 SPACs have liquidated, shareholders will redeem, and the trust fund will be
returning the cash they raised to shareholders. depleted at closing. Sponsors end up paying a high
For the SPAC sponsors, liquidation means losing cost to keep the money in trust while searching for
millions of dollars in risk capital spent to pay fees a target and navigating the SEC registration process.
to investment bankers, lawyers, auditors, and other But then, when they and the target company really
costs of being a public company and conducting due need the money, it disappears.
diligence. While SPAC sponsors are often portrayed
as profiting at the expense of retail investors, these Restoring a fundamentally healthy SPAC market
deal makers have collectively lost billions of dollars, would require a few significant changes. Investors
while public shareholders are made whole when a need to see they can make more money by holding
SPAC dissolves. their shares in the merged company rather than
redeeming them for cash. Companies need to have a
44 SPACs have completed a business combination higher degree of confidence that they can raise the
with a private company so far this year. However, capital they require to execute their growth plans.
investor redemptions on those deals have run at And sponsors need to be rewarded for the effort
an average of 96 percent, meaning the new public and capital they put into sourcing great companies
company is left with only a tiny fraction of the and guiding them to be successful in the public
anticipated capital raise to fund expansion. In many markets.
cases, the accumulated professional fees are higher
than the amount of cash left in the SPAC to pay Achieving those goals requires changing how SPACs
them. approach valuations, incentives, and public company
readiness.
Today 210 SPACs are still searching for deals. But
given the inherent uncertainty about how much capi- To entice investors to keep their money in the deal,
tal will be injected at the end of the process, luring the SPAC and the target must provide a valuation
private companies to embrace the SPAC format has that offers a reasonable upside to public investors
grown more challenging. Many SPACs have reached based on achievable financial targets. In the heat
the end of their allotted time to complete a deal and of negotiations to persuade a private company to
now must pay additional fees each month to extend pursue a SPAC merger, sponsors and advisors may
their lives. be tempted to dangle an inflated valuation to close
a deal. Company management must be educated
By the end of the year, the population of SPACs that it is far better to have most of the cash remain
seeking to complete mergers could be winnowed in the company and have the stock trade up than to

briefly obtain an inflated valuation and end up with a network Iridium Communications (NASDAQ: IRDM),
threadbare balance sheet. digital sports gaming platform DraftKings (NASDAQ:
DKNG), and salty snacks brand Utz Brands (NYSE:
In a difficult financing market, SPACs with some form UTZ) have created value for shareholders and
of captive financing are likely to have a competitive accelerated their growth via this method.
advantage in sourcing quality deals and the cred-
ibility to negotiate favorable terms for all investors. Given their flexibility, SPACs are likely to be a
One solution could be a hybrid structure combining permanent part of the corporate finance landscape
committed private financing with the contingent for the foreseeable future. Now that the champagne
capital offered by the SPAC. has gone flat and the bills have come due, it is the
right time to look in the mirror and contemplate what
The incentives for SPAC sponsors should be aligned changes are required to make the SPAC a valuable
away from “get rich quick” towards “build wealth tool for discovering and launching great companies.
over time.” This might involve rebalancing their
equity ownership from shares to warrants that pay Drew Bernstein, Co-Managing Partner Marcum Bernstein & Pinchuk (MBP)a
leader in SEC audit accounting and consulting services to Chinese
off once the stock trades above the cost basis of companies seeking access to capital markets.
public investors.
In 1983, Drew Bernstein co-founded Bernstein & Pinchuk. Additionally, he
co-founded MarcumBP, which is a member of the Marcum Group and an
Investment banking compensation could be adjusted affiliate of Marcum LLP. a leading U.S. accounting and advisory firm. Both
firms have multiple offices within the United States and Asia.
to reflect the amount of cash on the balance sheet
at the closing of the SPAC merger and not simply Bernstein is a distinguished expert with deep knowledge of the China and
U.S. financial ecosystem with experience extending across Asia. Europe
the amount raised at IPO. This would create incen- and Africa. Industry experience encompasses technology. retai l. manufac-
tives to advise on positioning deals to be attractive turing, hospitality, pharmaceutical and real estate. Bernstein directs a
to equity investors beyond the “SPAC mafia” of global team, featuring highly trained PCAOB and SEC accounting experts
and financial consultants working in New York as well as Beijing. Tianjin.
credit and arbitrage funds. Shanghai. Shenzhen. Hangzhou. and Guangzhou.
Additionally, Bernstein is considered a valuable thought leader and news

commentator. He has published articles for Forbes.com and China Daily
and is a frequently called upon source by prominent media such as China
Global Television Network. CNBC. Bloomberg TV. The Financial Times.
Finally, SPAC managers will need to pay greater The South Chino Morning Post. The Wall Street Journal. Yahoo! Finance.
attention to selecting targets that have the potential and more regarding Chinese IPOs. China’S economic growth. investment
appetite, innovation trends, corporate governance, SEC regulations and
to be successful as public companies. This requires more.
not just an investment story that resonates with
public shareholders but the ability to set targets and 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.
deliver results in a reasonably predictable fashion.
Building a robust financial reporting and forecasting About MBP
Marcum Bernstein & Pinchuk LLP (MBP) offers specialized audit and
function is essential to earning investors’ confidence advisory services to support SPAC sponsors and SPAC targets in Asia.
and remaining current with reporting obligations. 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
have a dedicated SPAC team for Asia. MBP performs all audits for Marcum
One of the great potential advantages of a SPAC in Greater China. and MBP is a top-five auditor for Chinese companies
listed in the United States.
merger over a traditional IPO is that the target
company can draw upon the expertise and guidance The dedicated SPAC team has worked with SPAC sponsors, underwriters,
of executives with extensive experience in public and targets. MBP draws on wide-ranging experience with the initial publiC
offerings and subsequent business transactions forged by such companies.
company management and the capital markets. MBP has designed its audit platform to deliver the technical expertise.
Ideally, a strong SPAC management team would efficiency. and urgency required by SPAC IPOs. This includes high-quality.
PCAOB-compliant audits for private Asian companies that are contemplat-
remain closely involved for several years after the ing entering a SPAC merger.
transaction closes, providing a bridge to becoming a
Website: U.S.: https://www.marcumbp.com:
thriving public company. China: https://cn.marcumbp.com
When it works well, a SPAC merger provides a

path for companies with solid fundamentals that
are slightly outside the mainstream to access the
public markets. Companies as diverse as satellite
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insi g hts
// By Kelly Anderson, CPA, CXO Executive Solutions
2023 Mid-point Check

In - How Have We
Fared and What is the
Outlook for the 2nd
Half of 2023
It’s hard to believe that 2023 is half over. It has been an interesting
year in the markets.
C
apital is still available, but harder to come On the human capital front, companies are starting
by, IPO’s are slowing down, although there is to realize that they need employees in the office
some upward momentum. SPAC’s continue at least on a hybrid basis. There are studies now
to have the microscope on them. The redemption stating what many of us knew, remote work is not
rate remains high for SPAC transactions. In March as productive nor innovative. The pace of innovation
alone we saw almost a 95% redemption rate on trust has slowed considerably in a remote environment.
capital for the March deals. This leaves the SPAC Employees are still pushing back on retuning the
underfunded and investors quickly lose interest in office and are enjoying their work from home situ-
the deals. Companies can’t rely on the funding and ations. Companies need to weigh the productivity
have to look to raise capital to meet their plans. and innovation with the happiness quotient of
employees. Companies that can educate the work-
On the executive talent front, 2023 is definitely a force and create the culture that incorporates the
transition year. There are very qualified execu- importance of on-site work for career development
tives available in the market looking for their next will see long term success. In addition, the ability
opportunity. For companies looking to expand to show employees that collaboration at the office
or upgrade their teams, it’s an opportunistic time is a vital component of that growth, both personal
to bring in some exceptional talent. Many of the and corporate will reap the rewards of employee
available executives are the victims of M&A. Compa- development. Employees who embrace the culture
nies are slowing their hiring decision process, many will see a more rapid career growth. Companies
companies are just not adding to the headcount and that can successfully develop a hybrid culture will be
instead asking the existing team to do the work of more successful.
two executives. While asking more for less keeps
cash burn down, companies that don’t build out their Microcap companies are constantly faced with staff-
executive team, run the risk of not executing their ing challenges. Competing with larger companies on
business plans and not meeting their goals. For experience, pay, benefits, etc. that larger companies
companies that are looking to grow, I expect to see can use to attract and retain talent. Historically,
hiring growth as we near the end of the year. microcap companies have succeeded as they are
nimble and can make decisions faster and more

efficient. In a microcap company there is access to flow break even sooner rather than later. While this
the decision-makers and routinely the executives are is always the goal of a company, investing in the
working alongside the team, thus creating a sense initiatives that require more time to vet out or bring
of ownership and collaboration at a level employees to market are not as popular and many CFO’s are
would not experience in a large firm. As larger tech experiencing pressure to manage these initiatives or
firms are laying off employees, opportunities exist potentially cut them until the market conditions are
for microcap firms to grab these tech-savvy employ- more friendly for investment.
ees from larger firms. This will create the innovation
needed for a microcap company to accelerate The interest rates are also impactful to microcap
development, growth and build their success. Com- growth. With the cost of capital increasing, there is
panies that can take advantage of hiring employees pressure on the CFO to continue to deliver results
will have an advantage in innovation and growth. that cover the increased costs of capital. i.e. – you
need to deliver more to cover your fixed costs.
From a CFO perspective, there is a lot going on. This puts a lot of pressure on the organization to
The microcap capital markets have been volatile. manage their costs and their return on innovation
Many companies are losing market value due to the and/or new products. The conundrum between
economic conditions as well as the tightening of the bringing new products to market and creating
ability to raise capital to continue their innovation future value through innovation, or maximizing your
and growth. The CFO is under pressure to continue existing products and drive the results with market
to bring company awareness to the market with penetration. How do companies manage the speed
the challenge of slower growth and less available and cost of innovation that requires capital with
liquidity. The CFO continues to be under pressure the ability to continue to be a going concern. This
to manage costs and preserve cash. This creates is always a concern with the microcap company.
friction between innovation, growth and execution Executives that can effectively manage the growth
of the strategy. The overhead is scrutinized by capital will reap the rewards into 2024.
investors and there is a lot of pressure to get to cash

From a staff outsourcing prospective, we are seeing There are a lot of great executives on the market
a trend in the CFO outsourcing the back office. With right now and companies will take advantage of
the tight employment market, many companies are executives with experience on transformation as well
looking to the outsourced model. This is starting to as restructuring companies through and economic
include the CFO, however, public companies are still downturn. In addition, executives that were success-
reluctant to have the CFO outsourced due to the ful in launching products and achieving high growth
risks involved of not having that executive on-site results will continue to be in demand. Don’t be
as a key part of the team on a daily basis. We are surprised if you start to see the turnover coming.
however, seeing a trend to bring in interim CFO’s
to bridge the gap on turnover. For companies that Recapping, 2023 has been a very tough year in the
have an executive transition, having an interim microcap market. Companies that can be innovative
executive ready to step in allows the company time and execute on their strategy while preserving cash
to find the right executive and not the right now and value will see a rise into 2024. Companies that
executive. capitalize on building out a team that can execute
will be rewarded on the back half of 2023 and set up
DEI initiatives are still in full swing, however, we are for success in 2024. Remember, there is nothing like
seeing many companies cut back on the initiatives performance to reward a company with continued
and the spend associated with such initiatives. It investor support and the ability to raise capital for
is important to incorporate the initiatives in the the next initiative.
culture and part of the company core values. As
we all know, culture is driven from within and not Kelly Anderson, CPA (Inactive)
Founder and CEO
dictated from the top down. As companies continue CXO Executive Solutions
to incorporate diversity into the workforce, we are (A Hawkstone Capital Portfolio Company)
seeing the make-up of the C-suite changing. This Kelly Anderson is the Founder and CEO of CXO Executive Solutions, LLC,
self-awareness is key to a more inclusive workforce a national woman-owned company providing executives to clients on an
interim, advisory or permanent basis. Kelly’s 25+ years as a public and
and bringing diversity to the C-suite. Companies private company CFO is critical to the success of CXO and the ability
that can incorporate the culture aspects of DEI to have peer discussions with CXO clients. With Kelly’s capital market,
strategic development, financial acumen, organizational and communica-
will be more successful than companies that have tion experience, she is able to partner with clients and partners to solve
sponsors trying to push the initiatives through the their issues/problems/concerns.
company.
Kelly/s approach to her clients is as a strategic member of the management
team. she takes responsibility for team’s ability to report on performance,
From an ESG front, we continue to wait for the SEC trends and business issues that affect the execution of client’s goals. These
roles require working closely with her clients, including board of directors
to finalize the ESG disclosure rules. Companies and executive management to present and communicate company-wide
should be focused on sustainability and focusing on achievements and provide ideas on how to seize new opportunities and
mitigate shortfalls.
the how developing the sustainable culture. There
is a lot of discussion around ESG and the future, Current Board Seats:
•• Tomi Environmental Services (TOMZ) – Board member since 2016,
including how to continue to frame the “name” of Audit Committee Chair, Compensation Committee
ESG. We can stay tuned on how this will develop •• AgEagle (UAV) Board member since 2022, Audit committee chair,
into 2024. compensation committee, nomination/governance committee
•• Accounting Advisory Committee – California State University,
Fullerton
Outlook for the rest of 2023. We fully expect hiring •• Association for Corporate Growth – Board Member and Awards
Committee
to pick up in the fall. Companies need to get the •• Woman Corporate Directors – Co-Chair LA/OC chapter
right people in place to ensure that their business
Past Board Seats:
plans and strategies can be executed. I expect to •• Marygold Companies (MGLD) Audit committee, Nomination/gover-
see more executive turnover for underperforming nance committee
•• Guardion Health Services (GHSI) – Audit and Strategic Committee
companies as well as employees who are not willing Member
to be on-site and working with a team. Investors
are starting to demand that companies build teams Education:
Kelly has a Bachelor of Arts, Accounting Concentration, from California
that are highly functioning and delivering on results. State University, Fullerton and is a California CPA. Her license is currently
Lackluster performance will not be tolerated as we inactive.
move into the later half of 2023. This will result in

executive turnover on underperforming companies.

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VirTra, Inc. (NASDAQ: VTSI)
Q&A with Bob Ferris,

Founder and Executive
Chairman of the Board
1. Let’s start with a quick With V-Author™ software, customers
overview of the company. can create custom scenarios. In
addition, we offer simulated recoil kits
VirTra, Inc., is a global provider of and the patented Threat-Fire™ device,
judgmental use of force training simu- designed to simulate real-world stress,
lators and firearms training simulators. along with several other innovative
Our offerings target law enforcement, offerings.
military, and commercial markets.
We leverage patented technologies, VirTra’s operations are anchored in
software, and scenarios to deliver two main facilities: our long-standing
intense, real-world situational training base in Chandler, Arizona, and our
in areas such as de-escalation, judg- new facility in Orlando, Florida, which
mental use-of-force, marksmanship, came into operation in 2022. Orlando
and more. Our mission is to improve is recognized as the epicenter of the
and save lives globally through military simulation market, further
Bob Ferris
effective virtual reality and simulator strengthening our strategic position-
technology. ing. We rely on local suppliers for sourcing the essential
parts of our products. Our dynamic team of 121 full-time
Our firearms training simulator stands out due to its employees, as of March 2023, powers our mission.
unique features, which enable scenario-based training
without the need for live ammunition. These features 2. We’re about half-way through 2023,
include multi-screen, video-based scenarios, an what are some highlights for the company
exclusive scenario authoring capability, our patented for the first half of 2023?
Threat-Fire™ shoot-back system, and realistically
powerful gas-powered simulated recoil weapons. Reflecting on the first half of 2023, I am pleased with
the progress our team has made, but we have much
Our customers fall into two main categories: law en- more to accomplish. Building off the momentum of
forcement and the military. Our strategy is to expand our 17th consecutive year of revenue growth and
our market share and scope in these areas by enhanc- adding John Givens as Co-CEO, we’ve continued
ing our core business, increasing our total addressable to push the envelope, reaching a milestone with a
market, and expanding our product offerings. record quarterly revenue of $10 million in Q1.
Our product portfolio is diverse and tailored to meet Our strategic decision to add John Givens as Co-
a variety of needs and budgets. It includes V-300™, CEO, centralize operations in Arizona, and add a
V-180™, and V-100™ simulators, each boasting unique new Orlando facility has played a significant role in
features. For departmental training, we provide V-VIC- accelerating our growth.
TA™ a curriculum solution, and STEP™, a subscription-
based program for simulator access for smaller budgets. Our diverse portfolio of products and services and our

ability to adapt to the changing needs of our customers reward our shareholders with steady, profitable growth.
have played a pivotal role in our financial success. This
is also reflected in our robust gross margin, an achieve- All in all, we find ourselves in a promising position,
ment that speaks to our strong operational control. backed by strong industry tailwinds that are propel-
ling us towards our 2023 goals.
In terms of market sectors, we’ve observed a
substantial increase in our government revenue, 4. From what you can tell us, what are
largely due to our enhanced performance in the some of the company’s value catalysts
law enforcement market and an increase in federal for the rest of 2023?
government contracts. Our international market
has also made significant strides but has not yet Many of the key value catalysts for the rest of 2023
achieved the level of sales we expect. are points we’ve touched on earlier in this conversation.
As we celebrate our 30th anniversary in 2023, with Our ongoing development of advanced, realistic training
our industry leading products and investments, solutions is a crucial driver. With the success of our V3
a clear vision and a dedicated team, we’re well technology, we plan on introducing even more innova-
positioned to capitalize on the opportunities that lie tive products that are poised to increase market share.
ahead and deliver increased value for our customers.
Second is the international market expansion strategy,
3. Are there any industry tailwinds to which is expected to propel our growth significantly.
push forward some of the company’s We are currently delving deeper into this underserved
goals and objectives for 2023? and underpenetrated market segment. We’re espe-
cially anticipating meaningful traction in the military
The industry’s rising demand for realistic and effective market as we focus on the Department of Defense in
de-escalation training solutions fits perfectly with our fiscal year ‘24.
revolutionary V3™ technology. On top of that, we’re
seeing broader acceptance of simulation training, es- Finally, the operational efficiencies we’ve been
pecially in government, law enforcement, and military working on are slated to continue providing con-
sectors, aligning with our goals of market expansion, siderable benefits and visibility for the years ahead.
including increased focus on the international market, Our investments in facilities, personnel, leadership,
which is still full of untapped potential. In terms of our and systems aim to streamline operations, and
military market focus, we’re setting our sights on the we expect these efforts to continue to boost our
Department of Defense’s fiscal year ‘24. productivity and financial performance.
Further, some customers want a budget-friendly Yes, we have had a strong start to 2023, but there
option which led us to offer a recurring revenue model, is still so much work to be done. Our efforts have
called STEP (Subscription Training Equipment Partner- raised our performance standards and our expecta-
ship). This arrangement offers budget-conscious tions of what is possible, and I think our customers
agencies access to our solutions, ensuring they get the and shareholders are benefiting in a big way!
best training. For us, it added a new recurring revenue
source. It aligns well with our goal to increase effec- For more information about VirTra, Inc., please visit:
tive training, increase recurring revenue, and further www.virtra.com
SNN did 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.

LEG
gaA L COR
co r N ER
Er
// By Jon Uretsky, Esq.
Try
gETTiNg
Not STaRTED
to Give
the
ON ESg
Regulators
DiSClOSuRES
a
Head Start
ThE SEC’S NEw ENviRONMENTal, SOCial aND gOvERNaNCE (“ESg”) RulES
T
he SEC recently proposed a series of new Task Force on Climate Related Financial Disclosure
rules which will significantly increase disclosure (“TCFD”) and the Greenhouse Gas Protocol (“GHG
We hear it all the time. “There’s nothing to worry about. We didn’t do
requirements that relate to: (1) climate related Protocol”) emissions reporting framework. As a law
anything wrong.” It sounds good. It makes sense too – if in fact the
risks, (2) greenhouse gas emissions, and (3) climate- firm focused on providing services and counsel to
related financial metrics. The SEC partly modeled the microcap space, we fully embrace the challenge
client is correct that they didn’t do anything wrong.
the proposed climate disclosure framework on the these new requirements pose for the microcap
Of course, the real world is far more complicated. the target receives a subpoena, but it will often be
In my experience, seemingly all companies are mistakenly perceived as innocent by the target. The
convinced they did nothing wrong and have nothing SEC is only requesting some information or docu-
to hide but very few are actually willing to go to trial ments – and it isn’t as if the company in question
to prove it. They have no appetite for litigation. This did anything wrong (right?). Given how certain all of
dynamic is only heightened when the litigation would our clients tend to be about how they have nothing
be against FINRA or the SEC. Sure, lenders sue to hide because they did nothing wrong, it is at this
public companies when they default and both sides point that the mistakes really start to be made. This
seem to have accepted that as a part of the lending is the point where, without experienced microcap
process. But all parties involved in the microcap securities litigation counsel, many clients actually
space seem to equally resent regulators, and tend to seal their fate.
be understandably of even the existence of a lawsuit
from a regulator. Sometimes it is best to cooperate and work with
the regulators. Other times clients seem unaware
This logic is sound. Say, for example, a private that the SEC or FINRA has already made up their
company is about to ramp up for an initial public mind and plan to sue. It is in these situations that
offering after years of preparation. A lawsuit from cooperation is plainly a mistake. To borrow a phrase,
SEC Enforcement can quickly dry up any hopes at this point anything you tell or give to the SEC or
of that IPO, no matter how much merit such a FINRA can and will be used against you in a court
lawsuit might truly have. This is why one of the first of law. So why do so many players in the microcap
questions we ask when conducting initial intakes of space handle this stage of a regulatory investigation
clients is what their true appetite for litigation is. It on their own? Why do they just give regulators
is a question everyone in the microcap space really whatever they happen to ask for? Part of it is a
should ask themselves well before they even receive practical choice. Retaining experienced microcap
a subpoena from either the SEC or FINRA. securities litigation counsel might be preferable, but
most microcap companies aren’t flush with cash.
The thing is, there is a long, involved process that In a liquidity crunch, outside litigation counsel is a
occurs prior to either the SEC or FINRA actually luxury many can’t afford. So they have someone in
dropping a lawsuit. The investigation likely starts the company, often the CFO handle it the best they
before you know about it. Subpoenas will go out to can. The other reason is purely mental. Many have
others who were tangentially involved. Testimony a hard time believing that the regulators, if shown
may be taken from these other parties. Eventually everything, wouldn’t just drop the investigation.
42
72 MicroCap
Planet MicroCap
ReviewReview
Magazine www.PlanetMicroCap.com
www.SNN.Network
We see this disconnect in almost every case. A The problem is, of course, when the disconnect
company is certain that they did nothing wrong what- between clients who believe they did nothing wrong
soever, and genuinely do not understand why the and the regulators who believe the conduct in
investigation is still going. Clients show up all the time question constitutes a serious violation of the law
telling us that the investigation will be over shortly crash up against each other. This usually occurs as
and the SEC will realize nothing happened and they’ll part of what is known as the Wells process. Whether
just drop the matter entirely. The next case we have or not to submit a Wells response is a question that
where that actually happens will be the first. So on deserves its own Legal Corner, but the takeaway is
the one hand, we have clients completely convinced the same throughout the entire pre-Complaint phase.
that the regulators will drop everything once they Anything you say (or provide) to the regulators can
just see or hear everything there is to see. And on and will be used against you in a court of law.
the other hand, you have the regulators who are fully
convinced (yes, sometimes for good reason) that the If the case doesn’t settle, that means litigation.
company or individual in question actually violated a Meaning a Complaint, and everything between
number of securities rules and laws. The regulators that and trial. Unfortunately, there will be motions
view these actions as very serious and believe that along the way. The SEC will almost always try to
the people in question should be barred from the win before the trial using a Motion for Summary
securities industry for years, or sometimes forever. Judgment. The best way to survive that motion is
They will seek large monetary amounts in addition to to testify well on depositions and not have provided
injunctions keeping people from, for example, serving anything damaging to the regulators that they can
as an officer or director, or licensed broker. use against you as an “undisputed fact.” That is the

issue with the notion that giving the SEC everything 212.571.1164 for a complimentary analysis.
its asks for pre-Complaint can’t hurt. It hurts when
PULLP, “The Microcap Litigators” is one of the only law firms specializing
you get to summary judgment. It hurts at trial. We
in microcap litigation. Jon Uretsky is the founding and managing partner
have faced countless motions where the SEC relies of PULLP. Mr. Uretsky has a broad multidisciplinary practice that includes
largely on materials and testimony freely given over extensive experience in litigation and dispute resolution, regulatory
investigations (including FINRA and SEC matters like those described
to it by the company in question pre-Complaint. above). In addition, he counsels corporate boards, board committees
(including special committees) as well as being a personal adviser to
many entrepreneurs, business leaders and corporate executives. He has
Fighting regulators in court is hard enough without counseled clients on significant litigation, regulatory and transactional
giving them a head start. The entire process is matters across multiple industry sectors. Additionally, the PULLP team
has extensive experience negotiated mergers and acquisitions (including
important, from the first day you find out about it reverse mergers); domestic and cross-border investments/joint ventures;
through settlement or trial. The potential penalties the representation of private equity; venture capital and other private
are extreme. There will always be the natural urge investment funds; securities offerings; and private and public financings.
www.PULLP.com
to just give the regulators whatever they want, since
you – like every other client – didn’t do anything Notes:
1. Special thanks to Anna Adelstein for her assistance in the preparation of
wrong. The monetary pressure to go the cheaper this article, as well as her work in the many matters PULLP handles.
route will be there. But the difference in winning or
2. This article is not an attempt to provide investment advice. The content
losing a case is often the mistakes clients make dur- is purely the author’s personal opinions and should not be considered
ing the pre-trial process. Get experienced microcap advice of any kind. Investors are advised to conduct their own research or
seek the advice of a registered investment professional.
securities litigation counsel such as PULLP involved
as soon as possible.
We invite you to contact uretsky@pullp.com or call


insi g hts
// By Claire Aitchison
Q&A With
Independent
Investment Research
W
e posed several questions to Claire Aitchi- research is you get to see a diverse range of com-
son to help guide our understanding of panies and meet a lot of great people who are doing
sponsored research and how Independent some amazing things. The biotech sector is a great
Investment Research utilizes its market experience in example of this. Some of the R&D work being done
providing quality research reports for microcap public by these companies has the potential to lead to
company issuers and institutional and retail investors. some life changing outcomes for people. By doing
research on life sciences companies, our experts
In many instances, if not for sponsored research the recognize the forward looking potential of the
alternative is no research coverage at all! science and the ramifications for humankind. Albeit
the time from discovery to regulatory approvals and
Claire, thank you for your insights. commercialization can take years, research reports
Please give us an overview of your analysing a company’s potential as well as the risks
background and experience. are invaluable to investors.
I’ve worked in investment markets for over 15 years How do you maintain independence?
now covering a range of asset classes including
equities, funds, structured products and hybrid We maintain independence by the removing the
securities. I’ve been with Independent Investment prospect of influence. Companies are required
Research pretty much since its inception during to pay up front so that there can be no potential
which time I’ve covered over 100 companies across influence on the outcome. They can choose not to
a range of sectors including industrials, financials publish the report however they cannot withhold
biotech and property. payment to try and get a more positive outcome.
Why is independent sponsored research What are your expectations for the
important and why is it valuable? market in the 2H’2023?
Those that are producing research on companies I’m pretty cautious on markets at the moment given
that they are raising capital for can result in overly inflation is still well above the preferred bands
optimistic price targets. Given independent research of 2%-3% in a number of countries. Recent and
is not partaking in capital formation, investor relations, potentially additional interest rate hikes will likely put
receiving equity or generating revenue from the pressure on economic growth in the near-term. With
company through other activities, we can look at a some markets trading near their all-time highs, I am
company objectively and provide an assessment of a certainly bracing for some volatility.
company that does not have to take into account the
bottom line for other internal service departments. As a microcap analyst in a research
firm, what is your take on the microcap
What’s the best part of your job? market?
One of the best things about doing sponsored Microcap stocks have been hit particularly hard in

the last 18-months with the inflationary environment Once IIR is engaged to write research what
and forecast economic headwinds resulting in the must the company provide to IIR? What is
reallocation of portfolios to more defensive style the timing from start to finish?
stocks, including those with strong balance sheets
and liquidity. Since hitting highs in February 2021, the We use a combination of information provided by
Dow Jones U.S Microcap Total Stock Market Index the companies and publicly available information
is down over 40%. This compares to the Dow Jones to undertake the research on a company. While
U.S Large Cap Total Stock Market Index which is our models and forecasts will include information
up 10% over the same period. Given the decline in garnered from our discussions with management
microcap stocks there is no doubt there is some and information provided by companies, we create
great value to be found, however given the eco- all our valuation models and analyse information
nomic headwinds I would be looking for companies independently. With regards to timing, reports are
that are well capitalised so they can ride out any usually delivered 6 to 8 weeks after a contract is
market weakness or volatility. signed, however this may vary depending on the
availability of information and management.
How does an issuer calculate the ROI of a
sponsored research report? What’s the most frustrating part of your job?
The return on investment from sponsored research The most frustrating part of the job is when you put in
for a company is difficult to calculate given it will all the work on a company and then the company elects
depend on the outcome of the research and the use not to publish the report as the outcome is not favour-
of the research by the company as well as the inter- able. One of the realities of our sponsored research
est shown by the readers that access the research is that given the company has paid for the research
through the distribution networks. Research can be they can elect not to have it published, which happens
very valuable in terms of getting a company’s story more than one might think. Companies will often elect
and potential value out to a broad range of potential not to publish research if our valuation comes in well
investors, however research is typically most effective below that of existing price targets in the marketplace.
when combined with other tools such as conferences Of course, you’re not going to publish something that
and other stakeholder engagement activities. suggests a different value than what we view to be an
overly optimistic view of a company, however it can
Can you compare the performance of be frustrating when your assessment is correct, and
a company stock before and after a investors potentially lose money from an investment as
research report is disseminated? they didn’t have access to independent research.
You can compare the performance of a company Claire has over 15 years’ experience as an analyst specialising in equities
and managed investments. Claire commenced her career with the Aegis
before and after a report is published and distrib- Group (sold to Morningstar in 2009) as an analyst in 2005 specialising in
uted through the various retail and institutional equities, fixed interest and hybrid research. She also was part of the team
that studied listed managed investments and unlisted funds. She has a
channels, however volume as opposed to the move- Bachelor of Commerce with Distinction and a Grad Diploma in Accounting
ment in the share price is where you can see the from Deakin University. Claire now supervises all the research outputs
across for the firm except for Metals & Mining.
value of the research report. In the microcap space,
there is limited quality research available and a Claire Aitchison
Head of Equities & Funds Research
number of names that investors would not have Independent Investment Research
heard of without a research report coming across Melbourne
their desk. Whether the share price goes up or down Ph: +61 413 796 022
will ultimately come down to whether management IIR was established in 2004 to provide investment research to the
executes on the strategy and grows the earnings of investment industry including both issuers, Wealth Management firms and
Institutional firms. IIR specialises in providing high quality commissioned
a company, however there are a lot of great micro- equities and funds research. IIR provides customers and subscribers
cap companies that have a great story and earnings unparalleled research that covers listed and unlisted managed investments,
resource companies, structured related products, and IPO’s. IIR takes
potential that are yet to be noticed because they great pride on the quality and independence of the research analysis,
are buried in the pack. This is where research and underpinned by the high calibre staff and transparent research methodol-
ogy. IIR does not participate in dealing in securities, investor relations and
access to the distribution networks can be very corporate advisory services and only provides research services to issuers,
valuable for companies. wealth managers and institutional clients.

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 50
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 550 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
48 MicroCap ReviewReview
MicroCap Magazine www.SNN.Network
Q1 2023 Key Data Points
GENERAL CRITERIA key Data Points

• U.S. (NYSE/AMEX, Nasdaq, OTCM) or Canada
(TSX, TSX Venture, CSE, NEO)
• Primary Listing Only
• Average Daily Trading Value of $25,000 or more

in the preceding 3 months
• All public companies between $10 and $300 million

in market capitalization
Average Performance By Sector
• File a 10Q Or 10K in the preceding quarter
• The index comprses the Top 50 companies from

each sector based on share price appreciation
- As of rebalance date July 3, 2023

- Final inclusion determination is affected by available information as per our calculation
agent
- No compensation is paid or will be accepted for inclusion in the Planet MicroCap Index
top performing new constituents from each sector
PLANET Microcap INDEX PLANET Microcap INDEX

PLANET Microcap INDEX
Q3 2023 Constituent List
AACG ATA Creativity Global APEI American Public Education Inc.

Consumer Staples Consumer Staples
AAOI Applied Optoelectronics Inc. APYX Apyx Medical Corporation
Technology Healthcare
ACR ACRES Commercial Realty Corp. AQMS Aqua Metals Inc.
Real Estate Industrials
ACRX AcelRx Pharmaceuticals Inc. AREC American Resources Corporation
Healthcare Materials
ACU Acme United Corporation. AREN The Arena Group Holdings Inc.
Consumer Staples Media
ADN Advent Technologies Holdings Inc. ARKR Ark Restaurants Corp.
Utilities Consumer Discretionary
ADN:CA Acadian Timber Corp. ARR:CA Altius Renewable Royalties Corp.
Materials Utilities
ADTH AdTheorent Holding Company Inc. ARTW Art’s-Way Manufacturing Co. Inc.
Media Industrials
ADVM Adverum Biotechnologies Inc. ASPS Altisource Portfolio Solutions S.A.
Healthcare Real Estate
ADW.A:CA Andrew Peller Limited/Andrew Peller Limitee Class A Non-voting Shares ASST Asset Entities Inc.
Consumer Staples Media
AEP:CA Atlas Engineered Products Ltd. ASTC Astrotech Corporation
Industrials Industrials
AFCG AFC Gamma Inc. ATLX Atlas Lithium Corporation
Real Estate Materials
AFRI Forafric Global PLC ATOM Atomera Incorporated
Consumer Staples Technology
AHI Advanced Health Intelligence Ltd ADS ATOS Atossa Therapeutics Inc.
Technology Healthcare
AHT Ashford Hospitality Trust Inc AUGX Augmedix Inc.
Real Estate Healthcare
AIP Arteris Inc. AUID AuthID Inc Com (New)
Technology Technology
AKBA Akebia Therapeutics Inc. AYRO AYRO Inc.
Healthcare Consumer Discretionary
ALCO Alico Inc. BABY:CA Else Nutrition Holdings Inc.
ALLI:AQL ALPHA LITHIUM CORPORATION BAER Bridger Aerospace Group Holdings Inc Com
Materials Industrials
ALTO Alto Ingredients Inc. BAOS Baosheng Media Group Holdings Limited
Materials Media
AMPY Amplify Energy Corp. BBB:CA Brixton Metals Corporation
Energy Materials
AMSC American Superconductor Corporation BBGI Beasley Broadcast Group Inc.
Industrials Media
AMTX Aemetis Inc BDL Flanigan’s Enterprises Inc.
Energy Consumer Discretionary
AOMR Angel Oak Mortgage REIT Inc. BDTX Black Diamond Therapeutics Inc.
AP Ampco-Pittsburgh Corporation BFI BurgerFi International Inc
Industrials Consumer Discretionary
APCX AppTech Payments Corp. BGFV Big 5 Sporting Goods Corporation
Technology Consumer Discretionary
Note: As of rebalance date July 3, 2023, please see Planet MicroCap’s criteria for inclusion in the Planet MicroCap Index on Pages 48 & 49

BHIL Benson Hill Inc. CDZI Cadiz Inc.

Materials Utilities
BHR Braemar Hotels & Resorts Inc. CERT:CA Cerrado Gold Inc.
BIG Big Lots Inc. CHCI Comstock Holding Companies Inc.
Consumer Staples Real Estate
BLDE Blade Air Mobility Inc. CHEK Check-Cap Ltd.
Industrials Healthcare
BLIN Bridgeline Digital Inc. CHKR Chesapeake Granite Wash Trust Units
Technology Energy
BLN:CA Blackline Safety Corp. CHMI Cherry Hill Mortgage Investment Corporation
Technology Real Estate
BLRX BioLineRx Ltd. CIH China Index Holdings Limited
Healthcare Media
BMR Beamr Imaging Ltd. CIO City Office REIT Inc.
BODY The Beachbody Company Inc. Class A CIX CompX International Inc.
Media Industrials
BOSC B.O.S. Better Online Solutions CLEU China Liberal Education Holdings Limited
Technology Consumer Staples
BQ Boqii Holding Limited American Depositary Shares representing Class A CLIR ClearSign Technologies Corporation
Consumer Discretionary Industrials
BRAG:CA Bragg Gaming Group Inc. CLPR Clipper Realty Inc.
Media Real Estate
BRE:CA Bridgemarq Real Estate Services Inc. Restricted Voting Shares CLWT Euro Tech Holdings Company Limited
BRID Bridgford Foods Corporation CMCM Cheetah Mobile Inc. American Depositary Shares each representing
Consumer Staples fifty (50) Class A
BRN Barnwell Industries Inc. Media
Energy CMCT Creative Media & Community Trust Corporation
BRO:CA Barksdale Resources Corp. Real Estate
Materials CMLS Cumulus Media Inc.
BTB.UN:CA BTB Real Estate Investment Trust Media
Real Estate CMT Core Molding Technologies Inc
BTCM BIT Mining Limited ADS Materials
Finance CN:CA Condor Resources Inc.
BVS Bioventus Inc. Materials
Healthcare CNF CNFinance Holdings Limited American Depositary Shares each
CBAT CBAK Energy Technology Inc. representing twenty (20)
Industrials Finance
CBIT:CA Cathedra Bitcoin Inc. CNTG Centogene N.V.
Finance Healthcare
CBNK Capital Bancorp Inc. CNTX Context Therapeutics Inc.
Finance Healthcare
CCEL Cryo-Cell International, Inc. CODA Coda Octopus Group Inc.
Healthcare Industrials
CCLP CSI Compressco LP COE 51 Talk Online Education Group
Energy Consumer Staples
CDLX Cardlytics Inc. CORR CorEnergy Infrastructure Trust Inc.
Media Real Estate
CDRO Codere Online Luxembourg S.A. CPS:CA Canadian Premium Sand Inc.
Consumer Discretionary Materials

CPSS Consumer Portfolio Services Inc. DXYN The Dixie Group Inc.
Finance Consumer Discretionary
CRDL:CA Cardiol Therapeutics Inc. DYA:CA dynaCERT Inc.
Healthcare Industrials
CREG Smart Powerr Corp. EARN Ellington Residential Mortgage REIT of Beneficial Interest
Utilities Real Estate
CREX Creative Realities Inc. EDTK Skillful Craftsman Education Technology Limited
CRNT Ceragon Networks Ltd. EEIQ EpicQuest Education Group International Limited
CRT Cross Timbers Royalty Trust EEX Emerald Holding Inc.
Energy Media
CRVS Corvus Pharmaceuticals Inc. EFTR eFFECTOR Therapeutics Inc.
Healthcare Healthcare
CSBR Champions Oncology Inc. ELA Envela Corporation
CSTE Caesarstone Ltd. ELTK Eltek Ltd.
Industrials Technology
CTIB Yunhong CTI Ltd. ELTX Elicio Therapeutics Inc.
Consumer Discretionary Healthcare
CXAI CXApp Inc. EMPR:CA Empress Royalty Corp.
Technology Materials
CXDO Crexendo Inc. EPM Evolution Petroleum Corporation Inc.
Media Energy
CYTH Cyclo Therapeutics Inc. EPSN Epsilon Energy Ltd.
Healthcare Energy
DALN DallasNews Corporation ESEA Euroseas Ltd.
Media Industrials
DC.A:CA Dundee Corporation Class A Subordinate Voting Shares ESK:CA Eskay Mining Corp.
Consumer Staples Materials
DCM:CA Data Communications Management Corp. ESN:CA Essential Energy Services Ltd.
Industrials Energy
DII.B:CA Dorel Industries Inc. Class B Subordinate Voting Shares ESOA Energy Services of America Corporation
DIT AMCON Distributing Company EVI EVI Industries Inc.
Consumer Staples Industrials
DLPN Dolphin Entertainment Inc. EYPT EyePoint Pharmaceuticals Inc.
Media Healthcare
DMAC DiaMedica Therapeutics Inc. FAZE FaZe Holdings Inc.
Healthcare Media
DOUG Douglas Elliman Inc. FCAP First Capital Inc.
Real Estate Finance
DRCT Direct Digital Holdings Inc. FCD.UN:CA Firm Capital Property Trust
Media Real Estate
DRX:CA ADF Group Inc. Subordinate Voting Shares FDBC Fidelity D & D Bancorp Inc.
Industrials Finance
DSHK Drive Shack Inc. FENG Phoenix New Media Limited American Depositary Shares each
Consumer Discretionary representing 48 Class A.
DSS DSS Inc. Media
Consumer Discretionary FET Forum Energy Technologies Inc.
DTST Data Storage Corporation Energy
Technology FGPR Ferrellgas Partners L.P Unit
DUOT Duos Technologies Group Inc - Ordinary Shares Energy
Technology

FNGR FingerMotion Inc. GMGI Golden Matrix Group Inc.

Media Media
FOA Finance of America Companies Inc. Class A GPMT Granite Point Mortgage Trust Inc.
Finance Real Estate
FPAY FlexShopper Inc. GRAT:CA Gratomic Inc.
Finance Materials
FRD Friedman Industries Inc. GRCL Gracell Biotechnologies Inc.
Materials Healthcare
FREE Whole Earth Brands Inc. GRNQ Greenpro Capital Corp.
Consumer Staples Industrials
FRZA Forza X1 Inc. GROV Grove Collaborative Holdings Inc. Class A
Consumer Discretionary Consumer Staples
FSP Franklin Street Properties Corp. GROW U.S. Global Investors Inc.
Real Estate Finance
FSTR L.B. Foster Company GRPN Groupon Inc.
Industrials Media
FTFT Future FinTech Group Inc. GRZ:CA Gold Reserve Inc.
Technology Materials
FTG:CA Firan Technology Group Corporation GSHR:CA Goldshore Resources Inc.
Industrials Materials
FTHM Fathom Holdings Inc. GSI:CA Gatekeeper Systems Inc.
FTK Flotek Industries Inc. GSIT GSI Technology Inc.
Energy Technology
FUSB First US Bancshares Inc. GTIM Good Times Restaurants Inc.
FWZ:CA Fireweed Metals Corp. GURU:CA GURU Organic Energy Corp.
Materials Consumer Staples
GAN GAN Limited GXE:CA Gear Energy Ltd.
Consumer Discretionary Energy
GASS StealthGas Inc. HC:AQL HYPERCHARGE NETWORKS CORP.
Industrials Consumer Discretionary
GCL:CA Colabor Group Inc. HEAT:CNX Hillcrest Energy Technologies Ltd.
Consumer Staples Energy
GEOS Geospace Technologies Corporation HEO:CA H2O Innovation Inc.
Energy Utilities
GETR Getaround Inc. HFFG HF Foods Group Inc.
GGT Gabelli Multi-Media Trust Inc. (The) HGBL Heritage Global Inc.
Finance Finance
GH:CA Gamehost Inc. HIHO Highway Holdings Limited
GHL Greenhill & Co. Inc. HLGN Heliogen Inc.
Finance Utilities
GIP:CA Green Impact Partners Inc. HME:CA Hemisphere Energy Corporation
Utilities Energy
GIPR Generation Income Properties Inc. HMR:CA Homerun Resources Inc.
GLBZ Glen Burnie Bancorp HNST The Honest Company Inc.
Finance Consumer Staples
GMDA Gamida Cell Ltd. HOFV Hall of Fame Resort & Entertainment Company
GMG:CA Graphene Manufacturing Group Ltd. HOLO MicroCloud Hologram Inc.
Materials Technology

HOT.UN:CA American Hotel Income Properties REIT LP JAKK JAKKS Pacific Inc.
Real Estate Consumer Discretionary
HRTG Heritage Insurance Holdings Inc. JEWL Adamas One Corp.
HSTR:CA Heliostar Metals Ltd. JFIN Jiayin Group Inc.
Materials Media
HT Hersha Hospitality Trust Class A of Beneficial Interest JOB GEE Group Inc.
HTCR Heartcore Enterprises Inc. KAVL Kaival Brands Innovations Group Inc.
HTOO Fusion Fuel Green PLC KEI:CA Kolibri Global Energy Inc.
Utilities Energy
HUDI Huadi International Group Co. Ltd. KLX:CA Klimat X Developments Inc.
Materials Materials
HWO:CA High Arctic Energy Services Inc. KNDI Kandi Technologies Group Inc.
HYZN Hyzon Motors Inc. KOPN Kopin Corporation
Consumer Discretionary Technology
ID PARTS iD Inc. Class A KORE KORE Group Holdings Inc.
Consumer Discretionary Media
IDR Idaho Strategic Resources Inc. KPLT Katapult Holdings Inc.
IFRX InflaRx N.V. KPT:CA KP Tissue Inc.
Healthcare Consumer Staples
IH iHuman Inc. American depositary shares each representing five Class A LAS.A:CA Lassonde Industries Inc. Class A Subordinate Voting Shares
IHT InnSuites Hospitality Trust Shares of Beneficial Interest LBPH Longboard Pharmaceuticals Inc.
IKNA Ikena Oncology Inc. LEE Lee Enterprises Incorporated
Healthcare Media
ILLM:CA illumin Holdings Inc. LEJU Leju Holdings Limited American Depositary Shares each representing
Media one
IMUX Immunic Inc. Real Estate
Healthcare LFCR Lifecore Biomedical Inc.
INO.UN:CA Inovalis Real Estate Investment Trust Healthcare
Real Estate LFE:CA Canadian Life Companies Split Corp. Class A Shares
INTT inTest Corporation Finance
Technology LFMD LifeMD Inc.
INVE Identiv Inc. Healthcare
Technology LFT Lument Finance Trust Inc.
IPVF InterPrivate III Financial Partners Inc. Class A Real Estate
Finance LFVN Lifevantage Corporation
IPWR Ideal Power Inc. Consumer Staples
Industrials LIFT:CNX Li-FT Power Ltd.
IPX IperionX Limited Materials
Materials LINC Lincoln Educational Services Corporation
IREN Iris Energy Limited Consumer Staples
Finance LITM Snow Lake Resources Ltd.
ISIG Insignia Systems Inc. Materials
Media LIZI LIZHI INC.
IZEA IZEA Worldwide Inc. Media
Media LMB Limbach Holdings Inc.
IZM ICZOOM Group Inc. Industrials
Technology

LME:CA Laurion Mineral Exploration Inc. MGOL MGO Global Inc.

Materials Media
LMNR Limoneira Co MGRX Mangoceuticals Inc.
Consumer Staples Healthcare
LNSR LENSAR Inc. MINM Minim Inc
Healthcare Technology
LOAN Manhattan Bridge Capital Inc MITT AG Mortgage Investment Trust Inc.
Real Estate Real Estate
LODE Comstock Inc. MKFG Markforged Holding Corporation
LONE:CA Lithium One Metals Inc. MKUL Molekule Group Inc.
Energy Industrials
LTBR Lightbridge Corporation MLP Maui Land & Pineapple Company Inc.
Industrials Real Estate
LTCH Latch Inc. MMMB MamaMancini’s Holdings Inc.
LTH:CA Lithium Ionic Corp. MMV MultiMetaVerse Holdings Limited
Materials Media
LTHM:CNX Champion Electric Metals Inc Com MR.UN:CA Melcor Real Estate Investment Trust
Materials Real Estate
LUCA:CA Luca Mining Corp. MRAM Everspin Technologies Inc.
LUXH LuxUrban Hotels Inc. MRCC Monroe Capital Corporation
Consumer Discretionary Finance
LVLU Lulu’s Fashion Lounge Holdings Inc. MRKR Marker Therapeutics Inc.
LVO LiveOne Inc. MRZ:CA Mirasol Resources Ltd.
Media Materials
LWAY Lifeway Foods Inc. MSVB Mid-Southern Bancorp Inc.
Consumer Staples Finance
LYRA Lyra Therapeutics Inc. MTR Mesa Royalty Trust
Healthcare Energy
MATH Metalpha Technology Holding Limited MVLA Movella Holdings Inc.
Media Technology
MCB:CA McCoy Global Inc. MVO MV Oil Trust
Energy Energy
MCHX Marchex Inc. MXC Mexco Energy Corporation
Media Energy
MDF:CA mdf commerce inc. MXG:CA Maxim Power Corp.
Media Utilities
MDJH MDJM LTD NA Nano Labs Ltd
Real Estate Technology
MDWT Midwest Holding Inc. NAII Natural Alternatives International Inc.
MEOA Minority Equality Opportunities Acquisition Inc. NATR Nature’s Sunshine Products Inc.
MFG:CA Mayfair Gold Corp. NBM:CA NEO Battery Materials Ltd.
Materials Materials
MFH Mercurity Fintech Holding Inc. NC NACCO Industries Inc.
Finance Energy
MG Mistras Group Inc NCMI National CineMedia Inc.
Industrials Media
MGA:CA Mega Uranium Ltd. NCRA Nocera Inc.

NCTY The9 Limited OPHR:CA Ophir Gold Corp.

Media Materials
NECB NorthEast Community Bancorp Inc. OPRT Oportun Financial Corporation
Finance Finance
NEOV NeoVolta Inc. OPTT Ocean Power Technologies Inc.
NERV Minerva Neurosciences Inc ORC.B:CA Orca Energy Group Inc.
Healthcare Energy
NET.UN:CA Canadian Net Real Estate Investment Trus ORMP Oramed Pharmaceuticals Inc.
NGMD:CA Nugen Medical Devices Inc. OSI Osiris Acquisition Corp. Class A
Finance Finance
NGS Natural Gas Services Group Inc. OVBC Ohio Valley Banc Corp.
Energy Finance
NGVC Natural Grocers by Vitamin Cottage Inc. OZ Belpointe PREP LLC Class A Units
Consumer Staples Real Estate
NHK:CA Nighthawk Gold Corp. PBPB Potbelly Corporation
Materials Consumer Discretionary
NHTC Natural Health Trends Corp. PCYG Park City Group Inc.
NKG:CA Nevada King Gold Corp. PCYO Pure Cycle Corporation
Materials Utilities
NNBR NN Inc. PDLB Ponce Financial Group Inc.
Industrials Finance
NREF NexPoint Real Estate Finance Inc - Ordinary Shares PEA:CA Pieridae Energy Limited
Real Estate Energy
NRT North European Oil Royality Trust PETZ TDH Holdings Inc.
NSPR InspireMD Inc. PEV Phoenix Motor Inc.
NTPIF Nam Tai Property Inc. PEX:CA Pacific Ridge Exploration Ltd.
NTZ Natuzzi S.p.A. PFIE Profire Energy Inc.
Consumer Discretionary Energy
NXGL NexGel Inc PHX PHX Minerals Inc.
Healthcare Energy
NXPL NextPlat Corp PIF:CA Polaris Renewable Energy Inc.
Technology Utilities
NYC American Strategic Investment Co. Class A PINE Alpine Income Property Trust Inc.
Real Estate Real Estate
OB Outbrain Inc. PKOH Park-Ohio Holdings Corp.
Media Industrials
OCN Ocwen Financial Corporation PKT:CA Parkit Enterprise Inc.
Finance Real Estate
OIII:CA O3 Mining Inc. PLSE Pulse Biosciences Inc
Materials Healthcare
OMEX Odyssey Marine Exploration Inc. PNRG PrimeEnergy Resources Corporation
Industrials Energy
OMH Ohmyhome Limited PPSI Pioneer Power Solutions Inc.
ONC:CA Oncolytics Biotech Inc. PRST Presto Automation Inc.
ONTX Onconova Therapeutics Inc. PRV.UN:CA PRO Real Estate Investment Trust

PSTL Postal Realty Trust Inc. Class A RNGR Ranger Energy Services Inc. Class A
Real Estate Energy
PVBC Provident Bancorp Inc. ROOT Root Inc.
Finance Finance
PVL Permianville Royalty Trust Trust Units ROSE Rose Hill Acquisition Corporation
Energy Finance
PWM:CA Power Metals Corp. RVYL Ryvyl Inc.
PWOD Penns Woods Bancorp Inc. SABS SAB Biotherapeutics Inc.
Finance Healthcare
QBTS D-Wave Quantum Inc. SACH Sachem Capital Corp.
QH Quhuo Limited SAI SAI.TECH Global Corporation
Technology Finance
QUIK QuickLogic Corporation SALM Salem Media Group Inc.
Technology Media
RAVE Rave Restaurant Group Inc. SALT:CA Atlas Salt Inc.
RCMT RCM Technologies Inc. SAMG Silvercrest Asset Management Group Inc.
Industrials Finance
RCON Recon Technology Ltd. SANW S&W Seed Company
RDCM Radcom Ltd. SBNY Signature Bank
Media Finance
REAL The RealReal Inc. SCOT:CA Scottie Resources Corp.
REE REE Automotive Ltd. SDA SunCar Technology Group Inc.
Consumer Discretionary Finance
REFI Chicago Atlantic Real Estate Finance Inc. SDOT Sadot Group Inc.
Real Estate Consumer Discretionary
REKR Rekor Systems Inc. SDPI Superior Drilling Products Inc.
Technology Energy
RGCO RGC Resources Inc. SEEL Seelos Therapeutics Inc.
Utilities Healthcare
RGF The Real Good Food Company Inc. SEI:CA Sintana Energy Inc.
RGLS Regulus Therapeutics Inc. SELF Global Self Storage Inc.
RGTI Rigetti Computing Inc. SEVN Seven Hills Realty Trust
RHC:CA Royal Helium Ltd. SFT Shift Technologies Inc.
RM Regional Management Corp. SGA Saga Communications Inc.
Finance Media
RMBI Richmond Mutual Bancorporation Inc. SGC Superior Group of Companies Inc.
RMBL RumbleOn Inc. SGMA SigmaTron International Inc.
RMCF Rocky Mountain Chocolate Factory Inc. SHLE:CA Source Energy Services Ltd.
RML:CA Rusoro Mining Ltd. SHPW Shapeways Holdings Inc.
Materials Industrials
RMTI Rockwell Medical Inc. SIEB Siebert Financial Corp.
Healthcare Finance

SIEN Sientra Inc. TACT TransAct Technologies Incorporated

SLNG Stabilis Solutions Inc. TALK Talkspace Inc.
Energy Healthcare
SLNO Soleno Therapeutics Inc. TAO:CA TAG Oil Ltd.
Healthcare Energy
SMID Smith-Midland Corporation TAST Carrols Restaurant Group Inc.
SMLP Summit Midstream Partners LP Representing Limited Partner TATT TAT Technologies Ltd.
Interests Industrials
Energy TAYD Taylor Devices Inc.
SNAL Snail Inc. Industrials
Media TBRD:CA Thunderbird Entertainment Group Inc.
SNAX Stryve Foods Inc. Media
Consumer Staples TC TuanChe Limited
SNFCA Security National Financial Corporation Class A Common Stock Media
Finance TCX Tucows Inc.
SNMPD Evolve Transition Infrastructure LP Technology
Energy TEDU Tarena International Inc.
SOHO Sotherly Hotels Inc. Consumer Staples
Real Estate THRN Thorne Healthtech Inc.
SOU:CA Southern Energy Corp. Consumer Staples
Energy TISI Team Inc.
SRL Scully Royalty Ltd. Industrials
Finance TKLF Yoshitsu Co. Ltd
SSBI Summit State Bank Consumer Staples
Finance TMC:CA Trench Metals Corp.
STBX Starbox Group Holdings Ltd. Energy
Media TNZ:CA Tenaz Energy Corp.
STEP:CA STEP Energy Services Ltd. Energy
Energy TORO Toro Corp.
STHO Star Holdings Industrials
Real Estate TRUE TrueCar Inc.
STKH Steakholder Foods Ltd. Media
Consumer Staples TRZ:CA Transat A.T. Inc. Voting and Variable Voting Shares
STRS Stratus Properties Inc. Consumer Discretionary
Real Estate TSQ Townsquare Media Inc. Class A
SUNN:CNX SolarBank Corporation Media
Utilities TTP Tortoise Pipeline & Energy Fund Inc.
SUPV Grupo Supervielle S.A. American Depositary Shares each Representing Finance
five Class B shares TTSH Tile Shop Holdings Inc.
SURG SurgePays Inc. TUSK Mammoth Energy Services Inc.

Technology Industrials
SUU:CA Strathmore Plus Uranium Corp. TVC Tennessee Valley Authority

Energy Utilities
SVT Servotronics Inc. TWIN Twin Disc Incorporated

SWAG Stran & Company Inc. TXP:CA Touchstone Exploration Inc.

Media Energy
SYZ:CA Sylogist Ltd. TZOO Travelzoo

Technology Media

UG United-Guardian Inc. VWE Vintage Wine Estates Inc.

UIHC United Insurance Holdings Corp. WAVE Eco Wave Power Global AB (publ)
Finance Utilities
ULBI Ultralife Corporation WEB:CA Westbridge Renewable Energy Corp.
Industrials Utilities
UONEK Urban One Inc. WEYS Weyco Group Inc.
Media Consumer Discretionary
USAP Universal Stainless & Alloy Products Inc. WHG Westwood Holdings Group Inc
Materials Finance
UTI Universal Technical Institute Inc WILC G. Willi-Food International Ltd.
UTME UTime Limited WIMI WiMi Hologram Cloud Inc.
Technology Media
VEEE Twin Vee PowerCats Co. WKEY WISeKey International Holding Ltd
VFF Village Farms International Inc. WKSP Worksport Ltd.
Consumer Staples Consumer Discretionary
VGAS Verde Clean Fuels Inc. WLDN Willdan Group Inc.
Utilities Industrials
VIA Via Renewables Inc. WLDS Wearable Devices Ltd.
Utilities Technology
VIRC Virco Manufacturing Corporation WMC Western Asset Mortgage Capital Corporation
Consumer Discretionary Real Estate
VIRI Virios Therapeutics Inc. WRG:CA Western Energy Services Corp.
Healthcare Energy
VMC:CA Vicinity Motor Corp. WRLG:CA West Red Lake Gold Mines Ltd.
VOC VOC Energy Trust Units of Beneficial Interest XBIT XBiotech Inc.
Energy Healthcare
VRA Vera Bradley Inc. XELB Xcel Brands Inc
Consumer Discretionary Consumer Discretionary
VRM Vroom Inc. XFOR X4 Pharmaceuticals Inc.
VRR:CA VR Resources Ltd. XTC:CA Exco Technologies Limited
VSTA Vasta Platform Limited XYF X Financial American Depositary Shares each representing six Class A
Consumer Staples Finance
VTSI VirTra Inc. YES:CA Char Technologies Ltd.
VVPR VivoPower International PLC YGF YanGuFang International Group Co. Ltd.

iinsi hts
NSi g HT S
// By
// By Gavin
Gavin Wendt
Wendt
Battery
iS gOlD lOSiNg Materials iTS
OutlookOR aRE wE
luSTRE?
JuST ShORT-SighTED?
Commodity markets continue to be defined by near-term
pessimism, balanced against longer-term optimism.
“You have to choose between trusting to the natural stability of
T
he prevailing negatives are inflation, interest trillion investment law, which includes incentives for
goldrates,
and the natural
recession, as well as astability of thesourcing
sluggish China honesty and
dozens intelligence
of minerals, of 27th
and the February
recovery. The longer-term positives are based announcement from the White House Presidential
the members
around of the
growth in alternative government.
energy and the cor- And,
Waiver with due respect
of Statutory toitthese
Requirements, appears a
gentlemen, I advise
responding increase you,
in commodity as long
demand and as mining
the capitalist system
boom is close at hand. lasts, to
production.
vote for gold.” —George Bernard Shaw Surging Demand
The consequence is that the inevitable recovery in
M
commodity uch ispricing
beingwill
madebe of
more pronounced,
gold’s recent priceas Theyear
the market for critical
in US$ minerals
terms below useditiniselectric
$1700, nevertheless
record deployments
performance,of alternative
with energy technolo-
many questioning whether vehicles, solar panels
outperforming and wind
most major assetturbines
classes has doubled
- including
gies such theasyellow
solar and
metal batteries
can still will drive
fulfill demand for
its traditional over the past
Treasury fiveU.S.
bonds, years, reaching
corporate $320-billion
bonds, the S&Pduring
critical
role as minerals.
a safe-haven asset in turbulent times, as 2022.
500 The
and International
tech stocks. Gold Energy Agency’seffectively
has therefore (IEA’s) in-
well as a hedge against skyrocketing inflation. After augural its
fulfilled ‘Critical
role asMinerals Marketpolicy,
an insurance Review’by shows
helpingthat,
Joe Biden’s Inflation
all, shouldn’t Reduction
developments overAct
theauthorizes
past couple almost
of between 2017
investors andlosses
mitigate 2022, inthe energy
other sector
areas has been
of their
$400 –billion
years for investments
a global in energy projects
pandemic, unprecedented govern- the main factor behind a tripling in overall demand
portfolio.
and climate
ment change,
spending, including
European war,the mining
global of critical
uncertainty, for lithium, as well as the 70% jump in demand for
minerals.
and Wheninflation
rampaging this is combined
- providewith Biden’s spring-
the perfect $1 cobalt, and the
Furthermore, the40% risereport
latest in nickel
by demand.
the World Gold
board for gold to thrive? Council (WGC) also makes the case that gold can
typically be a powerful investment in the face of a
The fact that questions are being asked about gold’s potential economic recession. The London-based
relevance is not at all a new phenomenon. Indeed, group has compared the performance of a number
over recent decades with the advent of new- of asset classes during the course of the past seven
fangled financial instruments and the emergence of U.S. recessions going back to 1971, and it has found
cryptocurrencies, some speculators have become that gold performed the best on average aside from
captivated by these shiny new financial market government and corporate bonds.
trinkets - to the detriment of gold.
The bottom-line therefore is that gold’s performance
But does this necessarily mean that gold is losing must not be viewed simply in terms of its US$ price
out in terms of performance? Gold’s relevance is performance in isolation, but it must also be viewed
typically measured and interpreted on the basis within the context of how well it has stacked up
of its US dollar price performance - but this should against other asset classes. On this basis, gold’s
not be viewed in perfect isolation - as gold’s perfor- performance stacks up very well indeed.
mance must also be viewed in the context of how it
has performed in terms of other currencies, and also What we know about gold so far in 2022 is that it
against other asset classes. has struggled in US$ price terms since April, due
to the combined strength of a rampaging US dollar
Let’s begin with an examination of how gold has that is at fresh 20-year highs, along with the relent-
performed so supply
Figure 1: Overall far in and
2022. Although
demand gold
of battery is down
metals for 2016less
by sector, march
– 2022, of the
source: IEA. US Federal Reserve’s rate hike
60 MicroCap
22 Planet MicroCap
Review Review
Magazine www.PlanetMicroCap.com
www.SNN.Network
Figure 2: Price of selected battery materials and lithium-ion batteries, 2015-2023, source: IEA.
As a result, energy transition minerals, which used to exceeding 10 million during 2022. A total of 14%
be a small segment of the market, are now moving of all new cars sold were electric in 2022, up from
to centre stage in the mining and metals industry. around 9% in 2021 and less than 5% in 2020, with
The market has responded, with investment in three markets dominating global sales. China was
critical mineral development rising 30% last year, led the frontrunner once again, accounting for around
by lithium with a 50% jump in investments. Likewise, 60% of global electric car sales. More than half of the
exploration spending rose by 20% during 2022, electric cars on roads worldwide are now in China
again driven by record growth in lithium exploration, and the country has already exceeded its 2025
particularly in Canada and Australia, where year-on- target for new energy vehicle sales.
year growth of 40% was recorded.
In Europe, the second largest market, electric car
Lithium carbonate prices have been steadily increas- sales increased by over 15% in 2022, meaning that
ing over the past two years. In 2021, prices multiplied more than one in every five cars sold was electric.
four- to five-fold, and continued to rise throughout Electric car sales in the United States – the third
2022, nearly doubling between 1 January 2022 and largest market – increased 55% in 2022, reaching a
1 January 2023. At the beginning of 2023, lithium sales share of 8%.
prices stood six times above their average over the
2015-2020 period. In contrast to nickel and lithium, Encouragingly, early indications from first quarter
manganese prices have been relatively stable. sales of 2023 point to an upbeat market, supported
by cost declines as well as strengthened policy sup-
One reason for the increase in prices for lithium, nickel port in key markets such as the United States. Glob-
and cobalt was the insufficient supply compared to ally, the IEA’s current estimate is for nearly 14 million
demand in 2021. Although nickel and cobalt supply electric cars to be sold in 2023, building on the more
surpassed demand in 2022, this was not the case for than 2.3 million already sold in the first quarter of
lithium, causing its price to rise more strongly over the year. This represents a 35% increase in electric
the year. Between January and March 2023, lithium car sales in 2023 compared to 2022 and would bring
prices dropped 20%, returning to their late 2022 level. Electric car sales in the first three months of 2023
have shown strong signs of growth compared to the
Exponential EV Sales Growth same period in 2022.
Battery metals will benefit from electric car markets In the United States, more than 320 000 electric cars
that are seeing exponential growth, with sales were sold in the first quarter of 2023, 60% more than

Figure 3: Overall electric car sales by region, 2010 – 2023, source: IEA.
over the same period last year. The IEA’s current that higher shares of sales are achievable for electric
expectation is for this growth to be sustained cars than those anticipated on the basis of current
throughout the year, with electric car sales reaching government policy and national targets.
over 1.5 million in 2023, bringing the electric car sales
share in the United States up to around 12% in 2023. Global EV battery demand increased by about 65%
in 2022, reaching around 550 GWh, about the same
Significantly, the European Union and the United level as EV battery production. The lithium-ion
States have passed legislation to match their electri- automotive battery manufacturing capacity in 2022
fication ambitions. The European Union adopted new was roughly 1.5 TWh for the year, implying a utilisa-
CO2 standards for cars and vans that are aligned with tion rate of around 35% compared to about 43% in
the 2030 goals set out in the Fit for 55 package. In 2021. Battery demand is set to increase significantly
the United States, the Inflation Reduction Act (IRA), by 2030, reaching over 3 TWh.
combined with adoption of California’s Advanced
Clean Cars II rule by a number of states, could deliver To meet that demand, more than 50 gigafactories
a 50% market share for electric cars in 2030, in line (each with 35 GWh of annual production capacity)
with the national target. The implementation of the would be needed by 2030 in addition to today’s bat-
recently proposed emissions standards from the US tery production capacity. This increases to close to 65
Environmental Protection Agency is set to further new gigafactories to meet 2030 demand. According
increase this share. to Benchmark Mineral Intelligence (as of March 2023),
the announced battery production capacity by private
Battery Manufacturing Boom companies for EVs in 2030 amounts to 6.8 TWh.
Battery metals will also benefit from an ongoing expan- Supply Roadblocks
sion in battery manufacturing capacity, directly linked to
the outlook for EVs. As of March 2023, announcements Far more needs to be done to ensure supply chains
on battery manufacturing capacity delivered by 2030 for critical minerals, such as lithium, cobalt, nickel
are more than sufficient to meet the demand implied and copper, as well as platinum, manganese and
by government pledges and would even be able to various rare-earth minerals, are secure and sustain-
cover the demand for electric vehicles in the Net Zero able. There is also a need to diversify the sources
Emissions by 2050 Scenario. It is therefore possible of supply away from their current concentration

Figure 4: Battery demand by mode and region, 2016 – 2022, source: IEA.
in a handful of countries. The Democratic Republic China maintains about one-third of the world’s rare
of Congo (DRC) dominates cobalt supply, while earth reserves, a key component in the production
China holds half of planned lithium chemical plants, of EV batteries and electronics. China also hosts at
and Indonesia represents nearly 90% of planned least 85% of the world’s capacity to process rare
nickel refining facilities. Any project delays and earths into material manufacturers can use, a ca-
technology-specific shortfalls could undermine both pability other countries want to develop. China has
the pace and cost of the energy transition, pushing been the go-to supplier for companies because it is
commodity prices higher. able to export processed minerals at a lower cost
than other countries.
Figure 5: Graphic showing China’s dominance in rare earths production has eased after 2010.

Figure 6: Graphic showing China’s dominance in gallium production.
However, if rare earths prices rise as restrictions causing more angst. China accounted for about 98%
take hold, companies in the West would have of the world’s gallium production in 2022, estimated
another reason to shift supply chains, and make it at 430,000kg in 2021. China was also the world’s
more economical to boost output in Japan, Canada, leading producer of germanium in 2022, with the
the US or elsewhere. China’s previous efforts to country controlling 68% of global refinery production,
restrict the sale of rare earths have only diminished estimated at 140,000kg in 2021, according to the US
its market share as other countries work to secure Geological Survey (USGS), with the rest of processing
supplies of the metals that aren’t controlled by China. spread across Europe and North America.
China first introduced an export licensing system for
rare earths during the 1990s, whilst also gradually Gallium is a soft silvery metal, that’s similar to alu-
ramping up taxes that squeezed companies in Japan minium. About 95% of all gallium produced is used
and elsewhere that relied on Chinese supplies. to make gallium arsenide (GaAs), a compound used
in microwave and infrared circuits, semiconductors
However the big shift happened in 2010, when and blue and violet LEDs. The compound gallium
Beijing temporary halted exports to Japan in reac- nitride (GaN) is used as a semiconductor in Blu-ray
tion to a collision between a Chinese fishing boat technology, mobile phones and pressure sensors
and the Japanese coast guard near islands claimed for touch switches. There are no substitutes for its
by both countries. That incident set off a race to use in some products and gallium is not currently
find alternatives to supplies from China. Output in recyclable. Germanium, a silvery-white metal, is used
Australia and the US subsequently increased, push- in the manufacturing of fibre optics to transfer data
ing down China’s share of mining output to 70% of and information, as well as high-speed chips and
global supply in 2022 from a peak of 98% in 2010, infrared radiation.
based on US Geological Survey data.
And aside from China, it’s just taking longer to com-
China’s recent decision to restrict exports of strategic mission new mines. Quoting from a recnt Bloomberg
metals - gallium and germanium - from 1 August, is article, “There’s a huge crisis,” says Doug Kirwin, one

Figure 7: Comparative timeline for development of new copper mines.
of the earliest geologists to work at the deposit that about 59 new lithium mines and plants are necessary,
became Oyu Tolgoi, or Turquoise Hill, named after the according to Benchmark Intelligence. A gigafactory
area’s rocks, stained by oxidized copper. “There’s no can be built in two to five years, a refinery can be
way we can supply the amount of copper in the next built in two, but the mines needed upstream of them
10 years to drive the energy transition and carbon zero. take between five and 25 years to develop.
It’s not going to happen,” adds Kirwin, now an inde-
pendent consulting geologist. “There’s just not enough Junior Equity Excitement
copper deposits being found or developed.”
Junior equities are in the ideal position to benefit
Analysts at Wood Mackenzie estimate we will be from the energy transition. Junior companies are
short about 6 million tons of copper by next decade, typically far more nimble than the sector heavy-
meaning 12 new Oyu Tolgois need to come online weights in terms of adaptation, and being able to
within that period. But they aren’t, as there are acquire and efficiently evaluate exploration projects
simply not enough new mines, much less enough that are relevant to new commodity demand trends.
large ones. The result is a gap, as BloombergNEF We’ve seen this already with respect to key Aus-
estimates appetite for refined copper will grow by tralian and North American junior equity plays that
53% by 2040, but mine supply will climb by only 16%. have been successful in the battery metals space.
We’re also approaching a supply crunch in the One of the hottest investment destinations right now
global lithium market toward the end of this decade, for junior and larger companies alike is the James Bay
as EV demand ramps up. Raw materials loom as region of Quebec, Canada. Québec represents a highly
a bottleneck, with about 300 factories that can attractive investment destination for battery metals
produce batteries for EVs being developed globally, production due to its supportive resource develop-

Figure 8: Graphic highlighting the precarious supply-demand balance in the lithium sector.
ment sector, access to skilled labour and its proximity Resources (ASX: LTR), which has risen from a low
to the emerging European and North American electric of ~A$0.02 to ~A$3.00 over the past few years. Its
vehicle markets. Canada also has free trade agree- Kathleen Valley project will be one of the world’s
ments with the United States and the European Union. largest lithium mines, supplying ~500,000 tonnes of
6% lithium oxide concentrate per year when it comes
The James Bay region hosts projects that include on stream in 2024. Crucially, it has binding offtake
Allkem’s (ASX, TSX: AKE) James Bay deposit, a mine agreements with Tesla, Ford and LG Energy Solu-
capable of producing 321,000 tonnes of spodumene tions and A$300m in project funding from Ford.
concentrate per year; and the Corvette project of
Patriot Battery Metals (ASX: PMT, TSX-V: PMET), a Conclusion
company chaired by former Pilbara Minerals (ASX:
PLS) boss, Ken Brinsden. Battery metals will continue to increase in profile due
to a combination of growing demand, constrained
One of the key themes in the junior company space supply, and geopolitical risk factors. A robust pric-
is the growing partnership with car makers. Vehicle ing environment is likely to prevail and to assist in
manufacturers are boosting their upstream investments incentivising new production.
and supply contracts in order to secure enough battery
Gavin is based in Sydney, Australia and has followed the fortunes of
metals for EV production. It used to be that junior
international resource markets for the past 25 years, covering both
mining companies would only be acquired by majors equities and commodities, as a research analyst. He believes that the most
and mid-tiers, but that’s no longer the case. As vehicle interesting resource opportunities are typically found at the smaller end of
the market, which is his exclusive area of focus.
manufacturers and battery manufacturers become
more desperate for battery metals, we could be look- The resource sector is on an inexorable growth path, driven by an ever-in-
creasing world population and modernization of living standards in emerging
ing at a monumental shift in the way juniors are valued. economies, as well as a significant shift in how we generate energy. This will
provide enormous growth in the demand for commodities of all types.
One of the stand-out performers in the battery met- Gavin is the Head of Mining & Metals with research group Independent
als space and a great example of what is possible Investment Research (IIR) and he is the Founding Director and Senior
is Western Australian lithium company, Liontown Resource Analyst with MineLife.
The author does not own any shares in the companies mentioned.
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Xcel Brands, Inc. (NASDAQ: XELB)
Q&A with
Robert D’Loren,
Chairman and CEO
Let’s start with a quick The company has successfully
overview of the company. reduced overhead costs by $13mm
in Q1 2023 and outsourced its
Xcel is a media and social com- wholesale ventures to major indus-
merce company with owned try leading players. For Halston a
brands generating approximately new partnership with GIII has been
$600MM in annual retail sales announced, expecting to drive
through livestream and other wholesale sales from $50mm to
distribution. We seek to reimagine $250mm by 2027. For Judith Ripka
shopping, entertainment, and social the ecommerce website, livestream
media as one. We are engaged in and production has been licensed
design, marketing, merchandising, to JTV a leader in the jewelry
licensing, short form video content, marketplace with over $500mm of
sales and talent management livestream sales. These transitions
through livestream television and are expected to drive top line and
Robert D’Loren
digital commerce. The company the company plans to be EBITDA
is poised to launch the first fully positive by Q4 2023. The company
integrated social commerce marketplace which has no long term debt on its balance sheet and
management believes has unicorn potential. has significant cash reserves to bolster its brands,
positioning it for high growth in the near term.
We’re about halfway through 2023, what
are some highlights of the company for Are there any industry tailwinds to
the first half of 2023? push forward the company’s goals and
objectives for 2023?
The company is poised to launch a social commerce
marketplace by 2H 2023 which is a multi-brand Billions are now up for grabs as ecommerce,
short-form video content platform with the ability livestreaming, and social media are evolving into So-
for shoppers, creators, and influencers to earn fees cial Commerce marketplaces powered by short form
based on conversions. It combines live streaming, e- video content, with an estimated 20% of all online
commerce, and social media in one seamless social sales expected to be driven by social commerce by
commerce platform which drives brand discovery. 2026. Xcel is at the forefront of this change with its
The strategic partners and brands onboarded to proprietary technology designed to drive audience
the beta testing of this marketplace have combined engagement and sales of products. Xcel has over a
customers lists of over 10 million people which will decade of expertise with 10,000 hours of live stream
drive demand for the marketplace. This marketplace programming and over $4bn in cumulative retail
is fully developed. sales via livestreaming. The company’s social com-

merce marketplace will benefit from this industry launch a social commerce driven marketplace
tailwind. and app, which will feature well-known
designer brands as well as Xcel’s brands. This
From what you can tell us, what are some marketplace will harness the power of our
of the company’s value catalysts for the unique social commerce technology, creating a
rest of 2023? dynamic and engaging platform for shoppers
and brands alike.
The three main value catalysts for the company are: •• Pursue Acquisition Opportunities: We seek to
divest and/or harvest our brands where we can
•• New Social Commerce Brands: We are currently generate significant returns for our sharehold-
developing new brands in collaboration with de- ers, with our 2022 sale of a majority stake in
signers and other social media influencers who Isaac Mizrahi generating an excess of 99%
have millions of followers and are positioned to Return on Equity.
succeed in Live Stream and Social Commerce.
We plan to launch 2-4 new brands within the For more information about Xcel Brands, please visit:
next 12 to 18 months. www.xcelbrands.co
•• Social Commerce Marketplace: We expect to

insi g hts
// By Pulak Prasad
Don’t Confuse a
Green Frog for
a Guppy
If you are an ardent fan of the National Geographic TV channel as
I am, some or all the following scenes should be familiar to you.
A
male lion roaring to assert his dominance of
the pride; female baboons with their bright
sexual swelling indicating their readiness to
mate; bees performing the waggle dance to show
the direction and distance of flowers.
All these are examples of signals, and no textbook

on evolutionary theory is complete without a lengthy
discussion on them. Signals can be both “honest”
and “dishonest”. Let’s start with a deceptive signal.
Green frogs, like most animals, have a short window

for mating. During this crucial period, males need
to defend their territories aggressively to maximize
their reproductive success. Larger males advertise
their size and dominance by making calls (croaks, if
you prefer) at a lower frequency than smaller frogs. Females have a clear preference for brighter and
more conspicuously red males. But conspicuous
What do you do if you are a small green frog? Live coloration comes at a huge cost to the males – of
without a mate and die a virgin? No sir! Some small their life. Thus, brighter colours in a guppy are an
green frogs have found a way to lower their signals’ honest signal of attractiveness to the females.
pitch, thereby communicating that they are larger
than they actually are. This dishonest signal is easy The words “honest” and “dishonest” in the discus-
to produce and imposes a very little cost on the sion above do not communicate the intent of the
signaller, the small green frog. signaller. They point to the effect of the signal on
the receiver. When a signal fools the receiver, it is
Unlike green frogs, male guppies lead a more dishonest; when the receiver understands the signal
upright life. for what it is, it is honest.
Guppies populate the mountain forest streams of The Handicap Principle

Venezuela, Trinidad, and Tobago. While the female
guppies are plain and drab looking, the male guppies While I call myself an investor, an evolutionary biolo-
are quite colourful, and no two males have the same gist would not be remiss in branding me as a “signal
colour pattern. decoder”. The only things investors can rely on to
assess a company are the signals emitted by it.

Companies relay signals in the form of press Dishonest Signals Galore
releases, media interviews, analyst meetings, annual
reports, and so much more. Among the many rea- Let us start with real life examples of dishonest
sons for performance variance among fund manag- signals, i.e., those that do not reliably communicate
ers, one that stands out for me is the their ability to the trait they are supposed to. A “dishonest” signal
decode the honest signals from the dishonest ones. does not imply that the sender is dishonest, although
Acting on a dishonest signal and ignoring an honest they might be; it simply means that the signal may
one can lead to hunger or death in the natural world, not communicate what it is supposed to.
a fate not too dissimilar to a fund’s performance.
Press Releases
But how is an investor supposed to distinguish
between an honest signal and a dishonest one? Take this example of a Unilever press release on
20th January 2015. The headline states confidently,
Let’s turn to an Israeli evolutionary biologist Amotz “Profitable growth in tougher markets”. I assume
Zahavi. In 1975, he proposed his famous handicap you agree that developed markets like the US and
principle. Zahavi’s profound observation was that Western Europe should be classified as “tough”
when signals for a particular trait are costly to because they are mature with very high competitive
produce – he rightly termed them “handicaps” – and intensity and have growth challenges. But if you
cannot be matched by someone else with a lower read the press release carefully, you will notice that
quality of that trait, they can be deemed “honest”. the sales in 2014 declined by 0.8% in developed
markets. The sales grew 5.7% in emerging markets
And herein lies Zahavi’s lesson for us investors: lend (and even this growth was lower than 2013), but I
credence to only those signals from companies that would not call emerging markets “tough”. Maybe
are costly to produce. This, however, is easier said you disagree with me and you would prefer to call
than done. emerging markets as tough. But then how does one

the management look good. But as you must know
from your own life experience, looking good is not
the same as being good. Second, these kinds of
interviews can inform us a lot about the and the
company, but not a lot that is relevant to an investor.
Investor Conferences and Roadshows
In a typical investor conference, tens, sometimes

even hundreds, of companies converge to make a
series of presentations to visiting investors. Road-
shows are a scaled-down version of these confer-
ences where the company management typically
visits investors in their offices.
They are a dishonest signal not because manage-

ments are dishonest – most of them are upright folks
doing their job – but because it does not cost any-
thing to spin the best story possible in a 45-minute
presentation to an audience that is partly brain-dead
rushing from one meeting to another.
explain a sales decline of 20% in the 4th quarter in Earnings Guidance

China?
Investors and analysts love earnings guidance from
We don’t give press releases any importance. companies. What do you think management’s
projections about the next year are based on? Re-
Management Interviews in the Media cent past? Hope for a better future? Spreadsheet
manipulation? All of the above? Earnings guidance
It was 13th June 2019. The 51-year-old visionary CEO is a dishonest signal even though the management
was giving an interview to Bloomberg’s Matt Miller may fervently believe in it. It is cheap – easy to
on the sidelines of Europe’s most prestigious digital produce and needs little effort to deliver.
and tech conference in Berlin. Its stock price had
tripled over the past three years valuing at about €18 We base our assessment of the company on its riski-
billion. ness, competitive moat, quality of financials, and on
management integrity; not on its ability to forecast
The relaxed and confident CEO looked Miller directly earnings accurately.
in the eyes and answered every question with
remarkable clarity and precision. He assured Miller Face-to-Face Meetings With Management
that Asia was the primary growth engine, its new
sales were up 160%, and they were also witnessing In mid-2015, Valeant, a pharmaceutical company run
growth in Europe. Almost exactly a year after this by a McKinsey alum called Mike Pearson, was the
interview, the CEO was arrested on charges of darling of the stock market and had a market value
criminal fraud. The company filed for insolvency on of about $90 billion. Just five years before, in 2010,
25th June 2020. its market value was only about $5 billion. Investors
loved Mike and his seemingly unbeatable strategy,
The CEO’s name? Markus Braun. The company? and marquee investors like Sequoia, ValueAct, and
Wirecard. Pershing Square were big fans.
While I have taken an extreme example, it highlights Charlie Munger, however, was having none of it. He
two common features of almost all management rightly spotted that the debt-fuelled acquisition
interviews. First, they are an exercise in making spree of Valeant was a recipe for disaster. Com-

bined with Valeant’s numerous unethical business ‘Because She Said So’
practises, he opined that Valeant would fail spec-
tacularly sooner or later. While most people show positive bias in evaluating
themselves and their kids, they can be remarkably
Why could Munger correctly predict Valeant’s candid and accurate when it comes to analysing
demise without meeting Mike Pearson when many of other people and their spouses. As an investor, we
Valeant’s board members and investors continued to have used this well-proven human quality to solicit
be passionate supporters? The reason Munger was positive and negative signals on companies. A good
right was that he knew that any face-to-face meet- reputation is a very costly signal – and hence an
ing is a dishonest signal. honest one – because building a name for oneself in
any industry consumes enormous management time
Invoking Zahavi to Interpret Signals That and effort over many years, if not decades.
Matter
Hence, before we make any investment, we spend
It looks like we are in a bit of soup here. If we can’t many months speaking to dealers, competitors,
rely on press releases, investor conferences, earn- ex-employees, suppliers, and industry experts to
ings guidance, and management meetings, what get a holistic understanding of the company and the
kinds of signals can we, as investors, trust? industry.
Let’s go back to Zahavi, whose assertion for the ***

natural world is highly relevant for the investing
world; we should only trust costly signals emitted by In the business world, the senders of the signals
companies because they are the only ones we can – the companies – are clearly winning over the
rely on. There are broadly two such signals. receivers – us, the gullible investors. No wonder our
community performs poorly compared to the broad
Past Operating and Financial Performance market. What should we long-term investors do?
The past has happened. It is there for us to see. It Ignore the green frog and heed the guppy.
can’t be denied. It is an undeniable signal of the
company’s actions and outcomes. The problem, of Pulak Prasad is the author of What I Learned About Investing from
Darwin (Columbia Business School Publishing, May 2023,) and the founder
course, is that investors seem intently focused on and CEO of Nalanda Capital, a Singapore-based firm that invests in listed
receiving signals about the future. Indian equities and manages about $5 billion primarily for US endowments,
and US and European family offices and foundations. At Nalanda, in his
quarterly letter to investors, he started drawing parallels between investing
If you have some spare time, please find the tran- concepts and evolutionary theory. Encouraged by many of his readers who
said they loved his letters, he decided to write the book What I Learned
script of any company’s quarterly conference call About Investing from Darwin. To learn more visit www.pulakprasad.com
with analysts and investors. Almost every question
from the analysts and investors alike will attempt to
predict the future of the company, industry, and in
some case, even the broader economic environment.
An honest signal is not “our margin will be 15% next

year” but “our average margin was 12% over the
last ten years”; an honest signal is not “we will have
robust free cash flows starting two years from now”
but “we have generated free cash flow only one
year in the last decade”; an honest signal is not “we
will launch six new products next year” but “in our
recent history, we have launched an average of one
product every two years”.
No stories, no projections, just facts about the past.
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insi g hts
Current State of Play

with SPAC IPOs
Q&A with Douglas Ellenoff, Member,
Ellenoff Grossman & Schole LLP
Q.- Doug, EGS has been in the to say that more companies will
SPAC market for over 20 go public again this year through
years and have observed a SPAC than a traditional IPO- so
many cycles and shifts, no, there is no truth to the rumor
where do you believe we of the demise of SPACs. What’s
are at the moment? lost by the detractors of SPACs
(deSPACs) is they perform
A.- It’s actually a very dynamic quite similarly to both IPOs and
market at the moment, which Direct Listings, their preferred
may not be obvious to many approach to going public. So,
observers. The standard narra- we have a very active SPAC-
tive in the mainstream press and quisitions market, with some
with academics is that SPACs simultaneous PIPE financings and
Douglas Ellenoff, Esq.
had this massive run-up, failed the RE-emergence of a SPAC IPO
miserably and are now winding down. It’s much market.
more nuanced than a broad strokes conclusion.
You need to appreciate that during the course of Q.- You point out that the performance
my professional career the number of traditional of SPAC business combinations, IPOs
IPOs has dropped from nearly a thousand a year and Direct Listings are all performing
to less than 50 last year. The number of brokerage poorly, is that a good defense of the SPAC
firms willing to undertake an IPO process, which industry.
is time consuming and costly, has similarly been
reduced. In contrast to the IPO market last year, A.- No, not at all. My point is that you first need to
nearly 100 private companies elected to go-public acknowledge that the SPAC mechanism is neither
through a SPAC. This year will be higher still. good nor bad, it is merely an alternative way of
taking a company public. As the SEC likes to remind
So when we are analyzing the current state of play, us “treat like alike”- well I’d like to see their analysis
let’s be clear that there are still (15+) SPAC IPOs be equally high-minded. While regulators have
that have been listed in 2023. There were mid proposed substantial changes to the SPAC program,
80s last year. Net of successfully concluded and nothing has been suggested as it relates to IPOs nor
dissolved SPACs coming into 2023, there were Direct Listings, which given their mirror images of
450 funded and listed SPACs. 150 announced their one another, I just don’t understand. Don’t get me
proposed business combination partners prior to wrong, any mechanism that responsibly transitions
the end of the year and there probably have been private companies into our public markets I’m fully in
another 50 this year- leaving 265 listed SPACs favor of, but continue to challenge the asymmetry of
looking to identify suitable targets. Given the inac- regulatory approach.
tivity in the broader capital markets, I think it’s fair

Q.- While we are on the subject of the in the US and have been applying the same exacting
SEC’s proposed rules from April of last standard to SPACs as they have to IPOs, and, most
year, when do you believe they will be importantly NOTHING has changed during g the last
considered for approval. year.
A.- Maybe never. I’m told that the SEC may be of Q.- Even though the SEC’s proposed rules
the view that it is their considered view that the may not have been approved, hasn’t the
proposed rules have already served their function in litigation in Delaware affected the SPAC
both chilling the market as well as possibly altering business?
how business combinations have been processed
since. The SEC proposed several rules that several A.- To some limited degree. For all the noise, there
commentators challenged and argued that the SEC are a few cases that are working their way through
didn’t have the proper authority to advance- particu- the Delaware court system but there’s no final
larly the elimination of the Congressionally approved determination that the plaintiff’s bar can point to
safe harbor for the use of Projections and the as a categorical win. That’s not to say that they
imposition of Gatekeeper Liability in brokerage firms haven’t had positive results like settlements or
involved in both the front-end and back-end process. decisions, that based upon the facts, have advanced
To be clear, failure to approve either of those provi- their arguments. However, the D&O carriers have
sions confirms our historic view that absent these generally taken comfort. The Delaware court found
rules, SPACs and targets may continue to use the in favor of the dual class voting issue and that issue
projections pursuant to the M&A safe harbor and seems to have resolved itself for the industry. There
member firms can’t be held responsible for those are certain claims surrounding structural conflicts of
numbers of many other issues. While I’d continue interest of Board Members and the Sponsors be-
to argue that is very healthy, I’m also supportive of cause of the founder shares that will continue to be
professionals applying the same standard of care determined on a case-by-case basis. Going forward
on a voluntary basis that is present in an IPO. With though, Delaware has sent a message to the industry
respect to other aspects of the proposals I’d argue and it just won’t be the jurisdiction of choice.
that the SEC has always had the authority to force
additional/clearer disclosure and that they haven’t Q.- I think you’d agree that even if the SPAC
because it was never a legitimate criticism of the industry resumes, it won’t be as frothy as
program since the SEC has been actively engaged it was in 2021?
in the program for 20 years and given all of their
comments during all these years, the law firms are A.- Unquestionably, I’d not only be surprised but
the same large firms that process most of the IPOs concerned if it did. Although regulators aren’t

concerned, I’m dismayed by the significant loss of generalized market appetite for risk is low. In either
sponsor capital over the last couple of years in ad- case, those investors that want their capital returned
dition to losses suffered by the public in spacs, IPOs have that automatic right. It’s a foundational prin-
and direct listings. I’d like to see a slow and steady ciple of SPACs and unique to this vehicle. It should
re-emergence of the industry, with broad positive be lauded rather than used as a metric for the failure
results for each constituent party. of SPACs. Unfortunately, for sponsors the higher the
redemption rate the less likely the proposed deal is
Q.- We observe with the exception of likely to get funded. This is their risk and a risk to
the Ares SPAC, that the IPOs seem to be any proposed business combination being consum-
significantly smaller than the average mated.
SPACs from the last several years.
Douglas S. Ellenoff, a member of Ellenoff Grossman & Schole LLP since
its founding in 1992, is a corporate and securities attorney with a focus in
A.- The observation is a correct one, for the most business transactions, mergers and acquisitions and corporate financings.
part the trend is $100mm or less. This makes sense Mr. Ellenoff has represented public companies in connection with their
initial public offerings, secondary public offerings, regulatory compliance,
since smaller spacs have the ability to pursue a much as well as, strategic initiatives and general corporate governance matters.
larger universe of potential targets. Additionally, In the last several years, he has been involved at various stages in
numerous SPACs, SPAC M&A transactions, registered public offerings, and
smaller SPACs require less sponsor At Risk Capital private placements into public companies, representing either the issuers of
investment. those securities or the registered broker-dealers acting as placement agent.
The Firm represents nearly 70 public companies with respect to their ongo-
Q.- In the last year the level of investor ing 34 Act reporting responsibilities and general corporate matters. He also
redemptions seems to have increased provides counsel with regard to their respective ongoing (SEC, AMEX and
NASD) regulatory compliance. Mr. Ellenoff is routinely requested to be a
substantially? panelist and presenter at industry conferences.
Mr. Ellenoff has been ranked by Chambers and Partners USA as a Notable
A.- Yes, this is a current market reality. In many ways Practitioner: “Douglas Ellenoff is a leading figure in equity capital markets,
this is healthy, although amusingly reported as nega- garnering fame for his ability to take blank-check companies public. He
is very knowledgeable about SPACs as he has done this for a long time.”
tive by the press. All high redemptions mean is that
the investing public either doesn’t like a deal or that

insi g hts
// By Erik Nelson
Not All Broker/

Dealers Are the
Same
It comes up time and time again in conversations with clients
and prospective clients; they have spoken with countless broker/
dealers and investments banks, and just can’t seem to find one that
provides the services they need or is interested in their company.
I
t is a common issue, trying to find a broker/dealer
or investment bank that meets the needs of your
company. Your company needs additional capital
to grow and expand, yet finding an investment bank
to raise those funds is proving harder than expected.
This is an important task, and those companies that
can successfully navigate this process are able to
secure that capital they need to fuel their growth
and expansion.
To m successfully navigate this issue, it is important

to understand the nature of the brokerage industry.
The Financial Industry Regulatory Authority (“FIN-
RA”), which is charged with regulating the brokerage
industry provides an annual industry snapshot. The
2022 Industry Snapshot provides some interesting
information about the nature of the industry.
The most recent data shows that at the end of 2021

there were 3,394 brokerage firms registered with
FINRA. FINRA primarily groups firms into three
(3) categories based on their size, large, medium
and small. Large firms are those with 500 or more
registered representatives. Firms with 151 to 499
registered representatives are considered to be medium-sized, and 3,048 considered to be small
medium sized firms; and those with 150 or less firms. This is important, as firms tend to focus on
registered representatives are considered to be clients who are relative to their size. The large firms
small sized firms. According to FINRA, at the end pursue the larger projects, medium sized firms focus
of 2021, there were 161 broker/dealers considered on medium sized projects, and smaller firms focus on
to be large sized firms, 185 firms considered to be smaller capital raising projects.

Registered firms are required to receive FINRA ap- find a broker/dealer or investment bank to raise the
proval for the various lines of business they engage capital it needs? It is important to remember that
in. This complicates things. Not every registered the brokerage and investment banking industry is
firm is approved for every line of business. This one of personal relationships. Who you know is
is primarily a function of the personnel they have important. And having someone who can help get
available. In order to operate in a particular business your company reviewed by the right people is even
segment, a broker/dealer must have appropriately more important. The ability to receive a personal
licensed personnel. As a result, most brokerage introduction cannot be underestimated. The various
firms only engage in a limited number of, or niche conferences like Planet MicroCap are an excellent
segments of the securities industry. In the small way to get in front of the investment banks that are
firm category, the 2021 Industry Snapshot reports seeking to raise capital.
lists approximately 1,381 firms that are active in the
Capital Markets and Investment Banking Services. Being well prepared as a company is key. Time
There are approximately 192 firms that provide retail and time again, we have looked at companies we
private placement services; and approximately 356 thought had excellent prospects; only to find they
are firms listed as providing trading and execution lacked the preparation necessary for an investment
services. The point of all this is that it can be very bank to work with them. For too many companies,
difficult to find a brokerage firm or investment bank starting the process of getting prepared came
to service the needs of your company. It can be to late, and they were not able to complete it in
somewhat like searching for a needle in a haystack. time before they ran out of money. In many cases
we have seen the market change by the time a
Moreover, it is important to understand that many company was prepared to start the capital raising
firms develop specialization. There are firms that process. Back in the mid-2000’s there were many
specialize in servicing retail customers, discount ethanol companies that thought they had an unlim-
brokerage firms, cross border trading, as well as ited amount of time to raise money, only to find out
merger and acquisitions. Within the investment that the market had soured on their industry and the
banking space there are many brokerage firms that window of opportunity for them to raise capital had
specialize in finding privately held companies and closed.
private equity firms to buy those companies. Once,
I even met with an investment bank that specialized I truly believe the companies that take the time to
in arranging financing for companies whose facilities become well prepared and understand the capital
were damaged by natural disasters. Talk about a raising process will be successful at raising capital. It
niche line of business. Overall, there is a tendency is also important to understand that not all broker/
to focus on those industries the investment bankers dealers or investment banks are the same, and why
understand the best, and have had success in. they are different.
All that being said, I think the capital raising process Erik Nelson is the President of Coral Capital Advisors, LLC. www.coral-
capital.com and www.dtc.coralcapital.com, an independent consulting
and the ability of companies to raise growth capital and advisory firm focused on companies and participants in the lower and
here in the United States is the best it has been in middle markets. Coral Capital Advisors specializes in DTC Eligibility services,
due diligence, and corporate restructurings. Coral Capital Advisors.
decades. The United States continues to have the provides services to Investment Banks, Private Equity Funds, investors,
most liquid and well-developed capital markets in and both privately held and publicly traded companies, as well as various
stakeholders in those organizations. This has included international public
the world. I believe the regulatory changes starting companies with operations on three (3) continents to smaller privately held
with the JOBS Act have opened the capital markets domestic companies. Our experience in the areas of corporate advisory,
due diligence reviews, and regulatory compliance allows for a cost
for US companies. I believe that subsequent regula- effective and efficient solution to the issues at hand. Please feel free to
tory changes have forced broker/dealers and invest- visit our web site at: www.coralcapital.com or call our offices via. telephone
ment banks to diversify in order to survive. This has # (404)-816-9220 to see how we may be of assistance.
resulted in better more well-rounded businesses,

more able to serve the needs of their clients. This
has tremendously increased the opportunities for
companies seeking to raise capital.
How does a company that is seeking to raise capital


insi g hts
// By Lance Jon Kimmel, Esq.
CYBERSECURITY
DISCLOSURE IS JUST
A CLICK AWAY
On July 26, 2023, the Securities and Exchange Commission adopted
long-awaited cybersecurity disclosure rules for all reporting
companies. While the rules will phase in by the end of the year, the
most immediate impact of their adoption is the need for companies
to begin planning well in advance, most likely with the help of
cybersecurity consultants and counsel.
Material Cybersecurity Incidents Must Be ment should proceed with all deliberate speed to
Reported Promptly determine the materiality of the incident in order be
consistent with acting in good faith and in compli-
R
eporting companies must now disclose in a ance with the new rule.
Current Report on Form 8-K, under Item 1.05,
“any cybersecurity incident that they experi- In rare circumstances, pursuant to a national security
ence that is determined to be material” and describe exception, if the U.S. Attorney General determines
“material aspects” of the reported incident, including that such a disclosure “poses a substantial risk to
a description of its nature, scope, timing and impact national security or public safety,” companies may
on the company, within four business days after delay providing the Form 8-K disclosure until such
determining a cybersecurity incident is material. period determined by the Attorney General, up to
One thing of note is that the requirement to file a 30 days, which can be extended for additional 30
Form 8-K is not within four business days following days (or even longer) if the Attorney General deter-
the incident itself, but rather within four business mines that disclosure would pose a continuing risk.
days following the determination that the incident is
material. That is an important distinction. To get ready for this new rule, management and
directors of reporting companies should begin early
Nonetheless, a determination of the materiality of assessment of their existing disclosure controls
such an incident needs to be done “without unrea- and procedures to ensure that information about
sonable delay . . . consistent with the standard set cybersecurity incidents are properly and promptly
out in the cases addressing materiality in the securi- escalated to management, the Board of Directors
ties laws”. While not quite creating a safe harbor, in and any Board committees with cybersecurity
the release adopting the new rules the SEC noted oversight responsibility. This “reporting up” the
that “adhering to normal internal practices and chain of command is essential to ensure that timely
disclosure controls and procedures will suffice to analysis of the materiality of any cybersecurity
demonstrate good faith compliance”. Therefore, incident and the possible need to file a Form 8-K is
following any cybersecurity incident, manage- made. Companies may also wish to arrange having

appropriate industry advisors “on call” to assist . . . the final rules do require
in making a materiality determination regarding a
particular cybersecurity incident. disclosure of the cybersecurity
Cybersecurity Risk Management, Strategy
expertise for those members
and Governance Must Be Disclosed of management responsible
Annually
for assessing and managing
Pursuant to Regulation S-K, Item 106(b), reporting
companies must now describe annually in their An-
cybersecurity risks. It is time for
nual Report on Form 10-K their processes, if any, for them to get educated.
assessing, identifying and managing material risks
from cybersecurity threats, as well as the material
effects or reasonably likely material effects of risks
from cybersecurity threats and previous cybersecu-
rity incidents. the proposed rule that would have required 10-K
disclosure about specific Board expertise regarding
Item 106 also requires a description of the Board cybersecurity matters. On the other hand, the final
of Directors’ oversight of risks from cybersecurity rules do require disclosure of the cybersecurity
threats and management’s role and expertise in expertise for those members of management re-
assessing and managing material risks from cyber- sponsible for assessing and managing cybersecurity
security threats. This is a change, and relaxation, of risks. It is time for them to get educated.

It goes without saying that and develop tools at both the Board and manage-
ment levels for dealing with actual incidents.
reporting companies will need
Effectiveness
to get an early handle on
their existing cybersecurity The final rules will become effective 30 days after
the date of publication in the Federal Register. All
processes and make any reporting companies, including smaller reporting
companies, that file their Form 10-K for fiscal years
changes that are appropriate ending on or after December 15, 2023 must comply
to their circumstances. with the final rules in their next 10-K. Form 8-Ks
reporting a material cybersecurity incident will be
required beginning on the later of (i) December 18,
2023 or (ii) 90 days after the date of publication
of the final rules in the Federal Register; smaller
Reporting companies must describe annually in reporting companies will have an additional 180
their Form 10-K their processes, if any, for assessing, days to comply with the 8-K reporting requirement.
identifying and managing material risks from cyber- The new rules apply equally to, and as of the same
security threats “in sufficient detail for a reasonable effective dates for, foreign private issuers who use
investor to understand those processes”. Companies Forms 6-K and 20-F.
must also describe if the risks “have materially
affected or are reasonably likely to materially affect” Lance Jon Kimmel is the founding and managing partner of SEC
Law Firm, which represents growth companies around the globe, the
the company, “including its business strategy, results investors and funds who capitalize them, and the regulated profession-
of operations or financial condition and if so, how.” als who serve them. Mr. Kimmel’s practice focuses on public and private
securities offerings, SEC reporting, corporate governance, mergers and
acquisitions, representation of companies before the SEC and stock
Note that the final rule’s requirement to disclose exchanges, and SRO compliance for investment bankers, PCAOB audit
firms and other service providers. He handles capital raising at every
“processes” is not the same thing as the SEC level, from seed capital to initial public offerings, from SPACs to PIPEs,
proposal, which would have mandated disclosure of from equity credit lines to bank credit facilities. Mr. Kimmel is actively
involved in alternative public offering strategies, including SPACs for
the company’s cybersecurity “policies and proce- domestic companies, reverse mergers for Chinese companies going
dures”. From the lively debate among the commis- public in the United States, and direct public offerings.
sioners at the time of adoption of the new rules, it
The firm’s clients reflect the spectrum of 21st century business, from
appears that the commissioners regard “processes” robotics to medical devices, from biotechnology to green technology,
as a broader and less defined concept whereas from financial services to the entertainment industry, from consumer
goods to AI.
“procedures” was thought to be much more specific.
In the end, a majority of the commissioners thought As one of the most frequently quoted securities attorneys in America,
Mr. Kimmel has regularly contributed his insights to NPR Marketplace,
that the requirement to disclose specific cyberse- Dow Jones, Sky Radio, the Los Angeles Times and Bloomberg Forum,
curity procedures could have resulted in companies among other mainstream and financial broadcast and print media
around the world. He has written numerous articles and speaks
revealing sensitive information that hackers could often on current legal issues in the corporate finance and corporate
use to find flaws in a company’s cybersecurity governance arenas in the U.S., the U.K. and China. Mr. Kimmel is a mem-
systems. ber of the California and New York Bars, a member of the American Bar
Association Securities Regulation Committee and an approved sponsor
of the OTCQX Market, and has given testimony to the SEC’s Advisory
It goes without saying that reporting companies Committee on Smaller Public Companies.
will need to get an early handle on their existing SEC Law Firm
cybersecurity processes and make any changes that 11693 San Vicente Boulevard,
Suite 357 Los Angeles, California 9 0 0 4 9
are appropriate to their circumstances. They may T e l : ( 3 1 0 ) 557-3059
wish to consider retaining outside industry experts www.seclawfirm.com
email: lkimmel@seclawfirm.com
early on, well before the next 10-K reporting season,
to help train directors and officers in cybersecurity
matters, including on incident response, assess their
current processes of dealing with potential cyberse-
curity threats, ensure that there is appropriate and
meaningful Board oversight of cybersecurity risks,

Pioneer Power Solutions, Inc. (NASDAQ: PPSI)
Q&A with
Nathan Mazurek,
Chairman and CEO
Let’s start with a quick •• The e-Boost system is an e
overview of the company. -Mobility offering to charge a
broad range of EVs such as EV
Pioneer Power Solutions, Inc. is a shuttle buses, delivery vehicles,
leader in the design, manufacture, electric warehouse equipment
integration, service and distribu- and many other types of EVs as
tion of electric power systems, transportation companies, fleet
distributed energy resources, managers, and other enterprises
power generation equipment and recognize the ease and cost
mobile EV charging solutions for benefit of charging at multiple
applications in the utility, industrial locations without investing in
and commercial markets. fixed infrastructure. We are con-
fident that increased adoption
We’re about half-way for these types of deployments
through 2023, what are will lead to additional awareness,
some highlights for the Nathan Mazurek resulting in more use cases and
company for the first half greater sales.
of 2023?
The company reaffirmed organic revenue growth Are there any industry tailwinds to push
guidance of 50% for the full year of 2023 and at this forward some of the company’s goals
point any new orders are filling in backlog for Q1/Q2 and objectives for 2023?
of 2024.
•• Massive movement towards electrification of all
Two main products: E-bloc and e-Boost: types of vehicles to reduce carbon emissions.
•• Federal, state and local mandates to electrify
•• Our innovative and highly customizable E-Bloc their fleets, buses etc.
solution continues to expand its customer base •• Explosive growth of electric vehicle ownership
and new use-cases. Customers come to Pioneer without adequate charging infrastructure in
Power with unique challenges and energy needs, place.
and we can utilize E-Bloc’s modular design to •• Continued growth of distributed generation as
quickly design, deliver and support specialized, large users cannot get the power they need
complex, and large electrical applications. E- and anticipate needing from their utilities
Bloc’s design also allows us to seamlessly control •• From what you can tell us, what are some of the
multiple sources of power, including green company’s value catalysts for the rest of 2023?
energy especially from solar customers. •• Additional customer wins with both the E-bloc

and e-Boost product lines market expectation. Prime example- energy storage
•• Further penetration within existing large cus- being offered in conjunction with E-Bloc and E-
tomers and industry use-cases Boost- will battery solutions to add additional power
•• Broader market adoption with more use-cases source on E-Bloc side and a zero emissions option
•• Full year organic revenue growth of 50% vs. on the E-Boost side.
2022 with full year EPS and positive FCF
•• No debt. ~$11 mil in cash on the balance sheet. To learn more about Pioneer, please visit its website
at www.pioneerpowersolutions.com.
Constantly broadening both solutions to meet

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AS I A CO R N ER
// By Leslie Richardson
Hong Kong
Hopeful to
Breakout of
IPO Slump
The expected rebound in Hong Kong’s IPO market following the
pandemic has been slow to materialize as the city fell to ninth place
in global IPO rankings in the first half of 2023 and funds raised from
new share listings dropped to a two-decade low.
A
total of 30 companies raised HK$17 billion conditions to improve, investor sentiment is gradu-
(US$2.2 billion) from January to June ally turning around. By July, appetite for new listings
compared to 27 listing that raised HK$19.7 showed signs of a rebound as New Media Lab’s
billion (US$2.5 billion) in 2022. Expectations for the retail tranche was 40 times oversubscribed, making
second half of the year are more optimistic with PwC it the highest subscribed initial public offering in
Hong Kong predicting around 100 companies will list Hong Kong this year. The digital media flagship
in the city for the full year 2023, raising total funds group priced its stock at the upper end of its range
between US$19.1 billion and US$21.7 billion. Market to raise HK$101 million. New Media Lab will use the
optimism for a comeback is further supported by a funds to expand its digital media presence in the
stable IPO pipeline and new listing rules that open online media industry.
the door for technology start-ups.
IPOs on the horizon include Chinese e-commerce
The biggest IPO in Hong Kong, and eighth largest giant ‘s JD.com spin offs Jingdong Property and
worldwide in the first half of 2023, was from China’s Jingdong Industrials which could each raise about
fourth largest private baijiu maker, ZJLD, which US$700m–$1bn. Jingdong Property is the asset
raised US$675 million in April. Baijiu, a traditional management and operation arm of JD.com and
Chinese liquor with a 5,000-year history, is the exclusively handles the development, operation, and
world’s most consumed liquor. ZJLD is looking to management of warehousing and logistics facilities
gain market share in a highly competitive environ- for the company. Jingdong Industrials is an industrial
ment by expanding its premium baijiu nationally. The supply chain technology and service provider that
market for the fiery spirit is forecast to grow from offers digital solutions to help customers achieve
$112 billion in 2022 to $153 billion in 2032, according supply guarantee, cost reduction, and efficiency
to Prudour Private Ltd, primarily due to a growing improvement.
demand for high-end Baijiu combined with the
liquor’s popularity spreading outside of China. China’s largest express delivery company, SF Hold-
ing, plans to raise up to US$2-3 billion in a second
While volatile markets have swayed many compa- listing in Hong Kong which would make it one of the
nies to delay their IPO plans as they wait for market largest listings in the SARS this year. The Shenzhen-

listed company currently has a market value of markets and strengthen its position as an interna-
UD$33 billion. Lalatech, an operator of on-demand tional financial centre. In March, the HKEX gave a
logistics and delivery, has filed its application to list boost to its technology sector with the inclusion of
in Hong Kong. While the company did not specify Chapter 18C to its listing rules. The new rules apply
how much it intends to raise, expectations are that it to applicants in five hi-tech sectors: cloud computing
will be about US$1bn. and artificial intelligence (AI), advanced hardware
including electric and autonomous vehicles, semi-
Chinese chip startup Shanghai Biren Intelligent conductors and the metaverse, along with new
Technology Co. is considering an IPO in Hong Kong materials, new energy and food and agriculture
this year, according to Bloomberg. The company technologies. Under Chapter 18C, companies with
has not stated how much it intends to raise but it is at least HK$10 billion (US$1.3 billion) are able to list,
already considered to have reached Unicorn status even if they have yet to earn a single dollar in sales.
as it is capitalizing on domestic demand due to ex- For companies with at least HK$250 million in sales
port controls on Nvidia’s leading-edge GPUs. Biren in the financial year before their IPOs, the minimum
specializes in chips for display cards, cloud comput- valuation was slashed to HK$6 billion from HK$8
ing and AI systems. The company is supported by billion. While most companies listing under the new
the Chinese government’s effort to accelerate the rules are expected to come from mainland Chinese
development of its domestic semiconductor industry. tech firms, the new listing regime is also likely to
attract companies from Southeast Asia and the
Although the overall market is struggling under Middle East, both regions with their own hotbeds of
geopolitical and economic pressures, the HKEX innovative tech companies.
achieved several milestones that bolster its capital

Indonesia is experiencing batteries in electric vehicles, while copper is also a
key material in solar panels and cobalt is an essential
a boom in IPOs, ranking part of the magnets used in wind turbines. On June
19th, Amman Mineral International, the country’s
the fourth largest market second largest copper and gold producer, listed
for IPOs in terms of capital on the Indonesia Stock Exchange. The company
raised over $700 million, making it the country’s
raised this year, according biggest IPO in 2023. Trimegah Bangun Persada, a
nickel mining and refining company under the local
to Dealogic. The country’s conglomerate Harita Group, is the second-biggest
rise in IPOs is being fuelled by fundraiser for 2023, raising $673 million. The com-
pany produces nickel-cobalt mixed hydroxide and
the government privatising other materials for EV batteries.
some state-owned enterprises As the world’s largest offshore renminbi hub,

combined with its move to Hong Kong has long played a pivotal role in the
internationalization of the RMB. Further advancing
capitalize on its rich mineral the currency’s globalization, on June 19, the HKEx
launched the much-anticipated HKD-RMB Dual Coun-
deposits essential for global ter Model to the secondary market for trading and
decarbonization measures. settlement purposes. The scheme allows investors
in Hong Kong to trade stocks concurrently in both
Hong Kong dollar and the yuan as the shares are
fungible. The dual trading counter injects liquidity
and vitality to the equity market. It is also expected
to draw more global investors and boost trading
The HKEX is also accelerating its international reach on Hong Kong’s stock market. The initial batch of
as it looks to attract more foreign listings. Following 24 companies, including AIA Group, Bank of China
the February signing of a Memorandum of Under- (Hong Kong), Hang Seng Bank, Tencent Holdings,
standing with Saudia Arabia to cooperate with cross- Geely Automobile Holdings, Xiaomi Corp, Alibaba
listings, the HKEX and the Indonesia Stock Exchange Group Holding and HKEX, make up about 40% of the
(IDX) signed a Memorandum of Understanding at the average daily trading volume in the Hong Kong.
end of July. The exchanges hope to develop new
capital market products, including exchange-traded Ms. Leslie Richardson has over 20 years of investment management and equity
research experience. She operates a boutique investor relations firm in Hong
funds and derivatives; enable cross-border listings; Kong for Asian companies listed in the U.S. and Hong Kong. She also assists
and promote sustainable finance across the region. private companies develop investment material and build an investor following
in preparation for a public listing. Additionally, she is the Asian Correspondent
The MoU also enables Indonesia greater access to for Micro-Cap Review, www.microcapreview.com, a financial magazine focused
Chinese issuers and the related international invest- on mirco-cap companies. Previously, she worked for CCG Elite in assisting
Asian-based, U.S. listed clients formulate key communication strategies. Ms.
ment base. Richardson began her investment career at U.S. Trust Company then went on
to join Odyssey Advisors as a portfolio manager and Director of Research. Ms.
Richardson specialized in high growth sectors such as bio-tech, alternative
Indonesia is experiencing a boom in IPOs, ranking energy, IT and telecommunications. She earned her M.B.A. from the University
the fourth largest market for IPOs in terms of capital of Southern California. Ms. Richardson is based in Hong Kong. www.elite-ir.com.
raised this year, according to Dealogic. The coun-
try’s rise in IPOs is being fuelled by the government
privatising some state-owned enterprises combined
with its move to capitalize on its rich mineral depos-
its essential for global decarbonization measures.
Southeast Asia’s largest economy is looking to
become a major player in the global electric vehicle
(EV) supply chain by tapping its nickel reserves, the
largest in the world, and huge deposits of cobalt
and copper. All three metals are used to make the
Leslie Richardson does not own any of the stocks mentioned in this article.
insi g hts
// By Robert Cote, Esq.
Making The IP
Capital Model
The Model Of The
Future
In the world of finance, innovation is the driving force behind the
development of new investment models.
C
OTE Capital’s Intellectual Property (IP) Capital investments.
model is one such groundbreaking approach
that has been gaining traction in recent years. Reducing Risk through Diversification
This article will discuss the key reasons why the IP
Capital model is the investment model of the future, By including intellectual property in investment
and how it is transforming the landscape of asset portfolios, COTE Capital’s IP Capital model adds a
management and wealth creation. new dimension of diversification. This diversification
helps to spread risk across a broader range of as-
Recognition of Intangible Assets sets, reducing the potential impact of market volatil-
ity on individual investments. As a result, investors
Traditional investment models primarily focus on can enjoy the benefits of a more stable and resilient
tangible assets like real estate, stocks, and bonds. portfolio.
The IP Capital model, on the other hand, recognizes
the value of intangible assets, such as patents, Aligning with Global IP Trends
trademarks, copyrights, and trade secrets. By
incorporating these often-ignored assets into invest- The importance of intellectual property is increas-
ment portfolios, COTE Capital is tapping into a vast ingly being recognized on a global scale, with
pool of untapped wealth, creating new avenues for governments and international organizations
growth and value creation. promoting the development and protection of IP
assets. This global trend towards the prioritization of
Capitalizing on Innovation IP rights supports the growth and relevance of COTE
Capital’s IP Capital model, ensuring that it remains a
The IP Capital model allows investors to capitalize on vital component of the investment landscape in the
the immense value generated by innovation. With future.
the rapid pace of technological advancements and
a growing emphasis on research and development, Generating Competitive Advantage
intellectual property has become a critical driver of
economic growth. By investing in companies with Investing in companies with robust IP portfolios can
strong IP portfolios, COTE Capital enables inves- give investors a competitive edge. Firms with strong
tors to gain exposure to the most innovative and IP assets are often better positioned to defend their
forward-thinking firms, thereby future-proofing their market share, maintain pricing power, and drive

innovation. By identifying and investing in such intangible assets and capitalizing on the power of
companies, the IP Capital model enables investors to innovation. This unique approach offers investors
gain a strategic advantage over their competitors. the opportunity to diversify their portfolios, reduce
risk, and align with global trends, while also gaining
ESG Integration a competitive advantage and contributing to a more
sustainable future. As a result, the IP Capital model
COTE Capital’s IP Capital model also emphasizes is well-positioned to be the investment model of the
the integration of environmental, social, and gov- future.
ernance (ESG) factors into the investment process.
By considering ESG criteria alongside IP assets, Website: www.cotecapital.com
Email: rcote@cotecapital.com
the model aligns with the growing importance of
responsible investing and allows investors to make Bio: Robert Cote, founder and CEO of Cote Capital (www.cotecapital.com),
is one of the world’s leading intellectual property (IP) lawyers and investors.
more informed, ethical, and sustainable investment He has 25 years of experience in identifying, valuing, and investing in the
decisions. breakthrough IP of technology companies that built new industries in the
United States. He has experienced firsthand the challenges technology
companies face in funding the growth of their businesses as they enter
Conclusion commercial markets. He developed the IP Capital model as a better way of
investing in and scaling a new generation of these companies.
COTE Capital’s IP Capital model is revolutionizing

the world of investment by recognizing the value of

insi g hts
// By Yale Bock, CFA
Finding Hidden Gems

in MicroCap Stocks
Shifting the Odds In Your Favor
Today, nearly 50 million visitors a year come to Las Vegas to enjoy

the city, which obviously includes gambling.
I
t is a city built on a tiny statistical advantage in the researching, analyzing, and investing in microcap
games of chance offered by the casinos. Small companies. The same way casinos hold a small
edges in the risk reward outcomes moves millions advantage in games of chance, this article describes
of dollars into the pockets of the shareholders of actions investors can take to strengthen their invest-
casinos. Investors give themselves a better prob- ment process and shift their probability of success
ability of success by having a thoughtful process of for investing in microcap companies.

Let’s start by understanding the challenges of of shares and what voting rights each class of shares
active investing. According to a study by Hendrik is entitled to. With multiple classes of shares, you will
Bessembinder of the W.P. Carey School of Business find situations where the founder might own 5-10%
at Arizona State University, from 1990-2020, 2.4% of the company but has 50.01% voting control. I wan
of all the companies in the stock marke accounted situations where the management team has a history
for 75.7 trillion dollars of the wealth created. Es- of creating great wealth and high ownership. If they
sentially, one out of 40 companies do the heavy have voting control you can live with it, but the first
lifting of generating great returns. In the microcap two criteria are mandatory. As part of the ownership
area, the probability of finding one of these entities investigation, yearly issuance of stock options needs
is even smaller, probably much more so. We know to be analyzed. A good general rule is that issuance
we are up against a difficult task. If you are privately of 1-2% per year is acceptable. As a company moves
investing in microcap companies, a percentage of up towards 5% per year it becomes more of a concern.
to 10% of your capital is probably reasonable. Still, Anything over 5% per year is a problem. Remember,
investors come to the microcap area because it is you don’t ge those options and when exercised,
possible to find situations where the returns can be they reduce your ownership piece of the company.
substantial, and in some cases, life changing. On a yearly basis, constant dilution can really detract
from returns.
The first recommendation is to invest in industries
and companies where you are excited about the The third area to research is analyzing the balance
prospects. One way to do this is to eliminate indus- sheet of the company, specifically the capital
tries you have no interest in. Personally, I rarely look structure. Before diving into the liability section,
at the automobile, airline, cannabis, biotechnology, look a the total number of shares outstanding. In
early-stage pharmaceuticals, leasing, and many the microcap area, it is often the case that the total
manufacturing entities. Industrial entities are prob- number of shares outstanding is not symmetrical
ably not going to get much of a look, either. I means with the size of the business. Typically, it involves
you say no to 90-95% of most companies. The a total number of shares outstanding of over 100
filtering is importan because the largest microcap million or more, when the revenue (top line) of the
conferences like the Planet Microcap Showcase, LD business is 20 million or less. In these circumstances,
Micro, or investment banking conferences often unless the business sees tremendous year over year
have hundreds of issuers presenting. Online confer- growth for a long period of time, equity holders are
ences will have smaller numbers, closer to 10-20 burdened with too much supply of equity. There are
entities, but narrow your search to only those you high profile investors who believe you should look
are excited about. A healthy number is 10-15 compa- for situations where the number of shares outstand-
nies you really want to pursue with a more detailed ing is less than 10 million. The scarcity of the number
examination. of shares available is what you are concerned about,
especially relative to the size of the business.
The second piece of advice is to go to each web
site of the company you are researching and learn On the liability side, it is important to know the debt
about the individual members of both the board of profile of the company. How much debt does the
directors and the management team. You are look- company have? How many tranches of debt exist?
ing at the backgrounds of these individuals for proof What is the interest rate on each tranche? When
they have a historical track record of creating value does the most immediate piece mature? Are there
for their shareholders. You will find a vast majority credit lines and how much has been drawn? When
of microcap companies have executives which have do the lines mature? Most importantly, what do the
not proven they are wealth generators. While you interest and asset coverage ratios look like?
are researching the board and executive team, you
should find out what percentage of the economic As far as assets are concerned, value investors
and voting ownership of the company these individ- are always looking for situations where there is
uals possess. You can go to the proxy statement to a great deal of cash relative to the market value
learn this information. I look for percentages of over of the company. I is very rare, but there are some
25% or more, and higher is better. As part of this companies with more cash on the balance shee than
research, you should discover if there is a dual class the current stock price. These are occasions where

hundred million and headed towards five hundred
or a billion dollars. From my perspective, I want to
see businesses with a top line of at least 50 million
dollars or close to it. Anything less than twenty-five
million is going to be relatively small versus what is
needed to overcome the institutional barrier. Inter-
esting situations can be discovered where a business
might be at twenty million on the top line, and they
are involved with an acquisition which would double
or triple the top line and immediately improve the
cash generation capabilities. Clearly, this depends on
the specific situation and the ability to execute and
integrate.
I also am looking at 2,3-, and 5-year comparisons

of the income statement to look at top line growth
and margins. Clearly, higher growth rates, improving
margins (shoot for at least 10% on the operating
margin level), and operations which are consistently
improving over time is the ideal situation. Now, let’s
move to cash flow and capital expenditures.
I want companies that are either generating cash,

or are systematically moving towards operating
cash flow. I also don’t want to see a lot of capital
a closer look is necessary, but it is often the case expenditure so you will potentially own a high free
that the operations are burning cash. Comparing the cash flow generating entity. Comparing the balance
quarterly and yearly burn rate to the existing cash sheet to the cash flow statement gives you an idea
level gives you an idea of the time horizon before of how the working capital, cash conversion, and
more cash potentially needs to be raised. You timing of the receivables and payables is taking
often see this with early-stage biotechnology and place. Many investors use adjusted EBITDA, EBITDA,
pharmaceutical companies. One other asset to pay and EBIT as proxies for cash flow from operations. It
attention to is any tax loss carryforwards and those is important to look at capital expenditure as well. I
amounts. Larger is better, and combined with a cash typically avoid anything that is capital intensive, but
generating business, these assets are strategic and each company is unique in this regard.
potentially valuable for an extended period.
Finally, every listed company on a public exchange
Fifth, let’s turn to existing operations, the income is trying to improve their business. Those which
statement, and the size of the business. Understand- involve a big change, like a management replace-
ing the unit economics, business model, competitive ment, business model overhaul, spinoff, exchange or
advantages, and growth prospects of the business sale of a division, or a stock buyback, are potentially
is the highest priority for any investor. Those areas worth investigating further. If you incorporate all of
are directly related to the integrity, credibility, reli- these points into your investment process, it will help
ability, and focus of the management team. Strong improve your chances of finding a hidden gem in the
management teams tell you the plan, and execute microcap area. Like the casino in Las Vegas, improv-
it. There is consistency over a long period of time, ing your risk reward is potentially a tremendous
and the attention is on their core business. The main source of value.
business should have one or two segments. Any
Yale Bock, CFA, is the owner and operator of Y H & C Investments, a Reg-
more and there is not enough focus.
istered Investment Advisor (RIA) based in Las Vegas, NV. He was recently
selected to participate in the ValueVail investment event in Vail, CO. He
For a company to begin to attract institutional frequently has been asked for thoughts in high profile publications like USA
Today, US News and World Report, the Street.com, and Fox Business News.
sponsorship, the top line needs to be close to a He can be reached a information@y-hc.com or www.y-hc.com.

www.SNN.Network
www.PlanetMicroCap.com microcap
Planet MicroCap Review 99
review magazine 27
insi g hts
// By Richard Revelins
Awesome Aussies-
Rarified Air
Are Rare Earths positioned to become the next hot commodity?
Yttrium, Neodymium, Terbium, Lanthanum, Dyspro- $7 billion and is projected to reach $15.5 billion by
sium, Cerium, Praseodymium, Gadolinium………..You 2030, growing at 9.1% CAGR from 2021 to 2030. To
can be excused for thinking someone is trying to put this into perspective the lithium market for 2022
secure a critical element to maintain the warp core was also estimated at $7 billion. The lithium market
stability of the US Starship Enterprise. For the “Trek- will probably grow at a more rapid rate than that
kies” amongst us, of course well all know it is the of Rare Earths over the next few years, because
dilithium crystals that perform that function. Dilithium of the number of deposits already discovered and
is a molecule composed of two covalently bound the advanced nature of many emerging new lithium
lithium atoms which exist in gaseous lithium. Word producers.
of warning, I wouldn’t be putting dilithium crystals
into your new Tesla or you’ll be traveling “Back to So, what are Rare Earths used for and why are they
the Future” quicker than you can say Elon Musk! For so strategically important? To start with, the term
non-Trekkies, dilithium crystals don’t actually exist in “Rare Earths” is a bit of a misnomer, as they are not
the real world…………….or do they? really rare at all. However, because of their geochemi-
cal properties, Rare Earths are typically dispersed
What does exist are the 17 Rare Earth metals, which and not often found concentrated in Rare Earth
are increasingly being spoken about and explored minerals. Rare Earths, or REEs, are primarily used in
for and are arguably about to become the next big the production of permanent magnets (30%), high
thing because of their strategic importance. Accord- tech devices, smart phones, electric vehicles, comput-
ing to ResearchandMarkets.com (1 February 2023), ers, LEDs and flat screen TVs. These uses, as well as
in 2021 the Rare Earths market was worth around high tech military applications, make these elements

increasingly important in today’s high-tech world. ration and discovery generally far cheaper than hard
China accounts for approximately 60% of world REE rock hosted deposits. Outside of China, new IAC
production, 85% of REE processing and 91% of REE REE deposits have been discovered in the Southern
magnet production. Myanmar, the US and Australia States of Australia including Tasmania (ABX Group,
account for around 33% of world REE production, ASX: ABX), Victoria (Australian Rare Earths, ASX:
with the Rest of the world accounting for around AR3) and in Queensland (Devex Resources, ASX:
7%. Western countries have become conscious and DEV). A number of other ASX listed companies have
understandably concerned about China’s ability to reported important IAC discoveries in parts of the
control and potentially manipulate this market. US, Africa and Latin America, particularly Brazil. One
Aussie company, Meteoric Resources (ASX: MEI) is
The only operating Rare Earths producer in the US is developing its Caldeira IAC project in Brazil, which is
the Mountain Pass REE project located in the Clark claimed to be the world’s highest grade IAC deposit.
Mountain Range of California, about 53 miles south- The current JORC defined resource base sits at 409
west of Las Vegas, and owned by Mountain Pass mt @ 2626 ppm TREO (Total Rare Earth Oxide).
Materials Corp. The project has had a somewhat
checkered history with the project and its former Meteoric Resources’ Chairman Andrew Tunks com-
holding company having gone through Chapter 11. mented “This is a particularly exciting time for the
In 2002 a toxic waste spill closed production for a company with both Europe and the US looking to
number of years. Around the same time virtually all secure a large reliable and cost-effective supply of
other US Rare Earths producers closed as they were REEs outside of China”. The Australian market has
unable to compete with China. This was due to far certainly jumped on board with the price of MEI shares
cheaper labor costs and poorer working conditions, increasing over tenfold since November last year and
and significantly less stringent environmental con- driving the company’s market cap to around USD $
trols. Many Rare Earths deposits contain radioactive 300 million, in what some may call a “meteoric” rise.
elements such as thorium and uranium which not
only pose health and safety risks, but also can affect As we have all come to appreciate, commodity cycles
recovery rates, impurities, and acid usage. This in can be fickle, and commodities can go in and out of
turn can impact on the economic viability of projects. favor in response to world demand. It seems that
Rare Earths, especially IAC hosted Rare Earths, are
It should be noted that not all Rare Earths projects set for an exciting ride. Reliance upon technology,
are equal. The primary distinction is between electric vehicles, permanent magnets and high-tech
hard rock hosted REEs and ionic adsorption clay electronic devices isn’t going anywhere and under-
hosted(“IAC”) projects. As a rule, hard rock deposits pins the ongoing and increasing demand for REEs.
require a number of processing stages, much larger China aside, a growing focus on environmentally
capex and can be consumers of substantial quanti- sustainable extraction and processing techniques
ties of reagents and acid. There are currently not are highly influential in terms of the permitting and
many IAC projects (and none currently in produc- approval process and favor IAC hosted deposits.
tion) outside of China. Based on the nature of the
mineralization, they should be able to be exploited So, are Rare Earths set to become the next big
far more cost effectively and environmentally much thing and should we as investors be jumping
friendlier than their hard rock alternatives. on this Starship? You know the greatest danger
facing us is ourselves, and an irrational fear of the
The geological theories and production scenarios unknown. There is no such thing as the unknown,
behind IAC REE deposits are still emerging as this only things temporarily hidden, temporarily not
is a relatively new area and economic viability is a understood-Captain James Kirk.
function of size, grade and importantly pH levels. As
pH levels decrease this influences acid consump- That’s all for now folks, “Beam me up Scotty”.
tion and impurity removal. IAC deposits usually
contain very low levels of radioactive thorium and Richard Revelins has worked as an international investment banker for over
35 years and specializes in listed public companies. He is a co-founder of
uranium elements and are usually found at, or close Peregrine Corporate Limited based in Australia and is also a Managing
to surface. There is also a degree of homogeneity Director at Cappello Group Limited based in Los Angeles, USA. He
currently resides in Venice, California and divides his time between the US
within the mineralization. These factors make explo- and Australia.
The author does not own any shares in the companies mentioned.
insi g hts
// By Filip Erhardt
ESG Investing 101

with ESGFIRE
ESGFIRE is a Swedish investment company and research firm
that focuses on companies with either an environmentally friendly
service or product.
E
SGFIRE has a performance record of over 1000 take great pride in the fact that we personally invest
% returns since 2018. By only investing in envi- in ALL of our portfolio companies and they all have
ronmentally friendly companies, ESGFIRE has to go through the same rigorous selection process.
outperformed the major indexes for several years. This means that when our portfolio does well, our
We have a track record of over 1000 % returns since readers who follow us do well too. About 70 % of
2018 using our own proven method of identifying the portfolio consists of public companies and 30
high potential ESG companies. During the same time % are nonpublic companies which typically have
period (2018-2021) the Nasdaq has returned ~126 % 12-24 months until IPO. Our non-public investments
and the Swedish stock index OMSPI has returned have year to date on paper averaged returns of
~82%. For example, during 2021 our portfolio around 400 %*. We regularly meet with interesting
returned 91% compared to ~21% for the NASDAQ climate tech startups all over Europe and this gives
and ~35 % for the Swedish stock index OMXSPI. We our free newsletter subscribers a very interesting

deal flow since we write about all our new portfolio Current investment criteria for ESGFIRE
picks. Currently we have 12 companies in total in the
ESGFIRE portfolio. Since there was no clear definition of ESG investing
back when we started in 2018 we decided to cre-
Our challenge when first starting with ESG investing ate our own. In our opinion a company essentially
was that that there weren’t any clear guidelines on has to have either an environmentally friendly
how to define what constitutes as ESG friendly in- product or service for us to even consider invest-
vesting. Most people would agree that the acronyms ing. ESGFIRE focuses on small cap and microcap
of ESG namely Environmental, Social, Governance companies which for us typically are at a market
cover different aspects of how a company should cap below $100 million USD. The reason for our
act and treat stakeholders in order to comply with focus on smaller companies is that our strategy
ESG regulations. However, receiving a good ESG is based on finding high potential companies in
rating essentially means a company is managing its early stages in order to maximize our returns
environment, social, and governance risks well rela- during the expected growth journey. The other
tive to its peers. This is the reason why a company reason we have chosen to focus on companies
making harmful products such as tobacco or an oil in this range is that they are usually not covered
company such as Chevron and Marathon Petroleum by other analyst firms and the chance of finding
receive high ESG scores. This is also the very fact mispriced companies is considerably higher.
why ESG ratings have been highly criticized by the
broader investment community. The CEO of Black- As of now, the main scope of our investing com-
rock Larry Fink said last month he was going to stop panies is on those companies which are profitable
using the term ESG “because it is being politically or at least very near breakeven in the cleantech
“weaponized” and he’s “ashamed” to be part of the / Agtech sector. In other words, it has to be an
debate on the issue.” environmentally friendly business product or
service. If the company is not profitable it needs
*This does not constitute liquidated assets / investments we have made exit
to have a high MOAT or uniqueness for us to
on.
become interested.
ESG investing is a MEGATREND investors
cannot afford to ignore We have a unique way of picking our portfolio
companies and they need to meet almost all of our
If our governments around the world are to succeed criteria described below in order to qualify for the
in keeping global warming at a maximum of 1,5 ESGFIRE portfolio selection:
degrees celcius to stop disastrous climate change, it
will require massive investments into clean energy •• Environmentally friendly business idea
technologies to help reduce CO2 emissions. Not only •• Unique product offering or service with strong
will a massive reduction of CO2 and therefore green IP and/or patent portfolio.
energy be necessary, it will also become a necessity •• Either profitable or near profitability
to transform our society from a buy & throw society •• Solid management.
into a society which prioritizes circular economy and •• Sustainable production methods.
reusing valuable resources. ESG for us is a sector of •• Investor friendly management team.
interest which is bound to have massive growth and •• Recurring revenues.
enormous governmental subsidies support for the •• Solid path to profitability.
foreseeable future. This macro trend offers inves-
tors a huge advantage few other sectors are even
remotely close to. This is the reason investors should on the standard ESG rating criteria described in the
pay attention to ESG. beginning of this article and less on how sustainable
a company actually is. One mutual fund we think is
Where traditional ESG investors take the worth mentioning, which is somewhat aligned with
wrong turn our own investment criteria is the Swedish climate
tech fund Proethos. They currently have about $80
Where we believe most managers and ESG gurus go million USD under management. The fund mainly
wrong in ESG investing is that they focus too much invests in companies with a market cap above $100

million USD which excludes most microcap and investors. We would keep a lookout for companies
small cap companies of interest to ESGFIRE. They with a depressed share price return and don’t be
have chosen to focus on sustainable energy, energy afraid to look at companies that have had a rough
efficiency and sustainable transport / lifestyle which journey as long as you believe management has a
we think is a good investing angle. Traditional ESG viable plan financing path to profitability. A large
ratings are useful for screening out potentially share count does not necessarily mean a red flag
reckless companies but its less effective in actually as long as management has a plan to actually turn
identifying companies that ESGFIRE constitute as the company around and/or to make a reduction in
truly sustainable and environmentally friendly invest- number of outstanding shares.
ments.
Among the four areas mentioned above Agtech
How to build your own successful ESG is worth highlighting since its often overlooked by
investment strategy most investors. To give a short explanation of what
Agtech is: Agtech is the application of technology
As an investor if you wish to create your own ESG and digital tools to farming. However, from our
investing strategy our opinion would be to focus on investment scope we mainly look at Agtech compa-
green energy transitioning, sustainability, agtech and nies which either reduce carbon footprint or enable
companies offering solutions that reduce carbon larger crop yields with environmentally friendly
footprint. By focusing on these four major areas innovations. We would like to share two examples of
you will position yourself in the four areas we think climate friendly Agtech companies in our portfolio
will have the largest growth in the ESG space for and those are Replenish Nutrients (CSE: ERTH,
the coming ten to fifteen years. The companies OTCQB: VVIVF) and Ekobot (Nasdaq First North
mentioned below are a few of the many bargains Growth Market EKOBOT) . Replenish Nutrients is
that can be made right now by observant ESG a Canadian company which produces a patented

naturally-sourced, regenerative fertilizer which als lack the proper internal governance structure it
re-establishes soil health and increases crop yield may affect the risk management of how they invest
while reducing co2 emissions. Ekobot is a Swedish your hard-earned money.
company is at the forefront of the development of
the Autonomous Field Robot for Mechanical Weed Conclusion on ESG investing
Control which makes ecological farming a lot more
cost effective thereby reducing the need for harmful To conclude, we think there is mainly one principal
pesticides. Both companies are currently, in our opin- problem in ESG investing. All investors, regardless
ion, quite mispriced due to a very challenging market of whether it be institutional or retail, are essentially
conditions for small cap companies in general but delegating investing decisions to portfolio managers
especially for companies not already profitable. that are supposed to be outperforming the market
Another company worth mentioning in the green in picking the right stocks and experts in assessing
transitioning sector is Landi Renzo ( Milano exchange companies ESG credentials. ESG funds typically have
LR) which is an Italian small cap company that is a higher fee than regular funds and without knowing
supplying green technology to some of the largest how these companies actually pick their portfolio
players in the automotive industry. The company companies investors, in our opinion, are throwing
also has a subsidiary which is supplying technology their money away in most cases. If you want to be a
to hydrogen refueling stations across the globe. responsible ESG investor you need to pay attention
to what a company actually does, not what it says.
The G in ESG The same goes for when choosing what funds to
invest your money in. Investors need to be more
The G in ESG stands for governance and examines critical of portfolio managers stock selection criteria
how a company polices itself, focusing on internal to avoid making the mistake of simply placing
controls and practices in order to maintain their com- money with a fund or wealth manager that is using
pliance with regulations, industry best practices and traditional ESG criteria instead of a more accurate
of course corporate policies. In fact, most investors sustainability / lowering carbon footprint criteria
may be an ESG investor without knowing it since all more like Impact investing. All investors need to take
companies have to comply with regulations if they note of the governance risk when both investing in
wish to stay in business for the long term without individual stocks as well as picking the right wealth
unmanageable risks. Following the governance of manager or fund manager for their investments. If
the G in ESG involves, among other things, financial you want to make above index average returns you
transparency and business integrity. The German need a strategy that enables above index returns.
company Wirecard is a great and well-known ex- This inevitably means you will have to take greater
ample of failed governance where poor governance risks and potentially you will make big losses on
led to the biggest scandal in German financial history some investments. The key to succeeding investing
. The scandal concluded with the publicly listed in the ESG microcap sector is to be critical, investiga-
company Wirecard reporting on June 18th 2020 that tive and by applying a sound risk management /
2 billion EUR were missing from their accounts which diversification. Try to find companies that you are
amounted to all the profits the company had ever re- interested in since this will keep your own interest
ported as a public company in the end it turned out for the long run but don’t make the mistake of falling
the profits had been inflated. If this could happen in in love with your investments. Regularly review your
Germany of all places you may ask yourself, could strategy and cut out the companies who aren’t
it happen anywhere? Luckily authorities in Europe meeting your expectations. One thing is certain,
and North America have become increasingly more companies and investors will need to be pay atten-
aware and vigilant regarding accounting scams but tion to ESG criteria and environmental impact for the
this alone does not make it possible for investors foreseeable future.
to relax and not question red flags. It has become
Legal disclaimer: Investing in stocks is combined with certain risks and it is possible to
increasingly more important for all types of investors lose your entire investment. This article is made for Educational purposes only and is
to manage the governance risk of their investments. not to be interpreted as tips , financial advice or recommendations of any kind to either
buy or sell any stocks. We own stocks personally in Landi Renzo, Ekobot and Replenish
Investors should also be aware of the governance Nutrients (Earthrenew).
risk which follows hiring fund managers and wealth
managers to invest their money. If these profession-

insi g hts
// By Roger Pondel
Adding Public
Relations to
the IR Mix
A Q&A with PondelWilkinson’s Roger Pondel
A
lthough most publicly traded companies pay
close attention to engaging in professional
investor relations practices, adding public
relations to the corporate communications mix can
pay tangible, added benefits.
Planet MicroCap’s Shelly Kraft recently sat down

with veteran investor relations and corporate
communications advisor Roger Pondel, CEO of
PondelWilkinson Inc., to ask a few questions about
how PR adds value and why public relations should
be considered for public companies.
SK: Let’s start with the basics … how do

you define public relations?
RP: Public relations is a highly professional discipline,

with its own national association and thousands of
practicing professionals. While there are any number
of definitions, pros will say it is the practice of com-
municating with targeted audiences, which involves
managing, crafting and disseminating factual
information to educate, inform and to help influence
change or perception.
SK: What are some of the public relations

strategies that can be deployed to
enhance an investor relations program? as industry experts. This can be further amplified
through regular press releases, media outreach
RP: A few strategies that can enhance investor and publicity, investor events and leveraging digital
relations include developing a comprehensive media platforms to communicate key messages.
relations plan, utilizing social media platforms for
targeted investor messaging, maintaining a strong SK: What other value-add benefits come to
online presence, and engaging in thought leader- mind with engagement of professional PR?
ship activities to position organizational executives

RP: There is one big one: the ability to reach multiple sity, more bureaucratic management structures. Silos
constituencies. While investor relations focuses often exist, separating the PR and IR departments,
on one primary audience - the investment com- with divergent reporting structures and different
munity - the use of PR can help a company get its priorities. Smaller companies are usually more
messages out broadly to many audiences, including entrepreneurial and nimble, which in itself, better
customers. So there are marketing benefits. Custom- facilitate a smooth, consistent path to communicat-
ers can become shareholders, and shareholders can ing, regardless of intended audience.
become customers.
SK: How can PR contribute to attracting
SK: Are PR and publicity the same thing? investors?
RP: Not at all. Publicity, which can be favorable or RP: Public relations efforts can contribute to at-
not, is a tactic that could be incorporated into a tracting new investors and reinforcing the existing
broader public relations strategy. For example, firms the investor base by showcasing the company’s
pitch narratives to reporters to get them to write strengths, highlighting its financial performance, and
positive stories about their clients, such as a com- positioning it as an attractive investment opportunity.
pany’s earnings. The benefit of “earned,” vs. pay- Through targeted media coverage, thought leader-
for-play, media coverage is the amount of awareness ship articles, and engaging content on digital plat-
and credibility that publicity can bring to a brand, forms, public relations can effectively reach potential
organization or equity. However, earned media has investors and generate interest in the company.
become increasingly challenging to obtain given the
ever-shrinking news hole. Ensuring press coverage SK: Would you say that ‘communications’ is
requires creativity and expert knowledge of various a common theme for both PR and IR?
media landscapes.
RP: Definitely. Communicating is the red thread
SK: It sounds like both PR and IR are that brings the two disciplines together. For public
necessary to maximize communications companies, while the PR professional may be more
value? adept in the tactic and art of communicating and
getting messages heard, it is typically the IR pro who
RP: Absolutely. While it is possible for public has the deeper understanding of value creation and
companies to practice one discipline without the the knowledge of what and what cannot be com-
other, paying attention to both disciplines will indeed municated.
maximize communications value. For example, a
solid IR program without stellar PR could mean that SK: What role does public relations play in
messages are not getting out to the right and widest building investor confidence and trust?
audiences, or perhaps not getting out clearly and
concisely. Conversely, a PR program that does not RP: Public relations plays a crucial role in building
pay close attention to IR could be fraught with risk investor confidence and trust by shaping positive
from a legal standpoint. That’s why we believe CEOs public perception, promoting the company’s mission,
and CFOs should view corporate communications values and achievements, and addressing any poten-
with both disciplines in mind as “needs” and not just tial concerns or issues. Through strategic communi-
frilly “wants.” cation and effective media relations, public relations
can help establish a strong reputation, which in turn
SK: How can a company leverage PR and IR enhances investor confidence and trust.
together?
Roger Pondel is CEO of PondelWilkinson Inc., a full-service investor relations
and strategic public relations consultancy, operating for more than 50
RP: Certainly having expert tacticians in each years that has earned a national reputation for innovative, aggressive,
discipline is critical. But experience and teamwork professional service. The firm represents publicly traded, pre-public and
privately owned companies - from microcap to big cap - in multiple sectors,
are the real key. It is almost easier for microcap and blending public relations and investor relations disciplines to provide a
small cap companies than it is for larger companies value-add offering. Roger and his team can be reached at rpondel@pondel.
com, or 310-279-5965.
to manage the communications process. With larger
companies there are typically, and often by neces-

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
throughout the world. In 2017, Lucosky Brookman founded the Lucosky Brookman Foundation, a public 501(c)
(3) charity, through which the Firm uses the power of philanthropy to impact the lives of those less fortunate.
Lucosky Brookman invites you to join it in supporting The Save A Child’s Heart Foundation (SACH). SACH
is a global humanitarian organization, with a mission to provide life-saving cardiac care to children of all
backgrounds, regardless of race, religion, gender, nationality, or financial status, who suffer from congenital and
acquired heart defects and have no access to quality care in their native countries. SACH is
also committed to providing training to doctors from developing countries to set up local centers
of competence. To date, SACH has have saved the lives of 5,000 children from 58 countries and has
trained over 120 international medical personnel.
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MicroCap is Always Full of Opportunities…and Risk

©Copyright 2023 by Planet SNNMicrocap

regarding the companies and

4 Planet MicroCap Review www.PlanetMicroCap.com

microcap world often preach doing your homework, believe in

m a market traditionalist and since I historically lean on using my

www.PlanetMicroCap.com Planet MicroCap Review 5

10 What Makes a Great MicroCap Investor 30 Survival is Most Important in MicroCaps

102 ESG Investing 101 with ESGFIRE

42 Legal Corner: Try Not to Give the by Filip Erhardt

106 Adding Public Relations to the IR Mix

60 Battery Materials Outlook 48 Overview of the Planet MicroCap Index

by Gavin Wendt, Independent Investment Research

6 Planet MicroCap Review www.PlanetMicroCap.com

1. Reflecting on the first seeing emerging trends and trends

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3. How has macro news influenced your

Our investment approach will stay the same no

For more information about Travis Prentice and EAM

www.PlanetMicroCap.com Planet MicroCap Review 9

What Makes a Great

1. Can you provide a quick passion or competitive fire is really

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Lynne Bolduc, Esq. Representing entrepreneurs, business owners, private

AWARD-WINNING BUSINESS ATTORNEYS

(949) 788-8900 www.fkbrlegal.com

Why Do Investors Care About Climate

For starters, their main goal is to provide returns

Although there is risk involved with climate change,

Perhaps the most important from a capital stand-

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designated ESG Coach guides Socialsuite is an ESG reporting platform geared

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HALF YEAR REVIEW

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

Each month, Lucosky Brookman publishes The Uplisting Report and

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

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

Lucosky Brookman LLP

A total of 39 micro-cap issuers, operating in 15 different sectors completed their IPOs in

MICRO-CAP IPOs UPLISTS & CROSS-LISTS

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Dollars Raised IPOs

Micro-Cap IPOs $15.6M

UPLISTS & CROSS-LISTS

H1 Jan Feb Mar Apr May Jun

Q&A with Steven

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Why 2023 is the

And it’s really been a long time Pretty cool stuff.

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